The bee., 1902-05-01

4 district of Minnesota asking
for the dissolution of the
Northern Securities company people
want to know what it is all about. The
real point at issue is whether, under the
provisions of the Sherman antitrust
law, a company can without violating
the law buy a controlling interest in
the securities of two or more railroads
which are parallel and competing.
In this suit, commonly known as the
merger suit, Attorney General Knox
seeks to prevent the Northern Securi-
ties company, a New Jersey corpora
ton, from securing control of the Great
Northern Railway company and the
Northern Pacific Railway company.
parallel and competing lines.
Mr.. Knox charges conspiracy to vio-
late the laws of the United States in
combining two competing railroads
through the formation of the Northern
Securities company after other efforts
to combine had been defeated; that
for the purposes Of defeating the state
and federal authorities and furnishing
a defense that the Northern Securities
company does not hold a majority of
stock of the Great Northern railway
such stock 10 held by persons friendly
to the corporation and will not be vot-
| ed until the legal questions have been
| settled; that the Northern Securities
/ company is in effect Il merger or con-
! solidation of the competing lines, and
/ that if this merger stands then the
public will be placed absolutely at the
mercy of any holding corporation
which may seek to consolidate all the
railroads Of the country in one system.
In his petition Mr.. Knox says: The
/ attempt to turn over a controlling in
terest of the Northern Pacific railway
having in 1896 been defeated by a de-
cisiOn of the supreme court the de-
PENDANTS. James j. Hill and his asso-
ciate stockholders of the Great North
ern, owning or controlling a majority
Of its stock. and the defendants, j.
Pierpont Morgan and his associates,
owning or controlling a majority of the
stock of the Northern Pacific company,
entered into an unlawful combination
or conspiracy to effect q virtual con-
solidation of the Northern Pacific and
Great Northern systems and to place
restraint upon all competitive inter
state and foreign trade or commerce
carried on by them and to monopolize
or attempt to monopolize the same and
to suppress the competition thereto
fore existing between said railway
systems in said interstate and foreign
trade or commerce. through the instru-
mentality and by the means follow.
ing:
"a holding corporation, to be called
the Northern Securities company, was
to be formed under the laws of New
Jersey, with a capital stock of $780,.
100000, to which, in exchange for its
own capital stock upon a certain basis
and at a certain rate, was to be turn.
ed over and transferred the capital
stock, or a controlling interest in the
capital stock, of each of the defendant
railway companies.
'Tn this manner" Mr.. Knox says
'the individual stockholders of these
two independent and competing rail
way companies were to be eliminated
and a single common stakeholder. the
Northern Securities company, was to
be substituted.
"In this manner, by making the
stockholders of each system Jointly In
terested in both systems and by Drac'
tically pooling, the earnings Of both
systems for the benefit Of the former