The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-05-06
JAMES j. HILLS REPLY.

CONCLUDED FROM FIRST PAGE)
further, the purchase OF the Burlington
stock was not made in view of the forma-
ton of this defendant, but solely from the
motives and with the purposes already
stated"
The history of the formation of the hold
ing company is given very fully, the project
having its inception many years prior to
the decision of the Supreme Court in the
Pearsall case, which has been alleged TO be
the reason for the organization of the hold
ing company. Ten large shareholders in
the Great Northern and it's predecessor. the
st. Paul, Minneapolis & Manitoba Railway
Company, as far back as 1898 began to dis
cusS together what would be the effect on
the company's policy should their holdings
become scattered and by what means their
holdings could be kept together. so as TO
secure the continuance of such policy in
the management of the company. The idea
of a holding company resulted, but no def
mite agreement was made. These same
Great Northern shareholders from time to
time after the reorganization of the North
ern Pacific in 1896 had made large pur-
chases of Northern Pacific shares, individ-
ually. without any concerted action and
solely as investments. About May l, 1901
their aggregate holding of common stock
amounted to nearly 20.OOO.0 600 of the $4,000
coo common stock of the company. which
also had $75,000.O00 of preferred stock. At
that time j. PierpOnt Morgan * Co. held
about $4,000. 1000 of the common stock. In the
fall of 1900 Mr.. Hill and these Great North
ern shareholders discussed the question of
putting their Northern Pacific stock into
the proposed holding company. as we'll as
the suggestion of giving the same right to
other shareholders.
EFFORT TO DEFEAT HILL.
The answer then continues: AT the time
of the purchase of the Burlington shares il
was not contemplated by either purchasing
company, or it's shareholders. that any alli-
ance between the purchasing companies or
among their shareholders was needed to
preserve to each company it's fair share Of
the advantages secured by the purchase. II
was thought that the manifest interest Of
each company rendered any further guar
anty or security needless. But pending. or
just after the conclusion of the negotiations
for the Burlington stock, parties acting in
the interest of the Union Pacific Railway
system purchased Northern Pacific shares
both common and preferred. to the amount
of about $1S,O0,O0 being a clear majority
of the entire capital stock of that companv
TO defeat, and, If successful. II would have
defeated. the carrying out of the purposes
for which the Burlington shares had been
bought by the Great Northern and North
ern Pacific companies. and the development
of the interstate and international COM
merce of each of them. and would have
subordinated the policy of each 10 an inter-
est adverse to both the Great Northern an1
Northern Pacific companies, and TO the
public served by their lines"
After a lengthy explanation of various
features of the merger. the answer further
states that the Securities Company was
not formed for the purpose of restraining
trade or leSSening competition between the
two railway companies. nor would such
results follow from its organization, for.
In point OF fact. since the Securities Com
pany was formed, both lines nave voIun-
tarily so reduced rates as TO decrease their
earnings by upwards Of a million dollars
annually. 1t is claimed each of them is
independent Of the other and for the bene-
III of their shareholders and of the public.
In conclusion. the answer SAYS.
"Ffrst-The antitrust act was not in
tended TO prevent or defeat an enterprise.
in aid OF a great competitive interstate and
international commerce, merely because
such enterprise may carry with IL the pos
sibility of incidental restraint upon some
trifing both as respects terri
tory and volume.
"Second-NOr was the act intended 10
limit the power of the several States TO
create corporations. define their purposes.
fix the amount OF their capital and de-
termine who may buy, own and sell their
stock
would be unconstitutional. because the
power 10 regulate with foreign
nations and among the States does not
give Congress the power TO regulate any
OF the matters above mentioned In respect
10 corporations created by the States. and
because persons may not be deprived of
their property without due process OF law
by taking from them the right 10 sell II as
their interest may suggest"
Attention Is called 10 a defect OF neces-
sary parties defendant, there being over
1850 shareholders. few OF whom were con-
nected with forming the Securities Com
pany and in whose absence from the H,.ga-
ton, IL Is claimed. no decree can be made
affecting their rights. The defendant de
MES all and all manner OF unlawful com
binatfon and confederacy wherewith il is
by the said petition charged" II there be
any allegation TO such effect not already
fully disposed OF and answered.