The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1902-01-03
NORTHERN SECURITY
MIR. ]. ]. Hill Explains the Object
of the Company.
He Maintains that Consolidation of Ri
val Railroad Lines is not Comtempla-
ted. Tells how the Security
Came to be Organized.

Mr.. j. J. Hill, president of the North.
ern Securities Company, has issued q
statement to the press embodying the
purposes of the Northern Securities
Company and the events that led to it's
formation. He says:
II have been absent from Minnesota fol
more than two months, and during that
time there has been a wide discussion
throughout the state of what has been
generally called a consolidation or a
merger of the Northern Pacific and Great
Northern railroads, and in this discussion
statements have been made which are sc
widely different from the facts that feel
called upon to make conservative state
ment of just what has been done in the
past and what will be done in the future
when the Northern Pacific failed and
the banking house of ]. P. Morgan & Co.
reorganized it, myself and friends were
holders Of a large amount of the COM
pany's securities. After the reorganiza-
ton was completed we bought about s26,
100000 Of Northern Pacific stock, both
common and preferred. Some Of this
stock was afterward sold, but a large
amount has been held from that time to
the present.
about a year ago the Union Pacific
Company bought the Huntington and 9TH
er interests in the Northern Pacific and
at the same time made an effort to buy
the control of the Chicago, Burlington &
Quincy.
with these lines in the hands of the
Union Pacific interest, both the Northern
Pacific and Great Northern could be
largely shut out of the states of Ne
braska Kansas, Missouri, South Dakota,
Iowa, Illinois and Wisconsin, except by
using other lines of railway, some of
which were in the market for sale, and
might at any time pass under the con-
troll of or become Joined with the Union
Pacific interests. We then, of the North
ern Pacific, made proposals to the di-
rectors of the Burlington to buy their
entire property. When this transaction
was about being closed, the people who
represented the Union Pacific Company,
and who had previously tried to buy the
Burlington, asked to be allowed to share
with us in the purchase Of that COM
pany. This proposal we refused for the
reason that it would defeat out object in
buying the Burlington; and further, it
was against the law of several of the
states in which the longest mileage of
the Burlington was located.
AT that time, against the opposition of
more southern lines, both the Northern
Pacific and Great Northern had put into
effect a low colonization rate and were
carrying daily thousands of people into
the northwest. many of whom were COM
ing from Kansas and Nebraska, along the
lines of the Union Pacific. This move
ment was at it's height in the month Of
April and though after we had closed the
purchase of the Burlington, the Union
Pacific people undertook the boldest eff
fort that ever was made in this country
and bought over $50 600, 900 of stock of the
Northern Pacific in the markets of Eu-
rope and the United States. I was in
New York at the time, and after Messrs.
Morgan & Co. were aware of the action
of the Union Pacific people, it was found
that together we held about $26, 900, 900 Of
the Northern Pacific common stock, and,
inasmuch as the common stock by a right
of a contract made with the preferred
stockholders when the company was re-
organized and the stock issued, had the
privilege of paying off the preferred stock
at par on the first day of January of any
year until 1917, Messrs. Morgan & Co..
then bought in London and New York
about s16,OOOO 900 of the comomn stock of
the Northern Pacific.
"At the same time the Union Pacific
interests, having already so large an in
vestment, bid the stock up until there
was the largest stock corner ever known.
The common stock in three or four days
went UP to $1,000 per share I explained
to my friends how that, with control of
flo fho TT,,io Doc 40
would control the entire northwest and
of the west from Mexico to the Canadian
line, except for the Great Northern. So
great was this effort to get control that
one of my friends in London, who owned
s., 900 900 of Northern Pacific common, was
offered and refused s14OOO,OOO for his
stock.
1.-The result was that Messrs. Morgan
& Co. and ourselves owned 100000 out
of 100000 of the Northern Pacific COM
mon with the privilege of paying off the
s75,OOO,OOO of Northern Pacific preferred.
The Union Pacific people owned sS7, OO0, 900
Of the common and about s4O,0OO,O00 of the
preferred, which was a clear majority of
all the stock of the Northern Pacific and
claimed the exclusive control of the
Northern Pacific Railway and their own
ership and control of one-half the Bur-
lington."
When it was known that these pre-
ferred shares could and would be paid off
and before the annual election, mutual
negotiations resulted in Mr.. Morgan CIV
ing them representation on the North
ern Pacific board. When I was advised
of my election I notified them that I
could not legally act as director of the
Northern Pacific and Great Northern, at
the same time, and 7 resigned aftersthe
first. meeting of the. board. -
Several Of the gentlemen who have
long been interested in the Great North
ern and it's predecessor, the. st. Paul,
Minneapolis & Manitoba. and who have
always been among it's largest share
holders but not the holders of a majority
of its stock, whose ages are from 70 to
Sc years, have desired to combine their in
dividual holdings in corporate form and
in that way secure permanent protection
for their interests and a continuance of
the policy and management which has
done so much for the development Of the
SCRAPS OF INFORMATION.