Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1902-01-02
N G PHASE

ONE LEGAL PHASE
One legal phase of the Northern Sc
curities company's authority is settled
in the decision of Judge Lochren, dis
solving the injunction obtained against
the retirement of the Northern Pacific
preferred stock. In the argument Of
this injunction, it was alleged by the
plaintiffs, that the attempted retire
ment of the preferred stock would give
the Northern Securities company
ampler opportunity to carry out it's OBJ
ject of merging the three railroad sys-
TENS.
The answer of the Northern Pacific
attorneys admits that the Northern
Pacific and Great Northern lines are
parallel and competing, but denies that
this is true of the Northern Pacific and
Burlington. It denies that the North
srn Pacific directors entered into any
combination or conspiracy with direc-
tors and officers OF the Great Northern
railway, or of the Chicago, Burlington
& Quincy railway company for the
purpose of concentrating or CONSOLE
dating the three railway systems"
and also denies that the Northern Sc
curites company was, organized in
pursuance of any such combination, or
conspiracy of any similar or other
combination, conspiracy or agreement
between directors and officers Of this
defendant and directors and officers of
any other railway company" The
answer alleges that the plan to retire
the preferred stock has been submitted
to holders of the common stock, and
has received the approval of at least
$78.OO0,0O0 out of a total of $4,000, 600.
It is also denied that the Northern Sc
curlties company is a railroad corpo-
ration, II has any power to W or
operate a railroad, or that it was or
ganized for the purpose of uniting I'M
der its management and control the
Northern Pacific and the Great North
ern Railway company, and the Chi
cago, Burlington & Quincy Railway
company, or either of them, and denies
that said corporation was organized
for the purposes of owning, holding or
controlling all Or any of said railways
or to.stife or prevent competition or to
the end of exacting inequitable or ex-
Orbitant rates on freight or passengers.
Tt is claimed, on the contrary, that the
Northern Securities company is purely
an investment company having a right
under its charter to own stocks, bonds
and other securities issued by any COR
poration organized in any state, coun-
try or territory. 1T is denied that it
is Its design and purpose, or the design
OF the Great Northern company, or
the Chicago, Burlington & Quincy COM
pany, to consolidate or merge in the
said Securities company the complete
and exclusive control of all or either
of said railway systems, and denies
that the proposed retirement Of the
preferred stock has any connection
with the business of said Northern Sc
curities company, or with the control
OF this defendant-its sole purpose be-
ing to enable the defendants common
stockholders to extinguish and a off
the preferred stock, and in so doing
acquire for themselves the stock to be
issued in place thereof as had been
originally agreed upon and contem-
plated by all the stockholders from
July. 1896.
Judge Lochren's decision passes on
some of the legal points in the case as
follows:
IL the Northern Pacific Railroad
company never thought of ~consoIida-
ton, but to pay off the preferred stock
holders and issue common stock, il
had authority to do that. And that OF
Itself would certainly have no tendency
towards consolidation.
It IL claimed that It would place
certain persons who are alleged to be
manipulating these stocks with a view
AZ 4 consolidation or merger, In a DO
;tfon in which they would be enabled
To carry out their schemes better than
# there was not q retiring OF the pre-