Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1902-03-17
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existing between said railway systems
in said interstate and foreign trade,
or commerce, through the instrument
tally and by the means following, to-
wit: A holding corporation, to De
called the Northern Securities Co.,
was to be formed under the laws or
New Jersey, with capital stock OF
$500 ,OOO,O 900, to which, in exchange
for its own capital stock upon GER
tain basis and at certain rate, was
to be turned over and transferred the
capital. stock, of a controlling interest
in the capital stock, of each OF the de-
PENDANT railway companies.
I'm this mannef the individual
stockholders of these two independ-
ent and competing railway com
panies were to be eliminated and
single comm On stakeholder, the North
ern Securities Co., was to be suDstl-
tuted the interest of the individual
stockholders in the property and fran
chises of the two railway companies
was to terminate, being thus convert
ed into an interest in the property
and franchises of the Northern Sc
curities company.
I'm this manner, by making the
stockholders of each system jointly
interested in both systems, and by
practically pooling the earnings OF
both systems for the benefit OF the
former stockholders of each, and ny
vesting the selection of the directors
and officers of each system in com
mon body, towit, the holding corpora
ton, with not only the power but me
duty to pursue a policy which would
promote the interests, not of one sys-
tenn at the expense Of the other, but
OF both at the expense of the public,
all inducement for competition be-
tween the two systems was to be re-
moved, a virtual consolidation effect
| ed, and monopoly of the interstate
and foreign commerce formerly car
ried on by the two systems as inde-
pendent competitors established.
The petition then sets forth that the
| Nor thern Securities Co. was organized
Nov Il, 1901, with James j. Hill as
| D1SS1QCL "A 1pA So Q1nOullb VI NAAS NCSP
| ital stock of the Great Northern Rail-
way Co. and of the Northern Paclnc
Railway Co. was exchanged for stock
of the Securities company. the former
at a par value of $3.50 and the latter
at $115
The petition continues: IF the de-
| fendant, the Northern Pacific, has not
acquired large majority of the cap
| ital stock of the defendant, the Great
Northern Railway Co., it is because
the individual defendants named, and
their associates in the combination or
conspiracy charged in this petition, or
some OF them, since it became appar-
ent that the legality Of their corporate
device for the merger of the stock of
competing railway companies through
the instrumentality of a central or
holding corporation, would be assailed
in the courts, have purposely with
| held, or caused to be withheld, large
amount of the capital stock of said
railway company from transfer for
the stock of the Northern Securities
Co. and have purposely discouraged
and prevented the transfer and eX-
| change of such stock for the stock of
| the Northern Securities Co., all for the
purpose of concealing the real scope
and object of the unlawful combina-
ton or conspiracy, and of deceiving
and misleading the state and federal
| authorities, and of furnishing a
ground for the defense that the North
ern Securities Co. does not hold a
clear majority of the stock Of the
Great Northern Railway Co.
''The Northern Securities Co. was
not organized in good faith to pur-
chase and pay for the stocks of the
Great Northern and the Northern Pa
cific Railway companies. 1t was or
| ganiZed solely to incorporate the pool
ing of the stocks of said companies
and to carry into effect the unlawful
combination or conspiracy aforesaid.
The Northern Securities Co. is mere
depository, custodian, holder and trus-
| tee of the stocks of the Great North
ern and the Northern Pacific Railway
companies and it's shares of stock are
| but beneficial certificates issued
against said railroad stocks to desig-
nate the interest of the holders in the
pool The Northern Securities Co.
does not have and never had any cap
ital sufficient to warrant such stu
pendous operation. It's subscribed
capital was but $4,000, and it's author
lied capital stock of 100000 900 is
just sufficient, when all issued, to
represent and cover the exchange val
ues of substantially the entire stock of
the Great, Northern and Northern Pa
cific Railway companies, upon the
basis and at the rate agreed upon,
which is about $122,O0O,OO0 in excess
of the combined capital stock of the
two railway companies taken at par
eff the government fails to prevent
the carrying out of this combination
or conspiracy, not only will virtual
consolidation of two competing trans
continental lines, with the practical
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