New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-10-21
j. J. HILL ON THE q. p. MERGER
PURPOSE TO PROTECT RAILROAD
STOCKS FROM RAIDS, HE SAYS.

St Paul. oct 2O.-The adjourned hearing Of the
government suit against the so-caIled railway
merger called TO order by Special Examiner
Ingersoll al the Circuit Court in this city to-day
About the entire day was given to the direct
testimony Of James J. HILL for the defendants. the
cross-eNamination having just begun when the
hearing adjourned. Mr. Hill went over much Of
the ground previously covered by him IN his tes-
timony before the Interstate Commerce Commits
sion and in other suits similar to this. but o-day
he brought out more fully that the exchange OF
Great Northern stock for that Of the Northern Sc
curities Company the act OF the individual
shareholders de dwelt at length his statement
that the whole purpose OF the organization OF the
Northern Securities Company was to protect
great commerce with the Orient which the North
lines had sought 10 develop in competition
with the transportation companies Of the world
The circular Of the Northern Securities Company
10 shareholders Offering TO expand stock had here
tofore been placed IN evidence but to-day through
Mr.. Hill. there was introduced personal circular
letter sent by him 10 numerous Great Northern
shareholders. in answer inquiries telling them
that action by them in exchanging their stock must
be their individual action. uninfuenced by
him. Mr. Iiil will be on the stand again tomorrow
morning. He Will be followed by Colonel ". p,
Clough. Frederick Weyerhauser and other defend
ants. or directors OF the defendant companies.
Solicitor General J. X. Richards. W. 4. Day at
torney for the Interstate Commerce Commission.
and J. NJ Beck represented the government. Ex-
Attorney General J. W. Griggs. David Wilcox. Of
New-York; George Is. Young, c. ". Bum and N.
d. Grover. Of ST. Paul. appeared for the defence
The New-York hearing substantially completed the
governments presentation Of its and the test-
mony now being taken is behalf of the defend
ants. the Northern Securities Company, the
Northern Pacific Railway Company. the Great
Northern Railway Company and the principal OFF,
Gals Of those companies
HILLS ADVICE GOVERNS,
Mr. Hin told of mis- first connection with the old
liz
and Manitoba Railways. explaining that the direc-
tors Of those companies. being nearly all non-res-
dent. the policy and methods Of the old Manitoba
company were left almost entirely with him. The
policy OF the Great Northern since its organiza-
ton had been largely according to his advice; but
in recent years more directors lived in the West
and made frequent trips, frequently giving good
advice Markets for west-bound traffic were sought
everywhere. In Japan and China. and wherever
cargoes were to be had. where there was any
likelihood Of any business. He told in detail OF
the growth OF trade for Pacific coast lumber and
of the development Of the Oriental trade. 1t soon
became evident that some control Of the rate 10
the orient was necessary to make profit possible.
/ This was secured by gaining control Of the Bur
nngton. A trunk line Chicago. St Louis and
other centres made it possible TO control the re-
turn shipments and keep down the rates.
All conditions affecting the Great Northern, he
said naturally affected the Northern Pacific SINH
larly Both roads must handle business both ways
/ IN order 10 compete with everything that floats.
, and 10 compete with the Suez Canal route, but
. they were doing IL successfully. They competed
I with Germany and Great Britain IN transportation
/ and production. and with Norway and Sweden in
/ transportation alone. in less degree with the
J Panama route Railroad competitors 70 the Pacific
/ Coast were the Canadian Pacific. Union Pacific and
Southern Pacific and a new line now under con-
struction The chief competition. however, was
. with the conditions all over the world. and not
alone with these Western railways Speaking OF
the new line OF steamships. he said that the first
ship would be launched in December. with a ton
mage Of 2S 900. 1900 more than the Celtic, which
is the largest ship now ahoat
PLAN TO SECURE BURLINGTON.
At the afternoon session Mr. Hill said that in 1897
the project OF securing the Burlington consid-
cred but the Great Northern wasiunable 10 do this
alone and the Northern Pacific. which had just
been organized was not in position 10 join such
a scheme. He did not know Of any Great Northern
directors making heavy purchases Of Northern Pa
cihc stock IN order 10 control that line At the time
OF the fight for control he and his friends held from
$4,000 go S35 900 600 OF common stock Of the North
ern Pacific. On May 3. after the prices were above
par. and il was evident that attempt 10. secure
control was under way. he called the attention Of
lis associates 10 the matter, and no more stock
vas sold by them. The Morgans up 10 that time
had suspicion Of any attempt to make raid on
the stock. He explained that the Northern Pacific
holdings mentioned did not include those OF J. P.
He told how al this time he and his associates
with a holding company as being done with
their Great Northern stock. Nothing definite, how
some So oe5 o55 Of the stock ana Mr. Morgan held
about the amount The capital Of the pro-
posed general holding company was hrst placed at
Slo00gaOo0 in the preliminary discussions. Only a
few individuals were at first interested. There was
much hesitation over a holding company in which
all Great Northern shareholders might not partici-
that the Great Northern holdings would amount to
$500 700 The MORAN ana Hill interests IN the
Northern PACING controlled that COMPANY after the
redemption Of the preferred stock Then. in esti-
S3oooo9.0Jo would suffice. The amount varied from
time 10 time being finally fXed az 5000 oo.
Gent late December. 1901. IT. was intended
amending the article.
TO PREVENT RAIDS.
The purpose after the purchase Of the Burlington
company and Of the large blocks Of Northern Pa
cilc stock. In the formation OF the Northern Sc
curlues Company was to put the stock where it
could not again be raided as it had been" Rail-
road charters almost always do not provide for
buying other companies but a separate holding
company would be free from the possibility OF
ralcs' intended 10 destroy or hamper the com
pahy. Any other sort Of plan for controlling the
great oriental traffic would result in loss and
Possibly wreck the whole enterprise. He reiterated
,ba ne Whole intent and purpose was TO protect
a., r. 40 rleht or thought OF restricting trade
IN me contrary, il looked on as the most eff
ne insisted that the Great Northern RAILWAY vas
en- go siAe business lower than any OF the South
effect s on the Atchison ana Cnon Pacic ii if ap IN
h-aSu 70 ne present business the Great Nor h
Ms Moule raise the earnings fully 900 There
M1s 50 iar as he knew. never any Intention or
kLltSSse oI destroying mpetition between The
ss LsIh racine and Great Northern Railway com
tsl.iss py the organization of the Northern Sacri
nor SfScp, a5ly Little business on those lines was
- mar even II they wished to destroy comnettton
~ UTMOST EFFORTS could affect "a ner ~snt ~
Ne business. he believed that the eonnetitiore
years ~ '"'i a. at any Time IN twenty
os,Aeither the Great Northern oomnapv nor g.,
do Di,S as such said MIR. Hill had a1vthi,, ~ -
Corono,, % SANITATION OF the Northern SecrftJss
holders 49, AZ was purely matter for the sbares
OF eigbtecn noI 70 exceed eleven stockholders ont
orrst9t.s, hundred more less took mart a, ~.