New-York tribune., 1902-01-25
mr.. HILL ON THE STAND.
TELLS COMMISSIONERS ABOUT RAIL
ROAD MERGER.
REAL REASON FOR BURLINGTON PUR-
CHASE-COMPETTTION AND
TARIFF RATES

TARIFF RATES.
Chicago, Jan. 24-James J. HILL president of
the Northern Securities Company and president
OF the Great Northern Railway. testified for
three and one-quarter hours before the Inter
state Commerce Commission here to-day. In
answer to questions tending to show the effect
OF the community of interests plan on rates the
veteran railroad man declared that competition
does not lower rates. but on the contrary, he
believed that it advanced them. He declared
that in the Northwest, where for twenty years
the Northern Pacific and the Great Northern
have been at peace. where road has agreed
with the other rates and maintained the
agreements rates were lower than in any other
part Of the country.
In regard to the purchase of the Burlington by
the Northern Pacific and the Great Northern
Mr.. Hill declared that the purchase was a mat
ter Of necessity. and not due to "a
Ient in line with the trust idea" He testified
10 the formation Of the Northern Securities Com
pany, and In doing gave a reason far more
simple than has generally been conjectured. He
said:
There some old men-some very old men
snterested in the management of the Great
Northern. Two of them eighty, and
several over seventy years. They wanted TO
form a close corporation into which they could
confde their interests with the assurance that
the road would be managed along the lines
which have made il success. 1t was to have
taken over one-third Of the stock of the road
The plan seemed a good one, and then II was
proposed to let all the stockholders in-not alone
the few owners of the one-third-but all of them.
The plan met with approval. and then It broad
ened into the idea of taking in the Northern Pa
cifc also. The roads had worked in harmony
for twenty years, and the change in the holder
of the securities would make no difference. 1t
can make no difference, and will make no dif-
ference
Mr.. Hill was asked about the relation of the
Northern Securities Company. the Burlington.
the Northern Pacific and the Great Northern. to
-eech other. He said that the Northern Securi-
ties Company owned stock in the Chicago.
Burlington and Quincy Railway Company (the
new company, but owned about half of the
stock of the Chicago. Burlington and Quincy
Railroad Company (the old corporation).
He explained that the company was really
IA union of the three lines which formed the old
company and operated the latter by virtue OF
q lease. The half of the stock of the old
Rany not owned by the Northern Securities
Company, the witness said. was owned by the
Northern Pacific Company. In the
pany. he said. the Great Northern and Northern
Pacific were the chief stockholders, having is
fued joint bond to cover the purchase price
with the Chicago Burlington and Quincy Rail-
yoad Company. These two companies. as stock
holders. elect the directors of the Burlington.
There were approximately nineteen thousand
stockholders in the old Burlington" said Mr..
Hill. "It was impossible to buy the stock,
amounting about S1O0,OO0.OOO, in the open
market, and another plan adopted, result
ing In the sale OF the property like a piece Of
real estate. The Northern Pacific and Great
Northern railroads issued s216OO0Ooo joint
bonds to pay for it"
WHY THE BURLINGTON WAS BOUGHT.
In explaining his reasons for the purchase Of
the Burlington, Mr.. Hill went back to the time
when he found it necessary to offer low rate
to the timbermen of Oregon and Washington in
order to get loads for which had originally
gone West laden with merchandise. He said:
In order to put ourselves In safe position
We had to buy the Burlington road; it gave
the market for Western stuff that we had
TO bring back, and ii afforded US a connection
IN the East with all the producers, and IL COM
plemented the conditions that were necessary.
He also dwelt on the paramount importance OF
the coal problem in connection with the opera
ton Of railroads. and on this point said:
We were far from coal and far from a market
for our timber. We were at the mercy of a
possible coal famine such a famine would
be existing now were it not for the unusually
mild weather We needed more than connec-
ton, we needed connection which we could
control. 1 familiar with the railroad stua-
ton knew that the Burlington reached the
prairies where timber is needed. and I knew
that by the Burlington could have a n
fnection with the coal mines, which would put
us on q safe ground in respect to fuel. Further
more, tne burlington could be purchaSeQ SlU,WDD
mile cheaper than any other granger road,
everything considered. friend of mine. a
neighbor, told that for lumber market he
would rather have the State of Iowa than any
other five States. Perhaps you can tell me of
road which reaches Iowa points better than
the Burlington? 1 know OF none.
Mr. Day attempted TO show by long line of
questions that the real reason for taking over
the Burlington TO form a sort of trust,
whereby Northwestern rates would be absolutely
in the hands of Mr.. Hill and his friends. To
this Mr.. Hill reiterated his previous statement
concerning the purchase of the %"
SIS II true that before you purchased the Bur-
iington you proposing to buy the st. Paul?"
asked Mr.. Day.
No. sir: offer made about selling the
ST. Paul and / simply told them it could not be
done. for two reasons. simply because 1t was
against the law, and the other that the ST. Paul
gave nothing that practically had not be-
fore would buy it,
Yet before fixed price laid the st.
Paurs stock, were you your colleagues not
endeavoring to secure the st. Paul?"
NO. sir; the first thing heard of 1t an officer
connected with the st. Paul asked us to take 1t
and told him no."
Mr.. Day then asked the witness II after the
agreement 10 organize the Northern Securities
Company had been reached he had exercised
any control over given any instructions to the
managing officers of the Northern Pacific re-
garding its operation
Mr.. Hill replied that he had issued no instruc-
tions OF any kind to the officials of the Northern
instructions to the officials of the Burlington.
but when they had come to him for advice
they had received it. Occasionally he had voun- |
teered advice and thought" they would listen