The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-10-24
CL0UGH ON THE
WITNESS STAND
Why Securities Company Was
incorporated in New Jersey.
THE LAW HAD BEEN TESTED
HEARING ADJOURNED TO BE
CONTINUED IN NEW YORK.


OT. PAUL, Oct. 2s.-The hearing in
this city OF Special Examiner F. G..
Ingersoll. appointed to take testi-
money in the suit Of the United States
against the Northern Securities com
pany. the Great Northern and the Nor
thern Pacific company and others under
the Sherman anti-trus law, was con-
cluded late this afternoon and an adj
journment taken TO New York Nov.
10 next, when the examination OF wit
nesses residing in or about that e:tv
will begin. The hearing in this city
has lasted four days, Presidents Hill
of the Great Northern, Harris OF the
Burlington and Mellen of the Northern
Pacific being the principal witnesses
The other with sses were Colonel w.
p. Clough, vice president and counsel
of the Northern Securities company
and Frederick Weyerhauser' the big
lumberman Today's witnesses were
Colonel Clough and President Mellin,
but nearly the entire day was devoted
to the former. the governments attor-
neys paying particular attention 10 the
matter of rates and joint rates, various
schedules of tariffs having been intro
QuCeQ INTO the TcCoIus
Colonel Coughs Testimony.
Colonel w. p. Clough Unidentified for
the record a map of the territory COW
cred by the railroads interested Tor the
purpose of demonstrating that even II
il had been so desired it would not
have been possible for them to control
the rates completely on 10 per cent OF
the traffic carried in the territory
through which they run.
The witness told in some detail Oh
the organization fthe Northern Sc
curities company and its incorporation.
The capital stock was placed at hlSh
figure to make possible the acquire
ment of any desired railroad or indus
trial stock, The map of the northwest
| being placed in evidence, Colonel
Clough told of the connecting points OF
the Northern Pacific and Great North
ern and their interests in North Da-
kota. Montana and Washington. he
explained the meaning of Joint tariffs
and identified documents showing that
! the nature of such tariffs, which were
/ then placed in the record.
/ "Joint tariffs" he said, greatly IA
/ cilitate the movement of freight. This
| Arrangement makes a single route out
/ of several independent ones and is the
particular point in which the railroads
| of the United States are far superior
to those of Europe"
Had Been No Contest.
Colonel CIough was ross-examined
bv Special Attorney Beck, who sought
| to learn whether there had ever been
/ any contest with Mr.. Hill and his as
| sociates in their practical control OF
| the Great Northern. Colonel CIough
said there had not been any such con-
/ test and admitted that Mr.. Hills policy
would probably be supported also II
4 the Northern Securities company. He
| insisted that there had never been any
real attempt to consolidate the North-
/ ern Pacific and Great Northern rail-
roads and held that the only action
ever taken had been really nothing bu'
the personal Gets Of individual share
/ holders.
I Speaking of the Northern Securities
company, he said its organizers did not
adont the idea OF a trustee for theil
! stock, as they did not desire to tie W
} their stock that tight, as the stoch
} should be in such shape that 1T could
/ he dealt with. The effect of possible
/ adverse legislative action had been one
! influence in the action o fthe Northern
! Securities company as some supreme
court decisions had made little IN
! certain the question of vested rights
! and they even feared that their char
/ tiers might be taken away.
New Jersey Laws.
Colonel Clough was again on the
/ stand at the afternoon session, Assist
/ ant Attorney General Beck seeking thu
| reason why the Northern Securities
company had been incorporated in New
! Jersey. Colonel Clough alleged that II
was because the corporation laws OF
| that state had been judicially passed
on, interpreted and their validity es'
! tablished. while that the laws of New
York. under which it was at one time
| though possible to incorporate, anC
! which are similar TO the New jersey
statutes, were new laws and had never
been sustained by the courts. he de
/ MED that the Northern PACING Stock
/ holders had been consulted before the
articles of the Northern Securities com.
pany were filed, but admitted that j
p. Morgan, a large holder of stock. and
! ID. Willis James and other holders II
| both roads, had been consulted before
ARRANGEMENTS were completed and con-
sented to put their stock in holdins
| company.
Much time was given to questions
about increases in the capital stock OF
! the Great Northern, all of which
/ Colonel Clough said had been sold al
par to stockholders for cash or II:
{ equivalent, and he insisted that tbs
I SOP .O00, GOO par value of Great Northern
stock bought by the Securities com
/ pany represented a genuine valuation
and not any inflated valuation. Tit
Securities company held proxies for al
Northern Pacific and Great Northern
! stock deposited. He admitted that i
( was in both cases a majority and tina
there was nothing 10 prevent the cleo
ton of identical boards of directors o.
| both roads except the laws OF tn
country, which positively forbid suci
| action.
Rates Gone Over.
The rates given in the various docu
ments presented today were gone owe
at considerable length. Mr.. Day, attor
| new for the interstante commerce com
! mission, wanting to have various points
in the schedules more clearly stated II
| the records. Colonel Clough said tina
| since he had gone east his connection
| .-.s.L H. f.,aot NYortharF, had hnen sew,