The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1902-05-16

| cred by the stock than that for which
the stock of any other large and we'll es-
tablished system, in the same general ter
ritory, could then have been bought.
The purchase of the Burlington stock
| by the Northern Pacific and Great North
| ern companies in equal parts served each
| company as well as if it were the sole
| owner of such stock, while such purchase
might have been beyond the financial
| means of either company by itself
The Great Northern and Northern Pa
cific companies therefore each purchased
an equal number of shares of the Bur-
| lington stock as the best means and for
| the sole purpose of reaching the best mar
kets for the products of the territory
along their lines, and of securing connec-
lions which would furnish the largest
amount of traffic for their respective
roads, increase the trade and interchange
of commodities between the regions ira
versed by the Burlington lines and their
connections and the regions trayersed or
reached by the Great Northern and
Northern Pacific lines, and by their con-
Meeting lines of shipping on the Pacific
Coast These connections and such in
| terchange of traffic were deemed to be
| and are indispensable to the maintenance
of their business, local as well as inter-
| state, and to the development of the
country served by their respective lines,
and OF like advantage to the Burlington
| lines and the country served by them,
and strengthen each company in the COM
petition with the more southerly lines to
| the Pacific Coast, with the Canadian Pa
cific railway, and with European carriers,
for the trade and commerce of the
Orient.
In such purchase there was no pur-
pose to lessen any competition of the
Burlington lines with those of either of
the purchasers, for they are not Compel
| 1 tive on 70
tween the purchasers. Such purchase
was not intended to have, and it cannot
have, any such effect.
The purchase of the Burlington stock
was not made in view of the formation
Of this defendant, but solely from the
motives and with the purposes already
stated.
No Connection with the PearsaI Case.
The project of forming a holding COM
pany of any kind, was not the result, in
any way, of the failure of the plan which
was defeated by the decision of the SUI
preme court in the Pearsall case. There
was no connection whatever between the
two.
The project of a holding company which
finally developed into the formation of
this defendant had it's inception years
before that date, among several gentle
men, not exceeding ten in number, who
had been large shareholders in the Great
Northern company and its predecessor,
the st. Paul, Minneapolis and Manitoba
Railway company; some of them from the
original organization of the latter COM
pany in 1879, and others from dates not
long after that time. They have never
held majority of the stock of the Great
Northern company, but have taken an ac-
tive interest in its policy and administra-
ton; have aided it when necessary in
| fin q NO mo re +ol 70
gether in promoting it's interests; have,
with some exceptions, served from time
to time as directors and officers (Mr. Hill
having been president of the successive
companies since 1892; and by reason of
their active interest in the company and
services to it, have influenced, to a large
degree, its policy and management. AS
far back as 1898, most of these gentle
men being well advanced, and some far
advanced, in years, they began to dis
cuss together what would be the effect
upon the policy, which under their in
fluence the company had pursued with
great benefit to its shareholders, and the
public, should their holdings by death or
otherwise become scattered, and by what
means their holdings could be kept to-
gether so as to secure the continuance
of such policy in the management of the
company. 1t was considered that if a
company should be formed to which they
might transfer their individual holdings,
their shares were likely to be held to-
gether, so long as the majority in the
holding company should so wish, and this
would tend to give stability to the policy
of the Great Northern company, be of aid
to it in financial operations, and maintain
the value of their investments. These
conclusions were the result of various
consultations among the persons men
toned, or some Of them, but no definite
agreement was made for forming such a
company or binding any one to transfer
his shares to it if formed.
Purchasing Northern Pacific.
From time to time, beginning with the
reorganization of the Northern Pacific
company in 1885, Mr.. Hill and said other
Great Northern shareholders who had dis
cussed with him the plan of forming a
holding company, had made large pur-
chases of Northern Pacific shares, indi-
vidually, each for himself without any
concerted action, and solely as invest
ments. About May /, 1901, their aggre-
gate holdings of the common stock of the
Northern Pacific company amounted to
nearly twenty million dollars ($2O, 600 000)
of the eighty million dollars $3.50, 600, O0O)
common stock of the company
amounting to seventy-fve million
dollars ($75000,000), with the same vot-
ing power as the common stock. At this
time the firm of J. P. Morgan & Co. held
about six million dollars ($6,000, 000) of
the common stock. In the fall of 1900
Mr.. Hill and said Great Northern share
holders discussed the question of putting
their holdings of Northern Pacific stock
into the proposed holding company, as
well as the suggestion that all the other
stockholders of the Great Northern COM
pany should be given the opportunity of
selling and transferring their shares to
the holding company, and that its capital
stock should be made large enough to en-
able it to buy such holdings, though it
was not known that the holders of any
considerable amount of Great Northern
stock. other than those, above named,
would desire to make such transfer
Move of the Union Pacific.
AT the time of the purchaseNof the Bur-
lington shares, it was not contemplated
by either purchasing company, or it's
shareholders. that any alliance between
the purchasing companies or among their
shareholders, was needed to preserve to
each company it's fair share of the adj
vantages secured by the purchase. 1t
was thought that the manifest interest
of each company rendered any further
guaranty or security needless. But pend
ing or just after the conclusion of the
negotiations for the Burlington stock,
parties acting. in the interest of the Union
Pacific Railway System, did purchase