The pioneer express. [volume] (Pembina, Dakota [N.D.]) 1883-1928, 1902-05-23
ORIGIN OF THE
RAILWAY MERGER
WHY SECURITIES COMPANY WAS ORGANIZED
answer Filed in U. S. Circuit Court Gives Purpose
Tor Which Company Was Formed and What 1t
Was Expected to Accomplish-Tbe Answer:

siiC luulDeE VI lle FdCluC COAST. 1Ney
| reach Denver, Kansas City, Omaha and
Aurora, where are located the principal
! shelters of silver-lead ores, such as are
mined near the lines Of the defendant
| railway companies.
They reach Omaha, Kansas City and
Chicago, where are the great packing
houses and the great markets for the
Dakota. Montana, Wyoming, Idaho, Ore
gon and Washington.
They reach st. Louis and Kansas City,
connecting them with lines traversing
the cotton states, from which come raw
and manufactured cotton required for
shipment to China and Japan.
At Chicago and st. Louis they con-
meet with the lines which reach the
points of supply of manufactured iron,
steel, machinery and other manufactured
articles that find market in Japan and
China.
Reaches Coal Supply.
The Burlington line southwark from
Minneapolis and St. Paul along the Mis-
sissippi river reaches the great coal dep
osits Of Southern Illinois, the largest
west of Pennsylvania and West Vir-
ginia; and it's light gradients and con-
sequent low cost of transportation make
it possible to supply such coal to points
on the lines of each defendant railway
company east of the Missouri river, re-
lieving the people and the railways of
that territory from entire dependence
upon the Pennsylvania and West Vir-
gnia mines, the supply from which is
yearly becoming most costly and less
certain.
The price paid for said Burlington
stock was lower per mile of main track
covered by the stock than that for
which the stock of any other large and
well established system, in the same
general territory, could then have been
bought.
The purchase of the Burlington stock
by the Northern Pacific and Great
Northern companies in equal parts
served each company as we'll 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
citic 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
markets 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 line and their
| connections and the regions traversed or
reached by the Great Northern and
Northern Pacific lines, and by their con-
recting 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 we'll 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
ific railway and with European carriers,
for the trade and commerce of the Orient.
In such purchase there was no purpose
to lessen any competition of the Burling-
ton lines with those of either of the pur-
| chasers, for they are not competitive, or
to lessen any competitions between the
purchasers. Such purchase was not in
| tended toha We, 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 alread,
| stated.
Origin of Holding Company.
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 holding company which
finally developed into the formation OF
this defendant had it's inception years be.
fore that date, among several gentlemen
not exceeding ten in number, who haG
been large shareholders in the Grea,
Northern company and it's predecessor
the st. Paul, Minneapolis and Manitoba
| Of A.
original company in 1870, and others from
dates not long after that time. They hav,
never held majority of the stock of tn,
Great Northern company, but have take1
an active interest in its policy and admin
istraton; have aided it when necessary il
financing its operations; have acted to
gether in promoting it's interests; have
with some exceptions, served from time t
time as directors and officers (Mr. Hill
having been president of the successive
companies since 1882; and by reason O
their active interest in the company an
services to it, have influenced to a larg
J degree, its policy and management A
far back as 1S03 most of these gentleme
being well advanced, and some far ad
vanced, in years, they began to discus
together what would be the effect upo
the policy, which under their influence tn
company had pursued with great benef
to its shareholders and the public. shout
/ Llclr UOlulUSS ny UedLn OF OLneTW1Se Oe
come scattered. and by what means thei
e holdings could be kept together. so as t
e secure the continuance of such policy
q the management Of the company. It wa
considered that If company should b
formed to which they might transfer the
: individual holdings, their shares WEI
: likely to be held together, so long as tn
: majority in the holding company shoul
Il so wish. and this would tend to civ
stability to the policy of the Great Nortl
ern company, be of aid to it in financi
: operations, and maintain the value
: their investments. These conclusions wei
y the result of various consultations amor
e the persons mentioned, or some of Their
e but no definite agreement was made I,
), forming such company or binding ar
y one to transfer his shares to it If forme
n From time to time, beginning with Il
= reorganization Of the Northern Paci
y company in 1896, Mr.. Hill and said 9th
II Great Northern shareholders who h;
L discussed with him the plan Of forming
,e holding company, had made large pu
le chases of Great Northern shares, indivi
y ually, each for himself without any co
g certed action, and solely as investment
II About May 1, 1901, their aggregate hol
T. ings of the common stock OF the Mort
Fl ern Pacific company amounted to neal
t.lstwenty million dollars ($20. 600, COO of t
n eighty million dollars $50. 600, 0OO) col
{S11St oil