Courier Democrat. (Langdon, N.D.) 1891-1920, 1902-05-15


general of the United States against the
Northern Securities company, the Great
Northern Railway company the North
ern Pacific Railway company and others
Each of the three defendant companies
filed Its separate answer. The answers
are substantially the same in each case
except in so far as they are varied to
meet the technical differences in the
names and organizations of the various
companies.
The answer of the Northern Securities
is unique and of special interest be-
cause the attorneys for that company.
Messrs, John w. Griggs and George B.
Young, have included, in addition to the
technical and legal reply to the plaintiffs
petition, concise statement of the de-
fendant's case. They explain the origin
OF the so-called merger and the business
policy and purposes which prompted the
organization of holding company. The
explanation is the more interesting part
Of the answer and is herewith presented
first and out of its regular order with the
technical portions following:
COmpany's Explanations.
Answering the petition, this defendant
up on information and belief says that
the facts as to the purchase of the shares
Of the Chicago. Burlington and Quincy
Railroad company hereinafter called the
Burlington company and the planning
and formation of this defendant and the
motives, intentions and purposes of the
persons and corporations concerned in
these enterprises, or either Of them, were
not as enormously stated in said petition,
but were. and are, as follows:
When projecting the line of the Great
Northern to the Pacific coast, that COM
pany and Its directors contemplated the
necessity of creating for the line not
merely state and interstate, but an inter-
national commerce. Nearly all the coun-
try traVersed or reached by this line
was then but sparsely settled or not set
tied at all. 1t was principally agricultur-
al. grazing or timber land, with mineral
deposits in the mountain ranges believed
to be large and valuable but not deyel-
oped or explored. Whatever commodities
the region might furnish for carriage
would be raw material, of great weight
ana bulk in proportion to its value, which
would not bear transportation to market
except at low mileage rate such as
could be made possible only by every
practicable reduction in the cost OF trans
Eortation. The available market for all
such products was far from the places of
production.
est and finest bodies of standing timber
in the United States, the best market for
which is in the prairie states of the Mis-
sissippi valley east of the Rocky noun
tains; but the lumber and shingles from
the Pacific coast would not bear the cost
Of transportation to those states if the
cars carrying them had to be hauled back
empty. or nearly so, for a distance of
from one thousand five hundred to two
thousands miles. And the same is true of
the other products. On the other hand,
the unoccupied Or sparsely settled coun-
try along the line, or reached by it, could
not furnish a market for commodities
enough to load the retaining cars; the re-
suit being that unless the company could
secure traffic for carriage beyond the Pa
cific coast no great traffic either way
could exist or be created.
Asiatic Trade.
To meet these conditions the Great
Northern company not only went to great
additional expense in the construction of
its line to obtain gradients lower than
those of any other line to the Pacific
coast, but also made great efforts to Gre
ate and increase in the countries of East
ern Asia a demand for the products of this
country; and soon after the completion of
its railway in 1898 it induced a Japanese
company to run line Of steamships, con-
Meeting with it's railway, on the route be-
tween Seattle and the ports of Japan,
China and Russian Siberia and succeeded
In creating and has since been actively
engaged in building up a commerce in
line. cotton (both raw and manufactured),
iron and steel Especially steel rails and
plates), machinery, and such other manu-
dactures Of this country as market
could be found or made for in Eastern
Asia, have been carried to Oriental ports,
and return cargoes of such Oriental prod
ucts as are consumed IN this country have
been brought back. A large west-bound,
as we'll as an increased east-bound, tart
fic has thus been secured by the company,
enabling it to make such rates on lum-
Der and other products Of the country
served by it as permit them to be shipped
to Eastern markets with profit to the
shippers.
One year before the Burlington pur-
chase, this Oriental traffic had reached
such proportions that the Great Northern
company caused to be begun the construc-
ton of steamships to be run from Seattle
TO ports In Japan, China and the Philip
pines, which, from their great carrying
capacity (being the largest in the world,
will be able to carry at very low rates
Nt full cargoes can be securely, and thus
enable the company to move the largest
volume Of west-bound traffic (and also Of
east-bound traffic. at the lowest rates.
In the interstate and international COM
merce which the Great Northern COM
pany. has thus built up, it completes both
in this country and on the ocean with the
the Canadian Pacific and at the Oriental
ports it completes for commerce of the
world. Its rates are and must be made
In competition with the rates of ocean
carriers and by way of the Suez canal.
The policy thus followed by the Great
Northern company in building up an In
ternational, and thereby interstate, COM
merce has been followed by the Northern
Pacific. company. since its reorganization
In 1896.
Placed at a Disadvantage.
In creating and maintaining this COM
ipetitive interstate and international COM
merce both the Great Northern company
and the Northern Pacific company were
hampered and placed at disadvantage
with the other transcontinental railways,
as well as with European competitors, by
the want of sufficient direct connection
with the territory offering the best mar
kets for the products of the country
along their lines, and with the places OF
production and great centers of distribu-
ton from which their traffic must be
supplied. For many months before the
purchase Of the Burlington shares, they
had considered the best means of getting
closer to such markets and sources OF