Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1902-05-16
WHY AND HOW
THE MERGER WAS ORGANIZED
BY THE RAILROADS.

tiOns. Say the Securities Company's Advo
Gates. and Would Enable 1t to Develop the
Wide Middle West by Aid of Foreign Trade
and Give Stability to Enterprise of Worle
Wide Importance - The Position Is In
scniousIy Stated and Will Be Read With
Interest.
ST. Paul Pioneer Press.
The answer of the Northern Securi-
ties is unique and of especial interes,
because the attorneys for that com.
pany, Messrs. John w. Griggs and
George b. Young, have included, in
addition to the technical and legal re-
ply to the plaintiffs petition. concise
statement of the defendants case
They explain the origin of the so.
called merger and the business policy
and purposes which prompted the or.
ganization 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 fol-
lowing:
Answering the petition. this defend.
ant, upon information and belief, says
that the facts as to tho purchase Of
the shares of the Chicago, Burlington
and Quincy Railroad company (here-
matter called the Burlington company
and the planning and formation of
this defendant, and the motives, in
tentions and purposes of the persons
and corpor ations 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 company and its directors con.
templated the necessity OF creating for
the line not merely State and inter.
state but an international commerce.
Nearly all the country traversed or
reached by this line was then. but
sparsely settled, or not settled at all.
1t was principally agricultural, graz
ing or timber land, with mineral de-
posits in the mountain ranges believed
to be large and valuable, but not de.
veloped or explored. Whatever COM
modities the region might furnish for
carriage would he raw material, of
great weight and bulk in proportion to
its value, which would not bear trans.
portation to market except at a low
mileage rate, such as could be made
possible only by every practical reduc-
ton in the cost of transportation. The
available market for all such products
was far from the places OF production.
In Washington and Oregon are the
largest and finest bodies of standing
timber in the United States, the best
market for which is in the prairie
States Of the Mississippi valley east OF
the Rocky mountains; but the lumber
and shingles from the Pacific coast
would not bear the cost of transporta-
ton to those States If the cars carry.
ing them had to be hauled back empty,
or nearly so, for distance OF from
one thousand five hundred to two
thousand miles. And the same is true
OF the other products. On the other
hand, the unoccupied or sparsely set
tied country along the line. or reached
by it, could not furnish a market for
commodities enough to load the re.
turning cars; the result being that
unless the company could secure traf-
fic for carriage beyond the Pacific
coast no great traffic either way could
exist or be created.
To meet these conditions the Great
Northern company not only went to
great additional expense in the con.
struction OF it's line to obtain gradi.
ents lower than those OF any other
line to the Pacific coast. but also made
great efforts to create and increase in
the countries of Eastern Asia de-
mand for the products OF this country
and soon after the completion OF ite
railway in 1893 it induced japanese
company to run line Of steamships,
connecting with its railway, on the
route between Seattle and the ports ol
Japan, China, and Russian Siberia and
succeeded in creating and building ur
q commerce in which the flour manu-
factured along its line, cotton, (botl
raw and manufactured), iron and steel
Especially steel rails and plates), ma
chinery, and such other manufactures
Of this country as a market could bs
found or made for in Eastern Asia
have been carried to Oriental ports
and return cargoes of such Orienta
products as are consumed in this coun
try have been brought back. A larg'
west-bound, as we'll as an increased
east-bound, traffic has thus been Sc
cured by the company, enabling it tt
make such rates on lumber and othe
products OF the country served by it Al
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 North
ern company caused to be begun tn
construction of steamships to be rul
from Seattle 10 ports in Japan. Chin
and the Philippines, which, from thei