New-York tribune., 1902-05-06

stock. while such purchase might have been
beyond the financial means Of either company
Dy itself. The Great Northern and Northern
racine companies. therefore. each purchased an
equal number of shares of the Burlington 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
connections which would furnish the largest
amount of traffic for their respective roads. in
crease the trade and Interchange of commodities
betWe cen the regions traversed by the Burlington
lives and their connections and the regions
traNersed or reached by the Great Northern and
Northern Pacific lines, and by their connecting
lines of shipping the Pacific Coast.
In such purchase there was no purpose TO
lessen any competition of. the Burlington lines
with those of either of the purchasers for they
ar not competitive, or to lessen any competition
between the purchasers. The purchase of the
Burlington stock not made in view of the
formation of this defendant Ghe Securities com
pany). but solely from the motives and with
the purposes already stated.
IDEA ORIGINATED IN 1893.
The idea of a holding company, continues
the answer. originated among ten large stock
holders of the Great Northern and it's prede-
cessor, the Minneapolis and Manitoba Railway
Company as far back as 1893. They feared
that the possible scattering of their holdings
would result in change of the policy of the
company. At this time the idea Of holding
company was suggested, but agreement was
then made. These same stockholders. after the
reorganization of the Northern Pacific, indivdu-
ally and without concerted action, bought stock
in this company until about May l. 1901, they
owned nearly $2OOOOOOO of the $SOO01OOO
common stock, of which ]. PierpOnt Morgan *
Co. had also about $6GOoOO0
Next is recited the conferences with ]. Pier
pont Morgan, owner of the proposed holding
company as a means of protecting all interests.
and it is added:
At this time it was not expected that any
Northern Pacific shares, except the said ST.
ONO 900 -(being the combined MOrgan-Hi inter
esu would he acquired by the proposed holding
company. The organization of such company
was not dependent on anv agreement that il
should acquire majority of the shares of either
defendant railway company. IL would have
been organized if the Burlington purchase had
not been made. and if its promoters had had
no other shares 10 transfer 10 II than the
S}4.OOO,OOO of Great Northern stock and the
S2o~o0Oo of Northern Pacific stock held by
them on May /. 1901 After us oTganlzaton
this defendant bought and still holds Sl1oGn.-
OtO of the stock of the Northern Pacific Rail-
way Company, and II has also purchased and
negotiated for the purchase of the stock of the
Great Northern Company. as hereinbefore
stated
1t is denied specifically and generally that any
stock thus secured is TO be held or used for
the purpose of placing under one control the
railways of the Great Northern and Northern
Pacific companies. or their business. or 70
strain competition between the companies. or
for any other purpose than 70 manage each
of them for the benefit of their shareholders
and of the public"
ANTITRUST ACT NOT APPLICABLE.
1t is denied that such results would follow
ganization. and it Is stated that since the
Securities company formed both lines have
voluntarily so reduced rates as to decrease their
earnings by upward Of over Nl,Wo,tEp annu-
ally. II is asserted that the total amount OF
all traffic between points common 10 the two
roads is less than per cent Of the total inter
state traffic of the two companies; that the
Northern Securities Company is not a railroad
company. and has no power 10 operate railways
or control rates or restrain traffic
The answer says further:
The antitrust act was not intended 10 pre-
vent or defeat an enterprise in aid of great
competitive interstate and international COM
merce merely because such enterprise may
carry with II the possibility OF incidental re-
st-aint upon some commerce, trihing both as
respects territory and volume Nor was the act
intended 10 limit the power Of the several states
10 create corporations. define their purposes,
fix the amount of their capital and determine
who may buy, own and sell their stock
Otherwise construed. the act would be uncol-
stitutiOnal. because. -.-
The power to regulate commerce with foreisn
ma tions and among the states does not give TO
Congress the power TO regulate any Of the mat
ters above mentioned in respect % corporations
created by the States, and. because
Persons may not he deprived Of their property
without due process OF law. Ivy taking from them
the right TO sell il. as their interest may suS-
gest.
In the Individual answers it is further stated
that:
The Securities Company as existing. IS
necessary as a defensive measure against at
tennis of rival interests 10 gain control or di-
rection of one. or both defendant railway COM
ma MICS and 10 defeat the enterprise they had
undertaken Of establishing a larGe tuternau uonai
and interstate commerce. and that the erect OF
its organization on interstate commerce must
he determined upon the determination OF the en-
terprises a. a whole; and that the control ot one
OF the defendant railway companies by a rival
Interest might impose upon the other all the
burdens Of the Joint obligations incurred.
amounting To more than S22O,OOOotb. While tax
ing from il all the benefits Of the purchase Of
the Burlington shares.