The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-03-20
MERGER CASE HEARING
PETER POWERS SUIT AGAINST THE
JAMES j. HILL COMPANIES.
Testimony of j. s. Kennedy, a Bank
er, Who Purchased Large Blocks
of Railway Securities.

NEW YORK, March 19.-There was a
hearing in this city to-day before Richard
A. Mabey, special examiner in the suit of
Peter Power against the Northern Pacific
Railroad Company. The object of the suit
is to overthrow the transfer to the North
ern Securities Company of the control of
the Northern Pacific.
j.. S. Kennedy, a banker, was the first
witness to-day. He was questioned by w.
A. Lancaster, of Minneapolis. counsel for
Power. Mr.. Kennedy said he went TO
Europe in the spring of 1901, and when he
left James ]. Hill, Lord Strathcona, Willis
James, George F. Baker, himself and other
friends of James j. Hill owned a majority
of the common stock of the Northern Pa
cific. The witness understood that much of
the stock was held by j. Pierpont Morgan
q Co. The witness did not know before he
went to Europe that E.. III. Hartman
sought TO acquire a majority OF Northern
Pacific common. He learned from j. Z.
Morgan about May 3 or 6 that some inter
ests in New York were making large pur-
chases of Northern Pacific and later he
was informed that these purchases were
for Mr.. Hartman. In the following August
Mr.. Kennedy says he acquired 1900 shares
of Northern Pacific from j. Z. Morgan =
Co..
Mr.. Kennedy said he was told in August
that j. z. Morgan & Co. would like to dis
pose of some of their holdings, so he agreed
to take 10000 shares. In reply to a question
he said he had not heard that between
May 1 and May 9 j. Z. Morgan had pur-
chased from SIC, 100000 to SIS, 100000 of the
stock. Mr.. Kennedy said the Northern Sc
curities Company had been thought of for
many years before it was formed. 1t was
true, he said, that Mr.. Hill and his as
sistants had no difficulty in e~lecting direc-
tors of the Great Northern Railroad. Orig
inally the plan was TO turn over to the Sc
curities Company only the Great Northern
shares held by the controlling interest, but
later this was modified SO as TO allow all
stockholders to convert their shares into
Northern Security stock.
I'm the autumn of 1901 did not those gen.
tlemen have "A majority OF both the North
ern Pacific and the Great Northern stocks? %
MI. Kennedy was asked.
II did not know about the stock of the
Great Northern. l did know they held a
majority of the Northern Pacific stock, at
least l was SO informed"
Mr.. Kennedy said the object of the North
ern Securities Company was to protect the
holdings of the Northern Pacific against
such an attack as occurred here last
spring and which resulted in the panic. He
said that originally II was the idea TO poCl
the Northern Pacific stock only.
Was il the purpose of you gentlemen 10
place the stock OF the Northern Securitie 5
Company on the market for miscellaneous
purposes2" asked Mr.. Lancaster.
L cannot remember that any such thing
was ever discussed or suggested"
Was 1t not your intention TO acquire
other property besides the Northern Pa
cifc and the Great Northern"
Mr.. Kennedy said there had been sug-
g~estions in that direction. He knew moth
ing of his own knowledge about a pur-
chase of ST, ZOO or $l2. O.OOO OF Great
Northern stock by Mr.. Hill He understood
the stock was purchased, but he did not
know how much. He purchased IL, 900 shares
himself.
The examiner next turned his attention 10
the election of Mr.. Hartman 10 the di-
rectorate of the Chicago. Burlington K
Quincy. Mr.. Kenne said he could not give
him any information as TO why Mr.. Harri-
man was elected a director of the Burling-
ton.
do you know when Hartman sold his
Northern Pacific stock TO j. +. Morgan"
asked Mr.. Lancaster.
in the autumn, l believe" replied Mr..
Kennedy.
DO you know that at the time their
names were proposed for election on the
board of directors of the Northern Pacific
Company the relations between Mr.. Scnim
and Mr.. Hartman were very much
strained" asked the examiner.
Mr.. Kennedy answered that he did not
know IL. This closed the examination OF
Mr.. Kennedy.
George j. Perkins and Charles s. Steel.
members of the firm OF j. y. Morgan * Co.
were 10 nave been heard to-day, but il was
impossible for them 10 attend. IL was then
arranged that the hearing should be re-
sumed at 2 o'clock tomorrow afternoon.
After Mr.. Perkins and Mr.. Steel have tes-
tilted Jacob L. Schiff will be called.