The herald-advance. (Milbank, S.D.) 1890-1922, 1902-01-03
MERGER WILL BENEFIT NORTHWEST
EACH COMPANY WILL BE OPERAT-
ED SEPARATELY As HERE
TOFORE.
WILL PREVENT UNION PACIFIC
GETTING CONTROL OF THE NORTH
ERN PACIFIC AND DIvERTING
TRADE SOUTH. &

merger Of the Great Northern, the North
ern Pacific and the Burlington railroads
under the Northern Securities company
and explaining the purpose OF forming
the securities company:
7 nave been absent from Minnesota for more
than two months and during that time there
has arisen a wide discussion Throughout tne
state of what has been generally called q con-
solidation or q merger OF the Northern racine
and Great Northern railways. and IN TINS ais
cussion statements have been made which are
no widely different from the facts that l Ieel
called upon to make . conservative statement
Of lust what has been done in the past ana
what will be done In the future.
When the Northern Pacific failed and the
Banking house Of J. p. Morgan & Co. reorgan-
ICED it, myself and friends were holders OF a
large amount of that company's securities
After the reorganization was completed We
BOUGHT about $26, 600, 600 OF Northern Pacific
stock, both common and preferred. Some OF
this stock was afterward sold by individuals.
nut a larke amount has been held from that
time to the present.
About a year ago the Union Pacific, company
bought the Huntington and other interests In
the Northern Pacific and at the same time
made an effort to buy the control OF tho chi
cago. Burlington q Quincy.
with these lines in the hands OF the Union
Pacific interests both the Northern Pacific and
Great Northern would be
Largely Shut Out
OF the States Of Nebraska, Kansas. Missouri
South Dakota. Iowa, Illinois and Wisconsin,
except by using other lines Of railway, some
OF which were in the market for sale and might
At any time pass under the control OF or be
combined with the Union Pacific interests.
We then, with the Northern Pacific, made
proposals to the directors OF the Burlington to
buy their entire property. When this transac-
ton was about being closed the people who
represented the Union Pacific company, and
who had previously tried to buy the Burlington.
asked to be allowed to share with us in the
purchase of that company: this proposal we re-
fused for the reason that 1t would defeat our
object in buying the Burlington. and further it
was against the law OF several Of the states
in which the largest mileage Of the Burlington
was located.
At that time. against the opposition of the
moro southerly lines, both the Northern Pacific
and Great Northern had put into effect a low
colonization rate and were carrying daily
thousands Of people into the Northwest. many
OF whom were coming from Kansas and Ne
braska, along the lines Of the Union Pacific.
This movement was At Its height in the
month of April and after we had closed
the purchase Of the Burlington the Union Pa.
cinc people, undertook the boldest effort that
ever was made in this country and bought
over sixty millions OF the stock OF the North
ern Pacific in the markets OF Europe and the
and after Messrs. Morgan & Co. were aware
of the action OF the Union Pacific people It was
IO0nQ IndI IOKGtncT we Helu &UOul
of Northern Pacific common stock and, mas
much as the common stock, by right OF q con-
tract made with the preferred stcckholders
when the company was recognized and the
stock issued, had the privilege OF
Psying on the Preferred
stock at par on the first day of January in any
year until 1917. Messrs. Morgan & Co. then
bought in London and New York about 18. O0O.-
900 Of the common stock Of the Northern Pa
CHIC; at the same time the Union Pacific in
terests. having already so large an Investment.
bid the stock up until there was the largest
stock corner ever known; the common stock
share.
L explained to my friends how that. with
control Of the Northern Pacific. the Union Pa
cinc would control the entire Northwest and
OF the West from Mexico to the Canadian line.
except for the Great Northern. So great was
the effort to get this control that one OF my
friends in London. who owned 100000 Of
Northern Pacific common, was offered and re-
fused 81. 0Oo.o 900 for his stock. The result
was that Messrs. Morgan & Co. and ourselves
owned 100000 out OF 1000. 900 OF the
Northern Pacific common. with the privilege OF
saying of the 70, ooo. 600 Of Northern Pacific
81. 000. 900 Of the common and about $1,000, 600
OF the preferred, which was . clear majority OF
all the stock Of the Northern Pacific. and
Pacific railway and through that ownership .
control OF one-half the Burlington. !.
When it was known that these preferred
shares could and would be paid of, and before
the annual election. mutual negotiations result
ed in Mr.. Morgan giving them a representa-
tive in the Northern Pacific board. At the
came time / was elected a member Of the
Northern Pacific board. When I was advised
OF my election I notified them that
Ceuld Not Legally Act
a. . director Of the Northern Pacific and
Great Northern at the same time and I re.
signed after the FIRST injecting of the board.
Several Of the gentlemen who have long been
interested in the Great Northern railway and
its predecessor the st. Paul. Minneapolis &
.>kA~A ~>-a-~~~ ~~I r hANA 1uyoV ~ hAAn
among its largest sharehc,' ers, but not tho
holders OF q majority Of its stock. whose ages
are from seventy to eighty-six years, have de-
sired to combine their individual holdings in
corporate form, and in that way secure per-
manent protection for their interests and =
continuation Of the policy and management
which has done 20 much for the development
OF the Northwest and the enhancement Of
their own property IN the Northwest and else
where. Out Of this desire has grown the
Northern Securities company.
1t became necessary Tin order to prevent the
Northern Pacific from passing under tho con-
ths joint control Of the Burlington to pay of
the seventy-nve millions Of Northern Pacific
preferred. The enormous amount OF cash re-
Quired for this purpose from . comparatively
small number Of men made 1t necessary for
them
TO Act Together
IN . large and permanent manner. through the
medium - q corporation. and the Northern
Securities company Afforded them the means
Of accomplishing this object without the neces-
sity Of creating a separate company to finance
the transaction for the Northern Pacific;
WHILE. at the same time. the credit OF the
Northern Securities company would be much
stronger - 1t would also hold = considerable
amount Of Great Northern and other securities.
Tho Northern Securities company is organ
lxed to deal In high-class securities. to hold
the same for the benent Of its shareholders and
TO advance the interests of the corporations
whose securities 1t owns. Its powers do not
include the operation OF railways. banking.
mining nor the buying or selling Of securities
or properties for Others on commission: It Is
purely an investment company and the OBJ
3ect Of its creation was simply to enable those
who hold Its stock to continue their respective
interests In association together and to pre-
vent such interests from being scattered by
death or otherwise: to provide against such
attacks - had been made upon the Northern
Pacific BY Z rival and connecting interest,
whose main investment Was hun1rAdD Of