The Cook County herald. [volume] (Grand Marais, Minn.) 1893-1909, 1902-06-21

United States circuit court by the defend
&0ss In the suit brought by the attorney
general of the United States against the
Socenern Securities company, the Great
northern Railway company. the North
eSu Pacific Railway company and Others
Zach of the three defendant companies
dIed 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
- unique and of special interest be-
cause the attorneys for that company,
Aessrs. John w. Griggs and George B.
Young. have included, in addition to the
Sschn1cal and legal reply to the plaintiff s
Eesteion. concise statement of the de-
senoants case. They explain the origin
'ez che so-called merger and the business
policy and purposes which prompted the
organization of a holding company. The
explanation is the more interesting part
OF the answer and Is herewith presented
Nrst and out of it's regular order with the
technical portions following:
Company's Explanation.
Answering the petition this defendant
ap on information and belief, says that
'ehe facts as to the purchase of the shares
as the Chicago, Burlington and Quincy
Eeaaroad company Hereinafter called the
Sufi7ngton company and the planning
oHd FORMATION of this defendant, and the
motives, intentions and purposes of the
Persons and corporations concerned in
Shese enterprises, or either of them, were
mot as enormously stated in said petition.
Uus 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-
nasioual commerce. Nearly all the coun-
cry traVersed or reached bv this line
was then but sparsely settled or not set
sLed at all. 1t was principally agriculture
q. grazing or timber land, with mineral
oepes1ts IN the mountain ranges believed
20 De large and valuable but not devel-
'oped or explored. Whatever commodities
'sne region might furnish for carriage
would be raw material, Of great weight
and bulk in proportion to it's value. which
would not bear transportation to market
except at a low mileage rate such as
@ooId De made possible only by every
practicable reduction in the cost of trans
SoTta8ion. The available market for all
"uSn prouucts was far from the places of
production.
IN Washington and Oregon are the larg-
Hse and finest bodies of standing timber
VI enc United States, the best market for
winch is IN the prairie states of the Mis-
,eksslppl valley east of the Rocky noun
sa1as; but the lumber and shingles from
tine Pacific coast would not bear the cost
'oe transportation to those states if the
cars carrying them had to be hauled back
empty, or nearly so, for distance of
EEom one thousand five hundred to two
thousands miles. And the same is true of
fEae other products. On the other hand.
ehs unoccupied or sparsely settled coun-
Nry along the line, or reached by it, could
fA@1 surnash market for commodities
= sRsugh to load the retaining cars; the re-
"Gsst being that unless the company could
: secure traffic for carriage beyond the Pa
oa1c 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
It's line to obtain gradients lower than
those of any other line to the Pacific
coast, but also made great efforts to Gre
ace and Increase in the countries of East
&Fu Asia a demand for the products of this
country; and soon after the completion of
ssS railway in 1898 it induced a japanese
sosnpany to run line of steamships, con-
Meeting with it's railway, on the route be-
tween Seattle and the ports of Japan.
emma and Russian Siberia, and succeeded
tn creating and has since been actively
engaged in building up commerce in
which the flour manufactured along it's
sane. cotton (bOth raw and manufa ctureCD
aron and steel Especially steel rails and
ntates), machinery, and such other manu-
features Of this country as market
Gould be found or made for in Eastern
Asia. have been carried to Oriental ports,
ARd return cargoes of such Oriental prod
Sefs as are consumed In this country have
eeeo brought back. A large west-bound
GS well as an increased east-bound, tart
dc has thus been secured by the company
enabling it to make such rates on lurn-
Her and other products Of the country
4&rved by it as permit them to be shipped
20. Eastern markets with a profit to the
shippers.
0ne year before the Burlington pur-
chase, this Oriental traffic had reached
sxch proportions that the Great Northern
company caused to be begun the construc-
tfou 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
"wNh be able to carry at very low rates
'ds full cargoes can be securely, and thus
'@rRab2e the company to move the largest
volume Of west-bound traffic fand also Of
>ast-bound trafflc) at the lowest rates.
In the Interstate and International COM
snssree which the Great Northern COM
1any has thus built up, it completes both
In this country and on the ocean with the
other transcontinental lines Gncluding
'tsse Canadian Pacific) and at the Oriental
ports it completes for commerce of the
world Its rates are and must be made
fn 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
naerce has been followed by the Northern
Pacific company since it's reorganization
.en 1886.
Placed Mt a Disadvantages.
I'm creating and maintaining this COM
fuetttiVe interstate and international COM
G1erce both the Great Northern company
&na the Northern Pacific company were
fsanpered and placed at disadvantage
With the other transcontinental railways
As we'll as with European competitors, by
9Ae want Of sufficient direct connection
esfth che 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-
NA0n from which their traffic must be
supplied. For many months before the
purchase Of the Burlington shares, they
rad considered the best means Of getting
closer to such markets and sources OF
supply. The lines Of the Burlington, bet-
fer than those IF aY1v other rom panv f11ll