The times. [volume] (Richmond, Va.) 1890-1903, 1902-01-04
CONSOLIDATION.
yirgInian-Pilot Sc

CONSOLIDATE N.
The Norfolk yirginian-P Pilot says:
title s,,rprise Will DO occasional by
f the prompt dissolution, by the Feoe1 q
S.Ircntt Court, of the injunction restrain
,nr the Northern Pacific from retiring
its preferred stock that is to say, pre-;
VENTING the consolidation OF the ~ oIln-
.ern Pacific and Greet Northern tnrou y.
the device OF the Northern secuf sE-s'ss
Company ..,...,
g Tha courts have not unnaturaily taken
their cue from the Attorney-aehef 1850 : "a
has steadfastly refused to pI9cee g.
aEainst any combination Of Wea!tn' =.
any sort Indeed, the legal machinery ~
the Federal Government, from Top 70
bottom, has been at a stanostl ts4Wnlie
the Industries .of thes country were Gay
sbv day passing practically into the cor
fro,s 81 monopolies, Why should an eS-
ception be made as ito the railroads III
question? g
1t is, moreover, notorious that a rali-..
way company seldom falls TO make lts
contention prevail in the Federal Courts
What the basis Of such uniform success
10 It is not worth while here to INQUIRE.
Maybe, the railroads are always Flsh!.
ANYWAY. the Northern Pacicfic case Is
typical.
pO1IlL sOl 5ldAis -SAASA
ton of consolidation involved IN ems
particular decision of the court judge
sLochren simply held that the Nortnern
Pacific Company was acting within the
authority OF its charter, Of the contract
entered into between it and its stock
holders as incorporated In the certi-
fcates Of preferred stock. and OF the
agreement entered into November l3th'
in attempting to retire the $75,o00,oo0 OF
preferred stock But he also held that
railroad corporations could not DO IN
directly what the law prevented them
from doing directly, and that any method
by which consolidation Of two or more
competing and parallel lines would pe.
brought about would be illegal; and a
writ of injunction would properly re-
strain the contamination of the Plan.
But there was nothing In the case as now
presented to him that would Indicate
the stockholders of the Northern Paclnc
Railway Company were attempting such
a consolidation or merger: And the court
finally made this ruling:
..If the Northern Pacific Railroad COM
!pa1ly never thought Of consolidation, put
to pay off the preferred stockholders anu
issue common stock, it had authority TO
do that, and that of itself would Ger
tainly have no tendency toward con.
solidation. If the same persons own all
or substantially ali OF the stock OF both
companies, do not see the necessity or
forming the Northern Securities Com
ca. no ny nf carving,
that purpose out. They might do it Just
as well without 1t. 1t seems to me that.
the preferred stock may all be retired
without the Northern Securities Com
pany being formed. II it is formed, and
if 1t is unlawful, its unlawfulness con-
sists not in the retiring of this stock. but
in the acts which result in the forma-
tion of the company and placing other
securities in that company. It seems to
me that this injunction should be dis
solved, at least, so far as it assumes 70
prevent the retiring of the preferred
stock. And see no reason why it should
be retained for any purpose"
It is an open secret that the Northern
Securities Company was organized for
the purpose of acquiring the controlling
shares of the Northern Pacific Railroad
anu tIle INQl ttiS1ii 4SaiiAeto I'm
pany; it is an open secret that the
Northern Securities Company has So
cured the controlling shares OF these
two railroad companies. and that the
purpose is to operate them in harmony.
but as to whether or not the Northern
Securities Company has violated the law
in doing this. the court did not decide.
But, granting that these roads are to
be consolidated, why should our esteemed
Norfolk contemporary object? Why has
our esteemed contemporary a. hyphenated
name? Because two newspaper corpora
tons in Norfolk, each owning a separate
newspaper. consolidated and brought their
papers together under one management.
One of these corporations conducted the
Norfolk Virginian and the other con-
Quoted the Norfolk, Pilot. The officers OF
the two corporations decided that It
would be good business for them to con-
solidate, and they did SO, in a perfectly
legitimate way, and as a, result the peo-
pie of Norfolk got a better paper at one
price than either the Virginian or the
Pilot had been, and the advertisers got
the benefit of tho combined circulation
without any material increase In price.
The Norfolk Virginian-Pilot is the en-
bcdiment Of the corporate principle, and
we cannot understand how our esteemed
contemporary can consistently object to
the right of consolidation when it is eS-
e1cised by others.
RLAcKsInNE.S PROSPERITY.