The pioneer press. (Miller, Hand County, S.D.) 1893-190?, 1902-01-02
], ]. HILL MAKES
A STATEMENT
EXPLAINS THE PURPOSE OF FORM
ING NORTHERN SECURITIES
N.-.sANE.
MERGER WILL BtNEFlT NORTHWEST
EACH COMPANY WILL DE oPERAT-
ED sEPERATELY AS HERE
ToFoRE.
MERGER WILL BtNtfH NORTHWEST
WILL PREVENT UNION PACIFIC
GETTING CONTROL OF THE NORTH
ERN PACIFIC AND DIvERTISG
TRADE SOUTH.

President James ]. Hill yesterday issued
the following statement regarding the
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;
have been absent from Minnesota Tor more
than two months and during that time there
has arisen a wide discussion throughout the
state Of what has been generally called con
soiidation or a merger OF the Northern Paclhe
and Great Northern railways, and in This dis
cussion statements have been made "hlch are
20 widely different fror the facts that feel
called upon 10 make a conservative statement
of Just what has been done in the past anu
what Will be done in the future.
When the Northern Pacihc failed ana the
banking house OF J. p. Morgan & CO. reorgan-
ized IT, myself and friends were holders OF
large amount Of that compauy's securities.
After the reorganization was completed we
bought about S2B, 600, 600 OF Northern Pacihc
stock both common and preferred. some OF
this stock was afterward sold by individuals,
but a large amount has been held from that
time 10 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 the Chi
cage Burlington & 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 10
buy their entire property. When this transae-
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 81 would defeat our
object in buying the Burlington. and further Il
against the Law OF several OF the states
In which the largest mileage Of the Burlington
located
AT that time. against the opposition Of the
more southerly lines both the Northern Pacific
md Great Northern had put into effect low
colonization rate and were carrying daily
thousands Of people into the Northwest. many
of whom were coming from Kansas and Ne
braslSa, 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
ciie people undertook the bodest effort that
made in this country and bought
over sixty millions OF the stock OF the North
ern Pacific in the markets OF Europe and the
United States, l was in New York at the time
and after Messrs. Morgan & Co. were aware
of the action III the Union Pacific people Il was
found that together we held about $4,000 900
of Northern Pacific common stock and, mas
much az the common stock. by right OF a con-
tract made with the preferred stockholders
when the company was leorganized and the
stock issued, had the privilege of
Paying 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 10000
coo OF the common stock OF the Northern Pa
cinc; at the same time the Union Pacific in
terests. having already so large an Investment,
bid the stock W. until there was the largest
stock corner ever known; the common stock
in three or four days went W to $1,000 per
share.
explained 70 my friends how that with
control OF the Northern Pacific, the Union Pa
ci1c would control the entire Northwest and
OF the West from Mexico 20 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 SI4, ZOO, 600 for his stock. The result
was that Messrs Morgan g. Co and ourselves
owned AZ, 1000 out Of 10000, 600 OF the
Northern Pacific common, with the privilege of
paying off the 10 600 600 OF Northern Pacific
preferred. The Union Pacific people owned
81, 600, 600 OF the common and about 100000
OF the preferred, which was a clear majority ot
all the stock OF the Northern Pacific, and
Pacific railway and through that ownership
contr u OF one-half the Burlington.
When IL 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 representa-
tive in the Northern Pacific board. At the
same time l was elected member OF the
Northern Pacific board. When l was advised
OF my election notified them that
Could Not Legally Act
as director OF the Northern Pacific and
signed after the first meeting OF the board.
Several OF the gentlemen who have long been
interested IN the Great Northern railway and
its predecessor the St Paul. Minneapolis 6
Manitoba company and who have always been
among its largest shareholders, but not the
holders of a majority OF its stock, whose ages
are from seventy TO eighty-siN 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 50 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.
IL became necessary lin order 10 prevent the
Northern Pacific from passing under the con-
troll OF the Union Pacific interests and with II
the Joint control OF the Burling toni to pay on
the seventy-five millions OF Northern Pacinc
preferred. The enormous amount or cash re-
CURED for this purpose from a comparatively
small number OF men made IL necessary Tor
them
To Act Together
in a large and permanent manner. through the
medium OF a corporation, and the Northern
Securities company Afforded them the means
OF Accomplishing this object without the necss-
aIfxy &c tiuR