The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-01-25
By HILL
Competition Raises Rather Than
Lowers Rates, He Says.
DIDN'T TRY TO GET THE ST. PAUL
Mr.. Hill Gives His Version of the
Burlington Deal and the Se-
curities Organization.

Chicago, Jan. 25.-James J. Hill, presi-
dent Of the Northern Securities and Great
Northern companies, yesterday testified
for three and one-quaruer hours before
the Interstate commerce commission here.
In \answer to questions tending to show
the effect of the community of interests
plan on rates he declared that competi-
ton does not lower rates, but on the
contrary, he believed that it advanced
them. He declared that in the northwest,
where for twenty years the Northern Pa
citic and the Great Northern have been at
peace, where one road has agreed with
the other on rates and maintained the
agreements, rates were lower than in any
other part of the country. In regard to
the purchase of the Burlington by the
Northern Pacific and the Great Northern,
Mr.. Hill declared that the purchase was a
matter of necessity and was notRdue to
"a movement in line with the trustlidea. .
He testified to the formation of the
Northern Securities company, andAi in do
ing so gave reason far more simple than
has generally been conjectured. Said he:
There are some old men-some very old
men-interested in the management of the
Great Northern. Two of them are over
so and several are over 20 years. They
wanted to form a close corporation into
which they could confde their interests, with
the assurance that the road would be man
aged along the lines which have made it a
success. 1t was to have taken over one-third
of the stock Of the road The plan seemed to
be good one, and then it was proposed to
let all the stockholders in-not alone the few
owners Of the One-third-but all of them.
The plan met with approval, and then it
broadened into the idea of taking in the
Northern Pacific also. The roads had worked
in harmony for twenty years, and the change
in the holders of the securities would make
no difference. 1t can make no difference and
will make no difference.
The Burlington.
Mr.. Hill was questioned in regard to the
relation of the Northern Securities com
pany, the Burlington, the Northern Pa
cific and the Great Northern Securities
company owned no stock in the Chicago,
Burlington & Quincy Railway company
(the new company but that it owned
about half the stock of the Chicago, Bur-
lington & Quincy Railroad company (the
old corporation). He explained that the
new company really was a union of the
three lines which formed the old company
and operated the latter by virtue of a
lease. The half of the stock of the OLD
company not owned by the Northern Sc
curities company, witness said, was owned
by the Northern Pacific company. In the
new company, he said, the Great
Northern and Northern Pacific were the
chief stockholders having issued joint
bond to cover the purchase price of the
Chicago, Burlington & Quincy Railroad
company. These two companies, as stock
holders, elect the directors of the Bur
lingtOn. He said
There were approximately 10, 900 stockhold
ers in the old Burlington. 1t was impossible
; to buy the stock, amounting to 100000, 900, II
the open market, and another plan was adopt
ed, resulting in the sale of the property, like
| a piece of real estate. The Northern Pacif,
and Great Northern railroads issued $216OOO,
! 900 joint bonds to pay for it.
In explaining his reasons for the pur-
chase of the Burlington Mr.. Hill wen
back to the time when he found it neces
! sary to offer low rate to the timbermer
of Oregon and Washington in order
! to get loads for cars which had originally
| gone west, laden with merchandise HI
said:
| In order to put ourselves in a safe position
| We had to buy the Burlington road; it gave
| us the market for our western stuff that We
| had to bring back, and it afforded us a con
1ection in the east with all the producers.
Coal Problem.
| He also dwelt on the paramount i'm.
! portance Of the coal problem in con.
nection with the operation of railroads. He
said:
We were far from coal and far from a mar.
ket for our timber. We were at the mercy
OF possible coal famine, such famine as
would be existing now were it not for the
unusually mild weather. We needed more
| than a connection-we needed a connection
which we we could control I was familiar
with the railroad situation. I knew that the
Burlington reached the prairies where timber
| is needed, and l knew that by the Burlington
we could have a connection with the coa
mines, which would put us on safe ground
In respect to fuel Furthermore, the Burling-
ton could be purchased $1,000 a mile cheaper
than any other granger road, everything con-
sidered. A friend OF mine, a neighbor, told
me that for a lumber market he would rather
have the state of Iowa than any other five
states. Perhaps you can tell me of a road
which reaches Iowa points better than the
| Burlington. I know of none.
Mr.. Day attempted to show by cues.
lions that the real reason for taking oye1
| the Burlington was to form sort Of
trust, whereby northwestern rates would
be absolutely in the hands of Mr.. Hill an(
his friends. To this Mr.. Hill reiterated
his previous statement concerning the
| purchase of the Burlington. d.
| Didn't Try to Get the St. Paul.
Mr. 'Day-Is 1t true that before you pur
! chased the Burlington you were proposins
| to buy the St. Paul?
mo. sir. An offer was rnada about calI;,,.