Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1902-05-15
OF THE
| RAILWAY MERGER
SECURITIES COMPANY WAS ORGANIZED
uor Filed in u. S. Circuit Court Gives Purpose
! Which Company Was Formed and What 1t
IA Expected to AccompIish-Tbe Answer.

NfN II hNlllC InPV
reach Denver, Kansas City, Omaha and
aurora, where are located the PRINCIPAL
stnelters or silver-lead ores, such az ere
mined near the lines of the defendant
railway companies.
They reach Omaha, Kansas City and
Chicago, where are the great packing
houses and the great markets for the
cattle sheep OF the ranges of North
Dakota, Montana. wyoming, Idaho. Ore
gon n Washington.
they reach st. Louis and Kansas CITY.
connecting them with lines traversing
the cotton states, from which come raw
ana manufactured cotton required for
shipment to China and Japan. 2
AT Chicago and St. Louis they con-
meet with the lines which reach the
points OF supply of manufactured iron.
steer, machinery and other manufactured
articles that find a market in Japan and
China.
Reaches Coal supply.
The Burlington line southwark from
Minneapolis and St. Paul along the Mis-
sissippi river reaches the great coal dep
ostts of Southern Illinois, the largest
west OF Pennsylvania and West Vir-
ginia; n its light gradients and con-
sequent low cost of transportation make
1t possible to supply such coal to points
on the lines Of each defendant railway
company east of the Missouri river. re-
lieving the people and the railways of
that territory from entire dependence
upon the Pennsylvania and West yir-
ginia mines the supply from which is
yearly becoming most costly and less
certain.
The price paid for said Burlington
STOCK was lower per mile OF main track
covered by the stock than that for
which the stock of any other large and
well established system, In the same
general territory, could then nave been
bought.
The purchase OF the Burlington stock
by the Northern Pacific and Great
Northern companies in equal parts
served each company as well as If it
were the sole owner of such stock, while
such purchase might have been beyond
theh financial means of either company by
itself. =
The Great Northern and Northern Pa
citc companies therefore each purchased
an equal number OF shares of the Bur-
lington stock as the best means and for
the sole purpose of reaching the best
markets for the products of the territory
along their lines, and of securing connec-
lions which would furnish the largest
amount of traffic for their respective
roads, increase the trade and interchange
of commodities between the regions ira
versed by the Burlington line and their
connections and the regions traversed or
reached by the Great Northern and
Northern Pacific lines, and by their con-
Meeting lines OF shipping on the Pacific
coast. These connections and such in
terchange of traffic were deemed to be,
and are, indispensable to the maintenance
Of their business, local as well as inter-
state, and to the development OF the
country served by their respective lines,
and of like advantage to the Burlington.
lines and the country served by them,
and strengthen each company in the COM
pc ition with the more southcrly lines to
the Pacific coast, with the Canadian Pa
ific railway and with European carriers,
for the trade and commerce of the Orient.
In such purchase there was no purpose
TO lessen any competition of the B~urling-
ton lines with those OF either OF the pur-
chasers, for they are not competitive, or
TO lessen n competition between the
purchasers. Such purchase vas not In
tended toha We, and it cannot have, any
such effect.
The purchase of the Burlington stock
was not made In view of the formation
OF this defendant, but solely from the
motives and with the purposes already
stated.
Origin of Holding Company.
The project Of forming. a holding com
pany of any kind was not the result, In
any way. OF the failure of the plan which
was defeated by the decision of the SUI
preme court in the Pearsall case. There
was no connection whatever between the
two.
The project of a holding company which
finally developed into thu formation of
this defendant had It's inception years be-
fore that date, among several gentlemen,
not exceeding ten in number. who had
been large shareholders in the Great
Northern company and Its predecessor.
the st. Paul, Minneapolis and Manitoba
Railway company; some Of them from the
original company In 1879. and others from
dates not long after that time. They have
never held a majority Of the stock OF the
Great Northern company. but have taken
an active interest in its policy and admin
istration: have aided 1t when necessary in
financing it's operations; have acted to-
gether in promoting its interests; have.
with some exceptions, served from time 10
time as directors and officers (Mr. Hill
having been president OF the successive
companies since 1882; and by reason OF
their active interest in the company and
services to Il, have Influenced, TO a large
degree, its policy and management. AS
far hack as 1893, most of these gentlemen
heinr well advanced, and some far ad-
yanced. In years, they began TO discuss
together what would be the effect upon
the policy, which under their influence the
company had pursued with great beneft
TO its shareholders and the public. should
their holdings by death or otherwise be-
come scattered. and by what means their
holdings could be kept together. so as 10
secure the continuance or such poncy III
the management VI the company. IL was
considered that II a ompany should De
formed 10 which they might transfer their
Individual holdings, their shares were
likely TO be held together, so long as tne
majority In the holding company shouIo
40 wish. and this would tend TO give
stability to the policy of the Great l'orth,
ern company, be of aid to II In nnanciai
onerations, and maintain the value OF
their investments. These conclusions We
the result of various consultations among
the persons mentioned. or some OF them,
h,,t no definite agreement was mace Ior
forming such a company or pinalng any
one 10 transfer his shares to IT II FORMED.
From time TO time, beginning VIII taae
reoreanization of the Northern raC
comnanv IN 1896. Mr.. Hill and SAID oInes
Great Northern shareholders VINO naa
discussed with him the plan OF formins :
holding ompan had made large Ia
cbases Of Great Northern shares, inuisi
raIIy each for himself without any con
.a-,ad actor. and solely as inVestn