The sun., 1902-02-20
ROOSEVELT SAYSTEST MERGER
DIRECTS ATTORNEY-GENERAL TO
SUE NORTHERN SECURITIES.

pacific and Great Northern Stocks
he Given Back to Former Holders.
u.suyoroS, Feb Attorney General
~, cave out this statement to-day:
SW,tbin a very short time bill will be
a,ud hv tho United States to test the legality
,,a .,sroer Of the Northern Pacific and
nr.st Northern Railway systems through
49,. J,s,,ur,entality Of the Northern Sc
curities Company
some time ago the President requested
an opinlon as 10 the legality Of this merger,
and have recently given him one. TO the
effect that, in my judgment, 1t violates the
provisions Of the Sherman act Of 1890;
rbereupon he directed that suitable action
should be taken TO have the question tu-
dioially determined.
"A bill In equity is now in course OF pre-
paration which will be filed within very
short time and which will ask that the
merger, effected through the exchange OF
shares Of the Northern Securities Com
pany for shares Of the two railroad com
panles, be dissolved and such shares or
dered reeIchanged TO restore the stocks
Of tho two railroad companies TO their
original holders.
THE two railroad companies, the North
ern Securities Company. j. Pierpont Nor
gan and James j. Hill. and their associates,
stockholders In the two companies, will
be the defendants In the bill. The district
In which the proceedings viii be instituted
has not yet been determined. Most likely
II will be In Minnesota
RThe Attorney General did not discuss
the process by which he arrived at his con.
clusion, but 1t 10 known that he believes the
merger Of the two railway systems does not
differ In any essential principle from the
combinations heretofore held by the courts
10 be, potentially, at least, In restraint OF
trade and destructive Of competition.
It Is pointed out that the Supreme Court
decided adversely In the transmissouri case
and the Joint Trafho Association case.
The point is also made that tho Sherman
Antitrust law takes no account Of the IN
tention Of persons forming combinations
SIMILAR TO those cited, ID prohibits a CON-
bination which affords the power. whether
the power be used or not. TO control rates
and destroy competition.
The Attorney General holds that, under
the circumstances, the Government's duty
Is to proceed against the railway merger.
The bill will probably be hled within a
week.
MINHHApoLIs, MINI, Feb. is--Jamss J.
Hill is positive In his refusal to say any
thing on President Roosevelt's action
In the railroad merger case. He appeared
much surprised and much Interested In
the news.
President Charles 8, Mellen of the North
ern Pacific said II was Q great surprise
D., al H.. A.M1 q -
prise 10 all the Northern Pacific people.
Several Of the men principally interested
In the Northern Securities Company, who
were in this city last night. were seen and
declined to make any statement as TO the
contemplated action Of the Attorney
General.
James R. Keene said Until I learn
fully the grounds upon which Mr.. Knox
bases his opinion / do not feel qualified
to talk about this matter, but, from what
[ know OF the reasons for this merger, It
does not violate the spirit Of the Sherman
act. II may violate the act technically,
just as does the United States Steel Cor
poration. That corporation Is a trust.
II has In It's power TO create a monopoly
and TO initiate or lower prices, but II does
'On the contrary, II equallizes trade con-
ditions and maintains a steady market
for a universal commodity. The same
principle holds good with the merger OF
the Northern Pacific and Great Northern
roads. To my mind, the purpose Of that
merger, which was intended 20 maintain
equitable traffic conditions and to prevent
undue competition. does not violate the
spirit Of the Sherman act
The stock OF the Northern Securities
Company has been dealt In for some time
In the Broad street curb market. II was
firm yesterday, opening at 1857 and ad-
vancing TO i0oh, which was the closing
price.
After the famous struggle for the control
Of Northern Pacific and la settlement Of
the controversy over the Burlington road,
OF which the Northern Pacific and Great
Northern had control. the Northern Sc
cur1ies Company was Incorporated under
the laws of the State Of New Jersey on
Nov. is with capital stock Of s40o 900 900.
The purpose Of the company was 10 take
over and hold a ma jority OF the stocks
Of the Great Northern and Northern Pacific
taltoads and provide for a joint control
oil the roads Under the terms of the settle
inent brought about by the formation Of
the Northern Securities Company, North
'NNiAN N'llillou slOCk was 10 DE
turned over 10 the Northern Securities
Company, the proprietary company. at
ll5 and Great Northern stock at ls0
The merger. embodied in this plan has since
practically been completed, all but a COM
paratively small number Of the shares OF
the two corporations. It IA understood,
having been turned In In exchange for stock
OF the proprietary company at the prices
above named.
Following the announcement OF the
plans Of the Northern Securities COMPANY
and It's incorporation the legality OF such
step was questioned. first by Gov. Van
SAINT OF Minnesota and later by Others.
including Governors Of several States.
who sided with him In his contention that
II was an attempted consolidation OF two
railroads and hence was illegal II was
contended by the friends of the securities
company that IL was not tho intention 10
consolidate the two companies, but con-
tnue them In their integrity and 70 operate
them as competing companies within pru-
dental bounds.
The Sherman Law says that control
or combination in restraint OF trade or
commerce. among the several States Is
Illegal and punishable as a misdemeanor
ard invests the United States Circuit Courts
with Jurisdiction 10 prevent and restrain
Violations OF the act, the proceeding 70 be
by petition praying that the violation