Rosebud County news. [volume] (Forsyth, Mont.) 1901-1906, 1902-01-02
MERGER WILL BENEFIT NORTHWEST
EACH COMPANY WILL BE OPERAT-
ED SEPARATELY AS HERE
TOFORE.
WILL PREVENT UNION PACIFIC
GETTING CONTROL OF THE NORTH
ERN PACIFIC AND DIvERTING
TRADE SOUTH.

President James j. 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:
I have been absent from Minnesota for more
than two months and during that time there
has arisen a wide discussion throughout the
state of what has been generally called con-
solidation or a merger Of the Northern Pacific
and Great Northern railways. and in this dis
cussion statements have been made which are
SO widely different from the facts that feel
called upon to make conservative statement
Of just what has been done in the past and
what will be done in the future.
When the Northern Pacific failed and the
banking house OF ]. P. Morgan & Co. reorgan-
ized it, myself and friends were holders of
large amount of that company's securities.
After the reorganization was completed We
bought about $26, OOO, 900 Of Northern Pacific
stock, both common and preferred. Some of
this stock was afterward sold by individuals,
but q large amount has been held from that
time to 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
INdOe an EFFORT 10 guy the CoutToA VI tHe CHl-
cago, Burlington & Quincy.
With these lines in the hands of the Union
Pacific interests both the Northern Pacific ana
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 tc
buy their entire property. When this transac
ton was about being closed the people who
who had previously tried to buy the Burlington
asked to be allowed to share with in the
purchase of that company this proposal we re-
fused for the reason that 1t would defeat
object in buying the Burlington, and further it
was against the law of several of the states
in which the largest mileage of the Burlington
was located.
At that time, against the opposition Of the
more southerly lines. both the Northern Pacific
and 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
braska, along the lines of the Union Pacific.
This movement was at it's height in the
month of April and after we had closed
the purchase of the Burlington the Union Pa
cifc people undertook the boldest effort that
ever was 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. was in New York at the time
and after Messrs. Morgan & Co. were aware
OF the action of the Union Pacific people it
found that together we held about &c. 900. OCO
much as the common stock, by right OF
tract made with the preferred stockholders
when the company was reorganzed and the
stock issued, had the privilege of
Paying OF the Preferred
stock at par on the first day of January in any
bought in London and New York about 16 OoO-
900 Of the common stock OF the Northern Pa
cific; at the same time the Union Pacific in
terests, having already so large investment,
bid the stock up until there was the largest
stock corner ever known; the stock
in three or four days went up to $1,000 per
share.
I explained to my friends how that. with
control Of the Northern Pacific. the Union Pa
cifc would control the entire Northwest and
Of the West from Mexico to the Canadian line
except for the Great Northern. So great
the effort to get this control that one of my
friends in London. who owned 100000 of
Northern Pacific common was offered and
fused $14 600 for his stock. The result
was that Messrs. Morgan & Co. and ourselves
Northern Pacific common. with the privilege of
paying off The 75,00O.0 900 of Northern Pacific
preferred. The Union Pacific people owned
37,O0O 900 of the common and about 40 900 ono
of the preferred, which was a clear ma iority of
all the stock of the Northern Pacific and
claimed the exclusive control of the Northern
q
control of one-half the Burlington.
When it was known that these preferred
shares could and would be paid off. and before
the annual election. mutual negotiations result
ed in Mr.. Morgan giving them representa-
tive in the Northern Pacific board. At the
Northern Pacific board. When I was advised
of my election notified them that
Could Not Legally Act
as director of the Northern Pacific and
Great Northern at the same time and 1 re.
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. Minnea polls &.
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-six years, have de-
sired to combine their individual holdings in
corporate form, and in that way secure per
manent protection for their interests and a
continuation of the policy and manacement
which has done so 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.
1t became necessary lin order to prevent the
Northern Pacific from passing under the con-
troll of the Union Pacific interests and with II
the joint control of the Burlington to pay Off
the seventv-fve millions OF Northern Pacific
preferred The enormous amount of cash re-
small number Of men made it necessary for
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 neces-
0aty OF creating . separate company to finance