The pioneer express. [volume] (Pembina, Dakota [N.D.]) 1883-1928, 1902-01-03
EXPLAINS THE PURPOSE OF FORM.
ING NORTHERN SECURITIES
COMPANY.
MERGER WILL BENEFIT NORTHWEST
EACH COMPANY WILL DE oPERAT-
ED SEPARATELY AS HERE.
:, T0FoRE.
WILL PREVENT UNION PACIFIC
GETTING CONTROL OF THE NORTH
ERN PACIFIC AND DIvERTING
TRADE SOUTH.

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:
have been absent from Minnesota for more
than two months and during that time there
has arisen q 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
90 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-
lied 1t. myself and friends were holders of
large amount Of that company's securities.
After the reorganization was completed we
bought about $4,000 600 Of Northern Pacific
stock. both common and preferred. Some OF
this stock was. afterward sold by individuals.
but a 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 tho same time
made effort to buy the control Of the Chi
cago, 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
1t 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 to
buy their entire property. When this transac-
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 in the
purchase of that company: this proposal we re-
fused for the reason that 1t would defeat our
object in buying tho Burlington. and further it
was against the law Of several of the states
in which the largest mileage OF the Burlington
was located. 8
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 its height in the
month Of April and after we had closed
the purchase of the Burlington tho Union Pa
cine 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 was
found that together we held about 10000, 900
much as the common stock, by right OF
tract made with the preferred stockholders
when the company was reorganized 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 .000.-
600 Of the common stock Of the Northern Pa
cifc; 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 UP to $1,000 per
share.
explained to my friends how that. with
control Of the Northern Pacific the Union Pa
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 re-
fused $14, 600 900 for his stock. The result
was that Messrs. Morgan Co. and ourselves
owned 10000 600 out OF 10000, 600 of the
Northern Pacific common, with the privilege of
paying off the 100000 of Northern Pacific
$4,000 600 of the common and about 1000 900
of the preferred. which was a clear majority Of
all the stock Of the Northern Pacific. and
Pacific railway and through that ownership
sontrol Of one-half the Burlington.
When 1t 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 a representa-
tive in the Northern Pacific board. At the
same time was elected member Of the
Northern Pacific board. When was advised
Of my election notified them, that
Could Not Legally Act
O. director Of the Northern Pacific and
Great Northern at the same time and 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. Minneapolis &
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 e'ghty-six years have de-
corporate form. and in that way secure per-
manent protection for their interests and a
continuation o. the policy and management
which has done 30 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
I Northern Securities company.
It became neceisary Gin order to prevent the
Northern Pacific from passing under the con-
troll of the Union Pacific interests and with 1t
the Joint control Of the Burlins toni to pay off
the seventy Ave millions Of Northern Pacific
preferred. The enormous amount OF cash re-
CURED for this purpose from q comparatively
small: number q men made 1t necessary for
them
To ActsTosether
in . large ana permanen. manner. through tbs
medium OF . corporation. and the Northern
Securities company afforded them the means
Of accomplishing this object without the neces-
sity q creating separate company to finance
while. ct the same time. the credit Of the
Northern Securities company would DO much
stronger. as It would also hold a considerable
amount Of 0reas Northern and other securities.
Tie Northern Securities company 10 organ
issd to deal in hfEh-class securities. to hold
the same for thu benefit Of its shareholders and
TO advances the interests Of the corporations
whose securitiei Il owns. It's powers do not
include the oDtration Of railways. banking.
mining nor the buying or selling OF securities
I * properties TT others on commission: It IL
purely an inyeitment company and tho OBJ
3ectof its creation was simply to enable those
who hold it, stock TO continue their Respective
2intsrssts In association together and to pre-
.snt such tntststs from being scattered by
death or oth1fy1se: 70 provide against such |
nttacfa haAai4 nnosa Nh th an, Il