The pioneer press. (Miller, Hand County, S.D.) 1893-190?, 1902-05-15
ORIGIN OF THE
RAILWAY MERGER
Why SECURITIES COMPANY WAS ORGANIC
Answer r'iea III Y. ,. Circuit Court Gives Purpose
for Which Company Was Formed and What It
Was Expected to Accomplishments Answer

ants IN the SUIT brought by the attorney
general of the United States against the
Northern Securities company. the Great
Northern Railway company, the North
ern Pacific Railway company and Others
Each OF the three defendant companies
FLED its separate answer. The answers
are substantially the same in each case.
except I'm so far as they are varied to
meet the technical differences in the
names and organizations of the various
companies.
The answer of the Northern Securities
Is unique and of special interest he
cause the attorneys for that company
Messrs, John w. Griggs and George B.
Young, have included, in addition to the
technical ana legal reply to the plaintiff 5
petition, concise statement of the de-
PENDANTS case. They explain the origin
Of the so-called merger and the business
policy and purposes which prompted the
organization of a holding company. The
explanation is the more interesting part
Of the answer and is herewith presented
first and out of its regular order with the
technical portions following:
COmpany's Explanation.
Answering the petition. this defendant
up on information and belief says that
the facts as to the purchase of the shares
OF the Chicago. Burlington and Quincy
Railroad company hereinafter called the
Burlington company and the planning
snd formation OF this defendant, and the
motives, intentions and purposes of the
persons and corporations concerned in
these enterprises, or either of them, were
not as enormously stated in said petition,
but were, and are, as follows:
When projecting the line OF the Great
Northern to the Pacific coast, that COM
pany and its directors contemplated the
necessity of creating for the line not
merely state and Interstate, but an inter-
national commerce. Nearly all the coun-
try traversed or reached by this line
was then but sparsely settled or not set
tied at all. IL was principally agricuItur-
al grazing or timber land, with mineral
deposits in the mountain ranges believed
TO be large and valuable. but not devel-
Oped or explored. Whatever commodities
the region might furnish for carriage
would be raw material. of great weight
and bulk In proportion TO its value, which
would not bear transportation to market
except at low mileage rate such as
could be made possible only by every
practicable reduction In the cost Of trans
Eortation. The available market for all
such products was far from the places of
production.
In Washington and oregon are the larg-
In the United States. the best market for
which is in the prairie states of the Mis-
sissippi valley east OF the Rocky noun
tains; but the lumber and shingles from
the Pacific coast would not bear the cost
OF transportation to those states II the
cars carrying them had to be hauled back
empty, or nearly so, for distance OF
from one thousand five hundred to two
miles. And the same is true of
the other products On the other hand.
the unoccupied or sparsely settled coun-
try along the line, or reached by IL. could
not furnish a market for commodities
enough to load the retaining cars: the re-
suit being that unless the company could
secure traffic for carriage beyond the Pa
cihc coast no great traffic either way
could exist or be created.
Asiatic Trade.
To meet these conditions the Great
Northern company not only went TO great
additional expense i'm the construction OF
Its line to obtain gradients lower than
those OF any other line to the Pacific
coast, but also made great efforts to Gre
ate and increase in the countries of East
srn Asia a demand for the products OF this
country: and soon after the completion OF
Its railway in 1893 It induced a Japanese
company to run line OF steamships, con-
AtNAllls Win It's railway, On the De
tween Seattle and the ports OF Japan,
China and Russian Siberia, and succeeded
In creating and has since been actively
engaged in building up a commerce in
which the -four manufactured along it's
line, cotton (both raw and manufactured,
iron and steel Especially steel rails and
plates), machinery, and such other manu-
factures OF this country as market
could be found or made for in Eastern
Asia, have been carried 10 Oriental ports,
and return cargoes OF such Oriental prod
ucts as are consumed IN this country have
been brought back. A large west-bound.
as well rs an increased east-bound, tart
nc has thus been secured by the company,
enabling II TO make such rates on lum-
Der and other products OF the country
served by IL as permit them to be shipped
TO Eastern markets with a profit TO the
shippers.
One year before the Burlington pur-
chase, this Oriental traffic had reached
such proportions that the Great Northern
company caused TO be begun the construc-
tlon of steamships to be run from Seattle
10 ports in Japan. China and the Philip
pines, which, from their great carrying
capacity Cbeing the largest in the world,
VIII be able to carry at very low rates
vi full cargoes can be secured), and thus
volume OF west-bound traffic land also OF
east-bound traffic. at the lowest rates.
In the interstate and international COM
Inerce which the Great Northern COM
pany has thus built up. IL completes both
IN this country and on the ocean with the
other transcontinental lines uncluding
the Canadian Pacifcl and at the Oriental
ports II completes for commerce or the
world It's rates are and must be MADE
IN competition with the rates OF ocean
carriers and by way OF the Suez canal
The policy thus followed by the Great
Northern company In building up an In
ternational, and thereby Interstate, COM
merce has been followed by the Northern
Pacific company since its reorganization
IL 1896
Placed at a Disadvantage.
In creating and maintaining this COM
petitive interstate and international COM
nerce both the Great Northern company
ana the Northern Pacific company were
hampercd and placed at a disadvantage
with the other transcontinental railways,
as wei as with European competitors, py
the want OF sufficient direct connection
with the territory offering the best mar
ke,s for the products of the country
along their lines. and with the places or
Production and great centers Of distriou-
Nlon from which their traffic must De
supplied. For many months before tine
purchase OF the Burlington shares, tney
mad considered the best means OF getting
closer to such markets and sources Oh
supply. The lines of the Burlington, pet
yer than those OF any other company, Iu :
nlled the requirements of both the '1rea'
northern company and the Northern Ia-
enc company in respect OF markets 10.
eastbound and freight for westoound
trafic The ruriington lines traverse the
treeless states OF Illinois. Iowa, missouri
Nebraska, Wyoming. Kansas and COLO