The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-04-10

| of the Eighth circuit. pursuant to the pro-
| visions Of a recent act of congress, ap
| proved Feb. II, 1903, which requires such
| cases to be heard before not less than
three of the circuit Judges of the circuit
| where the suit is brought, when the at
| tOrney general files with the clerk of the
| court wherein the case is pending. a Ger
| tlhcate that 1t is one of general public
| Importance" Such a certificate has been
| filed and in accordance with the mandate
] Of the statute the case has been given
| precedence over others and in every way
From admissions made by the pleadings
as well from much oral testimony, We
reach the following conclusions as re-
spects matters of fact: Two of the de-
| PENDANTS, namely, the Northern Pacific
| Railway company and the Great North
| ern Railway company. are the owners re-
| spectively of lines OF railroad which eX-
| tend from the cities Of Duluth. St. Paul
and Minneapolis in the state of Minneso
ia. thence across the continent to Puget
sound. These roads are, and in public
| estimation have ever been regarded as,
parallel and competing lines. For some
| years at least after they were built they
| competed with each other actively for
transcontinental and interstate traffic. In
| the spring of the year 1901 they united
| in purchasing about SO per cent of the
| entire capital stock Of the Chicago, Bur.
| lington & Quincy Railway company, and
became joint sureties for the payment of
LondS of the last named company. where
by the purchase was accomplished. which
| per cent interest per annum.
The amount of stock SO acquired was
| of the par value of about $107, 900, 900. and
| as 1t was purchased at the rate of 500
| per share, the bonded Indebtedness of the
| two companies was thus increased to the
extent of $200000,0 600.
Securities Company Organized.
Subsequent to the acquisition of the
| stock of the Burlington company and in
the summer of the year 1901, certain large
fRNHr ff.1- H..
| ern Pacific and Great Northern COM
| panies. who had practical control of the
| two roads and who have been made par
! ties defendant to the present bill, acting
! in concert with each other. conceived the
| design of placing very large majority
of the stock of both of the last named
companies in the hands of a single owner.
! To this end these stockholders arranged
! and agreed with each other to procure
| and cause the formation of a corporation
! under the laws Of the state of New Jer-
sey, Which latter company, when
| ganized. should buy all or at least the
! greater part of the stock of the Northern
| Pacific and Great Northern companies.
| The individuals who conceived and pro-
| NOTED this plan agreed with each other to
| exchange their respective holdings of
stock in the last named railroad com
| panies for the stock of the New Jersey
company, when the same should be fully
| organized. and to use their influence to
! induce other stockholders in their respec-
! tive companies to do likewise, to the end
| that the New Jersey company might be-
come the sole owner of the whole or at
least majority of the stock of both
railroad companies.
In accordance with this plan the de-
| fendant, the Northern Securities company
thereafter termed the Securities com
| pany) was organized under the laws of
the state OF New Jersey on Nov. 49, 1901
| with a capital stock of $400, 600 600, that
sum being the exact amount required to
| purchase the total stock of the two rail-
| road companies at the price agreed to
| be paid therefor. When the Securities
| company organized. it assented to and
| became a party to the scheme that had
been devised by its promoters before it
became legal entity. Very shortly after
! its organization the Securities company
acquired large majority of all the stock
| of the Northern Pacific company at the
| rate of $115 per share. paying therefor
| in its own stock at par. At the same
| time it acquired about 300 600 shares of
| the stock of the Great Northern company
! from these stockholders of that COM
| pany who had been instrumental in or
ganizing the Securities company, paying
therefore at the rate of $3.50 per share
and using its own stock at par to make
| the purchase.
Made Farther Purchases.
The Securities company subsequently
| made further purchases of stock of the
! Great Northern company, at the same
| rate. and in about three months had ac-
| qulred stock of the latter company
amounting, at par, to about $93,0O0,O00,
using, for that purpose, its own stock to
| Securities company was abled to make
| the subsequent purchase of stock from
stockholders of the Great Northern COM
pany not Immediately concerned in the
organization of the Securities company,
by the advice, procurement and persua-
| sion of those stockholders of the Great
| Northern company who had been instru-
mental in organizing the Securities COM
pany and had exchanged their own stock
for stock. in. that company shortly after
| its organization.
At the present time the Securities com
| pany is the owner of about 96 per cent of
all the stock of the Northern Pacific
| company and the owner of about 76 per
| cent of all the stock of the Great North
/ ern company. The scheme which was thus
| devised and consummated led inevita bly
| to the following results: First, it placed
| the control of the two roads in the hands
| of d single person, to-wit, the Securities
| company, by virtue of its ownership of a
| large majority of the stock of both COM
| panies; second it destroyed ever mo-
tive for competition between two roads
engaged in interstate traffic which were
| natural competitors for business, by pool
| ing the earnings Of the two roads for the
| common binefit of the stockholders of
both a2ies; and. according to the fa-
|