The Virginia enterprise. [volume] (Virginia, St. Louis County, Minn.) 1893-19??, 1903-08-14
MINNESOTA LOSES SUIT
Judge Locfren Decides That the Northern Securities
Company is Legal Organization. s
Holding Stock Not Consolidate Northern and
Northern ads--Tex OF Decision. -

Judge Lochren of the federal court,
In decision handed down in st. Paul
yesterday morning. holds that the
Northern Securities company, popu-
larly called the merger" does not
violate the antitrust laws of Mime
sofa, nor of the United States.
This case is known as the states
case" because it was an action begun
by the state attorney genera! on be-
half of the state.
Judge Lochren's decision is at vari-
ance with that of the United States
circuit court of appeals, which held
that the merger was an illegal COM
bination and which sustained AttOr-
ney General Knox and the govern
ment's attorneys.
In brief, Judge Lochren holds. that
the Northern Securities company is a
holding" company and there is moth
ing to show that it is in restraint of
trade as the state laws define re-
straint.
Discusses the Merits.
Judge Lochren goes into the merits
OF the case and In referring to the
governments. case at St. Louis he
the government case that "a person
can be held to have committed or to
be purp0sing to commit highly penal
crime merely because it can be shown
that his pecuniary interest can be
thereby advanced"
Judge Lochren holds that the North
ern Securities company Is not an op-
Grating company and does not manage
the Northern Pacific and Great North
ern railroads. 1t Is not in possession
of majority of the stock of the two
roads and therefore physically unable
to control them.
Individual ownership of stock in
parallel railroads, says the court, is
not in violation Of the law. He dis
tinguished the famous Pearsall case,
where the Great Northern as COM
pany sought to purchase half the cap
ital stock of the Northern Pacific. This
was held illegal by the court, but as
the Securities company is an indi-
vidual, it is not unlawful for it to hold
stock in both companies.
History Of the Company.
The court deals with the history of
the company, tells of the efforts of the
Hartman interests to secure control
of the Northern Pacific at the time the
Burlington was absorbed and refers to
the triumph Of Morgan and Hill over
the opposition by forcing the retire
ment Of the Northern Pacifics pre-
ferred stock
The action just decided is one At
torney General Douglas instituted
shortly after the conference of gov
errors at Helena, Jan. 1, 1902. The
supreme court of the United States de
MED the petition that it assume orig.
insil jurisdiction, and the action was
resumed in the state courts, to be
transferred to the federal court and
brought to trial in June of this wear
after numerous delays-Minneapolis
Times, Aug. 2.
The Decision
This cause came on for final hearing
ut st. Paul June S. 1908, upon the bill
answers and testimony taken and on file.
a amat inc cause cay IS one of equitable
tul Jurisdiction of the same was conceded
by counsel: The cause was fully argued
and upon full consideration the following
facts appear and are exhibited:
Burlington Purchase.
The purchase of the Burlington system
cifc. which was completed about April !
1871, led the managers Of the Union Pa
c1fic company to fear diversion Of traf-
nc from tSn the 1; railway Of the Union Pacific
companies: ana Edward ~ H. PHa arrmaa
representing the Union Pacific company
applied to James J. Hill and J. Pierpont
G Morgan. WHO respectively represented the
the Union Pacific company to ioi pet anu
share with them in the purchase Of the
burlington system; but his application
Thereupon the said Hartman and
others acting in the interest Of the Union
racine company began rapidly and quiet
Pacific company, intending thus st to s'' &C"
quire majority of that stock and The
control OF that company. with its hall
interest er IN the Burling ton system.
The common stock of the Northern
Pacific company was $4,000, 900, and il
had issued. and had outstanding nre.
ferred stock to the amount of SIS, 900 900
which had the same voting power as the
common stock, but which the COMPANY
by the action of it's directors might nay
off at par. and thus retire on the ffrs1
d Day Of January, 1901 or on the first day
mon Of April and first week In May
!9ol. the SAID Hartman and others act
ing with him in the interest of the Union
raclhc company purchased and held 8
little more than $37, 900, 900 of the com.
mon stock, and little more than Sal
O00, 900 of the preferred stock of the
Northern Pacific company. being more
than $78,OOO,OO in all, and more than a
majority of the aggregate of the com
mon and preferred stock Of that com
pany. ~"'
But in the first week Of Nav. 1901 T
purchased 5000. 900 of the commnI
stock Of the Northern Pacific comnanv
which with their previous holding Of ths
stock and those of Mr.. Hill and othe,
stockholders of the Northern Pacific com
pany who in this matter acted with NJ
Morgan, gave the latter the control a.
more than $41. O00.O 900 Of such cornmor
stock; being more than majority Of thai
stock. As it was known that Mr. Mora
and his associates would insist upon fhe
payment and retirement of the preferreG
stock on Jan. 1, 1902. and that tho boa ~
of directors of the Northern Pacific com
pany would take action to that end NJ
Hartman and his associates abandonof
hnx q 70 WIT tn nh tot %Nn~