The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-08-02
WAS ORGANIZED AS A
MEANS OF DEFENSE

The attempt in the interest of the
Union Pacific company to purchase ma
jority of the stock of the Northern Pa
ciftc company and obtain control of that
company, and through it of the Burlng,,
ton system. alarmed the managers ana
stockholders of the Northern Pacific com
pany and led them to consider the FEAST
bility of forming holding company
which should purchase or secure, In ex-
change for its own stock, more than
majority of the stock of the Northern
against any raid in the future in the
interest of a rival or hostile railroad.
Mr. Hill and the stockholders referred to
of the Great Northern company were
likewise alarmed by such attempt in the
interest of the Union Pacific company TO
obtain control of the Northern PACING
and through it of the Burlington system,
result which they apprehended would in
juriously affect the property of the Great
Northern railroad and the country tray
ersed by it and by the Northern Pacific
railroad.
And in the project of establishing a
holding company to purchase and hold
a majority of the stock of the Northern
Pacific company, they joined for the pur-
pose of selling to such holding company
and placing therein their own stock in
the Great Northern company and permit
ting all other stockholders of the same
company who might so choose to do like
wise. and thus accomplish their purpose
above stated of having permanency to
the management and policy of the Great
Northern company.
Roads Did Not Promote.
The Incorporation of the Northern Sc
curities company under the general laws
of New Jersey and with a capital of
$500, 600, 600, was completed Nov IL, 1901.
Neither the Great Northern company nor
the Northern Pacific company by an act
of its directors, or any corporate act, had
anything to do with the formation or sub
sequent action of the Northern Securities
l1,,k Mo- ntN6
other stockholders of the Northern Pa
cific company and Great Northern COM
pany We're individually the promoters who
caused and procured the incorporation of
the Northern Securities company for the
purposes above stated.
The Northern Securities company, when
formed, offered and agreed to purchase
and to pay for in it's own stock at par
G$1OO per share5 any stock of the Northern
Pacific company at the price of $115 per
share and any stock of the Great North
ern company at the price of $3.50 per
share; and large amounts of the said two
railroads were at such rates and so paid
for, purchased from said promoters and
other stockholders nof said two railroad
companies by said Northern Securities
About the same time Mr.. Hartman and
his associates sold to j. p Morgan & Co.
all the Northern Pacific company stock
which they had purchased as aforesaid
both common and preferredz--amounting
to more than SIS, 600, 600, and said j.. p.
Morgan e Co. at the same time sold all
the same stock to the Northern Securities
company, who paid the consideration
therefor directly to Mr. Hartman and his
associates; a part of such consideration
heing something more than So, 100000 of
the stock of the said Northern Securities
company. That purchase was completed
on Nov. IS, 1901. - $50
Preferred Stock Is Retired.
On JAN l. 1902. the. Northern Pacific
company paid off and retired its preferred
stock, having raised the money for that
purpose by an issue of bonds which were
made convertible and were converted into
common stock of that company.
Other stockholders of each of said two
railroad companies sold their stock to the
Northern Securities company, receiving in
payment or exchange therefor, at the
rates aforesaid, stock of the last named
company, so that by Dec. l, 1901 said
Northern Securities company had become
the owner of considerable more than a
majority of the stock of the Northern Pa
cifc company, and a large amount, but
less than majority, of the stock of the
Great Northern company. Similar pur-
chases from stockholders continued. and
at the time of the commencement of this
suit the Northern Securities company had
become and still is, the owner of about
SO per cent of all the stock of the North
ern Pacific company and of about 76 per
cent of all the stock of the Great Northern