The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-05-15
INVESTMENTS 0. K.
!; Northern Securities Company Has
Not Confined Itself to G. N.
and N. P. Stocks.
Open Attack Upon the Company Re.
ceives Little Consideration
in Wall Street.
Special to The Journal.

f
New York. May 15.-The Evening SUMS
financial article says: While nobody has
paid any attention to the latest effusion
attacking the Northern Securities COM
pany, and which. so far as the street
generally is aware of the authors iden-
tiy, might as we'll be anonymous.
Some points are raised that are inter-
estlng, altho they serve to emphasize the
absurdity of the arguments used to bolster
up the attack. After somewhat elaborate
argument, the deduction is made that the
Northern Securities company has not con-
fined itself to exchaning it's stock for the
securities Of the Great Northern and
Northern Pacific. but that it must have
sold some of Its stock. This is brought
to show apparently that the company has
been guilty OF some great injustice to the
stockholders. more particularly to forme r
owners of Northern Pacific stock.
When the Northern Securities company
was organized 1t was not solely and ex-
clusively for the purpose of taking over
the control of the Northern Paci.c and
Great Northern. Its charter was inten-
tionally made broad to permit 1t to &C
qu1re all sorts of securities, and it's
stockholders have right merely to ex-
pect that its investments shall be such
as will make for the benefit Of the COM
pany.
The actual facts In the case are that the
Northern Securities company has invested
In securities other than stocks of the
Great Northern and Northern Pacific and
1T has disposed, III consequence, Of a
part Of its own stock. There Is nothing in
the charter which forbids it to do such
things, the fact being that it's charter
gives it a specific right to do 50.
Hence former holders of Northern Pa
cif1c or Great Northern stock are not only
holders Of Northern Securities stock. The
idea of the attack on this point seems to
be that by purchasing other securities,
the equity in the earnings of the company
OF those who exchanged Northern Pacific
and Great Northern stock for Northern
Securities is lessened.
That deduction is possible only be-
cause of complete ignorance Of the
facts Securities other than Northern Pa
cific and Great Northern held by the
Northern Securities company are much
more profitable investments than either
Northern Pacific or Great Northern, and
If earnings of the latter two companies
decreased other investments would help
to make up the deficiency.
II, for Instance the Northern Pacific
dividends were ODE reduced instead Of
increased the securities held by the COM
pany other than Northern Pacific and
Great Northern are gilt edged, but they
were acquired at prices which make pos
sible. heavy, returns. BIT it is adjudged by
the latest critics Of the company that it
Is positively criminal for it to take steps
that will enhance the value of it's securi-
ties and the fact that the company act
ually transacts the business for which it
was incorporated is regarded with sus-
picion.
Another point raised is that the former
holders of Northern Pacific have suf-
fered grievous injury because the property
has so increased in value and its earn
lngs are SO much greater that they would
entitled f0 Love -
dividends had they retained their stock
than they do no won their Northern See
curities, which they received in ex-
change.
OF course the only thing carefully
avoided in this point is the fact that
holders of Northern Pacific sold their
stock at what they considered good bar
gain and they have since received more in
dividends than they expectd
y Ii the earnings of Northern Pacific had
decreased, they would have congratulated
themselves on their shrewdness, but since
they have increased theirl woes are set
forth and the injustice which they suffer
pictured at length Presumably they who
sold their holdings of Northern Pacific
prior to the panic are also included among
the list Of injured.
In preparing the elaborate table show
ing the dividends paid, etc, one fact is
overlooked and that is that at each sue
ceeding dividend period since the first
dividend was paid in February, 1902, there
mas been an increase in the holdings of
the company or other stock against which
Northern Securities stock was issued and
a consequent increase in the dividend dis
bursement.
There are excellent reasons why the
company should not furnish detailed ac-
count of its business just at present and
no reason at all why it should answer the
statements the purpose of which is plain
ly evident.