River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1903-08-06

Northern Securities company, popu-
Iarly 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 general on De-
BALI 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 en- 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
must reject the doctrine advanced in
the government case that "a person
can be held to have committed or to
be purposing 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 OPP
Grating company and does not manage
the Northern Pacific and Great North
ic n
of a 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 a 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 Pacific's pre-
ferred stock.
The action just decided is one At
torney General Douglas instituted
shortly after the conference of gov
errors at Helena, Jan. /, 1902. The
supreme court of the United States de-
MED the petition that it assume orig
inal 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 year
Times, Aug. 2.
The Decision.
This cause came on for final hearing
at st. Paul June 5, 1903, upon the bill,
answers and testimony taken and on file.
That the cause is one of equitable
cognizanCe and that this court has right
full 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
10y the Great Northern and Northern Pa
cific, which was completed about April l.
1901, led the managers of the Union Pa
cific company to fear diversion of traf-
tic from the railway of the Union Pacific
to the railways of the two purchasing
companies; and Edward H. Hartman
representing the Union Pacific company
applied to James j. Hill and j. Pierpont
Morgan, who respectively represented the
Great Northern and Northern Pacific
companies in such purchase, to permit
the Union Pacific. company to join and
Esho with hn rNIrrf hos Of h.
Burlington system; but his application
was declined.
''Thereupon the said Hartman and
others acting in the interest of the Union
Pacific company began rapidly and quiet
~ to purchase the stock of the Northern
Pacific company, intending thus to ac-
quire a. majority of that stock and the
control of that company, with its half
interest in the Burlington system.
THE common stock of the Northern
Pacific company was $50 000, 000 and it
had issued, and had outstanding pre-
ferred stock to the amount of SIS, 00O, 600
which had the same voting power as the
by the action of its directors might pay
off at par, and thus retire on the first
of any succeeding year. During the
month of April and first week in May,
1901. the said Hartman and others act
ing with him in the interest of the Union
Pacific company purchased and held
little more than $37,000,000 of the COM
mon stock, and little more than SAL,
Northern Pacific company, being more
than SIS, 600 600 in ALL and more than
majority of the aggregate of the COM
mon and preferred stock of that COM
but in the first week of May, 1901. j.
p Morgan & Co, becoming apprehensive.
purchased $4,000 600 of the common
stock of the Northern Pacific company,
which with their previous holding of that
stock and those of Mr. Hill and other
stockholders of the Northern Pacific COM
pany who in this matter acted with Mr..
Morgan, gave the latter the control of
more than $41. 000 900 of such common
stock; being more than a majority of that
stock AS it was known that Mr.. Morgan
and his associates would insist upon the
payment and retirement of the preferred
stock on Jan. 1, 1902, and that tho board
of directors of the Northern Pacific COM
pany would take action to that end. Mr.
their attempt to obtain the control of
that company.
Securities compsny.
1.-The attempt in the interest of the
Union Pacific company to purchase a ma
jority of the stock of the Northern Pa
that company, and through it of the Bur
lington system, alarmed the managers
and stockholders of the Northern Pacific
company, and led them to consider the
Feasibility of forming a holding company
which should purchase or secure in ex-
change for its own stock more than ma
iority of the stock of the Northern Pa
cific company, and hold the same secure
against any raid in the future in the in
terest of a rival or hostile railroad
Mr. Hill and the stockholders referred
to of the Great Nor IN company We're
likewise alarmed by such attempt in the
interest of the Union Pacific company to
obtain control of the Northern Pacific
and through it of the Burlington system,
iniuriously affect the property of the
Great Northern railroad, ana the country