The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-08-02

and oversight Of the operation and BUSH
concerned, Mr. Hill, alone. was a. rail-
road manager He did not effect any con-
solida ton. He promoted the formation of
the Northern Securities company. and sold
to it stock of botn railroad companies.
Right to Purchase.
when the Northern Securities company.
had. about Dec. /, 1901, purchas ed and
become the owner of large and con-
trolling majority of the stock of the
the purchaser Of that railroad corpor-
alton, within the meaning of that word
| as used in the act of 1874, and became
thereby disabled from acquiring as it
afterwards did, controlling majority
of the stock of the Great Northern COM
pany.
And upon the subject of purchasing a
railroad by. buying all the stock, 1 am
cited to chapter "a, General Laws of
Minnesota, 1881, which provides that any
railroad corporation may lease or pur-
| the stock of any other railroad. when
| their respective railroads can be con-
nected together and form a contin-
ueus line with or without branches But
! in that case the purchase of the stock
| would be by "a railroad corporation hav
| ing capacity to operate the railroad, even
aside from the authority to do SO, either
| expressly or implicitly granted by this
| statute; and such railroad could there
fore rightfully assume the control, man
agement and operation, of the railroad
| the stock of which it had so acquired.
AS to the PeafsaII Suit.
| am also cited to the case of Pearsall
vs.: Great Northern railway 161 Y. S.
| 646. Pearsall was the owner of 500 shares
| of the stock of the Great Northern COM
pany and filed the bill in behalf Of him
| self and other stockholders to enjoin the
Great Northern company from entering
into and carrying out an agreement with
| Dondholders, under mortgages of the
Northern Pacific company, who were
ABOUT to foreeloSe the mortgages and re-
organize that company, issuing new bonds
! to the amount of 800, 100000, to be guar
anteed by the Great Northern company;
| also stock to a like amount one-half of
which was TO be transferred to the stock
holders of the Great Northern company
| IN consideration of such guaranty, and
thereafter at all intersecting points, traf-
| fic was to be exchanged between the two
companies and the common earnings
therefrom divided on a mileage basis
The bill averred that the threatened
| to consolidation of the two railroads,
| In violation of the said Minnesota
statute Of 1874, and endanger the value of
compliments Great Northern stock
The court held that the transfer of one
half of the capital stock of the Northern
Pacific company to the shareholders of
the Great Northern company as body,
! for a consideration coming from the
Great Northern company as corpora tion
was virtually transfer of the stock to
the Great Northern company, who, having
| thus acquired one-half of the stock of the
| Northern Pacific company, would easily
and certainly obtain the little more neces-
| sary to assure it the mastership of the
Northern Pacific company and result in
the probable amalgamation of the two
companies in violation of the antitrust
statute, thus endangering the value of the
compliments shares.
| Why Relief Was Granted.
| The relief sought by complainant was
therefore granted to protect the property
interests against probable threatened
danger. But here again the purport of
the holding was that if one railroad cor
poration acquired controlling, majority
of the stock of another railroad corpora
ton 1T could operate it or control its
operation. under its own ample franchises
and powers to operate railroads
The court is far from sustaining the
idea that If single investor in railroad
stocks. whether a natural person or q
corporation without railroad franchises,
should acquire by purchase a majority or
the whole of the stock of both the North
ern Pacific company and the Great North
ern company that would work any con-
such purchases would have any power to
manage or operate the railroads of both
or either Of said railroad companies.
In the case under consideration the
effect between the purchase of control
ling majority of the stock of a railroad
corporation by rival railroad corporation.
which might control, manage and operate
| it, and a purchase of the same stock by
an individual or individuals, though hold
ing whatever amount Of stock in the same
rival railroad company.
I The court says: Doubtless these
stockholders fof the Great Northern
company could lawfully acquire by m
dividual purchases majority or even the
whole of the stock Of the reorganized
/ ! Northern Pacifc) company, and thus
possibly obtain its ultimate control but
/ the companies would still remain sepa
rate corporations. with no interests as
such in common.
l. l am not able to agree with the sug
gestion that this expression may be re-
| garded as one not necessary to the de-
cision and therefore perhaps not carefully
me to be a carefully considered and neces-
sary limitation or explanation of general
| language elsewhere made use of in that
decision