The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-06-10
Light in Which M. D. Mum Seeks
to Place the Railroad
Merger.
Well Studied Answer to Judge
Young's Extended Plea Of
Justification.
Defense, He Says, Has Practically
Admitted All Allegations in
States Complaint.

acts of James J. Hill, ]. Pierpont Morgan
and their associates. He reviewed the
whole history of the merger to show that
there was a conspiracy from the start to
suppress competition and his argument
was we'll studied answer to the plea Of
justification advanced by Judge George B..
Young and M. D. Grover. His construc-
ton Of the various acts Of 1901 was that
the "coterie" was attempting to do an
illegal thing In a legal way. While each
man claimed to be acting for himself and
without any agreement, all acted In con-
cert and the result pointed to a con-
spiracy to violate the law.
The States Rights.
Mr. Mum said he would reply fully to
the attack made on the rights of the
state Of Minnesota to prohibit consolida-
ton and would show that the sovereignty
Of the state and of the nation were each
complete, in their respective spheres.
Counsel for the defense, he said, had de-
voted much time to showing the be-
nevolent nature Of the merger. They
urged the courts to set aside the laws. be-
cause Mr.. Hill was seeking to build up
a great oriental trade 'Such an argu-
tive bodies" said Mr.. Mum. TT has no
place in this courtroom, and I will pay no
further attention to it."
Mr.. Mum then said the court was, no
doubt, surprised at the submission Of
three volumes Of testimony since the adj
missions made in the defense. They had
acknowledged the common ownership Of
the stock, and practically all the facts
alleged.
Referring to the rights of stockhold-
ers,' Mr.. Mum said that there was no
desire to abridge the rights of any man
but to preserve the rights Of all men, the
rich and poor, alike. The state was in
Nv In orfn inc re- Ia
Mr.. HIPS Denial
Mr.. Mum then referred to the testi-
mony Of President Hill, in which he de-
MED that anything had been done to re-
move competition. This was refuted by
the exhibited circulars, in which compe-
tition was eliminated between junction
points.
Much has been said Of the Testimony
of the states Witnesses by the counsel"
said Mr.. Mum. ~. ~ e,
81 will remind your honor that the
the evidence of the defendants them
selves as to their acts. This is a case in
equity, and it is the privilege and duty
Of the court to examine this evidence in
the light Of motives Of the witnesses.
think it Is clear that without deliberately
intending to perjure themselves these
witnesses have been very careful to give
The defendants had been attempting to
do an unlawful thing-consolidate parallel
and competing Hnes-in a lawful way He
maintained that this was a conspiracy. The
ambition of Mr.. Hill and Mr.. Morgan was
evidently to form more perfect union"
Of the two railroads. Testimony was read
to show that control of the two companies
prior to May, 1901, was in the hands OF
Mr.. Hill and Mr.. Morgan.
Merger PreIImlnarles.
Mr.. Mum then reviewed the acts leading
purchased" the Burlington not by deed
but by acquiring the stock, and issuing
joint bonds for the same. The Union Pa
cif1c demanded a voice in the Burlington.
This was denied Mr.. Hartman then made
1.-THE boldest move ever made on the finan-
c1al checkerboard in this country" He
started to buy the Northern Pacific. He
bought $41,0O0,000 Of the preferred and
$37, 900, 600 Of the common, or majority
of the total stock. Mr.. Morgan succeeded
in retaining control Of the common stock.
The retirement of the preferred stock, not
before preached. was now made neces-
sary to keep control of the road in Hill
Morgan hands. This was done by agree
ment. It was the foundation of the whole
merger scheme. The "coterie' then sought
to put the stock where it would stay, and
make their control permanent. So the
lied. after fruitless search for a terri
torial charter, beyond legislative amend
ments."
A Question Answered.
"Politeness compels me- said Mr.. Mum.
to answer Judge Youngs question as to
the difference between the Twin City
Rapid Transit company and the North
ern Securities Incorporation The differ
ence is that between a lawful and an I'M
! lawful act. The Twin City company
Is organized to operate connecting and
continuous lines. The Securities company
is organized to control parallel and com
peting lines
| The Northern Securities company was
arranged upon cut-and-drie plan. The
price Of the stock was fixed arbitrarily by
Mr.. Hill, and these men stepped up, one
after another, and deposited their stock.
Mt passes understanding that men should
place fabulous fortunes in the hands of
a company Of which they knew nothing.
Each man was acting for himself That
Is the way In which conspiracies to do All
| unlawful thing in an unlawful way are
usually carried on. There was. to say the
least, concerted action which brings the
same result as an agreement and amounts
! to a conspiracy. Mr.. Thorne testified that
Mr.. Hill had said it was his purpose to
put the control OF the Great Northern and
Northern Pacific in the Northern Securi
! ties company. Mr.. Baker and MIR. Ken
nedy admitted practically the same thing.
Mr.. Hill admitted that he had considered
deferring the annual meeting of the North
ern Pacific, in which he was a small stock
holder. so that the Morgan board could
not be displaced by the Hartman interests
and the preferred stock could be retired
Jan i, 1902. The sophistry of counsel
could not explain away this concert OF
action
Mr.. Morgan controlled the election OF
directors in October, and Mr.. Fill was one
Of those selected When his attention was
called to the fact that 1t was unlawful fol
/ him to hold office in both roads, he re-
signed. Colonel Clough then resigned from
the Great Northern as vice president. and
became director of the Northern Pacific.
Two months prior to the organization
Of the Northern Securities company Mr.
Morgan began negotiations with Mr.. Har-
riman to buy $7s, 100000 of Northern Pa.
cific stock and pay for it in Northern Sc.
tcurities stock. So confident was he tina,
Inc would control this corporation yet un,
4 born. s4s "
The three young men selected to do tn.
work met and organized the conpanx 40