The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-06-08
WHO CONTROLS
N. S. COMPANY?
Judge Young in Merger Case Argu-
ment Says Morgan and Hill
Do Not.
Takes the Position That Promoters
of the Merger Were Entirely
Innocent.
>Defense's Counsel Goes Over Evil
dence of the State With Fine
tooth Comb.

having opened with tWo-hours' speech
Saturday afternoon.
The argument did not deal with legal
problems. 1t was a plea in justification
of the Northern Securities company. Mr..
Hills testimony was the text for it, and
it was an argument after Mr.. Hills own
heart. Judge Young maintained the in
nocence of the company's promoters.
They were driven to this course. They
had to do something to protect the North
ern Pacific from the Hartman DOGGY, so
they planned a holding company. The
aged men who owned Great Northern
stock had planned just such a company,
SO they got together to create company
with a capital SO lareg it could not be
raided.
AS a clincher Judge Young advanced the
rather startling proposition that Messrs.
Hill and Morgan did not even now con-
troll the Northern Securities company.
They only had s140,Ooo,0o0 out of the
$3.50, 600, 900 in stock issued Therefore. in
spite of the common impression, these
gentlemen did not control the two prop
critics. Just who was lin the saddle,
and who was bringing about the com
munity of interest" Judge Young did not
state. However. he maintained that they
were either innocent or they had failed
in mad attempt to mrege the two rail-
roads and become candidates for the Min
nesota penitentiary. All these gigantic
transactions, he declared, were done with
out any controlling plan or purpose. There
was no evidence to show that the public
had received anything but benefit from
this change.
Printed briefs Of the opposing counsel
were fled day They are very similar
to the oral argument used, except Tor
several decisions cited to cover each point
Great Northern Shareholders Wishes.
Judge Young attempted to show that
the Northern Securities company was
formed under the necessity of protecting
the Northern Pacific from the control Of
hostile system traversing another part
of the country. The Great Northern
shareholders were allowed to come In,
he said because they had wished to form
such holding company. They were not
brought in to form a merger, and the Or
ganizefs Of the company did not partieu-
larly desire them to come in, as shown
}sby their putting a price Of 40 on stock
that was selling at 100. and has since
gone higher. Mr.. Hills testimony was
quoted to prove that there had been no
| solicitation Of Great Northern sharehold-
ers except a letter offering them the op-
portunity This letter. urged Judge
Young, was entirely silent about the
| Northern Pacific or any merger PROPOSE
| ton. There was some discussion to
whether the Northern Securities COM
pany should organize under Minnesota
laws. but the danger of continual tinker
ing by the legislature deferred the pro-
| moters of the plan. Owing to the ex-
tremely unfriendly treatment of the rail
roads by the legislatures and the courts OF
! the state for several years. There were
| no territorial charters available 50 after
| some search Of statutes New Jersey was
selected as a home That state was also
! the home Of the street railway company
| Nnn coff no t1oA %r,},, 1T;
What reason Is there demanded
Judge Young Of Mr. Mum. why that
company should hide behind the law OF
New Jersey? What connection does II
have with New Jersey? On the other
Inland the Northern Securities company
does no business in this city and is chiefly
concerned in selling stock on Wall street
AS to the statements of counsel thai
Mr.. Hill had acted against the advice Of
his counsel and only by the advice of Col
onel Clough, Judge Young declared that
the company was organized under the
! advice OF as able counsel as could be
found in the United States.
Who Is In Control.
Out Of the 100000, 900 outstanding stool
tof the Northern Securities company, Judge
Young said the persons accused of tryins
to control the stock had only $140, 900 900
If they were making themselves liable tt
imprisonment by trying to get hold o
these properties, they had failed in thei
} attempt, and did not really have control
Mr.. Kennedy's testimony was quoted t,
show that the promoters were not solici
tous about getting a majority of the stock
and there was no mutual agreement. Mel
ther of the railroad companies nor thei
officers, as such, had anything to do wit
organizing the Northern Securities com
pany. 1t was purely the shareholders, an,
, only eleven out Of the 1900 Great North
ern shareholders were concerned.
ALI Of the acts of the Northern Securi
ties company, except that of securing it
, charter, were done in New York. Non
were done within the limits of the stat
of Minnesota, and the jurisdiction Of tina
state stops with her boundaries. Mr.. Ken
nedy also testified that there was no agree
/ ment with regard to the voting of tn
Northern Securities stock. He owned tn
latter stock, but the stock he for1nerl
held in the railroad companies had passe
out Of his hands, and was absolutely owne
by the Northern Securities company
No Agreement with Hartman.
81 Judge Young combatted the statement
that the merger company was formed &C
cording to the agreement with Mr.. Harri
man after the raid in May. There wa
no talk of joint holding company tt
September. according to the evidence
Before that time Mr.. Morgan thought ,
: putting the Northern Pacific stock in til
!, hands of some trust company. The retire
= ment of the Northern Pacific preferre
stock had nothing to do with the forma
: ton Of the Securities company.
!. Attorney General Douglas and Mr. Nun
: maintained that these actions were a
), tied together as part of a common pla
:. and agreement. and Mr.. Mum promise
!, to cover that point in his concluding a,
:. gument.
Judge Young said that the purchase Z
the Hartman stock by Morgan gave MOI
!, gan control without the aid of Mr.. Hill
). and he could have retired the preferre
stock on his own motion.
I'VE would not ask anything better tina
= the states testimony declared Judg
Young, ito show that there has been n
injury to the public from the organize
:, ton of this company. 1t is absurd to sa
:. : from this evidence that there is an
= prejudice to the shippers from TIL
: change
Judge Young then went over the ev
dence Of the Moorhead business men q
: to the withdrawal of long haul rates. Il
Continued on Second Page.