The Cooperstown courier. (Cooperstown, Griggs Co., N.D.) 1902-1913, 1903-08-06
Judge Loclren Decides That the Northern Securities
Company is Legal Organization.
Consolidate
Northern Pacific Railroads Of Decision

oOtaM cOnsro! OF tne NOrthern Pacific
injuriously affect the property OF the
Great Northern railroad, and the country
cific railroad. And in the project Of es-
tablishing q holding company to pur-
chase and hold majority Of the stock Of
for the purpose of selling to such holding
company and placing therein their own
stock In the Great Northern company and
same company who might choose to do
likewise. and thus accomplish their pur-
pose above stated Of giving permanency
to the management and policy Of the
Not Done by Companies.
The Incorporation Of the Northern Sc
curities company under the general laws
OF New Jersey and with q capital of
$500 000. 900. was completed Nov. Is, 1901,
Neither the Great Northern company nor
the Northern Pacific company, by any
had anything to do with the formation or
subsequent action Of the Northern Sc
cnrities company; but Mr.. Morgan, Mr..
ern, Pacific company and Great Northern
company. were individually the promoters
VINO caused and procured the incorpora-
for the purposes above stated.
The. Northern Securities company
when formed offered and agreed to pur-
chase and to pay for in its own stock at
Northern Pacific company at the price Of
Sis per share and any stock Of the Great
Northern company at the price Of $3.50
stock OF said two railroads were at such
rates and SO paid for, purchased from
said promoters and other stockholders
Ct said two railroad companies by said
About the same time Mr.. Hartman
and his associates sold to ]. p. Morgan
& Co. al the Northern Pacific company
amounting to more than SIS. 900. 900, and
said ]. r. Morgan & Co. at the same
ern Securities company. who paid the
considerable therefor directly to Mr..
Hartman and his associates: a part of
than Ss2. 900. 900 Of the stock Of said
Northern Securities company. That pur-
chase was completed on Nov. Is. 1901.
stock. having raised the money for that
purpose by an issue Of bonds, which were
made convertible, and were converted
er stockholders Of each of said two rail-
road companies sold their stock to the
Northern Securities company receiving
rates e the last
company so that by Dec. 1, 1901. said
Northern Securities. company had become
the. owner of considerable more than a
majority Of the stock of the Northern
Pacific company, and a large amount, but
less than q majority Of the stock Of the
Great Northern company Similar pur.
at the time Of the commencement Of this
suit the Northern Securities company had
become and still IL the owner OF about
ern Pacific company and Of about rs pei
cent of all the stock of the Great North
ern company. a.
Conclusions Of Law.
"First-1t is obvious from the fore
ging facts that the Northern Securities
company was incorporated with the pur-
pose and intent on the part of its pre-
by exchange for its stock. and should
Of all the stock Of the Northern Pacific
AGAINST the danger Of any nf futSpe ras
upon its stock which might place its man
agement and the resulting control Of the
Burlington system In the power Of any
! might be hostile to the development and
property Of the Northern Pacific and
Great Northern companies, and their sea-
board terminals. and Of the region Of
This was the avowed purpose Of Mr..
Morgan and his ASSOCIATES who acted t..
Hill and other large stockholders Of the
Great Northern company. who also held
large amounts of stock in the Northern
that any hostile control Of the Northern
Pacific company which might sacrifice
its interests to rival. would be disas-
Of eaof the c Great Sortse g Company And at
the very time when the Northern Sc
curities company was formed and incor-
sy OF the large .f h9nss
himself and his associates acting with
him and by the then purchase by J. p.
Morgan & Co. Of the Hartman holding
able at once to transfer and have trans
ferred to the Northern Securities COM
pany large and controlling majority of
the stock OF the Northern Pacific COM
pany as was done; thereby accomplishing
las was believed) the purpose Of securing
that stock against hostile raids in the
future.
No Purpose to Control.
With respect to the stock Of the Great
at wen e ae
pany was incorporated It was the purpose
and intent Of Mr.. Hin and other large
stockholders Of the Great Northern COM
pany who acted with him to sell and dis
pose of to the Northern Securities COM
pany for its stock, their several hold
ings of stock in the Great Northern COM
to the end that such large amounts Of
Great Northern company's stock should
be kept together, and Gas 1t was hOped)
aid in giving permanency to the manage
ment and policy which had controlled and
was controlling the railway and develop
ment Of that company. And It was their
purpose that all other stockholders Of the
Great Northern company who might
choose to do so. should be permitted
to sell or exchange their stock of that
company for stock of the Northern Sc
curities company on the same terms; and
1t was hoped and expected that many
would do SO.
but the said Hill and his associates
had no power or control which could en-
able them to transfer Or cause to be
transferred to the Northern Securities
company so much as one-fourth Of the
stock Of the Great Northern company.
The evidence. therefore. fails to show
that the Northern Securities company
was formed for the purpose Of acquiring
and holding q majority. Of the stock Of the
Great Northern company. as well Rs that
| Of the Northern Pacific company. Al
though that result followed soon. after.
and may have been desired ald antici-
p-'e state Antitrust Lave. s.
..2. One question in. this cause is
whether the acquisition by the Northern
Securities company, in the manner above
stated, Of majority Of the capital stock
Of both the Great Northern and NortheSn
Pacific companies. which own and operate
parallel and competing railroads across
the State Of Minnesota, and its ownership
81, such stock is q violation Of the Mime
sofa 4anti-trlst law-Laws of Minnesota