The Aberdeen Democrat. (Aberdeen, South Dakota) 1???-1909, 1903-08-07
LOSES SUIT
,, ocf1ren Decides That the Northern Securities
Company is a Legal Organization.
.,.up of the Stock Does Not Consolidate the Great Northern and the
Northern Pacific Raiiroads--Text of Decision.

1,,,a L.ochren OF the federai couFt,
PHasS sion handed down in st. Paul
q ass morning, holds that the
'.hsrn Securities company, popu-
'n aal,ed the merger" does mot
Tho antitrust laws of Mime
s'a nor of the United States. i ,
a. al3 l% ease is known as the states
lu /" because it was an action begun
state attorney general on be
n Of the state.
1.asa Lochren's decision is at vari-
~ wv with that of the United States
W.. court of appeals, which held
!. the merger was an illegal com
ss.i,r and which sustained Attor-
' ro,aral Knox and the govern
ent's attorneys.
~ hrisf. Judge Lochren holds that
= Northern Securities company is a
aiding" company and there Is moth
: "a show that it is in restraint of
80 az the state laws define re-
RANT.
Discusses the Merits.
7,,asa L,ochren goes into the merits
the case and in referring to the
Monuments case at st. Louis he
ms. reject the doctrine advanced in
l. government case that "a person
L. he held to have committed or to
! %purposing to commit a highly penal
lime merely because 1t can be shown
hat his pecuniary interest can be
hereby advanced"
Judge Lochren holds that the North
I'm Securities company is not an OPP
rating company and does not manage
he Northern Pacific and Great North
I'm railroads. 1t is not in possession
/ a majority of the stock of the two
baas and therefore physically unable
b control them.
Individual ownership of stock in
arallel railroads, says the court. is
lot in violation of the law. He dis,
Enguished the famous Pearsall case,
Ehere the Great Northern as a COM
bany sought to purchase half the cap.
tai stock of the Northern Pacific. This
Vas held illegal by the court, but as
he Securities company is an indi,
tidual, it is not unlawful for it to hold
btock in both companies.
History of the Company.
The court deals with the history OF
he company, tells of the efforts Of the
Hartman interests to secure control
bf the Northern Pacific at the time the
Burlington was absorbed and refers tc
he triumph of Morgan and Hill over
he opposition by forcing the retire
ment Of the Northern Pacifc'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. 1, 1902. The
supreme court of the United States de
nied the petition that it assume orig
inal jurisdiction, and the action wa!
resumed in the state courts, to bt
transferred to the federal court ant
brought to trial in June of this yea.
after numerous delays.-Minneapoli!
Iimes, Aug. 2.
The Decision.
ht st. Paul June S. 1903. upon the bill
W and testimony taken and on file
rat the cause is one of equitabl
&coSnizance and that this court has right
Iiua' jurisdiction of the same was concede
~ counsel: The was fully argue
ana upon full consideration the following
liaels appear and are exhibited:
Burlington Purchase.
Inc purchase of the Burlington syster
Wy the Great Northern and Northern Pa
rIane' which was completed about April
a'o!' led the managers OF the Union Pa
G Gc company to fear a diversion OF trat
to i tha r me railway Of the Union Paeifi
sompanies; and Edward H. Hartman
aepiesentlng the Union Pacific company
anpplied to James j. Hill and j. Pierpon
Gci rnagt Who respectively represented tn
ttbS n 1ies In such purchase. to PERM
she Union Pacific company to join an
SnaSe with them in the purchase of tn
r pusl'agton system; but his applicatio
s%Thcreupon the said Hartman an
GptaSrs acting in the interest Of the Unto
Latilc company began rapidly n quiet
y 20 purchase the stock Of the Norther
n n,,;rd company. intending thus to &C
auire a majority Of that stock and tn
iohIrol OF that company. with its ha
interest In the Burlington system.
ine common stock Of the Norther
bas'flc company was $50, 600, 900. and
tlaa issued. m had outstanding pre-
,eLted stock to the amount of SIS, O0O,0 90
m..cn mad the same voting power as II
common stock, but which The compan
TX me action Of its directors might pa
az at par, and thus retire on the fir!
NY ! OF January, 1901, or on the first da
VI any succeeding year. During TT
llaa0on,th of April and first week in Ma,
i'ul. the said Hartman and others &C
DE- ps with him In the interest of the Cnic
luitaG!ac company purchased and held
Ute more than $37, 900. 900 of the con
. idon ans stock. and a little more than s4i
NSyO,qSo OF the preferred stock Of Il
.nan $751; 900. 900 in all. and more h
majority of the aggregate of the con
mon and preferred stock of that con
u But in the first week of May. 1901:
~ n Morgan & Co. becoming a~pprehensiv
purchased $1,000, 900 of the commt
n.ock of the Northern Pacific compan
MhlGh With their previous holding OF IN
stock n those Of Mr.. Hill and oth
stockholders Of the Northern Pacific. con
npany who in this matter acted with N
MORGAN; gave the latter the control
more than $4,000 900 of such
STOCK. As It was known that Mr.. Morg;
'nnu MS associates would insist upon Y
m and retirement Of h prc1err,
ssoGk on JAM /, 1902. and that tho ooa
81 directors OF the Northern Pacific col
Iany would take action to that emo; "