The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1909-09-30

cago and St. Louis. and nearly every
other prominent point on the Missls-
sippi and Missouri rivers above St.
Louis, besides spreading over the
states of Iowa, Nebraska and the
Northern Colorado, Wyoming, and
the Black Hills mineral country.
The total Burlington stock is
around $11O,000,000, of which some
thing over $1O7, O00,O 900 were acquired
by Great Northern and Northern Pa
ciflc by issuance OF around $685.
100000 OF Their joint bonds. During
the progress OF these purchases ma
:ority OF the stock of the Northern
Pacific Railroad CO. was acquired by
the Union Pacific Railway system,
for the evident purpose Of securing
not only control At the Northern Pa
cifc company itself, but also, through
it, control over the Burlington. The
stock of the Northern Pacific CO..
then consisted Of $4,000. 1000 prefer
red, and $S0,0OO,000 common; the Or
mer being subject to retirement. at
par, on the first of January of any
year up to 1917. The acquisitions of
Union Pacific comprised $41,000,000
preferred and $37,0o0,00O common.
When, in April, 1901, Mr.. Hill and
those then in control of Northern
Pacific learned of Union Pacfics
move, they held, in the aggregate,
about $24,000,0OO Of Northern Pacific
common, and to fortify themselves
aga INST Union Pacific's project, &C
uuired enough more of the common
by purchase in the open market, to
bring their holdings of common up
to something more than $41 900, 900;
thus to majority Of all the COM
mon. The purchases by the two in
tererts stripped the New York mar
ket Of Northern Pacific common
available for deliveries; so that some
short sellers OF common were un-
able to make delivery. This condi-
tion produced the extraordinary
prices for this stock, and resulting
panic, of May 9, 1901. ..
The holding by Mr.. Hill, and those
acting with him, OF a majority OF
Northern Pacific common stock, gave
them the advantageous position, that
if the Northern Pacific company
should exercise it's right to retire
the preferred stock, and should raise
the necessary funds y an issue or
new commo nstock, sold to holuers
of the existing common, ratably to
their holdings. Union Pacific would
thereby become minority holder.
For some years PRIOR to 1901, Mr..
Hill and few of his associates in
Great Northern had been consider
ing the advantage of keeping their
holdings together, where all would
receive Ike care and treatment, and
had reached the conclusion that the
purpose could best De met by selling
to some corporation with appropriate
legal powers, which should pay for
them in it's own stock or other form
of security. The events OF the
spring of 1901 naturally accelerated
the maturing of thi splan. AS near
ly or quite all the party individually
also held shares in Northern Pacific
it seemed that these latter mi"ht
advantageously (be treated in the
same way; especially in view of the
recent efforts, SO nearly successful,
of rival interests to obtain control
of the Northern Pacific property.
It was decided that the proposed
holding company should extend the
pportunity of selling to it Great
Northern and Northern Pacific stock
to all owners of those stocks, large
and small, upon identical terms. No.
vember l., 1901, certificate OF in.
corporation under the name North
ern Securities company was filed in
the state of New Jersey. The author
lied capital stock was fixed at $780,.
100000, and the compan was en-
powered to buy, sell, own and man.
age the stocks and ecurities of any
other corporation.
BY mere coincidence, and without
ny designed connection between the
two transactions, on the same day
the board OF directors OF the North
ern acific Railway company adop-
ted resolutions retiring the company's
preferred stock, from and after Jan.
I, 1902, at par for cash and pro-
viding for raising the needed funds
b issue and sale to holders of ID
common stock rata'bly, at par, OF
$75,000,00O OF new common. The re-
striction to holders of old common, of
Inc right to buy the new common
conformed with the plan of Northern
Pac ,fic reorganization in 1896. which
created the right Of retirement of the
preferred stock solely for the benefit
of the common, as tn preferred
mainly represented bonds of the old
and. in the re organization,
the common had been subjected to a