The Sun and the New York herald., 1920-02-18
HILL MERGER OF
WESTERN LINES
TOBE REVIVED
New Northern Securities"
to Take Up $4OO,OOO,OOO
Burlington Bonds.
RAIL BILL OPENS WAY
Famous Consolidation in 1901
Was Dissolved Under the
Sherman Act.
RAIL BILL OPENS WAY

lserdl 10 TIE SOS AND NEw YoEx HERALp.
81. PAUL, Feb. 1.-THE gigantic
railroad merger evolved by the Hill
Morgan interests after the panic Of
1901 on the New York Stock Ex-
change, known as the Northern Sc
curities Company, which was held
violation OF the Sherman Antitrust
law by decision OF the United States
Circuit Court Of Appeals in 1903. is to
have rebirth in a new consolidation,
according 10 reports strongly current
here to-day.
J As in the former instance, the COM
bIne is TO consist Of the Great North
srn Northern Pacific and the Chicago.
Burlington and Quincy railroads. The
chief reason for the merger is the
necessity Of meeting s4OO, ,OOO. 900 worth
Of Burlington bonds which were issued
a the time Of the formation OF the Ma
tOnal Securities Company and fall due
in 1921. Confirmation of the amalga-
nation is refused by all officials, in
Guiding L. w. Hill, chairman Of the
Great Northern Railroad, who said no
pans for the merger had been dis
cuSsed
There Is. however, excellent basis to
the report from authoritative sources.
Additional strength is given TO the re-
port BY the fact that the present railroad
bill in Congress, which has been agreed
upon BY the conferees Of the Senate and
the House. provides for the consolidation
Of even competing lines Consolidation
is urged upon the roads In the bill. but
with certain restrictive limitations fixed
BY the Interstate Commerce Commission
or some like board. The question now
Is how far consultations Of competing
Ines will be permitted in the interests
Of the public. The new railroad bill, 1t
is admitted here, lifts the bar laid over
tae railroads by the Sherman antitrust
act and opens the way for a revival OF
railroad activities and consultations.
When the Northern Securities Com
rsny was ordered dissolved the Great
Northern and the Northern Pacific were
left as guarantors Of the $500. 100000
capitalization issued in Burlington
bonds The Burlington stock Is deposited
as additional security. The refinancing
0, $500, 100000 at the present rate OF
interest as against AZ per cent, which
me bonds now bear, Is a tremendous
task The merger would make the re-
nnancing comparatively simple. 1t
would have the further result Of wiping
out the costly competition between the
Wo big transcontinental lines
something Of the importance Of the
merger. II II Is effected. Is made appar-
ent from the total mileage Of the three
roads involved-27, 900 miles The
earths circumference is $4,000 miles.
u the retroaction Of Congress regard
ing combines becomes fact, return TO
,ch railroad enterprise as marked the
formation Of the Northern Securities
company may be expected. The battle
,T supremacy that led to the merger in
!'O! sprang out Of the purchase by the
James j. Hill and j. p. Morgan group
=! hnsnciers Of the Burlington. The
,alon Pacific. with lines paralleling the
burlington, saw itself forced into a sec
"naaFy position. and failing in an at
,hpt tN reach an agreement with the
burlington buyers through Kuhn, Loeb
20 quietly began buying Northern
Pacific s.Cck.
IN May 3. 1901. while the market was
'akns from the effect of this drive,
EHn Northern Pacific forced up to 1000
snare anJ the bottom tumbled out Of
lt rest Of the market because Of the
navy nlnading OF the short traders,
ue Inion Pacific announced II had con-
w OF f6t.O00.O00 worth Of Northern
,,,, rscihc s'gk. That won the battle. The
nAl-Nortsn interests parleyed. but
en,usl'H offered TO take the Union
ae'hc Ito the new company. and the
merger was Effected. The company paid
per cent dividends in 1902, and In
t,sorusry. 1903. increased the rate TO
"a per cent. In April the Circuit Court
=. appeals handed down its decision.
was announced an appeal would be
clear -
s'snd' 70 THE sUv AND NEw YoRK HERALb. I
"l-E!&SS5,'. Te1. iT.-Consoiidation
me Northern Pacific. the Great |
NCgf'hern and the Burlington into one
,a.foad system will be possible under
E pending railroad bill as finally
SEQ on hy 'he conference managers
\ ne S"nVs and House tonight As
q, WI Be -e;orted 10 tine two houses
~, OIL rro- Les for ''permIssive con.
"'a'oH %. rairoad lines or systems
..' me approval OF he Interstate Com
e Comm ssion. The commission
>-'' pass on any proposed merger and
aen '''s
no, ?. poss Of consolidation under I
~, ali tie roads naturally must fit
,.. -9 single unit. The commission,
n the act. is empowered 10 suggest
AaFaaee general grouping OF roads
tof'Hued on Eighteenth Page.