Plentywood herald. [volume] (Plentywood, Mont.) 1908-current, 1927-11-18
Hill Once "Unified' @. N amid N. Po3 Empire
Builder Saw Wisdom of Mergimg Lines i'm 1898

United States. I was in New York al the
time, and after Messrs. Morgan & Co
were aware Of the action OF the Union
Pacific people, it was found that to-
gether We held about $40, O0O. 900 OF
Northern Pacific ommon stock; and,
inasmuch as common stock, by right OF
a contract made with the preferred stock
| holders when the company was reorgan-
lied and the stock issued. had the privi-
lege of paying off the preferred stock
at par on the first day OF January In
any year until 1917. Messrs. Morgan & Co
then bought In London and New York
about $16, 900 900 of the ommon stock
of the Northern Pacific; at the same
time the Union Pacific interests, having
| already so large ar investment, bid the
stock up until there was the largest
stock corner ever known: the common
stock in three or four days went UP to
81, 900 per share.
Control of Northwest Sought
Il explained to my friends how that,
with control OF the Northern Pacific,
the Union Pacific would control the en-
tire northwest mt Of the west from
Mexico to the Canadian line, except
for the Great Northern. So great was
the effort to get this control that one
of my friends In London. who owned
V@fONNr000 ~ AVA "a Al
was offered n refused tl4.O 1000 900 for
his stock. The result was that Messrs
Morgan IL Co. and ourselves owned S42,-
10000 Of $50, 900 900 of the Northern
Pacific common, with the privilege OF
paying Oft the $75 .000, 900 OF Northern
Pacific preferred. The Union Pacific
people owned $37, 600. 900 Of the common
and about s42,00o,0oO OF the preferred
which was a, clear majority of all the
stock of the Northern Pacific. and
claimed the exclusive control OF the
Northern Pacific railway and through
that ownership q control OF one-half OF
the Burlington. When it was known that
these preferred shares could and would
be paid off n before the annual elec-
ton. mutual negotiations resulted In
Mr.. Morgan giving them a representative
in the Northern Pacific board. AT the
same time l notified them that I could
not legally act as a director Of the North
ern Pacific and Great Northern at the
same time. and / resigned after the first
meeting of the board.
Several Of the gentlemen who have
long been interested in the Great North
ern railway and its predecessor. the st
Paul, Minneapolis and Manitoba COM
pany, n have always been anon
holders of majority Of its stock, whose
ages are from 10 to SO years, have desired
to combine their individual holdings In
corporate form and in that way secure
permanent protection for their interests
and a continuation OF the policy and
management which had lone so much
for the development of the northwest
and the enhancement OF their own prop
erty in the northwest and elsewhere. Out
of this desire has grown the Northern
Securities company.
Explains Northern Securities
1T became necessary Tin order TO pre-
vent the Northern Pacific from passing
under the control of the Union Pacific
interests and with 1t the joint control
OF the Burlington) to pay off the $75.-
000,0 900 of Northern Pacific preferred
The enormous amount of cash required
for this purpose from a comparatively
small number of men made 1t necessary
for them to act together in a large and
permanent manner through the medi-
UNI of a corporation, and the Northern
Securities company afforded them thu
means of accomplishing this object with
out the necessity of creating a separate
company to nance the transaction fol
the Northern Pacific: while, at the sam
time, the credit of the Northern Securi-
ties company would be much stronger, a.
it would also hold a considerable amount
of Great Northern II other securities
"The Northern Securities company Ii
organized to deal. in high-class securities
to hold the same for the benefit of Its
shareholders, and to advance the interests
of the corporations whose securities II
OWNS. Its powers do not include the OPP
Grafton of railways, banking. mining, mol
the buying or selling of securities OF
properties for others on commission; II
Is purely an investment company and the
object of its creation was simply to en-.
able those who hold stock to combine
their respective interests in association
together, and to prevent such interest:
from being scattered by death or other
wise. to provide against such attacks az
had been made upon the Northern Pa.
cific by a rival and competing interest
whose main investment was hundreds Of
miles from the northwest and whose ONLY
object in buying control Of the Northern
Pacific was to benefit their southern
properties by restraining the growth Of
the country between Lake Superior anc
Puget Sound, and by turning away from
the northern lines the 0 Orienta
traffic which must follow placing on thu
Pacific ocean the largest ships In The
world"
1t was In this manner that Mr.. Hill
and his associates retained control o.
the Northern Pacific In 1901, though the
instrument which made UGH contro
possible-the Northern Securities com
~peny-was declared by the United StateI
supreme court to be Illegal, and 1t haC
RI ho abandoned in 1904