| Show significance OF RECENT LEGAL controversy at the conclusion of the national governments suit against the northern securities company the further declaration of dividends on its stock was enjoined and its assets were ordered to ie distributed to the original holders A plan was devised to govern thi distribution 0 assets whereby the holders of the northern securities stock were to receive ratable proportions of great northern and northern pacific stock with the result of leaving the control of the northern pacific in the hands of the mill morgan party this was resisted by mr harriman acting for the union pacific party on the ground that the oregon short line had deposited northern pacific stock with the northern securities company as a quasi trustee that the northern securities stock should therefore ba looked upon as representing trust certificates and when presented to the northern securities company in accordance with the decree of the supreme court should be redeemed with the exact stock deposited viz the stock of file northern pacific an affirmative decision by the court upon this proposition would have left the oregon short alno in control of tho northern pacific and mr harri mans original object would have been accomplished the courts however held to the contrary view that is that the original exchange of northern securities curi ties stock was an actual purchase and that the company had tho right to dispose of its assets according to value and not to identity with their defeat upon this fundamental proposition the interests of the union pacific party in the securities of its northern competitors are reduced to mere investments without collateral advantages of control and it is not unlikely that they will cven dually be disposed of for cash or for securities which will carry with them some benefits in addition to the income derived from their ownership the oregon short line holdings of southern pacific while not producing any revenue are of great potential value southern pacific earned last year aeden per cent on its stock and the excellent physical condition and strong traffic position of the company apparently the declaration at an early date of at least four per cent on its stock this would mean 1 13 1 3 per cent on the stock of the union pacific and it la co doubt due to those holdings of southern pacific stock aa well as to the expected special dividends on the great northern stock which it owns that the common stock of the union pacific has recently sold at prices which yielded the investor ices than 33 per cent possession of southern pacific stock Is also profitable to the union pacific because it insures it permanent tenure of the line of the central pacific the western link in its overland route and further by these holdings which have been translated into identical official control it is protected against competition in overland rates |
