New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-08
THE NORTHERN PACIFIC EAILRoAD.

TIE NORTHERN PACIFIC RAILROAD
Since the disaster which has Ovcrtaken the
scheme for railway from Lake Superior to
Puget Sound, the public have been reminded
of an important commission of German fnan-
ciers and railroad men who visited this coun
try in 1871 to inquire into this very project.
They travelled over so much of the route as
was then open they made minute examina-
ton of the resources of the country and the
probabilities of future traffic. they looked into
the financial condition of the company; and
when they went home they made two elabO-
rate reports to those who had sent them,-
namely, to the Union Bank of Vienna and to
a company of capitalists in Berlin. The ex-
PLANTATION of this inquiry was that the North
ern Pacific Railroad Company proposed to
negotiate in Europe loan for large amount,
secured by first mortgage on the property of
che road. The loan was not effected, and it
has always been understood that the reports
of the Commissioners were highly unfavOr-
able. For some reason neither of these docu-
ments was permitted to see the light. Jay
Cooke & Co. assumed the burden which Ber-
lin and Vienna were unwilling to carry, and
the bonds of the Northern Pacific Railroad
Company, instead of being taken up in block
by foreign capitalists, were sold in small
amounts to investors at home-to farmers,
shopkeeDers, widows, and poor clergymen-in
short, were converted into popular loan by
nearly the same agencies which Jay Cooke &
Co. had used in behalf of the Government
during the war. How far this popular dis
semination of the securities has been carried
it would not be easy to say far enough, at
any rate, to render the document which we
publish this morning most interesting reading
for great multitude of people
With great deal of trouble we have secured
both the German reports, and we present this
morning a translation of that of Herr Haas of
Berlin The two reports agree very closely in
their chief features. Both reach the conclusion
that the company does not offer a sufficient
guarantee for the payment of its obligations
TO the ndhOlders-lndeed, that for some
time after its completion it is certain to make
default. Herr Haas therefore advises his prin
cipals TO have nothing to do with the loan.
Herr FOltz of Vienna is equally decided in his
opinion as to the present scheme of the COM
pany, but he suggests plan for the creation
of reserve fund of $20.0OO00O, by an assess
ment on the stockholders, out of which any
deficiency IN the interest fund may be made
good. The report which we print this morn
ing has been shown to the President of the
Northern Pacific Railroad Company, and as
matter of justice we print also his remarks
upon it. BY a comparison of the two, any one
can see just how the enterprise stands.
Herr Haas reports that the estimates Of the
cost of the road are generous enough, and Che
land will in time bring good price, for it is
generally of excellent quality. IL the loan
should be taken, therefore, tho work could be
completed with the proceeds, and the land
sales would be sufficient to provide for the re-
payment of the principal at maturity. Whether
the company could pay interest however on
the bonds is another question. Tho interest
would amount 10 S73OO.OOO q year in gold.