Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1881-05-06

the land grant valuable, and the interest
on the cost Of construction and expenses
begin at the start and never stop.
The company is able to undertake this
work of going on, from the Missouri river
westward and from the Columbia river
! eastward, not on this land grant alone,
but because its present road has been freed
| Of debt, is beginning to earn something
handsome, and therefore out of this present
road the company can pay the interest
! on its new obi igations. In time the stock
holders hope 10 realize something from
the lands To remuncratc themselves. for
this advance of interest on the cost of new
divisions, out of the earnings of divisions
which have been entirely paid for by their
money. In that hope, they dedicate the
net income on the road already built by
their money to help, in addition to the
land grant, the further construction of the
road.
But how does it happen that this road
is free from debt? And whose money is
thus going from this present road to pay
the interest on the new division to be con
structcd? Let me tell you the present con-
dltion OF this company, and let me briefly
explain to you how it got into this con-
ditiOn. When the crash came there were
three parties in interest; those who had
brought tn e bonds, the holders of the
stock, and the owners of what is called
the proprietary interest" The bondhold-
ers were scattered from Maine TO Texas,
and at that time numbered about 1000.
This large amount of bonds was Outstand-
ing, and there was considerable floating
debt, and the road was but little more than
paving its expenses. The enterprise had
reached no objective point; it was necessary
to carry ii further to make what had been
invested in it valuable. But in its then
condition no additional funds could be
raised, and so, early in the spring of 1875,
it was thought best to forcclose the mort
gage to rid the road of its debt and to
place ii in a condition for further develop
ment. All parties in interest were brought
together, andin order that there might be
no prolonged litigation all interests were
harmonized, aud in five months he pro-
property was sold under plan of reor-
ganization, which was made part of the
decree of foreclosure and thus speedily
taken out Ofcourt.
This aggreement which harmoniZed all
parties was this. The capital stock, which
by the charter, was authorized to be $780,
100000, was divided into SOL 100000 of
preferred stock and $4,000 900 of CON-
mon stock. The bondholders were to have
$40,000,000 of preferred stock for their
$4O,OOO,0OO of bonds, and as their bonds
drew 40 per cent. in gold, the interest
was called per cent. currency two years
interest had already accrued, and it was
decided to give to the preferred stock
accrued and three ~ IL aivaBce i've
years of interest at 0 per cent, making 40
per cent. so that each holder of bond of
81 900 received 81 400 of preferred stock.
This absorbed, say $42 900 900 of the pre-
ferred stock, and the remaining $9,O00,O00
was to he in the treasury for the general
purposes of the company. The stockhold-
ers were to receive common stock, share
for share, were not to be allowed to vote
for several years, and were never to have
dividends until, in each year, the preferred
stock had received per cent. and the re-
mainder of the capital stock, after deduct
ing the SOL 100000 of preferred and COM
mon stock, was to be distributed to the
owners of the proprietary interest. There
never was, in my opinion, wiser or more
expeditions proceeding with reference to
Il great corporation in a court of law in the
world. Aside from floating debt-which.
has since then all been taken care of-the
property was relieved of all its embarrass-
ments bv The surrender of the bonds in
nxchanIe for nreferred stock and there
was y hase on which TO raise new cani.
fol and IN nroceed with the work
Thn road in 1876 bcoan to mako Gonna
thinr ;ts net EARNINGS heinz sometbinr
inss iban $500 600. t6cv annear IN have
hoor n lit,io more in the animal renort
Inv, tho ovnepsns of tho rcneroI off;cos had
nv, no, hnen drdnc,ed Tn 1sT7 thow sl;ghtiv
Increased 10 somctbinr over S36, OO0 In
1s1s to ,hou, s4S0 00O and in IsTo n
about 5000 600
Won ,ll know how tho donross;on :,
business lasted f,iiv five vaors ond II Was
;mnossible 70 moko anv fnrward move.
ment in anv great undertaking and every
enterprise Witch was homnd t0 on forward
and accomnlish Il" worl, w;th;n car,I;n
ncr;od shnuld bn creditcd with five Years
Ind Ave years I've charrod to his Ion ~
nor;od ofienrnssinn w. Wing 'e
~, A.. ,, ,a-o
IN .ic 'ail ol 100 ,he company ielt
tiia' ,o''ci a''les were oa"hihS, anu ina,
llc ii'cuine from tie constructed foaa
Woulu slo" lls apill'y 10 pay the interest
on a ne" issue Oh oohus, "a ana lney 9e-
'rIin'ne. 70 go forward Do on dhey piaGeu
mortgage 10 secure S:''oo,ooo OF oohus on
VIA! - 'aiieu tle Missour! uiVisioh' eA-
tCnu'nS i.oin .hc Missouri nn river 10 .hc