Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1883-10-23
NORTHERN PACIFIC CIRCULAR.

NOKIHEkA IAClEIC JiECULAE.
| NEW YORK, Oct. % A circular will be
sent to each preferred stockholder of the
Northern Pacific railroad as soon as the
list can be copied from the stock ledger.
After recjtirC the actor OF the meeting of
! directors, October 6, locking towards exc
cution of the second mortgage of SIC. Geo.
900 the circular says: "Your beard con
sider it their duty to submit the following
explanation relative to the obisct CT the
meeting. In cur report for the fiscal year
Of 1928, you were duly advised OF the
existence of deficiency arising from TIE
excess of the cost Of the construction and
equipment of the main .ire over the avail
able resources, and 81 1unting on June
80, 1888, TO S7,966,507. You we're further
informed that to avoid embarrassment
to the company from the pressure of the
large floating debt. An arrangement had
been enter ed into with the Oregon & Trans
continental company, under which that cor
poratioa made the necess ary advances
on open account. Il was agreed that this
company should secure these advances
temporarily, by the issue of such obliga-
tions as could be created under tha re-
strictiors of the plan - reorganization.
This assistance has proved OF incaIculable
value, as besides assuring tha speedy COM
p!stion of the road, it has saved this com
panv during construction from the con-
slant embarrassments that s large floating
debt would inevitably have ertaiied. The
deficit, st the close of the past fiscal year
was increased by further requirements for
construction and equipment purposes be
tween July and October I. by the sum Of
OF 81, AIS, ,412, so that on the latter date it
amounted to $9,459. .92O. Ever since it be-
came evident that the main line could not
be completed ana equipped from the pro-
ceeds of the sale OF the first mortgage
bonds, your board have been fully i'm
pressed with the necessity OF dealing with
the deficiency at the earliest possible mo-
ment, but no measures of relief could be
determined upon and roposed to you IN
I'll the ac3ual cost of the main line over
available resources could 90 ascertained
with accuracy, which was not practicable
until the construction work had reached IT'S
latter stages. L is indeed e2ly row we are
prepared to make a definite statement in
this respect. There Will be required in
addition to the deficiency Of $9,459,920
Oct. the sum of &5,500,003 for the fol
lowing purposes: For acccuing construc-
ton estimates and voaehers, $1,66O,OO0;
for meeting future e5dno stes Of the chief
engineer for com pletion Of tbs main line
including machine shops, station houses.
water tanks, coal buukers, etc, 1851 eco;
bridge over Snake river at AinsTortp,
$+20,000; for present work on bridge over
Willamette river at Portland, Oregon,
$35,00O: additional motive power, $7+6,O00
additional rolling stock, $1,266.-
coo; miscellaneous, $IO6O00 total.
S5.5O0,O00. This arnount will provide
funds to finish tbs construction and equip
ment Of the road, except S750,O0O, which
will be gradually needed in the course of
two years subsequent 10 March 1st next,
for the complatioc Of the bridge over the
Willamette, and can be readily met out of
the current income, or out OF the reserve
Of the bonds hereinafter mentioned. We
have thus total. exclusive Of cost Of the
Willamette bridge, OF $14. .959, ,920 IN excess
of the requirements over the proceeds of
the general first mortgage bonds. It is
due to you that you be told plainly
so that you shall understand clearly the
causes that combine to produce this de-
fciency. In the first place the cost of the
Yellowstone, Clark's Fork and Pend
D'Oreille divisions was greater by $780,
600 than the engineers original estimates.
Loose material encountered instead of
solid rock in the Bozeman and Mollan tun-
nels largely increased the cost of these
vo-ks over the estimates, besides necessi-
tating the construction or temporary over
head lines ct an eZperso of $4,000.
The Bismarck, Snake River and Willamette
bridges will be more than expected owing
to the. extra cost OF foundations, ap-
proaohes, etc.'
Then again the development CT traffic
ere such that fully 20 per cent. more mo-
tive power and equipment is required than
has been estimated. Las! and not least
the Minnesota, Dakota and Missouri div
isions CT the main line were IN such con-
6ition and the requirements OF business
SO large that in order to render
their safe and economical operation prac-
c.ical total expenditure the past three
years of $3.804. sol for renewal of track
| and superstructure, the erection of shops
| at Brainerd and elsewhere, aud other bet
terments were 1ndispep sible. The cogt of
erection OF the Office buildiog at st. Paul
is also included in these expenditures.
We do not hesitate to ssy that
the road is as good as has
ever been built for the money west of the
Mississippi river. It has been examined
by number Of eminent American and
foreign experts since the opening to
through traffic, and their united testimony
is to this effect, and it is to thorough char
actsr OF construction that the excess of
the sctusl cost over the estimates must be
largely ascribed. But on the other hard
the road will hereafter be operates 50
much more chesply and efficiently in
consequence of the thorough manner in
which it has been built that the stockhold-
ers will find they have fall equivalent of
the enhanced expenditure.
| Alter due consideration of the situation