Helena weekly herald. [volume] (Helena, Mont.) 1867-1900, 1883-09-13

PRESIDENT of the Vermont Central Railroad
Smith and his associates spent over foul
years in vain attempt to induce Congress
to make grant of bonds to aid in building
the road, or to guarantee the interest on the
Company's stock. In order to strengthen
this project for Congressional aid the organ.
lzatlon of the Company was changed under
Smiths management, and a number of emf
nent railroad men brought in, including j
Edgar Thompson, of the Pennsylvania
Robert Burdell, of the Erie, William G
Fargo, of the New York Central, G. w. Cass
of the Pittsburg, Fort Wayne & Chicago, and
William B. Ogden, of the Chicago & North
western.
No progress was made towards commenc
ing the construction of the road till Jay
Cooke came to the aid of the enterprise with
his great reputation as a successful fnancier
He obtained legislation in Washington
authorizing the issue of bonds and changing
the main line of the road, so that it should
run down the Columbia river to Portland
and thence north to Puget Sound, instead Of
across the tremendous barrier of the Cascade
Mountains. Cooke first proposed to place
the Northern Pacific loan in Europe, but his
plans to this end were defeated by the break
ing out of the Franco German war;
He then put the bonds upon the American
market, using the same means to ipopularize
them which he had successfully employed in
selling the great war loans of the United
States Government. In two years time, be-
ginning in the spring of 1870, he sold about
S3O,OOO,O0O Of bonds. In 1870, with the
means supplied by him, the company began
to build its line, commencing work at
I Thompson Junction, twenty-three miles west
Of Duluth. Jay Cooke was then building a
line from st. Paul to Duluth and the North
ern Pacific bought half interest in the
twenty-three miles from its junction to Du-
luth Duluth was an obscure hamlet in the
forest, inhabited by perhaps hundred peo-
pie. 1t had no harbor, but good one was
obtained by cutting a canal across long,
narrow sandbank enclosing the Bay of Su-
perior. Construction was also begun, in the
same year, on the extreme western division
of the road, running from the Columbia
river at Kalama northward to Puget Sound
In 1871 the road was finished across Mime
sofa to the Red River of the North, and in
1772-3 it was built as far as the Missouri
river, where town was laid out and named
Bismarck. On the Pacific side 1O5 miles of
road, between the Columbia river and Puget
Sound, were completed by the fall of 1873,
and terminal city laid out in dense fir
forest on the Sound and named Tacoma.
BANKRUPTCY AND REORGANIZATION.
The panic of 1878 destroyed the banking
house Of Jay Cooke & Co., and paralyzed for
the time, the Northern Pacific enterprise
The company was left with bonded debt of
about S3O,OO0,0O0, drawing interest at the
high rate of $40 per cent and with con-
siderable floating debt
The earnings on its completed division
were barely sufficient to pay operating ex-
penses. The country traversed by its line
had scarcely begun to attract settlers. Presi-
dent Smith resigned and was succeeded by
General George w. Cass and he in turn, by
Charles 3. Wright, of Philadelphia Moth
ing could be done for time but to persuade
the creditors Of the company not to press
their claims, and to wait for the storm to
blow over. In 1875, however, the finances
of the company were re-organized in very
successful manner. The bondholders agreed
to take preferred stock in lieu of their bonds
and the directors put the company through
a bankruptcy court in an expeditions and in
expensive manner, fighting off all the sharks
and railroad wreckers that hang about great
corporations in distress. The success of this
achievement was largely due to the Hon.
Frederick Billings, Of Vermont, who after
wards became president. During Mr..
Wright's administration, which lasted from
1875 to 1879, the company managed to pay
off its floating debt, and to operate the COM
pleted portions of its road, so as to gradual
ly accumulate little surplus over running
expenses.
1t also built thirty miles of road on the
Pacific Coast, from Tacoma to the extensive |
coal field on the western side of the Cascade |
Mountains Mr.. Cass and Mr.. Cheney, two
of the Directors, opened wheat farms in the
Red River Valley of the North, which de-
that that region was peculiarly |
adapted for wheat culture. Settlers began
to come into Northwestern Minnesota and
Northern Dakota along the line Of the road
new towns sprang up, and with this influx
of population the affairs of the Northern
Pacific wore, year by year, brighter look
WORK BEGUN AGAIN.
In 1879 the company had SO far recovered
it's credit that it was able to borrow money
to resume construction operations on large
scale. 1t began to build from the Missouri
river westward, and from the Columbia
river, in eastern Washington Territory, near
the junction of the Snake River, northeast
wardly toward Lake Pend d'Oreille, in north
ern Idaho The company did not feel strong
enough to put forth any financial scheme for
the entire road, but only asked