Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1884-09-17
xoxrHERs PACIFIC CONSTRUCTION


NORTHERN PACIFIC CONSTRUCTION
1Coatinmed from first page.
When I assumed the Presidency OF
the company there were in the treasury
nearly $6,OO0,0O0 of cash ard some %
O00 shares of preferred stock. and, fur
tber. there we're $4,000, 900 general hrst
mortgage bonds yet lssuable aealnst
road to be constructed. Measured oy
the chief engineers estimate, these re-
sonrces seemed ample for all construc,
tion requirements. The credit, TOO, OF
the company stood very high. In snort,
in eyery direction the prospect seemed
as bright and promising as couId VIC
wished. -,
The illusions arising from the nrst es-
innate continued until called TOT
new one. some time after my acces5ion
70 the Presidency. The CHIEF ehRiheei'
in response to his INSTRUCTIONS SUN"
ted it in person in New YORK on 9ain
ary IL, 1882. He figured the cost Vi alIe
no miles then remaining 70 DC o''A
pIeted as follows: 1900, 60
Grading and bridging. -.... SIV'ooA'"''
Track, including rails, cross o-o ,co
ties. sidinge, etc. ........-. J'o'%'iO'
bull s,ino s, n cS....... 1874, 300
Contingent expenses, includ
ing enelnser'De' '' 2,Is4.2Oo
To complete "i'sou' .. 10000
To complete onAA' 10000
ro.at "a, Ul GU
The former estimate covered % more
miles and yet was fully ~ per csnI
lower than the new one. In tue IatVoe
!, mas sxnlaiued that the difference was
dna IN a yery great increase IN the prices
~-aid FOR labor and all materials enter
mo into the construction OF a railroad;
TIE chief engineer had been instructed
NOT 10 estimate too closely, but, attei
nsino liberal figures, to make extra
sIIovances for contingencies, all OF
,.h;.h was done. There was reason,
thayafore. to assume that the total OF
x24. COS. 900 really covered the entire COST
NJ completing the main line 10 'he
junction with the Oregon Halfway I"
Navigation Company's road. Inc re-
sources of the company at the time, IN.
cludjne cash on hand, the REMAINDER Vi
nyeferred stock in the treasury, the pro
ceeds of general first mortgage pohus
vet 20 be issued and delivered 10 TUG
svndicate. and the net earnings above
mortgage interest, seemed, upon CLOS
. calcuiatlon. sufficient TO meet the total
of the new estimate.
Thns the situation IN this respect
while far from as favorable as ia the
lioht of the original estimate, was oy nc
means disauieting. Neither i nor any
one else connected with the manage
ment then had the remOtest conception
of what the true outcome OF the con
struction account would be.
simultaneously with the dlsappoint
inc REVELATIONS of the second estimate
there appeared the first sign OF serious
coming troubles in the refusal OF the
nresident of the United States, IN No
yember, 1881, to act upon the appilca
ton of the company for the appoint
ment of commissioners to inspect add
tionaI finished mileage. The non action
of the executive was based on the hos
tile demonstrations, originating partly
with demagogues and partly With stock
speonlators, against the cOmpany's
rights to its land grant in both houses
of congress, in the session OF lSSi-o2.
Every posslble effort was persistently
made 10 overcome the hesitancy at the
White House, but without any success
until after the adjournment OF congress
in August. The result was that from
October, 1881, until September, 1882,
not mile Of road was inspected and
accepted by the government.
The effect was to expose the company
To the pravest peril. The monthly drain
on construction account rapidly emptied
the treasury. After selling the remain
der of the preferred stock, the company
wss left virtually without any resources
whatever to meet the necessary dis
bursements for construction and equip
ment purposes, running at an average
rate of two millions of cash month.
For, under the general first mortgage
trust, bonds could be issued and deliv-
cred to the syndicate only against
finished mileage accepted by the gov
eminent In view of the possibility of
definite refusal of further inspection
by the latter, the banking firms compos-
ing the syndicate absolutely declined TO
make any advances TO the company
against future deliveries of bonds, ex-
cept upon personal security. Their re-
fasal shut ali other doors against us.
Thus was actually brought face To
face. in February, 1882 with the neces.
sity, at no distant day, of a suspension
Of payments and its oalamitous eonse-
nces-bankruptey and foreclosure
unless relief could be obtained from
some quarter. | considered il my duty
TO extend to the company personally ali
the assistance in my power. Next
arranged with the Oregon Iransconti.
mental Company TO assist by the loan OF
its credit and its assets, to be used as
oollaterals by your company. l com.
menced To II axe cash advances on my
personal account on April 14th, and
continued them until August 9th. when
they reached the maximum amount OF
900. lent this great sum with.
out any security whatever, and nj the
risk of personal ruin. In view of the
foul calumnies spread about my man.
agement. claim IL as my privilege Il
give due prominence to this fact. MOI
will II be improper, IN view of the atti.
tude assumed toward me by certain
members of your board of directors. "a
say that my record in this respect will
suffer nothing by comparison with the
terms on which they loaned money TO
the company.
The Oregon aud Transoontinental
Company began TO give relief at first in
May, 1882, by indorsing the Northern
Paoific's notes and lending collaterals
both in order to enable your company
TO obtain advances from the syndicate
against future deliveries of general frs,
mortgage bonds. That company con.
tinued its aid in this form, taking as So
curity the Northern Pacifio's notes, with
orders ON the general first mortgage
trustee for bonds as collateral, until
August, 1882, when the final appoint
ment Of commissioners by the Presi.
dent having rendered it safe step, il
also assumed the cash advances madt
by me.
No less than 275 miles OF newly finish.
ed road were inspected and accepted all
at once by the Government in Septem.
Der, lSS2 The corresponding deliveries
OF bonds to the syndicate made the con.
dition OF the company much easier. but
by no means ended all financial embar
rassment. In order 10 avoid great waste
of time and of expense in prosecuting
the construction of the main line, il was
Indispensable, not only TO build stimuli,
taneously from both the Atlantic and
the Pacific side, but 90 begin at once the
haavv xrapk M all ,,-xsrta ala.s. A. -.