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


road COMPANY, as railroad builders.
With the sole exception Of rresioeh'
Willard there has never been man al
the head of that Company who appeared
at all able to grasp the sitaation OF
whose motives az developed In the man
aoement of its affairs we're less sordio
and narrow than those OF q pawn
hyoLer. The Northern Pacific Railroad
stands today an unoomplesed monu-
ment of bad management svariee'
suindlinQ and incompetency. 1t was
conceived in speculation and born 10
fraud. Its stock was from the hrst sno
isoted to the greed of Adventures ana
its credit has been the sport OF wall
street spectators. Its Liabilities e1-
clusive of It's common stock, largely e1-
coed all necessary cost Of its constrnc-
tion and equipment. It's $4s.Uo,oo OF
commen stock is charge upon its prop
ertv. made absolutely without consider
alton. and represents nothing whatever
oontributed 10 the construction OF tne
main line or any of its branches.
The charter was granted in 1854. Inc
o.n;t,l stock five years afterward was
aiv;ded up among the holders OF the
franchise. This share capital was = w.
oooooo Retweeu 1863 and 1874 about
.sa miles OF road were built ont OF pro
oasds Of bonds sold. When the com
many defaulted interest ON these Dohds
in January, 1874, II owed in bonds ana
;n,arsst thereon $43,oO0,0OO. After the
road Was sold under foreclosure OF the
mortgage by which these bonds were
sa.n,ad this funded debt and interest
ware converted into preferred stock, OF
which sbl 100000 were issued. Inc
balance Of the 100000 capital to-
wit $4,000 600, was issued to holders Sol OF
the original stock. This Sis,V"'o''
NOW called common stock, represents
M contribution whatever to the con-
struction or equipment Of the Northern
Pacific Railroad. In the hands OF ihe
original holders il represented water
pure and simple, or, in other words
steal. It'cost them nothing. Whatever
profit has been derived from its sale te
the pablic has been put into the pockets
of these who divided it among them
selves. None OF the proceeds OF its salt
have gone to pay for building the road
The Northern Pacific Railroad ha'
baen built solely upon borrowed money
secured by mortgage upon construct
ed seotions of the road and the lane
grant claimed 10 be- earned by such con
struotion. From 1874 to 1879 the com
pany could borrow no money, benee nc
road was built. The holders OF tat
S49,OOO,OOO of stock would not, or al
least did not contribute. The proceeds
OF all stock sold went. not into the com
pany's treasury, but into private pockets
Finally in 1879 the company borrowed
s,me more money and work was re-
sumed. IL was prosecuted slowly fol-
over two years under Mr.. Billings, the
cost being betrayed solely by proceeds
of bonds sold. When Mr.. Villard-the
only railroad builder the Northern Pa
cific ever had as President-took bold
there remained to be constructed over
800 miles of road between Ainsworih
and the eastern terminus. IL was the
most difficult and costly portion OF the
read, vet IL WAS all built in less than
two years, together with nearly COG
miles of branches, and 40 miles from
Portland to Kalama. Ii was construct
ed under difficulties, at great expense,
and wholly like the balance, with bor-
rowed money. Not a dollar from stock
holders, all from bondholders. Ii cost
double the estimate of the engineers,
swamped Willard and nearly all his
friends.
All this time the holders of the $49.-
100000 of common stock, which never
should have left the oompany's treas
ury. were peddlinR 1t out on Wall street
and trading II for good gold coin, to be
placed in individual pockets. Today
the Northern Pacific Railroad,
had this stock been appropriated
for company instead Of personal uses,
could have been completed, equipped
and earning good interest upon legiti.
mate investment. Its bonded debt
would be reduced by the proceeds of
that stock, and II would not need gift
Of public lands to mortgage as security
upon which to borrow money to con-
struct the Cascade branch.
II is no wonder that Willard failed.
His statement, published elsewhere,
gives the true reasons. He started with
a load that increased daily. When he
teok charge, the coapany had about
300 miles Of road completed, its liza
bilities in stock and bonds we're $lls.-
0O0,00o, and il had received from sale of
lands over $i0,000,0Oo more. In other
words, the net result Of the several ad-
ministrations of the Northern Pacific
mp to the time Mr.. Willard was elected
President was the construction of
about 500 miles Of railroad. at a nomi
nal charge of over $4,000 per mile,
and an actual expenditure, as shown by
the balance sheet Of July, 1881, of $780,
600 per mile. The road hogan nswhere
and ended nowhere. IL had no feeders
and no system whereby the products of
the country penetrated were TO be made
available for transportation. In seven.
teen years the enlightened aud liberal
CD managers Of the Northern Pacific
Railroad Company built 75l miles of
railroad, at a cost Of over $4,000 per
mile. and saddled upon IL. in addition,
stock to the amount of over 500, 900 per
mile, the proceeds of the sales of which
were divided among themselves. Truly
magnificent showing of good faith
The history of Wizards railroad
building is as told by himself. He
built and equipped $50 miles of the