The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1889-02-27
ARBITRATION CONTRACT"
Three Great Roads Of the Northern Pa
cific Brought into Close Relations.


Pacific Railroad company took the
most important step it has taken in
years. 1t has been long time IN de-
Gliding what to do relative to the Or
egon Railway and Navigation prop
erty; its natural outlet to the Pacific
coast, but yesterday it committed 1t
self to a comparatively new project
thst had been the subject of negotia-
tious between President Thomas +.
Oakes and Chairman Robert Harris
of the Northern Pacific and President
Charles Francis Adams of the Union
Pacific. The agreement between
these two companies, and to which
the Union Pacific auxiliary line, the
Oregon Short Line, is incidentally a
party, is entitled "Arbitration Con-
tract" 1t differs materially from any
scheme that has yet been devised to
accomplish a similar purpose, namely
the practical consolidation of several
properties in the interest OF two other
interests.
The agreement or contract provides
that all Of the branch lines OF the
Northern Pacific in Oregon and
Washington territory and the lease
of the Oregon Railway and Naviga-
ton company and its branch lines
including the Oregon Short Line,
which is used as a part of the Union
Pacific System, owing to its guaran-
tee of that lease and its ownership OF
the Short Line shall be turned over
to five managing trustees. qhe trust
is perpetual one, and under its
terms the stock of all the Northern
Pacific branch lines is to be deposited
in q trust company and the voting
power given to the managers of the
trust.
Two of the trustees are to be chos-
en- by each company, and they are to
select the fourth. The president of
each is to represent his company in
the board of managing trustees. 1t
is understood that the man who will
be executive head of the new system
has not yet been named.
A half interest in the Oregon Rail
way and Navigation company has
been leased to the Northern Pacific,
which also assumes its share of the
guarantee of 6 per cent. dividends
upon the stock of the lesser COM
pany, as well as becomes responsible
for one. half of the fixed charges of
the company. The net earnings of
the system i'll excess of fixed charges
are TO be divided equally between the
two companies for whose benefit the
trust has been created.
The transaction is based upon one
condition, namely, that the stock OF
the Oregon Railway and Navigation
company shall be deposited with the
trustees, or rather in some trust COM
pany that is to act jointly with them,
aud be held forever for the benefit of
the trust. The trustees will issue
beneficiary certificates or a deben-
ture of some sort that will entitle the
holder to all of the cash and other
benefits, excepting the voting power,
that may accrue to the stock. OF
course it is understood that the Ore
gon and TrancontInental company
will at once turn into the trust on
these terms a majority of the Oregon
Railways capital stock, rs the Union
and Northern Pacific companies are
in control of that corporation. Other
stockholders will have an Opportun-
ity to deposit their stock and receive
therefore whatever beneficial obliga-
ton the trust may issue.
Nearly every member of the North
ern Pacific board was present to-day
when the contract was finally approx
ed. The only vote cast against the
plan was that of director John ..
Brookman of this city. 1t has already
been approved by the Union Pacific
directors, and president Adams has
been authorized to sign it, so that the
deal is virtually completed.
A meeting of the directors of the
Oregon and rranscontinental COM
pany, of which Henry Willard is presi
dent, has been called for an early day
next week to perform their part ot
the work. To-day's action concludes
long and bitter struggle between al
OF the interests, during which the pro
perty of each has suffered, not onl!
in operation and development. but in
the market as well, The three great
roads of the Pacific Northwest are
by the action referred to, brought in
to the closest and most harmonious
relations, that must be beneficial t.
all of them.