St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1889-01-17
VERY DEAR WATER
Which Washburn Injected In
to His Railroad Schemes
Last Year.
To the Extent of Over
Seventeen Million Dol
lars.
Sharp Arrangement by the
Railroad Commits
sion.
The Attorney General Re-
quested to Investigate
and Prosecute.

that he was the only ''truly good" man
on earth. Cold facts, however, do not
seem to warrant this conclusion. and
official documents seem to indicate
that he actually is truly good"-io
Mr.. Washburn.
Public attention has before been
called, to what appears to be fragrant
violation of the law against watering
railroad stocks, and the GLOBE presents
this morning the official statements of
the Minnesota Railroad commission,
which body evidently does not propose
to be hoodwinked by loud-mouthed
claims of virtue, evidently put forth the
better to cloak dishonesty and violation
of law. The following extracts from
the railroad commissions report strip
the mask from Mr.. Washburn and place
him in his true colors before his fellow
citizens:
On the 18th of March, 1887, the governor
approved az act of the legislature of the
state entitled An act relative to the issuing
of false, fraudulent and postpaid and IN
paid shares of the stock of railroad COM
pan1es and providing a penalty therefor
The annual report of the Minneapolis &
Pacific Railway company for the year end
ing June 80, 1887, contained some items
which challenged attention, and CORE
spondence was opened with the company for
the purpose of obtaining more specific in
formation than the report of the company
afforded.
The information obtained was such as
made it plain to the commission that the sub
1ect should be laid before the attorney gen.
eral for his opinion as to whether the facts
given constituted violation of the law re-
ferred to.
The whole correspondence was accordingly
transmitted to that officer on the Goth of No
vember, 1888, and copies of the same are
herewith given.
DEMAND FOR THE FACTS.
Office of the Railroad and Warehouse Com
miSsioners, st. Paul, Mimi, June z. 1855
F. d. Underwood, Esq, General Manager
Minneapolis d Pacific Railway Company
Dear Sir: Referring to your annual report
to this commission of the operations of your
company for the business year ended June
80, 1887: it appears from the report that the
total cost OF your company's road to June
80. 1887, was S7,769. 96O.47, and that the
third largest Item, making up the grand
total was: Interest and discount charged
to construction. LASS, $500" and that
after deducting this item from the alleged
cost of the road there remains but $2,S17.-
054. "a in place of s., 305, 610.S3 Also that
lnere ndu Deel lSSueu your company ana
were then outstanding income certificates
to the amount of 81, 1927, 900, but the nature
of these certificates is not indicated further
than is disclosed in the word "income.'' Be
kind enough to make supplemental report,
stating the items composing the said sum of
interest and discounts" upon what obliga-
tons of the company the interest accrued, the
amount of such obligations and the time
and rate per centum upon and on which the
interest was computed; and, second. the
amount of the discounts included in said
sum of 81. 4SS. 55619 and where and how
the same was obtained. Also, please show
the reason why said sum of interest and dis
count is charged to construction
We would further call your attention to the
amount you give III reporting the average
cost of your road and equipment per mile of
the entire line and in Minnesota; the former
was reported at 50, 5S5 AZ, and the latter at
S3,56S.S5; also, to your answer as to Me av-
erage rate per mile for through and local
passengers during the year; were there not
errors made in these statements which you
desired to correct?
Please send your answer to this communi-
cation, explaining all the matters of which
we make inquiry, by the bearer. Mr.. Warner,
who will wait for the same. Yours truly,
HORACE AUSTIN Chairman.
RAILROAD AND WAREHOUSE COMMISSION.
SLIGHT CORRECTIONS.
Minneapolis. Sault Ste. Marie & Atlantic
and Minneapolis d Pacific Railway Com
panies-Auditors Office, Minneapolis. June
8, 1S9S.-E. S. Warner, Esq, Secretary Rail
road Commissioners. St. Paul, Minn-Dear
Sir: Referring to your favor of recent date
to Mr.. Underwood. will you kindly correct
our report of June 80, 1887, to read as fol-
lows:
On page 9, average cost of road and equip
ment per mile NOW readsl $3,5S5.47i should
lie $35, 855.73.
Same page, average cost per mile in Min
nesota NOW reads) S3,568, IS; should be
$50, 7I5.17.
On page H. under cost of road land (now
reads S20l, 1870; should be SLIT, 1870.
The average rate per passenger, through
and local, to which you REFER was reduced
by our including laborers going to the west
end to construct our new line in Dakota
We included these passengers in our earn
ings at low rate, Your truly,
G. W. GARDNER, Auditor.
EXPLANATIONS IN ORDER.
Minneapolis, Sault Ste. Marie d Atlantic
and Minneapolis q Pacific Railway Com
panies-Auditors Office, Minneapolis, Jnne
II, 16S8.-E. S. Warner Esq, Secretary
Railroad Commissioners. st Paul, Mimi
Dear Sir: In explanation of the item of 81
4SS, 456.19 charged to interest and disc cunt
in the report of June so, 1897 would say
that it is made up as follows:
Discount on q, 1927 income GER
Discount on 3,131 bonds at 10
percent: ................. 1896 90
Interest on bonds accrued dur
ing construction. ....... 2LS15 90
Interest ana discount on notes,
drafts, eIc, etc .......... :. 14,5IS 81
Total. ............. S44Ss.4 1855 10
The above is an analysis of the item as in
Guided in our report. Since the report was
rendered, however, there have been some
further credits TO income certificates which
affect the above item, but which | cannot
fully explain at present for the reason that
have not the proper information myself
These credits will not materially affect the
cost per mile AS soon as possible we will
give the fnrthnr i,,fN
and If you cannot wait you are at liberty to
examine our books yourself. Yours truly.
f. ID. UNDERWOOD, General Manager.
wAsHBURN's ATTORNEY TO THE RESCUE.
Minneapolis, June -, 1SSS.-E. S. Warner,
Esq, Secretary Board of Railroad and Ware
house Commissioners. st. Paul, Minn.-Dear
Sir: The Minneapolis 4; Pacific Railroad
ton. 1t has issued 81, 300, 900 of 5 per cent
bonds, a part of which were sold at a dis
count of 10 per cent, and the remainder al
discount of IS per cent, with S425 900 of in
come certificates in addition. There have
been issued 900 inincome certificates
Gncluding the S425, 900 sold with the bonds.
The So, 302, COO of income certificates were
sold at the rate of S133 per thousand. In
addition there have been issued S53. 600 in
stock which has been paid for at par in cash.
The income certificates were issued under
the laws of this state, and are simply an as
signment of future profits after deducting
operating expenses and fixed charges.
/ enclose you herewith sample copy of the
income certificates.
1t will be impossible at this time to give
exact figures for the cost of the road in this
state, because it has not yet been completed,
nor have all the obligations incurred for its
construction and equipment been paid.
The figures heretofore given as to the cost
OF the road only embrace the cost up to that
time, or else were mere estimates and not an
accurate statement Yours truly.
d. ID. SPRINGER. General Solicitor.
NO CoNCEALMENT TO BE ALLOWED.
Office of Railroad and Warahollsa Com.