New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-01-24
WISCONSIN CENTRAL LEASE.
ADVANTAGES OF THE NEW ARRANGEMENT.
REASONS WHY THE PLAN WILL BENEFIT BOTH
THE NORTHERN PACIFIC AND THE

THE NORTHERN PACIFIC AND THE
LEASED LINE
The lease of the Wisconsin Central Company to
the Northern Pacific Railroad Company is practically
assured, although the directors Of the two companies
still busily engaged in perfectlng the contracts
required to put the compact into complete shape.
No doubt is entertained however, OF the oincai an
nouncement in few days. The transaction was the
logical outcome Of the close association OF the TWO
systems in the past, but its importance Is drawing TO
ii fresh attention in railway circles. 1t is conceded
to be one of the most important @deaS' recently con-
summated in the Far West
Tribune reporter yesterday talked with the pres-
dent Of one of the companies Interested IN the ease
and the following information may be considefeu
official. The lease is founded substantially upon the
traffic agreement under which the two systems nave
been operated since July ], 1850. That agreement
secured to the Wisconsin Central 80 per cent OF Its
gross earnings leaving the remainder to the Northern
Pacific for operating expenses. But the lease makes
this percentage absolute, relieving the Wisconsin oeh-
trail of the possibility provided In the tranc agree
ment of sharing portion OF any possible Increase III
the operating expenses. The company Is thereby
enabled to handle its rental from the Northern Pacihc
with exactness and simply by following the course Oh
It's gross earnings know what returns can SaleS anu
properly be distributed to the security holders.
The great advantage Of the lease to the Northern
Pacific said the officer referred to, is that II secures
to it the absolute control of the terminal facilities OF
the Wisconsin Central, through the Chicago and Great
Western in Chicago 1t transfers the eastern terminus
of the Northern Pacific from ST. Paul TO Chicago beyond
the possibility Of cav. These Chicago terminals arc
the finest in the country. The property includes 10
OF land and 200 feet OF river 'front.' Forty acres
situated within two blocks of the Chicago Produce
Exchange The depot grounds comprise the whoie
section from Ffhave. to the Chicago River ana sout
of Harrison-st To give a comparison that can be APP
thaf lp
depot grounds is the length of Wallst The acreage
is about equal to that Of the Boston Common Inc
depot is splendid structure and Is longer than the
Grand Central depot here. The cost OF the building
when entirely finished will be $75O,OOO The interest
Old the cost will be covered by the rental Of the bust
ness Offices provided in it, If the cost OF the lahd anu
the freight houses ETC., be included, the whole prop
erty will represent g. 100000 Under the lease there
10 doubt that the Northern Pacific will be able 10
introduce many economies and abolish much eA-
pense and the percentage of operating expenses VIII
doubtless be largely reduced look to see the saving
In this direction net TO the Northern racine from
5000 900 TO 100000 year.
at is advisable for the Wisconsin Central security
holders to allow the lessee company TO make TINS
profit in return for the advantages they secure uhder
the lease BY it they are assured Of being the Duul
end of a great trunk line The Wisconsin Cehtfal
now need not dicier with half dozen companies, iof
il becomes big funnel into which all the business OF
the Northern Pacific is poured IL gets clenh Pr
ihe Northern Pacific the terminal charges, which
amount TO a35O,OO0. Under the closer operation oi
The two roads the expenses Of working the Wisconsin
Central must be materially reduced. The cOncentra
ton of traffic IS also increased and the volume OF
business Is bound grow, as the great region trlD
tary to the Northern Pacific develops. The lease is
mutually advantageous, and Its Dement'S VIII NC
realized more and as time goes on.~ -,
The earnings Of the Wisconsin Central, regularly
repeated in The Trlbunes financial columns, sh0"
steady gains last year, and AT remarkaDe RATIO
For fhc first sx months of the company's iscal yea
beginning July l, 1889, the gross revenues were
80 II ! Go in addition to the natural increase
some gain is relied upon as the outcome OIL lhe an
,.ntaScs of the operation OF the system by inc
Nnrtbern Pacific under the new lease. Friends OF
Tho Wisconsin Central say that they look VIII con
Gdepre 10 record Of S6,0O0,000 for the fiscal year
The total capitalization of the company, with tie
changes, IS as follows, 80 -.
ir mo,tqaee bonds (s12 900 COO at per cent 100000
SSnn cnmuiative income bonds (S9OOO,OOO) at -ooo
~ per stock is3 600 900 at per cent. 10000
Common stock (sl2 900 OOO)-
rotal charges before common stocR-...Sl 25oOOo
There are some important items, such as interest
ON cor trnsts rentals OF controlled roads, etc., winch
Como ont of he 80 per cent of gross earnings allowed
20 Tho comnany under the lease. These charges
smonnt 10 about 900 per annum. One-hah OF
This sum is $4,000: add 10 that 100000 as the
hafvears interest the first mortgage bonds total
10000 Thirty-fve per cent OF the SIX months
earnings $50 515G42l i $seO475. so that the hrsi
half of the wear will show fully S13O ZOO earned toward
the Interest on the income bonds. These figures are
said nv friends of the company to be ultraconserVa