The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1892-10-20
AFFAIRS OF THE N. P.
Two Parties Formed Among
the Stockholders.
THE ANNUAL MEETING TODAY.
Contest Over Distribution OF Bonds
Portland & Puget Sound Road
Soon to Be Built

The annual meeting of the stockholders OF the
Northern Pacific Railroad Company Will be
held in New York today and promises 70 be
made interesting by fight over the disposition
oi the s3,3i7,0)0 consolidated per cent bonds
which have been placed in trust with the Farm
crs' Loan and Trust Company for the benefit OF
tire preferred stock holders. There are two fac
tions among the stock holders, one OF which in
Fists that these shall be Immediately distributed
according to the conditions OF the trust, while
the other urges that 20 do go would cause fur
ther depreciation in the value Of the securities
of the road.
The explanation of the whole controversy is
contained in circular issued by Charles y. Bar
ney Il Co, the brokers, OF Philadelphia, To the
bond and stock holders. They begin by saying
that a member Of the firm has inquired into the
financial condition of the road, aud that they
give information from official sources which
they consider entirely reliabia 1t then says:
The purchase of the property of the Seattle,
Lake shore 4 Eastern Railroad Company was
made by your managers upon the representa-
tons OF the operating department. OF your COM
fany, Of its necessity. and although IL has not
yet proved % bsa profitable addition To your
lines, We believe IL was made in good faith and
for strong reasons, and that with the revival of
business activity in Washington IL cannot be
long before IL will be self-sustaining. Ulti-
Taaiely IL will become valuable and profitable
addition 10 your property. and even at this time
the addition to the fixed charges of your COM
able as 10 justify the harsh criticisms that have
for some time been made upon il.
The circular proceeds 10 discuss the approach
fng advent of the Great Northern, ana denies
that the expectation that its competition will
reduce the value OF the Northern Pacific prop
erty is justified by experience 1t says that,
though the Great Northern has been In compe-
tition with the Northern Pacific at Helena since
lSos. the latters busIueks has largely increased,
and at fair and remunerative rates and that,
though the Great Northern has been running
trains to Spokane for the last two months, its
effect on the Northern Pacific s business has so
far been impereeptible. Stress 10 also laid on
the fact that the Great Northern has not yet
reached Puget sound, that II still has extensive
and expensive work TO do, and great natural OBJ
staeles to overcome before doing 90. 1t says
that the through business for which the Great
Northern will compete is already subject to
such severe competition conditions as that
roads advent VIII not increase: that IL last year
yielded only II per cent of the Northern Pa
cfffc's gross receipts, and Is done under such
conditions tina, the loss of any part or tho
whole would hardly be reflected in the net
profits. The circular goes on:
We are assured that there has been nothing
whatever In the experience of the managers OF
yonr company in respect TO the competition,
past, present or 10 be expected, OF the Great
Northern Railroad Company to give rise to any
apprehension whatever or 10 justify In the
slightest degree the alarm pretended to be felt
by those who have recently been writing down
your property.
The circular proceeds to state that the floating
debt OF the company Is now about $40 0n, 00D SCI
cured by ample collateral even at the present
low prices, and il extended for year, besides
which there are in the treasury assets amply
sufficient to cover 1t again. This debt was
largely incurred in the purchase OF extensive
terminals In Chicago. to which n connecting
line twelve miles long has just been completed
These terminals now come within $1,000 of
earning interest on the bonds issued for their
purchase and are expected 10 make handsome
addition TO the net earnings during the remain
der OF tie year. The circular sets out the fact
that the net earnings set apart for the purchase
OF the 81 7. 900 bonds referred To have been Used
by the management in the bettcrment of the
property.
The circular urges that In view of the fact
that the floating debt is largely secured by these
bonds, their distribution now would be detri-
mental 10 the interests OF the stock and bond
holders in both these capacities Many o. them
would be sold, thus depressing their market
price and thereby preventing the company
from speedily paying off the floating de5t by
the sale at fair prices OF part of the bonds
pledged therefor.
1t Is also stated that the directors will request
the meeting To appoint committee of stock
holders To examine into the lenses pur chases
and eetterments made in the Mst two years, tho
physical condition aud future needs of the
property and the financial condition OF the
company, so that the stock holders NAV be i'm
partially Informed by the report as 10 the truth
or falsity of the attacks made upou the COM
rany and its managers.