The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-03-02
Lake Shore Roads Sponsor
Answers Its Traducers.
CAKES TO THE STOCKHOLDERS.
He Asks Thorn to withhold Proxies
Abbot Defends tho Wisconsin
Central.

services SI5o,0O0 in frat mortgage gold bondA
Al they admitted that they had not fulfilled
their part of the contract the suit was dismissed
on their own testimony and Mr.. Gilman was
in New York three weeks for the purpose. Mr..
Gilman brought with him . copy Of the report
OF the stockholders' committee of the Northern
Pacific road and was very indignant 1t the state
ments contained in it in regard to the Lake
Shore road, OF which he was in effect the father.
He said in an interview on the subject:
The committees statement that the operation
OF the Lake Shore for the two years from July l,
1880, to June 30, 1892, WAS $75s, 4s9 81 was arrived
at by charging per cent year interest on the
cost of the stock, amounting to $i74, 100. bring
ing up the total from 1854, 299.A to &75s.499.54
They might as we'll charge interest on the stock
OF the Northern Pacific. The statement that the
road was built a. an adjunct to a land spccula-
ton Is era.uitous lie. As to the further state
meDt that the i25 miles of road from seattle 70
sumas could have been built for little more
than the cost of the stock to the Northern
Pacific. 81, 742,o Goa, IL Henry Clews had taken the
contract to build that piece OF road At that price
he would have busted up financially worse than
he did In 1873. when he could not pay 10 cents
on the dollar. Ii the statements of the commit
tee and its judgment are no better in regard to
the other portions of the Northern Pacific prop
erty that il critici1es the report is absolutely
worthless II was manifest to me, IL was TO
every one in New York with whom talked on
the subject, that the report OF the committee
was made in the main for stock jobbing pur-
poses and as q vehicle for venting the spite of
Brayton Ives against the Northern Pacific
directors who had been instrumental IN bounc-
entirely incompatible with the duties OF an
honest trustee.
The criticism of the line from woodinville to
ealiai Prairie displays gross ignorance and
worse judgment, for that IL the part of the line
capable OF earning more money per mile than
any other portion With short extensions of
this road TO the snoQualmie iron mines and
other resources In the Snoqualmie pass. this
piece OF road would DO the most productive
railroad mileage In the United States. Even
now the coal mines at Gilman are the largest
single traffic resource on the entire line. With
little inquiry the committee could have ascer.
tanned that the Seattle Coal and lion Company
Is rapidly developing these mines to a large
capacity and that the coal is finding q ready and
extensive market The tonnage from this
mine within year from this date will exceed
Loo tons day and Is already in the ne.ghbor-
hood of GOO. ANY railroad man who does not
understand the Importance aud value of such
trsiiic resources is an ignoramua
Regarding the fifty miles of the eastern divis-
lou from spokane to Davenport, the criticism
OF the committee may be nearer right. but in
justice to the projectors and builders of the
Lake shore road, 10 must be borne in mind that
the construction of this division was begun be-
fore that of the Washington Central was begun
by the Northern Pacific The Northern Pacific,
by paralleling this piece Of road, absolutely de-
stroyed Its value as local road. The construc-
ton of the Great Northern, paralleling both
that division and the Washington Central. has
as completely destroyed the value of both az
local roads that neither one 10 worth more than
the salvage that could be obtained from them
hshouid further be borne in mind that one
OF the PRINCIPAL objects Of the Northern Pacific
In purchasing the Lake shore was TO prevent
that road from bringing into Seattle the trans
continental traffic OF the Canadian Pacific. BY
that act eighty miles OF road from Snohomish to
she International boundary was left without
any earning power, but its local traffic has now
80 far developed as to show that il will soon be-
come very productive piece OF property.
II will therefore be seen that more than hal I
of the constructed mileage OF the Lake shore
rendered worthless for the purposes for when
1t was constructed II may have been q good
stroke of business TO cut Off the Canadian Pa
eihc competition, so that the loss 10 reduced
proportionateiy. After discrsditing the prop
crty as tar as 1t 10 able. the committee proceeds
to hedge in the following remarkable manner:
fortunately. however. there are some en-.
couraging features In the situation. Tho defcit
IL stated by the auditor to be SIS. 453 70 for the
four months ending October 81, 1s92 or but little
more than half OF that for the same time in 1891
and there is no doubt that the business OF the
road Is steadily improving. IL Is not likely to be
profitable at present. but such Ia the growth and
reeupcrative powers Of that marvellous western
country that it would not be strange to see .
balance on the right side In shorter time than
now seems possible"
60 good property Is all OF the mileage OF the
Lake Shore in Western Washington that, not
withstanding IL will be prevented Tor few years
from doing the very business for which II was
Judgment. within five years be worth more to
the Northern Pacific than the stock OF the St
Paul d Northern Railroad Company. which ii Ia
now proposed TO sell to the Northern Pacific
stockholders at par, this price being considered
. great privilege
President Oakes' immediate reply to the 70
port OF the committee which Investigated the
Affairs Of the Northern Pacific railroad was a.
follows:
NORTHERN PAcrric RAILROAD COMPANY,
PRESIDENTS OFFICE, No - WALL IT. :
NEW YORK. Feb. 10. 1899
10 the Stockholders Of the Northern Pacific Rail
rcod company' My attention has been called to
the following circular, extracts OF which have
appeared in the newspapers. signed by three
members OF the COMMITTEES OF ivc
"NEw YORK. Feb. Is. 1909
"7b the Stockholders Of the Northern Pact Rail,
voad Compdny: The accompanying report has
been ready Tor distribution for several days, our
the committee has not been able 10 issue it. ow-
ing to the delay of the Northern Pacific com.
1ist was asked for previous u January I, aud its
epeedy preparation was promised BY the secre-
tary. Later. however. the company attempted
% make. ms condition for furnishing the list,
the right of It's officers TO revise the report and
20 issee n reply simultaneously with its publica-
tion This demand tho committee naturally re-
fused. aud then the committee agreed TO fur
nish the names. The delay is due TO this action.
"Durng the time which has elapsed since the
completion of the report the directors have
inside pubic plan. subject 10 the approval Of
the stock holders. for l.qu!dat.ng great part of
The floating debt through the sale OF the stock
OF the ST. Paul Northern Pacific railroad
While tie committee realize that II is delicate
matter TO interfere with the action of the board
in this respect, and while they hesitate to oy-
ynse a movement which 10 favored by the oircr-
tors, in whose ability and integrity they have
confidence, they feel. nevertheless, that such an
important proceeding should not he trken Just
now without great deiibersiioI, and the assur-
snce that n change is TO he made in the financial
policy which aas proved To be 30 injurious TO
the company.
'.In The arsi place il Is not by any means clear
tbai II Ia wise ssep except in case o: extreme
necessity, for tae Northern Pacific COM
pany - part with its So Paul and
Northern Pacific stock. IL has been tho
unan nous opinion OF It's directors for years that
the lstter road should be under the complete
and undisputea control of the Northern Pacific
and one o. the objects OF the issue of eousolt-
dated bonds Mas the possession of this stock
Vet no sooner has it been acquired thsp a
schenle - contriNcG for It's disposal. Granting
eli that may he said in favor OF the plan, aaa
assuming that IL wiz toe hesced about with
many safeguards, IL caonot he deuted that other
things being co la, 1t will 10 for the Interest OF
ghc Northern Pacific so retain lh.s stock in its
treasury. Furthermore y Is not eyfdeu. that
tic necessities of the ease REQ Vire suCn action at
tsis time. VITA The exception OF $50 oO3 all Of
tue floating debt is borrowed Gu me loans
rons oi which mature before the latter part OF
JAY. aad the bulk of them In sepien her Con
seaneatiy IL cannot be claimed That undue haste
L. lastsaaoie.
Again, the sale Of this stock viii take from tie
koy.aefa Tac!fle treasury as most Important re-
malrinE sssct 1t Will also eel tree the botds
Vhleh are now pledged fer the floating deb; and
leave them al the dssposag OF the present ngAa-
cts, management There 10 no ressor 10 believe
cha: they will not be used As Others have hSen,
20 promote the schemes which Involve loss TO
the Northern Pact6e Company
'sIn other words, BY this sale the present man
snemsns can continue their previous course aud
Incur frcsh liabilities. 90 that at the explraion
81 tae.- term o. Office they can turn over 10
their successors . road with III embarrassed
treasury and weighed down with additional
unprontsbls leases. We believe that careful