St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-03-01
Report OF the Northern Pacific
Investigating Committee
Answered.
Policy Of Building and Leas-
ing Branch Lines Warmly
Defended.
The Lease OF the Wisconsin
Central Explained in
Detail.
Terminal Facilities in Chi
eago Will Be OF Great
Value.

New YORK, Feb. 2S.-The directors Of
the Northern Pacific met at the COM
pany's Office in the Mills building today
and held an important meeting, which
resulted in the adoption of report to
the stockholders. The report was in
answer to the charges against the man.
agement which were formulated about
ten days ago by Henry Clews, Brayton
Ives and Jay Cooke Jr., composing
special investigating committee. The
report as prepared for the directors
was changed greatly, so much
so that committee was APP
pointed to make the necessary
alterations. Tomorrow it will be print
ed and ready for distribution to the
stockholders. The report is a long one,
and no mention is made in it of the
names of the committee. This is an alb
stract of the report:
The policy of building or leasing
branch lines, the st. Paul 81 Northern
Pacific, the Rocky Fork q Cook City,
the Northern Pacific & Manitoba, the
to have been an imperative necessity
for railroads in new country, which
will
Develop Their Business.
Some of these roads which do not earn
fixed charges were commented upon by
the Investigating committee. This re-
port shows that the net earnings to the
main line from these branches amount
ed to the large sum of $500, 900. Branch
line construction met with the unani-
nous approval of successive boards of
directors from year to year, the whole
policy being formally authorized by
vote of the stockholders of the company
cific, the Rock Island. and. indeed,
lakes, might have been cited
in the support of the PROPOSE
ton that branch lines, though they
do not at first earn fixed charges, are an
imperative necessity to all roads, which
would hold and develop their territory.
At the time of the purchase uf the
Seattle. Lake Shore Il Eastern, both the
Great Northern and Union Pacific were
bidding, the latter contemplating large
system in the state of Washington by
connecting with its lines then building
between Portland and Puget sound.
The indirect benefit to the Northern
Pacific from the purchase of this prop
erty, even at the price paid, was very
great, and, if we credit to the main line
the amount Of traffic furnished to it by
the Seattle. Lake Shore ~ Eastern, the
result shows profit OH the stock OF 12112
per cent.
Wisconsin Central Lease.
L.
st. Paul and Chicago is fully set out
cOnsin Central explained in detail.
Not only was the request under discus
sion for long time in the board of di-
rectoIs, but the lease was ratified by
the unanimous vote of the stockholders
at their annual meeting in October,
1890. The records also show that at the
time of the execution of the lease, not |
one of the officers or directors of the
Northern Pacific was an officer director
or trustee of the Wisconsin Central.
The Chicago 81 Northern Pacific prop
erty, it is explained. is OF much greater |
extent and value than is shown in the |
committees report. The floating debt |
spoken of by the committee was really |
included in the bonded debt. The
Northern Pacific company owns S15.000.- |
600 of the capital stock of the Chicago |
d Northern Pacific, worth at current |
price about S2.000,000. The great value |
of the Chicago d Northern Pacific, its |
charters from the city and its impOr- |
lance to the whole system ale clearly |
stated.
The reasons for the requirement Of |
the Chicago & Calumet Terminal prop
erty are given, and the Importance Of |
that property to the whole
Terminal System in Chicago
are set forth. The city of Chicago occu-
pies an area of lis square miles, and |
has a population of 100000 which is |
increasing at the rate OF 100, 900 year.,
Twenty-four trunk lines enter the city, |
more than double the number of twenty |
years ago. If the future is to be judged |
by the past, these terminals. the report
says, Will soon be rented to their full |
capacity and become diyidend-paying |
properties.
Regarding the condition of affairs un-
der which the floating debt was bOr-
rowed, the report says the action of the
chairman of the board, instead of being
a subject of criticism and censnre, was
entitled to the highest commentator.
Without his personal efforts and his
faith in the property, evidenced by his
personal subscription to the loans, much
greater difficulty and higher rate of
interest would have been eXacted by
the lenders of the floating debt. The
report alludes to the mention by the in
Vestigating committee of the excellent
physical condition of the property, of
its good operating management, OF its
extensive and conveniently located
terminals, of the steady growth and i'm
prOvement in the territory tributary to
|, Oh hot oil irAi
show q healthy growth. The report con-
cIudeS as follows:
Caused Great Loss.
"Your directors have always endeav-
ored to act judiciously and for your best |
interest, and all their acts censured by |
the committee were either authorized or
ratified and approved by you. If the
contract relating to the preferred stock |
has been modified, as charged by the |
committee, such modification was made |
with the full knowledge and assent of |
the stockholders, among whom were the |
members of the committee. The CON-
mittee, acting as your agents, have, |
through erroneous statements and con- |
illusions, caused serious depreciation in
your securities and great loss to you.
Your directors, also acting as your
agents. consider it their duty to cor
rect these erroneous statements and
conclusions, and rectify, if possible, the
wrong that has been caused to you by
their publication. Therefore, we send
this communication to you before the
report of the committee has been for
mally received and acted upon by you.
We take pleasure in ayailing ourselves
of this opportunity TO remind you that
at the close of the fiscal year June 80,
1892. there was an undivided surplus of
over $3.50, 900, and that for the SIX months