The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-02-28
THE N. P.'S TROUBLES.
How the Committee Of Investi-
CATION Explains Them.
SEVERE ATTACK ON WILLARD.
Inside Facts Of Lake Shore and Wis
eensia Central Deals-Appesl to
Courts Proposed.

The full report Of the committee of stock
t,olders of the Northern Pacific railroad
appointed to investigate the condition Of
She property, as published in the New
York papers, shows that its nature was
not In the slightest degree misrep-esented
. I'm the dispatches already published in re-
gard to il. It is throughout q scathing ar
sraignment Of the present management in
general and Of Henry Willard in particular.
II was no sooner prepared than the COM
snittec began to take steps to carry the
Eight into the next stockholders meeting.
"A statement was sent out with it explain
ssng that the delay in furnishing it to the
stock holders was due to the reluctance of
she officers to furnish list of them unless
ahey were allowed to revise it and send
out reply simultaneously. The commit
Zee refused to comply with this demand
and It got the list.
:: The report pronounces the physical con-
.dition Of the road to be excellent and says
~ 10 maintained in high state of cff-
s,iency. It recommends the reduction Of
mountain grades estimating that at an ex-
oense Of s. Coz, coo in this direction $750, 600
n year can be saved. The terminals were
-sound in good condition and the only
criticism il that too much was paid for
those at Portland under the extravagant
management of 1882. Comment is made
nm the steady growth of the towns and
territory tributary to the road and the
opinion is expressed that little is to be
cared from the competition of the Great
Northern. The expenses Of the general
and department are thought to be very
leavy, but the committee refrains from
Saying that they can be reduced without
saetriment to the company.
Then comes q discussion of the financial
condition Of the company, and disapproval
- expressed of the methods by which GER
ta'n officials have used their positions of
trusts as q means of personal gain.
4 A statement is given showing that the
1otal indebtedness of the company rs of
June 30 was $is6, OG6, s65, of which $685..
as was floating debt The report says of
'she latter item:
1 The floating debt has been somewhat reduced
ainco June 30. On January "a 1t was 81. 2s9 900,
IL which only $6J0.000 10 payable ON demand.
ia little over ss,O00000 of this amount the
company 10 paying per cent. interest and
sc..:misston of per cent A loan of $725 900 due
s. the chairman OF the board tMr. viIlari) on
January 20 was renewed for year ut per
ssSnt and commission Of per cent Perhaps
~ moro expressive or suggestive comment can
- found on the financial management of tho
Northern Pacific Company than 10 furnished by
sis transaction. At the tmo 1t was made
s:oney was in abundant and daily increasing
sSpply. The rate for demand loans was per
ctnt, and millions werc offered on time At from
soer cent to per cent That the chairman of
t;as board should consider himself justified in
each . condition of affairs In cxacting per
cent from the company, and that the finance
nv~stHs shnsx ny,,k a
10 submit 10 the exacsion, shows both the low
state Of the company's credit, and perhaps the
S,ocess by which that state has been reached.
s The operations of the branch lines show
& deficit in the last fiscal year of 81 229, 961,
Tut on the other hand the net revenue de-
yived from tho business turned over by
these branches to the main line is eSti-
mated at 81 4O0, 600. The investment in
Tho Puget Sound 4 Alaska Steamship
company made last August is regarded as
:Df little value.
OF the purchase of the entire stock of the
:Rocky Fork & Cook City railroad, 81, 402.
200. the report says that the price paid was
saxorbitant, and as no equipment was in
:,3'luded. the profit to the vendors must
s.nave been large; the capitalization Of the
ssoal trust seems to be excessive and the ar
arrangement between il and the railroad OBJ
:iectionable. both because of the capitalize
:tion and because the railroad derives uti-
(; mately much less proportionate advantage
; than the stockholders of the trust, some of
: whom were at the time when the deal was
made. and are still. prominently connected
; with the management of the railroad; il
4. the road had been built and the contract
Tor coal made with exclusive regard to the
! interests of the Northern Pacific, the latter
would have been much more benefited
Mr.. Willard and his friends composed the
trust and he made the deal
3! THE Northern Pacific & Manitoba is de-
scribed as the most conspicuous case of a
branch road that does not earn operating
expenses and drains the resources of the
Northern Pacific. 1t is 2G3 miles long and
was acquired by the exchange of bonds of
the two companies to the amount of
$500, 900. through a syndicate represented
by Mr.. Willard. The price. $4,000 a mile
IS considered excessive, as other roads in
the same section cost only $4,000, or at
most SAC 4 mile. The loss in opera
ton. in addition to taxes. in the last fiscal
year. was $So6, 22S3. A terminal company,
owning three miles Of road and a hotel at
winnipeg, is bonded for $50 COO, and the
COMMITTEE fails TO discover property ade-
squately representing that amount, and
:. annot understand why the Northern Pa
.cific should be running hotel at Winni-
! peg. II says the road is not likely to
prove for many years anything but dead
weight, as it completes directly with the
Canadian Pacific in its own territory
necessarily at a disadvantage
;. The Seattle, Lake Shore & Eastern
showed loss To the Northern Pacific in
us operations for the last fiscal year. in
:,luding interest on cost, of $75S, $40. OF
she Al. 500 shares of this company the
Northern Pacific bought in 1890 81. 6a6l. at
~, paying therefor in consols. SD that at
80 the Northern Pacific company. includ.
:ang discount on the consols. WAS 81. "a, opa
IN addition Ia this the Northern Pacific
guarantees interest on 1858, 90 bonded
sndebtedness. After stating the above
sac,s. the report says:
The acquisition of this property for the rrics
:IaiG. and under the conditions exi.tius AZ ths
.slEnc. seems 10 have been an act Of s,uneuson,
:And Incredible folly. II was evidcn. in $500
s. now that the Eastern division Of ffsy miles
tau.t be useless 10 the Northern Pacific. ~ n
:rScticxily psrslleled one OF its own lines Nil.
.ssed terminal facilities 81 Spokane which II
aid not need. which were inferior ~ those i, al
,asiy possessed, and which IL now rents To a RI
ss road az an unremunerstave rate lf.t Wa.
suppossd that s;rasesical advantages would
&c gained. that snppcsitioa has proved 20 be
contrary to fact. as the Great Northern has car
lied out It's plans Of reaching Spokane snd Seat
Sc unaeterrcd by this action OF the Northern
y.ciac.
!. The seattle, Lake shore b Eastern was started
,s.if aesrr YEAR, ago m an adjunct TO a land