The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-05-22
WHOLE STORY TOLD.
Northern Pacific Turns the
Light On the Lake Shore.
TRAFFIC CONTRACT DEFENDED.
The Omeeps Psonousee II . BsesstaG
ssd Say the y. r. saved the Eosd
From Certain Ruin.

The answer of the trustees OF the Sc
attic. Lake Shore 4 Eastern Railroad
Company and Of the Northern Pacific
Railroad Company TO the Application OF
Thomas Earle and Angus Macintosh for
the appointment Of . receiver for the
Lake Shore makes a thorough explanation
Of the circumstances OF the sale Of the
control in the road 20 the Northern Pa
cilc and Of the relations Of the two roads.
The first few paragraphs are merely al
missions o. the formal parss Of the COM
pia!ns. except that 1t II denied that the
Northern Pacific is empowered by Its
charter only to build and operate . road
from Lake Superior 20 Puget sound and
therefore by implication forbidden TO
huiid or purchase branch lines The de-
PENDANTS deny that the Lake Shore Vas
doing large Or profitable business or ~ss
entitled TO make large earnings. Or that it
ever did or could have earned enough 20
pay operating expenses. fred charges
and dividends. either on May !. lsstl. or NJ
any other time. They deny that its stock
was worth IS per cent. of its face on
May J. 1880, or had any value except such
ss a majority might have for purposes Of
control. They make the same denial in
In particular They also deny that their
acts have deprecated the value Of the
stock. although they admit thai il has no
market value. nor are they able To suggest
any reason why it should have.
They then state the circumstances and
conditions Of the purchase of the majority
of the stick. On or abou. June 3, LOO.
Thomas NJ. Logan. r. d. Christian and
IL n N.sst . 10
Il Iranscon.,nental Railroad Company
stock not 10 exceed s.. i,i .1cD in par value
a. the price Of SIS per share to be paid ns
follows. with 6 per cent. interest from May
=, ieg0: 5000 on July /. 1880; 10000
on September /. 1880, $4,000 on Novevrs-
Der l. 1890 and the balance on June ]. issi
or sooner. a, the option OF the Oregon &
TranscontInenta Company. This contract
was assigned On June 3, 1890, to the
Northern Pacific. and in accordance with
il the Northern Pacific became on March
Is. i.9s. the owner OF 3i.e2t shares on. of
the IL so Of the stock OF the Lake Shore
road. Il has since teen voted and con-
trolled as the property OF the Northern Pa.
ellie and used in it's interest. bu. at the
same time In the bes. interest OF the Lake
Shore. They deay tina, until the stock
was fully paid for tho road was to be man
aged ms directed by the Northern Pacific.
but say that IL was managed by directors
eieeted BY Logan. Christian ard Armour
NATL March Ii. 1892. since which date i,
Ass been operated by the Northern Pacific.
The deny all know ledge as to- whether
". Ii. Akin and Alexander were among
those Who had sold their stock or not, or
whether Joseph H. Cox aud John II. Bry-
AIT Simply acted ~ agents for Logan. nor
do they know whether the meeting Of
trustees held on May IS, 1891, was a regu-
lar meeting or was called In accordance
with the by-lass. but they deny thai it
was iliega. or void. They admit the ALE
CATIONS ia regard 70 the appointment of
u. W. Dickinson as superintendent and
the reduction OF the number OF trustees
from thirteen to five. also the making of
the traffic contract. They admit tina; the
present trustees are officials of the North
ern Pacific in various capacities. and say
that these trustees hold small amounts of
stook tor the purpose OF qualifying them
10 act.
They deny that the Lake Shores .i;ua-
tion Was such as t. make its stock vaiua-
bic or tha, IL received large freight rates
10 connecting transeoutnentsl roads: that
u made large earnings profits and re-
eniTed large proportion OF through
rates, but claim, on the contrary,
that large proportion OF the earnings
prior 10 March H. is1.. was derived from
.he transportation OF Iahorers aud con-
siFGcfion material. which WAS only tenn
rogagy source 81 supply. AMI las entirely
ceased slats tha sprsng OF isai Tnes DENY
that prior 10 the lime when the Northern
saeinc assumed control The Lake Shore
was entit.ed 20 arbitrary rates on trans
Continental business. ar tha, Il j. a custom,
az rlGat # railroads similarly situated to
~harge such rates. The say :hat she pav-
NJ ~ aFhstfaries Is one depending en-
tfely upon contract between the parties
and not controlled hy any recognized. Gus
taa among railroads. They say that tin-
der the traffic contract In existence the
Lake shore does not receive an arbitrary
IN It's double mileage, which is liberal
Pate and euud not be afforded hv any road
having less intimate relations with il than
the Nefther;l Pacific.
They deny that the contract MAS the re-
sait of any ccsiusion or combination for
the fnrtheging Of the interest 81 the Nnrth-
eya Pacific at She expense of the Lake
Shore, OF 81 derrsv.ag the Lake shore o.
It's due share Of the earnings and say that
the coatract VAS a tasr enc ~ the Lake
Shore. They deny thas under /. the Lake
Shore receives only one-twentic:h 70 one
hsif what railroad compan,es similarly
situated receive. that the excess was 70
relved hs the Nor;hern rac,nc in fraIi u!
thc rights of tie pisintids. They also
deny that the contract VAS entered intn
without the consent oi the minority stock
holderS. or that they ever protested, or
That the contract VAS made AZ the dlcta.
tlor q: the Northern pacliic
They say that a great portion Of the
earnings at THE Lake Shore are derived
from forests products in which there IL a
large and constantly increasing trafne.
shas large portion of these products. par.
sssulssly shingles, Is destined for tasicYn
points. 80 whieh IL IS shipped over the
karshera Pacific under the contract. but
that the large increase in such tEaIfic is NJ.
ssshataale te that traffic contract aui "a
che low rates msde unier IL, a. timber pro-
ducts ar. a low class Of freight en which
the charges must be Low and the rront
sraail. oF the producers could nos make
sny profit and the production Won "a &C aSe.
They deny that on such business the Lake
snoFe made .srgv profits prior 10
tne making al the contract ~
the Whole ~ the earnings were aprro-
rFsatcd - the Northern Pacific or iaa;
she issAe shores share vas insufficient to
YaY the coat ~ hauling il They saw that
SO lake Shore has received a liberia. share
81 shs tstsr. deny ;hss bas fer the eontrac;
the Lake Shore wooi1 have earned eaoagh