The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1893-08-31
BAD MANAGEMENT.
Plain Cause of the Wreck of TIL
Northern Pacific.

The real cause for the condition
of bankruptcy into which the North
ern Pacific railroad company was
forced this week was not "hard
times" but bad management. Dull
business for the preceding month
and considerably reduced earnings
for the first week in August are
given in the dispatches as the
causes for compelling a great ma
tional enterprise to go into the
hands of a receiver. That state
ment is literally true, but it is
equally true that there has been no
time in the past three years when
the Northern Pacific was able to
support itself under short season
of adversely. It's means have been
FILTERED away; it has loaded itself
with a crushing bond Indebtedness
it has acquired by purchase and
by lease a lot of railroad properties
intended to be feeders to the main
line, but which have sucked its
life-blood, and it has built branch
lines where there was no traffic,
present or prospective, in order that
its officers might line their pockets
with proceeds from the sale of town
lots.
In 1892, the gross earnings of the
Northern Pacific were $24, 661 ,457
it's operating expenses, $14, SIT $40
net earnings, $1O,OS4,1 los. Out of
its net earnings it had to pay &c.
901, 956 interest on bonded indebt-
edness, 1890, PA for rentals, ST.
OS6, 90S for guarantees and 1894 900
payments to other lines. This was
high-water mark. The net earnings
in 1890 were $9,750,594, in 1891
SO, 146,727. Thus, it is clear that
a falling off of 8 per cent. in the
gross earnings would have thrown
the road into bankruptcy during its
most prosperous period for it must
be remembered that 1890, 1891 and
1892 were "boom" years in the
Puget Sound basin.
The Northern Pacific has never
profted by its own mistakes. In
1878 it went down with Jay Cooke
in the general wreck. Rehabili-
tated six years later, the company
undertook to close the gap Of 1000
miles between its then western
terminus and toe Pacific. This
would have failed but for Henry
Willard, who sustained the North
ern Pacific by appropriating to its
use the money belonging legiti-
mately to the Inflated Oregon and
transcontinental company. Then
came the crash 1888, one month
after the road was completed, and
from that time to this Northern
Pacific stock has been football
for Wall street.
Willard retired, and for the next
six years the company, under the
management of Thomas F. Cakes,
husbanded its resources, and by
extensive advertising and ener-
getic immigration work peopled the
fertile country tributary to its lines
and built up a large local traffic.
But it could not stand prosperity.
1t must have it's own line to
Chicago, and leased the Wisconsin
Central, thus mourning the opposi-
ton of five older and stronger Chi
cago lines, which for selfprotection
directed what traffic they could
control to the Union Pacific. Then
it went into extensive and expen-
sive terminal arrangements in
Chicago. In order to head off OPP
position, it bought the control of
the Seattle, Lake Shore and East
ern railroad (256 miles of rail-,
whose deficit last year was $467, FOL.
It built hundred miles of 49,
road from Tacoma, toy TINT