The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-02-28

which the committee IL advised could have
been built for but little more than the stock
has cost the company up to the present time.
The lire 70 6atal prairie, thirty eight miles. has
very heavy grades IL most expensive to main
tain. involves large operating expenses. ana
thus far has but little business In brief, the
Northern Pacific assumed directly and indi-
rectly burden OF about &7,sO0.ooo. when 1t
could have acquired substantially the snrne ad-
vantages BY spending less than y, 100000.
With such nnanciasiag il 10 not strange that
Its own preferred stock cells for the same price
that II pays for that OF q bankrupt concern. For
tuna.cy, however, there are some encouraging
features in the situation. The deficit is stated
BY the auditor % be Sos, 453 for the four months
ending October 81. 1897 or but little more than
half OF that for the same time in 1891. and there
II no doubt that the business of the road II
steadily improving.
The Seattle Belt Line, of which only
twelve miles have been built at . cost Of
$547. 5sl, is considered to that extent q
dead loss. Even if completed it would
practically parallel the Seattle, Lake
Shore & Eastern road.
Then follows a full statement of the re-
lations of the Northern Pacific with the
Wisconsin Central and its Chicago termi-
nal companies. The loss on the Wiscon-
sin Central for the year was $403. 957, but
there has been a slight improvement in
the first four months of the present fiscal
year. The deficiency since January Is.
1890, has been $3.50. 265. besides about $780,
O00 for the purchase of terminals at Mil
waukee. of which no account has been
rendered to the treasurer. A history of
the negotiations which ended in the con-
A-~g 81 L. L.. r.
Northern Pacific is given with this pref
ace:
Inasmuch ~ the present depiorable financial
condition OF tho Northern Pacific company 10
due more than to any other one cause to its a.
sumption OF the burdens OF the Wisconsin Gen.
trail system, it is only proper that the facts
should be clearly stated, especially N they fur
nish an instructive and startling chapter in the
history OF railroad management
The first effort to sell was made ten
years ago, when the Oregon Il Transconti-
mental Company bought many thousand
shares of Wisconsin Central common
stock. but the disasters which beiell both
companies delayed the contamination of
the deal. 1t was revived when Willard re-
turned to the presidency of the Oregon d
Transcontinental Company in 1888 and
those who controlled the Wisconsin
Central became Northern Pacific directors.
They had been buying great tracts of land
in Chicago and it became essential that
they should find guarantor. Through
the Oregon e. Transcontinentai Company
they bought millions OF Northern Pacific
stock and secured control in 1889 and q
few months later unloaded tho Wisconsin
Central on the Northern Pacific. Though
the latter has been throwing business over
a. - - ~
nearly 81. Oo0. 900 under the lease and but
for the assumption of its burdens by the
Northern Pacific would have been hope
lessiy bankrupt.
The Chicago & Northern Pacific Com
pany is paid $4,000 year rent for Its
depot and IL cents per 100 pounds of
100000 shares of capital stock. 1Jo, 900 are
held in trust by Henry Willard, Charles l..
Colby and T. f. Cakes for the Northern
Pacific. Since the Chicago & Northern
Pacific Company began operating on April
1, 1890. until April l. 1892. its deficit in
interest has been adjusted by the sale of
81 ,O00, 600 of its bonds. The mortgage debt
of the company is $26 392. 600 on property
valued by it at $3i. 7O6 coo. which the
committee believes to be 100000 or
$1,000, 900 too high. some property valued
/! by 1t at $14 per square foot being valued
| by the Chicago real estate board at S. and
| s. and other tracts at even less in proper
| ton. The Green South Branch addition,
valued at 81, 500, 600, is pronounced unavail-
able at present. as it has no connection
| with the rest of the property. The Chi
| cago e. Calumet Terminal Company is
| declared Improbable and the committee
| says the only reason given for taking it up
was the necessity for using its extensive
| and Improbable terminal facilities-a
commentary on the wisdom of those
acquiring them.
A comparison between the Wisconsin
Central and its competitors for business
| between Chicago and St. Paul is then
| made, very much to the disadvantage of
the former. 1t is 462 miles long against
400 by the Chicago & Northwestern, so
| SO that its train service costs Is per cent.
more: its maximum grades are thirty-four
feet to the mile against fifteen feet on the
Burlington & Northern, equal to an ad-
vantage of 20 per cent. in the number of
cars that can be hauled. 1t is further al
| legged that the interests of the Northern
! Pacific have been subordinated 70 those Of
the Wisconsin Central in all respects.
| The committee says the situation in
wolves the question Of the right of direc-
tor to so vote as to protect his own inter-
ests at the expense of the property he is
bound in honor. if not in law. to protect
| Then il shows the relation of the manage
meht of the Northern Pacific and Wiscon-
sin Central. The latter is controlled abso-
| lutely by its three trustees, who perform
! the functions of the stockholders at the
annual meetings, and these men are also
directors of the Northern Pacific, while
two other directors are so closely allied
with them that their interests are practi-
caliy identical. They were the dominant
| influence when the deal was made by
which the Wisconsin Central and the Chi
cago 4 Northern Pacific were rescued from
bankruptcy and increased in value bv
millions of dollars at the expense of the
Northern Pacific. The report continues:
| The chief benefciariss OF this action were the
members o. the syndicate which was stagger-
| ing under the roads. The leading spirits in this
syndicate and the men who. by reason of their
position. should aud must have known the
| financial status OF the Wisconsin Central were
also Northern Pacific directors. who fought
| most persistentiy for the lease. and who could
not be otherwise than immensely benefited by
| IL Their gain, however, involved correspond.
| ing loss to the Northern Pacific. Substantially
all OF the floating debt of the latter on the most
| of which IL IL paying per cent interest, l. due
TO its Chicago terminals. and at least 81 COO zoo
of its earnings. which rgh;fully belonged 10 its
| preferred stock holders. have been sunk in the
same place How far can this 60? And can no