The Yakima herald. [volume] (North Yakima, W.T. [Wash.]) 1889-1914, 1894-06-07
THE NORTHERN PACIFIC.
How This Great Property Was Thrown
Into the Hands Of Receivers.
A STORY OF CRIMINAL cRooKEDHESS.

Liabilities Increased One Hundred
and Thirty Millions ana tsscss ne.
creased Ten s,iIii-asi I'm five Year,
Earnings and Expensee
II is now fully recognized that the fate
Of the Northern Pacific railway and Of its
securities rests with the committee OF
consolidated per cent mortgage bond
holders, and that the formulation Of any
successful plan for rehsbllitating the con-
Germ will proceed from that organization
and the interests ii represents, says
Brddstreets. In view Of the exceedingly
unfavorable earnings Of the road and OF
the complications In which the road and
its branches are involved, 1t is highly
probable that considerable time will elspse
before a definite basis for reorganiza-
tion can be arrived at Meanwhile, how
ever, the consolidated mortgage bond
holders committee are steadily pursuing
the investigations into the condition and
history Of the corporation and oil Its
finances which are Q necessary pre-
liminary to their labors. With this object
in view II has employed eminent expert
accountants, who are now examining the
details Of the company's business. The
scope Of this investigation is q wide one.
embracing not only the revenue accounts
Of the company and its branches, but the
facts relating to use Of the consolidated
mortgage bonds, the branch and leased
lines, and the permanent properties Of
the corporation.
The personnel Of the committee and
the systematic method with which their
labors have been prosecuted make It GER
tain that the Investigation In this case
will not be Of a perfunctory character,
but that the security holders and the
public will in due time obtain full and
accurate history Of the financial misman-
agement which led to the company's
downfall. Public curiosity in regard to
the matter is already pronounced, and II
is probably 10 recognition Of this fact that
certain details already secured by the
committees experts have been permitted
to appear in advance Of the completed
report, which will be presented at some
future date. The figures which have just
been presented cover an inquiry into the
assets and liabilities of the Northern Pa
cifc for the five years ending August Is,
1893, conducted by Mr.. Little, one Of the
experts employed on the work. His re-
port, which is very voluminous, may be
summarized in the following results:
Increase OF liabilities yl4s, S54, ls4
Decrease OF liabilities. ............. l2,372,s42
Net increase Of liabilities. ..... .sis7 ,lsl,bsI
Increase OF profit and loss account. l,iS2,iS
Total ......................S12s 663, 736
Net total increase Of liabilities to be
accounted Tor ....................... l4s,643,ooS
The list Of assists offsetting or account
ing for the increase Of liabilities Is an ex-
tended one, embracing q multitude OF
items, from which it Is possible, however,
to extract some interesting examples Of
bookkeeping. For instance, the discount
and expenses OF the consolidated bond is
sue, amounting together to $685.. 345, have
been carried as something Of value, while
in the same category is q charge Of $780,
600 for surveys Of branch lines. The ex-
cessive cost Of such branches as the
Northern Pacific & Manitoba, the Nor,
thern Pacific & Montana and the Rocky
Fork & Cook City railroad also invite at
tention, the totals in this instance
amounting to over sl4,O0O,00O Doubtful
items also abound, such as the company's
investments in and advances to the
Seattle, Lake Shore & Eastern (amount-
ing to nearly 5000 ,000), its subscription
to the Worlds Fair stock, and the 1885,
900 Of bills receivable, the collection OF
which is dubious. In short, the portions
Of the report made public indicate that
even on a cursory examination items to
the amount of 10000. 900 or SO can be
designated which are wrongfully carried
on the books as assets. 1t is not pre-
tended that these items are all that
are bad or doubtful in the long
list of assets submitted to the committee,
but the few are given to show how read
lily the $l4s,64s, 00S.50 may contract or
shrink in bulk. Before the work in COM
pleted, however. the chat will be thor
oughly winnowed from the grain, 90 that
when reorganization Is undertaken the
exact condition of the company will be
laid bare to public inspection. This 10
one Of the duties the consolidated mort
gage bondholders' committee has charged
itself with.
Another interesting statement has also
appeared in relation to the earnings Of
the Northern Pacific property exclusive
Of branch lines) from August l6, 1893,
when the receivers we're appointed, to
February %, 1894. These figures are as
follows:
Gross earnings. sss. 6s2
ssss5,0O6
And miscellaneous income. ...,.,.. ss4s.7so
Less land receipts. .................,... 1854
s24s.46s
ts,s7s, s72
Prior charges l.sos 800
Net earnings. .......:..........; :. ,2,575.s7a
fund Of the 6rst mortgage bonds 81. $50. 222