The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-02-04
IVES DID IT HIMSELF.
Receiver Cakes Says His Ac-
cuser Built the Branches.
IT WAS WISE TO BUILD THEM.
Isss Reply ef sorthern Pacific Recsiv-
ers to the Directors Northern Pacific
Employees May Strike Tuesday.

uu~.rrrr. Feb 3-TheYe were fled
today BIZ The Farmers Loan Il Trust Com
MANY. shsIdoa Il Co., T.. Il. Winston and
RECEIVERS Oakes, Payne and Rouse, in the
eireuis court Of the United States. six
wparste answers to Ives petition for
,,uoyal of the Northern Pacific receivers.
The answers make exhaustive replies TO
every charge made. and comprise over 500
rrin,ed pages The answers not only meet
iii the specific charges, but explain and
Yefuie the insinuaiions- It is shown that
ne branch line policy originated during
she fves-Harri. administration. and the
receivers bring proofs to show that by re-
secsing branch line leases they have saved
more than 100000 per year. The re-
eeisers have already paid s. ,ooo. 600 of pre-
ieren:ial debts and about 500. 90 of
interest, with important economies in
operation. Cakes answers every charge
specifically. fling exhaustive documents
sud proofs. Ra!ston vigorously scores his
accasers. and refates every allegation. In
bis answer, Cakes specifically denies thai
be vas a partner in or proiited by the con-
ssraction of any branch lines, or guaran-
teed the bonds of the same. He also de-
niss that the directors profited thereby.
He shows that under his management the
gross earnings increased from ST., on, 0oo
10 s2s.000.Uo, until the recent extraor-
binary depression. which solely caused the
bankruptcy Of the company. He reviews
the history of the purchase or lease Of
various railroads. The answer shows the
necessity for meeting competition and
controlling business and protecting terri
tory. The Northern Pacific directors and
stockholders unanimously adopted this
policy in 1s8i. aud re-adopted il in iss6
and i8s9. Pursuant to this policy. branch
roads were constructed or acquired
TO meet particular exigencies. In
each instance the subject was carefully
examined. referred 70 special committees
aud reported upon by the various depart
menis TO the board. and all the twenty
three branches now in operation. with the
exception of five. were commenced or
authorized by the Ives-Harris board. The
acquisition OF branch lines was a necessity
in railroad management, and upon the
whole beneficial 10 the system.
The branch lines now constructed or
acquired during the period while Cakes
was director had furnished business to the
Northern Pacific Railroad Company of
over 81, 10000. The Central Washington,
Green River a. Northern, Spokane Il Pa
louise and Northern Pacific & Mon
tans roads were all constructed
or their construction provided for
under the Harris-fves management.
On the Spokane & Palouse the business
last year exceeded 10000. The net
revenue paid all the interest on bonds
issued on account of extension. The
Green River & Northern was authorized
by The iyes-Harris faction OF the directors,
and the contract for construction was
signed by Robert Harris. The answer
shows that no director Was interested in
the construction of the United Railroads
Of Washington. They cost the total
amount OF the bonds issued thereon. and
no profits were made in construction. The
answer shows that not a cent of money
was paid TO the Oregon aud Transcontinen.
tai Company for services in purchasing
the Seattle, Lake Shore & Eastern. Foui
directors OF the company were inter.
ested IN the syndicate which owned and
controlled the Rocky Fork mines. and
the railroad company purchased the
stock of this company and made n con
tract with the Rocky Fork company foi
500 tons OF coal daily for ninety mine years
ct 81 so per ton. with certain rebates. Eoi
the three fiscal years ending June 30 last
the company saved by virtue OF said con,
tracts over 100000. or sum equal e
81 600 day. As 10 the Northern Pacific
4 Manitoba railroad. tue answer shows
that a syndicate was organized BY Willard
10 construct this road, bur be had no per.
sonal interest In it. The entire road, in,
gliding terminal properties at Winnipeg
Portage la Prairie and Brandon. and the
Winnipeg transfer road, cost s.. coo. 600, and
the profits for the year ending June. tso2
were over $500 coo. As To the Chicago ter.
minals and the Wisconsin Central lease the
answer shows that before the lease or any
traffic contract was entered into the value
at the properties was thoroughly ana care
fally examined by independent experts
not only representing the company. bat
aso representing bankers who expected "a
MAKE large investm ents in Chicago Ter.
minal bonds. These experts uniformly
placed the value Of the leased properties
largely ia excess of the value on which
rental was paid under the lease. The
iTes-Ilews report placed the value Of the
th.Cago terminals at about s.. 0o0, 0so
While they were acquired under the lease
hy the Northern Pacific on rental
valued az about SIS. 0a09a. aud Cakes had
no interest. direct or indirect. in the &C.
QUESTION aud control of these properties.