St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-07-07
NO CHANCE NOW REMAINS IN
FAVOR OF CONSOLIDATION
OF ROADS.
OPPONENTS TRUMP CARD
IS THE INCREASED EARNINGS
OF THE NORTHERN PACIFIC
FOR THE YEAR.
A MINNESOTA LAW IN THE WAY.
Outlines of a Proposed Plan a
Reorganization by Stock
and BOndhoIders

LIE I1lll-AudHlS pldn OF reOrSdu-
izing the Northern Pacific is dead
This is no longer a question of
speculation, but a cold and settled
fact. The G o b e does not make
this statement without information
having been received from highest
sources, very near to the present
management of the Northern Paci-
fic, and coming from a gentleman
who is we'll up in the affairs of the
road.
The deal, so called, was never a
very strong feature from it's incep-
ton. 1t was a mere possibility, a
shadow at which certain elements
financially interested in Northern
Pacific affairs would have gladly
grasped to save for themselves what
they could. 1t was a pretty idea.
and was we'll enlarged upon by the
newspapers. But there are now in
opposltlon cogent reasons and
strong factors, practically insur-
mountable in their character. even
by the aggressive and enterprising
Northwestern railway manager. Hill.
The Minnesota statute prohibiting
the consolidation of parallel roads.
or even their management bv the
same officers, is not a new law. IT
was passed some years ago. It's dis
coVery at the present stage of the
negotiations simply helped the op-
position to the consolidation. But
there are other and still stronger rea-
sons
AGAINST CONSOLIDATION.
even If the law in question did not
exist, and these reasons are the most
powerful factor against the deal.
AS matter of fact the Northern Pa
chic has shown most remarkable
improvements in the net earnings
Tor the past fiscal year. 1t has
earned the large figure of Sc .OOO. 900
net Tor that period, and promises to
increase these earnings to 81 ,OOO. 900
curing the next twelve months.
Such remarkable Improvement
In the net earnings of the road nat
urally made transfer impossible.
Mr. Hill hrst offer, or guarantee,
and the only one which was ever
made, so far as the public knows
was the payment of the interest on
the old and new bonds, amounting.
TO about five and a half million dol
lars annually. But the bondholders
nave now no longer any motive to
accept such guarantee, as the net
earnings far eclipse the amount
named in Mr.. Hills proposition.
IL was stated in Northern Pacific
circles that a new reorganization
committee will soon be formed by
the joint action of the preferred
stockholders and the junior bond
holders. The Northern Pacific is now
earning the full interest on it's first
and second mortgage bonds and a.
considerable surplus which goes to
the credit of the junior securities.
1t is said that the new plan will no
doubt embrace as one of it's feat
ures the raising of enough cash to
take up the $6,000,000 of the colIat-
eral trust notes, the Sc, ,OO0. 900 Of
trust equipment notes and the s4.5OO.-
600 of the receivers certificates. The
reorganization committee intends or
is said to be charged with wiping
out the common stock and provide
for the
ISSUE OF NEW STOCK.
to take the place of the preferred to
much smaller amount than the
present preferred stock outstanding.
This new stock is to be given to the
junior bondholders as a partial
equivalent for their concessions.
which they are expected to make to
the reorganization committee. The
powers of the old or present reorgan-
ization committee expire next Sep
tember. 1t will not accomplish any
thing, and then make way for the
new committee.
These statements are not random
shots, but come with good faith from
a reliable source. AS a matter of
fact, Mr.. Hill is now on his way
home, and it is stated at the general
offices of the Great Northern that he
would be in the city Monday 1t is
also matter of fact that General
Passenger Agent Whitney, of the
Great Northern, was home for the
Fourth, but started Immediately back
East. He did not get far, and put in
a sudden appearance yesterday at
his offices. He informed a Globe
reporter quietly that he was here to
stay, but beyond this all question:
ing was of no avail. 1t is, however,
very natural but what Mr. Whitney,
who has been in New York for some
time with the other officials of the
road, received some message inform
ing him that his services were not
longer required in the East, and in
consequence of such message he re-
turned to his duties.
The story here given fully bears
out what the G Iob be said a few
days ago. What was then said as a
possible fight in the reorganization
may, by this new plan, be avoided.
AT any rate, Mr.. Hill will see his
wishes gratified in seeing his power
full rival placed back upon a busi-
ness basis, which will make compe-
tition more reasonable and fair. And
that end secured, he will feel salts
fed in having accomplished great
deal, and will certainly not be-
grudge the services rendered, nor
the loss of time incurred. In an
other direction a sound reorganiza-
ton of the great transcontinenta1
highway will benefit the entire terri
tory traversed by it, namely, impor-
tant movements will be carried for
ward wherever needed.