The Minneapolis journal., 1901-11-12
THE FARMER AND THE 20" DEAL

L L AhmEh AMI IhE " OEAh
The farmers of the northwest may be
interested to know that they, with the
timely aid of Jupiter Pluvius, have insured
the success of President j. ]. Hill in the
gigantic traffic deal consolidating the Bur-
lington with the Great Northern and
Northern Pacific railways.
When the directors of the two north
ern roads, on June 30 last, gave their joint
collateral per cent trust bond to the
amount of $215. .154. 400 in payment OF
$1O7 ,577 200 of Burlington stock-that is
to say, gave two dollars in bonds for ev
cry dollar Of 80" stock, which was the
equivalent OF guaranteeing the holders of
the new per cents a dividend of per
cent on their former stock-the financial
world stood aghast Wise men declared:
Jim Hill has bitten off more than he
can chew this time; and when the most
severe drought in years, blasted the corn
crop of the southwest in Burlington ter
ritory, predictions were general that the
Great Northern and Northern Pacific
earning power would be strained to the
uttermost to make good the Burlington
deficiency. But the October earning state
doubling Thomases and show that the
farmers of the upper Mississippi valley
have come to the rescue with traffic de-
mands which send the Hill project onward
toward the goal of success with the sweep
of North Dakota cyclone.
What have the farmers done?
This is what they did in October for the
Northern Pacific. They increased it's
gross earnings to 1885, ,499, as compared
with $3,389, ,965 for the same month last
year-an increase of $1,2O5. 534, or 1881
per cent. For the preceding quarter,
July 1 to September 80, Northern Pa
cifc earnings were $lO,46O, 178. a gain of
81, ,991, $50 over last years comparative
showing. Consequently, for the first third
of the new fiscal year, Northern Pacifc's
earning power shows a growth of So, 1877
3S4, which is heavier by over $500, 900 than
the increase for the full fiscal year pre-
ceding, and the greatest record in the his
tory of the road.
This is what the big crops of the farmer
have done for the Great Northern. For
October they sWelled the gross earnings
to "a. 163. .408, as compared with $3,023, ,327
for October last year = an increase of
| S1,140, 0S1, or 37.71 per cent. For the four
months July TO Oct. 81, they piled up the
earnings to $13, 557, ,227, an increase of So
979,677, or % per cent. Coupled with this
heavy growth in earnings volume, is an
operating expense much lower for the two
northern roads than for any other Pacific
system.
But what of the Burlington earnings for
the critical year of the Burlington North
ern deal? This is the greatest surprise
of all. The %" comes up out of the
much advertised drought district with a
report for the first quarter showing a sur
| plus % per cent larger than for the same
time last year. In place of $13, ,225,O2O as
/ the earnings of last years first quarter,
the Burlington this year comes forward
with $14, 430. 1856; and in place of a sur
plus of $2,835, ,946 with which to pay a
quarterly dividend of ~ per cent last
year, it exhibits surplus of SO, ,485 504,
which will not only take care of the re-
quired 2 per cent for this years quarter,
but leave balance Of over 81, 900, 900 to
f! the good. In other words, the Burlington
| single handed, without calling upon the
| guaranty of the two northern roads, is
able to meet a dividend demand on the
! basis of present earnings, not of per
cent merely, but of per cent if neces-
! sary.
! 1t may be that Burlington earnings for
the next quarter, when the corn movement
is heaviest, will not show the marked
growth of the first quarter On the other
hand, the earnings of it's two northern
associates in the spring wheat territory
will show much larger gain in the second
than in the first quarter so that the ag-
gregate earning power of the roads in
President Hills Burlington Northern con-
solidation IS assured of increasing
strength, and the resources for making
| good the per cent guaranty on Burling-
ton stock are unquestioned. The farmers
of the northwest, therefore, with their
record-breaking crops, have given ]. j,
Hill a bulwark against which all the pes
simistic predictions of Wall Street COM
petitors fall imDotently. There is little
question now that the 90" deal will be
sustained in it's critical period and come
through its first year with a financial
showing which not only will astound the
hostile critics but go far beyond the san
guine expectations of Hill himself.
Schwab ought to resign. Far from get
| ting million it turns out that his salary