538 Annual Report, 1907. See also Interstate Commerce Commission, Report in the Matter of Consolidations and Combinations of Carriers, Relations between such Carriers, and Community of Interests therein, their Rates, Facilities, and Practices, 12 I. C. C. Rep. 319.

539 The Union Pacific acquired a half-interest in the San Pedro, Los Angeles & Salt Lake Railroad Company in 1904.

540 Recent reports suggest that a holding company is to be formed, which will take over the securities now owned by the Union Pacific Railroad.

541 Dividends upon Union Pacific Railroad Stock:

542 Entitled An Act granting Lands to aid in the Construction of a Railroad and Telegraph Line from Lake Superior to Puget’s Sound, on the Pacific Coast, by the Northern Route. Statutes at Large, 38th Congress, 1st Session, chap. 217.

543 To make possible the selection of indemnity lands.

544 Josiah Perham was the prime mover at first and after him certain Boston capitalists were prominent.

545 Ellis Paxsom Oberholtzer, Life of Jay Cooke. Philadelphia, George W. Jacobs & Company, 1907. See also Smalley, History of the Northern Pacific.

546 The notes were put on the market at par, though sold to the syndicate at 88.

547 Chron. 18:16, 1874.

548 R. R. Gaz. 6:135, 1874. The indebtedness of the Northern Pacific to Jay Cooke & Co. amounted to about $1,500,000.

549 R. R. Gaz. 6:496, 1874; Congressional Record, 43d Congress, 1st Session, May 11, 1874, pp. 3749, 3773.

550 Net earnings “shall be construed to mean such surplus earnings of the said railroad as shall remain, after paying all expenses of operating the said railroad and carrying on all its business, including all taxes and assessments and payments on incumbrances, and including the interest and sinking fund on the first mortgage bonds, the expenses of repairing or replacing the said railroad, its appurtenances, equipments, or other property, so that the same shall be in high condition, and of providing such additional equipment as the said Company shall deem necessary for the business of said railroad.” Annual Report, 1876, p. 45.

551 Annual Report, 1876; Chron. 20:522, 1875; Ibid. 21:15, 1875.

552 Annual Report, 1876.

553 R. R. Gaz. 7:330, 1875. Deposits of bonds kept coming in, until on June 30, 1879, when the rights of conversion into preferred stock expired, there remained outstanding but $529,000. Annual Report, 1879.

554 These lands were reserved for the time because some of them had not been surveyed, and others which had been surveyed had not yet been deeded to the company owing to a dispute with the Interior Department over the payment of the costs of the surveys. R. R. Gaz. 7:340, 1875.

555 R. R. Gaz. 7:420, 1875.

556 Annual Report, 1881.

557 Annual Report, 1882, p. 13.

558 Henry Villard, Memoirs, vol. 2, pp. 272–94.

559 Memoirs, p. 297.

560 For the manner in which the Northern Pacific directors attempted to keep Villard from obtaining control, see notices in the Chronicle for 1881.

561 See First Annual Report of the Oregon & Transcontinental Company; R. R. Gaz. 14:516, 1882 (contains statement of organization and purposes).

562 Annual Report, 1883. Arrangements had been made with the Oregon & Transcontinental Company for necessary advances in order to avoid the accumulation of a large floating debt.

563 R. R. Gaz. 15:716, 1883. For attempted explanation of this deficit, see Villard’s statement to the stockholders in 1884, just after his retirement from the presidency.

564 Memoirs, p. 315.

565 Villard was back in control by 1887 with the backing of German capital.

566 In 1886 the Oregon Railway & Navigation was obtaining 28 cents per 100 pounds for its haul of 213 miles from Wallula Junction to Portland, leaving to the Northern Pacific 28 cents for its haul of 1699 miles from St. Paul to Wallula. R. R. Gaz. 18:681, 1886, Report of Vice-President and General Manager Oakes.

567 For the negotiations between the Union Pacific, the Oregon Railway & Navigation, and the Northern Pacific from 1885 to 1889, see the financial papers of that time and the reports of the railroads concerned.

568 In 1890 it was reorganized as the North American Company.

569 Annual Report, 1888, p. 8; Chron. 44:752, 1887; Ibid. 44:782, 1887.

570 The preponderance of west-bound freight prior to 1888 forced the Northern Pacific to carry grain east-bound at very low rates in order to fill its empty cars. See Daniel Buchanan vs. the Northern Pacific Railroad Company, 5 I. C. C. Rep. 7.

571 For immigrant traffic into the Northwest see Ry. Rev. 28:163, 1888.

572 The capital stock of the Cœur d’Alene Company was $1,000,000, and there were $360,000 in 6 per cent guaranteed bonds outstanding. Ry. Rev. 28:551, 1888.

573 Interest due and accrued, bills payable and accounts payable for the following years were:

574 Annual Report, 1889.

575 Annual Report, 1889; Chron. 50:279, gives text of mortgage.

576 Ry. Rev. 29:541, 1889. In fact the issues were all made at 5 per cent.

577 Annual Report, 1890. For answer of directors see R. R. Gaz. 21:759, 1889.

578 Chron. 51:539, 1890. The point of view of the stockholders is briefly but clearly set forth in a circular issued by Mr. Robert Harris, chairman of the board of directors. Ry. Age, 14:658, 1889.

579 In 1919.

580 Evidence of this appears in the $10,000,000 reserved for premiums.

581 Memoirs, vol. 2, p. 336.

582 Annual Report, 1889; R. R. Gaz. 21:318, 1889. The Wisconsin Central divided its gross earnings into two parts, 65 per cent and 35 per cent; retained 35 per cent for its own use, and appropriated 65 per cent for operating expenses and for certain improvements tending to reduce operating expenses. When operating expenses were less than 65 per cent the Wisconsin Central was to pay over one-half of the difference to the Northern Pacific in consideration of the business which the latter gave it. When operating expenses exceeded 65 per cent the Wisconsin Central was to pay not exceeding 2½ per cent of this excess out of its 35 per cent, and to divide one-half of any excess of operating expenses above 67½ per cent equally between the Wisconsin Central and the Northern Pacific. The Northern Pacific, however, was not bound to pay its half of such excess except out of future profits received under the contract.

583 Annual Report, 1890. For a brief statement of the complicated relations between the Wisconsin Central, the Chicago & Northern Pacific, and the Chicago & Great Western, see R. R. Gaz. 22:350, 1890. Terms were agreed upon with the Baltimore & Ohio for the use of the Chicago terminals of the Chicago & Northern Pacific, by that corporation. Annual Report, 1891.

584 Annual Report, 1890, p. 14; R. R. Gaz. 21:318, 1889.

585 Chron. 54:845, 1892. Resolutions adopted at the stockholders’ meeting were in substance:

“Resolved, That the $3,347,000 of consolidated mortgage bonds now deposited with the Farmers’ Loan & Trust Company as trustee for the preferred stockholders ... be not sold below 90 and accrued interest.

“Resolved, If all the bonds be not sold as above, and smaller lots can be disposed of at 90 and interest, then the Directors may sell enough to make up the deficiency any year between the dividend actually paid to preferred stockholders and the 4 per cent which should be paid.

“Resolved, If 4 per cent dividends or more are declared by the Board of Directors any year, then enough bonds shall be sold to produce 1 per cent additional dividend to be paid to preferred stockholders.” Chron. 55:679, 1892.

586 Ry. Rev. 32:687, 1892. Members were, Henry Clews, Brayton Ives, Frank Sturges, William Solomon, and Jay Cooke, Jr.

587 Ry. Times, 63:275, 1893; Chron. 56:332, 1893.

588 Ry. Rev. 33:143, 1893; Chron. 56:362, 1893; Ry. Times, 63:302, 1893; Ibid, p. 360. See also R. R. Gaz. 25:161, 1893.

589 Memoirs, pp. 359–60.

590 Among others the investigating committee protested loudly against a sale. Ry. Rev. 33:127, 1893.

591 Ry. Times, 65:595, 1893.

592 Chron. 56:1017, 1893; R. R. Gaz. 25:398, 1893.

593 The heaviest subscribers were the Rockefellers and Villard and his friends.

594 Annual Report, 1893; Ry. Times, 64:290, 1893.

595 Criticism was aroused by the alleged fact that all three receivers were adherents and virtually protégés of Henry Villard. Ry. Times, 64:290, 1893. See also Smalley, p. 291.

596 Except that Henry Stanton of New York was to be the Eastern receiver for all the branches.

597 Ry. Times, 64:337, 1893.

598 These officers had resigned in consequence of the non-payment of their salaries.

599 Ry. Rev. 33:587, 1893.

600 Chron. 59:697, 1894.

601 Ibid. 57:765, 1893.

602 Ry. Age, 19:40, 1894.

603 Ry. Age, 23:154, 1897.

604 Ry. Rev. 33:783, 1893; Chron. 57:1123, 1893; Ry. Age, 19:11, 1894.

605 Ry. Age, 19:89, 1894.

606 Ibid. 19:231, 1894.

607 R. R. Gaz. 26:294, 1894; Chron. 58:683, 1894.

608 R. R. Gaz. 26:642, 1894; Chron. 59:473, 1894.

609 Chron. 59:738, 1894; Ibid. 59:697, 1894.

610 This is not to be explained by more liberal expenditures by the receivers on maintenance of way and equipment, for the sums applied to both these purposes were materially less in 1894 than in 1893.

611 Ry. Times, 65:87, 1894.

612 Ibid. 65:38, 1884.

613 R. R. Gaz. 27:160, 1895.

614 For opposing circulars by the Livingston Committee and by the directors see Ry. Rev. 35:55, 1895. On February 20, 1896, a Stockholders’ Protective Committee was appointed, consisting of August Belmont, Brayton Ives, and George R. Sheldon of New York, and Charlemagne Tower, of Philadelphia. Chron. 62:365, 1896.

615 Chron. 60:930, 1895.

616 R. R. Gaz. 27:590, 1895.

617 For the use of trackage and terminals at and between St. Paul and Minneapolis. See Ry. Age, 20:161, 1895; Ibid. 20:198, 1895; Ry. Rev. 35:209, 1895.

618 Chron. 61:325, 1895.

619 Pearsall vs. Great Northern Railway Company, 161 U. S. 647.

620 Ry. Rev. 35:461, 1895.

621 Proceedings were begun in the Seattle court in August. See Chron. 61:241, 1895; Ry. Age, 20:394, 1895; Ibid. 20:418, 1895; Ibid. 20:430, 1895.

622 Up to this time such accounts had been filed in the Milwaukee court.

623 Ry. Age, 20:442, 1895; Ry. Rev. 35:503, 1895.

624 Ry. Age, 20:478, 1895; R. R. Gaz. 27:648, 1895.

625 Chron. 61:611, 1895; Ry. Times, 68:442, 1895.

626 Justices Brown, Harlan, Brewer, and Field.

627 “We are of the opinion,” said Justices Field, Harlan, and Brewer, “that proceedings to foreclose a mortgage upon lines extending through more than one district should be commenced in the Circuit Court in which the principal operating offices are situated, and in which there is some material part of the railroad embraced by the mortgage. Such court should be the court of primary jurisdiction. But in view of the fact that a portion of the line of road owned by the Northern Pacific Company is within the State of Wisconsin, and that at the time of the filing of the creditors’ bill the Northern Pacific Railroad Company was operating a road through the Eastern District of Wisconsin, although such road was under lease to it for 99 years; and in view of the further fact that the railroad company assented to the action of the Circuit Court for the Eastern District of Wisconsin in taking jurisdiction, and as such jurisdiction has been recognized by the Circuit Court in every district ... for the space of about two years, we are of the opinion that the Circuit Court for the Eastern District of Wisconsin has jurisdiction to proceed to a decree of foreclosure which will bind the mortgagor company and the mortgaged property, and ought to be recognized by the Circuit Court of every district along the line as the court of primary jurisdiction.” Chron. 62:234, 1896.

628 Justice Field of the Supreme Court declined to exercise his authority to remove Burleigh, intimating that the existing arrangement was satisfactory. Ry. Age, 21:174, 1896.

629 The existing general mortgage covered only the main line, land grant, and equipment so far as owned by the company.

630 See Circular of the Reorganization Committee, or Chron. 62:550, 1896; Ry. Times, 69:287–8, 1896.

631 In addition there were $73,875 of unpaid interest on receivers’ certificates.

632 See R. R. Gaz. 28:219, 1896, for editorial on plan.

633 Ibid. 28:349, 1896.

634 Chron. 62:1139, 1896; Ibid. 63:155, 1896.

635 Chron. 62:990, 1896; Ibid. 62:1041, 1896.

636 Chron. 62:1088, 1896.

637 Ry. Times, 69:511, 1896.

638 Chron. 62:779, 1896.

639 Curiously enough the sale did not extinguish the old Northern Pacific Railroad Company. Some 25,000 or more shares did not assent to the reorganization plan and are still outstanding. They assert that it is because of them that the old organization is kept up.

640 From 1898 to 1907 inclusive. This does not include advances to subsidiary companies, which have aggregated nearly $20,000,000.

641 The average train load in 1907 was 406.77 tons; that in 1898 was 264.59 tons.

642 Chron. 83:1524, 1906; Ibid. 84:103, 1907. The new issue is to go in part for improvements previously made out of income. The directors have adopted the questionable policy of charging all such expenditures to capital account.

643 For this and for an account of the Northern Securities episode see B. H. Meyer, A History of the Northern Securities Case, Bulletin of the University of Wisconsin, July, 1906.

644 Annual Report, 1901.

645 The dividends declared by the Northern Pacific Railway have been:

A Including August.

646 Poor’s Manual, 1878. The name was first the Rock Island & La Salle Railroad Company, and was changed to the Chicago & Rock Island Railroad Company in February, 1851.

647 Chron. 30:356, 1880.

648 Chron. 30:616, 1880.

649 For the attempt of Vanderbilt to get representation on the board see the pamphlet issued by the Rock Island Company at this time; also R. R. Gaz. 16:420, 1884; Annual Report, 1884; Ry. Age, 9:428, 1884.

650 R. R. Gaz. 16:891, 1884.

651 R. R. Gaz. 16:709, 1884.

652 Annual Report, 1891.

653 Ibid. 1889.

654 Ibid. 1892.

655 Annual Report, 1892.

656 “With the Chicago, Rock Island & Texas Railway Company this company has financial and traffic agreements under which the Chicago, Rock Island & Pacific Railway Company supplies all funds necessary to build and equip the road in consideration of receiving all the stock and all of the bonds of the Texas company, the latter issued at the rate of $15,000 per mile of completed road and additional for equipment to an amount equal to cost of the same, not exceeding $5000 per mile.” Annual Report, 1893.

657

658 Ry. Age, 33:186, 1902.

659 Stock quotations:

660 The par was $50 for both common and preferred.

661 R. R. Gaz. 34:562, 1902.

662 This line had been leased before, and the majority of its stock and that of the Rock Island & Peoria had been owned by the Chicago, Rock Island & Pacific.

663 See financial papers for 1897.

664 Annual Report, 1903.

665 Quotations of securities:

666 Chron. 75:212, 1902.

667 Ry. Age, 34:301, 1902.

668 R. R. Gaz. 34:750, 1902.

669 Previous to this the stockholders of the Chicago, Rock Island & Pacific Railroad Company had approved the deal, had authorized the new bonds of 1913, and had voted to increase the capital stock of their company $20,000,000, which increase was turned into the treasury of the Rock Island Company of New Jersey, in return for an equal amount of this latter company’s stock. It is worth noting that the purchase was to be made by Railroad Company and not by Rock Island Company bonds, although the desire of the management was ultimately to see the indebtedness of all subsidiary roads replaced by Rock Island Company bonds.

670 Ry. Rev. 43:408, 1903.

671 Chron. 76:1192, 1903.

672 Ry. Age, 36:1, 1903.

673 Ry. Age, 37:1153, 1904.

674 See the Annual Report of the St. Louis & San Francisco Railroad for 1904.