CHAPTER XXXVIII.

OTHER NORTHWESTERN SYSTEMS.

The Chicago Great Western RR.

Among the more important systems of the Northwest this is the youngest, having been started as recently as 1886. The first year it operated 355 miles, in 1887, when the Minnesota and Northwestern (chartered 1854) was absorbed, 608; at present the mileage amounts to 922 miles, all of which is in excellent condition. Until quite lately the system was known as the Chicago, St. Paul and Kansas City RR., its lines interconnecting the three cities after which the company was named by means of as many roads meeting in Oelwein. The line has no branches worth speaking of, and consequently depends almost entirely on through traffic, a fact which accounts for its exceptionally low average freight rates; nevertheless the company has a very fair traffic, its freight business having developed to such a degree that it is only exceeded (per mile of road) by that of two other Northwestern systems, the Alton and Chicago and Northwestern. An extension of the system to Omaha and other points has been planned, and to provide for the required funds the Chicago Great Western RR. Co. was formed with a capital of $30,000,000 4 p.c. cumulative preferred stock, $30,000,000 5 p.c. non-cumulative stock, and $40,000,000 common stock. It is intended to convert the income bonds and the stock of the Chicago, St. Paul and Kansas City Railroad Company into the common stock of the Chicago Great Western, the second mortgage bonds into preferred stock, and the first mortgage bonds into first preferred stock.

The plan also contemplates the raising of $3,000,000 in cash against a like amount of preferred stock at par in the nature of a voluntary assessment on the income bonds, and it is reported that more than two-thirds of the holders of these bonds have signified their approval of the scheme. A general mortgage bond will receive $1,080 in preferred stock. An income bond will be assessed $150 in cash, for which cash payment preferred stock will be given and the bond exchanged for $2,000 of common stock. The $14,892,900 of common stock will be assessed $15 a share, receiving preferred stock for the cash paid and new common for old.

Below are details of the company's capitalisation, traffic, and earnings. It will be seen that the latter show a most satisfactory increase, but nevertheless no returns upon capital have been made since 1890, a fact explained by the deficits up to 1889 which, however, were effaced in the last two years. Interest on most bonds has been paid in scrip (priority loan) with consent of holders, cash payment having been suspended until Jan., 1893. It is quite superfluous to remark that in view of the suspension of interest, of the low rates, of the small net result and especially of the inflated capital the securities of this company deserve little recommendation. Passenger and Freight Movement of the Chicago, St. Paul and Kansas City RR.

*This interest is on the three-year notes, 5 per cent. priority loan, and collateral notes.

GENERAL BALANCE SHEET, JUNE 30.

128,816

*92.276

*54,590

871,879

477,038

355 291

296,235 236,825

605,854

447,567

350,825

1,108,704

Share capital and funded debt of the Chicago, St. Paul and Kansas City RR.

.

Share capital

Funded debt:

* Priority sterling loan, due 1934, 5 p c. gold

* Minneapolis & Northwestern 5 p.c. gold first mortgage.

*Ch., St. P., & K. C. first gold mortgage 5 p.c.

Gen. mortgage p.c. gold..

Income bonds (conv. into 5 p.c. pref. stock)
Equipment lease warrants

Quoted in London.

$14,892,000

Total

$48 264,131

THE NORTHERN PACIFIC AND WISCONSIN CENTRAL RAILROADS.

The Northern Pacific being a transcontinental railroad, it need scarcely be said that a discussion of its affairs properly belongs to another part of this work. Nevertheless, the position it occupies in Northwestern business life is so important that reference to it may not be omitted here. The tendency among American railroads is towards the development of local traffic, and the N. P. makes vigourous efforts in that direction, with the result that such business is rapidly increasing in three distinct and different parts of the system.

The development of local traffic has been especially marked on the company's Northwestern lines, which have been considerably extended in recent years, partly by building feeders in North Dakota, and partly by acquisition of the N. P. and Manitoba, which gives access to some of the best parts of Dakota and Manitoba. The result has been that the position of the Northern Pacific as a factor in Northwestern transportation business has gained in importance to an appreciable extent. The connection with the fertile wheat lands of the Red River Valley and Manitoba and several extensions in North Dakota which are rapidly increasing in mileage seem to denote that the management intends to stimulate local traffic and to construct a dense network of lines in a State which hitherto has had but a small proportion of its soil under cultivation, although it offers practically the same advantages and prospects as Minnesota or Nebraska: we mean, of course, North Dakota. This State, to the needs of which the Northern Pacific, in competition with its rival the Great Northern, seems to pay special attention, lies North of the region especially cultivated by the St. Paul, and contains the finest wheat lands and some of the most beautiful timber in the world; this produce being carried to Duluth or the twin cities, it follows that the Northern Pacific is as little to be despised as a local line as in its capacity of a transcontinental route.

In both respects, however, its importance has been augmented by the lease of the Wisconsin Central Company, which long before the formal addition of its lines to the N. P. system was controlled by the same interest as its present lessee, namely, the Villard group, which enjoys the support of Mr. John D. Rockfeller, the notorious originator of the Standard Oil Company. The Wisconsin Central Company gives the Northern Pacific a direct entrance into Chicago, where it meets the Baltimore and Ohio as a direct connection with the East. This trunk line and the Chicago and Great Western uses its Chicago terminals.

The Wisconsin Central Company owns 239 miles of railroad and leases the Wisconsin Central RR. and other lines, the whole being operated as one system connecting Chicago with St. Paul and Ashland, and meeting the Northern Pacific at both points. The system is composed of four main parts, as follows:

The securities of the Railroad Company are virtually all owned by the Wisconsin Central Company; the consolidated balance sheet and income account to be found in the supplement show the company's condition.

MINOR NORTHWESTERN RAILROADS.

The Northwestern, St. Paul, Burlington, Rock Island, Wabash, Alton and Great Western systems and the 'Soo' lines are the principal carriers of freight in the Northwest, but they by no means monopolise the transportation business of that vast region; apart from the great systems just enumerated there are others which either locally or as through routes are of some importance, and for that reason it is necessary to devote a separate chapter to them.