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AMERICAN RAILROAD JOURNAL.

new machine shops, of sufficient capacity to ena-
ble the company to combine and consolidate its
present old, inadequate, outgrown and expensive
shops at Chicago, and to supply requisite hous-
ing for its largely increased locomotive equip-
ment, and for general improvements of this char-
acter, the company concluded, in November last,
to create a new mortgage on all its railroad-‘,
equipment, franchises, leaseholds, land grant
lands, and all other property—-subject to exist-
ing 1iens——-—of sufiicient amount not only to provide
means for the above purposes, but, also to em-
brace provisions for the ultimate consolidation of
its entire bonded debt, and the bonded debt of
the other railroads owned and controlled by this
company, now existing under separate organiza-
tious,wheuever the said railroads shall become
consolidated with the Chicago and North Western
Railway Company. To this end a new mortgage
was created, with the Union Trust Company of
New York as trustee, authorizing the issue of
848,000,000 of seven per cent. Consolidated Gold
bonds, running thirty years from the first day of
December, 1872, in registered coupon form, at the
option of the purchaser, with interest payable in
gold at the oflice of the company in the city of
New York, on the first of June and December in
each year, and asinking fuud after the first year
established, of one per cent on the amount out
standing in each and every year thereafter. Of‘
this issue, the amount of $18,749,500 of the
bonds is reserved, and can only be issued at the
option of the company, for and in place of the
like amount of other issues of bonds which con-
stituted at that date all of the outstanding bonded
debt of this company, and of the companies em-
braced in the consolidation, as specified in said
mortgage; and there is also reserved in said
mortgage the further amount of $16,599,500 of
bonds to provide, in like manner, for the retire-
ment and exchange of the bonds of other com-
panies, for which this company is liable, by own-
ership and control of the roads, viz.: of 31,724,-
500 of Chicago and Milwaukee Railroad line cur-
rency bonds; of $1,350,000 of the bonds of the
Iowa Midland Railroad Company; $1,000,000
bonds of the La Crosse, Trempeleau and Prescott
Railroad Company; $9,025,000 of bonds of the
Winona and St. Peter Railroad Company, and $3.-
500,000 of the bonds of North Western Union
Railway Company, upon consolidation of these
companies respectively -with the Chicago and
North Western Railway Company. All of which
reservations are specifically set forth in the mort-
gage. The total amount so to be reserved is $35,-
349,000, and the residue, to wit. $12,651,000, is
authorized to be issued for uses of the company.
As before stated in the description of the bonded
debt., $4,534,000 of these bonds were sold during
the last fiscal year.
The important work of construction in which
this company is interested are hapidly'approach-
ing completion, and by the first of October next,
or sooner, the entire line of the Madison Exten-
sion, and of the North’ Western Union Railway,
between Milwaukee and Fond du Lac, and of the
Winona and St. Peter Railroad Company,will be in
successful operation. Trains have been running
regularly over the extension,between Fort Howard
and Escanaba, since last December, and the result
of the trafiic fully justities the anticipations of that
enterprise; the steamboats, which before were
necessary to connect the line between these points
by navigation of Green Bay, haveisince been sold.
Besides these outlays for the Chicago and
"North Western, the further sum of $4,578,773 33
has been expended during the year for construc-
tion on other lines, which are embraced in the
system of roads operated by this company, and
included in the provisions of the general consoli-
dated mortgage last created, to wit: For con-
struction of the_ extension of the Winona and St.
Peter Railroad to the Minnesota State Line, $1,-
979,930 20; for the same in Dakota, $193,992 01;
for the Mankato Branch, $4,812 16; for account
of the Mississippi River Bridge at Winona, $3,-
291 97; for the La Crosse, Trempeleau and Pres-

cott Railway, $7,979 69; for the Stanwood and ,

Tipton Branch, $144,482 47; for the State Line
and Union Road to Geneva Lake, $2,495 11 ; for
the Iowa Midland, $28,509 2-'3,and on account of the
North Western Union Ptailwtiy, between Milwau-
kee and Fond du Lac, including extensive and
valuable depot grounds in Milwaukee, $2,213,-
280 4.7.

The aggregate sum expended by all these cor-
porations during the year, for construction and
equipment purposes, amounts to $10,462,154 01,
apportioned as follows :

Chicago and North Western Co.:

Construction  ....$4,446,116 72
Equipment.... .... .. 1,437,263 96

$5,883,380 68
2,173 922 21

   

Winona, and St. Peter F... R. Co....

Winona, Mankota and New Ulm Co. 4,812 16
La Crosse, Trempeleau and Prescott
R.R. 11,271 66
Stanwood and Tipton Co   . 144.482 47
Iowa Midland R. R. Co .... .  .. . 28,509 25
State Line and Union R. R. Co  2,495 11

North Western Union Railway .... . 2,213,280 47

On some accounts, the last year may be regard-
ed as exceptional to any that has preceded or that
will follow it, in completing or bringing to an ap-
proximate close many large animportant works of
construction that could not be postponed without
loss, especially in respect to the land grant roads.

The total quantity of land secured to the entire
line north of Fort Howard, by completion of the
extension of last year, is computed at a little more
than 1,000,000 acres. Many of these lands are well
timbered, and it is not unreasonable to suppose
that some may contain valuable deposits of iron
ore. Steps are being taken to examine and as-
certain their value, which will constantly appre-
ciate and add to the worth of the company’s pro-
perty. ,

Various improvements on all the lines of the
company, and a further increase of equipment,
which Was indispensable to the business, have
been supplied, and are mentioned in the general
manager's report.j Ample grounds, lying just
west of Chicago limits, have been acquired for
new engine house, machine and car shops,_aud
buildings for a large part of these works are far
advanced.

Of the lines under construction, owned by this
company, the Winona and St. Peter was a land
grant road, and the time for its completion ex-
pired on the 3d of March last. This road would
have been finished last fall, but for the early win-
ter which set in in November, and made further
progress impossible. An extension of six months’
time was granted by Congress, and the line will be
fully completed within that period. The quanti-
ty of land which will be obtained for the exten-
sions made since the purchase of the road in 1867,
is estimated at upwards of 1,200,000 acres. The
land is of the best quality to be found in either
Minnesota or Dakota, and with great quantities of
Government land on the alternate sections, now
for the first time opened up to settlement, will at-
tract early occupation and improvement. It will
be the policy of the company to encourage actual
settlers, and to build up traflic for the railroad,
by the sale of lands at low prices, and minimum
rates for transportation.

The only other work of large proportions which
had been undertaken in the interests of this com-
pany, was the Fond du Lac Division of the North
Western Union Railway. This line, of 62.7 miles,
was put under contract, from Milwaukee to Fond
du Lac, last summer, is nearly completed, and
will be in readiness for the fall traffi c.

The necessity for this line to protect our busi-
ness north of Fond du Lac, from the effect of the
competition of new roads on shorter lines to Mil
waukee and Chicago, was none to soon seen and
provided for. With this connection, a new route
for all that region is opened to Milwaukee, a fine
local business insured, and by the use of this line,
and of our Chicago and Milwaukee road, a short-
er route by at least 29 miles is made for all the_
Chicago business.

The original conception of the North Western

Union ltailivay to provide this line and the branch
between Milwaukee and Lodi, has only been part-
ly realized.

Great encouragement was had from some
of the most substantial citizens in active busi-
ness in Milwaukee, that material aid would
be gladly rendered to put the enterprise on
its feet, but subsequent experience proved the
error of this view, and that portion of the road
extending to Fond cl u Lee has been built at great
expense for necessary depot grounds, and right
of way in Milwaukee, and at a cost of over 82,--
200,000, without equipment. These enormous
outlays, except in the most imperative cases for
the protection of the property, cannot be afforded.
and however disappointed the company may be
in not bringing its Madison Extension line, and
the La Crosse, Trempeleau and Prescott, and
Winona and St. Peter roads, with their valuable
trade and products, in direct communication with
Milwaukee by the Lodi line, it has saved the ex-
penditure of its construction, at a time when the
importance of other enterprises demanded the
best efforts of the company.

The earnings and expenses of the several roads
owned by this company, whose business is not in-
cluded in the earnings and expenses of the Chic-
ago and North Western Railway Company, are as
follows, for the year ending May 31, 1873:

Winona and St. Peter.  . ..... ....$7l8,924 98
La Ci osse, '1‘rempeleau and Prescott. . 230,551 19
Winona, Mankato and New Ulm .... . 4,690 65
Iowa Midland .... 84,781 16

910: one: n-no -coo

$1,038,947 98

Their operating expenses and taxes
' were . . . . . . . . . . . . . . . . . . . . . ... .. $748,842 55
Their interest on bonds .. .. . . .. .  605,392 46

 

   

$1,354,235 01
showing a deficiency of $315,287 03 in the oper-
ating of these roads for the year.

The earnings of the Winona. and St. Peter give
uo fair criterion of the results which may be ex-
pected when the whole of that road shall be fin-
ished,and connected with our main lines,by the com
pletion of the Madison Extension. Its business is
now rapidly increasing, the month of June, since
the close of the last fiscal year, showing gross
earnings of $117,700, against $63,400 for the same
month in 1872. A large increase is anticipated
for the entire year. ,

The La. Crosse, Trempeleau and Prescott is self-
sustaining, and affords a margin of profit for re-
payment of the advances made to it by this com-
pany. The Winona, Mankato and New Ulm is a
short branch to Mankato, whose business can
never be very remunerative in competition with
other lines at Mankato; but the traffic it contri-
butes as a feeder to the Winona and St. Peter, is
of more account than its own local earnings.

The Iowa Midland has not proved profitable as
alocal line, and the benefits it centers as a feeder
to the Fulton Air Line at Clinton, can only be es-
timated by the increase of traffic which it furnishes
to and from Chicago on the Galena Division. Full
balance sheets of all these roads, as combined in
their accounts with the Chicago and North West-
ern, are appended in the last pages of this report.
By reference thereto, it will be seen that in case
the entire deficiency which has ever accrued in
operating these roads, shall be taken from the
balance of income account belonging to the Chi-
cago and North Western Company—-which stood
at $1,629,967 84 at the close of the last. fiscal year
-«there will stillremain a clear balance of income,
over and above the total deficiencies of all the
combined roads, of $764,264 91, on the 31st of
May last.

It is believed that the time is not far off when
these roads, taken together, will prove self-sus-
taining and valuable feeders to our trunk lines,
and become profitable in their net results, aside
from the value of the lands which, by the construc-
tion of the Winona and St. Peter road, are secured
to that company. .

A contract has been entered into with the Green