Northern Pacific Railroad System Collapses into Receivership
Four local branch rail lines in Washington are placed under court control as the main Northern Pacific system fails to cover operating costs.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The United Railroad, the Green River railroad, the Cascade railroad, and the Central Washington railroad—four feeders of the Northern Pacific railroad in this state—shared the fate of the main line yesterday and were placed in the hands of receivers by Judge Hanford, of the United States circuit court. He appointed Henry Stanton, of New York City; C. H. Prescott, of Tacoma; and F. B. Howell, of Spokane, to act in that capacity for the four branch lines. The suit, which was an amicable one, was instituted by the Farmers' Loan and Trust Company, the trustee for the bondholders. The four railroads mentioned are all unprofitable, depending upon the Northern Pacific under traffic contracts. Since the Northern Pacific went into the hands of receivers, it has refused to pay the interest on the mortgage bonds of its branch lines. This naturally renders the roads liable to attachment and foreclosure suits; to prevent which, it was decided to place them in the hands of receivers.
“The theory on which the applications were made and the orders granted has been to prevent waste and destruction of the property and to preserve its integrity.”
This 1893 financial collapse reflects the fragility of Seattle’s early infrastructure, which was built on the back of massive, often over-leveraged, transcontinental rail expansion. Today, as we discuss the regional transit authority's funding and the cost of public projects, the 'Too Big to Fail' anxiety of the 1890s serves as a sobering reminder of what happens when a system's expansion outpaces its actual revenue.
From readers
No comments yet. If you know something about this story — a correction, a family memory, a source — it belongs here.