Page:Oregon Historical Quarterly volume 25.djvu/378

 1884, the stockholders authorized another bond issue. Be- sides this, they increased the stock of the company. The preferred stock was increased to $15,000,000 and the common stock to $10,000,000.

Just how the company expected to finance the project is a mystery. Certainly they could not do it on their earn- ings. It is true, the earnings did show an increase, but still not enough to warrant raising the funded indebted- ness to over eleven million dollars. The earnings since 1881, the year of the reorganization of the company, are show in the table below.

Operating Operating Earnings Expenditures Ratio Net Earnings $788,488.18 $473,902.12 60.1% $314,586.06 1,044,334.44 715,531.88 328,802.56 Under Oregon and Transcontinental Company. Gave no figures for publication. 1,014,427.47 762,832.68 75.20% 251,591.79

At the average rate of $300,000 per year for earnings, the company would only be paying about fifty per cent of the interest on the eleven millions dollars funded debt. It is true there was some income from land sales at this time, but on the whole this was almost a negligible item, although for one year the sale of land did bring in over $100,000.

Inevitably another reorganization was due, and it was not long before the inevitable came. The company defaulted payment on the first mortgage bonds in 1885 and as a result of a suit of Lawrence Harrison, a bond- holder, the company was placed in the hands of the re- ceiver, and Richard Koehler, former vice-president and manager of the company, was appointed receiver.

V. LAST PHASES OF THE COMPANY. 1885—

It now remains only to show how the company was finally completed under lease to the Southern Pacific Company and to show the changed conditions after the assumption of management by the Southern Pacific. The