The decree of foreclosure and sale of the property of the Northern Pacific Railroad Co. did not embrace the lands east of the Missouri River, in the States of Minnesota and North Dakota, as they were not covered by the mortzages foreclosed. Suitable steps are now in progress by which it is expected to acquire these lands (3,738,874 acres remaining unsold), or the bulk of them, for the new company, and to subject the same to its mortgages.

BONDED DEBT AND FIXED CHARGES

The entire bonded debt of the Northern Pacific Railway Co. held by the public, including its own bonds already issued or presently to be issued under the plan of reorganization, and all bonds of other railway companies which it has assumed to pay, and the annual interest charges thereon, are as follows:

This amount of annual interest will be reduced to the $6,052,660 contemPlated under the plan of reorganization, when the remainder of the general rst mortgage bonds are retired and the plan fully carried out.

The annual sinking fund for the redemption of general first mortgage bonds, if not fully met by the sales of lands, will be provided by the issue of prior ien bonds reserved therefor.

The company leases trackage facilities at Portland, Oreg., and other places, for which the rentals amounting to $91.927.16 per annum, are charged as part of the operating expenses.

No mortgage additional to those securing the above-mentioned bonds, can le placed upon the property acquired under the plan of reorganization except under the conditions hereinafter described, nor can any further bonds be Issued under the existing mortgages of this company except as expressly proTided therein or in the plan of reorganization.

No additional amount of bonds can be issued under the old mortgages assumed by this company, viz, Northern Pacific Railroad, Western Railroad of Minnesota. and St. Paul & Northern Pacific, as shown in above table.

Reference is particularly made to a detailed statement made herewith concerning the prior and general lien mortgages of the Northern Pacific Railway Co. and the bonds issuable thereunder.

The securities of these branch line companies owned by the Northern Pacific Railway Co. and their relation to the total amount issued and outstanding. is shown by the following statement :

Little Falls & Dakota R. R
Northern Pacific, Fergus
& Black Hills.

Fargo & Southwestern..
Sanborn, Cooperstown &
Turtle Mountain R. R.
Jamestown & Northern

$1,460, 207.50

R. R.

102.59

300,000.00 3,200,000. 00

89.08 $1,463, 357.50
117.05 15, 000, 000. 00 15, 000, 000.00
87.41 4, 000, 000. 00 4,000,000.00
36.75
300,000.00
3,200,000.00 2,050,000.00 1,843,916.00 206, 084.00

$1,757,000.00 $1,577, 429.00 $179,571.00

2,342,000.00 2, 102, 701.00
1,748,000.00 1,569, 398.00

239, 299.00

178, 602.00

730,000.00

665, 750.00

64,250.00

1 $100,000 still to be pledged. Pending the receipt and pledge of these bonds as contracted for, the roads are controlled by lease to the Northern Pacific Railway Co.

1, 000, 000. 00
2, 000, 000.00

963,000.00

309,000.00

962,000.00

994, 266.00

INCOME

The following statement of income account for the past six fiscal years (ending June 30) is made in conformity to the unification of the Northern Pacific Railway system, effected under the plan of reorganization of March 16, 1896, and shows the results of operations as conducted by the Northern Pacific Railroad Co. from July 1, 1891, to August 15, 1893, and by the various receivers from August 16, 1893, to June 30, 1896.

Condensed statement of income account and charges thereto for the six fiscal years ending June 30, 1896, including the five-year period as revised and corrected by Stephen Little and J. H. McClement, auditors for reorganization committee and published with the plan of reorganization

CAPITAL STOCK

The capital stock of the company issued as fully paid, on account of its purchase of its property (except $4,300 of common stock previously outstanding), is as follows:

Preferred stock.
Common stock.

$75, 000, 000 80, 000, 000

The preferred and common stock is divided into shares of $100 each, registered as to name, and transferable, at the option of the
holder, either in New York or at the Deutsche Bank, Berlin. Checks for the dividends declared are to be mailed to the stockholders of
record when payable. Dividends declared on the preferred stock are payable without deduction for any tax or taxes imposed by the
United States or any State or municipality thereof that the railway company may at any time be required to pay or to retain therefrom,
and may be collected in Berlin upon preferred stock registered there, at the fixed rate of exchange of M. 4.20 per dollar. The share
certificates are signed by the president or a vice president and a secretary or assistant secretary, and registered by the Central Trust Co.
of New York as registrar of transfers.

Each share of the preferred stock is entitled to noncumulative dividends to the extent of 4 per cent per annum, payable quarterly
(out of surplus net earnings in each fiscal year), before any dividends for such year shall be paid on the common stock. In any fiscal year
in which 4 per cent dividends shall have been declared on both preferred and common stock, all shares, whether preferred or common,
participate equally in any further dividends for such year. The share certificates provide that the preferred stock shall have the right
to elect a majority of the board of directors of the new company whenever for two successive quarterly periods, after July 1, 1897, the
full and regular quarterly dividends upon the preferred stock at the rate of 4 per cent per annum are not paid in cash.

The company may retire the preferred stock in whole or in part, at par, i. e., $100 per share from time to time upon any 1st day of
January, but not later than January 1, 1917.

RESTRICTIONS ON INCREASE OF MORTGAGE DEBT AND CAPITAL STOCK

No additional mortgage can be placed upon the above-described property, nor can the present amount of the preferred stock be in-
creased, except in each instance after obtaining the consent of the holders of a majority of the whole amount of the outstanding preferred
stock, given at a meeting of the stockholders called for that purpose, and also the consent of a majority of such part of the common
stock as shall be represented at such meeting, the holders of each class of stock voting separately. During the continuance of the voting
trust, as hereinafter stated, the consent of holders of like amounts of the respective classes of beneficial certificates is also necessary for
the purposes indicated.

VOTING TRUST

In furtherance of the independent reorganization and administration of the property and to promote and protect the value of the securities of the new company, both classes of its stock, except 2,000 shares of common stock, have been deposited with J. P. Morgan & Co., New York, and the voting power thereon has been vested in the following five voting trustees: J. Pierpont Morgan, Georg Siemens, August Belmont, Johnston Livingston, and Charles Lanier. The stock is held by these voting trustees and their successors jointly (under an agreement prescribing the powers and duties to be exercised by them, or by a majority of them, and the method of filling vacancies) until November 1. 1901, although the voting trustees in their discretion may deliver and distribute the stock at any earlier date. Until delivery of the stock is made by the voting trustees, stock trust certificates will be issued entitling the registered holder to receive payments equal to the dividends collected by the voting Trustees upon a like number of shares.

The voting trustees' certificates are registered as to name, and are transferable in New York and in Berlin; in New York they are signed by J. P. Morgan & Co., as agents for the voting trustees, and registered by Central Trust Co. of New York, as registrar of transfers, and in Berlin they are signed by two oficers of the Deutsche Bank, as agent for the voting trustees, and are registered by the Deutsche Bank as registrar of transfers.

New York certificates may be discharged to Berlin, upon their surrender to the agents of the voting trustees in New York, and in like manner Berlin certificates may be discharged to New York. In all cases of such discharge a suitable voucher will be given entitling the holder to obtain a new certificate to be issued at the place to which the old certificate has been discharged.

FISCAL YEAR

The fiscal year of the company commences in each year on the 1st of July and ends with the 30th of June following, excepting that the first fiscal year Commences with the 1st of September, 1896, and ends with the 30th of June, 1897.

PRELIMINARY BALANCE SHEET

The following is a preliminary and condensed balance sheet of the Northern Pacific Railway Co. as of the 1st of September, 1896, when taking possession f the property purchased at foreclosure sale.

Upon completion of the exchange of securities provided for under the plan of reorganization and the liquidation of the reorganization accounts, the full details of the treasury assets will be entered in the balance sheet of the new company.

2. Lands granted by the United States and the State of

4. Sundry bonds, stocks, and accounts, representing interests in railroad, land, terminal, express, sleeping car, coal, navigation and other companies.

5. Supplies, accounts, and bills receivable and land contracts for deferred payments.

3,625, 131. 37

311, 157, 500.00