1864 Q Q Q @1964

NORTHERN PACIFIC RAILWAY COMPANY

TABLE OF CONTENTS

Page

Directors and Oicers - - - - - - - - —

Highlights - - - - - - - - - - - - -President’s Letter - - - - - - - - - -Trafc and Revenues - - - - - - - - -Industrial Development - - - - - - - -Agriculture - - - - - - - - - — - -

1

O'3U\|BUON)

CENTENNIAL RECORD

€O®

Railway Expenses - - - - - - - - - -Additions and Betterments - - - - - - -Other Operations and Income - - - - - - 11

1Qi‘l§1:e‘*r“°‘fP'{‘°'j‘ j j j j j j j j j j Northem Pacic's Centennial LP album,Minerals '_ 13 “_A Thousand Miles of Mountains,” high-Afliated and Subsidiary Companies - - - 14 hghled °bse'_'vance °f the Rmlway 5 looth

Matters of Interest - - - - - - - ~ - - 15 anniversary m 1964'

F1YIe“:;'gf-‘a1'l Légiglagiol; ‘ ‘ ' ' ' ' ' ‘ ' Narrated by stage, screen and television

Litigation - - - - - - - - - - - - 15 3;; gvgggdymmyorkst;=§PP°m'*dm‘;i{j;s1"tg§Corporate and Financial - - - - - - - 16 d b. sto g dpe to ’

Trafc Representatives - - - - Inside Back Cover dream and the reality of opening the

Pacic Northwest by the Northem Pacic.

Northern Pacic Railway CompanyStatements of Income and Retained Income - 19Balance sheet _ _ _ _ _ _ _ _ _ _ 20-21 THE ANNUAL MEETING of stockholders will beLong Term Debt - - - - - - - - - - 22 held in the general oice of the company in St. Paul,Investment in Ailiated Companies - - - - 23 Minn., on April 22, 1965, at 10:00 A.M. Formal notice

C. B. & Q. Income Account - - - - - - - 24 of the meeting will be mailed to stockholders onS. P.&S. Income Account - - - - - - - 24 M¢11'Ch 19.

FISCAL AND TRANSFER AGENTSMORGAN GUARANTY Tnusr Comnmv or N|:w Yonx,

New York, N. Y.

REGISTRAR OF STOCKMANUFACTURERS Hmovm Tnusr Conumw, New York, N. Y.

PRINCIPAL OFFICE OF Tl-IE COMPANYNon-rt-mm Pacmc Buummc, St. Paul, Minnesota

BOARD OF DIRECTORS

Term Expires in April, I965Joan E. Colurrrl: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Butte, Montana

President, The Montana Power Company

‘Domini C. Dsrrou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Minneapolis, MinnesotaChairman of the Board, The Dayton Company

'CHARLB Drvms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Boston, MassachusettsPresident of Incorporated Investors and of Incorporated Income Fund

‘Pans? L. RAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaPresident, Great Northern Iron Ore Properties

Term Expires In April, ‘I966°C1uuu.ns H. Bnu. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Minneapolis, Minnesota

Chairman of the Board of Directors, General Mills, Inc.

‘Roam S. Mscnnuun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..St. Paul, MinnesotaPresident, Northern Pacic Railway Company

Wruuul G. Rem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Seattle, WashingtonChairman, Simpson Timber Company

Joan F. Slum, In . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Chicago, IllinoisPresident, Inland Steel Company

Term Expires in April, ‘I967Joan M. Mun, Jn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New York, New York

Executive Vice President, Morgan Guaranty Trust Company of New York

Jsuns S. Roc|u:r|:u.m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New York, New YorkChairman, First National City Bank

‘Norma Smou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Fu1le1-ton, CaliforniaChairman of the Finance Committee, Hunt Foods and Industries, Inc.

Eowsnn B. STANTON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SL Paul, MinnesotaVice President, Northern Pacic Railway Company

‘Member oi Executive Committee

OFFICERS

Roam! S. MACIARLANI, President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaEnwiuw B. Snzrron, Vice President . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . .St. Paul, MinnesotaF. L. Srunssxanr, Vice President, Operations . . . . . . . . . . . . . . . . . . . . . . . . . ..St Paul, MinnesotaWu. J. Lucxsmcm, Vice President, Traic . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..St. Paul, MinnesotaGnoaol: M. Wssmmrrou, Vice President, Oil Development . . . . . . . . . . . . . . . ..Bil1ings, MontanaEARL F. Rmwi, Vice President and General Counsel . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaDun H. Essnum, Vice President and Western Counsel . . . . . . . . . . . . . . . .Seatt.ie, WashingtonDAVIS Pom Wlumwns. Sunnmuum & Knmun, General Counsel . . . . . . . .New York, New YorkR. L. Kolnrm, Executive Assistant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaE. L. QIDIL, Comptroller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaH. S. LATIAI, Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesotaE W. F. JOHNSON, Assistant Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .St. Paul, MinnesohRussns. H. Dxcx, Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..St Paul, MinnesotaHuan McLson, Executive Assistant and Assistant Secretary . . . . . . . . ..New York, New YorkRxcnnn A. Bnnxz, Assistant Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..St. Paul, Minnesota

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~ “‘ "-:1:»a@-%':. .5» -». 1964 1963 1962 1961 1960“Tm (In Thousands of Dollars)

Railway Revenues . . . . . . . . . . . . . . . . . $ 210,816 8 204,472 $ 198,679 S 188,416 $ 197,995

Railway Expenses . . . . . . . . . . . . . . . . . 196,688 190,216 186,608 179,753 185,287

Other Income . . . . . . . . . . . . . . . . . . . . 21,842 21,736 18,290 19,701 20,277

Fixed Charges . . . . . . . . . . . . . . . . . . . . 11,069 11,074 11,283 11,380 11,434

Federal Income Taxes . . . . . . . . . . . . . . 326 ( 1,222_) 671 3,004

Net Income . . . . . . . . . . . . . . . . . . . . . . . 23,50l_ $ 24,592_ S 20,300 $ 16,313 8 18,547

Net Income Per Share . . . . . . . . . .. S 3.90 $ 4.09 $ 3.39 S 2.72 $ 3.10

Dividends Paid . . . . . . . . . . . . . . . . . .. $ 15»044 $ 14,106 $ 13,191 S 13,184 $ 13,171

Dividends Paid Per Share . . . . . . . . 8 2.50 $ 2.35 $ 2.20 $ 2.20 S 2.20

Number of Shares . . . . . . . . . . . . . . . . . 6,024,620 6,009,373 5,995,550 5,993,233 5,989,529

Number of Shareholders . . . . . . . . . . . . 33,702 33,801 33,586 31,905 33,072

Operating Ratio . . . . . . . . . . . . . . . . . . . 85.32 84.98 86.02 86.60 84.54

Times Fixed Charges Earned . . . . . . . . 3.12 3.22 2.80 2.43 2.62

Taxes Per Share . . . . . . . . . . . . . . . . . . . S 3.15 $ 2.94 8 2.65 S 2.92 S 3.37

Working Capital in Thousands . . . . .. $ 62,157 $ 67,505 S 58,847 $ 61,570 8 61,583

Average Number of Employees . . . . . . 15,676 15,852 15,931 16,043 17,188

Total Payroll in Thousands . . . . . . . . . $ 104,191 $ 102,390 8 100,952 $ 99,203 $ 103,819

(. . .) Credit.See Notes to Financial Statements on pages 20 and 21.

VIC! PIISIDINTS

l.B.Sm-An-Ion F.L.Sl'lIII—IlIl‘l' W.J.Lvcmman G.M.Wnnn¢non EIERIQIIA D.H.lu|-nunlzecutioe Operating Trac Oll Development General Conneel Western Coaneel

Department Department Department Department Law Department Law Department

THE

PRES|DEN'l"S

LETTER

The year 1964—our Centennial Year—was ahighly successful one for the Northern Pacic. Al-though not a record year, both revenues and netincome reached relatively high levels.

Railway revenues of $210,816,000, after deduct-

which, in total, were far in excess of savings. Theimpact upon 1964 earnings was particularly heavybecause the major portion of the total increase inwages was retroactive to January 1, 1964, whilesavings were limited to six months or less becausethe effective dates of most of the settlements fell inthe last half of the year. This resulted in a heavyconcentration of increased wages, severance pay-ments and other costs in the accounts for the lasthalf of the year, particularly in the fourth quarter.

Because these increases were charged againstearnings late in 1964 and additional increases be-came effective January 1 of this year, the rst twoquarters of 1965 will include two rounds of in-creased wage and fringe benets. Since there wereno similar increases in the rst and second quartersof 1964, earnings for the rst two quarters of 1965will suffer by comparison. These circumstances willnot prevail to the same extent during the last halfof 1965 when expenses will be on a more nearly com-parable basis.

Net non-rail income before income taxes, reporteding $3,200,000 in connection with the Divisions on Page 19, amounted to $21,842,000 for 1964 as againstCases (see Page 15) were the highest since the $21,736,000 for the year 1963. Oil and gas revenuerecord level of $211,286,000 established in 1956.

After absorbing the largest increase in wages inthe history of the Company and above averageexpenditures for maintenance of way, net income at$3.90 per share was exceeded only by previous post-war highs of $4.09 in 1963 and $3.97 in 1959.

Cash dividends of $2.50 were paid during theyear. An increase in the quarterly rate from 55 to

was down $1,139,000 because of a change in 1963accounting procedures (Page 11) which adverselyaffected year-to-year comparisons and, in part, be-cause of lower production.

The proposed merger of the Northern Pacic,Great Northern and the Burlington moved a stepforward in 1964 with the ling of the InterstateCommerce Commission Examiner’s Report and

60 cents per share became effective with the Janu- Recommended Order on August 24. The Examinerary, 1964, payment which also included a 10-cent recommended that the merger be approved subjectextra. A similar extra was paid in January, 1965.

Freight revenue of $164,168,000 was up $3,330,000to certain conditions discussed on Page 15. The Com-mission xed January 15, 1965, as the nal date for

or 2.07 per cent over 1963 after deducting $3.2 mil- ling exceptions to the Examiner’s Report. Thelion and $1.6 million from revenues in 1964 and 1963, next step is the ling of replies to the exceptions onrespectively, in connection with the Divisions Cases 01‘ b8f01‘e March 15, 1965-referred to above. Before this downward adjustmentin each of the past two years, 1964 Freight Revenueamounted to $167,368,000 as against $162,437,000 in1963. The increase in 1964 of $4,931,000 or 3.04 percent reects the actual growth in business handled.Forest products and manufactures and miscellane-ous items, which moved in heavy volume during theyear, were principally responsible for the improve-ment in freight revenue. Grain loadings in 1964 werebelow 1963 despite a good crop and the heavy exportmovement to Russia during the rst quarter.

Passenger revenue of $6,821,000 in 1964 showedan encouraging increase of $360,000 or 5.6 per centover 1963.

The most signicant development affecting 1964operations was the nation-wide settlement with vari-ous railroad labor organizations. The increase of$6,472,000 in railway expenses over 1963 was duelargely to higher wages and other benets resultingfrom these settlements. (Page 8.)

While these settlements involved certain presentand future benets for the railroad industry, 1964operating results were burdened with severance

We enter the year 1965 in strong nancial condi-tion with prospects favoring a protable year of op-eration. With three consecutive years of better-than-average agricultural production in NorthemPacic territory, the general economy of the areashould continue to produce a heavy movement offorest products and manufactures and miscellaneousfreight. The volume of grain stored at interior loca-tions is at near record levels. Loadings for move-ment to terminal position are expected to rise in1965 with a corresponding increase in freightrevenue.

I join with the Board of Directors in expressingappreciation to our stockholders and customers fortheir continuing support and condence, and to themen and women of Northern Pacic whose effortshave made possible the favorable results achievedin 1964.

a4,Zw-QPREIDBIT

payments, increases in wages and fringe benets St. Paul, Minnesota, February 19,1965

TRAFFIC AND REVENUES

per cent below 1963. The decline was due to a grainhandlers’ strike at the Head-of-the-Lakes duringJuly and August, a severe car shortage in Octoberand November and the retention in storage of anabove-average volume of 1964 production.

Total railway revenues of $210,816,000 in 1964were up $6,344,000 or 3.1 per cent over the 1963 The 1964 Payments t°fa1'me1'5 \1hde1‘1-he G°Ve1'h'1eve1of$204,47g,000_ ment program were made soon after the harvest.

Consequently, there was not the same pressure toll f ash l ' d 1 th h

Freight Revenue of $164,168,000 was up $3,330,000 or iien oiilcthe ax garagsg egl;_;:nmasst°fargee 3:2.1 per cent over the $160,837,000 reported f°1' the farms and at other interior locations is well aboveyear 1963 The higher level ef trefhe ih 1964 is hot avera e and in some areas at near record levels.fully reected in these gures. Interstate Commerce A heagvy m°'vemem to terniinal position could de_Commission regulations require that the increased velop in 1965 regardless of the Size of the cropdivisions on transcontinental traffic involved m theDivisions Case (Page 15) be dedueted from fi-eight The generally high level of business activity inrevenue and placed in 3 reserve pending the 5ettle- 1964 was reected in 3 heavy movement Of fOl'€St

ment of the division of joint rates between Eastern, products and manufactures and miscellaneous items-Midwesiei-n and Western ea;-i-iei-S, sinee the ICC Despite a strike in the automobile industry whichorder became effeetive on July 1, 1963, Northern curtailed production in October and November,Paeie reserved $15 million from fi-eight revenue Northern Pacic carried 7,183 carloads of autos andfor the belanee of that year and $32 million for trucks on multi-level racks and trailers-on-at-cars1964. Prior to these adjustments, 1964 freight rev- during the Yeah This ‘Tame, Whieh inveh/ed theenne was $167,363,000, up 3 per eent over 1963_ movement of 85,476 vehicles, produced revenue of

For the third consecutive ain harvested $4,309,987, up $114,271 or 2.72 per cent over 1963.in Northern Pacic territory Wis at’ gelatively high The acquisition of additional multi-level equipment

level. Heavy production notwithstanding, the vol- h°1P‘?d lfhethhlogl11):“), to mamtem its compehhveume moved to market was below 1963. Although hosmon m ls esubstantial increases were recorded during the At several points in the Pacic Northwest, theearly months of the year, when grain was moving to Company has established a distribution plan, underRussia, loadings for the last half of 1964 were 19 which carload shipments may be stored and re-, .

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A giant 85-foot “Pig Palace,”one of the largest livestockcars in the world, was placedin service by the NorthernPacic in 1964. More thantwice the length of the all-steel stock car introducedby the Company in 1958,the new car can carry up to325 hogs weighing an aggre-gate of more than 80,000pounds. It can be used alsoto transport calves andlambs.

shipped in small lots to all points in the Northwest.Favorable rates and benecial service are outstand- &ing features of the plan which is being used by a 1

growing number of national concerns. One of thesedistribution centers is located at Pasco, Wash.,where a former military installation of 450 acres,with 1,636,000 square feet of covered storage, has L-been converted into an industrial park. Carloadrail shipments are broken down here and deliveredby Northern Pacic Transport Company to a largenumber of consignees in the surrounding territory.

Late in the year, the Company placed in serviceone of the nation's largest rail cars for livestock. Thenew 85-foot “Pig Palace” can accommodate some325 animals with an aggregate weight of more than80,000 pounds. This exceeds the capacity of a con-ventional stock car by more than 100 per cent. Pur-pose of the car is to meet truck competition moreeffectively, especially in the handling of westboundcarloads of swine. Testing of the car has proved shell Oil ¢?mPa"U is "35"? N°"'¢h¢'m P¢¢i¢ TOFCsuccessful, and additional units will be acquired. 3¢""'-"¢e daily b¢tw¢¢_" P°"tl"-"11 {"1-d the _s¢¢ttle

area to cut costs and improve service to its gobbersand retail outlets. By piggybacking orders of pack-

Trailer-on-Flat-Cur—Among the bright spots in the ‘Wed 9°°d's direct t° °'“t°me'3 f"°m its "ml" Plant. .

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1964 tr-we was the mm-d -Mh of :::...5:*:‘“:z?..5.!;:£‘;.i:. ‘:::.r;::.i:.:"..*:.*:i.::. .2.TOFC service, which brought increases of 17 per - ’

cent in trailer loads and 22 per cent in tonnage mvem°m'handled. Equipment additions to the TOFC eet

during tjhe Year came t° 75 ‘-‘nits’ made “P °f f°rty once-a-week service from a transfer facility on the40-foot msulated vans, fteen 40-foot and four 26- Fraser River near New Westminster, B_ C_

foot dry vans, ten 40-foot refrigerated vans withmeat rails, and six 40-foot at bed trailers.

Trulc Data Pro:essing—A system whereby essentialinformation can be promptly supplied to the Traic

Freight Commodity Statistics-—The Interstate Com- Department was developed in 1964. Pertinent in-merce Commission prescribed a new Standard formation, including consignee, consignor, origin,Transportation Commodity Code effective January destination, weight of shipment, and revenue, will1, 1964. This system provides for 47 detailed com- be furnished to sales personnel early each monthmodity classications, replacing the seven previously covering shipments of the preceding month. This

used. The new code has been a useful tool in the will be a valuable tool in the solicitation of business.

analysis of freight rates, which are under continuous

leview in effort lo Seep Northern Pacic sew’ Passenger Revenue totaled $6,821,000 in 1964, an en-

mes compemwe y pnce ' couraging increase of $360,000 or 5.6 per cent over1963. During the year, additional Slumbercoaches

Frei ht Rates-—Establishment of the rst joint through were_acqmred t°_pr°v1de thls p°,pular’ economlcalt 9 d Ni bet n the 48 conti O state sleeping car service between Chicago and Seattle

ra es an se ce wee gu us s . .

and points on the Alaska railroad made 1964 a sig- $1 :thheCMamit,re?tg’ as wen as on the v1sta'D°menicant year in the annals of transportation. Arrange- 0 oast “mtments were completed early in the year to providethrough service, without transfer of lading, in con- Industrial Develop|nent—Northern Pacic’s continu-nection with Puget Sound-Alaska Van Lines and the ing industrial development effort in 1964 includedAlaska Trainship Corporation. Puget Sound-Alaska the acquisition of 65 acres for industrial sites. MostVan Lines operate “Hydro-Train” car barges, each important of three purchases was a 55-acre tract atwith a capacity of 42 rail cars, direct from Seattle Bismarck, N. D. This acreage will be used to locateevery three days. Alaska Trainship’s vessel ALAS- new industries and to provide for the increasedKA, with a capacity of 50 to 56 freight cars, provides needs of those which are expanding.

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Northern Pacic boa: cars are now rolling cars are transshipped via oceangoing ves-in Alaska, too. A new service established sels from Pacic Northwest ports andearly in 1964 involves the transportation of points on the Alaska Railroad, providingrail freight among the 49 continental states integrated rail service among these stateswithout transfer of lading. Loaded freight and Alaska for the rst time in history.

During the year, 121 new industries were 10- strip mine in northeastern Montana is moved by thecated on the Northern Pacic and 46 were removed Northern Pacic to a power plant at Sidney. Thefor a net gain of 75. This brings to 829 the net in- North Dakota mines, on the Mandan North line, arecrease in new locations on the line over the last 10 capable of producing more than one million tonsyears. Also in 1964, 57 traic-producing industries annually. Current production moves principally tomade capital investments exceeding $100,000 each power plants at Mandan, Bismarck and Valley City,for new plant location or expansion. N. D., and Fergus Falls, Minn.

Esneeially noteworthy as growth areas are the Other industrial activity on the Northern Pa-

Yakima Valley and other areas in the Columbia clc Included the Start °f 3 $71/5 m1n1°n Pulp andBasin in Washington which are assuming ever paper mill by the Boise Cascade Corp., at Wallula,greater importance as ‘producers of fresh and pro¢- Wash.; the start of a $25 million expansion by theessed produce for national consumption. A 1964 Longview Fibre c°- at Lmlgview» Wash“ and theexample is the $1 million plant for Seneca Grape beginning of construction ‘on a $20 million cement

Juice Corp. on a 20-acre site at Prosser in the Plant b3’ Idealcement C0-1“ Seattle-Yakima Valley. In September, the plant began op-

frfmon by shipping extracted and c°_nce_ntra_ted Agu-iculture—For the third consecutive year, grainJuices to New Y°rk for packagmg and dlstnbutlon production in Northern Pacic territory was at a

In the Columbia Basin Wheeler Wash relatively high level. The resulting favorable effect’ _ _ ' _ _ " upon the purchasing power of the area was re-

iaromo FF°°di’ started lamldmg a $1 mllhon flected in a relatively heavy inbound movement ofmzen rem me potato p a_nt on property pl?" manufactures and miscellaneous items, including

chased from the Northern Pacic‘ Annual capacity farm chemicals fertilizers machinery and otherwill be 40 million pounds, with aked potatoes as a agricultural Supislies 'by-product. This plant is served exclusively by '

N°rthem Pacic’ as *5 Country Garflensv blew _at The wheat crop in the State of Washington wasnearby Warden’ where ma? C°mPany ‘F ‘_l°ubhng Its somewhat above the high production of 1963. Infrfazen French fnes °aPa°1t¥ t° 89 m11h°n Pmmds Montana, North Dakota and west central Minnesota,wltha $700'000Pla“t°xPa“51°“Pr°3ect- the aggregate production of wheat was at near

record levels.In Montana and North Dakota, the Knife River

Coal Mining Co., a wholly-owned subsidiary of Although acreage planted in sugar beets was upMontana-Dakota Utilities Co., is steadily expanding in 1964, total production was down because ofits lignite mining operations. Output of the Savage lower average yields per acre. A cut in acreage

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amounting to an average of 6 per cent nationally hasbeen announced for 1965 by the United States De-partment of Agriculture. This includes an above-average reduction of 11.3 per cent for Montana and9 per cent for Washington. At the same time, therewill be a substantial increase in acreage in theRed River Valley of North Dakota and Minnesotadue to acreage allotted to the new sugar plant atDrayton, N. D.—served exclusively by the North-ern Pacic—which will begin production in 1965.

Carloadings of fruit were down in 1964, largelybecause of a reduction of 20 per cent in appleproduction from the Yakima Valley and a smalleryield of pears. Temperatures, well below zero inthe Yakima Valley in December of 1964, killedmany buds on trees of soft fruit and may also havedamaged the trees. The eect upon the cherries,apricots and pears cannot be determined until later This giant 750'¢°" electric dmgline, with 11 17-eubie

in the year. yard bucket, is being employed by the Knife RiverCoal Mining company in its strip mining operation

With many young orchards-especially apple, at the South Beulah elds, Beulah, N.D., on the

pear and cherry—-approaching the age of heavy Railway’s Mandan North line. Production of the

bearing, and with the planting of additional or- Mining c0mpany’s North Dakota mines is moving

chards, the forecast is for increased production of via N°_"the""" Peele 30 $¢ellm_ eleelfie 9e"e"'¢""9

fruit in the Lower Yakima Valley of the Columbia Plants m Nmth Dakma and M"me3°t“-Basin. It is expected that the volume of appleproduction will double by 1970 and that pears will In the pacic N01-thwe5t__Q1-egon, Washington

increase by 40 Pei‘ eent during the Seme Pe1'i°d- and Idaho—the 1964 fall seeding of winter wheat was

Production of commercial potatoes was about the the largest since 1952. Montana growers increased

same as in 1963 in Washington, but considerably their acreage °f winter wheat by 28 Per cent-

lower in Montana and the Red River Valley. Since Northern Pacic eastern territory has a shortage

prices were well above 1963, growers and shippers of moisture in many areas. Precipitation will have

had a good year. The Northern Pacic movement to be above normal during the next few months,

from July through December ran about 25 per cent if adequate moisture is to be provided prior toabove 1963. the start of the 1965 growing season.

The $1 million plant of the Seneca Grape New York for packaging and distribution,Juice Corp. was built on a 20-acre site at it was one of 121 new industries which lo-Prosser, Wash, in the Yakima Valley. Ship- cated on the Northern Pacic Railway dur-ping extracted and concentrated juices to ing 1964.

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‘I

RAILWAY EXPENSES

January 1, 1964, for all other operating organiza-tions. In addition—beginning with 1965-—a fourthweek of vacation was granted to operating em-ployees with 20 or more years of continuous service.

Railway expenses for 1964 were $196,688,000, up Tim princieal increlases in basic retgsi ,?;$6,472,000 or 3.4 per cent over 1963. The principal ?aY °1"i °P‘:'3tm§ 911115031685 W€:'c$1as44<; ows.d .

variations in expense categories listed on Page 19 °r ma ,3“ yar con uc 91.5 an ' or ma anwere in the following accounts: Transportation yard tramnlem eectwe ‘Ianuary 1’ 1964; $1175

- - - ' for locomotive engineers, effective June 1, 1964, withgghuéflgfgtengggts’ Mamtemmce of Eqmpment and an additional increase of $1.50 in all classes of road,

freight and yard service when the engine crew conTrensP°rtet‘°r‘ exPe"5e was “P 5400361000 due 9° sists of only an engineer. The basic daily rates of

higher wages end ether leber benets and the larger locomotive remen, hostlers and helpers were in-v°l‘-rme °r tragic handled during the Year creased, effective January 15, 1964, by 72 cents,

Equipment rents were up $1,707,000, primarily with a similar increase as of January 1, 1965.because of higher muti-level per diem rates.

Maintenance of equipment expenses were down ‘N ”““'°“5 °" °°“*"5$1,618,000 due largely to a reduction in expense for III]the repair of locomotives and box cars. Fifteen newdiesel locomotives purchased during the year re- _

placed other units which, if retained, would have I95 /I I‘,been repaired during 1964. Improvements to boxcars /* * erwere heavier in the year 1964 than in the preceding ,/ \year. As a result, repairs charged to expense were lm ’ | | “|'

redvwed w=<>r<1insly- /L\~-4 rout smav, WAGES,

Other expense 0: $17,979,000, up $1,056,000, re- * "rm" *"° We-‘*"ected over $1 million in severance pay for remen, Q5 ,, \ L/ 1’as well as higher wages for clerks not included inother specic accounts. gugugg Am; wAQ[$ //’Wage and labor Soltlomonta—With few exceptions, mg élong-standing differences between the nation's rail- I5roads and their employees were settled during 1964.The agreements provided for signicant changes inwork rules, wages and other benets. III ,_,. , .

Some of the 1964 agreements were negotiated

5

~ < % s, _.._, 71"» 1 '"settlements between the National Railway Labor ; _;_\-,_eConference—repi-esenting the railroad industry on a “ 9‘ ‘ I “'1” ‘“ ’”""“”" ' "'9" ' "“" “J “"1”national basis_and railway labor organizations, I955 I956 I957 I958 I959 I959 I961 I962 I963 I964

while others were made in accordance with the pro-visions of the award of a seven-man arbitration Eective May 7, 1964, certain remen in road,board, referred to on Page 9 of the Annual Report freight and yard service were given the option offor 1963. accepting other railroad employment at the same

. . f tin all -Agreements with the operatmg brotherhoods rate 0 pgy ohaccep .?°a gener€u:dsi;'er31ncZrbig_I:_(Locomotive Engineers, Conductors, Trainmen, Fire- a.nce un er e provlsl us spec y emen and Enginemen) provided for a health and hon board referred to ab°ve'welfare plan and insurance for employees and de- A reduction in the consist of certain freightpendents at a cost of $23 per month for each quali- crews became effective September 10, 1964, and afying employee. These payments were made effective reduction of certain yard and transfer crews wasJune 1, 1964, for engineers and remen, and made effective on October 10, 1964.

An agreement with operating employees, ne- crews. On November 3 an initiative measure was

gotiated as of June 25, 1964, covered certain second- adopted in North Dakota, by a plurality of almost

ary issues, the more important of which were: paid two to one, repealing the crew consist requirementsholidays; suitable lodging, plus a $1.50 meal allow- as they pertain to freight trains and self-propelledance for road service employees when detained at equipment. Rejected by approximately the same

away-from-home terminals for four or more hours; margin were two initiative measures sponsored byrules governing the manning of self-propelled ma- the railroad brotherhoods which would have ex-chines; a rule for eliminating the last remaining en- tended the crew consist and train service require-gine on a shift or in a yard; an adjustment in rates ments. As a result, Northem Pacic will release

paid yard foremen and helpers, and a wage increase locomotive remen in North Dakota on the basis

of approximately 3 per cent for yard remen.

On September 25, 1964, an agreement was made

specied under the arbitration board award. Effortsare under way in the three remaining states, in thel ' latur s and in th courts, to abolish similar

with the Shop Craft Organizations which provided rgictivg Statutes e

for allowances to employees in the event of transfer '

of work or the abandonment of facilities. Rules wereestablished covering the contracting of work to out-side parties and craft work performed by foremenor other supervisory employees.

25 AVEKAGE NUMBER IN THOUSANDS

29

IMHOI5

I9 A

I955 I956 I957 I959 I959 1960 I961 I962 I963 I954

Agreements with non-operating labor organiza-tions provide, in general, for an increase in wagesof 9 cents per hour, effective January 1, 1964, withsimilar increases on January 1 of 1965 and 1966.Other provisions include a paid holiday on an em-ployee’s birthday and a fourth week of vacationafter twenty years of continuous service, both com-mencing in 1965, and $2,000 of group life insuranceon and after March 1, 1964, for qualifying employeeswho retire.

Although most of the agreements outlined abovewere made at various times during the last half ofthe year, with but few exceptions they were maderetroactive, many of them to January 1, 1964. Sincethe savings involved were restricted to a relativelyshort period, the net result was a substantial in-crease in 1964 expense for wages and other benets,which is estimated at approximately $4.5 millionover 1963.

Work Rules—The last Annual Report noted thatfour states in which the Northern Pacic operates—North Dakota, Oregon, Washington and Wisconsin—have statutes which prescribe the consist of train

ADDITIONS AND BETTERMENTS

Gross expenditures charged to capital accountfor road and equipment in 1964 amounted to $29,-964,000 as compared with $15,672,000 in 1963.

Roadway Expenditures in 1964 were $9,892,000 asagainst $5,583,000 in 1963.

A total of 93.3 miles of new rail was laid during1964, slightly less than the 99.1 miles laid in 1963.

The 1964 program included 86.6 miles of weldedrail, bringing the total of this type in track to 488.7miles.

Northern Pacific placed an additional 48 miles oftrackage under centralized traic control during1964, bringing its total of CTC to 463 miles. Here,an NP freight train approaches a new “cantilever”signal as it leaves the new 38-mile stretch of CTCbetween Staples and Gregory, Minn. This sectionis controlled from Minneapolis, 95 miles away.

single track in the 288-mile double track territorybetween St. Paul, Minn., and Buffalo, N.D. The1964 addition of 48 miles brings total CTC operationsto 463 miles.

Currently under construction are 17 miles ofCTC between Missoula and Frenchtown, Mont., and55 miles between Tuscor, Mont., and Kootenai, Ida-ho. These sections will be in operation during 1965.

Equipment Expenditures charged to capital accountin 1964 amounted to $20,072,000 as against a1963 expenditure of $9,819,000. The following new

Three of the 15 new 2500-HP diesel locomotives equipment was placed in service during 1964 at apurchased by the Company last year are shown cost of $16 600 000pulling a long freight train in Hellgate Canyon, ’ ’ 'east of Missoula, Mont. The powerful units, equip-ped with six traction motors each, are used prin- HE Sim! iilll‘cipaull in the mountain divislmwi Woviding de’ Diesel Locomotives 15 Road-Switchers,2500 hp,6 motorpe1;ildl)l8, on-time service for fast main line freight Ref,-13¢,-am; can 200 Insulgtgfd, load dividebrzuctisluontra C. un e rame, ro er "rigs

Box Cars 136 50'6" with 14‘ combination doors,- - roller bearings

%;':.%:";:*i.;:1,"1%:;::":: M» 5» ~w»~=~@-eliminate a 1,169-foot viaduct, a 435-foot tunnel and cove;-ed Hopper gm 129 2604 ¢u_ ft, M119, bearings276 degrees Of curvature, and to reduce mileage by Covered Hopper Cars 25 4427 cu. ft., roller bearings1.9 miles. The project is scheduled for completion Covered Hopper Cars 25 2600cu. ft, roller bearingsin 1965 at a total cost of approximately $3 million. awn T°_l:'l1°PP¢1' Cars 20° 1:111:11"

echani " wi oa ‘vi ers, ro erA 12-mile section of centralized traffic control R°§"iK°"9°1' Ca" 75 _b°"i"89»°“$hi°" ““d°"f“"“°5

(CTC) was placed in service between Huntley and A“‘° R°°k5 5 B‘f1°"°lBillings, Mont., in 1964. The removal of 4% miles Au” Racks 13 Tmlevelof second main track was a art of the ro'ect. Con-struction of an additional 36, miles of (l)TC] between In additi°n' ten used Sl“mbeF°°a°}§e5 wer_°_Ffur"Gregory and Staples, Minn“ was nearing completion chased at a cost of $1,380,000. With this acquisition,t th d f th Th- th 1 t- f Slumbercoaches are now in service on the Main-

a e en 0 e year ls was e on y sec Ion O streeter, as well as the North Coast L1mi'‘ted.

Equipment listed below is scheduled for 1965delivery at an estimated cost of $22,400,000:

IN MILLIONS OF DOLLARS

GROSS CAPITAL EXPENDITURES HE gununz De,“-igon

Diesel Locomotives 15 Road-Switchers,2500 hp,6 motor30 Box Cars 564 50'6" with 14' combination doors,

roller bearingsBox Cars 20 60'6" with load dividers, cushion

underframes, roller bearingsRefrigerator Cars 200 50' insulated, load dividers,

cushion underframes, rollerbearins

ZI] Mechanical 50'9" wit load dividers, cushionRefrigerator Cars 100 underframes, roller bearings

N-I Covered Hopper Cars 50 2600 cu. ft., AirSlide, roller bear-. ings

Covered Hopper Cars 50 4427 cu. ft. with pneumatic out-lets, roller bearings

- V ~ . . Open Top Hopper Cars 150 3884 cu. ft., roller bearingsCovered Gondola Cars 20 52'6" with sectionalized roof,

cushion underframes, rollerbearings

Drop EndGondola Cars 25 65', roller bearings

Flat Cars 200 53'6", roller bearingsAuto Racks 7 Bi-levelAuto Racks 65 Tri-level

I955 I956 I957 I956 I959 I966 I961 I962 I963 I964 3888886 Cm 1° 85211shtW@isht'r<>1l¢r bear-has

10

O'l'HEll OPERATIONS and INCOME--1 ‘. '>

of the Cedar Creek anticline some 15 miles north-west of Baker, Mont., is the South Wills Creek eldwhich appears to encompass a relatively small area.Tgis eld had two producing wells at year's end. The

Gross revenues from non-rail operations am0unt- gen gufh$£sae;d‘§I:§§l%a!1:;ra th;ht£:nis°fcOL;ei%:,i

ing to $26,671,000 for 1964 were $854,000 or 3.1 per ably more signicant The disco'very wen drilled by

eem under 1963' The deehne was due largely l'° e Amerada Petroleum Corp on a Northern Pacicreduction in oil and gas revenues which is discussed lease was completed in the’ Heath and Madison fob

in the Oil Develepment seeti°n °f the 1'eP°rt' matidns with owing initial production of 863 bar-

The following review covers the principal non- T015 P91‘ day f!'°m the two f°1'm8ti°n$- BY Y°01"5

rail activities for the year 1964. 330» this 591: hlad £0111‘ P1'°d\1¢'£135 W011? Of Whidlee were ua comp etions. 0, inc ud1n'g one

dual completion, were on the Northern Pacic lease.

Oll. DEVELOPMENT Amerada is continuing systematic development

Northern Pacic’s net production from the Wil- drilling of the eld‘liston Basin and the Wyoming and central Montana During 1964, added emphasis was placed on de-

gsgeigggsbizggi ilggglels in 1964 as compared with veloping drillable prospects by the Company's oil

The 1964 decline in revenue from production was m 'N “MOMS °F DOM”

oset in part by an increase of $281,000 in revenuefrom the sale of leases and options and from leaserentals, leaving a net reduction in revenues for theyear of $538,000 as indicated in the following tabu- 8 /> Llation. The decline in 1964 oil and gas revenues is \"“~reported at $1,139,000 on Page 19 under Other In-come. The difference of $601,000 arises from the 5 31°55 liViNUi$-—-change in accounting from a cash to an accrual basis 9"» AND 355

in 1963. As a result of this change, 13 months ofrevenues and expenses were reported in 1963 ac- 4

counts as explained in the Annual Report to stock-holders for that year. The 1963 revenue and expensegures shown in the following ve-year summary 2

of oil and gas operations cover a period of 12 months 1-’ B-B‘in order that comparisons with prior and subsequentyears can be readily made on the same basis.

0 I

Gm Bgztnllévzlméd I960 I961 1%? I963 I954

Year Revenue’ Expenses‘ Income Taxes

1900 $7,331,000 $3,155,000 $5,332,000 exploration sta. Through the addition of personnel

1901 7,383,000 1.908.000 5.445.000 experienced in geophysical evaluation and photo-

g gg geological interpretation, the Oil Development de-

1964 7:259:o0° 2:194:00‘) £065,000 partment now has the capability to perform all ex-

‘Does not include allocation of interest on funded debt real ploratmn functmssl Smce dnuable pro are- ’ actively sought y operating companies, it is ex-

mopmv mes and “mm gm?“ om“ warhead can pected that the Company's eorts in this direction

Charges t0 ¢aPil131 0°00‘-mt f°1' lease and W011 will result in additional drilling and the possible m-

equipment, not included in the above tabulation, aease indj5¢0verie5_

amounted to $454,000 in 1964 and $319,000 in 1963.

The drilling of 19 wildcat wells under Northern The rst exploratory well drilled by The Su-

Pacific agreements resulted in two new eld dis- perior Oil Company and 1fI01'th°m P_ac1° m the

coveries during 1964. One of these, on the east side Montana portion of the Williston Basin was com-

11

TIMBER

Revenue from the sale of timber of $4,049,000 in1964 closely approximated the $4,237,000 reportedfor the year 1963. The volume cut, amounting to 291million board feet, compares with 308 million for1963. The average selling price per thousand boardfeet was approximately the same as in 1963.

In the interest of better management and a great-er ultimate return from approximately 1,360,000acres of timber and timber growing lands, theNorthern Pacic follows a policy of consolidatingits ownerships as rapidly as it is possible to do so.This is done through the acquisition of interveninglands held by others, either by exchange forNorthern Pacic lands or by purchase. Exchanges

‘P are based on relative values. When there is a differ-._ ence in values, compensation is made either through

an appropriate adjustment in acreage or by cashThe h"-’ll°°Pte' Plays “Tl ""P°"mm Tole _"' m“l°'",9 payment. During 1964, Northern Pacic acquired£1su'c?es8ofsu8tam€‘§_Iy'eldtZ'a""lgem"F "tl lg? NP; 2,427 acres of timber and timber growing landsfgiea gzzriiggogzahmovefrf seciiLl;lTc;'%ath;8Cgmggn;,s through exchange and 3,722 acres by purchase.

Green River tree farm near Cumberland» Wash" During the year Northern Pacic foresters com-More than 18,000 acres were added to lht8 amt 11!. leted eld work on Com an lands in the S irit1964, when an additional ve tree farms were dedi- P . . p y . Pcated. Aerial seeding completed in one area of west- Lake Basm of Washington‘ These. lands’ “lhmh areem Washington in 1956 has produced trees which at the foot of Mt. St. Helens, are involved in a pro-are now five to six feet tall.

pleted as a dry hole. This well was drilled on oneof the prospects developed through the joint geo- 5 W MWONS OF DOLLARS

physical exploration program referred to in AnnualReports for 1962 and 1963. Plans for future opera-tions in this so-called Circle-Culbertson area include 4 /1“ Lfurther testing during 1965.

On December 31, 1964, one wildcat well was ‘\\\being drilled. Existing agreements call for the drill- 3

ing of seven additional exploratory wells. GO$$ g5v5Nu5-

The waterood project in the Cabin Creek Unit 2 "Mainbecame fully operational at mid-year and shouldhave a signicant effect on production during 1965.This, together with waterood projects in otherelds of Northern Pacic interest and the continuing l iimprovement in production practices, should reducethe rate of production decline in 1965. '

llWildcat drilling successes within and adjacent to 6

the land grant area in North Dakota and Montana ‘gm I96] I962 1953 I964during 1964 were responsible for accelerating leaseand option sales late in the year. It is expected thatoperators holding these leases and options will un- posed exchange with the United States Forest Serv-dertake their further evaluation during 1965. Be- ice who would retain the area in its natural statecause of this and the development of drillable pros- as a public recreational area. In return, Northernpects by the Company, increased drilling activity Pacic would receive lands of equivalent value inon or affecting Company ownerships is anticipated Lewis County, Wash., which would be consolidatedduring 1965. with present ownerships in this area. Negotiations

12

between the Northern Pacic and the Forest Servicewere pending as of year's end.

During 1964, Northern Pacic dedicated ve newtree farms containing a total of 126,300 acres. Withthese additions, the number of tree farms has beenincreased to 14, and the acreage to 690,900. A treefarm is a specic area of land which the owner hasvoluntarily committed to the production of forestcrops. The owner provides protection against re,disease and other sources of injury and managesthe timber on a sustained yield basis to provide acontinuous supply of timber for the future.

Lumber and plywood mills, railroads, highwaysand logging roads providing access to timber landswere extensively damaged by the severe oodswhich occurred in northwestern California, westernOregon and southwestern Washington during lateDecember, 1964, and early January, 1965. BecauseNorthern Pacic properties lie north and east of thedisaster areas, they were not affected. The cripplingeffect upon lumber and timber operations was re-ected in a sharp rise in prices. As long as the higherlevel of prices continues, Northern Pacic's revenuefrom timber sales will benet accordingly becauseof the escalation clauses in cutting contracts.

MINERALS

Royalty income from mineral deposits on com-pany lands was $339,000 in 1964 and $526,000 in1963. Lower iron ore and taconite royalties wereresponsible for the decline.

At the Minnesota general election in November,1964, the voters approved an amendment to theState Constitution providing for equitable tax treat-ment for the taconite industry. As a result and be-fore the end of the year, plans were announced forfour new taconite plants with a total annual capacityof 10 million tons. While these developments willhave no immediate effect upon Northern Pacicmineral income, they should eventually lead to pro-duction from company lands in areas where theplants are to be constructed. Mining operations onexisting taconite leases are proceeding on schedule.An improving trend in royalty income should startin 1965 and continue for several years as NorthernPacic properties are brought into production.

Coal royalties were up in 1964. A further in-crease is expected with the growth of steam electricgenerating facilities in Northern Pacic territory.Two new steam plants are currently under con-struction in North Dakota.

LAND MANAGEMENT ANDREAL ESTATE RENTALS

Gross rentals from industrial and other proper-ties amounted to $2,659,000 in 1964, as against$2,445,000 in 1963.

The ownership of 2,200,000 acres of fee landsprovides Northern Pacic with an important andgrowing source of annual income. While industrialand commercial leases to traic-producing indus-tries are of primary importance, additional incomeis being developed through rentals from a widerange of miscellaneous activities. Leases provide fora periodic adjustment of the rental in accordancewith current values.

All Northern Pacic lands are managed on amultiple use basis. Under this concept, each tractof land is devoted to its highest and best use, andfrequently more than one use may be made of aparticular area. For example, Northem Pacic isdeveloping cabin sites along lakes and rivers in cer-tain forested areas. These sites are leased underagreements which permit the company to continueto harvest and manage its adjoining lands.

Over half of Missoula Snow Bowl, a rapidly-grow-ing western Montana ski resort, lies on NorthernPacic property. The NP leases this area under itsmultiple use concept of land management.

‘an-. .,

‘ 5

..

8 5- .~'

V 7

so i-‘,8 a

-

1" ;. <

Q.»

_¢-f’ 4122%Part of Northern Pacic Transport Co. steel on a atcar for transit out of Minne-service includes pickup and delivery of apolis. The piggyback trailer shown is ex-trailer-on-at-car shipments in principal tendible and has been drawn out from itscities on the Northern Pacic. Here, an NP normal 40 feet to 60 feet to handle the un-Transport truck loads a trailer of structural usually long load.

AFFILIATED AND SUBSIDIARY In 1964,é‘g:g:'¢;<;fn Pic re¢eit::dd$1;1Q}l:»2,(é0l()>&a§interest on irst ortgage n s. e

COMPANIES purchased from the Northern Pacic, at the latter’s

Chicllyol Burlington 8- Quincy Railroad Company re- rg::1cY:;ueh£fN1(:th€“r:t PI;/5;_;:geiie

Fsfgiid f:f‘1;’駰";: 330 $ir"9$1;§§ vestment therein from $18,098,000 to $17,048,000.

per share for 1963. Estimated Federal income tax In December, 1964, and early January, 1965,reductions arising from the use of new methods there was severe ood damage in various parts ofof depreciation, including guideline depreciation, the Pacic Northwest. The estimated damage toamounted to $8,138,000 for 1964-—$4.76 per share— SP&S trackage and facilities approximated $21/4 mil-and $6,932,000—-$4.06 per share for 1963. lion. The ICC has authorized the SP&S to charge

Dividends of $7.50 were paid during the year. this expense against retainedincoma' ' f

31;0ur(::1e(%t:042 ggyngfnzegl Igzgfgli P31 gui Northern Pacic Transport Company, wholly-ownedP P

lington stock. Northern Pacic's equity in the undis- subsidiary ?f$;h:7§{3(%w_ay 1(;gTp,;:_y’ reported grtributed income of the Burlington was $3,665,000, revenues e ’ ’ In ' ls eemperes wlequivalent to 61 cents per share of Northern Pacic $5’13e’e00 m 1963'shares outstanding as of December 31, 1964. The In addition to its own motor carrier operations,Burlington Income Account appears on Page 24. the Transport Company performs a substantial

volume of auxiliary service for the Railway Com-Spoltano, Portland 8- Soalo Railway Company, the pany. This includes pickup and delivery service ofcapital stock and bonds of which are 50 per cent both Less-than-Carload and Trailer-on-Flat-Car traf-owned by the Northern Pacic, reported net income c at principal cities, handling of the Railway’s LCLof $1,948,000 for 1964 as against $2,197,000 for 1963. freight shipments and United States mail and ex-Estimated Federal income tax reductions arising press in substitute highway-for-rail service, manag-from the use of new methods of depreciation, in- ing and operating the Railway’s TOFC ramps, andeluding guideline depreciation, amounted to $402,000 the unloading of automobiles from multi-level autofor 1964 and $311,000 for 1963. rack cars. In addition, the Transport Company pro-

No dividends were paid during the year_ North vides’ bus service for certain of the Railway Com-

ern Pacic’s equity in the 1964 earnings of the SP&S pany S branch hues‘amounted to $974,000 or 16 cents per share of North- The Transport Company again, in 1964, wonern Pacic shares outstanding as of December 31, national and state awards in various highway eet1964. safety contests.

14

MATTERS OF INTEREST

merce favorably reported out such legislation, itfailed of passage in the 88th Congress.

President Johnson, in his State of the UnionMessage of January 8, 1964, recognized the need

Me,.oe,_ Qh August 24, 1964, the Interstate Com- for legislation when he stated that Congress should

merce Commission Examiner who presided at the 1'at°"n “°\n' tangled t1'an$P°_1'tati°n and transit 13°11‘

hearings involving the proposed merger of the cies.” In his State of the Umon Message of January

Northem Pacic, Great Northem and Burlington 4, 1965, the President aain 1‘a¢°8n1Zad the nritiaalinto the Great Northern Pacic & Burlington Lines, need t°1' Such 1a8i$1ati°n when he Said, “I Win rea-Ineo issued his Report The Examiner found the ommend heavier reliance on competition in trans-

proposed merger to be consistent with the public P°1'tati°n - - -” It is axpeated that he will sand a

interest as required by the Interstate Commerce 5Pa¢ia1 t1'an5P°1'tati°n Inaaaaga t° C°n81'955 this Yea!‘-

Aet and reeemtnended tnnt tne merger be ep‘ In order for the public to obtain the inherentPt'°"ed- snbleet t° eertetn e°ndttt°n5' These e°n' benets of efcient low-cost rail transportation, it isdtttens nntnertze tne entrenee °t the Cnteegei Mn‘ essential that our industry be able to reduce its rateswenkee» st‘ Pent and Peettte Rattmed Ce‘ into to whatever level the needs of commerce and indus-Portland, Ore., over the tracks of the New Company. - -ded oh t to

POM is W W1 by the Mew $<.:;?":;:;.:*;::;.. .:;..2.§:.".:.:::P;:“..s.Greet Nertnerni Spekenei Portland and Seattle; are exempt from all rate regulation. Bulk com-Umon Pacic, and Southern Pacic. In addition, he modies’ soeh as groin, ooel and petroleum’ ere

31'entett eertetn requested tteekege rtgnte end meet’ free of all rate regulation when transported by bargecation in switching charges and practices. At the linen All of these eommodities are subject to roterequest of the Chicago and North Western, he rec- regulation when moved by rei1_ This inequality is

emmended that tne Crewterdi Nen" 3etewe¥ be compounded by the fact that rail rate reductions areopened and granted several operating conditions. frequently disapproved, even though eompensotory,The Examiner further prescribed the usual trafc beeooee of their eeet on other modes of trensponconditions together with the protection which the moonapplicants oered for the benet of their employees.

1 loo led b However, even if the railroads are granted theOn January 5, 5 exceptions were y - t to oh t boned to - oots d

the enptieents and othet interested parties the 11:11:51on the :1-ogtsldif ieir comtzetitzfrtz ?!i‘:1!11§fn8ti:!:t8lExammer’s report. Replies to such exceptions will be transportation neobloms remain to ’-no oolvoi Thedue on March 15, 1965, and in due course the case railroad industry the backbone of the nononnwill be set by the Commission for oral argument and tronsnortotion sygtom most be ouowod to nrosnordecision. A decision of the full Commission is not and servo tho ooonn_y’to the fun extent of no noton_

expected until late in 1965 or early 1966. After the no1_ Unfortunately this is impossible under nrosont

Commissitm rules’ any party to the proceedme Wm regulation and taxation and under a system whichhave the right t° appeal t° the e°“rts' permits competing modes of transportation to utilize

For the information of new stockholders, the tax-supported transportation facilities without ade-application for the proposed merger was led with quate user charges,the ICC on February 17, 1961. Hearings were com- _ _ _ _ _

pleted on July 10, 1962, and Briefs were led on The ettgtmesexnittgresenittftegmtteztm esgenttetJanuary 4’ O 8 SOUII I18 O anspo ‘D Sy E111. tOCk-

holders are urged to make their views on such vital

Fodorul Legislation — In the Annual Report for issues known to their Senators and Representatives.

1963, reference was made to the unfair regulatoryburden under which the railroad industry operates Litigation —Reference has been made in previousand the urgent need for corrective legislation. The Annual Reports to two proceedings before the In-late President Kennedy, on March 5, 1963, requested terstate Commerce Commission involving the divi-remedial legislation and, as a result, bills were in- sion of revenue on traic moving under jointtroduced in both Houses of Congress. While the through rates. The rst of these proceedings, knownHouse Committee on Interstate and Foreign Com- as the Transcontinental Divisions Case, involves a

15

New two-way radios are making main line portables which have eliminated the needpassenger operations more eicient on the for arm and hand signals between con-Northern Pacic since their introduction ductor and engineer. This, in turn, haslast year. Train conductors on the Vista- helped speed up the departure of trainsDome North Coast Limited and the Main- from stations, contributing to better on-streeter are now equipped with lightweight time performance.

request by the Eastern and Midwestern Lines for Case, dated May 7, 1962, which granted higher divi-a larger share of the revenue from traic moving be- sions to the Eastern Lines on traffic moving betweentween the East and the Far West. The second, the their territory and points on the Northern PacicMidwestern Divisions Case, involves a request by in Minnesota, North Dakota and Wisconsin. Thethe Eastern Lines for a larger share of revenue on Northern Pacic has received refunds from thetrafc moving between the East and the Midwest. Eastern Lines for the period involved. On Novem-

ber 16, 1964, the Eastern Lines, with the exceptionA5 Pre"i°u51Y 1'°P°rted’ the United States Dis‘ of the New York Central which has settled the pro-

trict Court for the Southern District of California eeeding, led e new complaint before the ICC_ Anissued an interlocutory injunction prohibiting the appropriate answer has been led, and a pl-ehem-_increased divisions which the Commission had pre- ing eonferenee has ab-eddy been 1-,e]d_ Further hear-scribed for the Eastern and Midwestern Lines in the ings will undoubtedly be held this yea!-_Transcontinental Divisions Case from becoming ef-fective pending nal disposition of the appeal. Briefs Cereereee end Findneie|_Cash dividends of $250Y"ere_Submmed °n 3 request f°r 3 permanent m’ were paid during 1964—four at the regular rate ofJunction, and the matter was orally argued to the 60 eems quarterly plus e 10_eent extraCourt on November 19 and 20, 1964.

Mortgage bonds outstanding with the public asOn January 25, 1965, the Court issued its opinion of December 31, 1964, listed on Page 22, amounted

setting aside the ICC order which granted higher to $202,673,000. This is a reduction of $1,187,000divisions to the Eastern Lines and Midwestern which represents the acquisition of $624,000 parLines, on the ground that it was unlawful. In ac- value of Collateral Trust 4’s and $563,000 par valuecordance with ICC regulations, the Northern Pa- of Prior Lien 4’s. A total of $1,300,000 par valuecic has set aside, from freight revenues, $1.6 mil- Collateral Trust 4’s and $561,000 par value Priorlion in 1963 and $3.2 million in 1964 to take care of Lien 4’s was retired and cancelled pursuant to theincreased payments to Eastem Lines in the event provisions of these mortgages. As of December 31,the Commission’s decision is upheld. This is an esti- 1964, the Company held in the treasury $4,542,000mate of the prescribed increased divisions based par value Collateral Trust 4’s.upon a traic sample and is, of course, subject ‘to Equipment obligations of $80,757,000 were eut_

change based on a Qmplete analyS15 °f an _sh1p' standing at year’s end. A total of $13,275,000 of newn_‘e,nts' Th; Essterg émes may now appeal thls d9" obligations was sold and $10,710,000 retired, makingclslon to t e mte tates supreme C°urt' a net increase of $2,565,000 during 1964.

On January 31, 1964, the United States District Working capital, including debt due within oneCourt for the District of Colorado set aside the year, declined from $67,505,000 to $62,157,000 duringCommission order in the Midwestem Divisions the year. Cash and temporary cash investments in-

16

cluded in working capital were $73,282,000 at the income tax liability—1964 over 1963—was not as

end of 1964, as against $75,386,000 as of December great as indicated in the above table.31, 1963. The principal additions and withdrawals Effective November 1 1963 the annual salary

appear in the following tabulation: base subject to Railroad Retirement taxes was in-W°1"kin8 “P1181 December 31, 1963--~ $ 67,505,170 creased from $4,800 to $5,400. As a result, railroadAdditions, retirement taxes increased accordingly.

g:;r‘:c°i‘;’t‘i‘:n;";;;;;;;;;;;;';;§";§;;; $235°°'657 Effective January 1, 1965, the Railroad Retire-non-cash charges .......................... .. 15,680,505 ment ta-X rate was mcreased from 7% Per cent to

Salvage from property sold or 8% per cent. This increase in rate will add approxi-retired ...................................... .. 2,890,296 mately $750,000 to Northern Pacic Railroad Re-

Reduction in mvestments—net ...... .. 1,331,014 tirement taxes in 1965_

Proceeds from sale of capital stock 551,587

Miscellaneous—net i5§,@ Estimated tax reductions arising from amortiza-Total ..................... ....... .. $44,101,996 tion, new methods of depreciation, including guide-

wmldmwals: line depreciation, for the past three years are as

Dividends declared in 1964 .............. .. $15,052,146 f°11°WS=

Capital °XP°"dit\-"95 New Methods Total TaxRoadway and structures ............ .. 9,892,349 of pepnciagion and Reduction

Equipment .................. .. $20,071,400 Yul‘ Amoflilllion Depreciation Guidelines Per ShareLess nanced by equip-

ment obligations 12,096,899 1,964,502 1% $1-Q

Miscellaneous physical property 1,813,414 1964 (613,000) 5,518,000 .81

Mortgage bonds purchased .............. .. 1,187,000

Equipryentdobglgations 10'710’357 Awm-d—Northern Pacic Railway was one of threeCapita an o er reserve

net ...................................................... .. *s,416,_2@ railroads in the country to win the coveted E. H.

Total ............................. $50,056,563 Harrimall Mem°1'ia1 Award for rail Safety in 1963-N (d ) (5,348,570)

et ecrease 1964 S’?156 660* A Gold Medal, symbolic of the highest award forworking capital December 31' i5:4—*'-5* safety, was presented to the Railroad in special cere-

monies at the Roosevelt Hotel in New York on Sep-Tuxes—Total estimated tax accruals for 1964 in- tember 15, 1964_

cluded in the income account amounted to $18,-950,000, an increase of $1,256,000 over 1963.

Increase or1964 1963 (Decrease)

Federal Income Tax ........ .. $ 1,400,000‘ $ 326,000’ $1,074,000

Payroll Taxes:Railroad Retirement .... .. 6,002,000 5,509,000 493,000Unemployment

Compensation .......... .. 2,967,000 2,979,000 (12,000)

Property Taxes:For Support of Schools.. 3,844,000 4,100,000 (256,000)For Support of State

and LocalGovemments ............ .. 1,988,000 2,117,000 (129,000)

Other State, Local andMiscellaneous Taxes 2,749,000 2,663,000 _8§,000

TOTAL ........................ .. $l950,o00 s_11,69-1,000 §1,256,g0q

‘After investment credit of $375,000 in 1964 and $269,000in 1963

The increas‘? in t°ta1 accrual? was due largely F. L. Steinbright, right, vice president - operationsto a $1,074,000 1nc_rease_in Federal income tax and a fa», No,-the-m pacie Railway, accepts the E_ 1-1_

$493,000 increase in Railroad Retirement taxes. Harriman Memorial Award for railroad safety fro’?. . . . Interstate Commerce Commissioner Everett Hutc -

in T353 F£§Z’iL;3§Z5“io”£§ei‘%‘3b“‘%y°i *Z;§§§e°‘l‘} *"<;'-‘- T,';: 11"’ ";'";"' ""5 ;,°"e"d G015 M5,?‘ *3;i pos mg e opsaeyrecor among ra roa mt

$337,090 85 1I1d1¢81e<1 111 1-he Anflflal R9P°_1‘t 1°!‘ that class in 1963. The presentation was made in Newyear. Consequently, the actual increase m Federal York in September, 1964.

17

In 1957 and again in 1959, Northern Pacic won 10 options for 1,436 shares were cancelled. The num-certicates of commendation for top safety among ber of shares issuable under outstanding options atwestern roads. the close of 1964 was 70,153. The number of un-

ICC Commissioner Everett Hutchinson, who pre- ggogigusgslreihat ctrscbzl Shagezf £3; Zifggtdthad 'd“Lt Am"rail- » 8° ° ’g° °sen e e war s, sai , as year ericasroads achieved a passenger safety record that was end of the year was 87275’twice as good as the record of the previous year Under the Plan, each option runs for a period ofand considerably better than the records of 1961 ten years, and the option price is the highest price atand 1960. In 1963 the railroads carried 310 million which the stock was traded on the New York Stockpassengers a total of 18.5 billion passenger miles Exchange on the date on which the option waswith 13 fatalities.” granted. No option may be exercised until one year

after the granting date. Of the shares optioned, 20

Stock Option-—The Company’s Restricted Stock Op- per cent may be exercised during the second yeartion Plan, adopted in 1954, provided for the issuance and 10 per cent in each succeeding year, any un-of up to 240,000 shares to key employees. As of exercised options to carry over into subsequentApril 12, 1964, when the Plan terminated, options years.on a total of 165,180 shares had been granted.

As of January 1, 1964, options on a total of iii‘-67,325 shares had been exercised, and 30 optionst t 1' 11,019 h h d b ll d, - .

(bftdxdgin revioiisallfrinugl ReeeIi't§afI1'l'::=: fiumliiirrdf The Company publwhes a supplementary reportghares isstgble under the outsmdigg options at the containing additional statistics, including Compara-b . . tive Statement of Income and Balance Sheet accord-

egmmng of the year was 86,836. . . . .mg to Interstate Commerce Commission classica-

No options were granted in 1964 and, as stated tion, for distribution to nancial institutions, securityabove, the Plan is terminated and no further options analysts and others who may be interested. Re-may be granted. During the year, options previously quests for copies should be addressed to the Secre-granted, covering 15,247 shares, were exercised and tary of the Company at St. Paul, Minn.

jun’

18

-._ ,_\-.-,~_~-1",, ' 1: ~

~a!-)4‘

STATEMENTS OF INCOME AND RETAINED INCOMEFOR THE YEARS ENDED DECEMBER 3|, ‘I964 AND T963

Increase1964 T963 (Decrease)

AVERAGE MILEAGE OPERATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,783 6,795 (12)

RAILWAY REVENUES:Freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $164,167,588 $160,837,146 8 3,330,442Passenger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o.s21,s1s 0,401,384 ss9,934Mail and express . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,408,451 6,391,384 17,067Equipment rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,909,945 20,072,024 1,837,921joint facility rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,604,960 4,795,677 (190,717)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,903,434 5,914,597 988,837

Total railway revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,815,696 204,472,212 6,343,484

RAILWAY EXPENSES:Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,191,323 71,155,389 4,035,934Maintenance of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ss,s49,s19 35,461,131 (1,611,912)Maintenance of way and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,373,739 29,904,397 469,342Equipment rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,426,363 18,719,043 1,707,320Joint facility rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,317,929 1,279,127 38,802Taxes other than Federal income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,550,157 17,367,715 182,442

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,978,640 16,322,558 1,656,082

Total railway expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,687,970 190,215,960 6,472,010

Net operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,127,726 14,256,252 (128,526)

OTHER INCOME:Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,258,818 8,397,525 (1,138,707)Timber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,048,623 4,236,562 (187,939)Minerals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,767 526,240 (187,473)Real estate rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,659,215 2,445,203 214,012Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,400,844 6,407,487 (6,643)Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,755,606 3,798,097 (42,491)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,209,383 1,713,763 495,620

Total other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,671,256 27,524,877 (853,621)Less expenses (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,829,258 5,788,575 (959,317)

Net other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,841,998 21,736,302 105,696

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,969,724 35,992,554 (22,830)INTEREST AND OTHER CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11,069,067 11,074,084 (5,017)

INCOME BEFORE FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . .. 24,900,657 24,918,470 (17,813)PROVISION FOR FEDERAL INCOME TAXES (Note 1) . . . . . . . . . . . . . . . .. 1,400,000 326,000 1,074,000

NET INCOME—In conformity with I.C.C. accounting rules . . . . . . . . . . . . . . . . . . 8 23,500,657 S 24,592,470 S (1,091,813)

Estimated reduction of Federal income taxes (Note 1) . . . . . . . . . . . . . . . . . . . . . . . 4,900,000 6,525,000 S (1,625,000)

NET INCOME—In conformity with generally accepted accounting principles. . . $_1§,600,657 S 18,067,470 S 533,187

RETAINED INCOMEBALANCE AT BEGINNING OF YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $391,951,115 $381,474,367 3 10,476,748ADD: Net income—In conformity with I.C.C. accounting rules . . . . . . . . . . . . . . 23,500,657 24,592,470 (1,091,813)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415,451,772 406,066,837 9,384,935LESS:

Cash dividends declared (1964-—$2.50 per share; 1963—$2.35 per share) . . . . . . 15,052,746 14,115,722 937,024Property cost adjustment (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,950,523 —— 7,959,523

T0181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,003,269 14,115,722 8,887,547

BALANCE AT END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S392,448,503 $391,951,115 S 497,388

See Notes to Financial Statements on page 20 and 21.

19

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ASSETS

‘I964 I963

CURRENT ASSETS:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5 7,118,773 8 6,066,698

Temporary cash investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,163,467 69,319,470

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,919,974 22,988,735

Material and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,450,473 19,099,342

Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,187,858 2,450,338

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,840,545 119,924,583

SPECIAL FUNDS AND INVESTMENTS:Special funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,812,998 4,846,182

Investments in afliated companies (See page 23) . . . . . . . . . . . . . . . . . . . . . . . 166,830,452 167,726,665

Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,113,674 3,548,475

Total special funds and investments . . . . . . . . . . . . . . . . . . . . . . . . . 178,757,124 176,121,322

PROPERTIES:Transportation property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,581,432 891,207,941

Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 200,692,944 195,874,312

Net transportation property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 699,888,488 695,333,629

Non-operating property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,930,885 24,558,238

Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,944,925 4,452,312

Net non-operating property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,985,960 20,105,926

Total net properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720,874,448 715,439,555

OTHER ASSETS AND DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . . .. 8,211,731 8,362,032

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $1,028,683,848 81,019,847,492

NOTES TO FINANCIAL STATEMENTS

1. The Uniform System of Accounts for Railroad Companies prescribed by the Interstate Commerce Commissionvaries from generally accepted accounting principles, in that no accounting recognition is given to the 'bleeect on income taxes in uture fyears, of current reduction of income taxes, resulting from deductions (net) foramortization and depreciation o property for income tax purposes in excess of those recorded in the accounts.The cumulative amount of such estimated reduction of income taxes included in retained income at December 31,1964 was 839,700,000.

2. For the purposes of computing operating ratios as shown in income highlights on page 2 it is necessary to deductequipment and joint facility rents from railway revenues, and related expenses and taxes other than Federalincome taxes from railway expenses.

3. 8 applicable to other income do not include allocations of interest on funded debt and certain otherin ' t expenses.

4. As of December 31, 1964, the Com y was liable as guarantor, individual] or jointly with others, of securitiesissued by aliates amounting to 8‘ia1?521,(I)0. In addition, Northern Pang‘c Railway Company, together with39 other proprietary companies of Trailer Train Corgpany, is obligated to advance to Trailer Train Companyunder certain conditions such sums as may be need by that Corgrany to y principal and interest underterms of certain of its outstanding obligations. At December 31, 19 such obiizations aggregated 897,000,000.

5. The Company carries a service interruption policy under which it will be entitled to indemnity for certain work-stoppage osses. In the event such losses are sustained by other railroads holding similar policies, the Companymay be obliged to pay additional premiums, subject to a maximum premium of approximately 82,200,000.

20

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I

31, ‘I964 AND I963

LIABILITIES AND SHAREHOLDERS’ EQUITY

1964 1953

CURRENT LIABILITIES:Accounts and wages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13311335 8 10,520,716

Interest accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1961802 3,151,304

Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4377-994 4,271,434

Federal income taxes accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-944»-309 3,865,946Other taxes accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.115-531 8,276,912Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.132381 10,267,571Debt due within one year (See page 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.754993 12,065,530

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.683945 52,419,413

LONG-TERM DEBT (See page 22):Funded debt unmatured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,163-919 202,668,055

Equipment obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,619,016 67,481,873

Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271182.935 270,149,928

OTHER LIABILITIES:Pension, casualty, and other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-930.063 10,342,724

Other liabilities and deferred credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-115,433 2,912,935

Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,145,501 13,255,659

SHAREHOLDERS’ EQUITY:Common stock $5 value (outstanding 1964, 6,024,660 shares;

1m, o,oo9,4'14 Jigs) .......................................... . . so.12s.soo 30,041,010Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262,499-664 262,024,307Retained income.................................................. . . 392,448.50; 391,951,115

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685,071,467 684,022,492

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.028.683.843 $1,019,847,492

6. The Company has agreed that while the Merger Agreement is in eect it will not declare dividends in excess of82.60 per share per annum.

7. Increases in capital stock and capital surplus resulted from the sale of stock under the option plan. For detailsof the plan see page 18.

8. The current cost of renewals of parts of the track structure is charged to maintenance exgaense and additions andbetterments to the structure are capitalized. Provision for depreciation has been ma e as to other classes oftransportation property. Charges to operating expense for depreciation of road and equipment and for renewalsof the track structure were as follows:

9631964 1

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814,729,647 814,373,577

Renewals of track structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,337,416 12,591,696

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827,067,063 826,965,273

9. In accordance with Interstate Commerce Commission accounting regulations, aestablished, regresented by reductions in freighgrevenue of $3,200,000 in 1964nection with t e Transcontinental Divisions discussed on page 15.

E5gz5;

000 has been1963, in con-

10. Northern Pacic road and eq ' ment propert ' recorded at original cost to the Company, adjusted for sub-suent additions and retiremgiiis. This cost exicelgded the Interstate Commerce Commission basis (based on 1917v uation) by 851,863,000. In 1964, $7,950,000 of this amount, representing the portion applicable to retire-ments in prior years, was charged against retained income.

21

LONG TERM DEBTDECEMBER 31, I964

interest Held in InterestName and Character Rate Maturity Outstanding Treasury 1965 Expense

of Obligation % Date with Public or Piedged Maturitiea for 1964

FUNDED DEBT (BONDS):Prior Lien Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . 4 1997 S 94,507,300 8 2,000 Z S 3,783,675General Lien Mortgage . . . . . . . . . . . . . . . . . . . . . . . 3 2047 53,585,900 5,555,000 Z 1,607,577St. Paul-Duluth Division Mortgage . . . . . . . . . . .. 4 1996 253,000 Z Z 10,120Refunding and Improvement Mortgage

Series A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 2047 17,569,000 Z Z 790,605Series E (pledged under collateral trust

indenture) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2047 Z 66,500,000 Z ZSt. Paul and Duluth Railroad First Consolidated

Mortgage (assumed) . . . . . . . . . . . . . . . . . . . . . . . 4 1968 1,000,000 Z Z 40,000Collateral Trust Indenture . . . . . . . . . . . . . . . . . . .. 4 1984 35,758,000 4,542,000 8 1,560,000‘ 1,444,928

Total Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202,673,200 76,599,000 1,560,000 7,676,905

EQUIPMENT OBLIGATIONS:

Equipment Trust Certicates1949 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.375 1964 Z Z Z 1,9781949, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 2.375 1964 Z Z Z 4,6791949, Third Series . . . . . . . . . . . . . . . . . . . . . . . . . 2.125 1964 Z Z Z 4,6921951 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.75 1966 920,000 Z 460,000 28,4621951, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 3 1966 456,000 Z 228,000 19,9501952 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.875 1967 1,275,000 Z 425,000 48,3661954 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.625 1969 1,525,000 Z 305,000 43,0321954, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 2.75 1969 1,740,000 Z 348,000 53,8311955 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.75 1970 1,584,000 Z 264,000 43,8621955, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 3 1970 2,064,000 Z 344,000 66,6501955, Third Series . . . . . . . . . . . . . . . . . . . . . . . . . 3 1970 1,128,000 Z 188,000 36,8951955, Fourth Series . . . . . . . . . . . . . . . . . . . . . . . . 3.25 1970 720,000 Z 120,000 27,1921956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.125 1971 2,828,000 Z 404,000 89,9531956, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 3.5 1971 3,605,000 Z 515,000 135,9391957 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.375 1972 4,128,000 Z 516,000 181,5401957, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 4.5 1972 3,424,000 Z 428,000 162,9071958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.875 1973 2,223,000 Z 247,000 86,4071958, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 3.625 1973 4,509,000 Z 501,000 170,0081959 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.375 1974 3,160,000 Z 316,000 141,1301959, Second Series . . . . . . . . . . . . . . . . . . . . . . 4.75 1974 4,010,000 Z 401,000 201,5861960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.875 1975 2,508,000 Z 228,000 122,5741960, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 4.25 1975 4,763,000 Z 433,000 208,5621960, Third Series . . . . . . . . . . . . . . . . . . . . . . . . . 3.875 1975 4,598,000 Z 418,000 189,6451961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.25 1976 5,508,000 Z 459,000 246,6891962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.875 1977 3,497,000 Z 269,000 140,2851963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.875 1978 6,202,000 Z 443,000 240,8011964 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.125 1979 6,840,000 Z 456,000 275,3251964, Second Series . . . . . . . . . . . . . . . . . . . . . . . . 4.25 1979 6,435,000 Z 429,000 151,178

Conditional Purchase ContractsContinental Illinois National Bank &

Trust Co., Assignee-Series B . . . . . . . . . . . . 3.85 1965 300,000 Z 300,000 21,175Seattle-First National Bank, Assignee . . . . . . . . 3 1964 Z Z Z 3,609Seattle-First National Bank, Assignee . . . . . . . . 3.95 1965 450,000 Z 450,000 28,144

Serialiy£0

First National City Bank, Assignee . . . . . . . . . . 4 1966 356,873 Z 242,857 18,323

Total Equipment Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,756,873 Z 10,137,857 3,195,369

MISCELLANEOUS OBLIGATIONS . . . . . . . . . .. 3.5 1974 107,855 Z 57,136 4,826TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $283,537,928 $76,599,000 $11,754,993 $10,877,100

‘Sinking fund requirement.

22

INVESTMENTS IN AFFILIATED COMPANIESDECEMBER SI, I964

PerCent

Dlvldend andBook IntereetValue Income

STOCKS: Owned for 1964

Camas Prairie Railroad Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 S 50,000 ——Chicago, Burlington & Quincy Railroad Oompany—pledged . . . . . . . . . . . . . . . . . . . . . . . 48.59 109,245,973 $6,226,343gignina Realty Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00 7,934,713 ——

ta Alaska erminal Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.67 555 iThe Duluth Union Depot and Transfer Company-—p1edged . . . . . . . . . . . . . . . . . . . . . . . 100.00 300,000 15,000The Lake Sugerior Terminal and Transfer Railway Company—pledged . . . . . . . . . . . . 33.33 169,800 -—Lemhi Telep one Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00 85,645 20,000The Midland Railway Company of Manitoba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Minnesota Transfer Railway Company—pledged . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miseabe Realty Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Northern Pacic Terminal Company of Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Northern Pacic Transport Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Pullman Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Railway Egress Agency, Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The St. Pa Union Depot Company—&1edged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

%okane, Portland & Seattle Railway rnpany—pledged . . . . . . . . . . . . . . . . . . . . . . . . .

alla Walla Valley Railway Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trailer Train Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

G1-at Northern Pacic and Burlington Lines, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$P§$§rr§$§F.

8i§88383888Z8

50 2,400,000 --91,soo -

564,112 _1,819,520 _1,363,594 -_

336,659 1e,ss11,2oo —

130,475 4,1442o,ooo,ooo -

144,oa1 --11o,oso -—

soo -iiiTotal stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,824,013 6,282,044

BONDS:Spokane, Portland & Seattle Railway Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,048,500 1,031,700

UNSECURED NOTES:Cuyuna Realty Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 45,000Delta Alaska erminal Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,833 783Northern Pacic Transport Compansy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835,012 21,715The Duluth Union Depot and Tran er Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,180 1,659Lemhi Telephone Compan{ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,000 6,394Railway Express Agency, ncorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,986 17,349

Total unsecured notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,860,011 92,900

INVESTMENT ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,097,928 62,038

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $166,830,452 87,468,682

HASK I N5 8: SELLScnrrlnln ruluc Acoouuraurs

ACCOUNTANTS’ OPINIONNORTHERN PACIFIC RAILWAY Coumnvz

FIRST NATIONAL BANK BUILDINGST. PAUL. MINNESOTA SSIOI

We have examined the balance sheet of Northern Pacic Railway Company as of December 31, 1964 andthe related statements of income and retained income for the year then ended. Our examination was made inaccordance with generally accepted auditing standards, and accordingly included such tests of the accountingrecords and such other auditing procedures as we considered necessary in the circumstances.

The Company maintains its accounts in conformity with the Uniform System of Accounts for RailroadCompanies prescribed by the Interstate Commerce Commission and the accompanying nancial statements havebeen prepared in accordance therewith. As explained in Note l, the provisions of the Uniform System of Accountsvary in certain respects from generally accepted accounting principles.

In our opinion, with the exception referred to in the preceding paragraph, the accompanying nancial state-ments present fairly the nancial position of the Company at December 31, 1964 and the results of its operationsfor the year then ended in conformity with generally accepted accounting principles applied on a basis consistentwith that of the preceding year.

Februa 19 1965W» I-l_.JL;..>.J.».tLl

CHICAGO, BURLINGTON A QUINCY RAILROAD COMPANY

STATEMENT OF INCOMEFOR THE YEARS ENDED DECEMBER 3|, I964 AND I963

IncreaseI964 ‘I963 (Decrease)

AVERAGE MILEAGE OPERATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ~‘i~5r4‘> 8,547 (l_)

RAILWAY REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ $297,050.85). $290,501,800 $6,558,053

RAILWAY EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. l70~"l'>~‘>"l 261,546,115 9,370,247

Net operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11'-lfi-Y4"! 28,955,685 (2,812,194)

OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-‘I19.-159 4,378,870 540,489

OTHER EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ‘>35-3,3) 445,300 239,929

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -)0,-177-1'31 32,889,255 (2,511,634)

FIXED CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.879.006 7,646,545 232,461

INCOME BEFORE FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . .. 11»4‘I~‘4~0l5 25,242,710 (2,744,095)

PROVISION FOR FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . .. _3-143173 3,875,062 (1,731,789)

NET INCOME—In conformity with I. C. C. accounting rules . . . . . . . . . . . . . . . . S 20,.%55..H2 S 21,367,648 8(1,012,306)

DIVIDENDS DECLARED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $7 12,512.90) S 12,812,902 -i48.59% of capital stock of the C.B. & Q. is owned by Northern Pacic Railway Company.

SPOKANE, PORTLAND A SEATTLE RAILWAY COMPANY

CONSOLIDATED STATEMENT OF INCOMEFOR THE YEARS ENDED DECEMBER 31, ‘I964 AND ‘I963

IncreaseI 964 I 963 (Decrease)

AVERAGE MILEAGE OPERATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9.44, 936 ——

RAILWAY REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5 3*‘-7f\?<-795 8 38,135,303 5 633,492

RAILWAY EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.‘I‘?0.$.'i$ 33,923,747 1,066,606

Net operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-77?‘-443 4,211,556 (433,114)

OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X"?-I‘I" 701,378 100,821

OTHER EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.501 55,937 19,624

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4»505-0*“) 4,856,997 (351,917)

FIXED CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . . . . . . . . . . 2.179,.-‘>59 2,321,604 (142,045)

INCOME BEFORE FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . .. 3-315531 2,535,393 (209,872)

PROVISION FOR FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . .. 377.255 338,440 38,815

NET INCOME—In conformity with I. C. C. accounting rules . . . . . . . . . . . . . . . . $;_ I-_‘)4?*-106 S 2,196,953 S (248,687)

50% of capital stock and bonds of the S.P. & S. are owned by Northern Pacic Railway Company.

24

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aaeeaeee. w ah. nszo-1-1. J. Bond. Ge =1 Agent nu | mm. um —Bichard Roth Gen ral 2

U-nion Station - Phone Llinoatlgx-2140 u“ " Northern Pacic Station- Phonae548-gliin

Aolaata, oa. 10308 —J. A. Marahall. General Southeastern Agent New York, N. Y. noozo-w. C. liavena, General Agent, Paaa. Dept.1818 Healey Bldg. — Phone JAckaon 4-8119 J. B. Patteraon. General Freight e Paaaenger Agent

allllagl, oat. $9101 —D. J. Powera. General aaentzl63) Filth Avenue — Phone Clrcle 6-6453

NP. Bldg., Montana Ave. —Phone Oakland, Calif. out: —J. V. Kriaman. General Agent611 Central Bldg. — Phone 451-8717

lalala, N. Y. l6203— George A. I-lolm, General Agent601 Illicott Square — Phone TL 6-6622 Omaha, Nahr. 66102 —A. G. Anderaon, General Agent

latte, Moat. $9101 — K. A. Knutaon. General AbentNorthern Paclc Station — Phone 1 3275 Iaaea, Wash. 99101 — H. P. Wohld. Dlat. Fre t & Pall. Agent

ID W.O.W. Bldg. — Phma 80-1111

Northern Pacic Station — Phonelberty 1-8244Chleaga, Ill. 60608 —H. I‘. Com ton. General ., Pan. Deptc.n.c cwle1=.Au¥.r.-e th ' _ -1-lmmk 6,,

1112 M-33v-we Bur. - Pnlgwe rm-3:1-1 8 ' 6 """"""""iJe'.;. ‘egg. 1z§"s§YBroad s..°'_ 1>n§.‘.1“1$§Je, 5-01:1

Glaeiaaatl Ohla 4:202-u. r. Co .Ge al z _ Gm' mm c-w T»-==i“‘?1'»»--‘iii-=6?“ """""'* lt.“..‘.‘%?... ..€?.':?£'.;’..°.£‘.§l".'.~....€.2‘l...“%%"‘

"'""'* ‘:*.'.'. ‘.11:.?.;.%..:*-..i%.."t‘B*s..°.'.":.*.:'.'..'*rr;'.:.. '-~'-'~ "'5;-;, ;;_=::,;.¢,-_ 2 :,:,',::'.,,<=;,';:;-1 ~=~- P-- W-W. D. Miller. General Preit Agent

Dalian, Iaxaa 15201 — ll. A. Caaaell. General Agent 10’! American Bk. Bldg. — one CApltol 1-04231006 Kirby Bldg. — Phone Rlveraide 1-1812

St. laala, Ma. 68102-1 A. Kovaca. General AgentDOIYOP. €O|0- "193 — 3- |'- ntlvltrick. General AI?!“ 919-92 Boatmen'| Bk. Bldg. — Phone GAriield 1-8260

102 Ry. Exch. Bldg. — Phone 244-$763

Ilatralt Mich. 46126-Walter Weatman. Gen. Freight and Paaa. Agent _ _' aw Lafayette Bldg. - Phone WOodward 2-49:4 §f’§_' §§5(§,"“' t

so. Iaal, Mina. 55102 — H. R. Cotton. General Agent, Paaa. Dept.

urtney. tNorthern Paciiic Bldg. —Phone

Duluth, Illa. S$lO2—'lk‘?. Klrkvold. Aaat. Gen. Freight andCl‘ .

U ~=- -»»~ -M --»1» =--== =- '-*'~:...:+.@.-.'.;:.*:.:..: 2:::*:.w'..=.t'ldlaaatamllta. -n. w. Donaldao .Gen m A tmm mm, 5;" Rm, m“_ ph°°,,, <;§,§“,,, 4.4454 seeme, Wash. um - n. w. Gelerrnan. cng Ticket Agent

506 Union Street — Phone MAin 5560K. J. Delmore. Gene al Ag t. Frt. t.I---' <>-;¢;;g~,=,,;;-_-=i,,;=;,=_g=~1,;;1-,g,;===r-1 Aw 200 8...... 1.... _ 15...... ii‘... ..%

| , w ea, Qggog _¢_ 1-1, wgq , Ge "1 A 1; lpalraaa, Waah. 99204-w. J. Riddell. General t‘nun .2631 Broadway — PhonenALpiInee 9-11,1“ W. 221 Firat Ave. — Phone MAdiaon {t

"'00. N. B. w_ ;__-r;g‘1;;_ :g1a.uSeg_-7F“!':1lm Ind Pill Alt ‘laealaa, Wash. 96402 — G. '1‘. Flynn, Aaat. Gen. height and

Union gtation — Phone I‘Ulton 3-1428‘fill Ibfklue U. 5'10] —R. W. Cflll, General ggaent°"-5"" 73°15‘: 3“u°n- Ph°m 774' 1 Iaraata I, Oat. — W. A. Lemon. General Agent

llalaaa, Moat. $9601 — Herman Johnson, Jr.. City Paaa. andTkket 531%“ Vaaeaavor l I. — . M. Richmond. General AeéitNorthern ciilc Station — Phone Hickory 2-1660

Room C-29. Union Station — Phone Illipire 4-2028

gt‘gm

k latch. Bldg. — Phone tual 8-2461

Kaaaaa City, Ia. 64l65—K. A. Trowbridge. General A ent W " W " W m ”uz_G B N In Gm ml ‘411 Board oi Trade Bldg. — Phone Victor 2-$141 ' ' ' '°mf“m Fume suuoi‘ _¢ Pb‘;-ne JAzu°nAg*“_o,“o

laarlataa, ldaha 63501 —C. W. Meckstroth. General AgentUnion Station — Phone S!-lerwood 3-3434 Waahlagtoa, II. C. 2000! — E. K. Kremer. District Paaaenger Agent

la: Angolan, Calll. 90014 — Spencer A. Jewell. General AgentRoom 464. 610 South Main St. — Phone MAdiaon 1-2321 w|--bu, 5.,“ _ K_ 3_ mm Gem"; Aim;

Illwaahaa, Wla. 53203 — G. E. Thome. General Agent

500 Shoreham Bldg. — Phone NAtlonal 8-8610

Rm. 40 Tran:-Canada Bldg. —Phone 942-1646

m "‘j""° am" _ Ph°"' BR°"“""’ "ms Wlaatoa-Qalall, u. c. 21101 - L. o. Moe. om. Freight and Paaa. Agt.Ilaaaapalla, mm. 5:402 - J. A. Beatt£’Aaat. General Pm. Agent m'A R'>'"°“" 31¢‘-" “‘°"‘ P**"‘ 3‘ 1”

101 South 1th St. — Phone -4833J. D. Nankivell. Aaat. Gen. Fresgit lzxent Yalrlaua, Wash. 96901 — J. H. Halvoraen, Generalevent60’! llarquette Ave. — Phone -91 Yakima Ave. and Front St. — Phone 6-2631

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