On September 19, 1889, the managers issued a circular to the preferred stockholders. “In the opinion of the Directors,” said they, “the time has come to make new financial provision on a liberal scale for the growing needs of the Company.” Then followed a statement of gross earnings. “A further corresponding increase may be expected in the present fiscal year, which will bring the gross earnings up to $23,000,000 or $24,000,000.... But the Company could not in the past, and will not be able hereafter, to take full advantage of this auspicious situation without further large investments of capital. Secondly.—The prosperity of the road attracts competition.... The Company must be prepared to build additional feeders wherever and whenever the local developments warrant, and the danger of hostile occupancy appears.... Another strong [motive] lies in the Company’s ownership of a large land grant, the benefits of which cannot be fully realized without the promotion of settlements through the construction of branch lines. The Board is also of opinion that the time has come to make such provision, that the Company may take advantage of its high credit to effect a reduction of fixed charges.”[574] It was proposed to issue a $160,000,000 one hundred-year consolidated mortgage, bearing interest not to exceed 5 per cent, to cover the entire Northern Pacific Railroad, together with its equipment, land grant, branch lines, and securities of branch lines. This was to be applied as follows: For the retirement of $77,430,000 outstanding first, second, and third mortgage bonds $75,000,000 For the retirement of the existing $26,000,000 branch bonds 26,000,000 For additional branches at a rate per mile not over $30,000 20,000,000 For enlargement of terminals and stations, additional rolling stock, betterments and renewals, and other expenses not properly chargeable to operating expenses 20,000,000 For premiums on bonds exchanged 10,000,000 For general purposes 9,000,000[575]