AR, M&C 7/1/1861 P

Annual Report of the Memphis & Charleston RR
as of July 1, 1861,
President's Report
Report of the Directors to the Stockholders in the Memphis & Charleston Railroad Co.
President's Report
   The President and Directors herewith submit to the Stockholders their Eleventh Annual Report, as required by the charter and by-laws of your Company.
   The year just closed has been a most extraordinary one, having for two-thirds of its duration been disturbed by the most extraordinary political convulsion ever known on this continent, and finally resulting in civil war on a gigantic scale, disturbing and totally changing the entire character of the trade and commerce of the country, and destroying, in many instances, the principal elements of every material interest of the country, and entirely changing the nature and character of your business. All trade and travel to the Northern States was entirely cut off early in the present year; the blockade of Southern ports soon followed; next came the blockade of the rivers and railroads on your northern border, leaving you dependent alone on local trade and travel for support. But amidst all these revolutions of society, government and trade, it has shown that the property you have in this road is one of a most permanent, reliable and profitable character; and it is most gratifying for the Board to be able to present to you the result of the last year's operations of your road, as shown by the reports in detail of W. J. Ross, Esq., your General Superintendent, and M. B. Prichard, your Chief Engineer. Your are referred to the reports of these gentlemen in their respective departments for the details of the operations of the road for the past year.
   From these reports it will be found that the receipts and expenditures have been as follows:
Receipts from Passengers 1,022,595.48
Receipts from Freight 729,885.93
Receipts from Mails 54,064.58
Receipts from Express 26,296.94
Receipts from Rents, Tolls and Privileges 8,279.67
Total gross earnings $1,841,122.60
Total Expenses 793,735.78
   Net earnings $1,047,386.82
The above statement shows an aggregate gross increase over the previous year of $206,025.93
The increase in net earnings 173,790.15
Increase in passengers 47,336.15
Increase in freight 147,312.67
Increase in express 8,858.56
Decrease in mails 1,110.42
Increase in rents, tolls and privileges 3,628.97
Decrease in total number cotton bales carried 37,052 bales
Decrease in number carried to Memphis 49,466 bales
   The entire cost of your road, including equipment and every thing incident to the building of the main road and branches, two hundred and ninety-one miles in length, as per the Chief Engineer's report, has been $7,016,625.03, or $24,112.11 per mile for construction and equipment.
   The net receipts are equal to 14 3/4 per cent. on the cost of the entire road and equipment.
   The operating expenses have been 43 11/100 per cent. of the gross earnings.
   Leaving net earnings 56 89/100 per cent. of gross receipts.
   The net receipts of road being $1,047,386.82, deduct interest paid on funded and floating debt, $181,157.39, you have left, after paying interest on all borrowed capital, $865,229.43, or over twenty-three per cent. on your entire stock.
   The expenses will bear favorable comparison with the best operated roads here or elsewhere, while an examination of the road-way and machinery will satisfy all experienced men that the low operating expenses has not been obtained at the expense of either -- the main object at all times having been to keep the roadbed and machinery at least fully up to its original value and to gradually improve their condition.
   By reference to tabular statement A you will find that there has been expended in the last year, chargeable to construction and equipment, $271,977.86; of this sum $117,923.35 was for new locomotives and new cars to meet the growing wants of your business, and $154,054.51 for improvements in permanent road-way, buildings, bridges, etc., to take the place of temporary structures, about worn out. In all cases, first deducting the cost of temporary structure from new permanent work, only charging remainder to construction. By reference to the Chief Engineer's report you will find, in minute detail, the character of structure and full description of every expenditure, as well as very full details of the condition of you r road, with a complete list of the property owned by the company, representing the entire outlay. From this report the Stockholder will see that the expenditures in this department have greatly contributed to the permanency, safety and economy of operating your road, and secured you almost entirely from the dangers of washing away portions of your roadbed, by the rapid streams over which your road crosses -- heretofore many of them being crossed on trestles -- but now renewed by permanent stone-pier and iron bridges, rendering it much more exempt from casualties than heretofore, and enabling your trains to be run with much greater regularity and safety.
Financial Condition
   Your financial condition is shown from the following exhibits. Exhibit B is a balance sheet from the books of the Eastern Division. C is a balance sheet from the books of the Western Division. D is a general balance sheet, condensed from both Divisions, embracing the entire operations and transactions of the Company from its organization to 30th June, 1861. E is a special statement from the Treasurer's condensed cash statement, showing the receipts and disbursements of the past year.
   The liabilities and assets of the Company are as follows:


291 miles of road fixtures and equipment $7,016,625.03
Stock and other property 297,730.46
Cash and cash assets 413,550.89
   Total assets $7,727,906.38
Capital Stock issued $3,812,525.00
Funded debt 2,650,000.00
Floating debt 259,634.11
   Total liabilities $6,722,159.11
   Difference $1,005,747.27
   This difference between your assets and liabilities will be placed to the credit of profit and loss in closing up the account of last year; less the suspense account, $12,548.74, which has been sent aside to meet probable contingencies that may arise out of last year's business that could not be adjusted and brought into the present report. This will leave at the credit of your profit and loss account $993,198.53, as shown by Exhibit F. This is the surplus earnings of the road, that has gone into construction and other property not now represented by either stock or debt. It is for you to say what, if any, disposition shall be made of it.
   Your liabilities are of such character that they have not changed much since your last meeting. Such as have matured have been paid. The remainder, owing on bills payable, is either not due, or has not been called for. The individual dues, foreign roads, dividends and unpaid coupons, will probably never be less than at present, as these are constantly being added to and settled, never remaining the same for any length of time. No fund, however, need be provided to meet liabilities of this kind. In the purchase of a large amount of machinery during the past year, a number of notes were given for it, as the3 amount was large, and the machinery needed all about the same time, it was desirable to scatter the payments of it through several months. This accounts for the bills payable being larger now than at your last report.
Taking the past year's net receipts, $1,047,386.82
   as a basis, and deducting --
Interest on Funded and Floating debt $181,157.39
2 1/2 per cent. Sinking Fund on funded debt, 66,250.00
Eight per cent. dividend, 304,511.00 551,918.39
Would leave an annual surplus of, $495,468.43
after paying interest and a sinking fund of 2 1/2 per cent. on all funded debt and an eight per cent. cash dividend to the Stockholders.
   This surplus will be amply sufficient to continue your past policy of replacing temporary structures on the road with permanent works. This should be kept up until every structure and building upon it has been rebuilt in the most solid and durable manner; then you will have a permanent and reliable property, subject to but few casualties.
   By reference to the able report of your Chief Engineer you will see that great improvement has been made in your permanent road-way, water stations and buildings for the past year, and that permanent stone culverts, iron bridges and solid embankments now supply the place of several miles of temporary trestles heretofore relied upon for the safety of your trains. The character and extent of bridging built during the year, and those contemplated to be built during the coming year, is fully set forth in said report, that you may fully understand the condition of the road and its progress towards perfection, and its necessary wants. The report is full of interesting details, and does credit to its author, as will his permanent works on the road, when examined. You are referred to it for particulars in that department, believing it affords all information necessary to fully understanding of every thing to which it should refer.
   For the details of the Transportation Department I must refer you to the very interesting detailed report of your General Superintendent, which its full and complete, and it affords the Board pleasure to say exhibits a highly satisfactory condition of the efficiency of that department. The details of receipts and working expenses shows that the road has been worked with great economy and efficiency, and that the machinery and rolling stock have been kept in fine order, and now exhibit a degree of perfection and efficiency rarely found on any road where business has been so near the full capacity of its machinery. The list of locomotives and cars, together with their capacity and character, will exhibit the full amount of your rolling stock, believed now to be sufficient for the business of the road, with the exception of freight cars, which your own ample shops will furnish hereafter, of the best quality.
   It would be idle to even speculate upon the future. With civil war raging throughout the land, our ports blockaded, no human foresight can tell what is to be the effect of such a state of things upon yours or any other business in future. It may prostrate it entirely, and you may not be able to pay expenses, or you may continue to do a fair business as heretofore.
   It depends upon the nature, extent, duration, success and character of the war more than anything else. The seasons have never been more propitious and the crops never better, as far as the season has progressed; and with peace, prosperity, plenty and happiness would reign throughout the land.
   In conclusion, the Board can only assure the Stockholders that their property was never in better condition; never have they had to report fewer casualties; and while property of every kind has felt, and felt severely, the present calamities befalling the country, in depreciation in price, and while many of the most permanent and valuable stocks in the country have fallen below one-half of their value one year ago, yours will command cash at within five to ten per cent. of the highest point it ever reached.
   The Board of Directors feel that to the faithfulness, care, ability, and unceasing watchfulness of your officers and employees generally, and the personal interest they exhibit and feel in the prosperity and character of the enterprise they, or most of them, are so closely identified with, having been with it from its infancy, has contributed in a great degree to its prosperity and success; and it gives the Board great pleasure and satisfaction to be able to bear this testimony to their high character and disinterested devotion to your interests, which is worthy of your highest commendation.
Sam. Tate