| Annual Report of the Mobile & Ohio RR |
| as of April 1, 1863, |
| President's Report |
| |
| Fifteenth Annual Meeting of the
Stockholders of the |
| Mobile & Ohio Rail Road Co. |
| Held in Mobile, April 21, 1863 |
| |
| To the Stockholders of the Mobile &
Ohio Rail Road Company |
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The President and Directors of your Company present the
following Report of their proceedings for the past year:
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| Report |
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The earnings and receipts of the Road for the past year
(1862) amount to two million six hundred and seventy-one thousand
six hundred and sixty-two dollars and twenty-one cents. The cost
of running the Road, (including the loss and depreciation of engines,
cars and rails, and also the cost of engine house and station
buildings, and a reasonable estimate of unadjusted claims for lost
freight) amounts to one million two hundred and ninety-one thousand
seven hundred and fifty-five dollars and seventy-six cents, leaving
a nett income of one million three hundred and seventy-nine
thousand nine hundred and six dollars and forty-five cents ($1,379,906.45).
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Of this amount, there was earned in the State of Alabama two
hundred and seventy-six thousand five hundred and forty-six dollars ($276,546),
and the balance was earned on the Road in the States of Mississippi,
Tennessee and Kentucky.
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By reference to statement B, in the annexed tables, it
will be seen that our floating debt has been reduced two hundred and
three thousand seven hundred and sixty-eight dollars and ninety-eight
cents ($203,768.98).
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The floating debt remaining includes a debt to the State
of Mississippi not yet due of $220,865.82. This we have offered to
pay, but the Governor entertaining doubts as to his right to receive
it before maturity, has not yet consented to accept payment. It also
includes the amount of change bills issued by the Company under the
authority granted by the State of Mississippi. The law allows the
issuance of $300,000, but only $116,071.40 has been issued, a part of
which has been redeemed. The remainder of the floating debt, except
small amounts on pay rolls, &c., is made up of foreign debts held
by parties in the United States and in England, which have not been
presented for payment, and in the present condition of the country are
not accessible. The debts owing to parties in the United States have
been attached by the Confederate authorities under the confiscation
laws, but as they are due on bills payable, they may have passed into
other hands, in due course of trade, and therefore no judgments can be
rendered on them. But for these difficulties in the way, these foreign
debts would have been taken up, as we have paid every indebtedness
within our reach, where creditors have been willing to receive
payment, whether the debts have been due or not.
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We now have (April 1, 1863) in our possession, or at our
command, the following assets:
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| Sterling Bonds redeemed from hypothication, but
not delivered up |
$100,000 |
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| Sterling Bonds in hand |
662,000 |
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| Making |
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$762,000 |
| Bonds of the State of Alabama |
|
125,000 |
| Confederate Bonds |
|
308,000 |
| Confederate Bonds due from the Government for
earnings prior to 1st January, 1863 |
|
282,000 |
| Gainesville Branch Bonds |
|
30,000 |
| Confederate interest bearing Notes |
|
240,000 |
| Confederate Notes (not interest bearing) |
|
336,000 |
| Bonds of the State of Tennessee, subject to a
lien to save our sureties on Custom House Bonds and other
liabilities in Kentucky harmless on liabilities of thirty
thousand dollars and interest |
|
197,000 |
| Columbus, Kentucky, Bonds |
|
28,700 |
| Making |
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$2,308,700 |
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These securities, held as assets by the Company,
excepting the Sterling Bonds, Tennessee Bonds, and the cash balance on
hand, are drawing an annual interest in favor of the Company of
$77,120. This meets a corresponding amount of accruing interest on our
outstanding liabilities.
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The $240,000 of interest-bearing notes above referred to
is included in statement A, of the annexed tables, as part of the cash
balance. It is referred to here separately, to show the amount of
interest accruing annually to the Company on assets in their hands.
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The accumulation of these assets in the hands of the
Company has been the result of several causes. 1. Our floating
liabilities, as already explained, have been chiefly in hands beyond
our reach. 2. The holders of our income bonds have neglected or
refused to present them for payment, preferring to hold them rather
than receive the money, the bonds being above par. These bonds pass by
delivery like bank notes, and we can't know in whose hands they are.
3. It has been, and is, important for us to purchase rails and
fastenings and Rolling Stock to replace such as have become defective
or have been lost or destroyed, but in the condition of the country it
has been and still is impossible to get them. Had our bills payable
and Bonds been presented for payment, and the blockade been removed so
as to allow the purchase of rails and other materials for the repair
of the Road, a large portion of this fund would have been absorbed.
The best we could do under the circumstances has been to put as much
of it as possible in an interest bearing form, to meet a corresponding
amount of interest accruing against us, and at the same time keep the
fund in a condition to meet our Bills payable and Bonds whenever
presented, and provide for the purchase of Rails and other materials
for repairs as soon as they can be had.
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In addition to the assets above referred to, we have on
hand two thousand and fifty-five bales of cotton, purchased at a cost
of $156,849.74. This cotton is vested in Messrs. George Peabody &
Co., London, as trustees, for the benefit of our English creditors, to
be sent forward as soon as the blockade will permit. We have also
purchased sixty negroes, now in the service of the Road, at a cost of
$98,500, and expect to increase the number to one hundred, if they can
be had at reasonable prices, and of good quality.
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Three Trustees were originally appointed under our Deed
of Mortgage to secure the payment of our Sterling Bonds. On these
Trustees devolved the duty of directing the sales of lands, and the
making of deeds for title. Two of them died, and the remaining Trustee
wholly failed to do his duty, greatly embarrassing the Company in the
sale of lands. This difficulty is at last removed, by a decree in
Chancery, removing the delinquent Trustee from office, and appointing
Charles Walsh, of Alabama, George H. Young, of Mississippi, and
Alexander Jackson, of Tennessee, Trustees under said Mortgage. The
high character of these gentlemen gives full assurance that no further
trouble need be apprehended.
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By the sales of lands heretofore made, two hundred and
eight thousand dollars of our Sterling Bonds have been taken up
and are held ready to be cancelled. And we may safely expect our
lands, under proper management, to furnish important aid in
establishing a Sinking Fund to reduce and finally liquidate our
funded debt. A small portion of the earnings of the Road annually
added to the sales of lands, will put our Sterling Bonds in course of
gradual liquidation, and take them up at or before maturity.
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It has been shown by previous reports that the Road has
been built at the lowest possible cost, the work having been done at
the lowest prices, and no material sacrifices made in the sale of
Bonds or otherwise. Few Roads are equal to it in the quality of its
rails and fastenings, and the substantial manner of its construction;
and none equal to it has been built at less cost per mile. It has been
built in part by amounts paid by Stockholders; in part by its own
earnings which have gone into the cost of construction, and the
remainder from the proceeds of Bonds negotiated, which make up what is
called our funded debt. Our lands formed an important part of the
basis of credit on which these Bonds were sold, and are destined to
render still more important services in their liquidation. Whatever
benefit is derived from these lands is a bonus to the
Stockholders, taking the place of that much Stock which must otherwise
have been subscribed and paid in before the Road could have been
built.
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These considerations account for the extraordinary fact
developed in the completion of this great enterprise -- that while the
Road has been built at the lowest possible cost, the lands and
the earnings have enabled us to complete the work with a Stock
list of less than one-half of the actual value of the Road. A
most important fact to be considered in estimating the prospective
value of the Stock.
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By a resolution of the Board, passed 1st October last, it
was ordered that interest to be paid in Stock should be allowed on
Stock from the several dates of payment up to the completion of the
Road, on the 22d of April, 1861, and that the Stock certificates
should issue for the interest as well as the amount paid. Some
Stockholders had paid their subscriptions long before others, and it
was proper to allow interest, in order to put them on an equal
footing. These certificates are being issued as fast as possible.
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By the Report of the Chief Engineer and General
Superintendent, it will be seen that we need Rails and other materials
for the repairs of the Road, and also additional buildings at
Whistler. To these and other important suggestions made in his Report,
special attention is invited. It is of great importance that the Road
should be kept in the best condition possible, and that Rails and
other materials for repairs should be purchased as early as they can
be had, and that a sufficient fund should be reserved for that
purpose.
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In conclusion, we desire to say that, after a careful
review of the condition of the Company's assets and income, we
recommend to the Board you may elect at your meeting, to declare a
dividend of six percent. on the Capital Stock of the Company, payable
on and after the fifteenth of June next.
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All of which is respectfully submitted,
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Milton Brown, President
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Mobile & Ohio Railroad Company
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