| Annual Report of the North-Eastern RR |
| as of March 1, 1863 |
| President's Report |
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| President's Report |
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| President's Office, N. E. R. R. Co. |
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Charleston, April 1, 1863
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To the Stockholders of the North-Eastern Railroad Company
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Gentlemen,
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The President and Directors respectfully submit the
following Report of the Company's operations for the fiscal year
ending 28th February, 1863:
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| The Gross Earnings have been |
$439,514.81 |
| The Operating Expenses |
141,992.18 |
| Balance |
$297,522.63 |
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which is equivalent to 14 58-100 per cent. on $2,040,000, the actual
cost of the Road.
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The appropriation of the Company’ receipts from all
sources during the year, will appear from the annexed statements of
the Treasurer, marked A and B. The latter showing a comparison between
its financial condition on the 28th February, 1862, and the
corresponding date of this year, exhibits a decrease in its
indebtedness of $94,928.82,and an increase of $135,269.41, in its
assets. The floating liabilities at the close of the year, amounted to
$238,628.08. Comparing their respective operations, we have as the
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1861-'62 |
1862-'63 |
Increase |
| Gross Earnings |
$251,550.15 |
$439,514.81 |
$187,964.66 |
| Expenses |
184,347.72 |
141,992.18 |
7,644.46 |
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In 1862, the ratio of Expenses to Earnings was 53 40-100 per cent.
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| In 1863, the ration of Expenses to
Earnings was 32 30-100 per cent. |
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The above encouraging results would seem to warrant the
declaration of a moderate dividend, and it is proper that your Board
should briefly notice the prudential considerations which have so far
restrained them from a compliance with such an expectation.
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| The impossibility of
procuring, for some time past, an adequate supply of rails and other
material essential to the repair of the Road, will entail upon us a
large expenditure at the close of the war, or earlier, if the means of
getting them can be successfully devised. Additional facilities have
also become necessary to the prompt performance of the Company’s
operations. Any estimate of these expenditures, in the present
inflated and unsettled condition of things, with a new currency and
the channels of supply yet to be opened, would be entirely
speculative, and, in the midst, therefore, of all this uncertainty,
your Board have thought it expedient to reserve the Company’s assets
until the extent of these expenditures can be positively determined,
and when no question can be raised as to the amount which should then
be distributed among the stockholders. We hold our present surplus
only because we have been unable to disburse it, and accordingly much
of it will disappear with the first opportunity of supplying our
wants. If, in the meanwhile, it should reach a limit beyond which any
further reservations would seem unnecessary, its division among the
Stockholders, would become to your Board a proper and most gratifying
measure. |
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In reviewing the operations of the past year, you should
be reminded that the increased business of the Road is to be accounted
for chiefly by the disturbed condition of the country and its military
necessities, substituting new and fluctuating sources of income for
those upon which we have heretofore relied. To assume that our
receipts hereafter are to reach the standard of the past year, or that
our expenses are to remain in about the same ration, would scarcely e
prudent, but upon the return of peach, we may reasonably expect a net
revenue which will authorize the payment of fair and regular
dividends.
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| During the past six months,
the Company’s facilities have been taxed to their utmost capacity,
and although convinced that more could not have been accomplished with
them, we have still to regret that, in the transportation of the
products pressed upon us, especially wood and timber, they have often
been unequal to our requirements. This is explained by the
insufficiency of our Engines and Cars, and their frequent withdrawal
from the freighting business of the Road, to meet the exigencies of
the public service, not only on our own, but our connecting Road,
combined with the difficulties and delays attending their repair, and
the very unfavorable circumstances under which they were constantly
running. Hence we have only been able to comply partially with the
frequent demands for Special Trains, from parties who have accumulated
wood and timber at points along the line of road most convenient to
them, instead of at Stations or Turnouts, where cars could be left to
be loaded, and thence removed by the ordinary Freight Trains of the
Road. The only and obvious remedy for this is an increase in our
mechanical means for such business. |
| The cost of the Road, with its real
estate, interest, etc., as shown by the Treasurer’s statement,
is |
$1,988,221.04 |
| From which, deduct proceeds of transportation for
1863, |
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297,522.63 |
| And we have as cost, 28th
February, 1863, |
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$1,690,698.41 |
| This is further shown by reference to
the Company’s indebtedness and assets, there being due to |
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| Stockholders |
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$898,950.00 |
| First Mortgage Bonds |
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700.000.00 |
| Second Mortgage Bonds |
145,000.00 |
*
300,000.00 |
| Preferred Stock |
155,000.00 |
| * The amount of Second
Mortgage Bonds is $300,000, but a the Preferred Stock, to
the extent of its issue, is secured by the deposit of a
corresponding amount of the Second Mortgage Bonds, in the hands
of three trustees, this liability is expressed in the aggregate,
under the above items. |
| Bonds for Real Estate |
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28,000.00 |
| Open Accounts (Balance of) |
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1,610.19 |
| Bills Payable |
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766.30 |
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$1,929,326.49 |
| With Assets applicable to the same,
of |
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| Bills Receivable |
$18,123.25 |
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| Due by Confederate States |
121,837.48 |
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| Confederate States Warrant |
12,550.00 |
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| Confederate States Postoffice Department |
9,589.55 |
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| Due by U. S. Postoffice Department |
2,585.90 |
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| Stock in Cheraw & Coalfields Railroad |
25,400.00 |
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| Material on hand |
12,725.59 |
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| Cash |
35,816.31 |
238,628.08 |
| Which corresponds with the above Cost |
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$1,690,698.41 |
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| During the progress of the
Road, and up to this date, construction was annually charged with the
interest paid upon the Company’s indebtedness, ad credited with the
balance of transportation at the close of each year, so the above
cost, while, in one sense, the true one to the Stockholder, does not
exhibit the proportion of the earnings of the Road, withheld from him,
and gradually absorbed in the payments for its construction. |
| On the 28th February,
1858, a few months after the Road was opened, though in an
unfinished state, the cost was fond to be |
$1,873,080.66 |
| And since that period there has been added to it |
209,678.88 |
| Giving as its actual
cost, 28th February, 1863 |
2,082,759.54 |
| But in this, is embraced certain real estate held
by the Company, which is not essential to its operations, and
which should, therefore, be disposed of in the future. Removing
this from Construction, and charging it to Property Account, we
have the figure, which it is proposed should hereafter represent
the cost of the Road |
2,040,000.00 |
| The gross earnings of the Road from the 28th
February, 1858, to 28th February, 1863, were |
751,250.24 |
| Interest paid during same period |
359,189.15 |
| Leaving a balance of |
$392,061.00 |
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| This sum will hereafter
appear at the credit of Profit and Loss, and, as it may be considered
the representative of past earnings, would be properly chargeable with
dividends to the Stockholders, until finally extinguished. |
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It was very desirable that Construction Account, as it now
stands on the Company’s books, should be permanently closed, and any
expenditures yet to be made, which properly belong to it, shown as an
Extraordinary Expense, to be deducted from Current Income. With this
view, a Committee of the Board was invited to examine the accounts and
verify the process by which the sum of $2,040,000 was established as
the cost of the Road. In doing this, the modifications which were
necessary, and alluded to above, are recapitulated in the
Treasurer’s Statement marked “C.” The property of the Company is
described in his Statement, marked “D.” The value assumed for it
is, in some cases, that which was actually paid; and, in others, it
has been assessed at what are deemed reasonable figures. |
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The details of the Road and its machinery, will be fully
presented in the annexed Report of the Superintendent. Their condition
is not so satisfactory as could be desired, but the deficiencies of
both are to be explained by the impossibility of our procuring iron,
and other material requisite for their repair. Some months ago
contracts were entered into for the delivery at any accessible
Confederate port, of certain articles most needed by us, but they have
not yet been complied with, and we question whether they will ever be
received. All the expedients which mechanical skill could suggest,
have been and are now being adopted, without reference to expense, to
keep our locomotives in running condition – but, you can readily
understand that the limit to these is daily becoming more
circumscribed. To maintain the efficiency of these departments, we
should provide for at least one thousand tons new rails, two new
locomotives, a large stock of material, and an increase in our shops,
equal to the class and extent of repair hereafter to be made in them.
The number of our Passenger Cars must be increased, as soon as the
material for their construction can be obtained, and those now in
service completely repaired and repainted. Our Freight Cars also need
considerable repair. In the frequent transportation of troops, they
have been much mutilated, and it has been impossible to place and
maintain them in the most secure condition for the conveyance of
freight, -- and hence our exposure to an unusual amount of loss and
damage during the year. In June last, five cars with their contents of
cotton, while on their way to Florence, were destroyed by fire, the
cotton having been ignited, as was supposed, by a spark from a passing
engine. To the energy and presence of mind of the Conductor on the
occasion, we are indebted for our escape from a heavier loss.
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| It affords us much pleasure
to record the close of another year, in the history of the Road,
unmarked by the loss of life on any of its trains. This continued
exemption from accident, is a satisfactory evidence of the zeal,
watchfulness and judgment of those directly in charge of the trains,
the condition of the track and the order of the engines. |
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With an enemy at the gates of our City, it may seem rash to
indulge in any prospective view of the Company’s affairs, but our
apprehensions upon this point should be relieved by the strong
measures adopted for its defence, and the distinguished ability of
those to whom it is entrusted. It must be conceded that upon the
termination of the war, come when it may, the products of our interior
will be pressed to the Seaboard in exchange for those commodities from
abroad, of which it has been so long deprived, and which are daily
becoming scarcer, and of greater importance to a vigorous resumption
of its industrial pursuits. In proportion to the facilities of the
Road to expedite these exchanges, will be the measure of its
profitableness, not only to the Stockholder, but of its great
usefulness to the community, and no effort should be spared to enlarge
them in anticipation of such a contingency. |
| Having on former occasions
very fully brought to your notice the advantages to accrue to this
Road, from the construction of the Cheraw & Coalfields Road, and
its contemplated connections, further allusion to them here is
unnecessary, except to inform you that the first has actually been
commenced, and, under the auspices of Col. Allan Macfarlan, is being
pushed forward as rapidly as circumstances will permit. Impressed with
its importance to the interests of this Road, and the propriety of our
aiding it to some extent, your Board felt authorized to subscribe
towards it the amount ($25,000) held by this Company in the Cheraw
& Darlington Road. |
| In conclusion, the Board
would announce to you the loss, by death, during the year, of two of
their members – the Hon. Mitchell King and Mr. John Ravenel. These
gentlemen were identified with the early history of the Road, and
throughout is checkered progress, cheerfully gave to it their matured
counsels and experience. |
| All of which is respectfully submitted, |
| A. F. Ravenel |
| President |
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