| Annual Report of the South Carolina RR |
| as of January 1, 1864, |
| President's Report |
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| Report of the President and Directors
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| Office of the South Carolina R. R. Co. |
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Charleston, 31st December, 1863
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Gentlemen,
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The operations of the Road during the year terminating
31st December, and the general condition of the Company's affairs at
that date, are respectfully submitted to you.
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The earnings have been as follows, viz:
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| From Passage |
$1,525,544.11 |
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| "
Freight |
1,355,571.23 |
$2,881,115.34 |
| " Other
sources |
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108,887.01 |
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2,990,002.35 |
| Operating expenses |
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1,071,405.35 |
| Making net earnings |
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$1,918,597.00 |
| Against this sum there have been charged for
interest, damages, etc. |
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177,992.29 |
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$1,740,604.71 |
| and for Dividends |
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698,328.00 |
| Leaving balance of Income carried to Surplus
Income account |
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$1,042,276.71 |
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The character of that account, the transactions in it
during the year, and its present position, will be found very clearly
exhibited in statement B, from the Auditor's office.
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The Earnings of the Road are shown to be unusually large
in comparison with previous years -- exceeding those of 1862, the
largest on record, by the very considerable sum of $1,149,788.32. Such
a result is due in part to the entirely changed character of the
business, which is in turn due to the peculiar condition of the
country, involving heavy movements of troops, singly and in large
bodies, as well as a weight of private travel, which has completely
overtasked our means of accommodation. It is further, and in a much
greater degree, due to the frequent and considerable advances of
Freight and Passage rates which have been forced upon the Board since
the last annual Meeting, by necessities too palpable and too urgent to
be ignored or postponed. Some estimate may be formed of the force of
these necessities from the following memorandum of the General
Superintendent's office, of the upward movement in a few of the items
of expenditure during the year.
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Memorandum of advance in Rates of Labor and
Prices of Materials
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| Clerical services |
100 |
per cent |
| Mechanical labor |
200 |
" |
| General labor |
150 |
" |
| Wheels, Axles, Tires, Nails, Spikes, Oils,
Tallow, Car Trimmings, etc., average of about |
2,000 |
" |
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Even in view of the irresistible character of the
necessity to advance, the Board very tardily and reluctantly yielded
their well know views in favor of low rates, sufficiently established
in the policy of years past. And only long after the Roads of the
Confederacy had generally attained a higher scale of charges were they
willing to move. We have entertained the anxious hope and earnest wish
of being able to pass through this way without adding in any degree to
the burdens of the country. But we believe that among our greatest
obligations, certainly among the most important services we could
render the country, would be rendered in the maintenance of this
property in the most efficient condition. Any other line of conduct
seemed to promise only disaster and disappointment.
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The Expenses for the same period doubtless appear
relatively small. That, however, is only apparently true. A very large
amount of material, sufficient to swell Current Expenses account more
than twenty-five per cent., purchased for the past year, but unwrought
for want of facilities and labor, remain on hand, and is deducted from
that account. It must also be remembered that it is impossible to
apply properly a large portion of the earnings in consequence of a
deficiency of supply of many much needed articles. These deficiencies
the Board have sought to supply by importations through the blockade,
and have succeeded at various periods in thus procuring material of
the greatest value. They were also able in like manner to export
Cotton in payment, and to that extent have avoided the ruinous rates
of Exchange. The value of the articles thus procured will reach about
L5,000.
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The Board feels that it is not called for, and not proper
to present to the Stockholders any speculations as to the future
movements of the Company's business. In the present condition of the
country, with all the relations of life disturbed, opinions would fade
into wild conjecture. They can, however, very confidently repeat the
expression of their last report, that under any circumstances of peace
or war the Road will find business sufficient to compensate the
Stockholders if the property can be kept up. To that end the best
efforts of the Board are directed.
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The Report of the General Superintendent, accompanying
this, will exhibit in detail the movements of the Operative
Department, the condition of the Machinery, Track, Structures, and
other property, and the wants of the several Departments of this
branch. The deterioration particularly of Machinery and Rails, to
which your attention was directed in our last report, has been very
great under the heavy and incessant demands made upon them. Not only
have the Locomotives and Cars been hard worked, but they have been
kept on the line between Augusta and Kingville and Charlotte Junction,
away from the shops and so deprived of the all important regular
supervision which in the usual movements of our business they
habitually received. It was very evident to the management that only
such a result could be anticipated; but the argument used, that our
army in Virginia was suffering for corn, was unanswerable. Hardly less
has the Rolling Stock suffered from deficient repair facilities
consequent upon the removal of a large portion of the Tools of the
Charleston shops to the interior shortly after the bombardment of the
city was commenced. The responsibility of such a step was well
comprehended, and it was only taken after the maturest deliberation.
Simultaneously, the extension of the shops at Columbia was resumed,
and it is hoped that at a not very distant day this deficiency at
least swill be removed. It may safely be assumed, that of the
Locomotives reported in the Tables of the Superintendent on the 1st
January, 1863, not one-half are now in service, and of that one-half
few in good order. Recently the Superintendent has been able to hire
from the Memphis & Charleston Railroad Company some six of their
Locomotives. With these it is hoped he will be able to maintain the
present line of service and avail himself of the supply to push
forward the repairs to our own. Our Rails occasion us the utmost
anxiety. From an early period of the year, the wear developed itself
in a startlingly rapid manner, and as the severe weather of the winter
approached it was by no means sure that the operations of the Road
could be continued to the present time. We have fortunately, however,
been able to procure from the War department and other sources some
six miles of Rails -- light, but comparatively new -- with which we
hope the business of the Company may be kept up for some months
yet.
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This, however, is but a temporary relief; 2,000 tons of
new rails {enough for about 23 miles of 55 lb.
rail, both tracks} are needed to place the Road in good
condition; but how they are to be obtained is beyond the power of the
Board to say. The Government, the only source of supply, in its
command of Roads of lesser importance, or its control of the Rolling
Mills of the Confederacy, has been, through the President, carefully
and frequently and fully informed of our condition and necessities,
and urged to aid us in the mode indicated. So, also, has the
Commanding General of the Department. In fine, no possible source or
means of supply has been left untried in order that we might maintain,
for the benefit of the country, a property so vitally important.
The wants of the Operative department, it will be seen from the
Superintendent's report, are large for the ensuing year. The supply of
much that will be required (we refer to small material -- Oils and the
like), though more or less deficient, we regard practicable, and if
not to be found at home, they may be imported. But it must be obvious
that any addition to the stock of Locomotives and of Rails from
foreign sources can only be attempted under the pressure of the most
imperious necessity. The hazard and the cost of importation, at the
present rates, reach such gigantic proportions that the ordinary
considerations which control the policy of the Board would not justify
them in contemplating such operations, at least just now. Perhaps
these objections, as the year advances, may lose some, if not all, of
their force. The Board will then not hesitate to act with promptness
and vigor. Indeed, they propose very shortly such proceeding as will
relieve them from doubt, at least with respect to the practicality of
importation of heavy property. The Board cannot conclude this portion
of their Report without the expression of their high appreciation of
the administration of the affairs of the Company by their excellent
and able General Superintendent. Surrounded with difficulties, perhaps
with pressing and contradictory exactions, followed up with
unreasonable demands, and in turn with equally unreasonable
complaints, with ordinary labor greatly disorganized, and means
constantly diminishing, the large and delicate business of the Company
has, notwithstanding, been conducted with a degree of success hardly
to have been expected. To him and his assistants the Board render
their fullest acknowledgments.
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The statements from the Auditor's office also accompany
this Report. They are presented in the very full and satisfactory
manner which distinguishes all the work of the very acceptable officer
in charge of the Accounting department. In the absence of any special
matter in connection with this branch of the Company's affairs the
attention of the Stockholders is respectfully invited to them. The
debt of the Company will be found increased since the last report. The
increase is simply the accumulation of certain items of expenditure,
such as foreign and domestic interest, and the like, to the
liquidation of which our earnings were inapplicable. Corresponding
amounts in the nature of offsets will appear in the assets. The
balance of debt, as shown in the tables, exhibits the heavy reduction
of $578,073.56; and stands at $1,525,986.18. But as that result is
only nominal, and proceeds from an assumption that all the items of
assets are equally valuable, and applicable to payment of debt, an
assumption not warranted, as shown above, in explaining increase of
debt, it is well for the Stockholders, therefore, to bear in view this
explanation.
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The increase of property has been $455,696.52; and is
thus particularized:
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| Columbia New Machine Shops |
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$39,278.98 |
| Purchase of Lands |
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65,519.90 |
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" "
Materials and Machinery |
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376,397.76 |
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$481,196.64 |
| Deduct Decrease in Negros |
$2,460.12 |
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Cars |
16,440.00 |
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Locomotives |
6,600.00 |
25,500.12 |
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Increase |
$455,696.52 |
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The Real Estate purchased in Augusta and Charleston will
be very valuable in meeting the Road's necessary wants after this war
has ended, and could now be sold at large profit.
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The Board regret to report their continued inability to
provide the funds abroad wherewith to meet the foreign interest due
this and the preceding year. They feel that an explanation is hardly
required by the Stockholders nor an apology to the Bondholders. To
remit at current rates would be simply an impossibility. It would take
five-sevenths of the gross earnings, without looking to the hazard. An
obligation, however, undischarged is not one unthought of. The Board
anxiously watch for and use every opportunity to put funds abroad, and
earnestly hope that the labors of the proper authorities, now turned
to the subject, may before a very long time so appreciate the money of
the country as to enable us to discharge our obligations to our
creditors.
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Of the Bond Debt due on this side and payable in 1863,
amounting to $250,000, only the sum of $30,000 has been presented for
payment.
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The Board have the sad duty again devolving on them of
announcing the loss of one of their members. Since the last annual
Meeting they have been called upon to mourn the death of Mr. C. J.
Shannon. Among the oldest and most valued of their associates,
connected with all the early trials and troubles of the Road; in its
prosperity and its difficulties an unflagging supporter and most
reliable counsellor. This is no common loss; and even at a time when
the country, writhing in the agonies of war, makes us unhappily too
familiar with death in all its various shapes, our sensibilities are
painfully affected. Let us hope that those who aspire to positions
thus vacated will closely study lives so rich in lessons of unselfish
performance of public duty.
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The resignation of Mr. C. R. Bryee having created another
vacancy the Board elected T. B. Clarkson, Esq., and the Hon. F. J.
Moses, for the unexpired term.
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Respectfully submitted,
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W. J. Magrath
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President
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