NP, NODC 3/28/1861

From the New Orleans Daily Crescent
 
March 28, 1861
 
Southern Pacific Railroad Meeting
   Pursuant to previous notice, a meeting of the stockholders of the Southern Pacific Railroad Company was held at Armory Hall on Tuesday evening.
   Theodore Gillespie, Esq., of New Orleans, was called to the chair, and R. W. Loughery, of Marshall, Texas, invited to act as Secretary.
   Col. V. K. Stevenson, the President of the Company, was then introduced to the meeting, and made a very able speech, in which he gave a brief history of the Company since his connection with it to the present time, showing the difficulties it had to contend with, and the manner in which they had been met by those entrusted with the management of its affairs.
   The first object to be achieved was to place the financial affairs of the Company in such a condition and upon such a basis that the Company would be secure against every contingency; and secondly, to bring to its aid the requisite strength to prosecute the work vigorously.
   To accomplish these objects, they first sought the aid of the Federal Government, and, in the next place, and subsidiary to it, to enlist capitalists to build the road rapidly through Texas. How far the agents of the Company had accomplished the objects contemplated -- with what industry and ability they had labored, were evidenced in the results which were already partially matters of history. It was a well-known fact that, for fifteen years, intelligent, enterprising men had endeavored to enlist the aid of the Federal Government at Washington in a scheme of building a railroad to the Pacific. But up to the time that Dr. Fowlkes and other enterprising gentlemen had taken the matter in hand, no bill had been introduced into Congress that promised the slightest hope of success. They, by their energy, their industry -- by exhibiting to the country the unparalleled advantages of a railroad to the Pacific -- had secured a decided majority in both branches of Congress, and were only defeated by events for which they were not responsible, and over which they had no control.
   He referred to the political revolution which had terminated with the secession of the Southern States. If, indeed, that revolution could have been postponed for thirty days the friends of the enterprise would have accomplished all they desired. And, in order that the stockholders might understand and fully appreciate the labors of their officers and agents, he would state briefly what were these results: 1. The Pacific Railroad bill secured to this company thirty-six millions of dollars and the right of way through the territories, with a grant of land amounting, in the aggregate, to about fifteen millions of acres. 2. A contract had been made with a wealthy French company, which secured the rapid construction of the road to the Pacific ocean. These French capitalists, under this contract, agreed to furnish $1,200,000 to pay for the fifty miles of road now being built by DeGraff & Co., leaving a surplus to meet contingencies.
   As many of the stockholders were doubtless advised, the Pacific Railroad bill passed the United States House of Representatives by a decided majority. It was then sent to the Senate where it underwent amendments, and was remanded to the House for concurrence on those amendments. These alterations met the sanction of the friends of the bill, and all that was required to secure its passage was a favorable opportunity to call it up. Immediately afterwards the political complications of the country culminated in the secession of several of the Southern States, and with the further understanding that Texas would also secede. Northern men then seemed reluctant to support a bill embracing such a large grant of money and land to a section and a State that denied the authority of the Union. They said they could not do so and sustain themselves at home. The friends of the bill, however, urged its passage as a peace offering, and succeeded in their efforts, when immediately afterwards the news reached Washington of the seizure of the forts and arsenals and other public property in Texas.
   So much for the history of events at Washington, and the efforts of the officers and agents of the Company. These officers and agents had done all that men could do, under the circumstances, to achieve success, and if they failed, for the time, no blame could be ascribed to them. They had, at least, brought this enterprise prominently before the people, not only of the United States but of the world, and had presented it with its great advantages and results, to their contemplation. He had himself assisted at Washington as far as he was able, compatible with the discharge of his other duties.
   The French association of capitalists with whom the Company had negotiated for the construction of the road through Texas, was known as Messrs. E. de Bellot, des Minieres Bros. & Co. In order that it might be understood who they were, he would state, for the benefit of those who were not already advised, that this French company has contracted to construct a canal in the State of Virginia, involving a very large expenditure of money. The Legislature of that State deemed it necessary to institute a rigid inquiry into the character and resources of the association, in order to obtain the requisite assurance as to whether they possessed the ability to carry out their contract. A committee, composed of the most able men in the Virginia Legislature, was appointed for that purpose, who consulted the leading capitalists of the United States, and wrote to Europe to obtain still further information. That committee, after a mature and thorough examination, made a report in which they state that the association of Messrs. E. de Bellot, des Minieres Bros. & Co., are abundantly able to perform their contract; that it is the most powerful combination of wealth, talent and political influence in the world.
   To illustrate the character of the men connected with this association, he mentioned the name of Count Morny, who occupied a distinguished position in the French Government. In addition to this, the Governments of France, Belgium and Spain had signified their approval of this contract on the part of these gentlemen, who were connected with their Governments.
   Mr. Stevenson said that in the latter part of the last summer he had made a contract with the American member of this association, of the character he had previously stated, and which secured to the Southern Pacific Company $1,200,000 in money, and the construction of the road across Texas. This gentleman ratified the contract, so far as it was in his power to do so, and immediately left for Europe to obtain the concurrence of his associates, of which he did not entertain a doubt. It was subsequently thought advisable by the Executive Committee of the Southern Pacific Company, inasmuch as it was a matter of great importance to secure this pecuniary aid, that he (Mr. Stevenson) should go to Europe, so that if any difficulties arose in the confirmation of the contract, that he might be present to afford all necessary explanations. He accordingly went to Europe and remained in Paris about three months. Every difficulty was speedily removed, and he entertained no doubt of the successful attainment of his mission.
   But about that time intelligence was received in Europe of the extraordinary political contest then going on in the United States. The parties with whom he was negotiating, from their enlarged political connections, were fully advised of the character of the contest, and of the probable disastrous results that might follow it. They asked time to await the result. Mr. Lincoln was elected, and with the intelligence of his election came also that of the secession of South Carolina. Still further time was asked, and of course must be granted, for it could not be expected that capitalists would advance money to carry out a great enterprise in a country threatened with civil war.
   Then followed the secession of the American Congress, the President's message presenting the alarming condition of our public affairs, the violence of public debate in Congress, the bitterness of our public journals, all breathing the spirit of revolution. The intelligence was received of the secession of Georgia, Florida, Alabama, Mississippi and Louisiana, with the probability that Texas and other Southern States would also withdraw from the Union. It was useless to remain longer in Europe, and he came home. But he would say to the stockholders that he had by no means failed in the object of his mission. He had received letters from Messrs. E. de Bellot & Co., written since these political complications and disasters, stating that as soon as there was evidence of peace and permanent government in the country, they were ready to confirm the contract. They could not negotiate with a people seemingly threatened with civil war, and it could not be expected of them.
   Thus he had given a brief history of the Company since his connection with it, and of the efforts of himself and others to place its affairs in such a condition as would have rendered it the grandest enterprise of the age. It was now his duty to present the existing state of things, and to advise the stockholders as to what was essential to the preservation of their interests. He would speak plainly and frankly.
   When the agents of the Company first went before Congress, asking aid in the construction of the Southern Pacific Road, they found, notwithstanding the superior advantages of the route, serious difficulties to encounter in having its claims recognized. There were rival routes, and the inquiry was at once made, "Why should we designate your road in preference to other routes that are urged upon our attention? You claim, and justly claim, your superior location through the center of the cotton region, with the best climate, and supported by liberal donations and privileges from Texas; but with all these advantages you are doing nothing. You have no road under contract, and are not preparing to prosecute the work with that energy which entitles it to favor." There was no denying that this objection was well grounded, and hence it became necessary to obviate it as early as possible.
   The late President of the Company made a contract with Messrs. DeGraff & Smith, for the construction of fifty miles of road. This contract was very liberal in its provisions, and highly favorable to the Company. The contractors under it agree to take two-thirds of their pay in the stock and bonds of the Company, and require only one-third in cash. He had no question of their ability to carry out their contract. As railroad men they stand second to none in the Union. The alacrity with which they had entered upon the work, and the energy subsequently displayed by them, justified his most sanguine expectations. Of the first section of twenty-five miles, eighteen were graded, leaving only seven more to be completed. When finished, the Company would be entitled to a loan from the State of Texas of $150,000. If it had this loan in possession, it could go on, temporarily at least, without burthening the stockholders. But it must be recollected that it was not to be obtained until the grading was completed; and, in the meantime, unless something was done immediately, the road would be sacrificed, and the stockholders lose their entire interest.
   The Company owed for this grading, the right of way in many instances had to be purchased, warehouses and other buildings on the line of road completed had to be erected, and other necessary expenses incurred, which had to be met. The times in Texas were hard, owing to a failure of the crops, the parties to whom the Company was indebted could not wait longer for their money, suits were instituted, judgments obtained, and unless something was done speedily to relieve the Company, the road would be sold out. Good faith to the contractors demanded that they should be paid; good faith to the people of Texas, and their continued good will, which is all important to the Company, required not only that they should be sustained against all loss, but that evidences should be given of the future vigorous prosecution of the work.
   The question then was simply this: Would they permit this road to be sold out, and all their interests sacrificed, or, by coming promptly forward, place it in such a condition as to render the enterprise valuable? The property of this Company, without regard to its franchise and privileges, was worth at least a million and a half of dollars. The stockholders had the alternative presented to them to surrender it -- to give up all that they had invested in it -- or to pay up its debts, at once, and furnish a fund sufficient to carry on the work.
   When he undertook to serve a Company, he endeavored to do so intelligently, faithfully and efficiently. And when he found it involved in debt or pecuniary difficulties, he knew of but one course to pursue, and that was to go to the stockholders and apply to them for relief. If they did not think enough of their own interests to afford the necessary protection, they could not expect others who were not interested, or more deeply interested than themselves, to do so for them. He felt it his duty, therefore, to say that unless the stockholders came forward and relieved the Company, it would be sold out beyond question. Nothing could avert it but immediate, prompt action. Let them not delude themselves with the idea that this property cannot be sold. He would tell them it could and would be sold, and when the day of sale came there would be plenty of buyers.
   There were many greedy eyes fixed upon it, who would rejoice at an opportunity to possess it. And when once sold, it could never be reclaimed by the present stockholders, for the Company that purchased it would take especial pains to comply with the Texas laws in every particular, so as to afford no chance for a law suit.
   His plan for relieving the Company was this: He simply proposed that every man who held stock in the road should subscribe for as much more as would be equal to an advance of one dollar on each share of his stock. In other words, if an individual possessed five shares, he should subscribe for an additional share; if then shares, he should subscribe for two additional shares, etc.
   This would furnish fund sufficient to discharge all the indebtedness, pay for the iron, ship it to Marshall, and furnish and fully equip fifty additional miles of road. This would give the Company seventy-five miles of road, and he had no hesitation in saying that it would be a paying road, and for the simple and plain reason that it perforated a populous and wealthy country, where there were no navigable streams, and where business would come to it from a hundred to a hundred and fifty miles in almost every direction. If the Jackson road, running side by side with the Mississippi river, earns a handsome dividend to its stockholders, how much more reasonable is it that a road that traverses a country having no other means of outlet will prove a profitable investment.
   He had some experience in railroads, and he thought he knew something of the value of railroad stocks and securities. He had no hesitation in saying, basing his opinion alone upon his experience, that this was one of the grandest enterprises of the day, and he was really surprised that it was not properly appreciated by those who owned it. Here was a Company with a charter granting them the privilege of constructing a road through the center of a State not possessing a single navigable stream worthy of the name. For this they were to receive a bonus of about eight millions of acres of land. What was this land worth? He could only judge by the effect of railroads elsewhere. Lands on the line of the Nashville & Chattanooga road advanced from ten to fifty dollars an acre. The lands of the Illinois Central could not be sold before the road was built for $1.25 per acre. When it was finished they were worth from $40 to $75 per acre.
   Is there any good reason to believe that these Texas lands will not increase in value as rapidly as those of Illinois? Cotton lands are intrinsically more valuable than wheat lands, and the day is not far distant when they will command a much higher figure than they do now. Estimating the lands of the Southern Pacific Company at ten dollars per acre, and they will realize upwards of eighty millions of dollars; at twenty dollars per acre, they amount to upwards of one hundred and sixty millions of dollars. If this work was prosecuted as it ought to be for eight years, (and eight years was a very short period of time,) these lands would unquestionably sell for from sixty to seventy-five dollars per acre. Did the world ever before present such a chance for speculation? It was a mine of inexhaustible wealth, which needed but the proper spirit for its development.
   In times like these, it was an unpleasant matter to call upon stockholders for money, and particularly in a case like this, where they had not anticipated such demand. But it was unavoidable. The condition of our political and monetary affairs rendered it indispensable. He had no power to compel them to advance a dollar. It was for them to determine what they would do; whether they would sacrifice their interests in the Company with its great advantages and prospective wealth, or by coming forward and advancing a small sum for additional stock, place the Company in a position that it would no longer need aid.
   It they concluded they could not spare the money, it was their misfortune, as they must be inevitably sold out. But he addressed them as practicable, sensible men, whether it would not be better to sell property, to take the money out of their business, or adopt any other like expedient to raise the necessary funds to place this enterprise upon a proper basis. He could have called upon them for less money. Fifty cents a share would have afforded temporary relief; but such relief was not what he desired.
   He called upon them to take stock to the amount of a dollar a share, for the reason that a dollar a share would pay the doubts of the Company, and iron and equip fifty additional miles of road, and thus render future calls unnecessary. Free of debt, and with seventy-five miles of paying road, there would be no difficulty in constructing the balance of the work. And in this connection, he begged leave to state that until recently the Company had refused to sell any more stock.
   but for the present state of affairs, this stock would not be offered for sale now. It might be that some of the stockholders would pay and others would not, and that many, fearing such a contingency, and that they would, after all, be sold out, and thus lose this amount in addition to their stock, would fail to come forward. He would say to all such, that if the road was sold, he would see that they were fully protected, and when he said this he meant to be understood as having the ability to redeem his promise.
   Whatever was done must be accomplished without delay. The judgments against the Company must be paid immediately. In addition to this, it was all important to finish and equip fifty miles of road in order to take off this year's crop. This could not be done unless the iron was shipped very soon, as Red River was liable to fall, and would not rise again probably before late in the fall or winter. Promptness, therefore, was demanded by every consideration which could appeal to stockholders.
   He had some experience in managing railroad, and he would say this, in conclusion, to those present, he had always attended with sedulous care to the interests confided to him. No Company had ever suffered in his hands. No man had ever lost a dollar in a railroad that he controlled; and he confidently believed that if the stockholders of this enterprise would stand by him, and by their own interests, he would bring this Company speedily out of its difficulties, and render its stock equal, if not superior, to any in the world.
   The foregoing is a brief summary of Mr. Stevenson's remarks. After the conclusion of his address, Col. R. V. Richardson, of Memphis, was loudly called for. Col. Richardson is a gentleman who has taken great interest in the Southern Pacific Railroad, and has been laboring for years industriously and with great efficiency to promote its success. He gave a very interesting history of the Company since his connection with it, showing that good faith and fair dealing had been always exhibited by himself and associates.
   When the stockholders of New Orleans, Louisville & Cincinnati, during the troubles in which the Company was involved, entrusted them with their money, every cent of it was returned when they found the objects for which it was given could not be accomplished. At a later period, the road was sold, and he (Mr. Richardson) became the purchaser, having a clear title to the property and franchise of the company. He was under no legal obligations to take in anybody. Yet he respected their rights, and reorganized the company under that sale.
   When Dr. Fowlkes took charge of the Company, its indebtedness amounted to over $500,000. The stock was comparatively worthless. Since then that debt was paid, not by calling on the stockholders, but by the financial management of the agents of the Company. These agents had contributed their own means liberally to sustain the enterprise. The stockholders would not now be called upon but for the political and financial condition of the country.
   He concluded by stating that he would be found at the house of Mr. H. S. Fulkerson, 84 Common street, where he hoped and expected the visits of stockholders. He urged them to come forward without delay, and not to hazard their rights by neglecting their interests; to make any and every sacrifice rather than permit the road to be sold or even to languish for the necessary aid to prosecute the work vigorously. It involved too large an interest to be sacrificed now, when success and fortune were right before them.
   The speeches were well received. The stockholders will generally, it is believed, respond to the call made upon them.

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