OR, Series 4, Vol. 1, Page 1060

Richmond, April 15, 1862
Honorable Secretary of War of Confederate States
  The act of the 15th of February last to provide for the connection of the railroad from Selma, in Alabama, to Meridian, in Mississippi, authorizes the President to advance to the president and directors of the Alabama & Mississippi Rivers Railroad Company, for the purposes stated, the sum of $150,000, upon such terms and conditions as he may deem best to secure the early completion of the proposed connection and to secure the repayment of the money advanced. Understanding it to be the desire of the Government to cause this connection to be made at the earliest possible day for military purposes, the undersigned, a member of the Board of Directors of said company, caused the acting chief engineer to prepare and furnish proper estimates of the work now to be done, and from these was of the opinion, in view of the increased and increasing price of railroad iron, supplies, etc., and the increased cost which such prompt work would necessarily involve, that a further advance of $200,000 would enable the company to complete the proposed connection in time to meet the wishes and probable exigencies of the Government. The undersigned, however, was perfectly aware that though the road bed could be thus finished, the rolling-stock of the company would be entirely inadequate for the probable requirements of the Government, but supposed that in case of necessity the Government might transfer to this road the rolling-stock of other roads not so immediately important, and it was the intention of the undersigned to have mentioned this sum ($200,000), but by the advice of experienced railroad men he was induced to suggest an amount that would certainly not only complete the road bed in the shortest possible time, but also furnish an ample supply of rolling-stock. The undersigned did not intend by this application for an increased advance to convey the impression that the company would be unable to finish the road with the aid of the $150,000 already authorized. His sole object was to hasten the work and meet the wishes of the Government at the earliest possible day. The company holds a large amount of stock notes on persons of unquestioned solvency, the payment of which is now delayed for want of a market for cotton; but the Board, with the aid already authorized, will proceed with all possible diligence to complete their road, and its president has already, relying on this aid, taken steps to procure the necessary amount of railroad iron, now becoming alarmingly scarce in the Confederate States. The undersigned has deemed it advisable to say this much in explanation of his former communication, and will now, in behalf of the company which he represents, submit the following proposition and statement, viz: That the said sum of $150,000 be loaned to said company for the term of ten years without interest, with a provision that the company in its transportation shall always give preference to freights belonging to the Confederate Government; shall charge for the same such rates as are customary on railroads in the Confederate States, and payment therefore shall be entered as a credit on the obligation of the company. As security for the repayment of the sum loaned the company offers its bond, secured by a mortgage on its entire road, including rolling-stock, fixtures, machine-shop, depots, &c. That the security offered is amply sufficient the following approximate statement of the condition of the company will show:
  From Selma, on the Alabama River, to Demopolis, on the Tombigbee River, is fifty miles, of which forty-five miles are in running order, with rolling-stock now sufficient for the present and ordinary business of the road. The balance of this distance is already graded and prepared for the superstructure. At Demopolis it is contemplated to connect temporarily by a steam-boat with McDowell's Bluff, a distance of about five miles. From McDowell's Bluff to Reagan, on the Northeast & Southwest Railroad, is about twenty-four miles, of which nearly one-half is now graded, and the contractors still at work. From this it will be readily perceived that there has been already expended on the road more than $1,000,000, to which is to be added as a part of the assets of the company more than $300,000 of good stock notes, now unavailable because due by planters whose means of payment are obstructed by the blockade. Upon the first thirty miles of road there is a mortgage to secure the payment of bonds of the company to the amount of $150,000, of which about $125,000 have now been used. Besides this, there is a mortgage upon the whole road to secure the repayment to the 2 per cent. fund of probably $150,000 more. Thus it will be seen that the security offered presents assets reasonably worth about $1,500,000, encumbered by liabilities amounting to about $300,000. If required, personal security will be given for the faithful application of the money and for the completion of the road as speedily as possible. As this matter detains me from other important business, I venture to hope that you will give it prompt attention, and remain,
Very respectfully, yours truly
James L. Price
P. S. -- It is suggested as a matter of convenience that the agent of the Government, Mr. Gaines, who has been sent out on business connected with the road, be instructed to take the bond and mortgage and have the mortgage recorded and the papers returned to you, and upon this being done that the company be authorized to receive the advance. Dispatch is highly important to the company, so as to enable it to secure the iron partially contracted for.
J. L. P.