| Annual Report of the Piedmont RR |
| as of January 1, 1864, |
| President's Report |
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| Report of the President and Directors of the
Piedmont Railroad Company |
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| To the
Stockholders of the Piedmont Railroad Company |
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Gentlemen,
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The President and Directors respectfully submit to you the
following report:
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| The construction of the
Piedmont Railroad has steadily progressed during the past year. The
report of the Chief Engineer states, with sufficient detail, the
results accomplished during that period; and from the report of the
Superintendent you will perceive that the company now derives and
income from the use of one-half of the road. We are able to
congratulate you with some confidence upon the approach of the
completion of a work so necessary to the country, and destined to
prove so remunerative to the stockholders. The inflation of the
currency having necessarily very much increased the cost of
construction, which will fall somewhere between two and two-and-a-half
millions of dollars, it has been found necessary to make provision
for an expenditure beyond the amount of the capital stock, the whole
of which has now been called for. |
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To explain the nature of the provision thus made, you are
referred to the following extract from the 16th annual report to the
meeting of the stockholders of the Richmond & Danville Railroad
Company, held in the city of Richmond on Thursday, December 10th,
1863.
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"Indebtedness of the Company on account of the construction of
the Piedmont Railroad
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"By agreement with the Secretary of War, one million
of dollars, in bonds of the Confederate States, was advanced to the
Richmond & Danville Railroad Company to aid in the completion of
the Piedmont Railroad. The details and terms of the contract, and the
transactions growing out of them, are set forth in the last annual
report to the Stockholders. They are respectfully referred to the
statement for a full understanding of our proceedings. As those bonds
bore eight per cent. interest, and were placed at the disposal of this
Company, the President and Directors were required to execute to a
trustee for the payment of the Confederate bonds, bonds of this
Company for one million of dollars bearing eight per cent. interest,
as security for the loan. The bonds so executed do not bear interest
until eighteen months after the completion of the Piedmont Railroad,
and said road is in actual operation. We are collecting eight per
cent. interest upon one million of eight per cent. Confederate bonds
held and owned by this Company, and the trustee holds one million of
Company eight per cent. bonds as security, bearing no interest until
the period indicated. When the Piedmont Railroad all have been
completed and actually in operation for eighteen months, we can be
called upon to pay the one million of dollars advanced by the
Confederate Government; this can be done by a return of the one
million of bonds now held by this Company, or by the sale of the same,
if commanding a premium, and payment made in Confederate Treasury
notes.
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"This transaction, then, discloses no substantial
debt due by this Company, but simply the execution of one million of
Company bonds held as security for one million of Confederate bonds,
the Company bonds to be void on the return of the Confederate bonds,
or the payment of one million in Confederate Treasury notes.
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"The policy of the Directory has been to make no use
of the Confederate bonds, except to draw the interest upon them to
retain them as they received them, and to return them again to the
government in discharge of the debt, or sell them at a premium and pay
off the debt. Either of these alternatives will fulfill the
obligations of the Company and subject it to no risk arising from
depreciation of the currency, change in value of Confederate bonds, or
casualties growing out of the unsettled condition of public affairs;
whatever may be the developments of the future in monetary affairs or
military operations, we can hold the Company harmless from any claim
by the Confederate Government.
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"Having provided against every contingency in the
protection of the Company bonds, and the mortgages of the railroad, it
became necessary to raise the money required for the construction of
the Piedmont Railroad to the amount of $1,484,000 subscribed to the
stock of that Company. The President and Directors of the Piedmont
Railroad Company have, from time to time, made requisitions upon the
Directors of this Company for the payment of their subscription,
closing with a requisition for the whole amount on the 27th November
last.
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"In anticipation of these requisitions, by
resolutions of your board, and by authority of the stockholders
conferred at their annual meeting in 1861, the President was
authorized to execute bonds of this Company from time to time as
required to meet the requisitions, to an amount not exceeding
$1,500,000 as security for the punctual payment of principal and
interest; he was also empowered to execute a deed of trust upon the
Richmond & Danville Railroad and other property of the Company.
The deed has been duly executed, and a portion of the bonds bearing
six per cent. interest and payable on May 1st, 1873, have been sold at
different premiums. The lowest sale of the bonds was at $133, and the
highest and most recent sale was $248. There has been a steady and
regular advance in the value of the bonds. The total amount sold is
five hundred thousand dollars (500,000), and the nett proceeds of the
sales, realized, reaches the sum of $934,395.66, all of which has been
paid over to the Piedmont Railroad Company to meet the different
requisitions. In addition to that amount we have received from
interest on the Confederate bonds the sum of $82,381.12 to July 1st,
1863. As no interest will be chargeable upon the Company bonds until
eighteen months after the completion of the Piedmont Railroad --
assuming the completion of the road on the 1st day of May, 1864, the
interest on the Confederate bonds which will become payable to the
Company will extend to the 1st of November, 1865, and will amount to
$186,666.00.
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"To sum up these various items the result will be
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| Received from sale of $500,000 of Company bonds |
$934,395.66 |
| From interest on $1,000,000 of Confederate bonds,
to July, 1863 |
82,381.12 |
| Future interest to November, 1865 |
186,666.00 |
| Total from sale of bonds and interest |
$1,203,442.78 |
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"It will be observed then, that the available
resources of the Company, to meet the requisitions of the Piedmont
Railroad Company, will be $1,203,442.78, for which amount your board
have incurred a debt of only $500,000. The various items of receipts
which have fallen due, and may hereafter become payable, are set apart
to meet the subscription of this Company to the stock of the Piedmont
Railroad Company."
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The sale of an additional half million of the bonds of
the Richmond & Danville Railroad Company, at the rates heretofore
realizes, will command a sum, in the judgment of the board, adequate
to the requirements of construction and equipment. We may safely rely
upon the earnings of the road up to the time of completion to meet the
expense of running it.
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Every effort is making, and has been made, to supply
rolling stock through application to the Government and the agency of
the Richmond & Danville Railroad Company. With the concurrence,
and indeed at the instance of the Confederate States Government,
appeals have been made to the Legislature of North Carolina to amend
the charter so as to fix the gauge of this road in correspondence with
that of the Richmond & Danville Railroad, the interests of the
Government and the Company clearly indicating the propriety of such a
modification of the Charter.
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We are gratified to be able to state that the authorities
of the North Carolina Railroad have shown a disposition to facilitate
the connection between the two roads, although they do not concur in
the plan which we proposed. We are now proceeding to make the
connection upon another plan, which, it is hoped, will suite the views
of both companies.
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With regard to the important question of subsistence, we
have, by the aid of the Confederate authorities and our own individual
efforts, endeavored, with a fair hope of success, to make suitable
arrangements and to provide for the wants of the Company. The results,
thus far, have been gratifying.
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The shops near the town of Danville, belonging to the
Richmond & Danville Railroad Company, have been used principally
for the construction of engines and other machinery and work for the
use of the Piedmont Railroad Company.
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It would simplify the transactions and accounts between
the companies, and greatly promote the interests of both, and
especially those of the Piedmont Railroad Company, if an arrangement
could be entered into for the transfer and sale of the said shops,
machinery and tools belonging to it, to the Piedmont Railroad Company.
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These shops were constructed as repair shops for the
Danville Railroad, and at the same time with reference to the
projected construction of the Piedmont Railroad; and if an arrangement
could be made to repair the machinery of the Danville Railroad needing
repairs at this end of the road, it would satisfy the requirements and
wants of that Company.
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In closing this report, we most cheerfully bear testimony
to the active and efficient services rendered by the officers of the
Company, and particularly to those of our accomplished, energetic and
indefatigable Chief Engineer, to whom has been confided (under the
most difficult and embarrassing circumstances) the task of executing
and bringing to a close this most important work.
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Respectfully submitted,
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Lewis E. Harvie
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President
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