| 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. |
|