| From the New Orleans Daily Crescent |
| |
| April 16, 1861 |
| |
| Southern Pacific Railroad |
| The following letter from Dr.
Jeptha Fowlkes gives important information and useful advice to the
stockholders of the Southern Pacific Railroad. His arguments are of a
character to induce every one interested in this great enterprise to
make one more effort to place it beyond the reach of future
contingencies. |
| The mode proposed at the
recent meetings of stockholders in New Orleans and Louisville seems
the easiest way of avoiding all future embarrassment and putting the
company on a sure and permanent basis. We therefore commend the
expositions of Dr. Fowlkes to the attention of those interested, with
the hope that his advice may be promptly acted upon, as it seems to
point to the only course that can be taken under the peculiar
circumstances in which the company is involved: |
| To the Editors of the Louisville Journal: |
| Memphis, Tenn., April 2, 1861 |
| Gentlemen -- I returned last night from New
Orleans and take pleasure in giving you some of the results of our
visit. I inclose an outline of the Hon. V. K. Stevenson's address to
the stockholders, which was well received. All of the largest
stockholders are paying up the additional purchase of stock, as
recommended by the Louisville meeting of stockholders on the 15th
March. |
| They pay with the assurance of
our President and Directors that all who pay will be protected,
and all who do not must give up the enterprise. The road cannot be
built without money, and if stockholders refuse or now neglect to
supply it, it is a virtual abandonment of it. Our largest and best
stockholders, when I left New Orleans, were zealously and cheerfully
responding, satisfied that the best interests of the company and
themselves were to lop off all who have not the disposition or the
means to duly sustain and keep up this enterprise. Col. Stevenson
assumes the one dollar per share upon the 460,000 shares of stock
invested in the unsold stock will yield a sum sufficient, with the
means of the company, to finish and complete fifty more miles of road,
making in all seventy-five miles, and this will yield a large yearly
income; and with this income the road and lands of the company will
enable them to construct the road across Texas, even though no
Government aid be given to the company, and though we fail finally to
have the contracts with Messrs. E. de Bellot des Minieres, Brothers
& Co., and associates, ratified. He, however, with others, still confidently
expects Government assistance and the ratification of the French
contracts too. |
| Nothing but the times has made
this call upon our stockholders necessary, and now really
indispensable; and has created an exigency not to be avoided. If the
call is not responded to, our interests must be sacrificed. This fact
is verily so. A part of our shareholders refuse to advance money
unless all advance, and unless all do, the benefits of this
stupendous project must enure to "the few" well and able to
meet its necessities now. |
| Many have their attention
directed to the sacrifice and purchase of our road and franchises.
There is no lack of buyers. "The few" who do pay require a
sale and repurchase for such as shall pay, unless nearly all shall pay
up. To this policy our President and Directory are pledged, for
without such pledges none will pay and all would be sacrificed as a
whole. No let us examine the effects of this policy to those who pay,
and when they are well understood, all able to pay will certainly do
so, I think. We have 460,000 shares of stock with $5 per share paid
thereon, making $2,300,000 of capital stock. We have a large and
valuable property, worth nearly this sum, and prospectively the whole
of it. Now suppose that only 200,000 shares pay up the $1, making
$200,000 in cash, and the balance of stock be cut off, say 260,000
shares, out of the total 460,000, the effect will be to give this
property and all the rights and franchises of the company to the
200,000 shares which have paid. The stock then becomes theirs at once,
worth in property $10 a share, and if sold for that will produce by a
resale of the 260,000 shares cut off, the sum of $2,600,000, leaving a
company with all the present property, and this fund to go on with the
work. But if sold at present prices it will yield $1,300,000 as a
fund, without more stock than we now have out, and this fund,
added to the resources of the company, will, in the judgment of
President Stevenson, prove sufficient to build the road to the Pacific
ocean, with the munificent land grants of Texas to aid it. |
| All who can ought to pay. All
who are able and will not, ought to expect "the few" willing
to pay to incur burdens to give them protection. Money must come, and
from all, not a part. Justice requires this. Justice make us pay our
debts. Justice to Texas and her people demands the progress of this
work. "The few" cannot pay and progress, if their associates
refuse or neglect to meet this exigency; they must, however reluctant
and painful, separate and unite with those who can and will aid to
"push on the column." Once before, this company
became entangled, when a call of fifty cents a share was recommended
and promptly responded to. It produced a fund not exceeding the sum of
$150,000 towards a debt, increased by expenses to some $800,000. This
fund of $150,000 protected the company from sale and sacrifice, the
stock then largely exceeded the property of the company, and it was
reduced to a sum below the value of the company's property, and by
active exertions and persevering efforts, enough stock was then sold
to liquidate the whole debt of the company; sales of something like
$650,000 were added to the loan of fifty cents a share. This was
applied to existing debts, and no part of it was left, or could be
appropriated towards the building of the road. The loan of fifty cents
a share contributed to free and disembarrass the company, only a small
proportion, and now, those most ready to pay and assist in the
crisis, are those who bought the $650,000 of stock after its
reduction. Those who paid or loaned the fifty cents per share
generally seem to feel that to assist to pay the then debts was to
construct the road. To pay the debts then, "the few had to
do:" to meet this crisis "the few" must do it again:
the supine and indifferent must give place to parties who have the
will and the means; it is a delusion to suspect or imagine that the
Southern Pacific Railroad will build itself, and the sooner those who
expect it wake up to the fact, the better for the enterprise and their
own interests. |
| The fewer who pay, the greater
is their advantage pecuniarily. Before I left New Orleans, the large
holders of stock present at the meeting on the 25th ult. became
sensible of the soundness, necessity and benefit to themselves and the
enterprise of Col. V. K. Stevenson's policy; they were cheerfully
responding, and some 110,000 shares had been arranged as required by
the terms of the Louisville meeting of the 15th of March. There is no
difficulty to supply, by a resale of cut off stock, the deficit of
defaulters in this policy. No advantage can result to stockholders
from this great work without money to progress with it, and it is due
to those able and willing to pay, by those unable or unwilling to pay,
to surrender it to those able and willing, inasmuch as no benefit can
flow from inaction, inability and incapacity to build the road. It is
due to Texas and her people that we abandon the work or prosecute it.
It is seemingly hard for stockholders to lose what they have already
paid, but this results from other operations, when parties prove
inadequate to their successful prosecution. I sincerely regret myself
to see loss overtake any shareholder if in my power I would protect
him; but I shall do well to protect my own stock, and to do so, I have
forced sales of real estate, and am still forcing sales,
determined to protect my stock at whatever sacrifice apparently I find
essential to protect it. I hope to live to see the stock and bonds of
the Southern Pacific Railroad sought for in every European market as a
favorite investment. I address you this for the benefit of the
stockholders in Kentucky, always ready, liberal and just, that may
fully realize the necessity for action and be also protected. |
| Truly your friend, |
| J. Fowlkes |
|