| Annual Report of the Richmond &
Danville RR |
| as of October 1, 1862, |
| Committee of Examination's Report |
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| Report |
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| The committee appointed by the
last annual meeting of Stockholders to investigate "the
conditions and affairs" of the Company, and report to the next
annual meeting have discharged the duty imposed on them, and
respectfully submit the following report: |
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Condition of the Roadway, &c. |
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Commercial difficulties and embarrassments, growing out
of our struggle for independence, have rendered it well nigh
impossible to procure iron for railroad purposes at any price, and in
consequence of these difficulties, the substitution of the heavy for
the flat rail along the line of the road has been necessarily
suspended during the past fiscal year, not more than three quarters of
a mile having been thus relaid. So pressing, indeed, have been these
difficulties, that it has been found unavoidable occasionally to take
up the heavy rail from the sidings and at the stations along the line,
to make such repairs on other portions of the road as were
indispensably necessary. But notwithstanding all these obstacles, your
committee are gratified to report that the road has been generally
kept in good running order under very heavy and constant use. The four
sections extending from Staunton river to Danville have been
thoroughly repaired by the introduction of new sills wherever needed,
and are now in excellent order. The residue of the track is not in so
good a condition as those four sections. On portions of it the iron is
beginning to wear very seriously, requiring both careful attention and
heavy expense to keep it in repair. It has been kept, however, in fair
running order during the fiscal year, much better in fact than your
committee expected under the heavy pressure on the road, and in the
present disturbed and unsettled condition of the country; and whilst
the increased cost of materials of all kinds has necessarily added to
the cost of repairs, your committee are gratified to state that the
road has been kept in its present condition with reasonable economy to
the Company. The perishable character of a large portion of the track,
that on which the flat rail is used, necessarily entails on the
Company a heavy annual expense. The attention of the Stockholders and
the Board has been heretofore called by this committee to the great
advantage in safety and economy of the heavy over the flat rail, and
without going again into that subject in detail, we beg leave to refer
the Stockholders to the views and tables presented in our report of
1860, where a somewhat careful and extended examination of this
subject will be found; and we repeat the opinion therein expressed,
that safety and economy both require a more rapid replacement of the
flat bar by the heavy rail, even should it be necessary to issue bonds
and suspend dividends for the purpose.
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Of course your committee do not advise the purchase of
heavy iron at present exorbitant prices, were such purchase in fact
practicable, but convinced as they are of the great advantage in safety
and economy of the heavy rail, they respectfully suggest the propriety
of setting apart a portion at least of the present large profits of the
road, in order that heavy iron for this and other purposes may be
purchased on the best terms so soon as the existing blockade shall be
raised, and our ports opened to the commerce of the world. The necessity
of this course would seem to be more manifest, when it sis remembered
that the subscription by this Company to the stock of the Piedmont
Railroad Company makes this Company in substance the manager, as it is
the owner of that line, charged with the duty and the burden of
completing it; and the true interest of both lines would seem to require
that the first favorable opportunity should be seized for the purchase
of iron for each. Your committee have not thought proper to investigate
the affairs of the Piedmont Company, as not being strictly within the
scope of their duty. They content themselves with referring to the
exhibit which will be made of that subject by the President in his
report, and will merely express the opinion that the interest of this
Company will be incalculably advanced by the completion of that road as
the property of this Company.
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Depots, &c.
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There has been no change worthy of note in the Company's
depots, either at Richmond or along the line of the road since our
last report. Those built by and belonging to the Company are generally
in reasonable repair, and your committee have no remarks or
suggestions to make concerning them. On that subject, as indeed on all
others within the sphere of his duty, your committee are of the
opinion that your accomplished Superintendent may be safely left to
the exercise of his own discretion, confident that in his hands the
interests of the Company will be entirely secure. He attended your
committee during their examination, which was somewhat protracted,
rendered them valuable aid in the discharge of their duties, and gave
attention and respectful consideration to all suggestions made to
him. Your committee deem it a fortunate thing for the Company to have
secured the services of so efficient an officer.
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The private depots at Wolf Trap, Price's Station and
Jennings' Ordinary, are very much out of order, each of them leaking
badly, and that at Jennings' Ordinary in a condition so dilapidated as
to render it utterly unfit for valuable storage, and unsafe for
storage of any kind. Goods and produce are received at these stations
by agents of the Company, and receipted for in the Company's name as
at other stations, thus making a prima facie case of liability
on the part of the Company; and if this practice is to be continued,
then these depots should each of them be promptly and thoroughly
repaired. If the Company is unwilling to repair them wholly or in
part, then they should all be at once discontinued, unless the
planters and farmers interested will themselves undertake to put them
in thorough repair without further delay, and unless there is a
distinct understanding that the Company is nowise liable for any
damage to freight at these stations.
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Whilst examining the depots, your committee took occasion
to test the scales along the line, and found quite a considerable
variation in a number of them from the true standard. The attention of
the Superintendent was called to the subject.
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Books and Accounts
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The mode of keeping the books and accounts of the
Company, both in the Auditor's office and elsewhere, is the same in
all respects which has prevailed for some years past, and your
committee have no special remarks to make thereon. The books both at
Richmond and along the line of the road continue (a few cases of new
agents on the line excepted) to be kept with neatness, and so far as
your committee could judge with accuracy. They have no change or
amendment to suggest, having made such suggestions in minor matters as
occurred to them to the agents themselves.
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The ticket system is the same which has been already
reported to the Stockholders on several occasions, and seems to your
committee to be as well calculated to secure fidelity in the Company's
agents as any that could be adopted.
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Work Shops, &c.
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The same disturbing causes which interfered with the
operations of the Board on the line of the road, have caused to a
great extent a suspension of work in the Company's shops during the
past year. Indeed, as early as the month of April last, all business
was suspended in the shops at Richmond, and the buildings turned over
for the time to the use of the Confederate Government as hospitals.
The greater portion of the machinery, tools and utensils, were removed
to the town of Danville, where valuable shops have been erected, and
are now in successful operation. The establishment of these shops at
the Southern terminus of your road is deemed by your committee a very
judicious measure, and one of both convenience and economy, and their
importance to the Company will be greatly enhanced by the completion
of the Piedmont road. They were especially gratified at the results of
a small furnace recently established by the Board at their shops, by
which valuable castings, indispensable to the use of the Company, are
quickly made at a very moderate expense, which otherwise could only be
obtained with much difficulty, and at an exorbitant price.
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A portion of the machinery and tolls which have been
removed from the shops at Richmond to Danville has been returned, and
valuable additions made by purchase, so that these shops are again in
successful operation, with valuable results to the Company, and
although not fully re-established when your committee examined them,
they were in progress of completion with important improvements, and
will very soon be in condition to render to the Company greater
facilities than those which have heretofore resulted from their
establishment.
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Your committee was gratified to learn from the President
that arrangements are now in progress to establish at these shops a
much more capacious furnace than that at Danville, so as to be able to
turn out castings on a much larger scale, equal in fact to the demands
of the road. Profitable results are anticipated from this enterprise.
It is the policy of the President and Board of Directors to make your
road as far as practicable a self-sustaining institution -- a policy
eminently wise under all circumstances, but especially so at the
present time, when we are engaged in an arduous but a glorious
struggle not merely for commercial independence and State integrity,
but for all that is dear to man -- for our homes and our hearth
stones, for our property, our liberty and our lives.
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It may be proper to add, that whilst at the shops there
has necessarily been a partial suspension of Company work, these shops
have been able to turn out much valuable work for the Confederate
Government, an account of which will doubtless appear in the
statements accompanying the President's report.
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Telegraph
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This institution is regarded by your committee so
indispensable to the safety and satisfactory working of the road, that
they would willingly incur the entire expense of keeping it up without
revenue from it, rather than be without it. But they are gratified to
announce to the Stockholders that all the benefits of the Telegraph
are secured to the Company without cost. Under the very efficient
management of Mr. Morrow, the agent at Richmond, who has had a general
supervision of the line, the profits already exceed the expenses of
the line, as will appear from the following figures:
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| Gross receipts for the last fiscal year |
$5,871.91 |
| Total expenses for same |
4,943.25 |
| Nett profit |
$928.66 |
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showing a nett profit of $928.66, being a fraction over 12 per centum
on the original cost, and this exclusive of all work done for the
Company. The business actually done for the Company at the regular
charges would amount in round numbers to $56,000, and all this is
secured without cost. Your committee regard the enterprise as a
complete success in a pecuniary aspect, and invaluable in point of
convenience and safety in working the road.
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Revenue of the Road
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The gross earnings of the road for the last fiscal year
amount to $724,430.00, showing an excess over the earnings of the
previous year of $276,970.07, and an excess of $163,525.57 over the
earnings of any year since the organization of the Company.
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The working expenses amount to $341,833.84, leaving a net
revenue of $372,519.16, being $165,924.48 in excess of the net revenue
of the previous year, and $90,190.69 in excess of the largest net
revenue ever received:
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| The ratio of working expenses to net profits is |
47.13 |
| The ration of net profits is |
52.87 |
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It will be seen, however, from the Superintendent's
report, that the ration of working expenses may be very properly
reduced to 42.33, by deducting from those expenses certain charges for
permanent improvements, amounting to $34,181.16, and thus the net
profits would be increased to 57.67.
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Financial condition of the Road
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The indebtedness of the Company to be provided for out of
the accruing revenue of the current fiscal year may be stated as
follows:
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| Balance unpaid of extended bonds |
$44,000.00 |
| One year's interest on same |
2,600.00 |
| Annuity to State of Virginia for less than 22
years from this time, payable in semi-annual installments |
42,000.00 |
| Annual interest on $200,000, guaranteed debt,
payable semi-annually until 1875 |
12,000.00 |
| Total amount |
$100,600.00 |
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From this statement, it will be seen that the entire
amount of indebtedness (properly so called) to be provided for out of
the accruing revenue of the current fiscal year is $100,600, and that
sum will wholly discharge the balance of extended bonds, with the
interest accruing thereon, leaving thereafter only the sum of $54,000,
existing debt, to be annually provided for until the year 1875, and
thereafter only $42,000.
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With a net revenue of $372,519.16, and a permanent annual
charge of only $54,000, it would seem reasonable that all
extraordinary and contingent expenses should be paid, and a margin
left for very large dividends. But your committee are decidedly of
opinion that such a step, under existing circumstances, is hostile to
the true interests of the Company.
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The attention of the Company has already been directed to
the importance of setting apart a portion of its net revenue for the
purchase of heavy iron. The rapid deterioration which we must now
reasonably expect in the flat rail on the track, (the whole of it
being from 9 to 12 years' old,) and the corresponding increase of
danger on that portion of your road must demonstrate the propriety of
replacing it with heavy rail as soon as practicable, and we think the
Company ought to be ready to enter the market for it with cash.
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But apart from this, it will be seen from the President's
report that there is another very heavy liability on the Company, not
properly listed perhaps among its debts, but which is in substance a
debt of the Company, and should be so considered and provided for by
them -- we mean the subscription to the Piedmont Railroad Company,
amounting to the sum of $1,484,000. Should the work be rapidly
constructed, as every consideration of public necessity and private
interest imperatively requires that it should be, then the payments
for the stock must of necessity be as rapidly made. It is true
that arrangements have been judiciously made by the President
and Board of Directors to borrow from the Confederate Government
$1,000,000 to meet this subscription in part. But it is also true,
that so soon ax this loan shall be effected it becomes a liquidated
debt, payable according to the terms of the loan in annual
installments of $100,000 each, commencing one year after the
completion of the road, and constituting a lien on all the works of
this Company. And it is equally true, that this sum of one million of
dollars will neither pay your subscription, (which is $1,484,000,) nor
complete the road, unless, indeed, this road shall prove to be unlike
all other roads which have been heretofore constructed. Should the
work be completed within a year, it is manifest that within that
period the balance at least of your subscription must be paid,
amounting to $484,000; for whatever may have been the estimate of the
cost of the road when the stock was taken, no practical man will say
that those estimates will or ought to apply under the existing
circumstances, when prices have gone up on 100 per centum. The
probability then is, that you will be called on not only for the above
balance of your subscription, but for a much larger sum, and this call
must be met at an early day if the public exigencies be consulted, and
the hopes and expectations of this Committee be realized. How is it to
be met? Your committee are of opinion that now, in the
"flush times" of the Company, when we are realizing large
annual profits, with very inconsiderable annual charges upon them, now
is the time to provide a sinking fund to meet these liabilities. They
think that considerations of prudence and economy should forbid us to
appropriate this large revenue to private uses, leaving the heavy
liabilities referred to to the chances of the future.
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They advise, therefore, that a portion at least, if not
all the nett revenue of the road, be set apart as a sinking fund to
meet this certain though prospective debt.
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In conclusion, your committee would beg leave to state
that the officers and agents of the Company have displayed in the
management of its affairs an active energy and wise forethought worthy
of commendation, and they congratulate the Stockholders on the
auspicious results of their labors.
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All of which is respectfully submitted.
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Wood Bouldin
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Elisha Barksdale, J.
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G. T. Pace
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