AR, SA&G 5/1/1863 P

Annual Report of the Savannah, Albany & Gulf RR
as of May 1, 1863,
President's Report
Office Sav’h, Albany & Gulf Rail Road Co.
Savannah, May 1st, 1863
   The President and Directors respectfully present the Ninth Annual Report upon the affairs of the Company for the year ending May 1st, 1863.
   Subjoined will be found the Reports of the Superintendent, Treasurer, and Engineer, to which reference may be made for any information desired more in detail.
   The following consolidated statement of the total receipts, and of the total expenditures, ordinary and extraordinary, will afford the Stockholders a complete view of the financial operations of the Company for the past year, and their results. By ordinary expenditures is to be understood, such as have related to the regular operation and business of the Road – by extraordinary expenditures, such as have gone to the accounts of re-construction, new extensions, liquidation of floating liabilities and interest on the same, interest on bonds of the Company and on guaranteed stock, and the purchase of a machine-shop at Thomasville.
Cash on hand 1st May, 1862 $13,149.30
Received of G. Gregor, amount of outstanding Bills 1st May, 1862 11,885.99
Received for Capital Stock paid in 900.00
        "      for Confederate Bonds and accrued interest 1,141.87
        "      for Mail Service 8,783.06
        "      for Passage the past year 264,033.09
        "      for Freight       "          " 245,354.97
Less amount due by Confederate States $66,614.83
   "   Freight Bills uncollected 15,914.79 82,529.62
     Total Cash Receipts $462,718.66
Ordinary Expenditures
Salaries $4,060.44
Repairs of Road 57,660.77
Maintenance of Motive Power 63,211.84
Current Expenses 38,881.59
Goods Lost 1,547.38
Stock Killed 5,373.60
Printing and Stationery 3,924.54
Repairs of Bridges 33,178.37
Maintenance of Cars 35,274.00
Incidental Expenses 9,568.03 252,680.56
Extraordinary Expenditures
Stock Atlantic & Gulf Rail Road Co. $20,100.00
Bills Payable 103,472.66
Interest Account 3,329.49
Filling Altamaha Trestle 6,707.50
Florida Branch Road 3,480.03
Improvements Savannah Depot 3,361.72
Filling Ogeechee Trestle 4,266.60
Extension to Lamar's Canal 3,025.00
Machine Shop at Thomasville 8,000.00
Connecting Line to Central Rail Road 1,867.04
Interest on guaranteed 7 per cent Stock 1,724.30
Interest on Bonds 19,369.00 178,703.34 431,383.90
     Cash on hand $31,334.76
   Thus it will be seen, that the actual cash receipts of the Company for the past year, amount to $462,718.66, including $13,149.30 cash on hand May 1st, 1862, and $11,885.99 of freight collected since that date. There is due by the Confederate Government $66,614.83. Freight Bills uncollected on the 30th ultimo, amounted to $15,914.76, which will pass to the account for 1864. The total earnings of the Company then, including all receipts and credits, amount to $545,248.28.
   The expenditures having been exclusively cash should be balanced against the actual cash receipts. These, ordinary and extraordinary, amount to $431,385.90, which leaves cash on hand $31,334.76. The ordinary expenditures, as before defined, amount to $252,680.56, or $65,279.61 more than for the previous year. This large increase is explained by the great advance in the prices of material and labor, and by the necessity of laying in large supplies of subsistence, clothing, and of numerous necessaries in anticipation of any scarcity of material and increasing elevation of price.
   The report of the Superintendent justly urges upon your attention the deficiency in the amount and kind of the Rolling Stock of the Company. The causes of this serious misfortune grow out of the total dependence of the country upon foreign production for nearly every species of railroad material. With iron, coal, and lumber abounding within the limits of the Confederacy, yet from the very institution of Railroads in the South until the declaration of an independent government, every article necessary to railroad equipment was purchased from Northern works. Freight cars, it is true, were constructed at home, but every bolt and rod, every wheel and axle, every nail, spike and screw, every sheet of tin, every ounce of solder, every gallon of oil and every pound of paint came from the workshops and factories of the North. Locomotives and passenger cars came from the same source of supply, or were constructed at the South at greatly enhanced cost. With our Ports blockaded in the onset of the existing war, by the same people who have proved themselves not merely the political, but the industrial enemies of the South, it became impossible for the Company to obtain proper or sufficient material for increasing its means of transportation. There was neither time before the outbreak of hostilities to make arrangements for importation, nor, indeed, was it anticipated that in despite of the total suspension of Commerce, the freightage of the Road would be increased, but that on the contrary, it would be so much diminished, as not to impose any considerable burthen upon the Rolling Stock then at command. The experience of 1861 appeared to sustain the correctness of these views, for the earnings of the Road from freight for 1861 amounted to $58,301.02 against $97,491.80 for 1860, or nearly $35,000 less. There was no reason apparently to anticipate that the experience of 1862 would differ from that of 1861, but when it was discovered that Southern Georgia and Florida were supplied with an abundance of cheap provisions from the crop of last year, the inadequate trains of the Company soon began to stagger under the large purchase of the government as well as of the people, the stations became surcharged with freight, and the necessity for an increase of transporting power became only too obvious. The Report of the Superintendent informs the Stockholders of the measures adopted to add to the number of Locomotives and cars, how far these measures have been successful, and what provisions are being made for the future.
   It is no exaggeration to assert that the earnings of the Company for the past year would be one-half greater, could the general supplies of the country have been brought over the road with ordinary dispatch and promptness. 162,040 bushels of corn have passed over the Road, principally since the month of July last, and it is highly probable, that had the Company possessed the means of running daily freight trains, nearly treble the quantity of this article alone would have been transported. The tri-weekly trains, with one irregular train, have been worked up to their full capacity, and yet it is estimated that a very large amount of corn, chiefly for government use, is still to come forward. This has been lately delayed in its movement, partially by the obstruction of transportation beyond Atlanta, but principally because the teams of the producers are now engaged in the fields and cannot be used for transportation to the Road until the new crop is laid by. Hence, the period of the year, which is usually an easy season of transportation, is likely to present a considerable business to the Road.
   The rates of freight have been advanced, since the 20th ultimo, 100 per cent over the existing rates of the Company, or 33 ˝ per cent. over the then existing rates. This step was not taken without much hesitation, but it was rendered necessary by the heavy appreciation in the prices of labor and provisions, and of every article of railroad material – an appreciation especially burthensome to an enterprise, which has as yet been unable to accumulate any reserved fund and is without any considerable net income. The advance in the value of railroad material varies from three to twelve prices, or from 20 to 1100 per cent. while the advance in the price of labor is from 40 to 100 per cent. Some essential articles of furniture and equipment cannot be procured at any price. In the meanwhile, the Rolling Stock must undergo rapid wear and tear under the extraordinary service to which it is subjected, and a portion of the rail, which has now been laid about eight years, begins to show the necessary results of long continued use. To meet the cost of the swollen value of all material necessary to maintain the current operations of the Road and its equipment, and to provide a fund for the future additions necessary to sustain increasing transportation, as well as for other expenses incidental to the period, the Board of Directors have been forced to double the original rates of freight. The most flourishing institutions of the South have been driven to the same step, not it would seem from the same degree of necessity which compels this Company, but to enable them to realize their customary dividends, as well as to meet the cumulated values of the times. Unwilling however, without more pressing necessity, to impose any restraints upon travel, the Board of Directors have not changed the rates of passage, which are now materially lower than on some of the principal thoroughfares of the State.
   The Report of the Chief Engineer, Mr. J. T. Stone, presents the condition of the Florida connection, which on the Georgia side of the Florida boundary, 25 ˝ miles in length from Station 12, (Lawton), is complete and ready for the superstructure, except 1600 feet of low trestle, (about 13 ˝ miles from Lawton) which can be readily constructed before the track can be extended to that point. The Florida portion of the connection, 22 miles in length, is completely graded and bridged, (with the exception of the Bridge over the Suwannee River, which is about to be commenced) and is entirely furnished with cross ties.
   The work upon the Georgia side of this connection was commenced in the month of April 1861, by Mr. F. P. Holcombe, who contracted to finish it, including the superstructure, by or before the first of July 1862, but the grading and bridging were not completed until the latter part of March last, as it was not deemed necessary to urge the work, when it was not in the power of the Company to obtain iron for the track. Much attention, however, having been recently drawn to the importance of more prompt and certain communication with the State of Florida, as a military as well as commercial measure, it is hoped that this valuable connection may be completed at no distant day.
   The whole of this work was contracted to be done by Mr. Holcombe for stock of the Company, guaranteeing annual interest at seven per cent. payable semi-annually on the first of May and November. Scrip for $70,400 of this Stock has been issued, sixty-nine scrip for $100 each, one hundred and twenty-nine scrip for $500 each, convertible into the general Stock of the Company at the option of the holder. To the sum of $70,400 should be added $4232.15 for cost of engineering, and $94.15 cash payment to the Contractor on account of fractional estimates making the sum total expended for the Florida Branch to date, $74,792.28, or $2,930.45 per mile, for grading and bridging (except 1600 feet), for cross ties for about one mile of road, and for cost of engineering. At peace prices for superstructure, the cost of the Road per mile would be less than $8,500.
   The special attention of the Stockholders is called to the proposed consolidation of the Stock of this Company with that of the Atlantic & Gulf Rail Road Company, and as the following extract from the recent annual Report of the later Company affords a brief and sufficient explanation of the objects of the measure, it is here introduced.
   "Such have been the intimate and apparently inseparable relations of the Atlantic & Gulf and Savannah, Albany & Gulf Rail Road Companies, that a consolidation of the two has for sometime past been a subject of the most earnest consideration to the Directors of both companies. Finally in November last, a Bill was prepared with this object to be laid before the General Assembly. Unfortunately before any Legislative action could be taken the General Assembly was adjourned, and the subject deferred to a future session. The expediency and propriety of the measure can scarcely admit of argument. The object of the two enterprises are practically one and the same, the point of separation of the tracks of the two railways is literally mathematical, one being merely a continuation of the other. The two lines are operated with the same Rolling Stock, and in every respect, admissible under the conditions of distinct charters, the two companies bear to each other the actual relations of an intimate partnership. The disadvantages of such relations, however unimportant, so long as harmony of feeling and strict agreement of views as to their common purposes exist between the companies, may, at any time and upon trivial occasion seriously impair the prosperity of both. As it is, the present arrangement of their affairs demands the nicest adjustment of accounts of the most complicated character, and upon a basis, which, though carefully just and equitable in its provisions for both, may not always prove satisfactory to one or the other, and from which it may be impossible to make any acceptable change. If it be of importance to reduce the common interests of the two companies to a fixed and unchangeable harmony, it would seem most judicious to consolidate them at once into a permanent, legalized unity.
   "Economically considered, such an union presents the most obvious and important advantages. Dissever the two Companies, and each would be driven to the heavy expenditure necessary to purchase and maintain separate equipments of all kinds, (amounting absolutely to double the quantity necessary for the operation of both, when working together,) and to the maintenance of separate corps of officers, clerks, and depot operatives. Upon the Atlantic & Gulf Rail Road Company, would devolve the excess of the burthen just now named, while that company would be forced to an enormous expenditure for adequate warehouses, offices, shops, and fixed machinery, at one or the other of its termini, or both. All this expenditure so readily avoided and seemingly so unnecessary to be incurred, amounting to perhaps a little short of a million of dollars, would be better devoted in carrying out the greater objects of both companies and in extending the Road to a point where its successful results will be beyond all mere speculation. The Atlantic & Gulf Rail Road is not now the great thoroughfare of commerce and travel for which it was projected, and cannot become such, until its lateral connections are fully established and it attains its terminus on the Gulf of Mexico.
   "Can such a consolidation prove injurious to either one Company or the other? The Savannah, Albany & Gulf Rail Road Company stands entirely cleared of every dollar of floating liability. The Atlantic & Gulf Rail Road Company stands in the same fortunate position, even while its road is still in process of construction, all of its grading completed and paid for, excepting about six and a half miles, and with abundant means to meet the cost of the remainder and to go far towards meeting the expense of the superstruction of the whole division between Thomasville and Bainbridge. The funded debt of the Savannah, Albany & Gulf Rail Road Company is $300,000, payable in 1879, and amply secured by the endorsement of the city of Savannah. The funded debt of the Atlantic & Gulf Rail Road Company amounts to $500,000, payable in 1881. With no floating liabilities existing against either corporation, and with every prospect of an easy liquidation of funded liens which cannot embarrass the profitable operations of either Road, there can be no fundamental financial obligation to an union of the two institutions.
   "Nor is there any condition in the charter of either corporation in conflict with such a proposition, so far as their separate interests are concerned. If there be any, let it remain unchanged so far as it may pertain to either Company. If the State has been careful in guarding her interests, and those of her citizens, in the charter of the Atlantic & Gulf Rail Road Company, let the protectives she has established in granting the charter remain untouched. They do not and cannot endanger the welfare of either Company, nor embarrass the accomplishment of the great objects for which both were created. In fine, the proposed consolidation can only result in a concentration of capital for the public good, in the enhancement of the common credit of both institutions, and in the harmonious pursuit of a policy which no dissensions could be permitted to weaken, and which is now bringing and will continue to bring abundant prosperity to every interest within its influence.
   Subjoined to this Report is the Act for the consolidation of the Stock of the two Companies, passed at the recent extra session of the General Assembly, which is not, however, of force until accepted by the stockholders, and until the terms and conditions of the consolidation are determined by the Boards of Directors and by a majority of votes of the Stockholders in each Company. The period of time which has elapsed since the passage of the Act has been too brief, to permit either Board of Directors to give to a plan of consolidation that degree of deliberation which is due to a measure of so much importance. It is therefore respectfully suggested, that the present annual meeting, when it adjourns, shall meet again on the third Wednesday in June next, to afford the Boards of Directors sufficient time to mature and adjust a plan of consolidation, and present the same for the consideration of the Stockholders.
Respectfully submitted,
John Screven