AR, SC 1/1/1863 P

Annual Report of the South Carolina RR
as of January 1, 1863,
President's Report
 
Report of the President and Directors
 
Office of the South Carolina R. R. Co.
Charleston, January 20, 1863
 
To the Stockholders of the South Carolina Railroad Company
 
Gentlemen,
   The Board of Directors have the honor respectfully to submit a Report of the operations of the Company for the year ending the 31st December, 1861, and of its financial condition at that date.
   The earnings have been as follows, viz:
From Freight $807,832.80
    "    Passage 986,758.26
    "   Other sources 45,622.97
$1,840,214.03
The operating expenses have been 678,984.70
Leaving a balance of earnings of $1,261,229.33
Against this sum there have been charged for interest, damages, etc. $166,827.58
Dividends 465,552.00 $632,379.58
Leaving as net income for the year $528,849.75
   This surplus, which is considerably in excess of any previous year, perhaps requires a few words of explanation, that there may not be any misapprehension of its real nature. It is customary out of this fund to make the annual appropriations for the replacement of wear and tear; and the amount of these appropriations, though of course ever varying, may be estimated to average about $120,000 ro $130,000. In 1861 a very cautious policy was forced upon the Board, in consequence of the heavy reduction in the business of the Road, and the great uncertainty respecting its future extent which then prevailed. In that year, therefore, but a trifling charge was made to this account. In 1862, though the same causes did not influence the managers of the Road, others equally powerful did, for, as is stated in the Report of the General Superintendent, it was found impossible to procure the needed material in any quantities, even at most extravagant prices -- and the material in these cases was "Locomotives," "Cars," and "Rails."
   It is thus seen that in the sum now at the credit of Surplus Income are comprehended the appropriations for the replacement of two years wear of Locomotives, Cars, and Rails -- only not withdrawn because of an inability to apply them, but of course liable to be as soon as the opportunity is afforded.
   The Income of the year is largely in excess of any previous year. In comparison with 1861, the following striking differences are shown, viz:
1861 1862 Difference
Gross Income 1,161,742.18 1,840,214.03 678,471.85
Expenses 757,164.26 845,812.28 88,648.02
Bal. of Earnings $404,577.92 $994,401.75 $589,823.83
   It is very gratifying to the Board to be able to present such profitable results to the Stockholders; but it is their duty, also, to add a caution against calculations upon similar results in the future, when obviously the present exhibit is due to the peculiar condition of the country.
   The Board have, however, no apprehensions about the Income. It is already demonstrated that during war the admirable location of this property will insure it amply remunerating employment, while a return of peace would bring with it a tide of prosperity whose swollen proportions would tax their best efforts for accommodation beyond all previous experience.
   The Board would greatly rejoice to be equally at ease with respect to the condition of the Company's Machinery and Rolling stock generally. They have to report a considerable deterioration in this department. The demands of the Government and of the public have been, through out this year, much in excess of our ability, and in consequence the Locomotives and Cars have been subjected to a strain, which could have no other result than that we have mentioned above, more particularly, when at times they were taken from us and sent upon connecting roads, and when, also, there was great difficulty in procuring necessary labor and material.
   Of the large number of Locomotives reported in the tables from the General Superintendent's office last year not two-thirds can now be relied upon for even moderately effective service, and this greatly reduced number is with difficulty maintained by the constant and vigorous efforts of the mechanical department.
   The Board are fully impressed with their responsibilities in this connection; with the vast importance of maintaining in a condition of the greatest possible efficiency property so essential, apart from other considerations, to the convenience if not to the safety of the country. They propose to leave untried no measures which promise success in procuring whatever may be necessary.
   They have placed at the disposal of the General Superintendent ample funds for present purposes. They have authorized contracts with parties they have the right to consider reliable for the delivery here at an early day (say sixty days) of a large amount of valuable material from abroad. They have adopted still other measures, and, these failing, contemplate further movements to obtain, if practicable, whatever may be needed.
   The Cars of the Company, the Board are pleased to know, have sustained less loss than they could have expected. So largely used as they have been in the most trying of all services, and so frequently scattered in all directions over connecting roads in military service, as compared with last year their condition is, of course, much reduced, but with care and such repairs as they can obtain readily from the shops, large and profitable service can be performed by them.
   Of the Road the Board feel great satisfaction in the favorable Report of the General Superintendent. It is considered in good condition generally -- much better than could have been expected. It is nevertheless very evident that very soon to this department, also, must be given the most anxious concern of the Board, and they frankly confess in advance the embarrassment which will be occasioned them, unless the Government will undertake the supply of rails, in connection with some concerted action of the Railroads of the country.
   The wants of the departments thus hastily reviewed for the ensuing year may be estimated, so far as it is possible to estimate at this time, as follows, viz:
In Material $75,000
Locomotives 150,000
Cars 100,000
Structures 25,000
$350,000
   For more particular information, and for much interesting detail, the Board would refer to the Report of the General Superintendent accompanying.
   The very full and satisfactory statements of the Auditor will convey a faithful exhibit of the financial affairs of the Company. The Board invite the attention of the Stockholders to them. This department of the Company they regard in a condition of decided and increasing strength; and with prudent management, and a steady resolution to reduce as fast as practicable the large debt which has so long preyed upon the vitals of the Company, a position of prosperity will in a short time be developed, amply compensatory of any self-denial the Stockholders may choose to impose.
   The Bond debt of the Company is now stated at $3,104,500. A comparison of it with that at the same period last year will show an increase of $465,666.33. The increase has been occasioned by an issue during the past year of bonds to the extent of $450,000, for the purpose of paying the subscription to the Augusta and Milledgeville Railroad {the Milledgeville RR}, the obligation of the Company to the City Council of Augusta, and of extinguishing the bills payable and other floating liabilities of the Company. These bonds have been arranged to fall due in annual succession in such amounts as will not be likely to interfere with the usual movement of the Company's affairs. If from the debt as above stated the securities and other assets usually applied to this object be deducted, the balance of indebtedness will stand at $2,104,059.74; and in comparison with the same period last year will show a reduction of $405,552.02.
   With very abundant resources in the currency of the country, it was found impossible at the usual time to procure the means of remitting to the foreign creditors of the Company the January interest due on the Sterling bonds of the Company. Our agents in London have been written to with full explanation of the difficulties in procuring exchange here, and have been furnished with a statement of the Company's business and condition for the information of all interested, and there is good reason to believe that all reasonable parties are quite satisfied to accept the condition of the country as a sufficient explanation of the circumstance.
   In view of the fact that a large portion of the Company's debt is rapidly advancing to maturity, the state of its finances must annually assume an aspect of great and growing interest to the Stockholders. In that connection, however, the Board have at this time no special measure to urge upon them of a preparatory nature.
   The Board have to announce that on the 20th October last, Mr. John Caldwell, who for many years had ably and acceptably presided over the affairs of the Company, resigned his position, and that they elected Mr. W. J. Magrath to the vacant seat for the unexpired term.
   The Board are deeply pained to be compelled further to announce their loss by death of one of their oldest and most valued associates, Mr. Andrew Wallace. The Board bear willing and grateful testimony to the wisdom of the counsels which his ripe judgment and large experience enabled him to bring to their assistance and support, and they could not hold up to his successor a brighter example of unselfish devotion to the interest of the Company.
   The Board before concluding this report discharge a most agreeable duty in acknowledging their obligations to their able and worthy General Superintendent for the skill, judgment, and energy exhibited in the management of the Company's affairs during a period full of perplexing cares and arduous labors.
   All of which is respectfully submitted,
W. J. Magrath
President

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