AR, VC 10/1/1864 P

Annual Report of the Virginia Central RR
as of October 1, 1864,
President's Report
 
To the Stockholders of the Virginia Central Railroad Company
 
   The past fiscal year has been one marked by the extraordinary difficulties and embarrassments. The history of this Company has doubtless not been forgotten, when the construction of the road was trammeled by the want of public confidence, by financial weakness and legislative opposition; but whatever trials and troubles were presented at that time in its construction, they were met and overcome with greater ease than the impediments which were encountered ruing the past year in the administration of its business. Circumstances attending the war had produced an entire change in the mode of supplying the Road with wood, cross-ties, and lumber generally. Formerly, contractors vied with each other in furnishing these supplies, and the Company had no trouble in providing for all their wants at reasonable prices, and in any quantities they though proper; and without any difficulty, negro labor was hired to keep the track in order. But as the war progressed, the negroes in the country bordering on the Road, either ran off, or were forcibly abstracted by the enemy; the teams were impressed by the Government, and the contractors were enlisted in the army. Before the Company could adapt itself to this changed condition, the Road as become almost striped of wood and cross-ties. During the late winter, for the want of timber and fuel, and of labor on the trains and in the shops, the transportation became extremely precarious and the supply of Gen. Lee's army became a source of painful anxiety more easily conceived, than expressed. During the year, however, arrangements were made which have secured for the time much relief. The Confederate Government, becoming convinced of the necessity of giving the Company some aid, detailed a number of men on condition that they would contract with the Company to furnish wood and ties, and thus a good supply for the present was procured; but we regret to say that a large number of our ties and some wood was destroyed by the enemy in their frequent raids on the Road. Congress passed an act, exempting from military duty a certain number of men for Railroad service, and thus mechanics were obtained for the shops, although they have been taken from on occasions of emergency, and our machinery has suffered much consequence thereof.
Raids of the Enemy
   During the present calendar year, the enemy have been on this Road at eight different times and places. They have destroyed in the aggregate about eighteen miles of track, and burned a large amount of property, details of which are contained in the report of  the Superintendent.
   On the 29th of February, Gen. Kilpatrick passed by Beaver Dam in his march towards Richmond, and burned all the Company's property at that place, but did very little injury to the track.
   On the 9th of May, Gen. Sheridan, making another advance on Richmond, reached Beaver Dam at the time Gen. Lee commenced accumulating stores there; several unloaded trains were surprised, two engines were disabled, and twenty-nine cars burned, the wheels of which were rendered entirely unfit for use in consequence of the excessive heat produced by the burning bacon and other articles which were not unloaded when the enemy arrived. In their retreat from the vicinity of Richmond, the Chickahominy bridges and some trestle work were burned.
   On the 20th of May, a small raiding party burned the trestle bridges near Hanover Court House, and one car, found at that place.
   On the 26th of May, a part of Gen. Grant's army occupied the Road between Anderson's and Hewlett's; while there they tore up 4 1/2 miles of track, burning the ties and bending the rails, many of which will be unfit for use until they are re-rolled.
   The trestles at Hanover Court House, which were destroyed on the 20th of May, had just been rebuilt, when the were again visited on the 1st of June, at which time they destroyed 2 1/2 miles of track, and burnt the South Anna bridge, this being the third which has been destroyed over that stream.
   On the 5th of June, Gen. Hunter burned all the Company's buildings at Staunton and Fishersville, the bridges between those points, and nine west of Staunton, including that at Goshen, and destroyed three miles of track.
   On the 12th of June, Gen. Sheridan, having passed up the north side of the North Anna River, from the direction of Hanover Town, crossed into Louisa and destroyed about three miles of track near Trevillian's.
   On the 26th of September, Gen. Sheridan's cavalry came to Staunton, and thence to Waynesboro', on which occasion all the Company's property in Waynesboro' was burned, and one span of the bridge at that point destroyed.
   By the activity and energy of Wm. G. Richardson, Road Master, his assistant, J. T. Maynard, and Geo. Thomason, principal Road Carpenter, and other employees of the Company, the damages to the Roadway, as they occurred, were repaired in a very short time on the whole line, thus preventing any serious interruption to the business of transportation. The Board have thought it unwise to rebuild, at the present time, any of the depots which have been burned, except that at Staunton, which seems to be indispensable.
Revenue and Expenses
Gross receipts for the fiscal year, ending 30th September -- see Treasurer's Statement, marked C $2,652,869.09
Expenses of administration, see Table C 2,212,122.38
Net revenue, or excess of gross receipts above expenses of administration $440,746.71
Out of this sum has been paid the interest on the debt of the Company, which has been called for $56,474.47
Dividend on the 15th of March 98,652.62
Tolls due to the State for the use of the Blue Ridge Railroad and Tunnel 64,984.49
Sinking fund for redemption of funded debt, due in 1872, and in 1880, and dividend bonds due 1865, '66 and '75 30,000.00
Sinking fund for redemption of debts due in 1884 * 25,000.00
Sinking fund for redemption of loan from the State 2,430.35 $277,541.93
Leaving a net balance of $162,204.78
   An amount of interest on the debt, about $20,000, has not been called for, and remains unpaid.
   *This sum is a new appropriation, ordered by the Stockholders at their Annual Meeting in 1858, on the recommendation of the Board. By reference to the Report of that year, pages 16 and 17, it will be seen that a continuation of the plan of a sinking fund therein explained, will extinguish the whole debts of the Company in 1884, which is the maturity of the last.
   The question of declaring in September the regular semi-annual dividend, was fully considered by the Board, but it was omitted in consideration of the very heavy damages inflicted on the Road by the enemy, some of which are not fully repaired, and the possibility of their repetition.
   A superficial view of the subject might induce the expectation that from an amount of gross receipts, exceeding two and a half millions of dollars, a larger available net balance ought to have been realized than that shown by the above exhibit; but it will not be a matter of surprise when the amount of extraordinary expenses and the enormous increase of prices are considered, together with the fact that when the Road was stopped, revenue was lost, while expenses continued, and that a large proportion of the business of the Company has been done for the Government at rates which did not pay expenses. On mature reflection it can scarcely be considered extravagant to say that the cost of operations this year are ten fold what they were before the war, when, as appears by the annexed table taken from the Report of the General Superintendent*, that the prices of many leading is articles of expense have increased since the year 1860, from thirty to fifty fold, and when it appears, by the vouchers of the Company, that the cost of a single barrel of oil this year, exceeds, by upwards of $600, the whole cost of "Oil, Tallow, Lard and Grease for the year 1862."
   The fact that so large an amount of the gross receipts have been consumed in expenses, is accounted for in part by the increase of prices and occurrence of many extraordinary expenses, viz: the payment of $66,666.89 to the Richmond, Fredericksburg & Potomac Railroad Company, in settlement of their suit of long standing. $50,292.97 for repairing the Brooksville Tunnel and rebuilding Cowpasture bridge, the cost of two locomotives, $44,594.05, which amounts to nearly five per cent of the capital stock of the Company, to say nothing of reconstructing eighteen miles of track torn up by the enemy. But it is proper to state that the consumption of so large a proportion of the gross receipts does not so much prove the greatness of the expense as the smallness of the receipts, or rather the inadequacy of the rates of charge. The expenses of administration have not been too large, but the charges for Government transportation, which constitute the large portion of our business, have not been remunerative, and consequently the receipts have been too small. From a calculation made by the Superintendent, if the whole business of the Company had been done at the rates paid by the Government, instead of the small profit now exhibited on the year's operations, the Company would have been brought in debt nearly $275,000. But the Board are glad to say that the Government has at last become convinced of the injustice of thus imposing this indirect double tax, and have agree, for the future, to allow an increase of rates.
Comparison of Prices
1860 1864
Clothing and Subsistence of a negro $60.00 $1,870.00
Iron castings and wrought iron .04 1.00
Brass    " .34 4.50
Car wheels, each 15.00 500.00
Oil and tallow, per gallon .90 50.00
Coal for shops, per bushel .12 2.60
Lumber, per 1,000 feet 12.50 100.00
Shovels, per dozen 10.50 300.00
In 1862, oil used 1,227 gallons
      "      tallow used 1,934 pounds
      "      lard used 4,586 pounds
      "      grease used 7,488 pounds
Cost of a bbl. of oil, 42 1/2 gallons, at present price, $100.00 per gal. $4,250.00
Cost of barrel 10.00
4,260.00
Cost of oil, tallow, lard and grease used during the year 1862 3,654.48
$605.52
   The result of the operations of this Company or the past year, has vindicated at least one of the Railroad Companies of the Confederacy from the charge of growing rich since the commence of the war, by extravagant charges. A fair and unprejudiced investigation of the subject will show that the Stockholders of Railroad Companies, generally, are probably the only persons in the Confederacy whose capital has not been productive since the war commenced. This Company has not declared more than 7 per cent per annum at any time in Confederate paper, and this year only 3 per cent.
Whole Debt of the Company
Bonds secured by mortgage, viz:
Due in 1872 $206,500.00
Due in 1880 100,000.00
Due in 1884 983,000.00
Debt to the Commonwealth, on account of loan authorized by the Legislature 210,000.00
$1,499,500.00
Deduct investment in Sinking Fund (see table A) 214,736.13
Leaving total mortgage debt $1,274,763.87
Dividend bonds due in 1865 $17,001.00
       "           "        "      1866 23,188.00
       "           "        "      1875 82,660.00
122,849.00
Floating debt 262,540.96
  $1,660,153.83
Deduct debts due the Company $849,427.34
Cash on hand 30th September, 1864 27,334.87
876,762.21
Leaving total liabilities 30th September, 1864 $783,391.62
   The cost of the Road and equipment remains without material change. The whole cost uo to the present time, as stated in the Treasurer's Report, is $5,937,307.25.
Brookville Tunnel
   During the last fall, a defect was discovered in the construction of the arch of this Tunnel, and during the winter serious apprehension were felt lest it might give way before the necessary support could be introduced. It is gratifying, however, to report that after consultation with engineers of eminent ability, our Chief Engineer, H. D. Whitcomb, adopted a plan for strengthen the work which seems to promise entire security, and it has so far progressed as to quiet all fears on the subject.
Road Way
   The general condition of the Road is better than would be expected from the heavy service to which it has been subjected. For details on this subject, reference is made to the report of the General Superintendent.
   The Road between Staunton and Goshen having been much injured by the enemy, and all the bridges burned, the Board was doubtful as to the expediency of repairing it at the present time; but the Government desiring it to be done, and wishing to use some iron from the west end of the Road, an arrangement has been made by which it is to be done at its expense, on terms and conditions which are deemed satisfactory for the interests of the Company.
Difficulty with the Postmaster General
   An address of the President of this Company to the Stockholders has been published, explaining the causes of the controversy on this subject, which induced the Postmaster General to suspend the transportation of the mails on this Road. although that address has probably reached the hands of most of the Stockholders, it is proper here to say that the course pursued by the Board insisting on certain modifications of the old contract is not to be regretted, as the agitation of the subject caused a thorough consideration on the part of the Postmaster, which resulted in satisfying him that some changes were necessary in the terms of the contract, and accordingly, in a commendable spirit of concession, such modifications as met the views of the Board were made, and the whole difficulty has been adjusted.
Importation of Supplies
   The Stockholders were informed at the last meeting that the Board had united with several other companies in the importation of articles of necessity which could only be obtained in the Confederacy at very great, and some of them not at any price, except from those who had imported through the blockade. Though some of the articles were captured, in amount about one-fourth of the whole purchase, those received, if valued at present prices in this country, are worth more than the cost and charges of the whole, and a portion are still in Bermuda.
   The articles imported were brought of Messrs. Charles Joyce & Co., of London, and the bonds for the amount, $11,714.18, are payable in October, 1865. Thirty-five thousand dollars of Confederate eight per cent bonds were deposited with them as collateral security. The first and second installments of interest have been paid by the proceeds of a joint shipment of cotton, leaving a balance due the importing Railroad Companies of L167 12s 5d, a sum nearly sufficient to pay the interest to the 1st of April, 1865, on the joint purchase.
   The sum of $201,000 has been invested by this Company in the Confederate States cotton coupon loan, at a premium of 50 per cent. Giving $134,000, or one hundred and thirty bonds, of $1,000 each, redeemable in 1883, paying six per cent interest per annum, either in specie, or cotton at 12 cents per pound, at the option of the Government.
   The interest if paid in cotton would be 500 pounds for each bond or $1,000, or 67,000 pounds of cotton per annum. One year's interest was due on the 1st of June last, but taking it for granted that the cotton would be tendered, in view of the difficulties of shipment abroad, it was thought best to permit the interest to remain in arrears. This outlay, though made for the special object of obtaining specie or cotton to pay the bond for our importation, is a valuable investment, looking to the future interests of the Company. The Board forbear to make any specific estimate of its value, as the many contingencies to which it is subject would make the result uncertain, but it does not need any specious array of figures to show the value of these bonds. When the interest and principal is realized, without taking into account any premium on exchange, the Company will have received 1,340,000 pounds of cotton, if paid in that medium for the interest, and at their maturity in 1883, the principal of the bonds, $134,000, will be paid in specie or cotton at 12 cents per pound.
   By order of the Board
E. Fontaine, President
November 8, 1864

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