| From the New Orleans Times Picayune |
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| April 2, 1861 |
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| The Southern Pacific Railroad Company |
| Is there a stockholder in New
Orleans or elsewhere who is reluctant to make the small advance required
of him in order to preserve this company, his hesitancy must arise from
a want of confidence in its management. He cannot distrust the ultimate
result as a profitable speculation, if correctly managed. |
| Presuming that there may be
those who are not advised as to what has been accomplished by the
present managers, we propose a brief recapitulation of this curious and
certainly not uninteresting history. |
| It is doubtful whether a
greater exhibition of talent, skilful management and financial ability
can be found on record. |
| When Dr. Fowlkes became
President of the Southern Pacific Railroad Company, it was a sold out
concern, its property having passed out of the hands of the great body
of the original stockholders to others, who maintained their title to it
by a sale under a deed of trust. To get possession of it again, required
a contest at law, and the litigation, when commenced, was seemingly
endless. In addition to this, the State of Texas had instituted suit for
forfeiture of charter, with every prospect that it would terminate in
the annihilation of the company. No one, at that time, knew, or
pretended to know, the amount of stock out, or the indebtedness of the
company. The books and papers exhibited a chaotic mass, requiring months
of investigation, patience, and labor, to properly regulate them. |
| Now, let it be borne in mind
that the party in possession of the road and property were composed of
leading and influential citizens of Texas; that the State suit was
ordered by the Governor, who was determined, if possible, to have the
charter forfeited. Add to all this, the company was regarded as
bankrupt, pecuniarily and morally. |
| What other man than Dr.
Fowlkes would have taken hold of an enterprise in such a condition? Who
else could have prosecuted such a contest to a successful termination? |
| Undaunted by the array of
difficulties, he went to work vigorously, and finally succeeded in
ending the litigation, harmonizing conflicting interests, getting
possession of the property, and dismissing the State suit. In the
meantime, with the assistance of the best accountants in the country, he
succeeded in getting the office, with its books and papers, in complete
order, but it was only to find that while the property of the company
did not exceed two millions, the stock issues amounted to four millions,
and the indebtedness of the company, which, up to that time, was
unknown, had been increased by costs of court, lawyers' fees, &c., to
upwards of $800,000. |
| The first object to be
achieved was the payment of this debt, and the second, to reduce the
stock, after its payment, to something like the cash value of the
property. This was no easy or pleasant task. |
| He first called upon the
stockholders for an advance of fifty cents a share upon their stock
investments, and in the event of their failure to comply with this
requirement, to surrender one half their stock. As there were800,000
shares of stock out, it will be seen, that if each individual
stockholder had answered the demand promptly for fifty cents a share on
his stock, it would have furnished on $400,000, to pay a debt of
$80,000. But many of them suffered the reduction, rather than pay money;
others forfeited their stock, and particularly those who owed
assessments. That the great body of the stockholders may see how little
agency they had in discharging this debt, it is only necessary to state
that less than $150,000 was furnished by stockholders. The liabilities
of the company were met by a few men, who came forward and gave their
paper for the surrendered stock, and that paper was turned over to
creditors to pay debts. |
| So the debts were liquidated,
and the company, instead of having four millions of stock out, had a
little over two millions, with property on hand nearly equal to its
value. |
| The next movement was to place
a man of eminence at the head of the enterprise, to secure the
construction of fifty miles of new road, and to go before Congress
asking aid. Mr. Thompson, of Pennsylvania, was induced to accept the
Presidency, who, finding subsequently that he could not give his
attention to its affairs, resigned. Col. V. K. Stevenson, of Tennessee,
was then elected, and is at present its controlling spirit. Mr.
Stevenson stands second to no man in the Union in point of ability and
integrity. |
| But for the political
difficulties, which have arisen, the Pacific bill would have passed
Congress. That bill granted thirty-six millions of dollars to this road
-- a sum amply sufficient, with the Texas land grant and loan, to have
constructed the road to the Pacific without calling upon the
stockholders for a dollar. In addition to this, a French company of
great wealth and political influence were ready to enter into a contract
to finish the road across Texas and equip it, and they still announce
their willingness to ratify this contract as soon as peace is
permanently restored between the North and South. Under this contract
they agreed to advance twelve hundred thousand dollars to build the
first fifty miles of road, and to furnish money for contingent expenses. |
| Now, if there is anything in
this history of the Southern Pacific Railroad Company that furnishes a
plausible reason for complaint upon the part of stockholders, or any
cause for despondency, we are at a loss to perceive it. On the contrary,
it seems to us to have been managed with consummate sagacity and skill,
and the stockholders, so fr from feeling a want of confidence in those
who are managing their company, ought to lend them every assistance in
their power. Gratitude as well as interest demands it. Their stock would
have been lost, but for the exertions of Dr. Fowlkes, Stevenson, and
others. These men have given their time, exertions, and money for the
last three years to sustain this great work. And now, when the "times
are sadly out of joint," the President of the Company says to the
stockholders, "I must have an advance of one dollar upon each share of
stock. This will furnish $400,000. With this amount, if furnished, and
the aid derived from Texas, I can finish fifty additional miles of road,
in time to carry off the growing crop. If you stand back, and fail to
pay your debts, you must of course expect to be sold out." |
| Is there anything unreasonable
in this? Is he not pursuing the course of a straightforward, sensible
man? Do you propose to permit you company, the property of which,
without regard to the franchise, is worth over two millions of dollars,
to be sacrificed for debts not exceeding $75,000? Do you intend to five
up your investment in this grand enterprise simply because it demands a
small advance to sustain it? |
| And what is it that
stockholders will thus surrender? With eighty-two miles of road in
operation this year, as contemplated by Mr. Stevenson, the company will
be entitled to 836,400 acres of land, as a bonus from the State of
Texas, and a loan of $492,000! Eighty miles of road, at $30,000 per
mile, are worth $2,460,000. Estimating the land at only two dollars an
acre, and it is worth $1,672,800. In the aggregate, $4,132,800, which
will be represented after the payment of the advance called for, by a
stock list of less than three million dollars. |
| Such is briefly the history
and present objects of the managers of the Southern Pacific Railroad
enterprise. If the stockholders are wise, they will advance promptly the
sum required, and place the enterprise upon a permanent footing? |
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