^ library
SOI\fiB«£AU OF RAILWAY eCOVIM.r.
WASHINCTO). /-
CONSIDERATIONS
SPECIAL REPORT
PRESIDENT AND DIRECTORS
fllESlPEARE AND OlilO (ANAL COWANÏ,
ON THE SUBJECT OF
1
Li«:
OOIYIPLETING THE CANAL TO CUMBERLAND,
MADE NOVEMBER 16th, 1843, IN A
SERIES OF FETTERS
ADDRESSED TO
Joliii Johnson, Esq.
Member of the House of Delegates,
ÍND POBLISHED IN THE
"AMERICAN."
.A:;;;
BALTIMORE;
BULL & TUTTLE, PRINTERS.
B Lcc
1844.
.i- -¿i
L E T 1 E R s
[No. 1.]
Sir:—Your name will draw public attention to the subject of
this communication; mine could not add weight to the opinions
which I may express. This consideration is to me a sufficient mo¬
tive, and will, I trust, be admitted by you as a sufficient apology,
for addressing you through the columns of a newspaper, and ad¬
dressing you anonymously.
The Special Report of the President and Directors of the Chesa¬
peake and Ohio Canal Company on the subject of completing the
Canal to Cumberland, made on the 16th of November, has fallen
into my hands within the last few days. This Report, though made
in the form of a communication to the stockholders, is, in reality,
addressed to the Legislature of Maryland. In it, all the arguments
heretofore urged for the promotion of the object in view, are embo¬
died with elaborate care, and presented in an imposing form.
The great obstacle hitherto encountered by the Canal Company,
in their efforts to obtain from the State the waiver of her liens, arose
out of the expectation which had been gradually gaining ground,
that the rail road could be advantageously used as a feeder to the
Canal from Cumberland to Dam No. 6. The predictions, then haz¬
arded by those who wished to see the experiment fairly tried, that,
the Rail Road Company would be able to transport coal along that
line at from two to two and a half cents per ton per mile, were met
with affected ridicule by the advocates of the Canal, and received
doubtingly even by those who had no conflicting interest to sway
their judgment.—Those predictions have been more than realized.
What was then speculation, is now fact. The report shows that an
arrangement has been made with the Rail Road Company for the
transportation of Coal from Cumberland to Dam No. 6, at the rate
of two cents per ton per mile; and it should be remembered that
these terms were proposed by the Canal Comipany themselves, and
were at once without hesitation acceded to by the Rail Road Compa¬
ny, showing that the latter had no doubt of their ability to tran.sport
the coal at that rate. At the same time the Rail Road Company, being
apprised emphatically that the arrangement was to be considered
merely as a temporary one, inasmuch as the Canal Company enter¬
tained no doubt of the completion of the Canal to Cumberland with¬
in the next two years, could not in reason be expected to bind them¬
selves in a "specific agreement for the transportation of all the coal
"that might be offered and that the means of conveyance should be
4
"increased accoiding to the growth and requirements of the trade
"until the Canal should be completed," that is, according to the Ca¬
nal Company, until the expiration of two years, when of course,
those increased means of conveyance, provided at a heavy expense,
would be left upon their hands, useless and valueless. They did all
that under such circumstances, could, in common justice, be expect¬
ed of them, in agreeing "to transport any quantity of coal that might
be offered until it should reach an amount requiring a material aug¬
mentation of their machinery."
The report speaks of the suggestion that the rail road can be ad¬
vantageously used as a feeder to the Canal at Dam No. 6, as an ex¬
ploded notion, now revived after having been abandoned; and then
goes into a long and laborious calculation to show the futility of the
idea that the rail road can furnish facilities commensurate with the
requirements of the Canal. On the last point but few words are
necessary. The rail load from Cumberland to Dam No. 6 is graded
for a double track. Under a permanent arrangement for the trans¬
portation of coal on that line, the second track will be laid the mo¬
ment that the want of it is apparent; and we then have, not a rail
road forty-five miles in length, blocked up with the overflowing
trade which the Report necessarily presupposes in order to give full
effect to its calculations, but two tracks, one for the descending, the
other for the ascending trade, thus forming what may be termed an
endless chain, over which the most enormous amount of tonnage
ever imagined by the most visionary speculator, may be transported
without difficulty and without confusion. With the exception of
the slightinterruption arising from the transit of two passenger trains
daily, the only question in estimating the capabilities of such a mode
of conveyance, is, how long a car, drawn with the ordinary velocity
of a locomotive engine attached to a burthen train, will require to
pass over a space equal to its own length; and a second question
will test its capabilities as compai-ed wdth those of a canal; over
what space will the same car be moved w hile a boat is passing
through the lock of a canal?
I find myself exceeding the limits which I am under the neces¬
sity of prescribing to this letter, and shall therefore defer to a future
occasion the few remaining observations with which I have to trouble
you. MARYLAND.
[No. 2.]
Sir:—It being evident then, as T think I have shown in my last
letter, that the rail road can furwish facilities commensurate with the
requirements of the Canal, it only remains to enquire whether those
facilities are or can be iuinif-hed at such a rate as will justify us in
reviving what the Report calls the "exploded notion," that the Rail
Road can be advantageously used as a feeder to the Canal at Dam
No 6.
The distance from Cumberland to Dam No. 6 is 48^ miles by the
line of the Canal, and 45 miles by the Rail Road. In the estimate
given in the Report, of the expense of transporting coal by the Ca¬
nal, the toll is assumed at half a cent, which is only one fourth of
the rate allowed by the charter, and the charge for carriage at seven
5
tenths of a cent, that being the charge on the Schuylkill navigation,
where, from the active competition between that work and the
Reading Rail Road, we may suppose the rates tobe lower than they
are likely to be elsewhere. Ttie actual present cost on the Chesa¬
peake and Ohio Canal, which is certainly rrjuch higher than the
one assumed in the estimate, would have been admitted as a fairer
criterion. Bui, taking the estimate of the Report itself, the total
cost of transporting coal by the Canal from Cumberland to Dam No.
6, a distance, as stated, of 43^ miles, will be 60 cents.
The cost by the rail road, 45 miles, at the present price
of "2 cents, is 90
Making a difference of 30 cents.
If the toll, cariiage and boat duty on the Canal be estimated at
one and a half cents, which is the cost upon coal on the Erie Canal,
and which I venture to assert is less than the actual cost at this time
on the Chesapeake and Ohio Canal, the difference will be one half
ofthat assumed in the Report, namely, 15 cents; that is to say, with
the use of the Rail road as a feeder, the coal is conveyed from the
mines to tide water and delivered at the place of export at a
price exceeding that at which it could be delivered if a contin¬
uous line of Canal existed, by one cent a bushel according to the
first estimate, and half a cent a bushel according to the second es¬
timate. The Report assures us, with an air of conviction, that the
Canal, if completed, will yield a nett revenue sufficient to pay the
interest on the $2,000,000 required for its completion, on the Mary¬
land Loans, on the outstanding debts, and still leave a surplus ade¬
quate to a dividend of seven per cent, on the capital stock.
On the other hand it giavely wains us that if the Canal be not
completed, that is to say. if the coal be subjected, by the use of the
Rail road between Cumberland and Dam No. 6, to a charge by
which the price at the place of export is increased one cent per
bushel, according to the estimate of the Canal company, or half a
cent per bushel, according to the estimate of any body else, then no
material addition can be expected to the present amount of ton-
age, and the Canal will remain as heretofore, a dead burthen upon the
State. This insignificant addition to the price of the coal is the only
cause alleged, and miserably deceptive as is the idea, it is the only
cause that can be alleged, as the ground of so extravagant a propo¬
sition. The communication from the mines to Cumberland, must,
in either case, be by Rail road, and the only question is wheth erihe
coal shall be transhipped to the Canal at Cumtieiland, or at Dam No.
6. What the facilities for transhipment will be at Cumberland, I am
unable to say. They cannot, b^' possibility, be. greater tban those
which are presented at Dam No. 6, where the coal cars are passed
upon a skeleton rail road, constructed over the Dam, and their con¬
tents dropped down by a simple contrivance into the boats below.
The Canal company themselves, in their Report, seem to be sen¬
sible of the absurdity of the ground they are obliged to take in re¬
ference to the point which I have just been considering; and, in
taxing their ingenuity to fortify the weakness of their position, they
have been able to fall upon nothing better than a fallacy so gross
G
that it is scarcely necessary to call your attenlion to it. Finding,
after all their efforts to swell out to the utmost the exce.ss of the cost
of transportation on the Rail road over that on the Canal, that the
difference could not, by any fair process, be magnified to an amount
exceeding thirty cents, they then tell us; "to this must be added the
"difference between the cost of transporting the coal from the mines
"to Cumberland by wagons instead of railways, as it cannot be ex-
"pecfed that the coal companies will feel themselves justified in
"constructing railways to connect with that place, until there is a
"certainty of the completion of the Canal. The charge for hauling
"a ton of coal from the Frostburg mines to Cumberland, and deliv-
"ering into the cars, is, at present, 9S cent.s. When the canal is
"completed, and the railways are constructed, which will follow, as
"a necessary consequence, it will be only about 20 cents per ton."
The difference between the two charges, amounting to 78 cents,
they accordingly add to the 30 cents, already mentioned, and the
aggregate of the two, being $1.08, is then confidently assumed as
the real difference in favor of the Canal.
I readily agree, with the Canal Company, that a charge of 98 cfs.
pel ton for wagoiiage to Cumberland will effectually interfere w ith
the working of the mines. But upon what just principle they as¬
sume that charge in the one case any more than in the other, I con¬
fess I am unable to discover. Do they mean to say that the railway
connexions will not be made by the Coal Companies, and that the
boundless elements of wealth, so much insisted on in the Repoit,
will remain undeveloped and dormant, merely because, according
even to their own estimate, the coal, in its transit along the whole
line from Cumberland to the place of export, is subjected to the in¬
significant additional charge of one cent per bushel? If they do not
mean this, then the principle upon which they proceed can only
resolve itself into a mere question of taste in the Coal Companies;
and about tastes there is, proverbially, no disputing. If the Coal
Companies, without reference even to the comparative merits of the
two modes of transportation, choose, in the one case, to convey their
coal from the mines to Cumbeiland, at a cost of "20 cents per ton,
and it) the other at a cost of 98 cents per ton, we can only pronounce
their taste to be a very singular one, and quietly leave them to cor¬
rect or indulge it.
It is amazing that a proposition so fallacious, so preposterous, can
be gravely urged upon the enlightened body to which the report is
addressed. MARYLAND.
[No. 3.]
Sir;—In maintaining the ground that the facilities afforded by the
rail road for the transportation of coal fi'om Cumberland to dam No. 6,
are such as to supei'sede the necessity of conipleting the Canal, I
have, hitherto, argued solely with reference to the present rate of
charge of two cents per ton per mile. The calculations which I have
given, based upon that rate, lead, I think, irresistibly to the conclu¬
sion, that it is the true policy of the State to look to that channel of
communication with the mines, as the one whicn promises, under all
the circumstances, to afford her the largest revenue from the Canal.
She should, at least, pause awhile, until the experiment is fairly
7
tested, before she involves herself beyond retrieval, by the waiver
of her liens and the surrender of the prior right which she now
holds upon the revenues of the Canal.
I now claim your attention to some considerations which have
reference to the rate at which the facilities in question can be fur¬
nished.
The Schuylkill navigation of Pennsylvania, which connects the
Schuylkill coal region with Philadelphia, was constructed with an
exclusive view to the coal trade. It is 108 miles long, 58 of
which are canal and 50 slackwater navigation. The par value of
the shares of stock is $50. In 18-38 the selling price was $150.
The toll on coal alone for the year 1841, was $48'4,460, and on other-
articles $75,•2-28, making an aggregate of $-357,089. The very large
dividends yielded to the Stockholders from this work, caused the for¬
mation of a company in 1833 to construct a rail road between the same
points, to compete with the Canal for the coal trade. The road was
commenced in 1835, and completed in 1841, at a cost of $-3,500,000.
You will perceive that I have borrowed this statement from the
Report of the Canal Company, and that I have given it, with some
slight abbreviations, in their own words. We are here referred toa
case which every one will admit to be strictly in point. The report
closes the statement by pronouncing that it "needs no seer to pre¬
dict the result." 1 am glad to see the Canal Company willing,
for once, to leave the airy regiotis of speculation, and 1 cheerfully
descend with them to the sober realities of fact.
The price of the Schuylkill navigation stock in 18-38 was, as the
Keport informs us, $150, the par value being only $50. Nearly about
the same period the Reading Rail Road was probably at its lowest
point of depression. The means and resources of its projectors were
completely exhausted, vast sums had already been expended, and an
enormous debt contracted, and the Bonds of the Company had reach¬
ed so alarming a point of depression that all expectation of finishing
the road seemed for the time abandoned. In this hopeless condition
the work remained, forsome time, a by-wmrd of ridicule and reproach,
as you will doubtless recollect, to those who had engaged in it. The
Company, however, eventually found means for resuming their oper¬
ations, and the work, as stated in the Report, was completed in 1841,
and entered upon its task of competing for the coal trade with the
Schuylkill navigation And what has been the result? The value of the
shares of stock in the Schuylkill navigation has gradually and steadily
declined from $150, the price quoted in the Report, to $33^, its pre¬
sent price. During the same period the value of the shares in the
Reading Rail Road stock, the par value of which is $50, has grad¬
ually advanced, with occasional slight fluctuations, from literally
nothing to $27^, the price quoted in the Philadelphia Prices Cur¬
rent of the 8th inst. The toll upon coal on the Schuylkill naviga¬
tion, which as the Report informs us, amounted in 1841 to $482,460
was in 184.3 less than $218,000 and the total gross tolls, which, in
1841 amounted to $357,689, declined in 184-3 to $-235,614, whilst
in the last named year the 7ict profits of the Reading rail road
were $180,000.
1 regret that 1 have not the means of giving an accurate state¬
ment of the comparative cost on the two works of conveying the
8
eoa! to tide water. The total charge on the Reading rail road is, at
this time, $1,20 per ton. The toll on the Schnylkill navigation
is half a cent per ton per mile. The cost of transportation it is dif¬
ficult to ascertain with entire precision. The writers in the inteiest
of the Reading rail road asseit that it cannot be fairly estimated at
less than 1 l-5th cents; those in the Canal interest affirm that it need-
not exceed 7-10ths of a cent. If we assume one cent as the real
cost, we have a total charge of H cents per ton per mile,, which on 108-
miles, the entire length of the Canal, amou nts to $ I (>2 per ton.
Present actual cost of the Reading Rail Road, 1 20
Showing a difference in favor of the Railroad of 42 cents per ton.
If we admit, as the cost of transportation, the price assumed in the
Report of the Chesapeake and Ohio Canal Company, namely, 7-lOihs
of a cent, the difference in favor of the rail road will be reduced to 10
cents per ton. As an evidence that this statementis not fallacious, I
need only refer to an advertisement of the Delawaie Coal Company,
Philadelphia, of the 28th ult., in which they announce to the public
a considerable reduction in the prices of thoircoal, in consequence of
the reduced winter rates on the Reading Rail Road. The inevitable
inference from this advertisement is, that the winter rates of the
ReadingRail Road are lowerthan the lates at any season on the Canal.
It may be supposed that one or both of these works must be pros¬
trated by the rivalry which exists between them. Permit me to
request your perusal of the following statement, derived from the
Baltimore Sun of the 4th instant, as affording the best reply to the
prediction, in the Report of the Chesapeake and Ohio Canal Com¬
pany, which reserves lhat fate for the Reading rail road :
"The Reading Gazette says that though the efforts of the Presi-
" ident, Mr. Cryder, to negotiate a loan in England, for the Phila-
" delphia and Reading Rail road Company were unsuccessful, yet
"the event has proved most fortunate for all concerned, as since
" his return, the sum of about one million of dollars has been ob-
" tallied in our own countiy, chiefly at New York and Boston, at the
"rate of six per cent., an amount amply sufficient to complete the
"second track with 69 lb. rails, and stock the road with a full com-
" plement of engines and cars. The iron has already been engaged,
" and the first cargo will arrive in February next. Operations will
"be commenced as early as practicable in the spring, and it is con-
" templated to have the track completed about the first of Novem-
" her. In a few days proposals will be issued for one thousand iron
" coal cars, capable of holding five tons each." The Journal says
—" We understand that during the past season, notwithstanding the
" disadvantages under which the road labored, it would clear $ 180,-
"000,—which would be three per cent, on the capital invested."
Such are, the re.sults of the competition for the coal trade between
the Schuylkill Canal and the Reading rail road.
I leave the facts, which I have placed before you, to speak for
themselves. MARYLAND.
[No. 4.]
Sir :—The charge for the transportation of coal upon the Reading
rail road i.s, at this time, as I mentioned at the close of my last let-
9
ter, il 20 per ton, being upon 97 miles, the entire length of the road,
at the rate of 1 24-100 cents per ton per mile. During the summer
months the charge is advanced and the average for the whole year,
calculated upon the rates of 184.3, which yielded, as has been shown,
so profitable a result to the stockholders, is 1 47-100 cents per ton
per mile.
Upon the Baltimore and Ohio Rail Road, the rate of two cents
per ton per mile is not confined to the section between Cumberland
and Dam No. 6, but extends along the entire length of the road to
the city of Baltimore. No one who has traversed the Baltimore
and Ohio Rail Road, and remarked the construction and condition
of the two sections, the one extending from Cumberland to Har¬
per's Ferry, and the other from Harper's Ferry to Baltimore, and
their comparative capabilities for the transportation of coal, will be
disposed, I think, to dispute the inference, to which a similar ex¬
amination has led me, that if the company can transport coal on the
latter section at the rate of two cents, without loss, they can trans¬
port it on the former at a cent and a half with profit.
In view, therefore, of the results upon the Reading Rail Road
and the Baltimore and Ohio Rail Road, 1 venture to affirm that
under a proper permanent arrangement, the coal can be transported
on the Rail Road from Cumberland to Dam No. 6, at the rate of
about cents per ton per mile, or say 70 cents per ton for the
whole distance of 45 miles. It will be difficult to show that the
Canal, the line of which is three miles and a half longer, could, if
completed, transport it for less. Admitting even the partial estimate
of the Canal Company, the difference in favor of their work would
be only about one third of a cent per bushel, which would probably
be considered, by the coal companies themselves, as fully compen¬
sated by the greater rapidity of transportation and the superior facil¬
ities for transhipment presented at Dam No. 6 If the toll, carriage
and boat duty be estimated at H cents perton per mile, and we are
sufficiently warranted in believing they cannot be less, the differ¬
ence would be slightly in favor of the Bail Road.
1 venture, farther, to affirm that the Rail Road Company will
agree, under a fair and equitable arrangement, to transport the coal
upon the terms mentioned. In hazarding this assertion, I do not
look to the intentions, (of which I am ignorant) nor to the interest of
that corporation, merely as such. I have chiefly in view the proba¬
ble vote, upon such a question, of the Corporation of Baltimore on
its three millions and a half of stock, and that of a large number of
private stockholders, whose interest, as citizens of Baltimore, is para¬
mount to their interest as Stockholders. I need not tell you that,
with the exception of a few whose views are warped by their interest
as scrip-holders, or creditors, in some other way, of the Canal Com¬
pany, oras speculators in the mineral lands of the Alleghany region,
the citizens of Baltimore entertain butone opinion as to the injurious
results which they have to apprehend from the completion of the
Canal to Cumberland. Apart from the general considerations of
the inexpediency of that measure in a merely financial point of view,
of which they are fully satisfied, and the mischievous consequences
which it will entail upon them in common with the rest of the State,
they cannot close their eyes to the hostile influences which have
o
10
ever in an especial manner, governed the policy of that Company in
reference to the City of Baltimore. Warned by past experience of
the irresistible predominance of those influences and remembering
the repeated instances in which, at the sacrifice of the interest of the
State of Maryland as a stockholder, and of her rights as a creditor,
the measures of that Company have been directed, exclusively
with a view to the diversion of important branches of trade to the
Cities of the District, they do not doubt that it the impediment to the
full success of that design, now presented by the interposition of the
Rail Road between Cumberland and Dam No. 0 were removed, and a
continuous line of Canal existed, the effort would be made, and made
with success, at whatever cost to the revenues of the Canal, to transfer
the Western trade, both descendmgand ascending to the City of Alex-
dria. It is vain to tell them that the State of Maryland would still
retain a controlling influence in the Canal, and that she would in¬
terpose for the protection of her own commercial emporium. They
look at the past, and just% fear for the future.
I do not allude to the apprehension thus entertained by the citi¬
zens of Baltimore, with the expectation or the design of influencing
your opinion in regard to the matter under discussion. I am sensi¬
ble that the question ha.s become too gravea one in a financial point
of view, to permit of its being considered with reference to mere
local interests. My object was, simply, to show the motives which
might be expected to influence the votes of the corporation of Bal¬
timore and the other stockholders mentioned, and to justify the as¬
sertion, with which I started, that the Rail Road Company will, as I
have endeavored to prove they cora, transport the coal from Cumber¬
land to Dam No. 6, for 70 cents per ton, being at the rate of IJ
cents per ton per mile. MARYLAND.
[No. 5.]
Sir—r have atflrmed that the Baltimore and Ohio Rail Road Com¬
pany can and will transport coal from Cumberland to Dam No. 6 at
the rate of H cents per ton per mile. I will go still farther, and ex¬
press my equally confident belief that, if the coal companies furnish'
their own cars, the transportation can be done at the rate of 1^ cents.
The arrangement here suggested is obviously for the interest of the
coal companies, as it will save them the expense attending the trans¬
fer of the coal at Cumberland from their cars to those of the Rail¬
road Company; and the cost of the comparatively slight addition to
the number of their cars, required by such an arrangement, will bear
no proportion to the advantages secured by it. Supposing the Ca¬
nal to be completed, and the coal dealer to have the choice between
the two modes of transportation from Cumberland to Dam No. 6,
which of them will he probably select? By the Canal his coal is
conveyed in two or three days ■it a cost (according to the Canal Com¬
pany) of 60 cents per ton; by the rail road in two or three hours at a
cost of 56^ cents, if he furnish his own cars, or 70 cents if the Rail¬
road Company supply them. Under such circumstances is it ex¬
travagant to suppose that the two millions expended in ihe comple¬
tion of the Canal may prove to be so much money absolutely wasted
and thrown away? With the use of the rail road as a feeder, the en-
il
tire revenues of the Canal go into the Slate treasury. If the Canal
be completed through the waiver of the State's liens, those revenues
must be handed over to pay the interest on the two millions, to lay
aside annually a sinking fund for the payment of the principal, (an
operatinn which will require forty years at the rate of $50,000 per
annum;) and to provide in the same way, if the plan about to be
urged by the Canal Company correspondió this particular with that
insisted upon a few years since, for the interest and principal of an
enormous debt of about a million of dollars, unjustifiably and unwar¬
rantably contracted by the Canal Company, and with which they
would now saddle the State of Maryland in her present crippled and
prostrate condition.
And it should not be overlooked that this preferred right to the
revenues of the Canal will not be limited to the earnings of the sec¬
tion to be completed between Cumberland and Dam No. 6; but will
embrace the receipts from all sources upon the whole line from
Cumberland to Georgetown, although, frorrfthe continued use of the
rail road, as in the case 1 have supposed, those receipts may, in point
of fact, be independent of, or at least but slightly increased by, the
use of the section for the completion of which they are given up.—
It will require the tolls upon an amount of tonnage of coal nearly
equal to the entire present consumption along the whole sea board
of the United States to satisfy this preferred claim upon the reve¬
nues of the Canal thus rashly yielded by the State; and until that
claiiTi is fully satisfied, she cannot receive a dollar from the work.
The total consumption of bituminous coal on the seaboard of the
United States upon which alone the Cumberland coal depends for an
outlet, was, in 1841, 232,000 tons. With the most liberal allow¬
ance for increase, we cannot fairly estimate the present consump¬
tion at more than 250,000 tons. Can the Cumberland coal be
brought to market at such prices as will fairly warrant the expecta¬
tion that it will drive the coal now used out of the market, and take
its place, or that it will suddenly open new channels of consumption?
I think neither can, by possibility, be the case to any considerable
extent. The Alleghany bituminous coal of Pennsj'lvania which be¬
longs to the same range as the Cumberland coal, and is of the same
quality, may be quoted, from recent actual sales in the Baltimore
market, at $3,92 per ton, with a very limited demand. The Rich¬
mond coal, which is admitted to be inferior to the Cumberland coal,
but which will compete with it at a difference in price of about ten
per cent., is now selling at Richmond, also with a limited demand,
at $2,80 to $3.-36 per ton, according to quality, and I have been in¬
formed that the price can be still farther reduced if at any time the
Cumberland coal should be brought to market at a price to compete
with it.
The alleged superiority of the Cumberland Coal for manufacturing
purposes may be theoretically admitted, and each person will judge
for himself what weight is to be given to the sanguine speculations
in the Report of the Canal Company on this point. But so far as its
adaptation to domestic uses is concerned, we have actual experience
to guide our opinion. The coal has been extensively tried in the
city of Baltimore, and has disappointed the expectations which had
been formed of it. An instance maybe mentioned which illustrates
u
the truth of this asseitiori. A gentleman in Baltimore received a
parcel of the Cumberland coal which had been forwarded to him for
his private use by a friend in Alleghany County. After having
been at the trouble and expense of depositing the coal in his cellar,
he was so little pleased with it on trial, that he caused the whole
quantity to be removed and replaced it with Liverpool coal. A
specimen, selected likewise, no doubt, with care, was sent to New
York for trial, and a similar judgment, as stated in the New .lournal
of Commerce, was formed of it. It was pronounced not very suita¬
ble for domestic use, though the opinion was expressed that it would
probably answerfor manufacturing purposes. I make these remarks,
not to decry the Cumberland coal, bui simply for the purpose of
showing that the extravagant piomises of the Canal Company in
their Report, and of their friends out of doors, ought to be received
with at least some grains of allowance. With every reasonable con¬
cession, however, on the score of quality, the mere expense of trans¬
portation on the long line of about 201) miles from the mines to
Georgetown, is so great as to preclude the hope that the coal can be
forced into consumption to any considerable extent. Estimating the
toll, trackage and boat duty at 1J cents )ier ton per mile, the trans¬
portation alone will cost $3 per ton, and to this must be added the
expense of mining privilege, mining, labor, loading and unloading,
waste, and commissions on sales and profits. The George's Creek
Company, in a report, issued some years since, calculate the total
cost of their coal delivered at Georgetown at $3.39 per ton exclu¬
sive of profits.
Taking into view, then, the present limited consumption of bitu¬
minous coal on the sea-board of the United States, and the trying
competition with which the Cumberland Coal will have to contend,
at the lowest price at which it can possibly be delivered at tide wa¬
ter, is it unreasonable to conclude that the promi.ses of the Canal
Company of a coal trade, on the completion of the Canal, amounting
to hundreds of thousands, nay to a million of tons, are, if not alto¬
gether delusive at the least over sanguine.?
MARYLAND.
[No. 6.]
Sir:—In a former letter I spoke of the results of the competition
between the Schuylkill navigation and the Reading rail road for the
coal trade of the Schuylkill region. The statements then given
were made up from the general returns to that time, and are sub¬
stantially correct, as far as they go. Permit me now to place before
y ou, in a more precise form, the results for the whole year, as de¬
rived from the annual reports of the two Companies, issued within
the last few days, and to add some particulars of interest collected
from the same source.
The Reading Rail road Report alludes to the critical position of the
Company, and the unfinished state of the road in 1842. That work,
therefore, cannot be said to have fairly entered upon its task of com¬
peting with the Schuylkill navigation before the Spring of 1842, or
perhaps later: and yet within the short period which elapsed between
that and the close of the year, namely on the 3Ist December, 1842,
13
Ihere were in active employment on the road 1,130 coal cars and 16
coal engines, and on the 3Uth November, 1813, the date of the Re¬
port, those numbers had increased to 1,592 coal cars and 30 coal en¬
gines.
In 1841, when the Schuylkill navigation enjoyed the monopoly
of the trade, the toll upon coal alone on that woik was $482,460; in
1843 it fell off, under the effect of the competition of the Reading
rail road, to less than $241,(100. The aggregate of toils from alt
sources, which in 1841 amounted to $557,689.39, declined in 1843
to $260,724,38; while, on the other hand, the receipts upon the
Reading rail road amounted, for the first eleven months of the same
year, 1843, to $394,318.49
In 1838 the established charge for the carriage of coal upon the
Schuylkill navigation was $1.30 per ton. That this was not deemed
an excessive charge, may be inferred from the fact that in that year
there was a turn out of the boatmen for higher prices, though they
returned, after a short lime, to the old rates This charge of $1.30
per ton, equivalent to 1 1-5 cents per ton, per mile, added to the
toll of half a cent, would make the total cost of transportation $1.84
per ton, or 1 7-lOths cents per ton per mile. In 1842 and 1843, the
competition among the boatmen, suddenly thrown out of employ by
the transfer to the rail road of a large portion of the vast amount of
tonnage previously transpoited on the Canal, facilitated the very
considerable reduction in the charge for carriage, which had become
necessary in order to prevent tne complete diversion of the trade;
and the rates are probably at this time, from that and other causes,
brought down to the lowest possible point. The Report of the Com¬
pany states that in the past season, the whole charge for carrying
coal, including freight and toll, has been less than H cents per ton
per mile. Even at that rate, the total cost of transportation by the
Canal is$1..35 per ton, while, by the rail road, the charge has aver¬
aged, during the whole year, less than $128 per ton, and during
some seasons isas low as $1.20 and even $1.10 per ton. With
these facts before us, we can have no difficulty in accounting for the
decay in the trade and revenues of the Schuylkill Canal on the one
hand, and the rapidly increasing prosperity of the Reading rail road
on the other.
It is, perhaps, a liberal concession to assume that the cost of trans¬
portation on the Schuylkill navigation, can be permanently main¬
tained at the present low rates. The Report of the Reading rail road
Company, on the other hand, shows in the most conclusive manner,
that low as are their piesent charges for transportation, the}- yield
large profits to the stockholders, and can be still farther reduced in
proportion to the increase of the trade. Permit me to contrast the
vague speculations in the Report of the Schuylkill Navigation Com¬
pany on this point, with the practical views and positive results pre¬
sented in the Report of the rival company:
"This diminution," says the former, in accounting for the dimin¬
ished coal trade upon the Canal, "has been caused bv diverting a
"portion of the Schuylkill coal trade from the natural channel of the
"navigation, and forcing it upon the Reading rail road, which has
"been effected, to some extent, by those having the control of that
"work, by means of a scale of prices far below what is known upon
14
"any other railroad, and which has been repeatedly varied and re-
"duced, for the apparent purpose of diverting the coal trade from
"the canal. The spendthrift and prodigal policy sometimes pursued
"upon railroads soon after their first construction, of carrying heavy
"freight at high velocities and at low prices, less by far than suí5-
"cient to keep up the business, soon defeats its own object, and
"comes to a speedy end, when the ability to accumulate indebted-
"ness no longer exists. With the weight of the load, and the rate
"of the speed, the wear and tear increase in a constantly increasing
"ratio, until the road itself, and its costly machinery and carriages
"are found to be involved in a common destruction. Though this
"conclusion may not, at first, be sti'ikingly apparent, it is just as cer-
"tain as the effect of over exertion and high excitement upon the
"human constitution, and much more speedy in its results; for a raii-
"road, unlike the human frame, has nothing recuperative in its na-
"ture."
The querulous tone perceptible in the Report from which these
passages are extracted, contrsats very unfavorably with the air of
calm confidence which pervades the Report of the Reading Rail Road
Company. The latter confines itself to a simple statement of its
own concerns, and in describing the present condition, and specu¬
lating upon the future prospects of the road, it abstains from any
allusions to the operations of the rival company. Its statements,
therefore, are the more to be relied upon in forming an opinion as
to the ability of rail roads, under certain favorable circumstances,
to compete with canals in the transportation of coal. I select from
the Report various passages, which are well worthy of your attention,
as throwing new light upon this subject.
" The quantity of coal hauled over the road to June .30, before the
"machinery had been increased to its present force, and the tracks
"and wharves made more effective, amounted to 6'2,099tons; since
"which time to the present date, a period of five months, the coal
"tonnage has risen to 156,612 tons, making a total of 218,711 tons
"of coal transported to market during the eleven calendar months
"ending the 30th of Movember, 1843."
" Statement C exhibits in detail the expenses of the transporta-
"tion department of the road " (including the sum paid the State for
tolls and motive power over the 3^ miles of her road, and the expenses
of hauling across the Schuylkill bridge, amounting together to $ 13,-
670 07,) "and statement D, the apportionment of these expenses
"to the several items of business on the road—coal, freight and
"passengers. It will be observed from the latter statement, that the
"actual cost of hauling from the mines to the Delaware has been,
"during the year, but 46 cents per ton. This has been much, tiigher
"than may be calculated on for the future, for the following rea-
"sons," which the Report proceeds to give, and then adds: "From
"the above considerations, it is confidently believed, that the cost
"of hauling coal per ton, during the ensuing year, 1844, will not
"exceed 40 cents." "The tonnage of the last eleven months on
"the Reading Rail Road, with all the disadvantages of a want of suffi-
"cient machinery early in the season, amounts, as per statements,
"to 317,277 tons. It may be mentioned as a gratifying fact, that
"notwithstanding the very heavy amount of tonnage thus passed
15
"over Ihe road, 56,554 passengers have been transported during the
"same time, without the slightest personal injury to any one."
"The gross expenses of the transportation department of the road
"are exhibited in detail in statement C. It is proper to state that
"some portions of these expenses were necessarily larger in the com-
"mencement of a business of such magnitude, without the required fa-
"cilities for carrying it on. A very considerable portion, also, of
"these expenses may be considered permanent, and are but slightly
"increased by a business double or treble that hitherto done on the
"road." The cost of repairs for the eleven months ending -SOth No-
"vember, 1843, of the Philadelphia and Reading rail road, equal to
"108 miles ol single track, including repairs on bridges of every de-
"sciiption, was $37,649 62, being at the rate of $348 67 per mile.
"One fact is worthy of notice in reference to the wear and tear of our
"iron, about which some pretty wild calculations have been made.
"From the date of our commencement in 1838 up to the present
"time, less than two tons of rail road iron has been used in replacing
"the bars which have been rejected from the track, owing to the
"imperfect quality of the iron; yet in this period 847,639 miles have
"been run by the engines, 333,000 passengers and about 500,000
"tons net have been transported over the road, which, added to
"weight of cars, will equal 87,442,101 tons hauled one mile."
"Taking this as a data, and with the facilities of a second track of
"60 pounds per yard, I am of opinion that the transportation of twen-
"ty millions of tons will not wear out ihe rails on the Reading rail-
"road and render new iron necessary. It must be borne in mind
"that, in renewing the rails, the old iron will always command about
"three-fiths of the cost of the new."
If the Bal'imore and Ohio Rail road were finished no farther than
to Dam No. 6, and the question before the State were, whether the
connexion between that point and Cumberland should be by canal
or rail road, these positive results in a precisely similar case might
well cause her to hesitate in the choice.* They must be deemed, by
*The Philadelphia and Reading Rail Road Co. commenced their operations
in 1842, at a late period of the season, bringing down that year only about
50,000 tons. The want of cars and other suitable accommodations prevented
them from bringing to market during the first six months of 1843, more than
62,099 tons.
Leaving the amount transported during the last six months . 168,138 tons.
The business of the company has been hitherto carried on upon a single
track with the necessary turn outs, but arrangements have been recently con¬
cluded by which the company has effected a loan of $1,200,000, for the purpose
of laying another track, to be completed by August next, when its friends con¬
fidently expect the realization of their most sanguine expectations. It is cer¬
tainly true that the road (94 miles in length) has been constructed at great ex¬
pense, and that the company have been compelled to submit to heavy sacrifices
to carry out their undertaking, but if the business of the last half year, with the
natural increase consequent upon the completion of another track, be assumed
as a criterion, the conclusion is not unreasonable that the stockholders as well
as the community may benefit from its operation.
The Schuylkill Navigation Company has been successful for many years,
although more recently the rail road has diverted a portion of its busines.s, and
from the great celerity of its operations bids fair to be a most serious competitor.
Other companies have been less successful, though perhaps the most signal
failure has been that of the Morris Canal. The only point, to our mind, in
■which the superiority of rail roads to canals for the transportation of coal may
IG
any reasonable man, uninfluenced by motives of private interest, ai
perfectly conclusive in the real question about to be submitted to the
deliberations of the Legislature: whether, namely, the owners of coal
lands, speculators and others in Alleghany County, not satisfied with
one of those modes of transportation, stiall be gratified in their demand
for both, at a cost which involves a virtual abandonment by the
State of all hope of any returns upon her present investment in the
Canal. MARYLAND.
[No. 7.]
Srn:—The conclusions which it has been the object of these let¬
ters to establish, are:—
1. That the Railroad can furnish facilities for the transportation of
coal from Cumberland to Dam No. 6, adequate to any possible
growth of the trade. This is proved by the experience of the Read¬
ing Rail road, upon which, with the disadvantages of a single track,
and a want of sufficient machinery during a considerable part of the
time, there were transported in eleven months 317,"277 tons and
56,554 passengers. The capabilities of a Railroad with a double
track are almost unliiuited; that they greatly exceed those of a Canal
cannot, at least, be denied.
2. That the rates at which those facilities are now furnished, and,
still more, the rates at which they can, and, for the reasons stated,
will, in all probability, be furnished, eflTectually supersede the neces¬
sity of completing the Canal. At the last mentioned rates, which
have been assumed at cents per ton per mile, the cost of trans¬
portation is actually less than by the Canal; at the former, little more
than half a cent per bushel is added to the cost of the coal delivered
at tide water.
3. That it is the true policy of the State to look to the channel of
communication with the mines already furnished by the Rail road, as
the one which promises, under all the circumstances, to afford her
the largest revenue from her present investment in the Canal. It
may be doubted whether, if the Canal were completed, a larger
amount of tonnage would pass over it than would otherwise be trans¬
ported on the Rail road, in which case, so far as regards the question
of revenue to the State, the vast sum expended in its completion-
would be absolutely thrown away.
4. That taking into view the present limited consumption of bitu¬
minous coal on the seaboard of the United States, and the low prices
at which the demand is now supplied, no hope can be reasonably
entertained that the Cumberland coal will be forced into consumption
to an extent sufficient to leave, from the tolls upon its transit over
the who'e line of the Canal, any surplus of revenue after satisfying
the preferred lien yielded by the State for the completion of the sec¬
tion between Cumberland and Dam No. 6.
The State thus gives up, without motive or consideration, the pre-
be questioned, is in the wear and tear of the roads. The opponents of rail roads
urge this as a strong objection, while the engineer of the rail road is of opinion
that the transportation of 20 millions of tons will not wear out the iron or ren¬
der a new track necessary—Kew York Commercial Advertiser o/20 January, 1844.
Editorial head.
17
sent revenues of the Canal, which, it is admitted, are small, and its
prospective revenues, which, through the agency of the Eail road
may be very considerable. The Cumberland coal cannot be brouglit
from the mines to tide water, a distance of-200 miles, at a price to
compete with other bituminous coals. The Alleghany bituminous
coal of Pennsylvania is now selling in Baltimore at $d.92, and the
Virginia coal in Richmond at $2 80 to $3.36 per ton, both with an
extremely limited demand. Ttie latter is little inferior, for domestic
use, to the Cumberland coal; the former, as shown by scientific an¬
alysis and actual experiment, is in every respect equal to it, for
either manufacturing or domestic purposes. In view, then, of the
present limited consumption, not exceeding 250,000 tons of bitum¬
inous coal on the whole seaboard of the United States, and the low
prices at which so far as regards the domestic bituminous coal, that
consumption is already supplied, is it not granting a great deal to
suppose that the quantity to be furnished from Cumberland will
gradually grow up, within a reasonable time, to 100,000 tons per
annum? But carry the concession very much farther, and assume
that quantity to be 200,000 tons. Even this tonnage, enormous as
it is, considered with reference to a reasonable calculation of the pro¬
bable demand for the coal, will barely }'ield, in its transit upon the
whole line of the Canal, a nett revenue sufficient to pay the prefer¬
red liens, and will not leave a single dollar to go into the State
Treasury. Is not this a virtual abandonment by the State of all hope
of return from her present investment in the Canal? On the other
hand, with the use of the Rail road as a feeder, the entire tolls upon
the same quantity, amounting on 136 miles, the distance from Dam
No. 6 to Georgetown, to $1-36,000 in addition to the revenues from
all other sources, would pass into her hands without deduction. In
whatever way, then, the Canal may be completed, she must be a
loser by it; but the plan proposed in the Report is peculiarly object¬
ionable, as throwing upon the State of Maryland the heavy loss con¬
sequent upon the low credit of the Canal Company, and involving
the surrender to a certain extent of her sovereignty over the Canal
into the hands of projectors and speculators. The Report states that
the Company have proposals to complete the Canal to Cumberland,
from Story, Mills &. Co., contractors in New York, for $ 1,313,250—
from Byrne, Noonan & Co. of Frederick, for $1,-350,000.
To provide these means, the Canal Company require a waiver of
the State's liens to the amount of $2,000,000, that is to say,
$2,000,000 in the bonds of the Canal Company, with a preferred
lien upon the entire revenues of the whole canal for the payment of
the interest and the gradual liquidation of the principal, are necessa¬
ry to pay for a work, the real cost of which is $1,350,000. At
whose expense is this wanton sacrifice made of $650,000 in a work
costing $I,.3.50,000? Is it not a gross fallacy to say that the State
of Maryland is not the sufferer? And yet the Report tells us very
complacently that, according to this plan, "the Canal can be finished
"to Cumberland without taking another dollar from the treasury of
"Maryland, or adding a dollar to the State debt or liability." Such
an argument is worse than delusive; it is an insult to the understand ■
ing of every man to whom it is addressed. No person can be found
to advocate the prosecution of the Canal, directly and immediately,
3
18
by the State in the present crippled condition of her finances; and
yet, by such fiimsy sophistry, it is urged upon her to do precisely
the same thing under cover of the name of the Canal Company.
Far better for the State, if the Canal must be completed, to take the
work directly into her own hands, than to confide it to the agency
of a Company which has ever shown itself utterly regardless of her
interests. If the bonds of the Canal Company for $-Í,01)0,00(1, with
a preferred lien upon the revenues of the Canal as the source, and
the only source, to which purchasers are to look tor the payment of
interest and principal, will pay the contractors their $ 1,350,000, the
bonds of the State of Maryland to the same amount, and with the
same condition, will also pay them. The obligations and liabilities
incurred, and the financial results, are precisely the same in either
case. The Canal Company sum up their project, the true features
of which I have endeavored to expose, in these words: "AH we ask,
"in this behalf, of the State, is that it will pass a law to postpone its
"liens, which are, at present, unprofitable, toan amount sutficientto
"enable this company to complete the Canal, and thereby render
"them profitable."
This is the great argument upon which they mainly rely for suc¬
cess, and it is one which is likely to mislead many, who will assent
to the conclusion without investigating the premises upon which it
is based. But those premises are absolutely false. Keeping in
mind that, whether the Canal be completed or not, the coal from the
Frostburg mines must be equally brought by railways as far as Cum¬
berland; that it can be thence transported to Dam No. 6 as cheaply
by the rail road as by the canal, and in a few hours by the former,
while as many days are wasted on the latter; that the facilities for
transhipment to the canal at Cumberland cannot by possibility, be
greater than those at Dam No. ö; keeping in mind, above all the ac¬
tual results in a precisely analogous case, that of the Schuylkill nav¬
igation and the Roading Rail road in their competition for the coal
trade of the Schuylkill region, can any reasonable man believe that
a greater amount of tonnage will be secured by the completion of
the Canal, than would otherwise accrue with the use of the rail road
as a feeder? May he not rather fear that, so far as regards the coal
trade, the section of the Canal between Cumberland and Dam No.
6, if completed, will prove an absolute nullity, since the coal dealer,
with the choice of the two modes of transportation as far as Dam
No. 6, may at last, find it to his interest, not to transfer his coal to
the Canal until it reaches the latter point? The proposition of the
Canal Company, stripped of its sophistry, may be fairly stated with
a slight change of terms; "What we ask of the State is, that she will
"abandon her present safe and protected position, and pass a law to
"postpone her liens, which, under the present system, may be pro-
"fitable, in favor of a measure which will render them certainly un-
"profitable." The truth, sir, is that the various infiuences which
direct this movement of the Canal Company and combine în its
support, do not, for a moment, consider (he subject with reference to
the interest of the State of Maryland. "The numerous chartered coal
and iron companies in the county of Alleghany," expect by it to give
substance to their shadowy "capital of seven millions of dollars." The
jobbers and speculators in the scrip and other unlawful debts of the
19
Canal Company, are eager to realize their profit of fifty, sixty,
seventy percent. The people of Ihe District urge forward a measure
which will involve the State of Maryland still more deeply, and
leave her no alternative against repudiation but the realization of a
revenue from the Canal. That revenue, they well know, the coal
trade will not yield, but they rely, for a more certain means of ag¬
grandizement upen the invincible necessity, under which the State
will then be placed, in order to secure some return from her invest¬
ment in the Canal, of transferring to it, by whatever forced means,
those great branches of trade which have hitherto, through the in¬
strumentality of the Rail road, formed the basis of the commercial
prosperity of the city of Baltimore. MARYLAND.
[No. 8.]
Sir:—I am sensible that T have already trespassed too long upon
your patience. I will only farther claim your indulgence, while
alluding briefly to the subject of the projected extension ofthe Canal
to the mouth of Savage river. The Report of the Canal Company in¬
forms us "that it will be found expedient, at no distant day, to ex-
"tend the work to that point by a siackwater navigation, with dams
"and locks, unless those more immediately interested should devise
"other facilities to connect the trade of the Westernport coal and
"iron region with the Canal at Cumberland, as was contemplated by
"them when they made their investments in that çuarter. The coal
"at that point is also very abundant and of equal excellence. But
"under existing circumstances, and for the purpose of enabling the
"State of Maryland to realize a return from its large investments in
"the Canal Company, at the earliest practicable period, we think
"that the pri/iary effort should be the completion ofthe Canal to
"Cumberland." Such is the view of the subject taken by the Canal
Companv, and widely does it differ from that insisted upon by
"those more immediately interested." These last assert emphat¬
ically that the promises of an adequate coal trade from the Frost-
burg region are illusory, and that the Canal will continue to be un¬
productive and a burden upon the State, until it is pushed on to the
mouth of their mines. They accordingly insist that immediate
provision be made for the completion of the Canal to the mouth of
Savage river. 1 he pretensions of those interested in the vast bodies
of land, equally rich in coal and iron deposites, which lie still farther
up the Potomac, beyond the mouth of Savage river, are for the pre¬
sent prudently kept out of view, and reserved to be brought forward,
no doubt, at the proper season.
It is very certain, as stated in the extract I have given from the
Report of the Canal Company, that the persons alluded to, vhether
chartered or private speculators, when they made their investments
in the Westernport region, did not contemplate calling upo.'; the State
of Maryland to make the connexion with Cumberland. Thet idea
gradually grew up as the State became more and more deeply in¬
volved, and was encouraged by the facility and patience she evinced
in her transactions with the Canal Company. But the design of
imposing this new and heavy ta.sk upon the State, was not openly
avowed until towards the close of 1840. The project was first
20
broached iii the official report of the State Geologist to the Legisla¬
ture, in their session of 1840-1841. In that Report "the propriety
"and advantage of the State's adventuring to construct an improve-
"ment of the Potomac above Cumberland, into the very heart of the
"coal region, that is, to the mouth of Savage," are strongly urged.
The Report admits "that in the hands of private enterprise this work
"might be delayed, among other things, by the fear of its not being
"productive." It states "that Cumberland is ten miles from the
"nearest, and more than forty miles from the farthest coal, and that
"the bulk of the coal is more remote than the mean distance.
The reason specified by the State Geologist for believing that the
work might be delayed in the hands of private enterprise, the fear,
namely, of its not being productive, will be admitted to be a very
sufficient one in itself, without reference to the other causes alluded
to. But why the same reason is not equally good in the case of the
State, and ought not equally to influence her action, it is not easy to
discover. The State can have in view only the single object of
profit from the work; the chartered companies and private proprie¬
tors, who have invested, as they tell us, an immense capital in the
mineral lands on both sides of the Potomac, have the strongest mo¬
tive for undertaking the work in the collateral advantages which they
expect from it.
And yet these companies and private proprietors, who understand,
better than any one else possibly can, the real resources of the coun¬
try, and can best estimate their probable development when sup¬
plied with the means of access to market, and whose large capital
is absolutely wasted and sunk, unless that access be provided, re¬
fuse to make the connexion with Cumberland because, "among
other things, they fear that the work will not be productive." But,
sir, the State has more than the mere apprehension, she has the ab¬
solute certainty, that the work will not be productive, to deter her
from undertaking it. The expense of transporting coal from the
mouth of Savage river to Cumberland, a distance of thirty miles, at
half a cent per ton per mile for toll, and 7-lOths of a cent(the lowest
charge assumed by the Canal Company themselves) for carriage,
will be, exclusive of boat duty, 36 cents per ton. On the other
hand, the charge upon the Frustburg coal to the same point, a dis¬
tance of 10 miles, will be, at the present railroad rates, 20 cents per
ton, orló cents, if the charge be assumed at 1| cents per ton per
mile. With regard to other items of expense, as mining, deliver¬
ing, &.C., it cannot be maintained that the Westernport mines have
any advantage over those of the Frostburg district. In the latter
case the coal is picked at once from the vein into the same car which
deliveis it upon the Canal, either at Cumberland or dam No. 6; in
the former, as soon as the mines, supposing them to be most favora¬
bly situated upon the banks of the river, are penetrated to a depth
of only forty or fifty feet, the coal must be carried, upon tram-roads
or otherwise, to the mouth of the mine, thence slidden down to the
banks of the canal, and, by a third process, transferred to the canal
boat. From Cumberland, then, as a common starting point, it is
evident that the Frostburg coal will be sent to market, with a differ¬
ence in its favor, over the Potomac coal, of 16 to 21 cents per ton.
21
The Canal Company, in urging the completion of the Canal to
Cumberland, tell us that the additional charge, amounting in fact to
15, though assumed by them at 30 cents per ton, to which the Frost-
burg coal is subjected by the use of the rail road from Cumberland
to Dam No. 6, will effectually check the development of the coal
trade, and disappoint the hope of a revenue from the Canal; but here
the proposition is exactly reversed, and it is insisted, for the argu¬
ment can mean nothing else, that a difference of twenty cents per
ton is too insi>;nificant to give the Fi'osfburg coal any decisive ad¬
vantage over that from the Westernport mines, and that it will not
materially check the vast trade promised from the latter. This is
so far from being true, that supposing the prices of both to be reduc¬
ed to the lowest possible point, and that mu.st be done to bring them
at all into consumption, it is perfectly certain that such a difference
would effectually exclude the iVesternport coal from the market.—
To enable it to compete on equal terms with the Frostburg coal, it
would be absolutely necessary to throw open the section of^ the Ca¬
nal, which it is now proposed to construct, toll free, the mere cost of
carriage upon it to Cumberland, exclusive of toll, being equal to the
entire charge to the same point upon the Frostburg coal. Can it
then, be reasonably expected under such circumstances, that any
considerable increase of coal tonnage will be secured by extending
the Canal to the mouth of Savage river? Will any one hesitate to
concur with the coal proprietors in that region, in their fear that the
work "will not be productive?" Is it not, on the contrary, certain
that it will not be productive?
Among other arguments urged by them for the extension of the
Canal, the parties in the Potomac interest allege that the Cumber¬
land coal region is of too limited an extent, to justify the expecta¬
tion of an adequate coal trade fi'om that source alone. To this alle¬
gation I will oppose a statement derived from a source whose au¬
thority, they, at least, cannot reasonably object to, since it is one
upon which they mainly relied, • in their first effort to prove "the
propriety and advantage of the State's adventuring to make the im¬
provement" in question. "Professor Ducatel, in his Report on the
Geology of Maryland, observes (as quoted in the ninth annual report
of the (Ihesapeake and Ohio Canal Company)—"From this view
"of the extent and condition of the coal deposite in this district, it
"will be seen that, should the projected scheme of communication
"between the Chesapeake bay and the Western waters, by means
"of canals and rail roads, be effected no farther than Cumberland,
there will be furnished a convenient outlet for an amount of coal
"which can be estimated only by hundreds of millions of bushels.
MARYLAND.
To the Editors of the .American :
Messrs. Editors—I request a place in your columns for a brief
statement, showing the practical operation of the bill reported,
within the last few days, by the Committee on Internal Improve¬
ments, for the completion of the Chesapeake and Ohio Canal, a
synopsis of which is published in your paper of this morning.
The bill provides for the completion of the canal to the mouth
of Savage river, thirty miles above Cumberland and eighty miles
from the present terminus at Dam No. 6. The State is to undertake
the work, not directly in her own name, but under cover of the
name of the Canal Company. The cost is estimated at about $1,950,-
000. To provide this sum, $.3,000,000 of bonds are to be issued in
the name of the Canal Company, the State yielding, in favor of the
bonds, the preferred liens she now holds upon the entire revenues
of the whole canal- The first step, then, is to subject the State to
the loss of more than a million, in a work costing less than two
millions The next, is to saddle her with another million, constitut¬
ing the present debt of the Canal Company; a debt contracted, not
only without her sanction, but in direct, positive and contemptuous
violation of her declared intentions. That debt is represented by
scrip, bonds, &c., which were paid out in the first instance at a
shameful depreciation, and are now, for the most part, held by
speculators, who have bought them up at a third, perhaps a fourth
of their nominal value. The bill contains a provision for the pay¬
ment, by the State, of the principal and interest of this debt, and
thus draws in a powerful auxiliary to the support of the measure.
The liberality of the bill does not terminate here. Another sec¬
tion extends the benefit of the preferred lien to the old Potomac
Company, and provides for the payment to them, for adjusted
claims, of a sum not exceeding $4,.500 per annum
The preferred lien upon the revenues of the canal now held
by the State of Maryland is $382,500 per annum; and she has, be¬
sides, a preferred claim, for arrearages of guarantied dividends and
interest, amounting to upwards of $1,500,000. According to the
provisions of the bill, these liens are to be surrendered and pledged
for the payment of:
6 per cent, on $-3,000,000 . . . $180,000
Fund set apart annually for payment of princi¬
pal 75,000
6 per cent on $1,081,000 credit debt (with in¬
terest) say .... 65,000
Fund set apart annually for payment of princi¬
pal ..... 20,000
To Potomac Company .... 4,500
$344,500
Repairs and current expenses, (which in 1842
amounted to $48,850) cannot be estimiated
with an increased length of new canal, at less
than ......... 60,500
$405,000
This annual chaige will, of course, be gradually, though very
slowly, diniinished, as the principal of the liens is reduced by the
sinking fund; but to all practical purposes, at least as affecting the
present generation, we may assume $405,000, as the sum which,
under the preferred liens, has first to be paid over, before the State
can receive a single dollar from the revenues of the Canal. To
pay that sum, will require the tolls upon an average of 4.35,483 tons
of coal transported from Cumberland to Georgetown. I appeal to
every reasonable man, whose views are not warped by motives of
private interest, to say whether a demand for the half of that quantity
can be fairly calculated on. The entire present consumption of hi-
23
tumioous coal on the seaboard of the United States, upon which es-
clusivelv the Maryland coal depends for an outlet, does not exceed
250,000 tons, and that consumption is supplied so far as the domes¬
tic bituminous coal is required, from Pennsylvania and Virginia, at
pricej wliich defy serious competition. Such are the practical re¬
sults of the bill in its provisions for the cotnpletion of the canal to
Cumberland and the extension, by a slackwater navigation, to the
mouth of Savage river.
If the bill be passed only in so far as it provides for the completion
to Cumberland, the State's liens are in that case to be surrendered
and pledged for the payment of:
6 per cent, on $2,00(1,000 . . . $120,000
Annual fund for payment of principal . . . 55,000
6 per cent, on $1,081,000, credit debt (with
interest) say .... 65,000
Annual fund for payment of principal . . . 20,000
To Potomac Company . . • . . 4,500
$264,500
Repairs and current expenses, not less than . . 54,500
$319,000
to pay which sum, there must be transported annually from Cum¬
berland to Georgetown 343,000 tons, a quantity exceeding by 93,-
000 tons, the entire actual consumption before stated.
Not only must every tori of coal now used, foreign and domestic,
be driven out of the market, and the Cumberland coal take its place,
but the actual consumption must, in the first case, be nearly doubled,
and, in the second, increased more than a third, before the State
can receive a single dollar from the work. There is nothing to war¬
rant the expectation of such an increase in the consumption either
for dorr.estic or manufacturing purposes. It is idle to suppose that the
Cumberland coal can displace the anthracite. A few years since,
the system of steam navigation on the ocean was pointed to as the
source of an almost unlimited demand for bituminous coal. But that
idea is now exploded. Experience has shown that except under
peculiarly favorable circumstances, steamers cannot be profitably
employ ed, on long voyages, for the transportation of merchandize, or
even passengers. The Great Western, the most successful steamer
of the day, has lost money for her proprietors. The British Queen
was sold to the Belgian government, and after running for a short
time between New York and Antwerp, was laid up in ordinary, be¬
cause she did not pay expenses. The Cunard line is kept in activity
only by the heavy contribution which it receives from the British
government.
In view of the present limited consumption and the little prospect
that exists of any material increase in the demand, it may be pro¬
nounced impossible that the coal trade can, within a reasonable pe¬
riod, supply an amount of tonnage sufficient to pay even the prefer¬
red liens, much less to afford a surplus for the benefit of the State.
To pass the bill in either form, is. then, unquestionably, to surrender
all hope of any return to the State from her present investment in
the canal.
The Canal Company, in their report of the 16th November last,
prepared and published, avowedly, for the purpose of urging upon
24
the State the completion of the canal to Cumberland, seem to be
sensible of the necessity of pointing out other sources of revenue be¬
sides the coal trade. They say: "In the views thus presented, and
"the estimates which we have made of ihe probable trade of the Ca-
"nal, we have taken no notice of the Western trade, nor of the pro-
"ducts of the forest and the furnaces of Alleghany. This omission
"does not arise from the want of a due appreciation of those import-
"ant interests." "As regards the Western trade, this will be the
"cheapest and most direct route to the Atlantic markets. After the
"canal reaches Cumberland, and the improvements in progress on
"the Monongahela are completed, the distance from tide water at
"Georgetown to waters of the West navigable by steamboats, &c.,
"will be only 25Si miles," &c. I fully concur with the Report in the
opinion that the Canal, if completed to Cumberland, will be the
channel of transportation for the Western trade, for the plain reason
that the State of Maryland, being disappointed in the expectation of
a revenue from the coal tonnage, will be compelled, in self preser¬
vation, to look out for other sources of revenue, and that thus, with
her sanction, the Western trade, ascending and descending, will be
transferred, by whatever forced means, from the Rail road and the
city of Baltimore, to the Canal and the city of Alexandria. But the
Western trade though extremely valuable and important as a source
of commercial prosperity to the city in which it centres, may yet, at
the reduced rates of toll which will be necessary to divert it to the
Canal, be insignificant with reference to the revenues which it will,
in that case, yield. The receipts of the Canal may, in this way, be
increased for the benefit of the secondary liens accorded by the bill,
and yet leave no surplus for the State. The evil consequences, on
the other hand, of the transfer of the trade, are certain, in the inevi¬
table decay of the city of Baltimore.
I have alluded, on a former occasion, to the various influences
which are brought to bear in support of the movement now making
by the Canal Company. In closing this communication, I desire to
refer again briefly to that subject. The public creditors are deterred
from opposing a measure so fatal to their interests, as well as to
those of the Slate and the city of Baltimore, by the apprehension or
the threat that, unless the friends of the canal be gratified in their
wishes, a majority cannot be secured for the passage of a bill for the
maintenance of the public faith. This is a most unhappy delusion.
A declaration, in however imposing a form, that the State will pay,
if obtained by the adoption of a measure which diminishes the ahil-
ity to pay, cannot advance their interests. They may hope, per¬
haps, that a short interval between the passage of the canal bill and
the general recognition of its fatal character, will afford to the more
sagacious an opportunitj' of disposing of their bonds. I think they
will be. disappointed in this expectation. Public opinion will come
to just conclusions too promptly to permit of its being realized.
Their true policy is, to consider the bill reported for the completion
of the canal, exclusively upon its own merits, with reference to its
permanent effect upon the finances of the State, and to support or op¬
pose it, according as they may judge that it will promote or impede
the satisfaction of their just claims. MARYLAND.