NEW-YORK AND ERIE RAIL ROAD COMPANY.
[At the annual election held on the 23d of October, 1844, the fol¬
lowing gentlemen were elected Directors for the ensuing year,
viz : George Griswold, Jacob J jittle, John C. Green, James Harper,
Eleazar Lord, Paul Spofford, Stewart C. Marsh, Henry L. Pierson,
Henry Shelden, C. M. Leupp, J. VY. Alsop, Silas Brown, Robert L.
Crooke, (and Sidney Brooks, who has since declined) of this City,
and D. 8. Dickinson oí Broome Counter, A. S' Diven of Allegany
and Elijah Risley oí Chatauque. At an early meeting of the
Board, the following address was ordered.]
ADDRESS.
It may be expected that this Board should express to the public
their views of the undertaking, the progress of which is the object
of their appointment.
Happily the merits of this undertaking are universally acknow¬
ledged. The lapse of time has but rendered them more evident and
unquestionable ; and the importance, not to say the necessity of the
work to this metropolis, has come to be very generally felt. But
in common with many other public works, including those of this
State, its progress has been suspended, and the plans and measures
heretofore proposed for obtaining funds for its completion have
failed of success.
There is, nevertheless, in the community, not only a prevalent
feeling in favor of this work, but a belief that it may be, ought to be
*
and will be completed—that further delay is neither necessary nor
expedient—and that a practicable plan for its resumption and ac¬
complishment may be proposed, and would be promptly supported.
Much of the doubt and discouragement which have heretofore
prevailed have arisen from want of information on the part of those
who were favorably disposed towards it ; but more, by far, from
2
the opposition and misrepresentations of parties interested to defeat
it, and from individuals who were disappointed of success in
their private schemes. The object of this opposition was to
destroy contidence and defeat the undertaking. It proceeded from
hostility to the work itself, which was viewed as in conflict with
certain local interests, and as prospectively in rivalship with the
more northern route to the Lakes, which had been rendered popu¬
lous and powerful by a muniflcent outlay of the public funds.
The eflect of the misrepresentations so long and so industriously
propagated, aided as they were by the embarrassments attending
and following the suspension of the work, has been to induce ex¬
tensively an impression that there must be some great difficulty
some formidable obstacle, deepl y seated in the scheme itself, or in
the manner in which its affairs have been conducted. The failure
of the Company to obtain the means necessary to a resumption of
the work, appears to have strengthened this injurious and un¬
founded impression. Some elucidation of this subject seems there¬
fore to be called for on the present occasion.
The hostile misrepresentations reiered to, had respect chiefly to
the prices paid by the Company for labor and materials; which were
alledged to be exhorbitantly high. Confidence was in this manner
impaired and a door opened to every species of injurious imputation
To such extent was this form of opposition carried that the
Legislature was induced on two occasions to appoint committees
of its members to investigate the affairs and management of the
Company. In both cases the official reports were altogether credi¬
table to the Company, and in no respect more so than in regard to
the prices stipulated in their contracts. The second committee
examined minutely all the books, contracts, documents, and vouch¬
ers of the Company, and took the testimony under oath of more
than one hundred and fifty individuals, touching the subject matters
of their inquiry. They entered upon their labors under the full
force of the strongest prejudices which at any time prevailed ; and
expected to find something to justify, at least in some degree, the
unfavorable impressions which had been induced. Their report,
comprising more than 750 pages, (Assembly Doc. No. 50. 1842)
may be refered toas evidence that the affairs of no concern, involving
the expenditure of millions, were ever more thoroughly searched ;
and that if there had existed anything of a nature justly to impair
3
confidence, they would have discovered it. But though their own
unfavorable impressions were removed, the result of their labors in
no degree allayed, the hostility of those whose object it was to
decry and defeat the work.
With respect to the main ground of prejudice and doubt, namely,
the reiterated and reckless assertion, that extravagant prices for labor
and materials were paid by the Company, the Board are in posses¬
sion of a document derived from official sources, in which the prices
paid during the same years, by seventeen different corporate and
public bodies, including the Canal Commissioners of this State, are
brought into comparison with the prices paid by this Company for
similar items of expenditure; from which it conclusively appears
that the prices paid by this Company, especially under the leading
and heaviest items were less, and generally by a large per centage
than on any of the works refered to.
In harmony with this result and with that of the respective Le¬
gislative investigations, it merits to be observed, that of the contracts
in force, and which covered all the unfinished portions of the road
when the work was suspended, some ol the largest were soon after
offered by the contractors to be cancelled without any claim for da¬
mages, it being their opinion that the prices were too low to enable
them to fulfil their engagements without loss. It was then sup¬
posed that active operations would soon be resumed, and was not
deemed advantageous to the interests of the Company to permit an
abandonment of the contracts. In the course of the last year it was
considered expedient to cancel all these contracts, and they have
been cancelled without any claim or allowance of damages in any
instance. Whereas, on the contracts suspended about the same time
on the Erie canal, allowances of damages, in consideration of the
profits which the contractors would have made had they gone on
with the work, amounting to near a million of dollars, have been
awarded out of the public funds, and a large amount of claims
against the State remain to be satisfied.
Extract from the Report of the Committee of the Legislature, of
which Mr. Culver was chairman.
Assembly Doc. No. 284, 1841.
" The prices paid, and agreed to be paid for land, for iron, and
other materials furnished, and for the work done and to be done,
are low, and are on an average, lower than the prices paid on other
4
public works, in this and the neighboring States ; and there is not
one witness or one established fact, going to prove the contrary.
This was regarded by the committe as a material point, and to it
more attention has been directed than to any other. On instituting
a comparison between the prices paid by this company, and the
prices paid by the State for similar work and materials, the wit¬
nesses make considerable difference in favor of this company
Great liberality has prevailed throughout all that community to¬
wards this company, in making contracts, in making donations,
and in freely granting a large portion of the road-bed. "The cost of
the h'ight of way' as it is called, constitutes a large item in the
expenditures of other roads, but on this it will be comparatively
small."
At the close of the report they add :
"In view of these considerations, the committee is constrained
to say that this company deserve the encouragement and liberal
support of the Legislature."
Extract from the Report of the Committee, of which Mr. Chat-
field was Chairman.
Assembly Documents, No. 50, 1842.
"As a criterion by which to judge of the reasonableness of the
prices paid for work and materials, by the New York and Erie
Rail Road Company, the committee have required the contractors,
who have appeared as witnesses, and who have been engaged as
such on other public works, to make, according to their knowledge
and recollection, a comparison between the prices paid by this
company and those paid on such other works, for the like labor and
material. The result of such comparison in almost every case has
been to show that the prices paid by this company are as low, and
in many cases essentially lower than on such other works. The
comparisons extend, not only to all the important public works in
this State, but to a great many others in several of the eastern,
western, middle, and southern States."
The facility with which misrepresentation and prejudice on this
subject were propagated, was greatly augmented by the disastrous
state of the times, and by the madness which seized the minds of
a portion of the people, who from being the friends and promoters,
proclaimed themselves to be opposed to the construction of public
works, whether by corporations or by Legislative authority, and
seemed to exult in the suspension and ruin of every such underta¬
king.
Successive Legislatures however, understanding the state of
facts in regard to the proceedings of this Company, far better than
5
the public didj have passed Laws of the most favorable character
at nearly every session for the last twelve years ; not indeed with¬
out the boldest exhibition on the part of some, of the hostility
which has been refered to, but generally, nevertheless, by strong
majorities. In short, the undertaking and its managers, appear to
have had the confidence of the Stockholders, of a majority of the
Legislature, and of that portion of the public generally, who de¬
sired the completion of the work.
It therefore seems to the Board to be due to the character of the
undertaking, to say, emphatically, to those who may be disposed
to promote it, that the difficulty in the case is not internal—that it
results not irom any thing in the actual condition or proceedings
of the Company, but from hostile misrepresentations and false im¬
pressions to which it has been subjected. Were this difficulty of
a nature to be overcome by testimony, by the results of impartial
investigation, or by the opinions of disinterested and candid men,
enough would seem to have been done in that way to effect the
object; or on the contrary, enough to show conclusively, that while
the ruin of the undertaking continues to be considered possible,
opposition to it and to all attempts to resume and carry it forward,
is to be looked for from the same source and for the same purpose
as heretofore. It can be encountered and surmounted, not by ti¬
midity, inaction, and delay, but only by earnest and successful ac¬
tion on some feasible plan.
If therefore this city needs and desires the completion of this
work, a timely and resolute effort to sustain and provide for it is
imperatively called for ; and to such effort, with a right apprehen¬
sion of the case, and a practicable plan, there is no obstacle, but
every encouragement. The public need no further evidence to
show that the undertaking is well founded, that its execution is o
the highest importance to this city, or that it will, when completed
yield satisfactory returns to its proprietors. The city and the
whole country are satisfied im these respetes. It remains only to pro
pose and prosecute a plan, which those who desire its completion
will not deem impracticable. There is nothing in its condition,
its history or its prospects to discourage or impair the value of new
subscriptions to the stock. On the contrary if stock in such a
work could in any case be deemed desirable or unobjectionable to
6
the citizens of this city, new subscriptions to this are recommended
by two unusual and valuable considerations : namely, first that
the time necessary for completing the road is brief, compared with
that which would be required, were the work now to be originally
commenced ; and second, that by the Law of April 1843, the com¬
pany are entitled to the State Loan of three millions as a bonus, or
a return of the monies paid by them, with legal interest, on condi¬
tion of their accomplishing the construction of a single track of the
Road within seven years fiom the passage of that Law.
It should be known however, that by this Law, two years only
were allowed for the Company to resume the work. The period
thus limited, will expire in the month of April next, and all the
benefits of the Law will then be forfeited should the Company
fail to obtain funds and resume the work before that date.
In the same most encouraging and valuable act of the Legisla¬
ture, provision was made expressly, to supersede the necessity of
any very formidable amount of new Subscriptions to the Capital
Stock. The Company was authorised to issue Bonds for three
millions of dollars, being half the amount required to complete the
work, which were constituted a lien upon the Road, in preference
to that of the State.
With respect to that Law, no renewal of its provisions can be
hoped for, should the Company fail within the time limited, to
avail itself of its advantages, by obtaining funds and resuming
the work. Least of all, is any modification of the Law for the
purpose of authorising an issue of the whole or a portion of such
Bonds, as the sole reliance for the means of extending any section
of the Road, reasonably or with any confidence to be looked for,
while no provision is made by new Subscriptions for carrying out
the entire undertaking. The object and intention of the Legisla¬
ture was to aid, encourage, and secure the completion of the entire
work. So far as the benefit of the Law was intended as a boon to
the southern tier of Counties, it was intended for all of them ; and
in so far as the Legislature designed in this way to benefit this
City, they undoubtedly had in view the entire work, as a tho¬
roughfare of commerce with the Lakes and regions of the West.
And if with the extraordinary advantages of this Law, in a period
of commercial prosperity like the present, the means of going on
with the work in such a manner as to justify confidence of early
7
and entire success cannot be attained, w?iat rational consideration
can be urged to justify any further public patronage ? If the
portance and the merits of the work will not now draw to it the
requisite support, who can persuade himself that there is any
ground oí hope in the future. If with its acknowledged merits-
and importance it fails of support from this City, who can bring^
himself to believe that any further encouragement of it would be*
conceded by the Legislature, or could with any propriety be solicr-
ted.
It is known and felt by the friends of this work in every succes¬
sive Legislature, that its benefits are to center and be realized chiefiy
in this metropolis, the interests of which in that behalf were so
carefully guarded in the charter, by the provisions ivhich confine
it within the limits of the State, and contemplate its approaching
on the east side of the Hudson, and traversing the whole length of
the City. They are also aware, that as yet the City has not been
heavily taxed for its construction, the City subscribers having paid
less than ^400,000 ; a sum believed to be considerably inferior to
that annually saved to the inhabitants, by the reduction in price of
a single article of daily consumption, in consequence of the new
supplies thrown upon the market from the counties through which
the Road is in operation—while the inhabitants of the counties on
the route have paid an aggregate approaching $1,^00,000.
It is obvious therefore, that those Counties as well as their Re¬
presentatives in the Legislature, look, not without reason to this
City for the co-operation and support which is now required to
secure the benefits of the Law referred to, and hasten the execution
of the unfinished portions of the Road. And with this—with a
subscription previously obtained, for the purpose of thus completing
the whole work, no doubt whatever exists, but that the Legis¬
lature would, more readily, even, than heretofore, enact or modify
such Laws as the safety and progress of the Company required.
The ill eflect, upon the minds of many, of a succession of inef¬
fectual propositions, and of the delay occasioned by them, is un¬
doubtedly to be regretted ; and may demand and excuse, in the
proposal now to be submitted, conditions which would otherwise
have been deemed superfiuous. But if an application for as mo¬
derate an amount of subscriptions as is now contemplated, and be¬
lieved to be sufficient, with the legalized Bonds, and the aid yet to
8
be relied on from the country, would at any time have been suc¬
cessful, there appears to be no sufficient reason to infer that such
an application will not yet be sustained. It is at least due to the
city, that a plan requiring the least amount of subscriptions, which,
with other resources will insure the completion of the entire work,
should be submitted to the action and determination of the citizens.
The importance of the work is such, and ought to be felt to be
such, as to justify a personal application to every citizen, who is
able to take evenga single share of the stock, and pay for it by in¬
stalments, within three years. And should such extended per¬
sonal application be found necessary, those to whom the under¬
taking is committed, ought not, till it is faithfully made, to think
that their ;vhole duty has been performed.
The affair requires and deserves to be taken hold of with unwa¬
vering confidence, and to be prosecuted with unfaltering step.—
The idea of its tailing, of its going by default, of its being an affair
of too much magnitude for this city, ought to be at once and for¬
ever banished from the minds of those to whom it is committed.
It requires decided, affirmative, not doubtful, negative, non-com¬
mittal propositions. Whatever is done should conduce directly to
the end. The plan of procedure should not be hampered with
limitations and conditions of a nature to cause doubt, distrust, de¬
lay, and defeat ; but should bear on its face, plainly and frankly,
the aspect of confidence, and give in its outline all the scope for
effort and perseverance which may be necessary to complete suc¬
cess. The patient, if the case is rightly understood, does not need
medicine or charity, but strong meat and exercise.
The actual outlay upon this work, including the value of dona¬
tions for Road way and other purposes, may be reasonably estim¬
ated at five millions of dollars : consisting of stock of the company
somewhat less than one and a half millions ; debts, chiefly settled
by obligations at five years, about six hundred thousand dollars ;
and three millions furnished by the State.
The donations of land furnished for the roadway, depots, sta¬
tions, and other purposes, are deemed to exceed in value the loss
incurred on the sale oí State stock, and the damages to unfinished
work, consequent on suspension and delay.
Those best acquainted with the subject, with the amount of la¬
bor and materials employed, and the prices paid, deem the work
9
to be well worth all that it has cost ; and are of opinion, that were
it now to be commenced, taking: into view the unavoidable loss
i / Ö
of time required in such a case, a greater amount or value of re¬
sults could not be accomplished for a less sum.
Much more than half of the work necessary to prepare the entire
line of the road for the rails, has been performed. The work is well
done. No part of it requires to be altered. The plan of the work
is in no respect inferior to that of any similar undertaking, and is
believed to be susceptible of no material improvement. The track
is six feet in width, in which respect it is deemed to be more ad¬
vantageous for so important a thoroughfare, than the narrower
tracks on other roads.
Fifty-three miles of the road on the Eastern division are in pro¬
sperous and profitable operation. On the Delaware, east of Depo¬
sit, between 30 and 40 miles are graded. Between Binghamton
and the Lake, 150 miles are prepared for the superstructure, some
of which is laid. The timber for the superstructure is provided
for about 250 miles. At the Western termination the rails are laid
on about 10 miles.
The work thus far accomplished comprises the following lead¬
ing items, the prices paid for which it will be manifest to those at
all accustomed to such matters, were remarkably low, especially
considering that nearly the whole of the work was performed dur¬
ing a period when prices generally ruled high. In the statement
annexed, the aggregates of quantities on the whole line, and the
average prices, are given.
194 6-10 miles of clearing and grubbing, a $468 per mile.
(The distances across cleared fields not
being measured.)
7,437,850 cubic yards of common excavation and embank¬
ment a 10 4-10 cents per yard.
This item embraces 3,430,881 cubic yards common
excavation, a 12 98-100 cts.
And 4,006,969 cub. yds. embankment, at 8 1-10 cts.
727,785 cub. yds. hard pan and cemented earth,
a 36-9-10 cts. - - - per yard
364,815 " " indurated earth, a 29 87-100 cts. do.
32,663 " " quicksand, a 53 4-10 cts. - do.
215j204 " " solid rock, a 78 28-100 cts. - do.
2
10
167,604 " " loose and slate rock, a 41 92-100 cts. do.
90,523 foundation excavations, including
pumping and bailing, a 32 54-100
cts. per yard.
23,923 " " Protection wall, a 50 23-100 cts. per yard
24,285 " " dry masonry, a $2.92 6-10 cts. do.
18,185 " " masonry, laid in cement, a $5.37, do.
19,989 " " stone delivered, a $1.05 80-100 do.
3,132,703 lineal feet of piles delivered for use, a 4 6-10 cts. per
lineal foot.
110 6-10 miles piles driven, a $921.00 per mile.
108,670 lineal feet of piles driven for foundation, including ma¬
terials and workmanship, a 30 4-10 cts.
11,032,424 feet ß. M. of bridge and superstructure timber,
a $9.82 5-10 per thousand.
6,746 tons gross of R. R. iron, including freight and all expen¬
ses, insurance, incidental charges, &c., (fcc.
$59.94 per ton.
Land and fencing, salaries of land agents, law expenses,
(fee., being the amount expended for the
building and perpetual maintenance of
140,464 rods of fence and 325 91-100
miles of line, amounting to $286,299,57
or $878 per mile.
To complete the entire line of the road, six millions of dollars
is deemed pecessary and sufficient. Towards this sum, the Bonds
legally authorized are an eligible and safe reliance for three mil¬
lions. From a variety of considerations it is believed to be quite
safe to rely upon the interior Counties for further aid to the amount
of one million. So that to insure the immediate progress and
early accomplishment of the entire work a subscription of two
millions of dollars only is required. With such a subscrip¬
tion the Board would have no hesitation in proceeding with-
the work in the confidence that no further call upon the citizens
of this city will be¡necessary.
Believing this to be the smallest amount that would give to the
Stockholders sufficient confidence of success to render their sub¬
scriptions safe as an investment, and that subscriptions to this
11
amount will not be deemed impracticable or out of proportion for
this city, it is proposed to give notice in due form within a few day®
comprising substantially the following conditions, viz :—
1. That Books of subscription to the capital stock will be open¬
ed for two millions of dollars; the option being reserved by the
Board of accepting such further subscriptions as may be made
prior to the 1st day of April, 1845.
2. That if two millions and no further sums should be subscrib¬
ed by that date, the Board will rely on subscriptions for one mil¬
lion in the interior Counties, so as to make an aggregate of three
millions, which, with the like amount of Bonds, as authorized by
the Legislature, is deemed sufficient to complete the Road from the
Hudson to the Lake in such time and manner as to secure all the
benefits of the Law of April, 1843.
3. That an instalment of $5 per share be called at the plea¬
sure of the Board after the 1st day of January, 1845, and that sub¬
sequent instalments be restricted to $20 per share in 1845; $30 in
1846 : and $45 in 1847.
4. That as an equitable, and under existing circumstances, an
expedient measure, interest at the rate of six per cent, per annum
be allowed on all the instalments on the Stock which shall be sub¬
scribed, from the dates of the respective payments until the whole
line of the road from the Hudson to Lake Erie shall be put in
operation ; and that the same be liquidated and paid yearly on the
1st day of January.
This measure is obviously equitable. The interest on the mo¬
nies employed in constructing a Rail-Road, or any other work,^
during the time elapsing between the dates of the advances and
the accomplishment of the object, is no less a part of the cost than
the expenditure for labor and materials. It is as justly to be view¬
ed in this light in the case of a company making advances by in¬
stalments, as in the case of an individual who should contract to
deliver a finished work at its cost, and who should borrow the mo¬
ney expended thereon, and pay for the use of it from time to time
out of the sums borrowed.
It is experbcnt under existing circumstances ; not only as a mo¬
tive to subs<" iptions, but because the net earnings of the Division
of the Road now in operation, and of portions in addition thereto
to be put i. i operation from year to year, incase of an early resump-
12
tion and vigorous prosecution of the work, will enable the Com¬
pany to pay interest on the instalments without encroaching upon
the capital to be subscribed.
The net earnings of that Division for the year just closed, are
stated in the report of the late Board at $58,678 ; subject, how¬
ever to a deduction in the settlements of the year on account of the
steam-boat service, which by new arrangements under a more pros¬
perous state of things, may hereafter be avoided. In view of this
consideration and oí the present deficiency of iurniture and facili¬
ties on the road, that report anticipates that if the company should
be relieved irom its straightened circumstances, and enabled to
use this portion of their road to the greatest advantage^ the clear
net income would be augmented to $75,000. This amount of earn¬
ings, therefore, should the affairs of the company be relieved with¬
in a short period, may be assumed for 1845.
Should the construction be speedily resumed, the road may be
opened to Port Jervis by the middle of 1846, in which case the net
earnings for that year may be safely estimated at $120,000.
And with the means of advancing the construction so as to open
the road to Binghamton as early as July, 1847, the net earnings
that year will not be less than $300,000.
With the supposed resumption and progress of the work in view,
the following calculations will show that reliance on the earnings
of the road for the liquidation annually of interest accruing on
the stock, is in no degree presumptuous.
Should two millions only be subscribed in this city, and should
there be a delay in respect to the million relied on irom the inte¬
rior counties, the subjoined calculation would not be strictly appli¬
cable ; a less amount of interest annually would accrue.
But assuming that the whole three millions should be subscri-
at the same time, and that equal instalments should be assessed'
upon all the shares, the following, taking the net earnings for suc¬
cessive years as above stated, would be the results
1845.
Net income from the Eastern Division,
Subject to the charge of interest at 6 per cent, on
the obligations (limited to $300,000 in amount,)
issued and to be issued, in liquidation of the
debts of the Company, . - - -
$75,000 00
18,000 00
57,000 00
13
Suppose then that instalments on three millions
of subscriptions should be paid, amounting to
$25 per share, in the course of the year, viz :
$5, on the 1st of January ; $5, on the 1st of
March; $10, on the 1st of July; and $5, on
the 1st of October ; the interest on the aggre¬
gates, at 6 per cent to the 1st of January, 1846,
would amount to - - - - - - 27,750 00
Leaving a surplus, applicable to other objects of $29,250 00
1846.
Net income for the year, - - - - - $120,000 00
Less interest on obligations as aforesaid, - - 18,000 00
Instalments on the three millions, amounting to 102,000 00
$30 per share ; viz : .$10, on the 1st of January ;
$10, on the 1st of May ; and $10, on the 1st of
October. The interest on the aggregates, to 1st
January, 1847, would amount to $34,500 00
Interest 1 year, on the gross sum,
$750,000, paid in 1845, - 45,000 00 79,500 00
Leaving for other purposes, - . - $23,500 00
1847.
Net income for the year, ----- $300,000 00
Less interest on obligations, - . - - 18,000 00
$282,000 00
Instalments amounting to $45 per share, viz : $10,
on the 1st January ; $L0, on the 1st April ; $10,
on the 1st July ; $10, on the 1st October, and
$5, on the 31st December. The interest to 1st
14
January, 1848, would amount to
And for the year on the gross pay¬
ments of 1845, and 1846, viz,
$1,650,000 . - . -
$45,000 00
99,000 00 144,000,000
Leaving a surplus of earnings at the close of that
year, of - - $138,000 00
Applicable to the payment of interest on the bonds'
authorized by the Legislature, and to other
objects.
On the assumed rate of collections, and of progress in the con¬
struction, the entire line of the Road may undoubtedly be opened
for use on or before the 1st day of January, 1848 : and in such
case the net earnings during that year, will, there can be no doubt,
be amply sufficient to discharge all accruing interest on the bonds,
supposing the three millions authorized by the Legislature to have
been issued ; and to provide for a dividend on all the stock of the
Company ; and for the redemption of the obligations issued for the
present debt.
The late Board in their Report to the public in
February last, in an elaborate analysis of the
sources of business, and estimate of the net
earnings of the road when the whole line shall
O
be put in operation, founded on the results
of the business on the division now in use,
on the late census of the population and pro¬
ducts of the counties on the route, and on other
legitimate data, allowing nothing for an increase
of inhabitants, products or business during the
time to elapse before the completion of the road,
and excluding all consideration of business to be
derived from the Lakes and of compensation for
transporting the mails ; and rejecting moreover
some of the elements comprised in their mode of
calculation, nevertheless give as their result an
aggregate of net earnings annually of - - $1,343 500
which it will be perceived is equal to payments
of 6 per cent yearly on three millions of bonds,
and over 25 per cent yearly on four and a half
millions of stock.
15
Assuming that estimate, as being entitled by the
caution which characterizes it, to be relied on as
sufficiently moderate, it will be seen that all the
payments indicated will be amply provided for;
thus:
Interest at 6 per cent on three millions of bonds for
the year 1848. $180,000
Ten per cent dividend on 4 12 mil¬
lions of stock (1 1-2 millions already
issued, and 3 millions yet to be sub¬
scribed,) 450,000
Redemption of obligations issued for
debt,* 600,000 1,230,000
Leaving a surplus of $113,500
Were this undertaking now to be originally commenced, with all
the confidence which now prevails, that when completed it would
be highly productive, five or six years would be required for its
accomplishment, and it would doubtless be felt to be reasonable
and equitable, that interest on the instalments during its progress
should be paid : more especially as there would in the supposed
case be no doubt but that the earnings of the Road when comple¬
ted would pay satisfactory dividends on its cost, including inter¬
est. In that case the interest would be paid out of the Capital.
The present case is distinguished by the important and gratifying
circumstance that the means of paying the interest instead of being
taken from the Capital, are to be taken from the earnings of that
portion of the Road which was put in operation, and is presented
in a highly productive state, by the old stockholders to those who
shall now become subscribers to the Capital. The old Stock so
far from being an incumbrance or disparagement to new subscrip¬
tions, is entitled to be considered as bringing to them a most im¬
portant element of success in the earnings of the Division now in
use, besides a saving of some three years time and an outlay and
value in the work performed, of some three millions of dollars
which is not represented by any certificates of Stock, and which
is burthened with no charge for interest.
* The whole amount of indebtedness is somewhat less than. $600,000. The interest on $300,000, is
to be paid annually, as above stated ; and on the balance at the end of five years from the date of the
obligations. But the holders have the option to exchange them for stock of the Company. Some
have already been exchanged; and the amount finally tobe redeemed in money, will probably be less
than $600,000, by cj sura much more than equivalent to the amount of defered interest on $3(X),000. jj
16
In connection with the application to the citizens for subscrip¬
tions, it is intended to advertise for proposals to contract for the
graduation of the road-way from Middletown westward to Port
J er vis, about 19 miles ■ to resume the work on that portion of the
line as soon as practicable after the unliquidated claims against the
( bmpany shall be settled ; to adjust those claims with as little de¬
lay as possible; and, as the subscription advances, to make the
necessary arrangements for proceeding in the construction of the
line westward to Binghamton.
By order of the Board,
ELEAZAR LORD, President,
Office of the New York and Erie Rail Road Company,
Oct. 31, 1844.
3 5556 042 147165