SKSATB DOC. No. 22.
COMMUNICATION
FROAI THE
IN RESI'ONSE TO A
líESOLüTION OF THE SENATE CALLING FOK A SCHEDULE OF THE
DEBTS, DUES, DEMANDS AND CLAIMS AGAINST SAID COM¬
PANY, AND WHAT PORTION OF SAID DEBTS, &C.,
ARE ASSUMED BY THE RICHMOND AND
ALLEGHANY RAILROAD CO.
OFFICE OF THE JAMES RIVER AND KANAWHA CO.,
Richmond, Va., February 12í7í, 1879.
To the President of the Seriate of Virginia :
Sir :
In response to the resolution agreed to by the Senate this I
have the honor to say that the first clause of the provisional contract be¬
tween this company and the Richmond and Alleghany railroad company,
approved by the stockholders November 28th, 1878, and found on page
4G5 of the 44th annual report, requires the assumption and payment by
tiie Richmond and Alleghany railroad company of all the debts and obli¬
gations of this comjiany, named in the accompanying schedule, which
could be asserted against this company, &c.
A schedule of debts and obligations was prepared by me .and delivered
to the Richmond and Alleghany railroad company, in which schedule I
intended—deeming this my duty—to embrace all the known and recog¬
nized debts of the company, but from which, in the haste of its prepara¬
tion (see pages 471-478 of the 44th annual report), there was inadvertently
2
Senate Doc. Xo 22.
omitted a class of obligations mentioned in the negotiations and known
as the "guaranteed debt." Afterwards, however, in pursuance of the
resolution of the stockholders, adopted December 6th, 1878 (see page 477
of the 44th annual report), this guaranteed debt was added to the schedule.
The nature and amount of said guaranteed debt is stated on pages 18,
19, 20, 21, and 25 of my response of date January 1.5th, 1879, to a reso¬
lution of the House of Delegates calling for information as to the debts
of this companj'-, &c.
Full details as to what is known as "the war claims" (under sections
two and three of act of March 18th, 18G2,) will be found in the case of
Stuart vs. James river and Kanawha company, 24th Gratt. page 294, and
in the first auditor's report, 1865-G, page 56 ; and see also pages 25-26
of my said response to House resolution, and pages 11 and 12 of the
reports of sub-committees to the special committee of the House of Dele¬
gates on the proposition of Mason, Shanahan & Randolph, to lease the
canal, January olst, 1877.
These war claims have not been and are not recognized as among the
debts of this company, and hence are not included in the said schedule.
In said case the court of appeals affirmed the judgment of the circuit
court of the city of Richmond pronounced in favor of this company in a
suit brought against the company upon a portion of these bonds known as the
" war debt."
In this schedule there was not embraced anything on account of the
annuity to the stockholders of the old James river company, this annuity,
like the guaranteed bonds, having been assumed and released to this com¬
pany by the state, under act of March 2.3d, 1800. In the case of the
guaranteed bonds, despite the fact that, as between this company and the
state, they have become and are the debt of the state, there have been and
are known demands made upon this company. In the case of the annuity
there have been and are no known demands made upon this company,
and it has. not been regarded or reported as a debt of tliis compiiny.
Full particulars as to this annuity will be found by reference to pages
10, 20, 21 and 25 of my said response to House resolution.
On pages 23 and 24 of my said response to House resolution there is
described a loan of eighty thousand dollars ($80,000) for the specific pur¬
pose of improving the navigation of the Kanawha river from its moutii to
Loup creek shoals. This fund, under the terms of the act (see section 9
of act of March 23d, 1860,) went into tlie hands of the Kanawha board,
and was by it applied to said specific purpose, and it is secured to the state
(as required by said act) by a trust deed on the works of said Kanawha line
Senate Doc. Xo. 22.
3
of improvement from its month to Lonp creek shoals. This sum has not
been regarded or reported as among the debts of this company. All that
I know about the outstanding annuity aforesaid and about the said |80,000
loan, was learned long after the negotiations with the Richmond and Alle¬
ghany railroad eomjjany and the preparation and delivery of the schedule ;
that is to say, during the investigations involved in my response of Janu¬
ary 15, 1879, to the House resolution. In all the negotiations there was
no discussion as to, or mention of, these or either of them, as debts or
obligations of this company. It was, however, expressly stated during
these negotiations, that the "war claims"' aforesaid were not recognized
by this company as among its debts.
I beg leave to transmit herewith a copy of said amended schedule as
showing the debts and obligations of this company, I'egarded as to be as¬
sumed bj' the Richmond and Alleghany railroad company under the terms
of said provisional contract.
I have no knowledge of any other debts of this company.
Very respectfully.
Your obedient servant,
JOHN W. JOHNSTON,
President.
The following is a schedule of the debts of the James river and 'Ka¬
nawha company to be appended to the agreement between said company
and the Richmond and Alleghanj^ railroad company, viz :
First—Debts on the 30th September, 1878, embraced in published flnan-
cial statement, and being as follows :
Old suspended floating debt [prior to May, 18G7] and interest thereon to
30th September, 1S78, none or only a fractional part of which it is
believed will ever be demanded :
Bonds of the North River Navigation Company, - $1,000 00
Interest on •' " . ' . . 1^375 po
Bills payable, notes, 3,g43 00
Interest on 5,172 E8
Pay rolls and open accounts, - . . . 3,500 00
Interest on " - . . - . 2,810 00
Hire of hands, 2 000 00
Interest on do. 2 016 00
n , „ . , , , , , $23.016 51
Balance of eight per cent, bonds, issued in IS.IG, - 12,500 00
Interest on eight per cent, bonds, to 30th September, 1878, 1,627 00
14,127 Ol
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Senate Doc. Xo. 22.
DEBT SINCE Ist MAY, 1S67.
1. Unfunded debt :
[A] Ordinary iioating debt—Payrolls, $11,622 91
Open accounts, 4.932 80
Inter't on accounts, 150 00
10,703 77'
[B] On account of repairs of fresh of Nov. 1877:
. To Jordan, Ballard & Co., negotiable notes,
due Feb'y 15, 1879, 500 00
To B. & C. P. R. Company, note for mules,
&c. (balance) 1,507 80
To county of Rockbridge, six bonds of $500
each, 3,000 00
To meichan's ofRichmond, balance of loan
principal and interest, 4,050 00 9,117 80
2. Funded debt :
[A] Prior to 1877—1st mortgage bonds, 750,000 00
Due bills for do 1.205 00
2d mortgage bonds, 170.400 00
2.5,823 .57
[B] On account repairs of fresh of Nov. 1877 :
To Jordan, Ballard & Co., 2nd mortg.age
bonds, 16,000 00
To city of Lynchburg 2nd mortg.age
bonds, only $3,000 actually delivered, 15,000 00
921,605 00
31,000 00
[Cj Third mortgage bonds held b3' B. & C. P.
R. Co. on account of stock subscription, 248,000 00
Interest matured on mortgage bonds :
1. On $750,000 of 1st mortgage bonds, 70,371 00'
2. On $170,400 of 2d " " 19,563 004
Debt contracted for repair of damages by freshet of 1870, not included
in statement of funded debt :
Bond to city of Richmond, 200,000 00
Bond to ciiy of Lynchburg, 3.5,0iX) 00
Bond to Rockbridge county, 50,000 00
[Under the written agreement between this
company and the county ot Rockbridge, the
payment o( this debt is to be made only from
the net proceeds of the North River canal,] —^ 285,000 00
Interest on above bombs :
Cit}' of Richmond, 93,000 00
(,'ity of Lynchburg, 699 48
County of Rockbridge, 31,000 00
124,009 48
-1,200,005 00
289,934 00
409,009 48
1,703,145'03
Senate Uoc. No. 22.
5
Second—Debts since September 30tli, 1878 :
Tlie interest on the first-mortgage bonds of the company, which accrued
1st November, 1878, and on the second-mortgage bonds, which accrued the
9th of November, 1878, remains unpaid.
Under contract with Jordan, llallard & Co., contractors for the repairs of
the canal west of Lj-nchburg, they will be entitled to receive $40,200 in
second-mortgage bonds of the company, in addition to the bonds alreadj'
received, and the further sum of §15,056.44 in money, in the instalments,
and on the terms prescribed by their contract and set forth in the forty-
fourth annual report of the board of directors to the stockholders of this
compam^ reference to which is made for the particulars and for the con¬
ditions of said contract.
Since September 30th, 1878, there have been delivered to the county of
Eockbridge two bonds of the company for §500 each, secured by a deposit
of §2,000 of second-mortgage bonds of the company as collateral. Said
county will be entitled to receive two other bonds of §500 each, to be se¬
cured in like manner, on their compliance with agreement to loan the com¬
pany that amount.
Since September 30th,'1878, the ordinarj? floating debt of the company
on pay-rolls, open accounts and notes have undergone some changes, but
not materially changing the balances under said respective heads as set
forth in the statement of debt up to the 30th of September, 1878. A de¬
tailed statement of these items will be furnished so soon as it can be made
up, and also a statement of the additional expenses and charges which
must necessarily be incurred in the future current business of tlie company.
Under contract with tlie State of Virginia this companj' agreed to give
its bonds for the cost of maintenance, clothing and guarding the convicts
used on canal repairs. These bonds have hot been given and the amount
cannot be accurately stated because the convicts are still emploj-ed on the
work, but it is supposed that the amount will approximate §50,000.
The debt set forth in the above statement as due the city of Richmond
of $200,000 is claimed by said city to be secured b}^ the second mortgage
of this company, and to form a part of the §500,000 of bonds secured by
that mortgage.
The debt to the county of Rockbridge, also set fortli in the above state¬
ment as amounting to §50,000, is subject to the conditions of the written
agreement between this company and said county, a copy of which will be
delivered as a part of this schedule. It is proper to state here that it is
claimed by said county that this debt is not payable only from the net pro¬
ceeds of the North river canal.
6
Senate Doc. Xo. 22.
Tlie debt of $35,000 to the city of Lj'iichbiirg is subject to the condi-
ditions of a contract pledging water rents at Lynchburg for its payment,
a cop3' of which will be delivered as a part of this schedule.
The $10,000 of second mortgage bonds due to the city of Lynchburg
and stated in this scliednlc are not delivered, but are considered as deliv¬
ered.
If anj' debts liave been omitted b3' inadvertence the eompan3^ claims the
right to add them.
ADDENDA.
" The gucminteed debt" was omitted from the above schedule through
inadvertence, in the haste of its preparation, and is now added in pursuance
of a resolution of the stockholders, adopted December 6,1878. It consists of
of such part of the old bonds of the James river and Kanawha compan3f guar¬
anteed b3' the state of Virginia as now outstand, the holders thereof having, up
to this time, refused or failed to fund the same into bonds of the state of Vir¬
ginia, as the}' are entitled to do under existing laws, the same being now the
debt of the state of Virginia to the release of this company therefrom by vir¬
tue of the act of March 23, 1860, and transactions between the state and
this ccrnpany thereunder ; but the holders having, up to this time, refused
or failed to release this compau}' from its obligation to them as aforesaid.
Princip.al amount outstanding, $122,580 00
Interest in arrear up to Januaiy 1, 1879, ... - 75,174 00
Total, - $197,754 00
Of this amount the hoard of public works holds in its name $4,500 of
principal, and $5,130 of interest, as of Januaiy 1, 1879.
Since tlie time of said assumpsit ly the State, judgments have been re¬
covered .against this corapan}' for a portion of the interest, s.ay about $8,205,
in .arrear on said guar.anteed bonds, on which judgments this compaiy has
been compelled to p.ay a sum approximating $4,500. The balance of s.aid
judgments, siy $3,705, is included in above statement of interest in arrear.
The amount actu.all}' paid by this comiiaiy, s.ay $4,500, has not 3'et been
funded into state bonds or otherwise arr.anged by the state. On said
judgments tliere are costs and an accumulation of interest not included in
the said $8,205.
[Copy from the original on file.]
IVM. r. ÄIUNFOKI),
Secretary.