The Sun.
London, England, 1864-10-20 00:00:00

PERNAMBJJCO.

The report of the directors states that they had fully
expected to have been enabled to announce the final settle-
ment of the long-pending question of the extension of the
company's guarantee. Capt. de Medeiros, the Government
consulting engineer, after careful investigation and personal
examination of the works, made his report to the Imperial
Government recommending the extension of the guaranteed
capital by the sum of £485,648. This recommendation,
having been adopted successively by the three Ministers
who succeeded Senor Sinimbu (since 1861), and finally
sanctioned by the Finance Committee of the Council of
State, was, early in the month of May last, brought before
the Chamber of Deputies, and read a first time as part of the
Ministerial estimates, The Imperial Government, between
whom and the company the most friendly relations existed,
thus pledged itself to an augmentation of the company's
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guaranteed capital to at least the amount so recommended

by Capt. de Medeiros, an instance of good faith on the part
of the Government which the directors felt assured would
be appreciated and acknowledged by the shareholders, and
which could not fail to enhance in public estimation the
honour and character of Brazil. On the second reading,
which took place on Juno 1, it was, after debate, carried by
a majority of 57 to 28. On July 7 following it passed the
third reading by a majority almost as great ; in which state
it went up in due course to the Senate, where, according to
the manager's last despatch to the directors, it was still
waiting to come on as part of the estimates, with every pro-
spect of being carried before the close of the session; which
was then expected to terminate as usual on the 2d of
September. But an unexpected dissolution of the Ministry,
on grounds wholly unconnected with this measure, having
taken place at the latter end of August, a suspension of
business unavoidably occurred. The session, however,
having been subsequently extended to the 12th of Septem-
ber; with the view of enabling the new Government to get
through with the estimates of their predecessors, which
they had taken up, it was possible that the French mail,
which would be due before the meeting, might bring intele
ligence of the measure having passed; otherwise the
manager feared it would have to stand over, if not to an
adjourned session, until next regular session, which would
be in April. The directors deeply regretted the continuance
of this long protracted state of suspense ; but having full
reliance not less on the honour of Brazil than on the justice
of the company's case, they all felt assured that it was sim-
ply a question of time. As regarded capital, the account of
which was virtually closed, the Board were of opinion that
it would be for the advantage of the shareholders that the
shares of the company, which were now paid in full, should
be converted into stock. The traffic receipt for the six months

ending June 30, 1864, amounted to £26,197, against £24,759
for the corresponding period of 1863, and £17,959 in 1862,
and notwithstanding the great reductions in the tariff which
had been experimentally in operation since Dec. 1 in last

year, the six months ending June 30 last had yielded a net
surplus beyond all working expenses, actual and contingent,
in England and Brazil of £3,327, of which the Imperial Go-
vernment had had the benefit in account, and one-half of
which had by arrangement with them been allowed to be
retained by the company towards recouping the cost of the
recent supply of the three additional locomotives mentioned
in the last report. The result therefore was that the half-
year's guaranteed interest received from the Government on
the existing capital, after payment of the interest on the
Government loan and on the existing debentures, had
yielded a surplus of £19,696 applicable to interim dividend,
at the rate of something more than 3 per cent. per annum
on the present share capital, or 1 per cent. for the half-year.
The line and works, which have recently been officially exa-
mined by the Engineer Fiscal, and the whole of the rolling
stock were reported to the directors to be in good working
condition. The insufficiency of the rolling stock still con-
tinued to be seriously felt, and had been pressed upon the
Imperial Government, who were perfectly aware of, the ne-
cessity for an increased supply ; but this, with the extension

_ _ _ •
into Recife and other minor questions, stood over, at their
instance, until after the additional guarantee had been finally
disposed of, Tho directors had no doubt of its being dealt
with at an early period, as the Imperial Government were
not only fully aware that the traffic was on the increase, but
were themselves contemplating its further development by a
road to bo opened from Victoria to Frexeiras, which, if car-
ried out, would materially augment the company's receipts.
The lawsuit with the late contractor yet remained undecided.
The company had secured the services of Mr Bovill in the
place of the late Mr Welaby, and the directors were advised
that the decision of the Court might be expected in Hilary

Perm next. The directors had much pleasure in stating
that the health of the entire staff, with some trifling excep-
tions, continued good, no cases of fever of any importance
having occurred since the directors' last report. Tho re-
venue account for the six months ending the 30th of June
last showed that £26,197 had been received on account of
traffic, and £24,973 on account of the Government gua-
rantee, making together £51,170. From this was deducted
20,942 for working expenses, £8,184 interest on floating
debt and debentures, and £2,347 legal expenses inEngland,
leaving a balance of £19,697. Tho expenditure on capital
account amounted to £1,822,158, leaving a balance of
£26,425 in favour of the company,