Red Wing sentinel., 1859-07-30
REPORT OF JAMES sHIELDs,LATE
PRESIDENT OF THE M. l. C.. v.
y, II. ca. e.-sz

REPORT OF JAMES SHIELDS, LATE
PRESIDENT OF THE M. l. C. v.
n. r.. co.
To the Stockholders of the Minnesota and
Cedar Valley Railroad Company:
GENTLExEN !: deem it my duty to make
you acquainted with the condition ef your
Company, and the line of policy which the
Board OF Directors, in view Of this condi-
ton, found it necessary to adopt.
Our present liabilities, as ascertained from
the books, amount in all to $l9l. .l3O 90.
To meet these liabilities our whole avail
able assets amount to only 125 bonds
Besides these there are 226 bonds hy-
pothecated with several parties in St. Paul
and New York, as coilatera, security for the
payment of money heretofore borrowed and
expended BY the Company, amounting to
$50, ,4O3 %. ,.-'"~7
This amount is included in the general
statement of liabilities.
a portion Of these hypothecated bonds
constitute banking basis, forming the cap
ital stock Of two banks" The Peoples
Bank" and the "Central Bank These
Banks are the property Of the Company
but as corporations cannot bank, two mem
bt'rs Of the Board. for the sake of protec-
ton, had been forced temporarily to give
the use of their names as stockholders to
these establishments. '. a..5 sf 1E@@s3'
The terms upon which these hypotheca-
t'on were made, are various, and the rate Of
interest is various, ranging from Z per cent.
10 81 per cent. per annum. The time of pay
tnent in most cases has already expired, and
IN al! cases will have expired before the end
OF this month-these bonds are therefore
liable to be sold at auction at a nominal sum,
leaving the bulk of the debt for the payment
OF which they had been pledged. still unli
qu'dated. This would be ruinous sacrifice
to the Company. Taking into consideration
our unpaid liabilities, our constantly accru-
ins expenses, the accumulating interest on
money borrowed, and the encountered con-
dltion Of our assets, and then considering
the additional fact that there was no money
III the treasury, think it would be difficult
to imagine Company in more embar-
RAISING Position-a position occasioned in
great part, / am bound to say, by circum-
stances and influences unconnected with its
management, md for which the Board Of
Directors is not responsible.
In this dilemma we formed the resolution
At once to stop all work upon the road.
abolish salaries, and arrest every kind of
expenditure. In, s..g ..
Our next resolution bound the Company
to call for no more bonds from the State for
any purpose, or under any pretext, except
for work already done, until after the meet
ing Of the next Legislature. The wisdom
of this policy will recommend ITSELF hope,
to the approval Of every man who has the
slightest regard for the interest Of the State
as we'll as the credit of the Company.
Having arrested expenditure, we set to
work to make provisions for the debts due
to engineers, contractors and holders of &C.
ceptances, amounting to the sum of $97,-
458 18, by devoting all of our available
means to secure their payment. For this
purpose, we put the whole Of our bonds
l25 in number in the hands Of Hon. II. IL.
Sibley, as = trustee to pay them to contract
ors At contract rates, and 70 pay them to
creditors if they would consent to receive
them, 1T the rate Of one dollar for ninety
five cents. ,. .G- .l ..-....ss
This trust is to terminate on the first day
OF October next, ana the bonds then IN the
hands, the trustee are to be disposed of to
the best advantage by the company to dis
charge such Of these debts as may then re-
main unsettled.
1t will be seen that under the circumstn-
ces, this was not only the best, but the only
provision that could be made for the securi
ty Of these creditors.
: This being effected, our next object OF
alH To nhk ~
responsible men, who would undertake to
redeem our bonds from hypothecation, and
apply them to the construction Of the road
provide for the remaining liabilities, and
prosecute the work with due diligence upon
the line of road already located and definite
ly established. Fortunately we have been
successful in this respect. We are now
able to congratulate you and all others,
upon having secured this assistance ~
Benjamin Pringle, Of Batavia, New York,
and Joseph Chamberlain, Of Cleveland, o.,
and their associates, offered to assume all
these responsibilities, and the offer was glad.
ly and promptly accepted.
Four of my associate Directors and nv
self Withdrew from the Board to give place
to men much better fitted in every respect
to manage such trust. For my own part.
l only accepted the position Of President
temporarily to aid in efecting some such ar
rangement, and the moment it was accom-
plishcd was but too glad to retire. The
Board of Directors, IS at present constitu-
ted, consists OF B. Pringle, who is Presi-
dent, H. Il. S b'ey, F. Steele, J. Chamber
lain, A. Caldwell, and WIN. A. Prentiss.-
hope you and tho creditors will be salts
fled with this arrangement. 1t is certainly
as coed IS any reasonable man had any
right to expect in the present condition OF
the Company. The character of the men