Daily union and American. [volume] (Nashville, Tenn.) 1865-1866, 1866-11-02
THE TENNESSEE CENTRAL OR PA
CIFIC RAILROAD.
Arc the Railroads OF the Country IN
Themselves, Productive Property
sIR DEBow's LErrERs-No. -.

a. Atlb1E WHICH are liAdt4E Al UAllNI VI ALAN1
Of business; and should this be made 10 ap-
pear, | may fearlessly address myself to the
pockets Of those who have annual savings
whether they are capitalists or not.
There is a very general opinion previous
/ ly that the money TO build railroads must
! be drawn from those who are directly bene-
/ fitted by the work, and when others con-
tribute il is often looked upon as a very en-
larged liberality and patriotism, and many
! taking advantage Of this view Of the case,
regard a railroad commissioner with his
/ open books as a person to be avoided by
/ every available means. This is grand
I mistake
1t is true that railroads frequently do not
for long time pay dividends, and why I?
! They commence operations with heavy debt
which must be hquidated from their earn
| ings, and which liquidation is in effect add
ing to the eventual value of the stock.
For example the President Of the Mem
! phis and Charleston Road in his report of
1883 says "the total net earnings Of the road
since its opening in 1853, is equal to 569
per cent on its capital, which amount has
gone toward building and equipment and is,
therefore, a monied interest to the stock
holders"
The Montgomery and West Point Road
was mainly built upon its earnings, and was
before the war paying ten per cent. upon the
capital stock
The results Of the Georgia State road are
equally surprising. In 1860 it had in cash
assets nearly double the cost Of the road,
one-third Of which was from surplus earn
ings. The whole debt was taken up by these
earnings, which rose from ST. ,567 net in
lS48, TO S544, 1868 in 1858, and since l949 the
dividends have been upwards of seven or
eight per cent.
The Charleston and Hamburg road, from
June to December 1865, with incomplete
road and inadequate and crippled running
stock, earned expenses, paid half years in
terest, and had a nett income besides of
S196,985.
The Mobile and Ohio road, with the same
embarrassments, and in about the same pc
riod, earned 81 ,529, 675 and expended $685.
S9S, leaving a net revenue Of SS24779.
A similar and most gratifying result is
shown by the New OrleanE Jackson and
Great Northern road which has not only
like the roads above mentioned repaired its
entire route, rebuilt costly bridges and re-
placed most Of the valuable running stock,
independent Of outside aid, but has from
its earnings since the war large surplus,
and will very soon begin to protect its bond
holders.
The Nashville and Chattanooga road in
tie nine months ending June 30 last, was
enabled, Notwithstanding Its condition and
that Of the country, to earn 81 ,423,5 $50
which left net profit Of S4l2,75
The Memphis and Charleston, by the last
report showed in earnings since the surren-
der Of the road 81, 274, 307, which after all
nary, left on hand a suplus of 1924, l42.
This is but the general experience Of
nearly all of our leading roads. They have
not been sufficiently long in operation to
have grappled with and disposed of debt or
completed their routes and connections, and
have besides been interrupted by war. When
all Of this shall have ceased to operate they
indicate clearly by the results how hand
somely the original stockholders will be re-
paid.
In reference to the Charleston and Ham
burg road, it is said on the highest authority
that after paying dividend of eight and
half per cent. it appropriated the balance of
earnings, six and three-fourth per cent. to
the payment of its debt. The result was as
follows: In fifteen years S4,000,000 debt
would, but for the war have been paid off
Thus the subscribers Of $4,000, 900 in fifteen
years are the owners of a road worth S.
100000, besides receiving dividends in the
meanwhile. All extensions made by the
road are in reality property aud the best
species Of real estate"
When a road upon original subscription,
which is frequently the case, Of 81 100000
expends from its earnings as much or dOubly
as much more in construction, the stock
holder in the great appreciation of value of
his property may well becontent TO postpone
the day of annual dividends.
Speaking Of the Southwestern road of
Georgia, Mr.. MILLNoR, in his report, says:
" The company started from Macon in a south
westerly directiOn--thcy knew 10 seems not where,
unless IL search for cotton bags. They get 20
place and stop. and pass resolutions ifthe cit-
gems of such counties ahead will subscribe so much
and pay IT, they will extend their road to such
place" In n week the stock is taken IN the
country and the engineer starts out; and so great
Is the value Of the stock and bonds that old con-
tractors often grade the road for stocks and bonds
alone. and thus they have gone along from county
10 county. from plantation to plantation, decar-
ing and paying regular semi-annual dividends of
four per cent. in cash, besides investing as much
more Of surplus net earnings in extension until
| Il has reached, and soon viii cross the Chatta-
hoochie at Fort Gaines and Eutaula, and then
after absorbing south east Alabama, will only
stop because 10 has no more territory over which
TO extend itself This road, like all the Georgia
roads, had a small beginning. and OF itself could
/ not stand atunes but when by the ala OF NANan-
nah it was once firmly set on foot, with each sue
ceeding year. its power continued 20 increase, un-
iii like large descending ball, that quiekens Its
pace IL continues TO roll it seems OF late years
| that this wonderful company has only to will
. IT, and the extension goes on
The example Of all the Northern roads,
/ with few exceptions, is even more striking
| than those of the South. Between 1856 and
1865 the Philadelphia and Pittsburg in
/ creased its passengers from l,l9S OPT, to
| 4,l74,093, and its earnings from S4,72O, l24
| TO SD 459, l59. The railroads Of New York
/ increased between 1855 and 1864, two hun
| dred and twenty miles, but the business
increased from 10000 600 to 100000 pas
sengers, and from SS,O00,O00 to Sl4, 100000
in profits In the same time the roads in
| Great Britain on an increase Of 4.509 miles,
| increased their passengers Ill ,O0e,O 600, and
/ their property about S20,000,000. The
amounts are prodigious. The roads of New
York earned SS,27S per mile, about half
from passengers, which Melted a clear profit
on each mile Of $685. fair dividend for
! stockholders.
The increase in the number Of passengers
on the South Carolina road was from 81 40
in lS43 to 1879 in 1917, which increase
went steadily on. The business ofthe Mem
phis and Charleston rose from 81 ,330,S l2 in
4 1909, 10 CAtotly IL III lool, UloEe IMAM nan
Of which was in passengers.
The Michigan Central road increased its
! earnings from s., 81 ,24l in 1862, 10 81, 446,-
| 400 in 1896 The New York and New
Haven from Sl,O49, 76S in 1860, to S2,l4l,-
SO7 in 1865. The Philadelphia and Read
ing shows as follows:
Passcusers, ,.....-............ 1904 LOIS ~
Coal transported, tons,..-.....-.l0iS50l S,J90Sli
The coal transportation was three-fourth;
Of the whole business in ireights. Charge
per ton in 1889, 81 Is; cost of transporting
forty-two cents per ton; 1865, charge 81 40
cost 81 06. Besides other large investments
| the Company has, in the last three years
expended s., 100000 upon new works.
The Railroad Journal, in one of its latest
issues furnishes list of some twenty-five OF
thirty roads all over the country, which
few years ago were regarded IS nearly worth
less, their stocks having scarcely any value
but which are now in a prosperous condi
ton, and paying dividends Of from eight {,
twenty per cent The fact may be ascer
tained at any time by visit TO Wall street
that the railroad stocks and bonds in ever,
part Of the Union have been and are still
rising in value, the result Of more expe
rienced administration. Whatever depres
sion existed was caused by extravagant an,
not unfrequently dishonest administration