Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1872-10-11


ty was derived from added capital will fully
appear from the report of the treasurer
herewith ubmitted-while on the other
hand the question whether the road has
legitimatelv earned its dividends and interest
will find a ready and affirmative solution.
The managers commend the statement so
carefully prepared by the treasurer to the
thoughtful consideration of the security
holders. as also to those who, from whatever
motive. are so ready to malign and dISpar-
age the management.
In consequence of the continued and per-
sistent assault of the enemies of the road
upon its credit and the stringent close money
market. the trustees and managers were
compelled temporarily to pass their matur-
ing obligations. With resources more than
abundant to pay all its liabilities, but not
for the moment available, with road never
in all its history more prosperous, with busl-
ness and earnings in excess of any former
period. in al itsappointments in the high
est state of efficiency. it was nevertheless
forced t. Weld to the combined pressure.
With the motives which have actusted
those who have thus assailed the character
and standing of a great and successful en-
terpri-e. the managers have at this time and
in this place nothing to do. They have here
to do only with the causes which produced
the result 50 far as they themselves are con-
cerned in it.
The statement of the treasurer aecompa-
nying this will give the amount OF the hoat-
ing debt and the cause oft, together with
the resources of the road.
From this report it appears that on the
first day of June the total floating debt was
3. SIS, l6l AZ, and the available assets were
81 .3I9, 2l9.57, leaving the actual Heating
debt 81 ,52S ,9l4.s5.
The debt consists in large part Of the detl-
ciencies in the earnings0f the Ogdensburg
and Rutland Roads To meet the expenses OF
the rentals.
The reasons which existed at the time for
making the contract for operating the Og-
denSburg and Lake Champlain Road We're
considered good and sufficient by all the par
ties to the negotiation.
The subject was well and carefully ma
tured. and the value and importance OF the
road 10 the Vermont Central and Vermont X
Canada roads. as well as to the interests Of
the whole line, We're fully conceded.
Present at the negotiation and participant
ing with the trustees and managers were
the committee of the Vermont x Canada
Company. specially appointed by the Board
of Directors for that purpose
After the completion Of the negotiationsand
the terms of the contract had been agreed
upon and the preliminary contract had been
drawn. the Directors of the Vermont < Can
ada Company called a special meeting of
their stockholders specifying the object Of
the meeting to be the consideration of the
question Of authorizing the lease.
At this meeting the whole question was
fully discussed BY the stockholders, and they
voted unanimously to authorize the execu-
ton of the contract.
The contract Is in the name of the Yer
mont * Canada Company, the Trustees and
Manag gers Joining in the contract and agree
ing To carry ont its terms and provisions.
The rental paid for the road. while con
Sidered large at the outset, and with full
recognition of the fact that loss would cnsue
in all probability for the first few years, Yet
as the term of the period otmanagement eN-
tended for twenty wears. II was believed that
the growth and development of the property
during that period would fully Justify the
undertaking. and that all losses which might
arise from the early period of the contract
would be more than covered during the
whole term. and handsome profit result to
the Vermont Central and Vermont and
Canada Roads.
In this view the other roads in the line
from White River Junction To Boston. who
are al-5 Ia interest in the contract, fully
shared Yet with this fact fully in view. II
was Thought advisable to secure the control
of the road. and the contract was according
IN executed hv the Vermont ~ Canada Com
pany. hy their committee appointed toI
that purpose and hy the Trustees and Mana
gers.
The Deficiencies. therefore have not come
unexpectedly. nor are the trustees and
managers surprised ; nor is their faith and
confidence in any manner shaken IN the
value ot the contract. nor are their views
changed a. 10 the wisdom Of making II. The
Deficiencies are by no means altogether
LOSES a- has been enormously stated. On
the contrary. while the Deficiencies 20 To
constitute a portion Of the present debt of
the trustees and managers, a large sum
should Boz charged t. account of assets.
Precisely 10 what extent this should be-
done can only be determined 10y a re-yalua-
tion and appraisal of all the property en-
hraced In tile contract Certain it l. that
To die extent Of the new equipment added,
and the large amount of wood and other
materials on hand. together with tho new
stations and other bdilding~ added 10 replace
old ones burned OF otherwise destroyed, the
improved condition of the track. ex-
pcnditurc- on wharf and terminal
property. all these, which cOn~ti-
tute large expenditure. enhancing the
value of the property and are embraced IN
the current operating expenses OF the road
are in fact assets, and should not IN any
sense be charged To the account of loss. n
nj the final or sooner determination Of the
lease the whole property is to be reyalued
and appraised, and the les>ees have the full
benefit Of the Improvements and enhanced
valuation.
The same remarks hold true in reference
to the lease Of the Rutland railroad. The
deficiency there is larger in proportion than
ON the Oglensburg and Lake Champlain
railroad Yet large expenditures have
been made which are properlyas~et-, and to
some extent available to apply toward the
rents to be paid.
The account of the trustees and managers
for work done on the Addison road. in order
10 put it in proper condition 10 be operated
Is clear asset. and applicable in the hands
Of the trustees and managers To the rents 10
become due to the Rutland railroad. Yet
this sum l. included in and constitutes
part of the operating expenses of the road,
and hence Swells the deficit against the trus-
tees and managers, and constitutes part Of
their present debt.
In addition 10 this 4 considerable outlay
of money has been required 10 complete and
?
by thu terrible freshet of 1869
Equipment has also been added, the track
grently improved, two old station houses
which were burned rebuilt in substantial
formal embraced in operating expenses.
yet not chargeable to loss.
Thus reduced. the actual losses on these
roads will fall below the amount estimated by
the trustees and managers at the time Of
taking the lease. The trustees andmanagers
do not hy this mean to underestimate the
real losses on these roads, Yet the eXtraya
CANT statements made in reference to them
in the public prints are not justified by the
facts in the case. The large expenditures
Immediately demanded are. however. made,
and viii not probably be required gain to
anything near the same extent, while On
the Other hand both roads are I'M
proving IN their earnings, and it Is not
unreasonable L, believe that the coming
year will show large and favorable reduc-
ton of deficit. Indeed, at the present ratio
of increase of earnings and such reduction
of expenses a. can now be safely made, there |
Is good ground for hope that the 0gdens- |
burg at least Will be sell-sustaining, and |
that the Rutland proper, the Vermont VAL |
ley and Vermont and Massachusetts will |
also pay the rents ont of the earnings leav- |
ing the deficiency, if any, to fall upon the |
other branches.
Another item in the floating debt of the
trustees and managers Is the amount paid |
for the wood, shop stock and materials on
hand on the Rutland road at the date Of
their taking possession of the same. This
was largely in excess Of what was estimated
by the parties. 1t was taken at an apprais-
ed value and was worth what it was valued
at. This amounted to Slls 600
The question of attempting TO retain these
leases or of abandoning them in one Of too
much importance to be lightly passed upon.
They were assumed not by the trustees and
managers alone, but as the deliberate sense
Of the stockholders and bondholders as IN
der all the circumstances the wsest and
best thing to be done.
Now after proper and careful examina-
ton of all the facts, it may be the most de-
sirable thing to negotiate with the parties
for a surrender of them. But the question