The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-06-02
Chamber of Commerce.

The Chamber met last evening" President
Oglesby in the chair. After dispensing with
reading the minutes of previous meeting,
the reports of various committees were III
order. Mr.. G. w. r. Bayley, chairman OF
Committee on Railroads, submitted the fol
lowing:
New ORLEANS, June lst, 1874
To the Preside and Members of the New Orlean
Chamber Of Commerce.
Genhemen-In response to your call for information
respecting the history and present status of the New
Orleans, Mobile and Texas Railroad Company, the
p aspect of said companys building a road to Texas
and what action if any, is needed part to
ped the construction of railway to Texas. your
Committee on Railroads respectfully submit the fol
lowing report: Said company was chartered under
the name of the New Orleans, Mobile and Chatta-
nooga Railroad Company, by the Legislature of Ala
bama, Novemb oath, 1866, to co struc and operate
q railroad from New Orleans via Mobile. to Chatta-
nooga Tennessee.
At the first meeting of the corporate directors in
New York city-Oakes Ames, Peter Butler, James A
Raynor, G. W. Durant and VIM s. Williams beiu g
present-the capital stock fixed at $25, co. 900,
blu. money never realized stock subscription
The Legislature of Louisiana, by an act, Nc. 49, APP
prove August 10, 1858, recognized tie company
corporation in Louisiana and authorized it to extend
its proposed road westward to Texas. About this
time probably. the company reconsidered its project
of building the road to Tennessee and began APP
precate the facilities Offering for the obtainment
grand scale Of State aid from Louisiana.
The statement that this company, being composed
of several of the most wealthy men in America,
wanted nothing but right of way and subscription
in, State aid from Louisiana, generally circu
lated in New Orleans, but before the commencement
of construction on the Mobi division, State aid had
been applied for and obtained, per Act &C. approved
February IT, 1869, providing for the Endorsement by
The S ate of the company's Western Division Second
Mortgage Bonds.
The estimated cost based upon surveys and location
Of the Mobile Uivsio alb Jut 81 100000 and tbs
but by an issue Of eight millions of dollars of
eight per cent. mortgage bonds, four of first
and four Of second mortgage, with four millions
Of nominally full psid stock certificates thrown
in. This equivalent to allowing six
teen per cent. interest for money to be used in the
construction of TIE road, and it necesstatei early
found that the actual cost would very largely
exceed the estimate.
Construction began in February, 1859, and the road
opened for public traffic between New Orleans and
cember II, 1871, account Of the Morgan opposition
line, there surplus earnings and large expendi
lures unavoidable for the renewal of destroyed
bridges, baastng, completion of structures etc. The
expenditures largely in excess of the roads
receipts and, with joint stock fund and
from the road built the current interest on the Mobile
Division bonds could not be paid except by sale Of
Western Division bonds by sale of State securi les
to be issued by the State Of Louisiana, in aid Of the
Of railway to Texas.
But in order to obtain these Louisiana securities it
necessary to build the road to Donaldsonve, for
by the terms of the $1,000 900 subsidy act of Febru
airy 81, 1870, the completion Of a road from New
Orleans to that point would the issue Of $780,
0G0 Of State bonds; while the completion of forty
miles Of road west prior the 18th of January, 1871
would the States indorseme of $500 900 of
the company's second mortgage bonds.
Accordingly the building of the road west com.
at Westwego, opposite the pr sent western
portion Of New Orleans in May, 1870 and the track
laying WAS completed to the Bayou Lafourche. at
May 18th, 1871, although the road
not opened for public traffic until September LIST,
1871. Considerable progress Lad been made also in
the construction of the road thence west q miles
Grand River.
The first forty miles of the road, which, according
the terms of the guarantee act should have been
until about April 5, 1871 but clause i'll
serted in jOintresolution No. a. approved April 49,
1871 changing the name of the company which pro-
vided that bends might be Endorsed for every ten
les instead Of every forty miles, of road completed
in the manner provided for, that is. within tie time
limited.
In July, 1871, $3.50 600 Of bonds we're indorsed. on
sixty miles of the road, though the distance from
Westwego to Lafourche is iftyseven miles only and
thus became part Of the contingent debt of the STATE
md in August, 1871 $750,000 OF subsidy bonds were
ssued t. said company. These bonds were dated
July 1870 Therefore the first two sets Of
aua coupons should have been detached and cancelled
out 1t is believed they not and in consequence
1920 90 paid by the State for back interest, al
though not due to any one.
But the 81 100000 State aid the road to Donald
vile was only about equal to its cost and therefore
Was still necessary to provide in some manner for
he payment Of interest on the first mortgage bonds
n the Eastern and Western Divisions which had been
ssued BY act 3d. approved April 90 1871, the State
ssued 81 500 600 of eight per cent bonds this
oapy for stock alone, in lieu Of its suspension condi
ona obligation to guarantee second mortgage Shreve
port Branch bonds after the completion of each forty
niles section of said branch, which, the company
rss evide tly already in a bankrupt condition, it
lever could have built, and probably never really
Intended 70 build. Stock il q company without
joint stock fund, and without an adequate revenue
md 10 road partially built with money obta ned by
he issue Of bonds bearing eight per cent interest
= oce. re Stats bsins lie c-,y 1e-- s.es.-c-s-x.