The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-02-03
THE IIEASE-A PAGE FROM HIS
TORY.


firmly to three propositions, namely;
I THAT THE rental money promised is
NOT as much as the State and the otner
stockholders ought to receive, because
the road has for a long time been max
ing over twelve per cent on the stock.
. That the lease was for too long
term.
2 THAT "a lease of this property for
so hong a term of years ought not 20
have been made without the approval OF
the peoples representatives in the Gem
eral Assembly.
We believe now land believed when the
lease was made) that IF advertisement
be made for bids the State and stock
holders could receive rental OF at
least ten per cent ON the S4,000,O0O of
stock. We ARE led to believe Ut ought 10
no worth more than the State rs 10 re-
ceiye under THE lease by considering now
much the road paid the State before 1t
was leased i'm 1871. The reports of Presi-
dent Smith show that the receipts from
tbe North Carolina Railroad from all
sources for the year ending May 3lst,
1871, were STA, 76116, and the expendi-
lures were S4o4, 1883. The ordinary
operating expenses were $279, 965.4S, and
fine net income over operating expenses
was S464. 1865. President Smith also
said, IN his report to the directors:
'9The net earnings of your road for
the last three years over all expenses
have been nine hundred and twenty
four thousand seven hundred and
ninetv-efght dollars and forty three
cents"
Commenting on this and other reports,
fine Legislative committee, composed or
John A. Gimer, DIR. J. NJ. Worth, Jno.
w. Graham, and E. b. Withers, used
these words i'm THE report of their inyes-
legation:
SIT will be thus seen THAT the
average net earnings of the road dor
each of the last three years nave
been S312, 266.14 over and above all
expenses, and that a road paying
this average rate and which last year
pa5d S34O,OO0 has been leased for
$500. 600 a year for thirty years. The
debt has been gradually extinguish-
cd. or changed into long bonds, and
now amounts to something over $500
900. and THE last payment of S4O,OOO
ON the five year bonds will be on the
first of january, 1S73-so that most
of aIhe earnings hereafter could go
into dividends"
'TYhe Legislature has shown it's
Willingness to part with the STATE
fnterest in the North Carolina Rail
road only upon condition that GER
tain portion OF the State stock m
other roads (the Western North Caro-
lima Railroad and Atlantic and North
Carolina Railroad) go with 1T and
certain portion of the debts contract
ed for these roads dis extinguished.
1.-THE North Carolina Railroad has
cost about S5,000,000, and to-day rs
worth more THAN that sum. lit rs
LITTLE singular THAT instead of the
gloomy forebodings set forth IN the
Presidents last report Che then want
cd to lease.-Ed) we find him stating
IN his report of July, 1870: 1T is very
important to you that THE road from
Augusta. Ga, to Portsmouth, Va,
should be worked as one road Che
I having recommended the purchase of
the road from Charlotte to Augusta.
Ed
Now. if such men as DIR. Worth, Judge
Gilmer, John w. Graham and II. b.
Withers thought the road, which had
acost the State about $5,000,000," and
was ''worth more than that sum" in
1S71-'72, how can it be argued to-day
| that in considering the rental, only the
| par value of the stock should be consider
ed? These men of high character tell
us that the road cost "about $5,000,00O."
| IF this is true, the State has lost about
| a million dollars for it holds stock for
only $3,000,O00. While all other roads
have been watered to apparently keep
| the dividends to a reasonable profit, IT
seems that this road has been ironed out
of 'about" S1,O00,000 of what was put in
| it, and that in considering fair rental
now, nothing is to be considered except
the stock that is pledged for the con
| struction bonds. We hold that the State
| ought to get the largest rental possible,
and that the road is now worth not less
than six million dollars. Certainly if il
was worth more than 100000 in 1871.
| ~. it is worth considerably more now
| that business has greatly increased al
| along the line Of the road. Ought the
Legislature to permit mistake thai
tells so heavily against the State for q
century, to stand? The lease ought te
be set aside and advertisement made foi
bids.
A lease for ninety-nine years is Writ
ually a sale, without the benefit of casf
payment. The trend of decisions II
againts permitting such contracts Il
stand, and at least four times in the pas
ten years the Supreme Court Of thu
Ivpitad States has held that an attempted