THE BLUE RIDGE RAILROAD
By
"Nolumus"
Library of
Emory University
TH.E BLUE RIDGE RAILROAD;
• ■ 111 '
* •
A series of Articles originally .published in the Charleston
M&cwry, tinder file signature of " Nolumus."
'-ir ,-V
No. I.
"When tlie State of South Carolina engaged, by an act passed In
1855, to guarantee the^ponds of the' Blue Ridge Railroad Compa¬
ny for a million of dollars, one of tbe Conditions of tbe engagement
was, "that such subscription should have been made, or aid fur¬
nished.,, to other Railroad Companies in North Carolina and Ten¬
nessee, designed to connect the said Blue Ridge Railroad with the
Georgia and East Tennessee Railroad, as should give reasonable
assurance of the construction of the said North Carolina and-Ten¬
nessee Railroads." The Company, finding that this condition
could not be fulfilled, applied to the Legislature at thejjTast ses¬
sion to rescind it.
The question presented for the consideration of the Legislature
was not simply whether the State should assume a secondary ligi-
bility for a million of dollars, but whether it should either incur an
absolute and unconditional debt of a million of dollars>for which no
value would be received and on which a very high rate of interest
would have to be paid for a long series of years, or to place itself
in a position which would involve the necessity of furnishifig all
the means necessary for the completion of the road from Pendleton
to Knoxville—or, in other words, to contribute a sum certainly not
-less than five millions of dollars, and.perhaps a great deal more.
Tor whatever may be thought of a railroad from Anderson to .
Nnoxville, completed in all its parts and fully equipped, even the
most ardent and sanguine advocates of the enterprise must admit
that it would be utterly worthless, and all that might be expended
upon it hopelessly wasted, if it reached no further than Clayton,
or stopped somewhere in North Carolina, or only a few miles be--
yond the southern frontier of Tennessee, or consisted of disjointed
soetions scattered along the whole line. The million of dollars
whichmight be raised on the bonds of the Company, to be guar-
ant'ied by the State, together- with their present means, would cer¬
tainly fall very far short of enabling them to complete the road,
and they do not pretend to have any reasonable prospects of ob-
1
2
taming farther subscriptions or contributions from any other quar¬
ter. Nothing more is to be expected from the city of Charleston,
already burthened to the extent o'f her ability. There is no hope
of forcing out additional prlva^l subscriptions, and it is well under¬
stood that neither Georgia, nor North Carolina, nor Tennessee,
will subscribe anything at all. The friends of the enterprises-rest
their hopes of obtaining the means to complete it entirely upon
additional subscriptions which the' State of South Carolina is ex¬
pected to make, and upon loans of money t<? be procured, either
with the aid of State endorsements, or without such aid on the sole
credit of the company and itg,property. If, therefore, the Legis¬
lature should now consent to dispense"witjb the condition on which
the engagement to guarantee the bonds of the company was, by
terms of the act of 1854, to take effect, thereby making the State
at once responsible as the surety of the company for $1,000,1)00,
they must then either go on and furnish all such further aid as
might be afterwards required. to enable th# company to finish the
road, or the obligation implied, in the guarantee would otherwise
be equivalent to an absolute assumption of the debt by the State;
for it is very .certain that the company, having no other means
than such as might be supplied by an unfinished and unproductive
railroad, would be unable to pay their bonds, and the creditors
would have recourse to the collateral obligation of the State-
Let us look for a moment at the condition and resources of the
company ^rwith due reference to the cost of the work they have un¬
dertaken, assuming the correctness of their own estimates. The
following statement, compiled from the last Report of the Presi¬
dent and Directors, exhibits the whole amount off subscriptions to
the entire line of railroads :—
Subscription of the City of Charleston 1,049,000
Subscription of the State of South Carolina 1,000,000
Subscriptions in Tennessee. 250,000
Subscriptions to Pendleton Railroad - 52,000
State subscription to the same 43,500
Subscriptions in Georgia . 3,600
Subscriptions in North Carolina .55,400*
Private subscriptions in Charleston, 53,000
Additional subscriptions in South Carolina, made in 1856 232,700
Stock taken by Bangs & Co. and others, in payment for work done—176,500
2,915,700
The estimated cost of the Road and equipments, according to the re-
portof 1856, confirmed by the subsequent reports,is— 8,691,677
Which exceeds the amount of subscriptions by.. $5,775,977
This deficiency they expect to supply, partly by an additional
State subscription, and in part by borrowing money; some of which
is to be obtained with the aid of State endorsements, and some
without such aid. Accordingly, it is announced by the President
3
of the Company that, besides the endorsement of bonds for
$1,000,000, the State is to be called on for another subscription of
$1,000,000. Indeed, we are given to understand very distinctly,
that this additional subscription is no less essential to the comple¬
tion of the road than the guarantee itself. The proposed addi¬
tional subscription would be a direct contribution by the State of
$1,000,000 towards making up the required amount; and the State,
by guaranteeing the bonds of the company, would also furnish, in
directly, another million of dollars, still leaving a deficiency of
$3,775,977, to be raised by borrowing. Of this sum, supposing it
to be borrowed on the credit of the company and the security of
their property, the State would, in effect, furnish the much great¬
er part. When an incorporated joint stock company borrows mo¬
ney, it is really borrowed on the faith of property which belongs
to the stockholders in the proportions in which they have respect¬
ively contributed to the capital of the company. The whole sub¬
scribed capital of this concern is, as-above stated, $2,915,700, of
which the State has contributed $1,043,500, viz : $1,000,000 sub¬
scribed to the stock of the Blue Ridge Railroad Company, and
$43,500 subscribed to the stock of the Pendleton Railroad Compa¬
ny, which is absorbed or merged in the former. The State is
therefore now the owner of about 35 per cent, of the capital of the
company. If there should be another State subscription of a mil¬
lion dollars, the capital of the company would be $3,915,700, of
which the State would own $2,043,500, or a little more than 52
per cent, of the whole. The whole amount to be raised by bor¬
rowing would, after the additional State subscription of $1,000,000,
be $4,775,977. If the State should guarantee the company's
bonds for $1,000,000, that sum would be borrowed on the respon¬
sibility of the State, leaving still to be raised on the credit of the
company alone, $3,775,977. But the credit of the company being
founded entirely on its capital, of which the State would own 52
per cent., that proportion of $3,775,977, viz : $1,963,506, would he
borrowed on the faith of property belonging to the State, and
therefore in substance on account of the State.
It is true that against the liability incurred by guaranteeing the
bonds of the company, the State is to be counter secured by a
mortgage of the road and other property of the company ; but we
have seen that the State is to be the owner of 52 per cent, of the
capital of the company, and therefore, as to so much, the mortgage
will be a mortgage of its own property. It must surely be too
obvious to need any demonstration that a party, having no other
security against a responsibility assumed for another than a mort¬
gage of his own property, has really no security at all, and his en¬
gagement, whatever it may be in form, is, in effect, an absolute
obligation. This is precisely the condition of the State as to 52
per cent, of the property of the Blue Ridge Railroad Company, of
4
which only 48 per cent, will belong to other parties than the
State itself.
But again : The whole property of the company in Tennessee
is to be subject to a prior mortgage to the State of Tennessee for
$640,000 ; and by the terms of the act of 1854, the mortgage by
which the State is to be counter-secured* is also to secure on a
footing of equality other bonds of the company, amounting to
$1,500,000 ; so that, after making all proper deductions, the secu¬
rity of the State will rest on rather less than one-eighth of the pro¬
perty of the company.
The contributions already made or hereafter-to be made by this
State to the Blue Ridge Railroad, may he stated as follows :—
Subscriptions . ...... $2,043,500
Guarantee of Bonds — . 1,00%000
52 per cent, of $3,775,977, balance of estimated cost of road to be
borrowed.... 1,963,506
$5,007,006
But there are still some additions to be made to this amount
which cannot be exactly defined. For example. It has been as¬
sumed that the whole sum of $1,000,000 to he raised on the bonds
guarantied by the State would he expended in the construction of
the road ; but that is obviously impossible, heeause from tbte time
of issuing the bonds at least until the completion of the road, the
company would have no income out of which to pay the interest
accruing on them, and would be compelled to use for that purpose
a part of the money obtained for the bonds. If we suppose an
average interval of three years between the issuing of the bonds
and the completion of the road, which is certainly not an unrea¬
sonable allowance, it would require $210,000 to pay the interest
accruing* on them, leaving only $790,000 to he applied to the con¬
struction of the road.
Again : It is, to say the least, very improbable that the bonds
of the company, not fortified be the endorsement of the State,
would command as mueh money as they would engage the com¬
pany to pay ; on the contrary, judging from the almost universal
experience of other companies, and the manifest want of confi¬
dence in this enterprise indicated by the extreme reluctance of
individual capitalists to embark their own money in it, we may
reasonably conclude that such bonds would not he taken up except
at very considerable discount; and whatever might be obtained
for them, a part of it would be required to pay the interest accru¬
ing on them until the completion of the road. All these deduc¬
tions must necessarily increase the deficiency to be supplied by
borrowing, and therefore add in the same proportion to the amount
of the charge upon the share which the State is to own in the pro¬
perty of the company, Nor does it end here. Several articles
5
appeared in one of the Charleston papers soon after the adjourn¬
ment of the last session of the Legislature, ostensibly under the
editorial head, but with evident marks of official authority, expati¬
ating upon the great merits of the scheme, and deploring the la¬
mentable want of wisdom and patriotism exhibited by the Legisla¬
ture in their then recent action, or rather refusal to act on the
subject. In the last of these it is very clearly intimated that in
order to prevent the very heavy sacrifices which would probably
result from borrowing money on the unassisted credit of the com¬
pany, the State might be again called upon to guarantee their
bonds for the whole additional amount required to complete the
road.
No. II.
We have seen what the State of South Carolina has done, and is
expected yet to do, in furtherance of this enterprise. Georgia
will do nothing for it. Nor will North Carolina do any more,"
though the road is to pass for nearly two-fifths of its length, through
the territory of that State. But Tennessee, we are told, has pro-
videdffiy law for furnishing efficient aid towards the construction
of the road within her limits. There is reason to believe that
among those who have not taken some pains to obtain correct in¬
formation, very erroneous impressions prevail as to the nature and
extent of the aid which the enterprise is to receive from the State
of Tennessee. Many persons, no doubt, believe that Tennessee,
like South Carolina, has made st liberal subscription to the capital
of the company. Some of those who, from their position, must
know exactly what Tennessee has agreed to do, when they have
occasion to mention it, have often used language very likely -to
make false impressions on the minds of the uninformed. Some¬
times it is spoken of as the '' contribution of Tennessee." In the
reports of the President and Directors, it is usually designated as
the " Tennessee State aid;" and in a speech delivered in the House
of Representatives last winter, by one of the most prominent ad¬
vocates of the scheme, and afterwards printed and extensively
distributed throughout the State, it is distinctly set down among
the resources of the company as " Tennessee's subscription,
$640,000."
It is in truth, not a subscription nor anything like one, but a
mere loan; neither can it be properly caljed a "contribution,"
which, according to the usual acceptation of the word, certainly
means something very different from a loan ; and here among us
where State aid to railroad enterprises has been almost invariably
given in the form of subscriptions to the capital stock of the com-
6
panies, to call it " Tennessee State aid " is much better calculated
to mislead than to inform.
All that the State of Tennessee proposes or is expected to do
for the purpose of aiding or encouraging this grand project, is to
make a loan to the Tennessee Company in the form of State 6 per
cent, bonds, at the rate of $10,000 a mile for the number of miles
of the road to he constructed in that State, and also for the cost
of bridges, provided that not more than $100,000 should he allow¬
ed for any bridge. The length of the road to he constructed in
Tennessee is, according to the report of the Chief Engineer; Ma¬
jor Gwynn, 53 miles 113 feet, which would make the portion of
the loan to be received on that account $530,214 ; but it is set
down by the President and Directors in their reports as $540,000 ;
and they also estimate the sum to be received on account of bridges
at $100,000 ; making the whole amount of the loan $640,000j The
conditions upon which this loan is to be obtained are of the most
stringent character. Before the company can claim any part of
it they must first have thirty miles of the road-bed graded, and so
far completed as to be ready to receive the iron rails, and they
must pledge themselves by the most solemn engagements, that
the bonds shall be used for no other purpose than to procure and
lay down the iron rails ; they will then be entitled to a correspon¬
ding portion of the loan ; and in the same manner, after grading
and preparing the remaining portion of the road, they will he en¬
titled to receive the residue of the loan. The State is to be se¬
cured by an exclusive first lien on the railroad and all the proper*
ty of the company in Tennessee, and the company is to be bound
to place in the State Treasury in due time, the money required for
paying the interest on the bonds as it accrues; and in case they
should ever fail to do so, the Governor is empowered to put* a re¬
ceiver in possession of the road, and sequester the income until the
interest is paid. It is manifest that before the company could
avail themselves of the aid thus tendered to them by the State of
Tennessee, they must first obtain, from other sources, sufficient
means to enable them to grade the road-bed in that State, and
prepare it for the reception of the iron rails. Now where and how
are these means to be obtained ? The whole amount subscribed
in Tennessee is, as we have seen, $250,000, of which $220,000 are
the subscriptions of Knox and Blount counties. These subscrip¬
tions are payable in county bonds, which it will be extremely
difficult to convert into money, except at a very considerable dis¬
count. The estimated cost of the graduation alone, without taking
into account such part of the superstructure as would be necessary
to put the road in a condition of readiness to receive the iron rails,
is, according to the report of the Chief Engineer, $756,987, which
exceeds the whole amount subscribed by $506,987. Is it not then
evident that a very large, perhaps the largest, share of the cost of
constructing the road in Tennessee, is to be defrayed out of the
7
money derived from this State, either furnished by State subscrip¬
tions, or raised by the sale of bonds guaranteed by the State or
borrowed on the faith of property the greater part of which is
owned by the State 1 And when the road is finished it is to be
mortgaged to the State of Tennessee, to secure them against a li¬
ability incurred on account hf a work which, if it is to be of any
value at all, will be at least as beneficial to Tennessee as to South
Carolina.
It is only in the figurative sense in which any man's credit may
be said to be a part of his means, that this " Tennessee State aid "
ean be counted among the " means " of the company. It belongs
properly to that large deficiency by which the subscribed capital
falls short of the amount required for the completion and equip¬
ment of the road, and which is to be supplied by borrowing. The
money, or rather the credit, of the State of Tennessee, on which
the money may be raised, is to be borrowed, and it will be the
same thing as if the company borrowed the notes of a bank or an
individual, except so far as the credit of the State may be better
than that of a bank or an individual, which is not always the case.
The money is to be borrowed and will have to be repaid, and
abundant precautions are taken for tbe regular payment of the in¬
terest and tbe ultimate reimbursement of the principal. It is to
be borrowed, too, on the security of property of which South Car¬
olina is to be very largely a part owner, and will, therefore, inso¬
much be borrowed on account of South Carolina ; so that, in effect,
South Carolina is to borrow money from Tennessee to be expend¬
ed in the construction of a railroad in Tennessee, which is to be
mortgaged to Tennessee to secure the repayment of the loan.
South Carolina is to have all the risk and Tennessee is to have a
full shere of the benefit, if there' should be any, and all the secu¬
rity. If the road should turn out to be of little value, its value,
such as it may be, would avail so far towards securing the State of
Tennessee. If it should prove so unproductive as not to pay run¬
ning expenses and interest, the locomotive engines and cars, and
the iron rails themselves, might be carried off and sold to in¬
demnify the State of Tennessee, and nothing would be left for
•South Carolina but the dead and worthless carcass of the road.
No. III.
To all objections to further committing the State to this scheme,
founded on the heavy indebtedness and burthensome taxation it
must bring upon us, its advocates reply that1 the money expended
in constructing the road will be well bestowed ; that the outlay
will be repaid, and more than repaid, by the countless benefits, po¬
litical, commercial and industrial, it will bring us ; that the road
8
will be worth all, and more than all, that it will cost; and that it
will add indefinitely and incalculably to the population, wealth
and importance of the State. These things have been pro¬
claimed and reiterated, in every form of bold assertion.'and
vehement declamation, until many people are made to believe
them by the mere force of constant repetition. But have thp^y ev¬
er been proved ? Where, among the numerous Blue Ridge re¬
ports, and speeches, and newspaper lucubrations, which the last
five or six years have produced in such abundance, do we find any
demonstration of their truth—any rational exposition of the pro¬
cess by which these grand results are to be brought about! Which
of them all presents anything like an exhibition of the facts and
statistics, geographical, agricultural, commercial and industrial,
from which such conclusions might be drawn ? Do they even at¬
tempt to furnish us with full and authentic information as to the
extent, fertility, population and wealth of the region of country
with which the Blue Ridge Railroad is to connect us, and the na¬
ture, variety and amount of its agricultural and other productions ?
It would really seem as if the great champions of the enterprise
studiously avoided introducing any sfich elements into the discuss¬
ion. Perhaps they have thought that it was safer to confine
themselves to assertion and declamation, and to throw upon their
opponents the burthen of disproving what it was incumbent on
them first to prove. It may be that East Tennessee abounds in
fertile and extensive vallies, but we are not, therefore, hastily to
conclude that the Blue Ridge Railroad would bring the whole or
any large share of their productions to South Carolina, or that the
foreign merchandize required for the consumption of their inhabit¬
ants would be purchased in the markets of South Carolina and
transported on that road. Many other considerations must be ta¬
ken into account. Much will depend on the nature and relative
value of the productions of the country, their capacity to bear the
burthen of distant and costly transportation, and the comparative
facility of communication in other directions and with other mar¬
kets ; and even assuming that the Blue Ridge Railroad would at¬
tract the surplus productions of that region, it would still remain
to be proved that the merchandize consumed by its people would
bp purchased from our merchants.
The productions of'the country around Knoxville are agricultu¬
ral, and consist mainly of wheat, Indian corn and other cereal
grains, of which a very large portion is required for home consump¬
tion, and it is only the surplus which remains after the wants of
the people themselves are supplied, that is sent away to other
markets. That this surplus is not so large as to furnish profitable
employment to the Blue Ridge Railroad, or to produce any of the
magnificent results which the friends of the enterprise -so confi¬
dently predict, is pretty clearly indicated by a fact which was
brought to view by Mr. Palmer, of Fairfield, in his very instruc-
9
tive speech on the subject, delivered in the Senate last winter.
The East Tennessee and Georgia Railroad has been finished and
in operation for several years, and until June 1858, when the
East Tennessee and Virginia Railroad was completed, furnished
the only outlet by railroad from Knoxville to. any of the Atlantic
seaports. It appears from the report of the Superintendent, dated
1st September, 1858, that the gross receipts of the road for freight
during the year ending on the 30th of June 1858, were $135,423.
This includes the freight of merchandize carried up, as well as of
produce brought down, and if about one-third be allowed for the
former it leaves two-thirds or only about 890,000 for the latter,
showing very clearly that the quantity and value of the produoe
transported cannot be great. , It is said in reply, that the freight
received on this road is no proper measure of the quantity of pro¬
duce to be transported from Knoxville, because the river is navi¬
gable down to Chattanooga, and at least two-thirds of the produce
must take that course in px-eference to taking the railroad. But
this is not proved—it rests upon mere assertion, and is only con¬
jecture or suggestion. If it is indeed true now that the river is
preferred to the East Tennessee and Georgia railroad, what assu¬
rance have we that it would not be preferred to the Blue Ridge
Railroad also ? But whatever might be the amount of the surplus
produce of that portion of East Tennessee seeking distant markets,
it is extremely improbable that the whole, or even the larger share
of it, would take the Blue Ridge Railroad and come to South Car¬
olina. There are already two railroads connecting Knoxville with
the seaboard—the East Tennessee and Georgia Railroad and the
East Tennessee and Virginia Railroad. It is reasonably certain
that whatever portion of it may be required for the consumption
of Virginia will be carried by the East Tennessee and Virginia
Railroad; and as the population of Virginia is at least double that
of South Carolina, it is probable that their share would be in the
same proportion larger than ours. So also the part intended for
tbe use of Georgia, would be transported on the East Tennessee
and Georgia Railroad, and would probably exceed the share of
South Carolina about as much as the population of Georgia exceeds
ours. Let us now consider the probabilities as to that portion
which may be destined for the general market of the world. The
valley of the Holston and its tributaries above Knoxville, stretches
in a northeastwardly direction to the confines of Virginia, and is
traversed throughout its whole length by the East Tennessee and
Virginia Railroad, which joins the Virginia system of Railroads at
the State line. This valley, as it recedes from Knoxville, approx¬
imates towards the cities of Virginia, until the diminished distance
must of itself exert a preponderating influence in turning the trade
in that direction ; and this tendency must also be greatly assisted
by the nature of the products to be transported. If the chief agri¬
cultural staple of East Tennessee was some article of as great va-
2
10
lue, in proportion to its bulk and weight, as cotton, and having
similar advantages with respect to facility of handling, warehous¬
ing, and the risk of injury by exposure to the weather, the course
and character of the trade might be very different. Cotton, for
example, grown in the valley of the Holston, fifty miles above
Knoxville, might be carried to Knoxville, by East Tennes¬
see and Virginia Railroad, sold there, and afterwards sent
back again over the same road to Richmond, or, in transitu,
to New York. The additional cost of transportation being
slight, in comparison with the value of the article, might
perhaps be counterbalanced by some compensating advantage
to the planter in selling it at Knoxville. But the trade in grain
is conducted very differently. Assuming that the average
weight of a bushel of wheat is sixty pounds and the average price
$1.20, and that the average price of cotton is ten cents a pound,
the value of a given weight of cotton is five times as great as that
of the same weight of wheat. This great inferiority of value, to¬
gether with the much greater liability of grain to injury
from exposure to the weather, involving the necessity of more
careful warehousing, makes it important to avoid as much as
possible every additional handling and transportation on account
of the greater cost relatively to the value of the article. And, ac¬
cordingly, we find that, in fact, the surplus produce of the valley
of the Holston, through which the East Tennessee and Virginia
Railroad passes, including even that portion of it which is only
a few miles distant from Knoxville, is not sent to that place for
future distribution, but, though it may be purchased from the far¬
mers by merchants resident in Knoxville, is delivered at the most
convenient points on the railroad, and carried directly to Lynch¬
burg, Richmond and Petersbnrg.
The trade in corn brought from North Carolina by sea for the
supply of Charleston and the neighboring country, furnishes an
apt illustration of the same thing. Those who are at all familiar
with that trade know that the corn is not first sent from the plan¬
tations to the towns, and then reshipped for Charleston, but is ta¬
ken directly from the plantations by the vessels which bring it to
the market of consumption.
And what has been said of the country above Knoxville is equal¬
ly trne of the valley below it, which is traversed by the East Ten¬
nessee and Georgia Railroad, and the unfinished railroad from
Cleveland, which will connect it with Chattanooga. The surplus
produce of the country put upon these roads will not be sent up
to Knoxville to take the chance of the Blue Ridge Railroad, but
will proceed at once through Georgia to its ultimate destination.
11
NO. IV.
• . '
We are urged to carry 011 this enterprise, not merely as a railroad
to Knoxville, but as the means of securing that connection with
the valley of the Ohio and its great cities, which the Louisville,
Cincinnati and Charleston Railroad was designed to effect, more
than twenty years ago. But there is very little prospect of reach¬
ing the Ohio by way of the Blue Ridge Railroad, unless we are
prepared to furnish money for building other railroads in Tennes¬
see and Kentucky, as we are now called on to do for railroads in
Georgia and North Carolina and Tennessee. For the railroads
which were projected for connecting Knoxville with the cities on
the Ohio, and on which the work of construction was commenced,
with great natural difficulties to overcome—with very small indi¬
vidual subscriptions ; some county subscriptions payable in coun¬
ty bonds; no State subscriptions at all; and altogether very in¬
adequate means—have been abandoned, and there is very little
reason to expect that they will be taken in hand again, unless we
supply the necessary funds. And even supposing that those rail¬
roads were completed, and the connection between Charleston and
the Ohio fully established, are we authorized at once to conclude
that the products of the adjacent country would be poured down
upon us through that channel ? For the sake of greater clearness
and simplicity, we may divide the surplus products of that region
into two parts, with reference to this question-one part required for
our own consumption, and the other destined for the general mar¬
ket of the world. And, first, as to the part destined to supply the
general demand : we have certainly no right to conclude that it
would come by the Blue Ridge Railroad to our markets, unless by
so doing it would find its way to general consumption at a cheap¬
er, or at least not a Nearer, rate than by any other route. It be¬
comes then very important to ascertain the cost of transportation
of some of the chief articles of western produce frojn the cities on
the Ohio to those Eastern cities to which they now have access by
railroads and by canal and river navigation, and to compare it
with the probable cost of bringing the same articles by railroad to
Charleston, estimated on the basis of the rates now charged for
transportation on our railroads so far as they extend.
By the most authentic and trustworthy information that can be
obtained, it appears that the articles of flour, bacon, whiskey and
grain are carried by way of the Baltimore and Ohio Railroad from
Cincinnati to Baltimore, Philadelphia and New York, at the fol¬
lowing rates, viz : Flour, per barrel, to Baltimore. 85 cents ; to
Philadelphia, 95 cents ; New York, $1.10.
Bacon, whiskey and grain, per 100 pounds, to Baltimore, 50
cents ; Philadelphia, 55 cents ; New York 60 cents.
According to the tariff of freights adopted in September last by
the New York and Erie, the New York Central, the Pennsylva-
12
nia Central and the Baltimore and Ohio Railroads, the above-
mentioned articles, which are all included in the fourth class, are
carried from Cincinnati to New York at 50 cents per 100 pounds
if transported partly by water) and 55 cents if entirely by railroad.
For carrying the same articles from Louisville to the same places,
there is an addition of eight cents per 100 pounds to the freight.
If we turn now.to the table of rates of transportation on the South
Carolina Railroad, and the Greenville and Columbia Railroad, we
find that the freights from Greenville or Anderson to Charleston aro-
as follows, viz: Bacon, 65 cents per 100 pounds;grain 20 cts. per
bushel, which, supposing the average weight of the bushel to-
be 60 pounds, is equivalent to 33J- cents per 100 pounds ; flour 90
cents per barrel, or 45 cents per hundred pounds; liquors $2.75
per barrel—what this may be per hundred pounds cannot be ex¬
actly settled, but it is certainly not less than $1. Assuming the
distance from Anderson to the Ohio to be the same as from Charles¬
ton to Anderson, and it is in fact, nearly one hundred miles great¬
er; these rates must be at least doubled, and would then stand as
follows : From Cincinnati to Charleston, flour, per barrel, $1.80,
against 85 cents to Baltimore, 95 cents to Philadelphia, and $1,10
to New York ; bacon; $1.30 per 100 pounds, against 50 cents to
Baltimore, 55 cents to Philadelphia, and 60 cents to New York ;
whiskey, $2 per 100 pounds, against 50 cents to Baltimore, 55
cents to Philadelphia, and 60 cents to New York ; grain, 67 cents
per 100 pounds, against 50 cents to Baltimore, 55 cents to Phila¬
delphia, and 60 cents to New York. It is therefore by no means
unreasonable to presume that the portion of the surplus produc¬
tions of the valley of the Ohio destined for the general market of
the world, would continue to he sent to Baltimore and Philadel¬
phia and New York, instead of coming to Charleston by way of
the Blue Ridge Railroad. And it is scarcely less probable that
even that portion which may be required for our own consumption
would still reach us by those more circuitous routes, rather than by
way of the Blue Ridge Railroad—for we have seen that the differ¬
ence between the actual cost of transportion by those routes to the
Northern cities, and what would be the cost of transportation to
Charleston by the Blue Ridge Railroad, and its extensions at both
ends, is more than sufficient to pay the additional freight by sea,
from those cities to Charleston. It is a well established and well
known fact, that the article of Bacon can be, and actually is,
brought from Cincinnati to Charleston through Baltimore, for 65
cents per 100 pounds, and we see that the cost of bringing the
same article by way of the Blue Ridge Railroad would be $1.30.
How is it then that these facts have been so strangely-overlQok-
ed or neglected by the leaders of this movement, some of whom
are eminent merchants, and cannot be supposed to be ignorant of
things so directly connected with commerce and so essentially per¬
tinent to the subject! With such facts staring them in the face,
13
by what sort of ingenious sophistry have they been able to pur-
suade themselves of the reality of the brilliant visions with which
they have dazzled the imaginations of some of our people 1
NOV.
The annual reports of the business earnings of some of the rail¬
roads in the upper part of this State, present a few facts which are
full of significance with regard to the prospects of the Blue Ridge
Railroad.
For example, it appears from the report of the Auditor and
Treasurer of the Greenville, and Columbia Railroad Company, for
the year ending on the 31st December, 1858, that the whole re¬
ceipts of the road during that year for passengers, freight and mail
service, were $340,150. The amount received for passengers was
$122,790 ; for up freight $118,433, and for down freight $83,326.
Of the amount received for down freight, very much.the greater
part must have been for cotton ; for the number of bales of cottpn
transported was 87,890, which, at the average rate of 75 cents per
bale, would yield $65,916, leaving only $18,410 for all the other
articles. Anderson and Greenville are the two upper termini of
the road. Of these the former is just within the cotton growing
region and the latter a little above it.
The whole amount received for dhwn freight from Greenville,
where tHere is little or no cotton to be transported, was $4,620.79.
The receipts for down freight from Anderson were $9,252.85.
There is the highest authority for the assertion that a large por¬
tion of this was for cotton. Indeed it can scarcely be doubted
that more than half was for that article. The United States
census of 1850 shows that Anderson District produced that
year 6670 bales of cotton. There must certainly have been
some increase of production since that time ; but supposing
it to have ^remained the same, and that it was carried at the
rates of a dollar a bale, the single article o'fj cotton furnished
$6,670 of the receipts for down freight, leaving less than $3,000
for all other things. Anderson and Greenville are the two points
on the Greenville and Columbia Railroad, at which all the surplus
produce of the country above the cotton growing region, destined
for the markets of Columbia and Charleston, would take the rail¬
road; yet we see that it was not sufficient in quantity and value
to contribute even so much as $8,000 to the annual income of the
company ; and this, be it observed, was after the railroad had been
in operation five or six years, and there had been time for the in¬
creased facilities for transportation to developethe resources of the
country. What then is to support the Blue Ridge Railroad ? Ac¬
cording to the census of 1850 the popnlation of Pickens District
14
was 16,904, and that of Greenville District, 17,839, of which one-
half, 8,919, may he fairly assigned to the part of the District ly¬
ing above the village ; so that the population of the country in
South Carolina tributary to the Greenville and Columbia Rail¬
road and not producing cotton, was 25,813. The Blue Ridge Rail¬
road is to pass from Anderson, through Pickens District, Rabun
county in Georgia, Macon county in North Carolina, and Blount
county and part of Knox county in Tennessee. In 1850 the pop¬
ulation of Rabun county was 2,448, that of Macon county
6,389, that of Blount county 12,424, and that of Knox county, in¬
cluding the city of Knoxville, 18,233—making in the aggregate
39,404, of which nearly one-half is in Knox county, where there are
already two other outlets by way of the East Tennessee and. Vir¬
ginia Railroad and the East Tennessee and Georgia Railroad.
The Districts of Pickens and Greenville are, to say the least, quite
as fertile as the counties of Rabun and Macon ; indeed, there is
very good reason to believe that they are more so. In countries
where the people derive their subsistence mainly from the soil, and
which are, in all respects, so similarly circumstanced as these, the
number of inhabitants, in proportion to the extent of territory, fur¬
nishes a pretty fair test of comparative fertility ; for we invaria¬
bly find our people searching out and settling upon lands which
easily yield them the neccessaries of life in sufficient abundance.
Judging by this test, we may reasonably conclude that Greenville
and Pickens are relatively more fertile than Rabun and Macon ;
for while they are, perhaps, double in extent of territory, they
contain nearly four times as mauy inhabitants. And, in the same
way, it may be inferred that they are nearly if not quite equal in
fertility to Blount county. The productions of all these counties
are of the same nature as those of Pickens and the upper portion
of Greenville—mainly Indian Corn and the smaller grains—not
more valuable in proportion to their bulk and weight, nor more
capable of bearing the expense of transportation, and with the dis¬
advantage of a heavier cost of transportation on account of their
greater remoteness. If, then, Pickens and the upper part of
Greenville, with their population of 25,813, and with the aid of
Henderson and Buncombe counties in North Carolina, pay less
than $8,000 to the Greenville and Columbia Railroad for down
freight, what right have we to expect that the counties in Georgia,
North Carolina and Tennessee, through which the Blue Ridge
Railroad is to pass, with only 39,494 inhabitants, will contribute
to the income of that road as much as $15,000*for down freight,
even throwing out of the question the fact that Knox county, the
richest and most populous of them all, has other means of export¬
ing its surplus produce ?
The report of the Engineer and Superintendent of the Char¬
lotte and South Carolina Railroad for the year 1858, shows that
the receipts for down freight in that year were $95,210. It is not
15
stated how much of this was for cotton, but there is a tabular
statement appended to the President's report, exhibiting the quan¬
tity of various articles of agricultural ..produce received at each sta¬
tion, from which it appears that the number of bales of cotton
transported was 54,128, which, at the average rate of $1 per bale,
would leave about $41,000 for all other articles. The upper ter¬
minus of the road at Charlotte is situated in a country where the
culture of cotton begins to give place to that of other things. It is
in fact not far from the outer verge of the cotton-growing region—
for of the 54,128 bales of cotton brought down the road, only 9,938
eame from that place; while 7,119 out of 7,151 barrels of flour,
41,155outof 43,795 sacks of the same article, '48,357 out of 54,235-
bushels of corn, 17,569 out of 25,138 bushels of other grain, 20,101
out of 20,334 boxes of tobacco, and 3,779 out of 3,798 bags of bran,
were received there, The freight of all these articles, estimated
with reference to the published rates of transportation on that
road, would not much exceed $20,000.
The country around and.above Charlotte is one of the most fer¬
tile, populous and highly cultivated iD North Carolina ; indeed,
more fertile lands are rarely to be found anywhere The counties
\>f Mecklenburg, Cabarrus, Rowan and Iredell, had in 1850 an
aggregate population of 52,250; yet we see that the transportation
of their surplus productions does not afford profitable em¬
ployment to the Charlotte and South Carolina Railroad. Why,
then, should the country which is to be penetrated by the Blue
Ridge Railroad do any better ? True it is rather further west,
and that alone seems to fill the imaginations of some people with
visions of wealth ; but sober-minded men will not easily be per¬
suaded that a little later sunset can make any material difference
in the profits of a railroad.
NO. YI.
We have seen how little reason there is for the opinion that the
Blue Ridge Railroad would derive a large or even a sustaining in¬
come from the business of bringing down the produce of the coun¬
try; Is it probable that the transportation of merchandize in the
opposite direction would supply the deficiency and yield remuner¬
ating profits? It may be assumed as a general principle, that the
commodities imported into any country cannot, in a series of years,
greatly exceed in value those exported from it. The value of the
ascending merchandize could not, therefore, be very much greater
than that of the descending produce transported on the road. The
former, it is true, representing not only the original value of the
latter, but also the additional value imparted to it by being expor
ted, would be absolutely more valuable; and the commodities
16
themselves being, from their nature and quality, of greater relative
value in proportion to their bulk and weight, and therefore capa¬
ble of bearing higher charges of transportation, would afford a lar¬
ger revenue to the road, but the difference surely could not be
sufficient to realize the brilliant anticipations by which so many
persons are deluded. It may be conceded that the merchandize
required for the consumption of the counties in Georgia and North
Corolina, through which the road is to pass, and even Blount coun¬
ty in Tensessee, would be transported over it, but no rational man
can believe that the receipt from that source would be sufficient to
sustain the road. As to the merchandize destined for Knoxville
and the surrounding country, it is by no means certain, or even
probable, that it would pass over the Blue Ridge Railroad. Chi
the contrary, thereis the strongest probability that it would not.
The merchants of Knoxville and the neighboring country purchase
their stocks of merchandize mainly at New York and Philadelphia.
The cost of shipping goods by steamers from New York to Rich¬
mond and Petersburg, including lighterage, is less than from New
York to Charleston, as might well be presumed, when it is consid¬
ered that the distance is so much less and the navigation so much
safer. At the same time, merchandize is transported by railroad*
from Petersburg to Knoxville at no greater cost than that of send¬
ing the same articles by the South Carolina Railroad and the
Greenville and Columbia Railroad from Charleston to Anderson,
not three-fifths of the distance to Knoxville. So that when the
additional cost of transportation on the Blue Ridge Railroad cornea
to be included, the route through Virginia would not only be the
shortest, but incomparably the cheapest. How then can it be
reasonably supposed that the merchants of Knoxville and the ad¬
jacent counties would prefer the longer and more costly route, by
way of Charleston and the Rlue Ridge Railroad % But the apos¬
tles of this enterprise do not limit their views to Knoxville and its
environs ; indeed they almost admit that if it stopped at that
point their magnificent anticipations would not be fulfilled. They
look beyond it to the valley of the Ohio, and the yet more distant
regions of the West, from which they expect the Blue Ridge Rail¬
road to draw the immense benefits it is to bring us. The Blue
Ridge Railroad is only a part of the scheme; it is to be pushed on
by the construction of other railroads, to Cincinnati and Louisville.
But even supposing that the projected railroads by which Knox¬
ville is to be connected with Louisville and Cincinnatti were com¬
pleted, is there the least reason to believe that the merchandize
destined for the supply of these cities, and the circle of country of
which they are the commercial centres, would reach them through
the Blue Ridge Railroad ?
The following statement exhibits the rates of transportation
adopted by the New York and Erie, the New York Central, the
Pennsylvania Central, and the Baltimore and Ohio Railroads, for
17
some of the most common and important articles of merchandize,
from New York to Cincinnati, Louisville and St. Louis, respect¬
ively, viz :
Boots and shoes, china ware in boxes, cigars, drugs and medi¬
cines, dry goods in boxes, bales and trunks, hats and caps, per 100
pounds—to Cincinnati $1.20; to Louisville, $1.35 St. Louis, $1.7().
Candles, cocoa, chocolate, china ware in casks, cutlery, crocke-
ry in boxes or barrels, per 100 pounds—to Cincinnati 88 cents;
to Louisville, $1.02 ; to St, Louis, $1.35.
Axes, anvils, ale and beer in wood, hardware, herrings in kegs,
iron castings in boxes, oil in hogsheads and barrels, shovels and
spades, per 100 pounds—to Cincinnati, 77 cents; to Louisville 8$
cents ; to St. Louis $1.10.
Crockery in crates and Hogsheads, earthen and stone ware in
crates and hogsheads, iron castings in casks, molasses, nails and
nail rods, tobacco in hogsheads, coffee in sacks, fish, pickled and
dry salted, sugar, per 100 pounds—to Cincinnati 55 cents ; to Lou¬
isville 63 cents; to St. Louis 70 cents.
The rates of transportation on the South Carolina Railroad and
the Greenville and Columbia Railroad, are so arranged as to make
it impracticable to institute a minute comparison, some of the char¬
ges being by measurement and some by the package, without ref¬
erence to weight; but the following charges for the trarsportation
of some of the articles above enumerated from Charleston to An¬
derson, not quite two-fifths of the distance to Cincinnati, will be
sufficient to show that goods are transported from New York to
Cincinnati, and Louisville, and St. Louis, for much less than it
would cost to carry them from Charleston to the same places,
by way of the Blue Ridge Railroad :
Bpxes and bales, dry goods, shoes, drugs, per 100 pounds $1.25
Candles, hardware, crockery in crates or casks, per 100 lbs.. .0.80
Sugar and coffee, nails, stoneware packed, per 100 lbs 0.75
Shovels and spades per doz 0.88
Molasses in hogsheads 9-00
Molasses, liquor, beer, fish, per barrel 2.75
How, then, can it be supposed, with any shadow of reason, that
the merchants of Ohio and Kentucky and Missouri would ship
their goods from New York to Charleston, to be sent home by
way of the Blue Ridge Railroad 1 What conceivable inducement
would they have to adopt so strange a course ?
But it seems to be a part'of the vague and indefinite faith of the
believers in the Blue Ridge Railroad, that in some way'or other,
by some magical or mysterious influence which nobody attempts
to explain or account for, it is to cause the foreign merchandize
required for the supply of the West to be imported through
Charleston, and the merchants of the Western States to purchase
their stocks of goods in Charleston rather than in New York.
How these effects are to be produced, it is by no means easy to
comprehend. We have railroads connecting Charleston with al-
3
18
most every part of the State, yet more than nine-tenths of the for¬
eign merchandize consumed in South Carolina are imported through
New York ; and there is scarcely a country merchant in the State,
whose annual sales exceed $10,000, that does not make his pur¬
chases in New York, and even the retail dealers of Charleston
do the same thing.
How, then, is the Blue Ridge Railroad to bring us the foreign
commerce of the West, when our own railroads fail to secure us
that of the State itself ?
An effort may be made before the close of this discussion to trace
out and explain the nature and operation of some of the chief cau¬
ses of that tendency to centralization, which pervades the com¬
merce of the whole country, and determines its convergence to¬
wards New York ; when, perhaps, it will be seen that railroads
and other improvements for cheapening and facilitating transpor¬
tation are much more likely to increase than to diminish the inten¬
sity of the centripetal force.
NO. VII.
Even the most enthusiastic and infatuated advocates of the Blue
Ridge Railroad do not pretend to say that it would derive any
considerable income from the transportation of passengers ; and,
indeed, the reasons why it should not are so plain and conspicu¬
ous that the blindness of partiality cannot overlook them. The
direction of the road lies across the great lines of communication
between the northern and southern portions of the confederacy, by
which the opposing streams of travellers are always flowing both
ways. Travellers coming to South Carolina, either from the North
or the South, would enter the State below the lower terminus of
the Blue Ridge Railroad; so, too, those coming to East Tennessee
would reach it above the upper terminus of this road. The only
persons who would have occasion to travel over the road, would
be those going from this State to the counties in Georgia, North
Carolina and Tennessee, through which it is to pass, and to Knox-
ville and the surrounding country, and those coming from the same
places to South Carolina. The number of such travellers would
obviously be too small to contribute materially to the support of a
railroad. If the road should be extended to the cities of the Ohio,
the number of travellers over the Blue Ridge Railroad might be
somewhat increased, but not so much as to make any important
difference ; for we have seen that the direct commercial relations,
between that region and South Carolina would be inconsiderable,
aird the number of persons passing between them would be cor¬
respondingly small.
This lack of income from the transportation of passengers,
19
would put the Blue Ridge Railroad at great disadvantage in its
competition with the other railroads diverging from Knoxville to¬
wards Virginia on the one side, and Georgia on the other, for the
transportation of freight. These roads are parts of the shortest
and most direct line of railroad communication between the south¬
western States and the great cities of the North, and must, from
their position, necessarily command as large a share of the travel¬
ling business as any railroads in the Southern States. This, alone,
will probably yield them an income sufficient to pay all their ex¬
penses, and they will thereby be enabled to carry freight at much
lower rates than could possibly be afforded by a road which, with¬
out any peculiar advantages to counterbalance this, would be al¬
most entirely dependent for its income upon the transportation of
freight. It appears from the report of the Superintendent of the
East Tennessee and Georgia railroad for the year ending on the
31st of June 1858, that the whole amount received for passengers
was $114,036.18. But on the 1st of June the East Tennessee and
Virginia Railroad was opened through, so that there was an unbro¬
ken communication by railroad to Lynchburg and Richmond ; and
the receipts for passengers alone in the two months of June and
July, were $25,818.12. On our principal railroads, and probably
on all of them, the receipts from passengers constitute a very ma¬
terial portion of the whole income. The gross receipts of the
Greenville and Columbia Railroad for the year 1858 were $341,-
190.56, of which $118,433.62 (more than one-third of the whole)
came from passengers. The current expenses were , $215,320.94,
leaving a net income of $125,869.52, or only $7,436 more than the
amount received from passengers. In the same year the Char¬
lotte and South Carolina Railroad received from all sources
$283,263.80. Of this $89,857.76 were for passengers. The cur¬
rent expenses were $131,727.44, and the net income was$l51,536.
36, so that much the greater part of the net profits consists of the
receipts from passengers.
The South Carolina Railroad, which is eminently a freight
road (having received $412,606.35 for carrying to Charleston in
that year, 42S,452 bales of cotton,, and $460,915.87 for the trans¬
portation of merchandize into the interior,) had a gross income of
$1,501,008.44, of which $416,801.05 were received from passen¬
gers. The two great railroads by which the city of New York is
connected with the western lakes, also derive a large portion of
their income from passengers. In 1858 the New York Central
Railroad received from passengers $2,532,647, and the Erie Rail¬
road $1,182,258. The business of carrying passengers where they
are so numerous as to afford full and steady employment, is per¬
haps the most profitable that a railroad can have to do, because
the expenses are .comparatively small in proportion to the receipts^
and do not advance in anythinglike the same ratio with an increas¬
ing number of passengers. It costs very nearly, if not quite,
20
as much to carry twenty passengers as to carry fifty, and nothing
like twice as much to carry a hundred as fifty, so that with every
addition to the number of passengers, the profits increase^ in a
much greater ratio. Of this business the Blue Ridge Railroad
would be almost entirely destitute, and what little might fall to
its share, Avould be done at great relative cost, and with very small
profit, or perhaps none at all. It would also, from its position out
of the way of any great, mail line, be precluded from the benefit
of profitable employment in the transportation of the mail. For
any chance of gain it would have to depend mainly, if not entire¬
ly, upon the transportation of frieght, and that, we have seen, pre¬
sents a barren and gloomy prospect. For the business of bring¬
ing agricultural produce from Knoxville and the adjacent valleys,
it would have to sustain an unequal and hopeless competition with
the East Tennessee and Virginia Railioad and the East Tennes¬
see and Georgia Railroad. There is certainly very little reason
to believe that even a moderate share of the foreign merchandize
required for the consumption of that region, would reach it by way
of the Blue Ridge Railroad. Supposing the line of railroads to
be extended beyond Knoxville, to the cities on the Ohio, of whieh
there is but a slender prospect, it is, to the last degree, improbable
that any considerable part of the surplus produce of Kentucky, or
Ohio, or Indiana, or Missouri, or of the merchandize destined for
those States, would pass through the Rabun Gap and the stump
House Tunnel. What, then, remains to realize the magnificent
dreams with which we have been amused, besides Rabun county
in Georgia, Macon county in North Carolina, and Blount county in
Tennessee ? The surplus produce of these counties, and the mer¬
chandize demanded for the consumption of their inhabitants, may
be freely conceded to the Blue Ridge Railroad. Of the transpor¬
tation of these it will undoubtedly enjoy a monopoly without any
fear of competitors. But what will it be worth ? We have seen
that the whole receipts of the Greenville and Columbia Railroad in
one year, for down freight from Greenville and Anderson, were
$13,863.64, of which nearly one-half must have been for cotton.
The residue represents the full value of the business of transporting
the surplus produce of Pickens District and the upper portion of
Greenville District, Henderson county, and probably Buncombe
county, in North Caroiina. It may be assumed as certain that
Rabun, Macon and Blount counties would not contribute twice as
much, or $15,000, for down freight to the Rlue Ridge Railroad.
They are above the cotton growing region; their productions are
of great bulk and weight in proportion to their value, and there¬
fore comparatively costly to carry. Low rates would pay no pro¬
fit to the road, and high rates would be prohibitory and drive them
off. The whole burthen then of sustaining the road would have
to be borne by the business of transporting merchandize from be¬
low. And this is indeed a very profitable employment when it is
21
furnished in sufficient abundance and with tolerable regularity,
It paid to the South Carolina Railroad last year, as we have seen,
$460,915.87. The receipt of the Greenville and Columbia Rail¬
road for up-freight were $118,417.49. Of this amount $27,916
.were for freight carried to Anderson, and $26,394.5S for freight de¬
livered at Greenville—making together $54, 310.58. If we sup¬
pose $40,000 to have been paid for merchandize destined for Pick¬
ens, the upper part of Greenville, and Henderson and Buncombe
counties, which is certainly assigning them their full share, and
then assume that Rabun, Macon and Blount counties would pay
the Blue Ridge Railroad $30,000 more for up-freight (an extrav¬
agantly liberal allowance,) the income of the road on that account
would be $70,000—-just enough, without deducting one cent for
expenses, to pay one year's interest on the debt of $1,000,000, for
which the State is urged to become unconditionally responsible—
throwing wholly out of view all the other millions which the com¬
pany expect to borrow.
No. VIII.
It may he instructive and profitable, as well to ourselves as to
those who a^e to come after us, to advert particularly to some
points in the history of this enterprise, which cannot be fully un¬
derstood and appreciated without close inspection and careful con¬
sideration. These are the words by which the act of 1854 autho¬
rizes the Comptroller General to subscribe on behalf of the State
to the capital stock of The Blue Ridge Railroad Company in
South Carolina
" Whenever satisfactory proof is produced to the Comptroller
Creneral within two years after the passing of this act, that one
million of dollars have been.subscribed, by responsible persons,
companies, or corporations, to the capital stock of the Blue Ridge
Railroad Company in South Carolina, he is hereby authorized and
required to subscribe, on behalf of the State, the sum of five hun¬
dred thousand dollars ; and when satisfactory proof is produced
of a further subscription, by responsible persons, companies, or
corporations, of five hundred thousand dollars, and also that at
least one-fifth of the subscribed capital of the Company is held
by responsible individuals of private corporations, then the Comp¬
troller General is authorized and required to subscribe, on behalf
of the State, the further sum of five hundred thousand dollars."
The period of two years within which it was necessary that the
condition on which the first State subscription was made to depend
should be fulfilled was running out, and the amount subscribed by
responsible persons, companies and corporations, still fell short of
,a million of dollars, by several hundred thousands; a subscription
22
of $500,000 made by tbe City Council of Charleston, constituted
much the greater part of the subscribed capital; the individual
subscribers were not numerous, and few of them for more than one
share ; and there seemed to be no reasonable prospect of obtain¬
ing the additional amount required to secure the State subscrip¬
tion. Now suppose that while the directors and managers of the
concern were sorely troubled and perplexed with fears of losing the
State subscription, and anxiously consulting together and casting
about for some means of surmounting the difficulty, one of their
number, with a genius more inventive of financial expedients than
the rest, had said to his companions : " My friends, I think I have
discovered a contrivance by which we shall be able to satisfy this
troublesome condition, or (which will serve our purpose just as
well) to circumvent it. Here we have more than half a million
subscribed ; let us use this, or as much of it as may be necessary,
to obtain what is wanted to make up the million. There will be
no difficulty in inducing people to subscribe, if they are assured
that they shall not be required to pay what they subscribe, but
that it shall be paid for them. This is what we will do ; we will
go about among our friends and tell them that we require a cer¬
tain amount to be subscribed within a certain time, in order to en¬
able us to obtain the State subscription ; that they must make it
up among them, that they can do it without any cost to themselves,
for that we will pay their subscriptions for them, and we will show
them that we have the means of doing so, and moreover our en¬
gagement with them would be a good set off against their engage¬
ments with us^ It is certain that we shall very soon obtain sub¬
scriptions enough, and the whole difficulty will be overcome."
Suppose that they had adopted this ingenious device, and immedi¬
ately set about to carry it into execution ; that they had speedily
obtained the requisite amount of subscriptions and exhibted them
to the Comptroller General, showing the full sum of $1,000,000
subscribed, and even something over; can it be doubted that,
knowing and suspecting nothing of the manner in which these sub¬
scriptions had been obtained, he would at onpe have subscribed
$500,000 on behalf of the State ? And, perhaps, if he had known
or suspected the whole truth, he might have then considered the
formal subscription a literal compliance with the terms of the act,
and thought that he was bound to subscribe on account of the
State.
They did not, to be sure, do this very thing ; but they did some¬
thing else, which was in substance and reality pxactly equivalent
to it. The City Council of Charleston had assumed certain sub¬
scriptions to the capital stock of the " Blue Ridge Railroad Com¬
pany "—a company incorporhted by the Legislature of Georgia,
to construct a railroad through Rabun county in that State, from
the North Carolina line to the South Carolina line. These sub¬
scriptions amounted to $549,000, and by assuming them the City
23
Council of Charleston engaged to contribute that sum towards the
construction of the railroad in Georgia. The " Blue Ridge Rail¬
road Company in South Carolina " induced the City Council to
enter into an arrangement with them, by which the shares held by
the City Council in the capital stock of the Georgia Company
were transferred to the South Carolina Company, and the City
Council subscribed 8549,000 to the stock of the South Carolina
Company ; in other words, the South Carolina Company engaged
the City Council to subscribe 8549,000 to their capital stock, by
assuming the obligation of the City Council to contribute the same
sum to the capital stock of the Georgia Company. They did not
contract to pay the subscription to their own capital, but they did
contract to pay another subscription for the same sum to the capi¬
tal of another company, which is substantially the same thing.
The Comptroller General, seeing that the amount subscribed by
other parties than the State exceeded $1,000,000, and not know¬
ing or not adverting to the fact that a large portion of it was sub¬
scribed in such a manner as to add nothing to the real means and
resources of the company, did not hesitate to make the first sub¬
scription of $500,000 on behalf of the State. When the Legisla¬
ture made it a preliminary condition of the State subscription that
there should first be other subscriptions amounting to a million of
dollars, they undoubtedly meant something real and substantial,
not merely the empty form of a subscription ; they meant that be¬
fore anything should be subscribed on behalf of the State the com¬
pany should have secured, by other subscriptions, a fund of
§1,000,000, to be used for the construction of the road, and for no
other purpose. It certainly was not contemplated or intended
that, after having obtained half a million, they should use that sum
for the purpose of purchasing, directly or indirectly, in any way
or under any disguise, other subscriptions for half a million more,
so as to present the outward semblance of a million with a real fund
of only half a million. If the arrangement by which the Gity
Council of Charleston subscribed to the capital stock of the South
Carolina Company, and they, in exchange, assumed the subscrip¬
tion of the City Council to the capital of the Georgia Company,
was a legitimate fulfilment of the condition which was to precede
the State subscription, then why might not all the subscriptions to
the capital of the North Carolina and Tennessee Companies have
been in the same manner, and with equal propriety, converted
into subscriptions to the capital of the South Carolina Company ?
Indeed, if this condition is really so flimsy and unmeaning a
thing, and may be so easily evaded by a mere form, a single bona
fide subscription of $100 would have been quite sufficient for t^e
purpose; for with that they might have procured a second, and
then a third, and so on until they amounted to 10,000, and made
up the million of dollars required. And as each subscription
would have been paid with one hand and received with the other,
they would always have had the money ready to pay the next.
24
There is good reason to believe that they expected and intended
to satisfy the condition which now stands in the way of their ob¬
taining the State guarantee of the bonds of the company for
$1,000,000, by a somewhat similar expedient. That condition is;
" That such subscriptions should have been made, or aid furnished
to the railroad companies in North Carolina and Tennessee, de¬
signed to connect the said Blue Ridge Railroad with the Georgia
and East Tennessee Railroad, as should give reasonable assurance
of the construction of the said North Carolina and Tennessee
Railroads." The whole amount subscribed to the capital of the
North Carolina Company was $55,400. There were more than
73 miles of railroad to be constructed, and it was known that the
State of North Carolina would neither subscribe nor furnish any
other aid to the company ; so that there was nothing to give rea¬
sonable assurance of the construction of the North Carolina Road.
In order to supply the deficiency and satisfy the condition, the
Blue Ridge Railroad Company in South Carolina was to make a
large subscription to the capital of the company in North Caro¬
lina. There cannot be stronger evidence of the intention to do
an act which, in itself, implies deliberation and design, than the
fact that it is done; and that is just the evidence we have that
the Blue Ridge Railroad Conipany in South Carolina intended to
subscribe to the capital of the North Carolina Company. In a
list of the subscribers to the capital stock of the " Tennessee River
Railroad Company," furnished by the President of the South Caro¬
lina Company, in November, 1856, in compliance with a resolu¬
tion of the Senate requiring a statement of the names of the
stockholders in the several companies, and the number of shares
held by each stockholder, the " Blue Ridge Railroad Company in
South Carolina" appears as a subscriber for 9,400 shares—being,
at $100 a share, $940,000. What other purpose could they have
designed to effect by this subscription than to make the apparent
capital of the company large enough to give reasonable assurance
of the construction of the road ? But the device was too trans¬
parent for practical use, and was, therefore, quietly laid aside.
Before the second State subscription of $500,000 could be ob¬
tained, it was necessary that there should be " a further subscrip¬
tion by responsible persons, companies or corporations, of $500,000,
and also that at least one-fifth of the subscribed capital of the
company should be held by responsible individuals or private cor¬
porations." They were unable to comply with this condition,
and applied to the Legislature for its removal, but they were un¬
successful. They then made a strenuous effort to obtain further
subscriptions, and did contrive to induce a few of the banks and
some individuals to subscribe $232,700; but these new subscribers
were.required to pay only five per cent, at the time of subscrib¬
ing, and, it is said, were assured that the residue would be called
for in very small instalments, and at very long intervals; and, that
unless the State undertook to furnish the means necessary to com-
25
plete the road, it would be abandoned, and they would not be
required to pay at all. Yet these subscribers who have paid al¬
most nothing, and may pay nothing more, are stockholders on the
same footing with the State, which has paid its subscription in full,
and has been paying interest on the amount ever since. But if
the condition of the first State subscription was not lawfully ful¬
filled, and the company never entitled themselves to that, there
could, of course, be no right to the second, and the whole State
subscription has been obtained unlawfully and without right.
No. IX.
The arguments or considerations, such as they are, by which it is
sought to persuade the people of the State to assume the burden
of carrying on this enterprise to its completion, are embodied in
the speeches of some of its leading advocates, made in the Legis¬
lature and elsewhere. As they are presented in tfie speech of
Mr. Memminger, delivered in the House of Representatives, "and
afterwards printed and widely circulated among the people, the
following is a brief but faithful summary of them all :
1. If we decline to do what is demanded, the work must be
abandoned, and " South Carolina will show that she had zeal and
energy to begin, but wanted constancy and perseverance to ac¬
complish," and will " leave in the half finished tunnels, in the
crumbling bridges and ruined cuts through hills and mountains, a
monument of inconstancy and feebleness."
2. The State is " indirectly pledged to carry out the work,"
and " is bound to go forward upon the same principle which re¬
quires every man of honor to fulfil expectations which he has cre¬
ated arid fostered." We have "encouraged the expectation that
we would not abandon, and are equitably bound to fulfil this ex¬
pectation " by "every consideration. of national character, of
elevated morals, and of kindly feeling." t
3. Nowhere " has individual capital been able to undertake a
road passing through^ a mountain region like this. The underta¬
king is too extensive and the profit too remote to induce individual
subscriptions. It is therefore, of necessity, a State work. Geor¬
gia so considered it, when she expended five millions on her State
Road. Virginia has scaled the mountains at two points." " North
Carolina has carried forward her State Road entirely by State
funds, and it is clear that this road of ours must be accomplished
in the same way."
4. " The whole extent to which the State is to be involved is
for one million of additional subscription and one million of
guaranty."
5. " If the State Treasury will pay the interest on any debt
created for the Blue Ridge Railroad, the Bank can pay the prin-
4
26
cipal if you give it time: six millions can be paid in twenty-five
years ; nine millions in about thirty years. If the State subscribe
one million more to the Blue Ridge Railroad, the Treasury will
be called on to pay the interest, amounting to $60,000, which is
equivalent to an eighth upon the taxes of the last year.^ And so
if the State shall embark $2,000,000, the taxes will be increased
one-fourth, or just about nineteen cents a head on each negro;
and so in proportion on lands and other subjects."
6i " The road will be worth all that it will cost the State," and
" the State will receive ample compensation for the outlay she is
called upon to make."
7. " Savannah has a decided advantage in the control which
the State of Georgia has over the State Road. It follows from
the very nature of things that this control will be exerted to give
her every advantage. The daily experience of our merchants
prove this; and it constitutes one of the principal inducements to
open a new route under our own control.- The entire Blue Ridge
route will be under our own management, and will, of course, be
so governed as to give us a fair competition."
The speech, which is of great length, occupying more than
twenty-five printed pages, contains, of course, many other things;
but they are all subordinate to and intended to illustrate and en¬
force one or other of these general heads.
The people of South Carolina, like every other people, are
liable to be occasionally deluded and misled by the plausible rep¬
resentations of honest and enthusiastic schemers, or more artful
and designing men; and while under the influence of such tem¬
porary delusion, to initiate enterprises which further time and
reflection afterwards discover to be leslf wise and beneficial than
they at first appeared, or perhaps even unwise and unprofitable.
This proneness to rush hastily into ill-considered undertakings, is
one of the proverbial characteristics of popular government, and
is happily counterbalanced by the facility with which they are
abandoned when their worthlessness begins to be seen. But we
are gravely admonished by this eminent leader and counsellor
that when we have once begun a work, though we may after¬
wards be convinced that it would be useless or*even mischievous, we
must carry it on to completion, no matter what amount of wasteful
expenditure it might involve within the limit of our ability ; be¬
cause its abandonment would show that, though we "had zeal
and energy to begin, we wanted constancy and perseverance to
accomplish," and would leave in the unfinished work " a monu¬
ment of inconstancy and feebleness."
Can this be really the genuine teaching of moral and political
philosophy of Christian ethics, or even of common sense ? What¬
ever you have begun to do, right or wrong, wise or unwise, go on
and finish it. Be anything rather than seem to be "feeble and
inconstant." Is it, then, the duty of an individnal, when he dis¬
covers that he.has fallen into an error, to persist in it, rather than
27
abandon it at the risk of incurring the charge of " feebleness
and inconstancy," or is there one rule of wisdom and morality
for individuals and another for States 1 If we have been misled
into making a bad law, ought we to maintain it with steadfast
obstinacy, because to repeal it would be evidence of fickleness
and instability ? It is, to say the least,, a possible event that
this great project, if it were completed, might prove so utterly
useless- and unprofitable as to be abandoned. Of what, then,
would its finished tunnels, bridges and cuts through hills and
mountains be a monument? Not, to be sure, of "inconstancy
and feebleness," but of something else certainly not more laud¬
able or honorable—folly and infatuation not merely temporary
and transient, but persistent and enduring—such as could only
possess a people too impenetrably stupid to be taught by any
thing short of actual experiment. If, on the contrary, time should
hereafter show that the magnificent anticipations of the projectors
of the enterprise and their disciples are not mere delusions, but
sober truths; if it should appear that the commonwealth of South
Carolina is indeed dwindling into insignificance, sinking into bar¬
barism, and in danger of perishing from off the face of the earth
for want of the Blue Ridge Railroad, what has been done will not
be lost; the mountains will not close up and obliterate the unfin¬
ished tunnels ; the bridges, if they are solidly constructed, will
not fall to pieces, and the cuts through hills and mountains will
remain open, and the men of the next or some later generation
will have so much less to do in completing the work. It is now
about twenty years since tbe Louisville, Cincinnati and Charleston
Railroad was abandoned—an enterprise to which our people, as
individuals, contributed so liberally. Among those who took a
leading and conspicuous part in advising and promoting that aban¬
donment, was at least one of the distinguished gentlemen by
whom we are now strenuously exhorted to persist in carrying on
the Blue Ridge Railroad to its completion. Where then was all
his anxious solicitude about the reputation of the State for con¬
stancy and perseverance ? Perhaps, at that early day, he had a
propheticgBsion of the Blue Ridge Railroad in the distant future,
and seeing clear through the visionary perforation of the Stump
House Mountain, he discovered that this new route was more in
the direction of Alabama and Mississippi, and that the true way
to those States lay through the northeast corner of Georgia, clear
across North Carolina, and more than half way across Tennessee.
But this number is in danger of exceeding its proper length, and
the farther examination of Mr. Memminger's speech must be de¬
ferred to another.
28
No. X.
It is difficult to conceive liow any reasonable man pan be
honestly and sincerely persuaded that, in our public capacity as a
State, we are in any sense, or in obedience to any, even the most
refined and sublimated sentiments of honor and good faith, bound
to do all that may be necessary to prevent the abandonment of this
enterprise, or to do any thing more than we have done already.
How is it possible to infer any such obligation from the acts or
declarations, the inaction or the silence, of the Legislature ? In
1854 they agreed to subscribe Si,000,000 to the capital of the
company, and to guarantee their bonds for another $1,000,000, on
certain conditions, which have been so often stated that it cannot
be necessary to repeat them again. Did they thereby engage the
State to subscribe $2,000,000 or $3,000,000, and to guarantee the
bonds of the company without any condition at all? Is their
language to be interpreted to mean the very reverse of what it
expresses ? But it is said that when this arrangement was made,
Bangs & Co. had contracted to build the road at a stipulated price,
of which they were to receive one-fourth in the company's stock
and one-fourth in their bonds, and that if they had not failed to
perform their contract no further demand would have been made'
on the State ; but that the failure of Bangs & Co. to do what they
undertook to do, has changed the posture of affairs, and thrown
upon the people of the State an obligation of equity or honor, or
"of national character, of elevated morals and of kindly feeling,"
to do much more than they engaged to do; and, in effect, to take
upon themselves the violated engagement of the defaulting con¬
tractors. How, in the name of common sense, could the dealings
and short-comings of Bangs and Co., the successful imposition of
those bold adventurers upon the simple credulity of the President
and Directors of the Company, in making them believe that they
would not only build the road, but furnish half of the necessary
capital, and their failure to fulfil thpir contract, in any sense
enlarge the obligation of the State? Suppose that, in^ad of this
fatuous contract, they had had such an amount subscribed by indi¬
viduals or corporations, and agreements with other parties for such
loans of money as would, in their judgment, have enabled them
to complete the work, and that the subscribers had proved insolvent
or faithless, and the parties from whom they expected to borrow
money, afterwards refused, or were unable to make the loans,
could it have been pretended, with the slightest shadow of reason,
that the State was bound in equity or honor, or by the most
romantic laws of chivalry, to supply the deficiency by makin°*
further subscriptions and additional loans or guarantees ? In wlia't
respect did the contract of Bangs & Co. differ from this ? Thev
agreed to take stock—that is, to subscribe for one-fourth of the
cost of the road, and to take the bonds of the company for one-
29
fourtli—that is, to lend them one-fourth. So far, their failure to
execute their contract was just like the failure of any other
subscriber to pay, or of any other parties to lend who had agreed
to do so.
Suppose that the Legislature of Tennessee should repeal the apt
authorizing a loan to this concern of State bonds for $040,000,
Avould that impose upon. South Carolina the obligation to lend
them the same sum, or to do anything else that would he equiva¬
lent to it ? Seriously to offer such pretences as this, is scarcely
consistent with a decent respect for the understanding of the
public. But we are told that, more than a year ago, the Legisla¬
ture had information "that, by the failure of Bangs & Co., these
conditions had become impracticable," and " were then invited'to
express their determination not to go on if they intended to insist/
They declined any such expression, and in consequence of that,
individuals have subscribed $235,000 additional, and more than
$1,000,000 has been expended upon the road." Let us recur to the
facts as they actually took place. Iml856 the company presented
•a petition to the Legislature, setting forth that one of the conditions
on which the second State subscription of $500,000 was to be made,
namely : " that at least one-fifth of the subscribed capital should be
held by responsible individuals or private corporations"—was not
satisfied, for that much less than one-fifth of the capital was
held by responsible individuals or corporations, and praying that
it might be repealed. Their petition neither mentioned, nor made
the slightest allusion to the condition which was to precede the
State guaranty of the company's bonds, nor did they in any other
way breathe a syllable on that subject. Perhaps they still cherished
the idea that their own generous subscription to the capital of the
North Carolina Company would be a sufficient fulfilment of that
condition. But however that may be, their application related
wholly and exclusively to the second State subscription. The
President of the company addressed the House of Representatives,
one of the two bodies which compose the Legislature, in a long
and elaborate speech, in which he enlarged upon the great
importance of the enterprise, represented strongly the extreme
improbability of obtaining further subscriptions from individuals
or corporations, and announced that, unless the State should
furnish the requisite means of carrying it through, it must be
abandoned; but that the Legislature were invited to instruct the
company to proceed no further unless they intended to supply the
necessary funds for its completion, does not accord with the recol¬
lection of others who had equal opportunities of knowing the truth.
On the contrary, after the failure of the application for the
removal of the condition which withheld the second State sub¬
scription, earnest appeals were made to the generosity and for¬
bearance of members of the House tnat nothing should be done
which might prevent the company from securing that subscription
by obtaining the required amount of private subscriptions. And
30
when resolutions were offered in the other branch of the Legisla¬
ture, looking to the withdrawal of the State from all further
participation in the- enterprise, the managers of the company and
their friends were rallied in full force to prevent their adoption.
Nor is it true that the subscriptions subsequently obtained were in
any degree induced by the omission of the Legislature to declare
their intention to do no more than they had already engaged to do.
There was, indeed, a connection between those subscriptions and
the action, or rather the inaction, of the Legislature ; but it was
of a very- different sort. If the preliminary condition of the
second State subscription had been removed, those subscriptions
would not have been made, nor would any effort have been put
forth to obtain them. It was because that condition was not
"removed, and, in order to satisfy it, that those additional subscrip¬
tions were procured by the great personal exertions and solicitations
of the President and some of the Directors, whose position gave
• them extraordinary influence in commercial circles, which enabled
them to induce many individuals to do what their own judgment
did not approve. It would be much more consistent with truth to*
say that those subscribers caused the State to make the second
subscription, than that the State induced them to subscribe. If
the Legislature, instead of refusing, had consented to remove the
condition of the State subscription, without doing or saying any¬
thing more, certainly nobody would have had a right, founded on
any intelligible grounds of reason, to claim that the State was
thereby involved in any sort of obligation to remove the condition
annexed to the agreement to guarantee the company's bonds, or
to make any further subscriptions to its capital; much lass then
could their refusal to remove the condition be reasonably under¬
stood to bind them to any such obligation, because they did not at
the same time declare that they would do nothing more. The
State has throughout adhered with unwavering fidelity to its
engagements, and has neither repudiated nor failed to perform any
of them. If the Legislature, instead of simply refusing to remove
the condition on which the State subscription depended, had, as
we are now told they were invited to do, repealed so much of the
Act of 1854 as provided for a State subscription and a guaranty,
upon certain conditions, the proceeding would no doubt have been
clamorously denounced as an outrageous violation of the public
faith, and certainly with much more show of justice. But every
day brings forth something new to illustrate the truth of JEsop's
immortal fable of the wolf and the lamb.
31
•N o. XI,
It is, to say the least, a rash and reckless assertion, that no rail¬
road passing through a mountain region, has been built anywhere
in the United States with private capital, and that such a road
is of necessity a State work. It is no doubt true enough that an
lindertaking of which the profit is so extremely remote and
improbable, as that of the Blue Ridge Railroad has been shown
to be, will not induce individual subscriptions ; and this has been
signally demonstrated by the remarkable paucity and caution of
the individual subscribers, of whom very few subscribed more than
one share, and even the President and Directors not many more,
until an amendment of the charter (which they strenuously resisted),
made it necessary that each of them should hold at least fifty
shares. But the instances in which such railroads have been con¬
structed by States and as State works, are exceptions ; the general
rule is otherwise, and many more such enterprises have been
undertaken and accomplished by the associated efforts and con¬
tributions of individuals. The Western and Atlantic Railroad of
Georgia, which is often called the State Road, because it was
built by, and belongs to the State, was not undertaken by the
State for the reason that it was to be constructed through a moun¬
tain region—for it, in fact, passes over a comparatively level
country—and though it has a tunnel in its course, that is not
through a mountain, but a low ridge, which an ordinary traveller
would scarcely have noticed, and which, it is said, might easily
have been avoided by better engineering. The State undertook
the construction of that road, because it was to traverse a remote
and fertile territory, then recently acquired from the Indians, the
settlement and cultivation of which would have been greatly
hindered and retarded by the extreme difficulty of getting its
produce to market. Nor is it true that the State never faltered in
the prosecution of the work; for, before it was completed, the
Legislature refused to raise any more money on the credit of the
State, and could not be induced to go farther than to authorize
*the borrowing of money, for the repayment of which the lenders
were to depend entirely upon the profits of the road, having no
right, in case that security should prove insufficient, to call upon
the State for payment. Neither is it true that North Carolina
" carried forward her State road entirely with State funds." On
this subject Mr. Memminger either did not take sufficient pains to
inform himself before he assumed to instruct others, or he was
misled by those from whom he sought information. There is
indeed, properly speaking, no such thing as a State railroad in
North Carolina. The State did, either by subscription to the
stock, or in some other form, furnish three-fifths of the funds neces¬
sary for the construction of the North Carolina Central Railroad,
which, by the way, is not any more than the Western and Atlantic
32
Railroad in Georgia, a road passing through a mountain region,
It may be that in Virginia the mountains have been scaled at two
points by railroads, but neither of them was a State work, though
to one of them, at least, the State did contribute, either by sub¬
scription or loan, two-fifths of the requisite means. But the most
important fact in relation to all these works is studiously kept out
of view. Tliey are all within the territorial limits of the States
which constructed or assisted to construct them. Not one of the
States has ever built or aided in building a railroad anywhere else
than upon its own soil. The nearest approach to such a thing was
made by Virginia in the case of the Roanoke Valley Railroad, to
which the State contributed three-fifths of $400,000—two-fifths in
the shape of a loan, and Afterwards one-fifth in preferred stock ;
but that road lies about one-half in Virginia and the other in
North Carolina, the upper half being in Virginia, so that it fur¬
nishes an outlet for the produce of a part of that State. Yet we
are invpked by the example of other States to furnish the means
for building a railroad, of which nearly three-fourths will be
beyond the limits of South Carolina, and which is to afford an
outlet for the produce of Georgia and North Carolina and Ten¬
nessee.
In the very beginning of this discussion it was shown that,
according to the most favorable view that could be taken, assuming
that the actual cost of the work would not exceed the estimates (a
thing which never yet happened in the history of railroad enter¬
prises) and that every thing should go on smoothly and regularly,
without the occurrence of any unforeseen or extraordinary diffi¬
culty, the contributions of South Carolina would certainly amount
to more than $5,000,000; and it would be very easy by a few
additions, which could not be reasonably disputed, to carry it up
to at least $6,000,000. It is therefore quite unnecessary to attempt
any further answer to the assertion that "the whole extent to
which the State is to be involved is $1,000,000 of additional sub¬
scription, and $1,000,000 of guarantee."
But Ave are assured that our taxes will not be increased by any
greater addition than may be necessary, to ppy the interest on the
debt which the State is to contract on account of the Blue Ridge>
Railroad ; that the Bank will pay the principal if we give it time,
and that it can pay $6,000,000 in about twesnty-five years, and
$9,000,000 in about thirty years. *
In human affairs, and with our limited and imperfect capacity,
Ave have no other, and certainly no better, means of judging of
the future than by reference to the past. Now, it appears from a
careful examination of the reports of the President and Directors
of the Bank, that in the period of thirty-six years, between the
1st of October, 1822, when the profits of the bank began to be
reserved as a sinkipg fund for the payment of the public debt,
and the 1st of October, 1858, the bank paid the following debts, viz:
33
Five per cent, stock of 1820 $800,000 00
Five per cent, stock of 1822 200,000 00
Five per cent, stock of 1824. 250,000 00
Five per cent, stock of 1826 300,000 00
Six per cent, stock of 1826—Mrs. Randolph 10,000 00
Five per cent stock of 1838 200,000 00
Six per cent, stock of 1839 600,000 00
2,360,000 00
And they had on hand for the sinking fund on the
1st October, 1858 1,843,803 37
Making an aggregate of * $4,203,803 37
Then if, in thirty-six years, they have been able to pay only
$4,203,803 37, it must be cyphered out by some other rules than
such as are found in Doball's or Pike's Arithmetic, how they are
to pay $6,000,000 in about twenty-five years and $9,000,000 in
about thirty years. In order to prevent misapprehensions it may
be proper to remark that, in the mean time, the bank has paid
some portions of the Fire Loan debt,, but these payments were
made not out of the Sinking Fund, which consists of the profits of
the bank, but out of the Fire Loan Fund itself; and whoever will
take the trouble to examine the annual statements of the bank
will see that, whenever any part of that debt has been paid, there
has been a corresponding diminution of the amount for which the
bank stands charged on account of the Fire Loan. But, suppos¬
ing that the bank could pay $6,000,000, or even $10,000,000, in
twenty-five yearn, and half as much more in thirty years, does it
follow that they money ought to be expended on doubtful schemes
of improvement, and that, too, in other States ? If we have such
a mine of wealth, why should we be burthened with any taxes at
all ? Why not let the bank defray the expenses of the State
government and all our public establishments ? Or, if we prefer
to be taxed for those purposes, and to devote the income of the
bank to objects of material improvement, can we not find enough
to do at home 1 Have we not within our own borders immense
swamps, embracing millions of acres of the richest soil, which the
expenditure of less than $6,000,000 in twenty-five years, or
$9,000,000 in thirty«years, might redeem from utter worthlessness
and add to the productive resources of the State ?
No people ought to murmur at such taxation as may be neces¬
sary for the sufficient and liberal maintenance of their government;
and only demagogues of the lowest class ever seek to encourage
and excite such discontent. But taxes are not blessings, and a
reasonable jealousy of unnecessary taxation is a sound and Avhole-
some popular insttnct. Whenever Ave find public men making-
light of burthensome taxation, and strenuously advocating great
public loans, and extravagant expenditures on speculative projects,
5
34
it is time to be vigilant and cautious, for there is reason ttxappre
liend something wrong in the affairs of the commonwealth.
N o. X11.
The assertion that this road would be worth all that it is ex¬
pected to cost, may be understood in two senses : either that it
would be worth its cost, as a productive and profitable investment
of money, and as property which might be sold for as much money
as it cost; or that, though it might be worth much less than its
cost, or even nothing as property, the commercial, industrial and
political benefits to accrue from it would be a full equivalent for
all the money expended upon it. Understanding it in the first
sense, if it be meant to embrace the general proposition that all
railroads are worth what they cost, it is certainly not true.
There are in South Carolina eight railroads finished and in ope¬
ration. Assuming that the market price of their stocks furnishes
the measure of the pecuniary value of the roads regarded as pro¬
perty (and if that does not, where else shall we look for it ?) not
one of them, unless, it may be the little King's Mountain Road, is
worth what it cost. Some of them have no market price at all.
The stock of the South Carolina Railroad is now at or a little
above par, but the par value of the stock falls short of represent¬
ing the cost of the road by at least the amount of the company's
debt, which is about $3,000,000. The stock of the Charlotte and
South Carolina Railroad, the only other one besides the King's
Mountain Railroad which gives dividends and has a market price,
never appears in our published prices current, and its money
value is not easy to be ascertained; but only a few months ago it
was little if any thing above 50 per cent., and it is not now more
than 75 per cent. The following statement, taken from the
American Railway Review of the 1st of September instant, exhi¬
bits the market prices of shares in twelve of the most important
railroads in the northern and northwestern States, on four different
days during the month of August:
Ang. 5th. 15th. 22d. 29th.
X. Y. Central R. R. shares 72% 71 73 75%
Illinois Central R. R. shares 63§ 64£ 65^ 65|
Galena and Chicago 63| 64| 66| 69%
Chicago and Rock Island 60£ 62 . 64§ 68%
Reading R. R. shares 43 j 43f 44 44
Michigan Central R. R. shares 40f 43| 43j| 4(5
Michigan Southern R. R. shares 7 6| 73
Bait, and Ohio R. R. shares 56 56| 57^
Hudson River R. R. shares 31J 31§ 32a 34a
Cleveland and Toledo R. R 20f 19 22% 24|
Harlem R. R. shares 9 9% 97 1Q|
X. T. and Eric R. R. shares 5 5-^ 5 1-9 5^
These figures represent the rate per cents which the market price
of the stock bears to the par value. The New York Central
Railroad, which transports a very large portion of the iffimenso
commerce and the almost countless multitude of travellers be-t.jvpqn^
the city of New York and the great chain of lakes, had, in is'57^
a gross income of $8,027,251—$3,141,637 from passengers-, and
$4,869,614 from freight; and in 1S58, $2,532,647 from passengers,'
and $3,995,766 from freight—making an aggregate of $6,528,414;
yet we see that its stock is about 25 per cent, below par. The
New York and Erie Railroad, which has one terminus at New
York and the other on Lake Erie, and is the most direct and
shortest route between them, received in 1857, $5,742,606",, and in
1858, $5,151,616—yet its stock is nearly 95 per cent, below par ;
and the stock of the Baltimore and Ohio Railroad, which brings
us bacon from Cincinnati so much cheaper than it could be brought
by the Blue Ridge Railroad, is more than 40 per cent, below pag!
How then can it be possible that the Blue Ridge Railroad, regarded
as an investment of capital, should be worth its cost 1 "We hg,vq
seen that it would not bring down the prodnce of the West,.cfeS|
tined for the general market of the world—that it would not cap'ry
up the foreign merchandize required for the consumption of that
region, and that it would transport very few passengers. There is
the strongest probability that it would not even bring the western
produce required for our own consumption, or at least for the use
of that portion of the State of which Charleston is the most con¬
venient centre of distribution. Then from what source would it
derive the income necessary to make it a productive investment ?
The chief engineer estimates the cost of the road and equipments
at $8,691,677, but when we take into account the interest to be
paid during the progress of the work, and other extraordinary
demands which always spriqg up in the course of such undertak¬
ings, it is extremely moderate to set down the actual cost at
$9,000,000. To yield a fair return on a capital of $9,000,000,
there ought to be a nett income of at least $630,000, clear of'all
expenses. The average expenses of the South Carolina Railroad,
the Charlotte and South Carolina Railroad, and the Greenville
and Columbia Railroad, amount to about 53 per cent, of their
gross receipts; so that assuming the same ratio for the Blue Ridge
Railroad, it would require a gross income of at least $1,275,000
to produce a nett revenue of $630,000. In other words, the gross
receipts of the road must be more than double those of both the
Greenville and Columbia Railroad and the Charlotte and South
Carolina Railroad put together. But unless all th,at has been said
in the course of this discussion, relative to the prospective income
of the road, is utterly! untrue, there, is no reason to believe that it
would be even equal to that o£ either pf the two roads above
named. Ifi then, it would not be. worth its cost as an investment
of capital, let us consider it in 'the, other aspect : that, is,.with
reference to the political, commercial and industrial benefits which
36
might accrue from it to the State; and we shall find this question
very closely connected, and, indeed, almost identical with the
first; for if the road would have hut little business and an incon¬
siderable pecuniary income; if it would not bring us either the
export trade or the import trade of the West, in what other con¬
ceivable way could it produce any beneficial effects upon the
commercial, industrial or political interests of the State, and how
would " the State receive ample compensation for the outlay she
is called upon to make ?"
But we are told that one of the principal inducements to build
the Blue Ridge Railroad is, that the control which the State of
Georgia has over its own road is exerted to give every advantage
to Savannah, and that the persons who have the management of
that road make partial discriminations in favor of the trade of
Savannah and against that of Charleston, and therefore we ought
to have a road of our own. It has been very often asserted, but
has never yet been proved, that in the management of the West¬
ern and Atlantic Railroad preference is given to produce destined
for Macon and Savannah over that which is intended for Augusta
and Charleston. Such preferences are strictly forbidden by the
law of Georgia, and the Superintendent of the road is sworn to
observe the most rigid impartiality. Any departure from this
rule would be quite as injurious to the trade of Augusta and the
business of the Georgia Railroad as to the commerce of Charles¬
ton, and the managers of the Georgia Railroad would, therefore,
be vigilant to detect and prompt to denounce it ; yet, so far are
they from sustaining the charge thus recklessly made by Mr.
Memminger and others, that they unhesitatingly deny that it has
any foundation in truth. This one, then, of the principal reasons
for having a road of our own, entirely fails. But how can we
have a road of our own to Ivnoxville, when, to reach that place,
we must pass through two States and over a part of a third ? How
is it possible for one State to have a road of its own through the
territory of another sovereign and independent State? Could
England have a highway of her own through the territory of
France, or France a highway of her own over the soil of England?
It would be difficult to devise anything more likely to disturb atid
interrupt our amicable relations with the neighboring States, than
a railroad passing through their territories and managed and con¬
trolled by our citizens, and in obedience to our policy. Every¬
body knows that jealousies and discontents are always rife among
the people of the immediate country through which a railroad
passes. However great may be the benefit it brings them, it is
always less than they expected, and their disappointment breaks
out on every occasion in murmurs and complaints against the
management of the road. If the road should be in one State and
the management in another, the government of the former would
always sympathize with its own people, and would make its sym¬
pathies felt-by unfriendly legislation, for which it would be easy
S7
enough to find abundant powers and pretexts. This idea of a
railroad of our own in other States, is quite original and peculiar,
and certainly savors more of that presumptuous arrogance, of which
we are sometimes accused, than anything that we have ever dope.
No. XIII.
In estimating the cost of this, enterprise, Mr. Memminger and
the President and Directors of the company think proper " not to
take into account the money requisite for what is called the rolling
stock of the road." This, they say, can he purchased and paid
for out of the income of the road when it is in operation. It is
certain that the road could not go into operation without locomo¬
tive engines and cars, and all other necessary equipments. These
are as absolutely essential as the road itself. The road would he as
useless without them as they Avould he without the road, and in
fact more so, for they might he transferred to some other road, but
the road itself must remain stationary. They must be had before
there* can he any business or income at all, and they must be
obtained either by paying for them at once, or by incurring a debt
for the amount of their cost, which is in effect only borrowing the
money from the manufacturers, instead of borrowing it from other
people to pay them, except that the price Would no doubt be a
good deal higher than if they were purchased for cash. Then
how would this debt be paid 1 It is said that " in the inception of
the road, the amount required will be small, and can be increased
from time to time as the business of the road increases." With a
small amount of rolling stock the business of the road must neces¬
sarily be small, and a small business would of course yield a cor¬
respondingly small income. Of this, at the very least, one-half,
and possibly the whole, would be absorbed by current expenses,
"Whatever might remain would be required, in the first place, to
pay the interest on a debt of $4,000,000 if the State should sub¬
scribe another million, or $5,000,000 if it should not, and that
without taking into account any part of the cost of engines, cars
and other equipments. Supposing the current expenses to be 50
per cent, of the receipts, it would take a gross income of $560,000
to produce enough to pay $280,000, the annual interest on $400,-
000 ; and to realize a net income of $350,000, the annual interest
on $5,000,000, would require that the gross receipts should be
$700,000. In one case the receipts of the Blue Ridge Railroad
must be considerably more, and in the other much less than those
of both the Greenville and Columbia Railroad and the Charlotte
and South Carolina Railroad. But We have seen that there is not
the least reason to expect that they would exceed or even equal
the receipts of either one or the other of those roads. How,
then, could the equipments be paid for out of the income'? Surely
38
no manufacturers of engines and cars would be found simple
enough to give credit to a company without even the prospect of
an income sufficient to pay the interest on their mortgage debts.
It would be found impracticable to obtain them on the credit of
the company, and we may rest assured that the State would be
called upon for further endorsements or for additional pecuniary
aid in some other form.
Mr. Memminger sets down among the assets of the State, sundry
railroad stocks at par, $2,142,000. The following is a statement
of these stocks, as they appeared in the books of the Comptroller
General's office, on the 1st of October, 1858, taken from the last
report of that officer : #
Shares in South Carolina Railroad, Company $ 30,000
Northeastern Railroad Company 220,000
Southwestern Railroad Bank 7,500
Spartanburg and Union Railroad Company 250,000
Chaidotte and South Carolina Railroad Company 31,700
Pendleton Railroad Company 35,000
Greenville and Columbia Railroad Company 348,100
Blue Ridge Railroad Company 800,000
Clieraw and Darlington Railroad Company 100,000
Laurens Railraod Company 50,000
Charleston and Savannah Railroad Company 270,000
$2,142,300
Of all the stocks enumerated in this statement the only ones
which have any present substantial value are those of the South
Carolina Railroad Company and the Southwestern Railroad Bank,
and the Charlotte and South Carolina Railroad Company, and
these have been long since appropriated to pay the State subscrip¬
tion to some one or more of the railroads now in progress; and
though they have not yet been actually transferred, they do not
in reality belong to the State, but their par value will appear
hereafter in an increasejj amount of some other stock, probably
that of the Union and Spartanburg Railroad Company. Since
the 1st of October an addition of $200,000 has been made to the
Blue Ridge Railroad stock, so that it now amounts to $1,000,000.
It certainly has no present value ; and though some people may
think that it will be worth $1,000,000 or more some twenty or
thirty years hence, when the bonds of the State become payable,
it is extremely probable that long before the expiration of that
time everybody will know better. And there is abundant reason
to fear that the same judgment may be justly pronounced as to
much the larger portion of the other stocks.
In the absence of substantial facts and solid reasons, we are
perpetually assailed with the authority of great names. We are
told that all the statesmen to whom we have looked for counsel
during the last twenty years, have united in advising us to attempt
this western connection, and that for twenty years past the judg-
39
ment of tlie whole State has been in favor of it. Just about
twenty years ago the Louisville, Cincinnati and Charleston Kail-
road scheme was abandoned, with the actiwe concurrence of Mr.
Memmin'ger, and from that time until this new project was started
in 1852, neither our statesmen nor anybody else advised or sug¬
gested that South Carolina should make any further attempt to
effect such a connection with the West. Indeed, after the com¬
pletion of the Georgia Railroad, from Augusta to Atlanta, and the (
Western and Atlantic Railroad, from Atlanta to the Tennesse river
at Chattanooga, the judgment of the whole State seemed to be
that the western connection was practically accomplished, and
that there was nothing left for us to do.
The act by which the Louisville, Cincinnati and Charleston
Railroad Company was incorporated, made it a condition prece¬
dent of the charter that 40,000 shares should be subscribed, and
as there could be no company, so there could be no State sub¬
scription, without other subscriptions for not less than $4,000,000,
and the State subscription of $1,000,000 never exceeded one-fifth
of the whole. But the State is expected to assume nearly the
whole burthen of constructing the Blue Ridge Railroad.
In assigning its due weight to the opinions of the eminent men
who, in 1835 and 1836, earnestly exhorted us to contribute libe¬
rally to the Louisville, Cincinnati and Charleston Railroad, we
should bear in mind that it was then generally believed that a
railroad from Cincinnati" and Louisville to Charleston, being the
most direct and shortest outlet from the Ohio to the Atlantic coast,
and one which would be open at all seasons, would bring in this
direction all the surplus productions of that region destined for
exportation; and that if such a connection could once be accom¬
plished, no other and rival enterprise would ever be attempted,
and this impression was encouraged by the fact that the Baltimore
and Ohio Railroad, which had been commenced some years before,
seemed at that time to be abandoned as impracticable; but time
has fully proved the incorrectness of that opinion, for there are
now several railroads connecting the valley of the Ohio with the
northern Atlantic cities.
It is argued that the products of the Tennessee valley would
be sent to Charleston rather than to Richmond, because they are
the same which reach Richmond from Virginia and other quarters,
and to send them there would be like " carrying coals to New¬
castle." For tl^ same reason the cotton of Georgia and Alabama
ought not to be sent to Charleston, and some wise man may be
expected to teach the cotton planters of those States the folly of
such a proceeding. " What !" he might say, " send your cotton
Charleston! Why, South Carolina produces more cotton than
anything else, and it all goes to Charleston. They have plenty
of cotton there ; to send your cotton there, will be like 'sending
coals to Newcastle.' Send it rather to some place where they
have none." For the same reason no sensible man would send
40
cotton to Liverpool,-for more goes there than to any other place
in the world. -
The income of the JEast Tennessee and Georgia Railroad for
the year ending on the 30th of June, 1858, had been saduced as
some index of the ability of the country of which Knoxville is
the commercial centre, to support a- railroad. To this Mr. Mem-
minger gives two answers, which might be very triumphant if they
did not unfortunately happen to be destitute of the essential
quality of truth. The first is, that "the produce on board a
steamer at Knoxville, seeking a market, will rtot be discharged at
Knoxville to take the railroad, but will continue in the steamer to
Chattanooga." .This implies that steamers ply on the Holston
above Knoxville, and bring down produce to that place ; but the
fact is, that the river is not navigable for steamers above Knox¬
ville, and they do not come there seeking a market. It is true
that occasionally, during the spring freshets, small steamers do go
up about thirty miles to Dandridge on the French Broad, which
falls into the Holston four miles above Knoxville, but that is the
whole extent of steamboat navigation above Knoxville. The
other answer is, that " a considerable portion of the produce at
Knoxville takes the other end of the road, and goes to Lynchburg,
Richmond and Petersburg."
Now it so happens that in the year ending the 30th June, 1858,
which is the year in question, " the other end of the road " was
not there—the East Tennessee and Virginia Railroad, which leads
to Lynchburg, Richmond and Petersburg, not having been opened
until the 1st of June, 1858. Mr. Memminger was here again
either careless in ascertaining facts or misled by false information.
No. XIV.
We have two printed speeches of Mr. Perry, of Greenville,
another distinguished champion of the Blue Ridge Railroad—one
delivered in the House of Representatives last winter, and the
other at the recent celebration on Tunnel Hill. They are both
replete with the usual abundance of bold assertion and eloquent
declamation; the opinions of the speaker are announced as un¬
questionable truths, and his hasty and mistaken impressions as
authentic facts. The most important consideration advanced in
the first speech is, that the road would add at least two dollars an
acre to the value of all the lands within ten miles on either sid«
of it. Now, all these lands which are not in other Stat es afe in
Anderson and Pickens Districts, and belong to individuals to
whose poculiar benefit their increased value would enure, and it
is certainly not easy to understand the justice and propriety of
making the people of the whole State pay for adding two dollars
an acre to the value of the lands of a part of the people of those
41
two districts. Justice would seem to require that those who are to
receive the benefit should pay for it. Why not, then, provide for
a local or district subscription, with power to raise the money by
assessment, as some of the other States have done % But the
lands within ten miles from the line of the road for nearly three-
fourths of its length, are in Georgia, and North Carolina antl Ten¬
nessee. Why, in the name of common sense, should the people
of South Carolina pay for adding two dollars an acre to their
value ? Why should our lands be mortgaged to increase the value
of other people's lands ? For that is, in effect, what it is proposed
to do. Whenever the State contracts a debt, every man's land is
mortgaged for its payment. The way in which a railroad or any
other improvement for facilitating transportation adds to the value
of the adjacent lands, is by enabling the proprietors to send their
produce to market and get back their returns with less cost to
themselves, so as to leave a larger surplus of profit. The land is
thus rendered capable of yielding a larger net revenue, and its
pecuniary value is correspondingly increased. The direct gain is
to the owners of the land, to whom the increased revenue belongs.
It follows that ^ere is a very important difference between such
an improvemenWnade at home and one made in another State*
considered with reference to their effect upon our wealth and pro¬
gress. The income of a planter or farmer in South Carolina is,
for the most part, expended at home among his neighbors ; out of
it he contributes to the support of a physician, a lawyer, a clergy¬
man, a schoolmaster, and all the oth€* persons whose services he
employs or from whom he purchases any of the various commodi¬
ties which he has occasion to consume. Whatever, therefore, adds
to his income increases the amount to be distributed among these
persons, and as they are all, as well as himself, citizens or inhabi¬
tants of the State, their wealth and progress are constituent parts
of the wealth and progress of the State. So in the same way the
income of a planter or farmer of Georgia, or North Carolina, or
Tennessee, is expended and distributed among the people of his
own neighborhood. Though it might be sent to market over the
Blue Ridge Railroad, the money received for it would be his,
would be sent back to him, and would constitute a part of the
wealth of his own State, not of South Carolina. Yet Mr. Perry
and others expatiate upon the immense wealth which the Blue
Ridge Railroad is to pour into the State, as if it was to be all
our own.
The morbific influence of excessive devotion to the Blue Ridge
Railroad, or some other cause, seems to have somewhat disturbed
and dhsettled this gentleman's mind, so that he has but a confused
and inverted recollection of even that portion of the history of
the State in which he has been himself an actor. He puts the
nullification controversy after the abandonment of the Louisville,
Cincinnati and Charleston Railroad project in the order of time;
for he can mean nothing else by " the grand quarrel which South
6
42
Carolina had instituted with the Federal Government, about some
abstruse constitutional question, in which she rallied all of her
chivalry, exhausted her strength, neglected her interests, and
seemed oblivious to all State enterprise and improvement." And
he forgets that the first railroad constructed in the State, and the
one which has proved the most important and successful of them
all, and which he himself says "was the longest railroad in the
, world at its commencement," was commenced in 1830, almost
* simultaneously with that great political agitation, was steadily
prosecuted during its whole progress, and was opened through for
business in ls34, soon after its termination. Nor does he remem¬
ber that the Greenville and Columbia Railroad, the Charlotte and
South Carolina Railroad, and the Wilmington and Manchester
Railroad, were all in progress duirng the political excitement of
'48, '49, '50 and '51.
If he had not mistaken his own prepossessions for facts, and
had taken any pains to obtain correct information, he certainly
never would have made the assertion, that " In all the thousands
of railroads that have been built in Europe and America, not one
has ever been discontinued." For very little inquiry would have
satisfied him that it is not true, and he is incapablP of making any
assertion which he did not at the time believe to be true. That
this is not true, is abundantly proved by the following extract of
a letter, written by a gentleman residing in Pennsylvania, who,
from his past experience and present position, is probably as well
acquainted with the history^pnd condition of American railroads
as any man in the whole country :
" The instances of railroads commenced and abandoned after
large sums had been expended upon them, are by no means rare
in the North and West. In this State we have the Alleghany
Portage Railroad, which, after its completion, at a cost of about
$3,000,000, was sold to the Pennsylvania R. R. £Jo., and the iron
removed from it. The Danville and Pottsville R. R., completed
and in use for some years from Pottsville to the Mahoney Valley,
has been entirely abandoned. The Chambersburg and Hagers-
town Railroad was completed, and after its use for some years,
abandoned. There are many other roads in this State, New York,
Ohio and Indiana, that have been abandoned, after much money
had been expended upon them."
With a single remark, we may leave the relative merits and
claims of the Blue Ridge route and the French Broad route to be
settled between Mr. Perry and the people of Union and Spartan¬
burg Districts. It is certain that if the western produce required
for the consumption of South Carolina is to brought to us difectly
by a railroad, Columbia is the most central and convenient point
of distribution for the whole State, having railroads diverging in
every direction ; and it cannot be disputed that the distance from
Knoxville to Columbia is at least thirty-four miles less by the
Fiench Broad route than by the Blue Ridge route.
Mr. Perry, speaking of the Georgia State Railroad, affirms
43
' that in all cases a preference is given to the transportation of
produce going to Srvannah, and that the road is so much encum¬
bered with freight that it is impossible for it to carry all expedi¬
tiously, and. that for Charleston is always postponed and be
corroborates this statement by the testimony of a merchant of
Columbia and a distinguished merchant of Charleston.—
But he must surely have misunderstood those gentlemen.—
■They could not have intended to be so understood, because, in
fact, no such preference is given. It is therefore due to those
gentlemen themselves, it is due to the managers of the railroad,
and, above all, it is due to the cause of truth, that the names,
dates and circumstances should be made known, in order that the
whole matter may be thoroughly sifted, the truth ascertained, and
the evil, if it exists, corrected.
Mr. Perry, as usual, indulges in a few sneers at the follies of
South Carolina. Like all other States, she has, no doubt, com¬
mitted some follies, though they were not perhaps exactly those
things which he deemed to be so, and therefore opposed. But
however that may be, if he never participated in afiy other of her
follies, there can be little doubt that the impartial judgment of
posterity will pronounce this grand project, in which he plays so
conspicuous a part, the very greatest of them all.
No. XV.
All the advocates of this enterprise seem to attribute decisive
weight to the alleged fact, that it would bring some portions of*
the valley of the Mississippi and its tributaries a little nearer to
Charleston than to some of the other cities of the Atlantic coast.
Distance is undoubtedly an important element in determining the
direction of commerce, but it is by no means overwhelming and
conclusive. On the contrary, it sometimes happens that a very
considerable advantage in point of distance is outweighed and
overruled by other considerations. Of this there is at least one
very striking example, of which the merchants of Charleston can¬
not be ignorant. The cotton produced in Middle Florida has, for
many years past, been sent directly to the market of New York,
not excepting even the crop grown on the plantation of a gentle¬
man who was himself a resident and a merchant of Charleston ;
yet Charleston is a great market for cotton, and is at least six
hundred miles nearer to Middle Florida than New York. Great
importance is also attached to the fact that Charleston is more
directly on the sea coast than many of the other cities; and this
proximity to the ocean no doubt has its advantages, but they cer¬
tainly cannot be essential or even very material, for they have
been disregarded in determining the position of many of the
greatest commercial cities of the world. London, the largest city
44.
in Europe, and the commercial metropolis of the world, is high
up the Thames, more than a hundred miles from the sea. Ham¬
burg, Bremen, Amsterdam, Glasgow—in short, nearly all the great
commercial cities of Europe—are remote from-the sea. Philadel¬
phia, which was for many years the greatest city on this continent,
and is noiv only inferior to New York, is at least a hundred miles
from the ocean; and Baltimore, though situated two hundred,
miles from the mouth of tne Chesapeake, has rapidly advanced to
the rank of the third commercial city of the United States, while
Norfolk and Charleston and Savannah, which are almost on the
sea shore, have fallen far behind in the race.
The manifest tendency of commerce on a large scale, every¬
where and in all times, to concentrate itself in some great
emporium, when not prevented by physical obstructions or artificial
restraints, seems to be one of the natural results of the same
principle whi<ffi gives rise to the division of labor and the growth
of cities an,d towns. Starting from the solitary country trader,
who retails all the various articles suited to the wants of his neigh¬
bors, who buys^ and sells comparatively little of each article, all
his sales in the course of the year amounting to an inconsiderable
sum, so that in order to insure a sufficient profit he must sell at
higher prices, you advance to the shopkeeper in a town, who,
though still a retailer, deals in only a few articles, buys and sells
more of each of them, and more in the aggregate, and is, therefore,
able both to buy and sell at lower prices. Then comes the whole¬
sale merchant, who sells to those who are to sell again, and must,
therefore, necessarily sell at lower prices ; and this he can well do,
because he buys on a larger scale and at prices lower still. And
so it proceeds, the prices always diminishing as the scale of opera¬
tions is extended. But it is obvious that the largest operations of
commerce can take place only in very large cities.
The economical effects of enlarging the operations ef commerce
cannot be carried on to their full development without concentra¬
tion, and hence the constant and uniform tendency to centraliza¬
tion. In the United States, where the commerce of the several
States is perfectly free and untrammelled, this tendency has full
play, and produces all its natural effects in the highest degree.
The fact that New York is the great commercial centre of the
confederacy, is, in itself, conclusive evidence of the existence of
natural or political causes sufficient to produce such an effect, even
though it might be difficult or impossible to detect and expose
them. But are these causes, in reality, so hidden and obscure
that we cannot discover some, at least, of the most potent among
them 1 The Erie Canal is sometimes said to have been the origi¬
nating cause of the commercial pre-eminence of New York; but
this is an error ivito which no one could fall whose knowledge of
the commercial history of the country reached back over the last
half century. Eor in 1810, some years before the Erie Canal was
commenced, New York was already the largest city in the United
45
States, 'having then a population of 96,373, while the population
of Philadelphia was 91,874. The true cause is to be found in tho
fact that it was and is the most convenient point of concentration
for the foreign commerce of a very large part of the most densely
peopled and commercial section of the country. Easily accessi¬
ble by Long Island Sound from the whole southern shore of New
England, and by sea and the small rivers which empty into the
adjacent bays from all the eastern and northern part of New
Jersey ; it had also one of the finest navigable rivers in the world,
stretching back a hundred and fifty miles into the interior, and
furnishing a cheap and commodious highway for the trade of a
productive region. No other place on the continent had such
natural advantages as these to begin with. They gave it a start
which soon carried it ahead of all the other cities in point of trade
and population, and then that very pre-eminence co-operated
powerfully to make it the point of convergence of the centripetal
tendency of the commerce of the whole country. For the gain
resulting from the division of labor in the department of com¬
merce can be fully realized only in large cities, and the more
thoroughly and completely the larger the city. A merchant of
New York, whose annual sales amount to $2,000,000, with a gross
profit of only five per cent., has a gross income from his business
of $100,000—in comparison with which his expenses, though they
might perhaps be positively large, would be relatively small, and
leave him a large net revenue. But a merchant in a smaller city,
selling to the amount of only $100,000 in the course of the year,
with the same gross profit, would have a gross income of only
$5000; and though his expenses might be positively much less
than those of the New York merchant, they would be relatively
so much greater as perhaps to leave him little or no clear gain.
How is the Blue Ridge Railroad to counteract the overpowering
influence of these great economical principles? Does it enter
into the imagination of the wildest dreamer that any railroad that
could be constructed would bring the merchants of New England
and the Middle States, the Northwestern States, or even Mary¬
land and Virginia, away from New York to purchase their foreign
merchandize in Charleston ? Then how can any of your rail¬
roads materially impair that commercial pre-eminence of New
York which constitutes its chief attractive power ?
If there was a long and unbroken reef of rocks and sands
stretching out from some point on the Atlantic shore just north of
us four fifths of the distance across the ocean, in the direction of
the British Islands, so that a voyage to New York would be nearly
twice as long as a voyage to Europe-andif on the landward side
there was a barrier of impracticable mountains between us and
the Northern States, so high, and rugged, and precipitous, that
+hev could only be crossed at an enormous cost of time and
tnonev- our trade with Europe would then be direct, and, the
merchants of the South would make their purchases of foreign
46
merchandize In southern cities, even though they might have to
pay higher prices than those at which the same articles could be
purchased in New York. This they would do because the cost of
going to, and of bringing merchandize from, New York would be
more than the difference of price. Now if, in the absence of
these physical obstructions, a legislator was empowered to accom¬
plish the same results by some political contrivance, what measures
would he probably adopt 1 He would see that the effect of the
supposed natural obstructions was to be attributed to the increased
cost of travelling and transportation to which they would give
occasion, and he would seek some effective substitute for that in¬
creased cost. This would be found in the shape of tolls and taxes
and duties. Accordingly he would impose a heavy toll or tax
upon every merchant going to New York, and high duties upon'
all merchandize brought from thence. In other words, he would!
do the very reverse of what is done by railroads; for he would
increase the cost of communication, while they open and smooth
the way for both men and things, and make the communication
cheaper and easier.
An argument in favor of making further advances to carry on
this enterprise to its completion, which seems to have great weight
in the estimation of some persons, is that, unless we go on, all that
has been already expended will be lost. But this consideration is
certainly entitled to no respect unless those who urge it show that
the work, when completed, would be fully worth not only all that
has been expended already, but all that would be expended in
addition, and this they have certainly not done; on the contrary,
the evidence strongly preponderates the other way. The utter
worthlessness of this argument, without the condition which has
been suggested, will be best illustrated by an example. Suppose
that a gentleman having a very poor plantation in an obscure and
unhealthy part of the country, should take it into his head to build
a very elegant mansion, which would cost, when finished, $50,000,
but would add nothing to the value of the plantation, nor cause it
to sell for any more than if it had a very plain and cheap house
on it, and that when he had expended $10,000, and the house
was about one-fifth finished, his friends endeavored to dissuade
him from going on with it, and he should reply that he must go on
and finish it or else he would lose what had been already expended,
everybody would sea at once the absurdity of his position. Now,
our case may be, and probably is, just such a one as this. But,
moreover, what has been expended has produced a railroad from
Anderson to Pendleton, and if the remaining resources of the
company are judiciously husbanded, it may be carried on to
Walhalla, and should that road be worth anything, all that haa
been expended will not be lost.
Whenever any measure is set on foot which involves the ex¬
penditure of a large amount of public money, the positive side—
that is, the side which favors the expenditure—is alway more
47
active and energetic tlian the negative side—that is, the one
which oppofces it. And the reason is obvious'enough ; though the
movement may have originated in public spirited and patriotic
motives, and its main object may be highly beneficial, it soon gives
rise to and col ects about, it a formidable array of private interests,
The expenditure of the money must be intrusted to one or more
persons, and though the trust may be honestly, and faithfully dis¬
charged, the mere function of disbursing l&rge sums of money
gives to those who exercise it a degree of importance and influ¬
ence which most men value on their own account. JTlien there
are subordinate officers and agents whose subsistence depends
upon their employment, and who are therefore deeply interested
in its continuance; there are also contractors and sub-contractoi's,
and all the persons employed under them. All these parties have
a fliit^et private^ihterest in the appropriation quite distinct from, if
not antagonistic toi the public interest. And' there is, moreover, a
strong local interest in favor pf the appropriation in the neighbor¬
hood yrhere the money is to be expended. No wonder then that
there should jbe gr^at activity on that side. Very much of it is
the proverbial .activity of private interest. But, on the other
side, each individual*has only his share of the public interest
whicl\ is tbo minute to stimulate him to much e'xertion, and no one
is more especially interested than anybody, else; the zeal and
activity of private interest are therefore'wholly wanting. This
very* natural,difference has been signally conspicuous with regard
to"the,,BlueRidgejlailroad.. I
And hnm fyiig ldftg and wearisome task may be appropriately
concluded,with the efpression of a hopeful confidence that, when
the legislature are again beset by the importunities of this intru-
siyje and pertinacious company, they will resolutely maintain the
ground they occupied at their last session, and that their response
wil£ again be^as it most assuredly ought to be, a decided negative.
Charleston', October 20th, 1859.
PRINTED BY A. E. MILLER.