MR. STEWART. <- L'bRAKlf BUREAU OF RAILWAY ECONOMICS WASHINGTON, D. C. REPORT OF THE MAJORITY OF THE COMMITTEE ON / INTERNAL IMPROVEMENT. ANNAPOLIS: WILLIAM M'NEIR, PRINTER. 1840. REPORT. The Committee on Internal Improvement beg leave respectfully to report, that they have prosecuted the enquiries ordered by the Senate on the 6th January, 1840, by addressing letters,covering copies of said orders, to Francis Thomas, Esq. President of Chesapeake and Ohio Canal Company, and to Louis McLane, Esq. President of the Balti¬ more and Ohio Rail Road Company. The committee have received fiom Mr. Thomas the letters marked No. 1 and 2, herewith submitted, and from Mr. McLane the letter No. 1, and the accompanying documents, marked Nos. 2, 3, 4, 5, 6, 7 and 8, which they respectfully submit to the consideration of the senate. It will be seen by the letter from Mr. Thomas, marked No. 2, that the officers of the Canal Company are preparing statements and copy¬ ing letters to accompany a report he proposes to make to the Legisla¬ ture of Maryland, which report will give to the senate all the informa¬ tion to which their orders have reference. The committee believe that they would not fully discharge their duty in this matter, did they not express the opinion that in the performance of the important trust delegated to Mr. McLane by the Baltimore and Ohio Rail Road Company as their agent in Europe for the sale of their State bonds, he has fully justified the public confidence in his sagacity and in the influence of his high reputation. Although his operations were limited, as jt were, to the scope of a merely private agency, he has so executed the task allotted to him, as to benefit his immediate con¬ stituent, and to elevate from a condition of peculiar depression all the public securities of the State. For it will be seen from the papers submitted in connection with his reply,that his financial arrangements with Messrs. Baring, Brothers \ and Co. in behalf of the Rail Road Company, are independent of an hypothecation of the State stock, while they ensure adequate provision for such advances as any urgent demands of the company may require. They make a provision against contingencies of the money market, which would retard the progress of the work, while they involve sacrifice of the State securities or State credit. The association of the name of the great London Bankers with the£f~ State stock has given to them a deep personal interest in its prices, and . character, already illustrated by the arrangement made between that fQ1 4 House and jyir. Peabody, for a control over another portion of the State securities in the London market. This arrangement appears in the letter from Messrs. Baring, Brothers and Co. to Mr. McLane, under date of twenty-third of November, 1839, herewith submitted. In truth, the President of the Rail Road Company, has assumed eve¬ ry position in these negotiations with so much caution and foresight, that while your committee refer with pleasure to this present advantage of his Agency, they feel justified to ancticipate yet more enlarged and enduring benefits. All which is respectfully submitted, DAVID STEWART, Chairman. No. 1. Letter from Mr. Thomas. Office of the Chesapeake and Ohio Canal Company.* Washington City, Jan. 10, 1840. David Stewart, Esq. .Chairman, &c. , Sir:-—I have received your letter, of the 7th of January, with its enclosure,' and will communicate them, to the Board of Directors of the Chesapeake and Ohio Canal Company, at their next meeting, on Wednesday next. • I am very respectfully, &c. FRANCIS THOMAS, President ., Chesapeake and Ohio Canal Co. No. 2; , r j; /* "r> r r~rr7 *■>■»-»4 ^ / v /i j xa * x «/. -."aw i WASHINGTON CITY, Jan/16, 1840. . David Stewart, Esq, Chairman of the Committee , W: of InternaTImprovement of the Senate. i i. _ Sir:—.There was not a quorum of the Directors of the Canal Com¬ pany present, at the. meeting on yesterday, to act on the subject of your letter of the 7th of this month. The officers of the Canal Company; are preparing statements, and copying letters, to accompany a report, I propose to make, to the Le¬ gislature of Maryland, exhibiting, fully, the condition, and past man¬ agement of the Canal Qompany, which will, I presume, give to the Senate, all the information desired by that body, on the subject to which your letter refers. * I am very respectfully, &c. &c. FRANCIS THOMAS, President, Chesapeake and Ohio Canal Co. 6 No. 1. Letter from Mr. McLane. Office of the Baltimore and Ohio Rail Road Company, • January 17th,1840. To David Stewart, Esq. Chairman of the Committee of Internal Improvement. Sir: I had the honor to receive your communication of the 7th instant, enclosing the following orders of the Senate of Maryland. "By the Senate, January 6th, 1840." "Ordered, That the committee on Internal Improvement be in¬ structed to inquire and report to the Senate what amount of the bonds of the State have been sold or hypothecated since the last session of the legislature, by the Chesapeake and Ohio Canal Company and the Baltimore'and Ohio Rail Road Company, at what price the same have been sold, or upon what terms they have been hypothecated, to whom they have been sold or hypothecated; and what funds were received for such sale or hypothecation. ' Ordered, That said committee be also instructed to inquire and re¬ port to the Senate what amount of notes have been issued by said companies since the last session of the legislature; the denomination of said notes; and in what manner the said companies have secured the payment of said notes to the holders thereof. , , Ordered, That the said committee be also instructed to inquire what amount of notes issued prior to the last session, yet remain unredeem-., ed; and what security the said companies have furnished for the re-., demption of the same." As necessary to a full answer to so much of the orders as relates to this company, I am instructed fco transmit the accompanying expo¬ sition of the board of directors addressed id the Coventor; and to it beg leave to add a copy of g letter addressed by me to the chairman of the committee of internal improvement of the House of Delegates, containing such explanations of the arrangement in Europe as may be proper.for a correct understanding of the whole subject. I have also the honor to transmit copies of several resolutions adopt¬ ed by the board authorising the issue of stock transfer orders, and a , statement by the Secretary shewing the amount of such orders which has been issued by the company and the denomination of said orders. The resolutions shew that the security consists in the value of'the city stock. I beg leave also to observe that stock of the city of Baltimore to the amount of $200,000, has been transferred to the commissioners, who 7 now hold the same in trust for the holders of the Orders; but that hone of the orders have yet been presented to the commissioners for the de¬ livery of the stock. I have the honor to be, sir, With great regard, Your obedient servant, LOUIS McLANE, President of the Baltimore and Ohio Rail Road Company. No. 3. Copy of a letter from Mr. McLane to the Chairman of the Committee on Internal Improvements of the House of Delegates. Office of the Baltimore and Ohio Rail Road Company, 15th January, 1840. To John Thompson Mason, Esq. Chairman of the Committee of Internal Improvements of the House of Delegates. Sir: I had the honor, the day before yesterday, to receive your letter of the 13th instant, asking the information desired by the following order passed by the House of Delegates on the 8th instant: ' "Ordered, That the committee on internal improvements be instruct¬ ed to inquire of the President of the Baltimore and, Ohio Rail Road Company, what arrangements the said company have made with the Barings in relation to the State bonds, and upon what terms, embrac¬ ing commissions and allowances, and to transmit to this House a copy of the written contract, if any, and all correspondence on the subject, and other information which the said president may deem necessary for the proper understanding of the expediency of the arrangement which he has effected with the Barings in regard to the State bonds." It is to be regretted that the erroneous impressions made upon the Governor's mind, and which dictated the remarks in the annual mes¬ sage relating to the Baltimore and Ohio Rail Road Company, should have exposed to censure those acts, which if correctly understood ought rather to call for commendation. If the Governor, previously to the preparation of his message, had sought from the president ot the company the information necessary to a full understanding of the subject, it would not only have been cheerfully communicated, but would, I cannot doubt, have spared the company the unmerited suspicions to which it has been exposed. 8 » To the successful prosecution of public works similar to those, fos¬ tered by the liberality of the State,the generous confidence of the com¬ munity at large and of the public authorities especially, is absolutely qeces&ary; necessary, not only to attract and encourage the talent and character suitable for their management, but to invite the co-operation of those various interests upon which i-iCy mc a!vr.:ys mere or less de¬ pendent. When such confidence is lightly withheld, or reluctantly be¬ stowed, the enterprise must languish, if not altogether fail. In the present instance, from strong inference, if not distinct charge, from a source entitled on every account to so much respect, that the rril road company had forfeited its former claims to confidence, had en¬ tered into engagements beyond its means; and, by the hypothecation of the State bonds abroad, had further impaired its resources and sunk still deeper the credit of the State, the most serious consequences were apprehended. By authorising an impression that the company had improvidently rendered irseif unable to comply with its engagements, the message threatened to destroy the confidence, which it had been the study of the board to inspire, with the landholders and others along the line of the work; and, both at home and abroad, to associate it with the mass of ill judged enterprises of which there is already so much distrust. The board of directors could not impart to brpxecutive an inten¬ tion to inflict such injury upon a work in which the State that has giv¬ en him so strong a proof of its confidence, has so deep a stake. It was nevertheless obvious, that the impressions, which had been made upon the Governor's mind, were unjust to the company and deserved to be corrected. This they believed could be best and most respectfully accomplished, by furnishing the Governor himself with a plenary explanation of all the acts and proceedings of the board touching the matters to which the message relates, and afford him an opportunity, which it was not doubt¬ ed he would desire, of averting, by his own act, the evils which he had inadvertently threatened. For this purpose, at a meeting on the 10th instant, the board unani¬ mously appointed a committee to prepare an exposition of then; acts and proceedings,and of their past and f uture policy; which, at a meeting on the 13th instant, was adopted, and has been transmitted to the Go¬ vernor. A copy of that exposition I am instructed to communicate to you, as affording for the most part, a full answer to the order of the House of "Delegates, and frankly and without reserve, disclosing the acts and motives and intentions of the beard, in regard to the matters embraced in it. From that exposition it will be perceived, 1st. That the company had not only not entered into the system of hypothecation referred to in the message, but have not hypothecated # fi> one of the State bonds committed to them; (hat by the ..contract with Messrs, Baring, Brothers,and Co. they have precluded themselves from the right of doing so, until after February next; and, in fact, that they have not even introduced the bonds into market below their par value. 2nd. That in order to avoid the necessity, or temptation, either to sell the bonds at a reduced price,or to use them for the purpose of rais¬ ing money in any manner, whatever, they have taken measures to comply with all their engagements, by means of the stock of the city of Baltimore, not saleable in the Foreign market, at its par value. Thus fulfilling the reasonable expectations of the city, and reserving the sterling bonds of the State for their appropriate market when they may be disposed of to advantage. , The contract with Messrs. Barings, Biothers, & Co. is contained in & letter from me to that House of the 12th of October, 1839, and in their answer of. the same date. These letters I have the honor to transmit herewith,and they will be found to correspond, in all respects, with the views contained in the exposition of the board, .in the annual report of the company, and in this answer; and will fully disclose the terms of the contract, embracing commissions and allowances, called for by the or¬ der of the House of Delegates. , \ , . Upon the views disclosed in the exposition, and the frank avowal of the only contingency in which they contemplate any use of the ster¬ ling bonds given them in payment of the Staters subscription, the board may with confidence rely, not less for the approbation of the legisla¬ ture than for that of the city of Baltimore, whose prosperity is so es¬ sentially dependent upon the vigorous prosecution of this great enter¬ prise. - As the order of the House, however, requests aany other informa¬ tion which I may deem necessary for the proper understanding of the expediency of the contract with the Barings," I will take the occasion to add some observations, relating more particularly to my personal acts and motives in the discharge of the agency with which I was en¬ trusted. . . v . The considerations, which induced the directors to solicit my agen¬ cy for the disposal of the sterling bonds are fully stated in the exposi¬ tion. I unaffectedly believed they over rated my ability to serve them, and I was profoundly sensible of the responsibility, of engaging in a mission in which my best exertions might fall far short of their expec¬ tations. Under all the circumstances, however, I feared that the res¬ ponsibility of declining might be greater even that that of failing in the enterprise. I felt, also, that other bonds of the State, in the hands of other companies, by forced sales at low rates, might indefinitely postpone or involve in a common fate the sale of those given to the rail road company; and I entertained some hope that I might promote an arrangement by which the whole cculd be disposed of at a fair valuel 2 10 Such ail arrangement, however, could not be accomplished with* out including those parties in London who had lent money upon the hypothecation of the bonds issued to the Chesapeake and Ohio Canal Company; and in this view my visit to Europe could scarcely be dis¬ pensed with. On my arrival in London, 1 found the condition of American stocks ■even worse than had been by any one anticipated. There had been no period, during ten years previous when it would have been more difficult to sell a large amount of such securities. This depression, - and the state of the money market had been in a great measure produ¬ ced by the previous large importations of grain into England, and the correspondent exportations of gold. In order to raise the exchanges, and obtain the requisite amount of gold, the Bank of England had resorted to all the means it could safely employ to render money scarce; and, amongst others, had raised the rate of interest to six per cent. The demand for money, in consequence of the great, extent of rail roads in England, contributed to make it scarcer; and if the money market had been in its usual state the demand would have been gieater, and the rate of interest higher than it was prior to 1826. To these causes, must also be added, the great amount of American securities exposed to ruinous sales. The Alary land sterling bonds, especially, could not be disposed of in large amounts at any price; they were re¬ tailing in small sums, at veiy reduced rates, and apprehensions were entertained that they would be disposed of at forced sales at even greater sacrifices. In this state of things, my relation to the state, having been intrust¬ ed by the Treasurer with a considerable amount of bonds on public account, not less than my regard for the interests of the Rail Road Company, dictated a caution of which I was in no degree unmindful. Ascribing the situation of other bonds to the exigencies of the com¬ panies to whom they had been given, in no wise affecting the ability or prudence of the State, I declined introducing the bonds committed to me into the market at a less price than ninety per cent, which, cal¬ culating the difference in exchange, would be considerably above the par value of a six per cent, stock. Under these circumstances, a suitable arrangement for the future disposal of the bonds became my paramount duty. It was obvious, that the redundant supply of American stocks would continue for some time, that from various causes they would be eagerly pressed upon the English market, and tkat the demand for capital in England would not immediately cease. At the same time I believed, that the slate of the English market Would gradually improve. The crops cf grain ivere sufficiently large to prevent any material importations, and it was probable, that, in the- Course of the winter and spring, they would recover a sufficient amount of gold to place the bank at her ease. I may here observe, that sub- II sequent events have gone, as far as could be so soon expected, to jus-^ tify these anticipations. It therefore became important, in my view, while I abstained from introducing the bonds into the market, to place them in a train of sale when circumstances should render it expedient. I could not doubt that this would be best effected by an agency of such ability, character and influence, as would elevate the credit of the State, and in the event of sale procure the best price for the securities^ It appeared to me that in the existing competition among the holders and sellers of American stocks—likely raiher to increase than dimin¬ ish—every consideration required that the Maryland bonds should be ' in the hands of competent agents, capable in the first imprbvement, of ensuring them a ready sale, at good prices* I deemed it of no less importance to secure the option of moderate advances in anticipation of sales, in case the exigencies of the com¬ pany should absolutely require their use. I did not anticipate an ear¬ ly necessity of using such option. On the contrary, looking to a rea- > sonable payment of the city subscription, I considered the necessity of resorting to the option as a remote one, and I acted with a view of rendering it more so. I mainly desired, by obtaining from a house so eminent for its caution and sagacity, such an expression of confidence in the credit of the State, and the value of the bonds, as the agree¬ ment to make advances upon them in a crisis so discouraging would imply, to separate the bonds in my hands from the general mass of discredited securities. The effect of the arrangement, so- far as it re¬ gards this object, was quite apparent, before I left England, and has. been further evinced by subsequent events. So far as the option of using the advances was designed to sub¬ serve unforseen exigencies of the company, it was guarded with every, reasonable precaution. By the contract, the advances cannot be de¬ manded until the month of March next, by which period it was hoped" that sales to a moderate amount might be effected, so as entirely to* dispense with them. If demanded, after that period, they cannot exceed fifty thousand dollars a month, and not more than two hundred thousand dollars in the whole, at any one time. The bills must be drawn at sixty days, and no part of the bonds can be sold to cover them at less than the company's limits, until the bills for the entire amount drawn shall fall due. If, therefore, the drafts should commence on the 1st of April,, the last bill would not m?itu:e before the 1st of September, 1840; and I could not, and do not doubt that, before that period the state of the market will authorize the sale at a proper price, of an amount suffi¬ cient to dispense with any further advance. It must, I think, be also-, evident to the committee of the house, that the advances secured are not only moderate, but so guarded as to make it the interest of the agent to avoid any sacrifice of, the bonds for their re-imburseraent Independently of these considerations, there were other expedients, oy which, even then moderate advances might not only be considers-' By postponed, but .altogether dispensed with. The first of these consisted in reducing the monthly expenditure upon the line of the road; so as to husband for a longer time the re* sources derived from the city subscription. Accordingly, as soon as I became acquainted with the condition and prospects of the money market abroad, as early as the 19th Sep¬ tember, 1 addressed a letter from London to the President pro tempore of the company, frankly limiting his expectations to the actual state of affairs. n Among other things, my letter states, that "from a view of the pre¬ sent condition of affairs here, and from the best judgment I can form of the future, I beg to say, that it becomes not only expedient, but indeed necessary, that the company should as far as possible limit its operations. I have no hope that the whole of our portion of the stock,/in whatever hands I may succeed in placing it, can be advan¬ tageously disposed of in less than two or three years." Pursuant to the recommendation cf this letter, all operations west of Cumberland were promptly discontinued, the expenditure on the work between Harper's Feny and Cumberland was considerably reduced, and imme¬ diately on my return to the United States, orders were issued to re¬ duce the expenditure to an amount not exceeding forty thousand dol¬ lars per month. 1 Another expedient by whmh I hoped to dispense with the advances, was that, already adverted to, as forming an important inducement for going abroad, of rescuing the other bonds of the State from the peril to which,they were exposed, and of uniting the whole under the same management, whereby they might be gradually disposed ot at a rea¬ sonable price. To this obiect my earliest efforts, after my arrival in London were directed. In the expediency of this measure, the agent of the canal company fully concurred, and he also concurred in the preference due tb the House of Messrs.' Baring, Brothers, & Co. To effect the ob¬ ject, we jointly negotiated with that House; and, that I might contri¬ bute all in my power to accomplish it—so important did I deem it to the credit of the State—I agreed, that the canal company should re- ' ceive the entire amount of sales up to the month of April, and subse¬ quently to that period, that the companies should share in proportion to their respective interests. If the success of the negotiation had depended upon such a concession, I was quite prepared, as was known, to make it greater. The agent of the canal company, how¬ ever, found it necessary, from the nature of his own position, and the pressing exigencies of his company, to demand an advance of two million dollars in less than six months. This was a demand so far exceeding any amount of sales, that could possibly be expected during I IS that period, and so disproporlioned to the actual condition of the money market, as at once to interpose an almost insuperable difficulty. Pending the propositions, the intelligence of the dishonor in Paris, of a Urge amount of bills drawn by the Bank of the United States, reach¬ ed London; and, in this state of things, a compliance with the de¬ mands of the canal company's agent being impossible, the negotiation terminated. The failure of this attempt gave further reason to apprehend that the system of retailing the other State bonds at low rates, might be prolonged even beyond the 1st of September next; and on that ac¬ count an arrangement with the Messrs. Baring, in regard to the bonds in my hands, embracing the option of moderate advances, acquired additional importance. But while the inducements to such an ar¬ rangement were thus increased, the difficulty of making it was propor¬ tionally augmented. • Not only had the occurrence already alluded to spread greater gloom on the money market, and inflicted a new blow upon American credit, but it was obvious that, so long as the bonds in other hands were daily liable to forced sales at ruinous prices, an agency for the sale of the rail read bonds at the company's limits, although it should not include advances, might remain barren and unproductive for an indefinite pe¬ riod. Finally, however, after an unsuccessful visit to Holland, I con¬ cluded With the House of Baring, Brothers, & Co. the arrangement which has been the subject of remark in the Governor's Message. The terms of the arrangement do not require any other comment from me than may be necessary to explain the motives and objects of concluding it. That it is eminently calculated to ensure, if any thing can ensure, the eventual sale of the bonds, at satisfactory prices, will scarcely be denied; and while it gives this advantage to the securities abroad, it does not prevent their sale in the United States, if not pre¬ viously disposed of in Europe. . The commissions allowed to Messrs. Having Brothers, & Co. for their agency, are not greater than are uniformly allowed for a similar service in the most prosperous times. By the existing laws, no authority is given to the Treasurer., or to the Commissioner of Loans, to appoint an agent for the payment of the interest and reimbursement of the principal of the sterling bonds of the State. They were given to the companies, however, under an obligation, from the sales of the bonds, to pay the interest for a period of three years; and, as the interest might become payable before the legislature could interpose, it was presumed-to be the intention of the act of the last session, to leave the selection of the agent to the com¬ panies. Proceeding on this assumption, I consented, that Messrs. Baring, Brothers & Co. should be the agents for these purposes also, and to allow the commission usual in such cases. My chief induce¬ ment, however, for acceding to this part of the arrangement, was^ 14 the desire of identifying the bonds with the acknowledged credit and influence of the House; which, I could not doubt, would inspire the highest confidence in the pun. tual payment of the interest, and reim¬ bursement of the principal. I considered also that, as the law con¬ templated the reservation of the interest from the sales, that confidence would be even moie strengthened by committing the sales and the payment of the interest to the same hands. If an opinion formed with the benefit of some experience, and a close and anxious observation, and the embarrassments with which my agency abroad was encompassed, be entitled to weight, I may be pardoned for saying, that the ariangementas concluded, in all its parts, had an immediate and salutary influence upon the credit of the State. The contract, it will be perceived, authorizes the company to pre¬ scribe the limits at which sales are to be made. Pursuant to this authority, and from the motives already stated, I fixed the general limit at ninety per cent, sterling, being, as nas been heretofore observ¬ ed, with the benefit of exchange, considerab'y above the par of a six per cent stock. From this general limit I made an exception of £75,000, authorizing the sale of .£25,000 at 85, and £50,000 at 83 sterling. My motives for this exception grew out of information received from the United States, of the difficulties impending over the banks of Baltimore, and of their desire, by abridging as far as possible their' advances to the city, to extend greater relief to their customers. It immediately became obvious, however, that nothing could be realized from these exceptions. Even before the conclusion of the arrangement with, Messrs. Baring, Brothers & Co., I had learned that several bills of exchange, drawn by the Chesapeake and Ohio Canal Company on their agent in London, were under protest for non-acceptance. In each instance the bill was accompanied with Sterling bonds of Ihe State, or with orders to the agent to deliver the requisite amount in London, to cover the draft at maturity. The grafts continued to be increased, until the condition of the bills and of the sterling bonds with which they were accompanied became a matter of notoriety. Under these circumstances, the probability that the bonds might fee ultimately sacrificed at the maturity of the bills, became too appa¬ rent to justify an expectation that any portion of the bonds of the Rail Road Company could be sold at the limits I had prescribed. In this state of things, and from an earnest wish, as far as possible, to guard against the consequences, which it was feared might ensue; further efforts were made, with the co-operation of the agent of the Canal Company, to induce Messrs. Baring, Brothers & Co. to inter¬ pose to obtain such control over all the bonds ot the State as should prevent the sacrifice of any part, and at the same time to prevent as iar as possible any delay in the sales of these embraced by my ar- 15 < f rangement. Owing to difficulties not in my power to obviate, and particularly to the increased amount of bills which had been brought by the British Queen, this purpose was not accomplished at the time of my departure from London. In a letter subsequently received from Messrs. Baring, Brothers & Co. under date of the 23d of November last, I learn "chat with a view to prevent the great depression that must inevitably have followed the forced sales of Maryland stock by Mr. Peabody to meet the bills now under protest fer non-acceptance, that House have made an agreement with him which places the sales of Maryland stock entirely under their control." I have the honor to transmit a copy of this letter for the information of the committee. Although it is to be regretted that, contrary to my expectations, the agreement is not such as wholly to prevent the sales of other bonds below my limits, it is nevertheless an additional confirmation of the expediency of ihe arrangement I had previously concluded with the Messrs. Barings, Brothers & Co. It gives reason to hope also, that ihe further sacrifice of the sterling bonds will be speedily arrested, and that at no distant day sales may be made at least to a moderate amount at reasonable rates. In the conclusion of this answer, although already so much ex¬ tended, I ask permission to add some observations in regard to an expression in the Governor's Message, which had hitherto escaped notice. The Governor has remarked that "preparations are now in progress for extending the Main Stem from Harper's Ferry to Wheeling." It is possible that a belief of this fact may have induced the Governor to impute a greater scope to the operations of the company than they really deserve, and have also increased his apprehensions of the extent to which the board might consequently be drawn tq use the advances under the contract in London. It cannot with propriety be said however, that preparations are now in progress for extending the Main Stem to Wheeling, unless, indeed, every step in a great under-, taking is to be considered as a preparation for the end ultimately ia view. Preparations, properly speaking, for extending the road to Wheel¬ ing were commenced under a resolution of the board of the 5th April, 1836, ordering the preliminary surveys west of Harper's Ferry to Wheeling, and to Pittsburg. These surveys were completed, and a report made on the 14th February, 4838. Measures were subsequently adopted for procuring relinquishments of the right of way on the various lines surveyed, and, during the uncertainty in the choice of the ultimate route, then were in most instances gratuitously granted. The expense attending the surveys and the agencies for procuring relinquishments were de¬ frayed out of the capital actually paid in, and from the current reve«* Hue. Early in the last spiing, a location of portions of the route wesi \ u X * ' 1 ■ • , ; * \ o'f Cumberland was ordered, in order to secure their occupation from conflicting claims; and the board subsequently directed the location of the route to Canoe Hollow, and also "such part of that on the Youghioghany river as might be interfered with by the Pennsylvania works; and, at the same time, they suspended the location of the remaining part of the line. The expense of these locations also, as far as they progressed were paid from the current revenue. In October last, and before the locations were completed, all the prepara¬ tions for extending the road west of Cumberland were discontinued, ahd are not now in progress. If this communication has been extended to a length to weary the committee, I hope they will see in the importance of the subject to the State, to the Company, and to myself personally, a sufficient apology. I have the honor to be, sir, With the highest respect, Your obedient servant, (Signed) LOUIS McLANE, President of the Baltimore and Ohio Rail Road Company. No. 4. • / 1Extract from the minutes of the Board> November 27, 1839. Resolved, That this company will receive from the city of Balti¬ more, from time to time, in lieu of its subscription to the Baltimore and Ohio Rail Road Company, for the sum of three millions of dol¬ lars in money, stock of the said city in such amount, at par, as they may deem expedient; the said stock to bear an interest at the rate of 6 per cent, per annum, payable quarterly, and to commence at the times when the instalments on such subscriptions have or may be¬ come due and payable. Resolved, That certificates of this company, based on the security of this stock, shall be issued as directed by the board, in such amount, and such denominations, and at such times as they may deem expedient; which shall be made redeemable in such stock when said certificates shall be presented in sums of not less than one hun¬ dred dollars, and that these certificates shall be used in payment to such persons as may have claims on the company, and who may be willing to receive the same. f Resolved, That an amount of this stock, equal to any issue direct¬ ed, shall be, at the time of such issue, transferred to two commission¬ ers in trust, whose duty it shall be, on the demand of any person holding these certificates, amounting to the sum of one hundred dol¬ lars and upwards, to transfer to such demandments an equal amount of the said stock, the interest on the same to commence at the time of said transfer. - Resolved, That this company will receive these certificates, so issu¬ ed, in payment of all dues to it. Resolved, That the details of these issues and transfers be referred to the committee on finance, with power to superintend the same. ' Extract from the minutes of the Board, December 4, 1839. Resolved, That, in accordance with the resolutions passed in refer¬ ence to an issue of certificates, the president take measures for the immediate issue of certificates, in denominations of five and ten dol¬ lars, to an amount not exceeding one hundred thousand dollars; Extract from the minutes of the Board, December 18,1839. Resolved, That the board proceed to the appointment of two com¬ missioners under the third resolution of the report of the committee on finance, of the 27th November last, to be taken from the board of directors, and unless otherwise ordered, to receive no salary or other compensation for their services. On the first ballot John J. Donaldson was elected, no other person having a majority; the board proceeded to a second ballot, when Fielding Lucas, jr. was elected. Resolved, That the president, with the committee of finance, be, and they are hereby authorized to issue certificates of transfer of city stock, in sums of one dollar each, to an amount not exceeding one hundred thousand dollars. Certified to be a true copy. J. J. ATKINSON, Secretary. 18 No. 5. Copy of Register of emission of Transfer Orders. The following transfer orders of city stock have been given to con¬ tractors and land holders by the Baltimore and Ohio Rail Road Company. * ; - To John Noonan, contractor, ? in denominations of one , t ; dollar, . $500 00 A. Martin, . do one do 200 00 Do do five do -100 00 Ritner, Beers if Co. do do do 300 00 Do do one do 200 00 Kid well & Chamberlain, dc five do 100 00 Do r. do one do 100 00 Cornelius Buckley, do five do 200 00 Do do one do 100 00 Wm. Nalor, land holder, do do 1,000 00 $2,800 00 I certify that the foregoing is a true copy.- Office of the Baltimore and Ohio Rail Road Company, 17th January, 1840. J. J. ATKINSON, Secretary. »No. 6. Copy of *letter to Baring, Brothers if Co., 12th October, 1839'. V I^gkdon, ■ October iSth, 1839. ■* « _ w , ifljf • To Messrs. Baring, Brothers is Co. 1 ■ i ■ Gentlemen: I herewith hand yoti a quantity of sterling bonds of the State of Maryland, dated the 1st of July, 1839, payable to the Baltimore and Ohio Rail Rqa3 Company, or bearer, at London, and at the period therein mentioned. Of these bonds, two hundred and fefrty are for <£1000 each; four hundred and eighty for <£500 eaclq and nine hundred and sixty for £250 each; amounting in all to seven hundred and twenty thousand pounds sterling. 19 The bonds are placed in your hands to be sold on account of the Baltimore and Ohio Rail Road Company, upon the terms as under¬ stood in our arrangement, finally concluded yesterday, that is to say: The Rail Road Company may, from time to time, fix such limits as to prices, as it may think proper, and you will endeavor to effect sales as rapidly as practicable at those prices. Of any sales which maybe effected, the company will be imme¬ diately advised, and be authorized to draw for the amount, and you will credit the account with interest at the rate of 4 per cent, pei an¬ num upon the 'cash you may have in hand from the sales of the bonds, until the maturity of the company's drafts; after the end of February next, the company will be at liberty to value upon your house in ad¬ vance or in anticipation jof sales, at sixty days, for the amount of .£10,000, and for a similar sum at such period, not less than monthly, as the company may think proper, not exceeding in the whole the amount of <£40,000. , In case of such valuing, in anticipation of sales, the company will withdraw the limits as to price, and leave it in your discretion to sell so far as will cover the advances; and after the same shall be covered the same power to draw shall be renewed, charging the account with interest at whatever the bank rate from time to time may be, not be¬ low five per cent. The principal and interest of the bonds to be made payable at your house in London.' ..Upon sales you will be allowed one per cent, commission, and one q uarter of one'per cent, brokerage, and one per cent, commission' additional upon the 'amount of sales necessary to , cover advances uoon the. company's drabs in anticipation of sales; * / 1 -C «- ... J. 7 also a commission of one per cent, upon the payment of the divi¬ dends, and one half per cent, on the redemption of the bonds. • ; I am, gentlemen, very respectfully, . . Your obedient -servant, • LOUIS McLANE, Pres. of the Bait, and Ohio R. R. Co. [ copy. ] LONDON, 12th October, 1839. Sir:—We beg to acknowledge receipt of the letter, with which you have been pleased to favor us under this date, containing certain sterl¬ ing bonds of the State of Maryland, dated 1st July, 1839, payable to 20 the Baltimore and Ohio Rail Road Company, or bearer, in London, at the periods stipulated, viz: 240 Bonds of j£1000 each, .£240,000 480 " 500 " 240,000 1 960 " 250 " 240,000 Together, <£720,000 These bonds are deposited in our hands to be sold on account of the Baltimore and Ohio Rail Road Company, at such limits and prices as the company may think proper to give from time to time. It is agreed that the company shall be advised as we progress in sales, and be authorized to draw for me equivalent, and after the end of February next, be at liberty to value upon us in anticipation of sales at 60 days sight to the extent of <£10,000, and for a similar sum month¬ ly, or later as the company may think proper, not exceeding in the whole the sum of <£40,000; and in case this facility should be availed of all limits as to price and sales, are to be withdrawn, in so much as may be required to cover us; and alter we shall be so covered, the same power to draw to be renewed, under the same conditions. Interest to be charged at whatever may be the bank rate from time to time not un¬ der 5 per cent, per annum. The principal and interest of the bonds to be made payable with us; and our commissions ?re agreed to be: 1 per cent upon sales. 1-4 per cent for brokerage. > 1 " " additional, upon sales needful to cover our acceptances of the Company's drafts in anticipation of sales. 1