[DOC. No. XXVI.]
REPORT
OF
A COMMITTEE OF STOCKHOLDERS
OF THE
JAMES RIVER AND KANAWHA COMPANY.
1852.
[Doc. No. 26.]
3
REPORT.
The committee to whom were referred the report of the president
and accompanying documents, the report of the special committee on
tolls and sundry memorials, have been busily engaged in considering
the subjects referred to them, and are prepared to report upon all ex¬
cept the subject of tolls, which they were unable fully to consider,
because the printing of the documents connected with that subject
was not finished. They proceed to report upon the other subjects
committed to them.
First.—The proposed change of the time of holding the annual
meeting of stockholders.
The president having recommended in his report, that the time for
holding the annual meeting be changed to the fourth Monday of Oc¬
tober, with a view to conform to the change of the fiscal year, and to
meet the wish of the Board of public works, the committee propose
the adoption of the following resolution :
1. Resolved, That the future annual meetings of the stockholders be
held on the fourth Monday in October.
Secondly.—The financial affairs of the company.
It appears from the president's report that, notwithstanding an in¬
crease of the income from tolls and a diminution of the expenses of
the general administration of the company, the disbursements of the
company for the late fiscal year exceeded its receipts by the sum of
$48,628 48, and a similar excess of disbursements for the current
year is anticipated to the amount of about $50,000. These defi¬
ciencies will have accrued in consequence of the large amount of
interest which has been and is to be paid by the company upon bonds
issued to pay for works yet in progress and unproductive. More¬
over, another deficiency is anticipated of not less than $250,000,
arising from the excess of the cost of the construction of the second
division of the improvement, and of the Tidewater, Southside and
Rivanna connections, above the estimates. Of these deficiencies,
together amounting to about $ 350,000, all to be provided for during
the coming year, the company expect to be able to meet from their
own resources not less than $ 50,000, leaving about $ 300,000 unpro¬
vided for, in respect to which they will be compelled to ask aid from
the state, expecting to repay whatever may be advanced on that ac¬
count from the larger income which will be received after their new
works now in progress are completed. In relation to this subject the
committee recommend that the stockholders adopt the following re¬
solutions :
2. Resolved, That the president and directors, on behalf of the com¬
pany, apply to the legislature for aid in relation to the existing and
4
[Doc. No. 26.]
anticipated deficiencies in their revenue, so as to enable the company
punctually to pay their semi-annual interest.
3. Resolved, That a committee of five stockholders be appointed to
aid by their efforts in giving eflbct to that application to the legislature.
4. Resolved, That if the general assembly shall consider it compa¬
tible with the interests of the state and of this company to fund the
bond debts of the company, and assume the payment thereof on the
part of the state, the stockholders hereby assent to such an arrangement
and to a modification of the charter, so as to increase the capital
stock of the company by the amount of the said bond debts and to
the issue of scrip for the same to the state as additional stock of the
company.
Thirdly.—Upon the subject of the future progress of the improve¬
ment to the west, the committee recommend to the stockholders the
following resolutions :
5. Resolved, That the president and directors of the company apply
to the legislature to provide the means necessary to extend the canal
towards Covington.
6. Resolved, That the president and directors ask of the general
assembly, in their memorial to that body, that in case any general sys¬
tem of internal improvement be adopted, provision be made for the
extension of the water line of the James river and Kanawha company
westward to the Ohio.
Fourthly.—The committee had under consideration the memorial of
citizens of Lynchburg, asking for certain alterations of the dam and
works near that town, with a view to increase the head of water in
the canal and pond, and certain resolutions were offered by Mr. Early
in relation thereto. The committee recommend the following re¬
solution.
7. Resolved, That the Lynchburg memorial and the resolutions of
Mr. Early be referred to the president and directors, who are re¬
quested to give prompt attention thereto.
The resolutions accompanying the foregoing report were severalty
adopted.
WM. P. MUNFORD,
Secretary.
[Doc. No. 26.]
PETITION
OF THE
JAIES filVEK AND KANAWHA CO.
3 8.52.
[Doc. No. 26.]
7
PETITION.
To the General Assembly of Virginia.
The James river and Kanawha company, by iheir president and
directors, respectfully represent :
That at a general meeting of the stockholders of the company, held
on the 25th of November last, a committee of the stockholders pre¬
sented a certain report and resoluions, which were approved and
adopted by the meeting, and a copy of them is hereto annexed.
In obedience to those resolutions, your petitioners now present to the
general assembly this their memorial.
They would first ask attention to the second of those resolutions.
Under the charter granted in 1832, the capital stock of the com¬
pany is five millions of dollars, of which three millions belong to the
state and two millions to private individuals and corporations.
In 1842, the canal being completed to Lynchburg, and some pro¬
gress having been made in the work above Lynchburg, the prosecu¬
tion of the improvement was suspended. The financial condition of
the company was such that it was not possible to procure means to
resume the construction of its unfinished works until the necessary
aid was furnished by the state by an act of Assembly passed the 1st
of March 1847, providing for a loan of state stock to the company, to
be used in constructing the works between Lynchburg and Buchanan,
commonly called the second division of the improvement. Bj' means
of the funds so obtained the works upon the second division were
resumed.
By an act of the 20th March 1847, the company was authorized to
borrow three hundred and fifty thousand dollars, to be applied to the
construction of a connection between the canal and tidewater at Rich¬
mond, through the dock. The company was also required to es¬
tablish connections between the canal and the south side of James
River at Bent Creek, Hardwicksville, Cartersville and New Canton,
and between the canal and Rivanna river. In the year 1849, the ge¬
neral assembly authorized the guarantee of the company's Ixtnds to
raise money for making these several connections to the extent of
$350,000 for the tidewater connection and $150,000 for the Southside
and Rivanna connections. The several acts of assembly required the
company to pay the interest of the state bonds loaned and the interest
on the guarantied bonds out of its own revenues, " after defraying the
necessary charges for the repair, support aud management of its canal
and other improvements, and general administration of its affairs and
after paying its semi-annual interest and annuity debts then existing."
8
[Doc. No. 26.]
The second division is now in use to Buchanan. The Rivanna con¬
nection is completed. The works for the Southside connections are
so far constructed as to ensure their completion during the next sum¬
mer, and the heavy works of the tidewater connection are far ad¬
vanced towards completion.
It has been found that the actual cost of these several works has
exceeded the amount which it was supposed would be sufficient, and
to supply the deficiency and ensure their completion there will be re¬
quired an additional sum of at least three hundred thousand dollars.
The object of your petitioners is to ask of your honorable body to
loan to them that sum, in the bonds of the state, to enable them to
pay punctually their interest debts and to complete fully their un¬
finished works, the importance of which has already been manifested
by successive acts of the general assembly and by the uniform deci¬
sions of the stockholders.
Your petitioners respectfully represent that, at the time of the re¬
sumption of the works under the act of March 1847, the debt of the
company was ----- 2,268,645 33
Its debts contracted since that date amount to - 2,206,000 00
Aggregate, - - _ $4,474,645 33
The items composing that aggregate, are as follows :
1. A perpetual annuity to the old James river com¬
pany of $ 21,000, equal to the interest on
2. To the state by bond of 24th February 1845,
3. " " " 25th March 1842,
4. To the holders of the company's bonds guaran¬
teed by the state under act of 23d March 1839,
5. For state stock issued under the act of 1st March
1847, -----
6. For bonds guaranteed by the state under the acts
of 9th and 12th of March 1849,
7. For state bonds under act of 25th January 1850,
8. For guaranteed bonds for the construction of the
third division under act of 15th March 1850, -
350,000
00
268,645
33
250,000
00
1,400,000
00
1,236,000
00
500,000
00
110,000
00
360,000
00
4,474,645
33
For the interest on all these several sums the state is either directly
or indirectly bound. The first is by the charter a preferred charge
upon the revenues of the company. The second and third are debts
to the state ; and for the principal and interest of all the rest the state
is bound either upon its own bonds or by its guarantee of the com¬
pany's bonds.
In the present condition of the company's affairs, it will be unable
to meet the charges of interest semi-annually as they fall due ; and it
is of the utmost importance to the company fully to complete the se¬
veral unfinished works from Tidewater to Buchanan as a means of
[Doc. No. 26.]
9
securing a large increase of revenue. The second division, extending
from Lynchburg to Buchanan, has been only put in use during the
present fiscal year, and no doubt will add very considerably lo the
revenue of the company. A similar result may be expected from the
completion of the unfinished works now in progress. It must be ob¬
served also that during the construction of the recent works, on ac¬
count of which a large portion of the existing debt has been incurred,
the company has been bearing the heavy and constantly increasing
burden of paying interest upon the cost of constructing expensive
works which were wholly unproductive so long as tiiey were unfinish¬
ed, and several of which are still in that predicament. The amount
of interest thus paid, since the commencement of the second division
of the improvement on account of the construction of works unfinish¬
ed and unproductive, amounted, at the close of the last fiscal year, to
$431,274.
But now the most important of these works yield revenue and all
will be in that condition. Your petitioners therelbre concur in the opi¬
nion that the revenues of the company will in a short time be such as
to justify the expectation of meeting all charges, and of repa3'ing
within five years the loan now asked.
The denial of this petition will prove disastrous to the affairs of the
James river and Kanawha company, with whose interests those of
the state itself are identified ; while it is believed that to grant the
prayer of j'our petitioners will prove beneficial to the state, both as a
creditor and as a stockholder of the company. And in a matter of so
much importance, 3mur petitioners will be pardoned for intimating
how deeply injurious to the credit of the state and to the whole cause
of internal improvement in Virginia it would be, if there should be a
failure to make adequate provision for the interest for which the state
is bound. Your petitioners must also express their great regret on ac¬
count of the unavoidable necessity which has compelled the compan3r
to make this call for aid upon the state, while they confidently believe
that the completion of the vast amount of work done in the last five
years will ultimately redound to the great advantage of the company
and of the public.
The fourth resolution was adopted by the stockholders with the
view of relieving the question involved in it from any embarrassment
which might arise if the views of the stockholders were unknown.
It is submitted with this view to the general assembly. It acquire»
great importance from the fact that a strong desire is extensively felt
amongst those using the canal to have a reduction of the tolls charged
by the company.
The company earnestly desire to prosecute their work on the third
division, which extends from Buchanan to Covington, and respectfully
ask of the state its aid to do so. The distance is a.scertained to be
less than fifty miles, and the practicability of the water line is unques¬
tionable. The funds appropriated by the act ot 15th March 1850
will not carry the improvement more than ten miles, and the sooner
the execution of the work can be completed the sooner will the com¬
pany be aided by the revenues arising from it to naeet the charge of
10
[Doc. No. 26.]
interest on the cost of construction and to provide for the ultimate re¬
demption of the debt.
The undersigned have supposed that the general assembly had de¬
finitely approved the plan of the stockholders to extend its water line
to Covington. This opinion is founded on the terms of the act of
March 15, 1850, giving aid expressly for that object, and on the third
section of the act of January 30, 1850, which secures to the canal
company the preferred right of location to the same point over the
railroad company. Your petitioners, confidently believing that the
extension of their water line to the Ohio river is destined to be com¬
pleted, and will be of incalculable advantage to tbe people of the
state, to their commercial and agricultural interests, and to the stock¬
holders, earnestly desire to proceed with the work on the third divi¬
sion. A connection will thus be formed between the company's east¬
ern and western works. The Kanawha turnpike has its eastern ter¬
minus at Covington and its western on the Ohio river.
This turnpike road was constructed at the cost of the state, and on
the reorganization under the act of 1832 was transferred to the com¬
pany at a high valuation, as a part of the stock subscribed by tbe
state. Although very valuable to tbe public as a thoroughfare, it has
not been a productive source of revenue to the company. Its con¬
nection with the canal at Covington will add to its value in that re¬
spect, and if the canal be not permitted to go at least as far as the
eastern terminus of the turnpike there can be no hope that any con¬
siderable freight can pass over it and add to the business of the ca¬
nal. The failure to make this connection will add so much to the
cost of transportation, by repeated transhipments, that the interests of
the company must be most injuriously affected, both in its upward and
downward trade.
The surveys for the location of the canal to Covington have been
made, and an estimate of its probable cost will be presented as soon
as it can be prepared.
Your memorialists invite the attention of the assembly to the 6th
resolution of the stockholders. In that resolution they ask, that if a
general system for the completion of the improvements of the state
shall be adopted by your honorable body, provision may be made for
the extension of their water line to the Ohio river. They have often
enquired into the feasibility of connecting the eastern and western
waters of the state by passing over the summit level with their water
line, and they are satisfied that the measure is practicable. It seems
obvious that being so, it is the best policy of the company to adopt an
uniform, continuous plan of improvement, in preference to a mixed
improvement partly of canal and partly of railroad, and to secure the
great advantages of a highway open to all, governed by one com¬
pany. The resolution expresses the opinion of the stockholders of
the James river and Kanawha company in regard to their own im¬
provement. Your petitioners submit herewith the last annual report
of the president of the company, with the accompanying documents,
which give the results of a geological examination, and the opinions
of the chief engineer on the question involved—a question which the
[Doc. No. 26.]
11
company had necessarily to decide, not in reference to the measures
of other companies, but as an essential feature of their own.
Relying on the justice of the general assembly in protecting the
chartered rights of the company iti regard to the location of their im¬
provements, and on the enlightened wisdom which will guide your
deliberations on all subjects affecting the interests of the state, your
petitioners confidently submit this memorial to your consideration.
Respectfully,
Your obedient servants,
J. Y. MASON, Tresidentf
For himself and the ßjard of Directors.
Richmond, January 16, 1852.