VIEWS 
 
 William H. Gatzmer, President of the | | 
 
 Camden and Amboy Railroad and ' 
 
 ! i 
 
 Transportation Company, upon the ! 
 
 proposition to Lease the Public W orks 
 of the United Canal and Railroad ! 
 
 Companies of New Jersey to the ] 
 Pennsylvania Railroad Company, read^ 
 before the Joint Board of Directors, at 
 their Meeting, at Trenton, New Jersey, 
 
 April 20th, 1871. 
 
3 85 , 14 - /'h- ^ 
 
 0144V ^ 
 
 / 
 
 io 
 
 VIEWS 
 
 Of William H, Gatzmer^ President of the Camden and 
 Amboy Pailroad and Transportation Company^ \(j)on 
 the Proposition to lease the Public Works of the United 
 Canal and Pailroad Companies of New Jersey to the 
 Pennsylvania Pailroad Company^ read before the Joint 
 Board of Directors^ at their Meeting^ at Trenton^ April 
 mh, 1871 . 
 
 ^MR. PRESIDENT AND GENTLEMEN 
 ' ^ OF THE JOINT BOARD 
 
 Ne should be actuated by our convictions as to wbat 
 we believe to be for the best interests of the stockholders 
 ■ of the United Companies, not for the present only, but 
 for the present and future ; and we should each be al- 
 lowed to act freely and independently upon this sub- 
 ^ject ; and however painful it may be for any of us to 
 ^differ from those whose experience, knowledge and 
 o judgment, we have always respected and deferred to 
 "■ upon other subjects, the present one is too grave and 
 important for any Director to yield his opinion, and he 
 ? should not be reflected upon for presenting his views 
 ‘ before this Board — nay, more, it is his duty to present 
 ^ to his stockholders, whose agent he is, the result of his 
 ^ calmest and best judgment, and the reasons which have 
 brought his own mind to the conclusion it has 
 reached. 
 
 \V. II. G.— 1 
 
 
 i rift 
 
2 
 
 Xo subject lias ever been presented for the considera- 
 tion of the Directors of these Companies, of so much 
 importance, and which involves so much responsibility 
 in their action: no matter which way they may decide, 
 whether to recommend the acceptance of the lease or 
 to decline it, the responsibility remains. 
 
 Upon all large and important operations of these 
 Companies the Directors have heretofore been united — 
 upon this subject they are divided. 
 
 The stockholders have committed to the Directors 
 the conduct of their business and care of their property, 
 and have selected their Directors and officers because 
 of their experience and knowledge of their works, and 
 look to them for full information and proper advice 
 u])on this subject. 
 
 Before making the submission to the stockholders, 
 the Directors should cause to be prepared an inventory 
 of their property with valuation — a statement of the 
 business from the origin of these Companies to the 
 present time, showing its rise and progress, the increase 
 of capital up to 1867, and the rapid and large increase 
 of capital since, and why such rapid increase was neces- 
 sary to be made ; together with an estimate of what the 
 future promises ; the Directors should give to the stock- 
 holders every information concerning their property, 
 as regards the past, the present, and an estimate of the 
 future, that they may be enabled to decide wisely in 
 regard to the value of their property and the franchise 
 they possess before parting with them. 
 
 Our works are invaluable ; their location the best in 
 the United States; are in good order and capable of 
 doing all the business that will ever come to them from 
 the South and West, and between Philadelphia and 
 Xew York. 
 
 Where one railroad connects with another so that 
 
3 
 
 tlie cars can pass from one road to the other it is not 
 necessary for the public accommodation, or prolit to 
 the stockholders, for extensions by acquiring direct 
 connecting railroads by lease or purchase ; the usage of 
 the whole railroad world is to connect with each other, 
 and traffic will seek its natural geographical channels 
 from one State to another, and the last link in the route 
 to the great metropolis is generally the most valuable, 
 as it is the final gathering up of the traffic of all the 
 others. Why, then, part with the last link and allow 
 others to go beyond their natural territorial boundaries? 
 It will prove far more profitable for our corporation to 
 take care of its own chartered locality and cultivate 
 friendly relations with all others who may have occa- 
 sion to use our works. 
 
 Premature extensions, leases, and increase of liabili- 
 ties, by railroads, no matter by whom encouraged, will 
 reduce per centage upon capital invested, as will be 
 seen by an examination of the reports of many of the 
 leading railroads of our country. 
 
 There are examples of the destruction of corpora- 
 tions by ill-advised increase of capital — institutions in 
 which the retired man of business, the widow and the 
 orphan had placed their all, and were suddenly bereft 
 of their income and rendered destitute. I will only 
 mention one with which we are all familiar, it being in 
 our midst and recent. 
 
 A prouder and more successful corporation than the 
 Lehigh Coal and Navigation Company did not exist ; 
 the stock and bonds were considered by capitalists the 
 safest of investments ; their net earnings, under the 
 management of a White, a Ilazzard and a Cox, had 
 exceeded the legal limit authorizing dividends to be 
 paid to their stockholders. This institution was com- 
 mitted to the management of those less cautious ; their 
 
4 
 
 ambition led them to increase their capital several mil- 
 lions in building a railroad alongside of their canal, 
 and the institution was ruined by the weight of its 
 obligations incurred for this road, and the widow and 
 the orphan were deprived of their living. 
 
 The disposition to increase the debt and stock lia- 
 bility of the United Companies is improper, when an 
 increase of business does not warrant it. We should 
 keep our works and equipment in good order, and no 
 railroad company can reasonably be expected to make 
 improvements faster than a growing business requires, 
 and they should always be graduated according to the 
 revenue. 
 
 The United Companies own a large and valuable real 
 estate, much of which is not necessary for direct rail- 
 road purposes, and will never he required for such, pur- 
 pose. All such property should be disposed of, and the 
 proceeds applied to the liquidation of our debt, or for 
 the purpose of making such improvements as the busi- 
 ness of the Companies actually needs. Ueither our debt 
 nor stock liability should be increased for any purpose 
 whatever, while we have real estate or other property 
 that we can dispose of, without impairing the facilities 
 and usefulness of our works. 
 
 In order that we may fully understand our present 
 business relations with the Pennsylvania Railroad Com- 
 pany, I will present some extracts from the contract 
 with the Pennsylvania Railroad Company, entered into 
 on February 18th, 1863, and fully confirmed by abso- 
 lute lease on the 1st day of January, 1868, for nine 
 hnndred and ninety nine years to the Philadelphia and 
 Trenton Railroad Company. 
 
 2dly. I will read the minutes of the Joint Board and 
 Executive Committee relative to the improvement of 
 Ilarsimus Cove property, the building of a branch road 
 from the New Jersey Railroad to Cornmunipaw Stock 
 
0 
 
 Yard, and show the preliminary steps taken that have 
 culminated in an otter on the part of the Pennsylvania 
 Eailroad Company to lease our whole works instead of 
 joining us in the improvement of Harsimus. 
 
 In order to secure a part of the Western, the South- 
 ern and Southwestern business, and to establish a 
 more perfect route between Yew York and Washing- 
 ton by passing through Philadelphia without changing 
 the steam trains, an agreement was entered into Feb- 
 ruary 18th, 1883, with the Pennsjdvania Railroad Com- 
 pany, for the latter Company to build the Connecting 
 Railway, and to lease it to the Philadelphia and Tren- 
 ten Railroad Company for nine hundred and ninety- 
 nine years, at a clear annual rent of six per cent, per 
 annum. 
 
 The contract secures to the Philadelphia and Trenton 
 Railroad Company two tracks from the junction with 
 Pennsylvania Railroad at Mantua to the junction with 
 the Junction Railroad, to connect South, and to the 
 depot in West Philadelphia for accommodation of local 
 business between Yew York and Philadelphia; so that 
 the United Companies can use their own locomotives 
 and cars between West Philadelphia and Market Street 
 Depot and Jersey City with the same rights and privi- 
 leges and facilities that they can from Camden or Ken- 
 sington. 
 
 The contract provides, also, that the Pennsylvania 
 Railroad Company shall divert all of their business 
 destined East over our works, and after deducting ter- 
 minal expenses, the receipts to be divided pro rata per 
 mile. 
 
 The contract also provides an absolute minimum rate 
 for freight and passengers, below which the United 
 Companies are not obliged to go when competition is 
 raging between the Pennsylvania Railroad and other 
 
6 
 
 Western lines, so that a contract exists providing for 
 the United Companies perfect facilities to carry on their 
 Western and Southern business by perfect connections 
 by means of the Connecting Railway. 
 
 The contract provides for the Pennsylvania Railroad 
 Company full facilities for their traffic to 'New York, 
 without change of cars to Jersey City and South Am- 
 boy, and the motive service is as well performed as 
 could, over the route, be performed by their own direct 
 agency. 
 
 The contract provides for the Pennsylvania Railroad, 
 facilities at South Amboy, Jersey City, and Yew York, 
 all of which have thus far been afforded fully equal to 
 the business they have given us. And for an increased 
 future business from the Pennsylvania Railroad, and 
 from the Philadelphia, Wilmington and Baltimore and 
 the Baltimore and Ohio Railroads, and other roads, 
 the United Companies have secured ample terminal 
 property, now under consideration of improvement, 
 which when improved must fully meet the reasonable 
 requirements of all the Southern and Western business 
 that will ever pass over this route. 
 
 The contract provides that if the Pennsylvania Rail- 
 road Company refuses to properly discriminate in our 
 favor, and not send all their traffic destined to the East 
 over the works of the United Companies, they shall 
 pay a sum equivalent to the net profit which would 
 have accrued if said traffic had passed over our Avorks. 
 
 The contract provides equitable running arrange- 
 ments, and no interference with our local or way busi- 
 ness between the cities of Yew York and Philadelphia. 
 
 It is a contract that provides every needed facility at 
 a very low rate for the Pennsylvania Railroad, and is a 
 most valuable agreement for the United Companies in 
 securing to them the Connecting Railway, by which 
 
7 
 
 they have a perfect steam connection with the South 
 and West. 
 
 The provisions of the contract have not been carried 
 out hy the Pennsylvania Railroad ; they have not di- 
 verted to this route all their Eastern business. The 
 United Companies have provided facilities at South 
 Amboy, and, also, at Jersey City, to do their business 
 as they have elected to do it, i. e., their transportation 
 lines, doing the business over the joint lines, to receive 
 the terminal expenses between Jersey City and 'New 
 York, and they to take charge of the cars as they ar- 
 rive at Jersey City, and to transfer tKem to Yew York. 
 Any interruption to their business the past winter was 
 occasioned hy the obstruction of ice in the Hudson, 
 causing an inability on the |)art of their agents to take 
 away the cars as they arrived at Jersey City. Their 
 business during the past winter did not exceed an aver- 
 age of one hundred and fifty cars per day. We were 
 prepared to transfer from Mantua to Jersey City several 
 hundred cars per day. 
 
 In the purchase of Harsimus cove property, it was 
 designed by the managers to improve it for the accom- 
 modation of the business passing over their works from 
 the South and West, and from other connections, and 
 to meet any expected increase of business ; but as our 
 revenue has not increased in proportion to our capital 
 expenses, and as it was deemed the best policy by the 
 Board of Directors to keep up the dividends, it was 
 decided not to go on with that improvement imme- 
 diately after the purchase, and for a ’while the subject 
 of that improvement was postponed, and no action had 
 until it was again taken up in January, 1870. At a 
 meeting of the Joint Bqard of January 17th, 1870, it was 
 
 Resolved^ That a Committee of Five be appointed to 
 take into consideration some mode of securing the im- 
 
8 
 
 provenient of the Harsimus Cove propertj^, in accord- 
 ance with the Eeport of the General President of Feb- 
 ruaiy 10th, 1869, and report to the Joint Board the 
 most expeditious and most economical manner of carry- 
 ing out the proposed improvements, either by leasing 
 to other companies or otherwise, or any other arrange- 
 ment that can be made to utilize the same to the United 
 Companies. 
 
 Messrs. Stockton, Macalester, Bradley, Eemsen and 
 Howell were appointed said committee. 
 
 On or about the 28th March, 1870, Col. Scott, of the 
 Pennsylvania Pailroad, addressed a letter to our Com- 
 pany upon the subject of building a branch railroad 
 from the Uew Jersey Pailroad to Communipaw Stock 
 Yard. 
 
 At a meeting of the Committee, March 28th, 1870, 
 it was “ Resolved^ That the letter of Col. T. A. Scott, 
 relative to branch from Bergen Cut to the stock yards 
 at Communipaw, be referred to the General President, 
 to examine and attend to.” 
 
 At a meeting of the Executive Committee, April 
 25th, 1870, it was “ That the General Presi- 
 
 dent be authorized to conclude an arrangement with 
 the Pennsylvania Pailroad Company for the building 
 of the Branch Pailroad from the Yew Jersey Pailroad 
 to the stock yard at Communipaw, each Company to 
 contribute in proportion to their mileage between Pitts- 
 burg and Yew York.” 
 
 At a meeting of the Joint Board, June 30th, 1870 
 the General President presented the draft of an agree- 
 ment between the Yational Storage Companj’^, the 
 United Companies, and the Pennsylvania Pailroad Com- 
 pany, providing for the construction and oioeration of a 
 railroad from the Yew Jersey Pailroad at the Point of 
 Pocks to Communipaw. 
 
9 
 
 Whereupon, it was Resolved, That the said agree- 
 ment he entered into, and that the proper officers, exe- 
 cute the same under the corporate seals of the several 
 Companies represented in this Board.’’ 
 
 At a meeting of the Joint Board, July 18th, 1870, 
 the General President reported that it was extensively 
 published in the newspapers that the Pennsylvania 
 Pail road Company was about to lease the works of the 
 United Companies, hut stated that there had been no 
 authorized negotiation on the subject. 
 
 The General President made a report on Harsimus 
 Cove improvement, which was accepted and ordered to 
 be tiled, and the matter referred to the Committee on 
 Harsimus Cove property. 
 
 At a meeting of the Executive Committee, December 
 19th, 1870, Gen. Stockton presented and read a letter 
 from J. E. Thomson, President of the Pennsylvania 
 Pailroad Company addressed to himself, offering to 
 lease the canal and railroads of the United Companies, 
 Whereupon, it was Resolved, That the communication 
 of Mr. Thomson be referred to the Joint Board for its 
 consideration and that a meeting of the Joint Board 
 he called for Saturday, the 24th inst., to consider the 
 subject of lease.” 
 
 At a meeting of the Joint Board, December 24th, 
 1870, Mr. Stockton presented and read a communica- 
 tion from J. Edgar Thomson, President of the Pennsyl- 
 vania Pailroad Company, proposing terms upon which 
 he, the President, thought the Pennsylvania Pailroad 
 Company would lease the canal and railroads of the. 
 United Companies. Mr. Stockton explained the infor- 
 mal interviews had with the President of the Pennsyl- 
 vania Pailroad Company upon this subject ; the matter 
 of lease having been introduced at the conference of the 
 
10 
 
 Committee of each Company appointed to negotiate 
 about the improvement of Harsimus Cove property. 
 
 After discussion, Mr. Taylor offered the following 
 preamble and resolution, which was adopted : 
 
 Whereas^ A communication from J. E. Thomson, 
 President of the Pennsylvania Pailroad Company, hav- 
 ing been read to this Board, proposing to lease our 
 works, it is 
 
 Resolved^ That the officers of these Companies be re- 
 quested to communicate with the officers of the Penn- 
 sylvania Pailroad Company, and report to this Board, 
 as to what arrangements can be made with that Com- 
 pany to utilize the Harsimus Cove property, and to 
 permit their trains to run over our works ; and also 
 the best terms on which they will lease our property, 
 and such facts and figures as will enable us to judge as 
 to the advisability of entering into any further arrange- 
 ments or agreements with the Pennsylvania Pailroad 
 Company. 
 
 Judge Pead offered the following resolution, which 
 was adopted. 
 
 Resolved^ That the basis of an}^ lease to the Pennsyl- 
 vania Pailroad Company should be a lease of our roads 
 and canal, and a transfer of all our assets, subject to 
 all our debts and liabilities of every description ; which 
 are to be assumed by said Company. In consideration 
 of which there should be equal to a clear yearly divi- 
 dend of ten per cent., payable quarterly, secured and 
 paid to our stockholders. 
 
 At a meeting of the Joint Board, January 19th, 1871, 
 the General President communicated the result of the 
 conferences of the officers with the President of the 
 Pennsylvania Pailroad Company, and read the letters 
 of Mr. Thomson, President, upon lease and running 
 arrangement. 
 
 
11 
 
 After discussion it was 
 
 Resolved^ That the communications be referred to 
 the officers of the United Companies, and that thej" be 
 instructed to continue the negotiations and furnish the 
 information required by the Joint Board, and when 
 ready to report that the Joint Board he called together. 
 
 The President and Committee of the Pennsylvania 
 Eailroad asked further time for consideration, and at a 
 recent meeting of their Board, there being no recom- 
 mendation of the Committee the matter was discussed 
 in the meeting and referred to the President, who made 
 a communication to our General President, not offer- 
 ing, however, clear ten per cent. 
 
 AVe should not approach the consideration of this 
 subject with the impression that our Companies are 
 running into bankruptcy, or from fear that the Penn- 
 sylvania Railroad Company or any other party will 
 build an opposition road to ours betAveen the cities of 
 Xew York and Philadelphia, 
 
 We are by no means bankrupt. It must be remem- 
 bered that during the war for five or six years, Ave Avere 
 obliged by the rules of the United States Government 
 to do business for the United States, and which Avas our 
 large business during those years, the transportation of 
 troops and military stores at a reduction of thirty-three 
 per cent, from our rates. Our works and equipment 
 in common Avith every prominent railroad in the country 
 Avere run doAvn during the war. 
 
 At the close of the war, the consolidation took place, 
 and the Joint Board of Directors by their By-LaAvs 
 created a neAv organization, appointing a General Presi- 
 dent to have full superintendence and direction of the 
 affairs of the several Companies, to have charge of the 
 engineering, mechanical, superintending and accounting 
 departments of the whole. 
 
 
12 
 
 
 After consolidation it was thought best and directed 
 hy the Joint Board, to put the roads and canal in per- 
 fect order, and to improve the equipment in cars and 
 locomotives ; to acquire real estate at the terminus and 
 upon the line of the roads ; to build station-houses 
 and bridges, and to do everything needed, as the exclu- 
 sive privileges would cease in 1869, fully to prepare for 
 increasing traffic, and so to perfect their works and the 
 arrangements upon them, that they might depend upon 
 the superiority of their facilities alone for protection 
 against competition. 
 
 Our works are now in complete order, roadbed, rails, 
 locomotives and cars, and everything equal if not supe- 
 rior to the first-class roads in our country. 
 
 These improvements have cost several millions of 
 dollars, and the traffic has not increased in proportion 
 to the expenditures. 
 
 Up to and including the year 1866, before the con- 
 solidation, each Company earned about twelve per 
 cent., paid regular dividends of ten per cent., and had 
 accumulated considerable surplus. 
 
 The gross receipts in were $8,112,107, and in 
 1870, $8,437,093 ; larger in lS70 by only $324,986, while 
 during the same time the stock basis was increased 
 $6,163,245. 
 
 It has been said that the Companies have not earned 
 ten per cent, dividends since the consolidation. 
 
 For the four years commencing January 1st, 1867, 
 and ending December 31st, 1870, the average earnings 
 per annum of the Companies was eight eighty-nine-one- 
 hundredths, a fraction less than nine per cent, upon the 
 capital stock, which had been increased during the 
 same time upwards of six millions. The earnings of 
 the last four years divided upon the stock basis of 1866, 
 
13 
 
 before consolidation, notwithstanding a reduction of 
 gross receipts of $837,000 in 1867, will show an average 
 of more than eleven per cent, per annum. 
 
 These Companies have kept up the dividends of ten 
 per cent., wdiile other ten and eight per cent, dividend 
 paying roads dropped to eight and six per cent. The 
 Companies have, therefore, notwithstanding this ex- 
 traordinary outlay for capital, with a greatly depressed 
 business in 1867 and 1870, been enabled to keep up 
 their dividends of ten per cent, without entirely ex- 
 hausting their surplus. 
 
 I have known the I7ew Jersey Railroad and Trans- 
 portation Company when it paid no dividends ; the 
 Camden and Amboy Railroad when it scarcely earned 
 six per cent., and the Delaware and Raritan Canal for 
 several years when it scarcely earned expenses. I have 
 known these Companies when they paid six, eight, ten, 
 and twelve per cent., besides many extra dividends, 
 and have seen the stock of the Joint Companies sehing 
 as low as fifty-nine, and as high as one hundred and 
 eighty ; no matter what may happen, my confidence in 
 the permanency of these institutions and future pros- 
 perity is firmer to-day than at any other period of their 
 existence ; they are more valuable and better protected,* 
 and have within themselves a local and domestic busi- 
 ness that will fully sustain them. 
 
 It would be far better after laboring so long to pro- 
 tect and improve the works of the United Companies, 
 for the stockholders and State of Rew Jersey and her 
 people to reap the advantages. The possession of tw^o 
 of the most direct railroad routes, and the only canal 
 route between the two great cities of the United States, 
 the possession of large and valuable wharf and depot 
 property in Hoboken, Jersey City and Rew York, South 
 
14 
 
 Amboy, Camden and Philadelphia, and a perfect con- 
 nection around the City of Philadelphia, with the lines 
 for the south and west, together with a complete double 
 track all rail route between the two great cities. Another 
 railroad, via South Amboy, and interested in one via 
 Long Branch, and another via Pennington and Mill- 
 stone, besides various branch and associated Companies, 
 all pouring in business upon the works of the United 
 Companies, occupying apparently every valuable route 
 across the State, so that competition cannot enter so as 
 to very seriously impair the revenues. Shall we because 
 of a present and temporary want of great prosperity part 
 with these works? Sacrifice them ! Would not a wise 
 man say no? Let us look about and bring to our works 
 more business and change somewhat our arrangements. 
 
 In our connections we reach the coal mines of Penn- 
 sylvania, both by rail and canal. The increase of coal 
 consumption is large, and it is now a question of more 
 facilities for its transportation to the 'New York market. 
 East and Yorth. We have a canal not full, and rail- 
 roads with a small business ; let us immediately make 
 arrangements for increased tonnage of coal on our canal 
 and our railroads. 
 
 * South Amboy will be the best shipping-point soon on 
 tide for the coal of Pennsylvania. Let it be abandoned 
 for passengers and ordinary freight and occupied and 
 used for coal, iron and heavy transportation, for which 
 it is peculiarly well located, and a first-class shipping 
 point for the Yorth, East, and New York and foreign 
 countries. 
 
 We have an expensive and large number of steam- 
 boats and other vessels necessary to operate the route 
 for passengers and freight, via Amboy. These are 
 perishable, and the expenses to keep them up draws 
 
15 
 
 largely from our revenue. As soon as practicable, let 
 all the passenger and freight business be done via 
 Jersey City. 
 
 To secure proper facilities for the transportation on 
 the canal, the Companies have been obliged to maintain 
 a large steam-towing establishment on the Schuylkill, 
 Delaware and Raritan Rivers, to tow boats and barges 
 to and from the termini of the canal. Row outside 
 parties will do this service cheaper than the Companies 
 can, and it should be given up to them. Such an ar- 
 rangement is now in operation on the Delaware and 
 Schuylkill, and by making similar arrangements on the 
 Raritan, including the sale of our boats, the shops at 
 Hoboken can be dispensed with, and that valuable 
 property sold. 
 
 All railroad companies seem inclined to do much of 
 their own Avork in building steamboats, cars and loco- 
 motives, and thereby increase the number of their shops 
 and workmen. This is very apt to run into extremes, 
 and railroad companies become manufacturers of almost 
 everything they use, while the cost is much greater 
 than to purchase them in the market, and therefore 
 railroad companies should not extend or multiply their 
 shops, except for repairs. A large reduction in ex- 
 penses may be realized, by contracting with parties 
 outside for new work, and thus reduce the number of 
 shops and mechanics. 
 
 Canals and railroads should confine their operations 
 to their legitimate business, the collection of tolls on 
 canal and passenger fares and freights on railroads. 
 
 To place the works of the United Companies in the 
 best possible position, it may be necessary soon to do all 
 our local business on the direct line connecting at Mon- 
 mouth Junction to Jersey City, so that all the passen- 
 ger and freight business from the Camden and Amboy 
 
16 
 
 and the branch and associated companies in ^^’ew Jersey 
 from the South and the West, and between Philadel- 
 phia and 'New York, can be accomodated over this 
 route. 
 
 It will he also necessary to have Harsimus Cove 
 property improved and reached by rail for an outlet for 
 this business, and to realize on this investment, now 
 dead. Use the Belvidere Delaware, Camden and Amboy 
 and other roads in which the Companies are interested, 
 for the transportation of coal to South Amboy and 
 other points, the way traffic upon these roads to con- 
 nect with the main trunk road to afford rapid facilities 
 for passenger and freight by the all rail route to New 
 York and Philadelphia. This us what our present im- 
 provements are now capable of doing. We have 
 every connection needed, and the United Companies 
 in their arrangements would then be perfect, and 
 save the immense expense of the transfers of passengers 
 and freights at South Amboy, and by using floats at 
 Yew York and at Camden for transfers, which is now 
 successfully done, we place our works almost in the 
 same position as to facilities and quick transit of an 
 all rail route into the cities of Yew York and Phila- 
 delphia. 
 
 Improve Harsimus Cove either ourselves or in con- 
 nection with the Pennsylvania Railroad, or the Phila- 
 delphia, Wilmington and Baltimore and Baltimore and 
 Ohio Railroads, or by an independent store-house cor- 
 poration. Do away as fast as practicable with all 
 steamboats and floating-stock, except to cross the 
 Hudson and Delaware ; diminish our shops and reduce 
 the number of our mechanics, keeping only necessary 
 gangs for quick repairs ; they to devote their surplus 
 time only to new work, and arrange our accounts for 
 
17 
 
 close comparison from clay to day, and week to week, 
 and month to month, and I see no reason, no matter 
 what parallel roads may be introduced beyond our 
 present borders, wdiy the United Companies, with their 
 valuable works and possessions, will not become again 
 in prosperity the first railroad and canal institution in 
 the United States. 
 
 The public works of Xew Jersey should continue to 
 he neutral, and .administered impartially. They are the 
 great highway of the nation, connecting the lUorth and 
 South and the East and West with the capital of the 
 United States and the great metropolis ; and so long as 
 the management holds to that policy, the United Com- 
 panies will continue to he prosperous and he protected 
 hy the State that gave them birth, and has sustained 
 them ; and the United States will have no reason to in- 
 terfere with them, nor with the domestic affairs of the 
 State of lUew Jersey. 
 
 Our true interest and policy is, to take the traffic of 
 any and all canals and railroads that come to us — the 
 Schuylkill Canal, the Chesapeake and Delaware, the 
 Lehigh and Delaware Division, the Penusylvania Rail- 
 road, the Baltimore and Ohio, and the Philadelphia 
 Wilmington and Baltimore Railroads, the Philadel- 
 phia and Reading, the lUorth Pennsylvania, the Lehigh 
 Valley, the Lehigh and Susquehanna, the Delaware 
 Lackawanna and Western, and numerous others that 
 directly or indirectly connect with us. 
 
 The business from the South is far more important 
 to us than that from the West by the Pennsylvania 
 Railroad, as will be seen by the following statement 
 from our books for 1870, and which is the largest an- 
 nual receipt received from the Pennsylvania Railroad 
 since our connectioii with them. 
 
 W. II. G.— 2 
 
18 
 
 South. 
 
 Receipts from passengers from Philadel- 
 phia Wilmington and Baltimore, and 
 Baltimore and Ohio Railroads, (1870).. $694,989 29 
 • Receipts from freight from Philadelphia 
 Wilmington and Baltimore and Balti- 
 and Ohio Railroads, (1870) 336,826 57 
 
 . $1,031,815 86 
 
 West. 
 
 From passengers (West) via Pennsylvania 
 
 Railroad (1870) $244,576 00 
 
 From freight ( W est) via Penn- 
 
 sylvania Railroad (1870) 415,263 77 
 
 659,839 77 
 
 Difference in favor of South $371,976 09 
 
 The number of trains run to connect with the South 
 for passengers, three trains each way ; to connect 
 with the West three to the West and five /ro?n the 
 West. 
 
 The number of tons moved to and from the South, 
 72,057 ; received therefor, $336^26.57. From the 
 West, 398,148 tons ; receiving $ B36 ' , - 826r 5- 7 . t cS 
 244,291 tons of above freight from Pennsylvania 
 Railroad produced but sixty-six cents per ton through, 
 about seven mills per ton per mile. 
 
 This average is the allowance for motive power and 
 use of road ; the Pennsylvania Railroad Company fur- 
 nishes the freight cam, and takes the terminal expenses 
 for crossing the Hudson and at Hew York. 
 
 There are no discouragements surrounding the United 
 Companies, and they will continue to grow in pros- 
 perity, and their future will be as promising as the 
 ast, if properly managed. 
 
19 
 
 The mania for leasing, extensions, and acquiring con- 
 trol of thousands of miles of railroads under one cor- 
 poration, seems to be the fashion of the day ; but where 
 it is done, it is done to draw business to a main trunk, 
 which extensions may be impaired in value by new roads 
 running parallel with them, and which may finally de- 
 stroy the main trunk itself in regard to its profitableness. 
 
 Our road between Philadelphia and ^^ew York is a 
 main trunk, ourselves controlling the parallel routes. 
 We have already two, and soon will have three roads, 
 when the Millstone line is completed, running near and 
 parallel with our main trunk. 
 
 Is the Pennsylvania Railroad and its controlled roads 
 any more secure from rivals than we were? In the 
 third of a century we have three ; and in less than ten 
 years the Pennsylvania Railroad between Philadelphia 
 and Pittsburg may have a rival, and all of the Western 
 and Yorthern and Southern connections controlled by 
 them may be duplicated. How then will they be able 
 to meet their obligations ? 
 
 We need no extensions. We are mainly confined 
 within the limits of our own State, and occupy the 
 most enviable railroad and canal territory in the United 
 States, and should be cautious in giving or taking 
 leases. We are located between the two great cities of 
 the United States, and join them together by both 
 canal and railroads ; the growth of population of Yew 
 Jersey far exceeds that of any of the thirteen old 
 States, so that we can sustain our works by the growth 
 of our local business alone, should we lose the AUestern 
 and Southern connections; but of which there is no 
 danger. AVe are the direct and established highway, 
 and the business from the AYest and South must pass 
 over our works, unless Ave shut it out by establishing a 
 monoply for a greatly extended institution, which 
 
20 
 
 would use these public works to subserve its own ends, 
 and for the protection of its own extensions. The 
 stockholders must not he discouraged because their 
 ship has made two unprofitable voyages in the last fif- 
 teen years, viz., in 1867 and 1870 — in 1867, occasioned 
 by the general depression in business immediatelj^ after 
 the war, and in 1870, owing to the strikes in the coal 
 regions mainly, so that the first six months’ revenue of 
 the canal was largely reduced as compared with the 
 six months of 1869. 
 
 By looking over our Dividend List, we find that the 
 Joint Companies commenced paying dividends in 1833, 
 and for that year paid three per cent. ; in 1834 and ’35, 
 paid six per cent. ; in 1836, nine ; in 1837, ten ; in 1838, 
 eight ; in 1840, an extra in bonds of eight and a half 
 per cent., and regular of six per cent. ; in 1841, ’42 and 
 ’43, six per cent. ; in 1844 and ’45, eight per cent. ; in 
 1846, ten per cent. ; in 1847, eleven ; in 1848 and ’49, 
 twelve per cent. ; in 1850, an extra of twenty per cent, 
 in bonds, and regular, ten per cent; in 1851, extra in 
 cash, five, and regular, ten per cent. ; in 1852, ten, in 
 1853, twelve per cent, in bonds, and regular, eleven per 
 cent. ; in 1854 and ’55, twelve per cent. ; in 1856, six 
 per cent, reduction occasioned by damages paid grow- 
 ing out of the Burlington accident ; in 1857, an extra 
 of twenty per cent, in stock, and regular, seven per 
 cent. ; in 1858, eight per cent. ; in 1859 and 1860, twelve 
 per cent. ; in 1861, an extra in stock of twenty per cent., 
 and regular, eleven per cent. ; in 1862 and ’63, ten per 
 cent. ; in 1864, twenty-five extra dividend in stock, and 
 regular, ten ; in 1865 and ’66, ten per cent. ; and since 
 consolidation the United Companies in 1867, ’68, ’69 
 and 1870, have paid ten per cent. 
 
 The average per annum from 1833 to 1842, both in- 
 clusive, ten years, is seven and eighty-five-one-hundredths 
 
21 
 
 per cent. ; from 1843 to 1852, ten years, twelve 
 twenty-oiie-hnnclredtlis per cent. ; from 1853 to 1862, ten 
 years, fifteen and eighty-one-hnndredtlis per cent. ; 
 from 1863 to 1866, four years, sixteen and twenty- 
 five-hiTodredths per cent. ; from 1867 to 1870, four 
 years under consolidation organization, ten per cent.. 
 The average of thirty-eight years to January 1st, 1^71, 
 is twelve and twenty-one-hnndredths per cent. 
 
 Onr gross receipts for 1870, are made np as follows : 
 
 1870. 
 
 Through business between Philadelphia and N’ew York, 
 
 for Freight and Passengers $2,281,757 25 
 
 Intermediate or way 2,620,795 70 
 
 Miscellaneous 619,889 36 
 
 Delaware and Earitan Canal 888,352 86 
 
 Steam Towing 334,642 20 
 
 $6,745,437 37 
 
 $1,031,815 86 
 659,839 77 
 
 1,691,655 63 
 
 Total $8,437,093 00 
 
 Onr local business between Philadelphia and Yew 
 York, which might be affected by a rival line is twenty- 
 seven per cent, of the gross receipts. Our canal and 
 way business, which cannot be materially affected, is 
 fifty-three per cent. Our Southern business, which we 
 have no apprehension of losing, is twelve aud twenty- 
 one-liundredths, and our W estern business from the 
 Pennsylvania Railroad, which we may lose, is seven 
 and eighty-one-hundredths [)er cent, of gross receipts. 
 
 South 
 
 West. 
 
22 
 
 Our Western business via Pennsylvania Railroad, is 
 less valuable to^us tban either of the other sources of 
 revenue, and much less than the Southern. 
 
 Our Western business from Pennsylvania Railroad 
 thus far, both in passengers and freight, we being 
 obliged to grant extraordinary facilities, falls short, I 
 think, of paying expenses, its whole loss would not lessen 
 our net revenue. 
 
 Total amount of receipts from Pennsylvania Railroad 
 in 1870, is $659,839. Amount paid to the Pennsylvania 
 Railroad Company in 1870, for rent of Connecting 
 Railway, depot accommodations, tolls, and use of engine 
 (for transfers between Mantua and West Philadelphia 
 depot), and expense of maintenance of way of Connect- 
 ing Railway is $289,452.00. 
 
 The great depression in our net revenue since con- 
 solidation, is mainly owing to a greater increase of 
 capital than required by the increase of business. The 
 increase of gross receipts in 1870, over that of 1866, 
 is but $324,686.00, with a decrease of net receipts of 
 $274,295.89. 
 
 The Stockholders have become dissatisfied, and the 
 Board is petitioned by some of them to go into a closer 
 consolidation. 
 
 The agreement of consolidation entered into in 1867, 
 provided a unity of interest and harmonious working 
 of the several corporations, the one with the other, and 
 provided that the Directors of the said Companies, 
 parties hereto of the first and second parts, shall meet in 
 Joint Board, in the same manner as the Directors of the 
 Companies composing the parties hereto of the first part 
 have heretofore done, and jointly transact, manage and 
 conduct the business of the parties hereto both of the 
 first and second parts, at such times and in such man- 
 ner as may be determined by the said Joint Board. 
 
23 
 
 The Joint Companies alluded to were managed under 
 the Joint Board by the Presidents of the Railroad and 
 Canal — -the Railroad was operated by its President, and 
 the Canal by its President. The accounts were kept 
 separate and distinct by each, and dividends were paid 
 to the Stockholders of each upon the net earnings of 
 both. All matters of increase of capital and extra- 
 ordinary expenses were first submitted to the Joint 
 Board, by the President of the Canal, or the President 
 of the Railroad, and if their recommendations were 
 considered expedient b}^ the Joint Board, they were 
 adopted. The Presidents felt their direct accountability 
 to the Directors and the Stockholders, and were always 
 careful to incur no expense that an increase of revenue 
 would not warrant. 
 
 Some of the Stockholders are dissatisfied because they 
 fear a reduction of dividends, and recommend a closer 
 consolidation. The Joint Board, by their By-laws in 
 1867, have secured to them a close consolidation, and 
 any further consolidation could not give more power to 
 one head, and would not affect their interests more 
 favorably. A reduction of the number of Directors 
 would not amount to much financially, and the change 
 of the names of a few officers to that of agents, would 
 not lessen their pay essentially, for the same service 
 will be required, and, if under another name, would 
 command about the same salary. 
 
 It is, however, the Stockholders’ right and privilege 
 to make such organization as will best promote their 
 interests, and whatever they may resolve upon the 
 Directors should carry out. 
 
 The Stockholders have elected their Directors from 
 time to time, and committed to them the working, 
 organization, and care of their property, and they 
 should faithfully carry out the trust, and be careful not 
 
24 
 
 to venture upon untried experiments, but adhere to the 
 old adage, ‘‘ Let well enough alone new theories, not 
 already well proven in practice, should not be adopted. 
 
 Some of the Stockholders are under the impression 
 that the working arrangements of these Companies are 
 extravagant, because of so many officers being under 
 pay, and that the establishment could be better and 
 more cheaply administered by one Ih’esident, and by 
 throwing the whole into one single corporation. 
 
 By comparison with other roads, it will be found that 
 as regards the expense for officers and superintendents, 
 that no road of the same number of miles in this coun- 
 try is worked cheaper. They operate, without includ- 
 ing the West Jersey and Belvidere Delaware Railroads, 
 two hundred and fifty-one miles of railroad. We have 
 one General President, two Local Presidents, two Super- 
 intendents, two Treasurers, two Secretaries, three Assist- 
 ant Engineers, and two Counsel. 
 
 The Pennsylvania Railroad, considered a model road 
 in its arrangements, is three hundred and fifty-four 
 miles long ; it has one President, four Vice Presidents, a 
 Treasurer, Secretary, General Solicitor, General Coun- 
 sel, Chief Engineer of Construction, a General Superin- 
 tendent and three Assistants, and three Division Su- 
 perintendents (each having a Division Engineer), two 
 General Agents, and thirteen Solicitors. 
 
 The United Railroad Companies are worked by four- 
 teen (14) officials ; the Pennsylvania Railroad by thirty- 
 five (35). The first has two hundred and fifty-one 
 miles ; the latter, three hundred and fifty-four miles of 
 road. As compared with the Pennsylvania Railroad, 
 according to mileage, the allotment to the United Com- 
 panies would be twenty-five (25) officials, but operated 
 with fourteen (14), — a little over one-half the number. 
 
 The Canal has its President, Secretary and Superin- 
 
25 
 
 tenderit. The Pennsylvania Railroad has also canals 
 represented hy separate and distinct officers, so that the 
 eoniparison is fair upon the roads. 
 
 There is considerable doubt that a lease will be made 
 of the works of the United Companies to insure ten (101 
 per cent, dividends, even if the Pennsylvania Railroad 
 C'ompany should otter it, as there is a division of 
 o[)inion in the Joint Board upon the subject : a division 
 of opinion with the Stockholders, and a questioned legal 
 right to lease the Public Works of New Jersey to a 
 foreign Corporation, so that the Directors will have to 
 resort to some other expedient to satisfy the Stock- 
 holders, and will have to so regulate their expenditures 
 as to insure under their administration ten (10) per 
 cent, dividends. This, I have no doubt they can do by 
 cutting offi certain expenses and procuring additional 
 business now offering. 
 
 With regard to the State of ISTew Jersey, its State 
 Directors being here, it is not proper for me to discuss 
 [)arlicularly her rights and interests. I will only allude 
 to her great interest- in our works, and thus show the 
 great res[)onsihility devolving upon them in their action 
 upon the subject of lease. 
 
 Pesides a direct interest in the stock and bonds of* 
 the United C'ompanies she is interested in a revenue tax 
 c([ual to a capital at six per cent, of about $5,000,000, 
 and a stock and bond interest of another million, in all 
 about $0,000,000 dollars, equal to one-sixth of the 
 whole capital of the United Companies. She derives an 
 annual revenue from the canals and railroads of the 
 State of $500,000, more than three-fourths of which 
 IS i)aid hy the United Companies. She will there- 
 fore naturally feel great concern about the future 
 control of her public works, and no matter how the 
 Stockholders in general may decide as to what they 
 mav think best for their interests, the voice of the 
 W. H. G.— 3 
 
26 
 
 State will be potential, for she has created and fostered 
 these Public Works, and must be looked to, to sustain 
 them. 
 
 I object to lease these works, because the offer falls 
 far short of what these works will produce to the Stock- 
 holders. 
 
 ^Tow, in conclusion let me sa}^, that the Public Works 
 of our Companies originated with patriotic Jerseymen, 
 who always avowed that the interests of 'New Jersey, 
 and the welfare of her people, were the peculiar and 
 primary objects of their enterprize. How zealously 
 and how faithfully was their vigilance exerted to pro- 
 tect those interests ! With what energy did they con- 
 tend against speculators to induce New Jersey to 
 tarnish her honor, hy violating her compact with the 
 Companies! With what exultation did they always, 
 contemplate the rich legacy which they would transmit 
 in these works to future generations of Jerseymen ! 
 The protection of the interests of New Jersey, identi- 
 fied with those of the Companies, was the chief object 
 of their attention, to the last hours of their useful lives 
 
 There is one venerable survivor of those patriotic 
 brothers, who were the Fathers of our Companies. 
 There he sits, his head gray with years devoted to their 
 service — but his gray hairs will go with sorrow to the 
 grave, should you commit to foreign hands the interests 
 of these Companies, and intrude the stranger in his 
 place. 
 
3 0112 053 
 
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