OF THE gJIranj! anlr Susquehanna §L €«. TO THE STOCKHOLDERS AND MEMORIALISTS. ALBANY: J. MUNSELL, 78 STATE STREET. 1854. D’02 THE DIRECTORS OF THE JPrang an^itsi)ucjM!ia§t|L Ci i. TO THE STOCKHOLDERS AND MEMORIALISTS. ALBANY: J. MUNSELL, 78 STATE STREET. 1854. Digitized by the Internet Archive in 2017 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/directorstostockOOalba I TO THE STOCKHOLDERS OF THE ^Jfoatrg Httb Jjusqucjrarora |\oab Ccmpng. The President and Directors to whose care you have confided the great work you have undertaken, deem it their duty to submit to you the following statement of its present condi- tion. It is known to all of you that after repeated efforts to let the work, a contract was finally made on the 30th day of May, 1853, with Gouverneur Morris, George L. Schuyler, Sidney G. Miller, Josiah W. Baker, James S. T. Stranahan and Charles G. Case, for the complete construc- tion and equipment of the road. The nominal sum that was to be paid them, was considerably more than it had been at first supposed the road would cost, but not more than was justified by the great advance that had taken place in the price of iron, provisions and labor. Could we have paid cash entirely, we do not doubt that a more favorable contract could have fc been made, but that was manifestly impossible, and we therefore, after consulting with very many of the stockholders, closed the contract upon the best terms we could obtain. From every quarter we were urged by the subscribers to do so, and on every hand we received the strongest assurances of their approbation after it was done. All then appreciated the great advantage of securing contractors of undoubted experience and responsibility, and the fact that we had thus rendered the completion of the work certain without undertaking anything not entirely in the power of the Company to perform, was regarded by every 15 2 . 512.4 4 stockholder as the strongest evidence of the wisdom of the contract. All knew that the expenses of construction, loss of interest, depreciation of bonds, commissions for their negotiation, and the other numerous contingencies attending the completion of so great an enterprise, always amounted to much more than any one anticipated in the outset, and the prudent and sagacious regarded it as by no means the least advantage that we had secured, that a sum certain was fixed for which the whole was to be completed, and that the hazard of all these contingencies, and the risk arising from possible changes in the money market, had all been transferred to contractors, whose ability to protect us against them was undoubted. The correctness of those opinions have since been fully justified. The contractors have proceeded slowly with the work for about one year. During that lime everything that enters into its cost has steadily advanced in price. The money market has been so seriously affected that all enterprises of the kind in weak hands have been suspended or abandoned, and the negotiation of rail road securities at any but the most ruinous rates has become, for the present, entirely hopeless. We deeply regret this change, yet we are certain that you will find in it the most ample justification of the course we have pur- sued. Had we undertaken to negotiate our own bonds, we might have failed in the attempt. Had we contracted with weak or irresponsible parties, they must have been ruined, and all hope of building the road at least for the present, would have been lost. Instead of being exposed to either of these contingencies, we have contractors of high character, ample resources and great experience — able to hold the securities they receive until the better times we now believe not far off, shall enable them to dispose of them to advantage — and ready and willing, we doubt not, to fulfill to the end, the contract they have made. We have undertaken to pay them no more money than you have pledged yourselves to furnish us; and if you — each of you — will promptly do your part, it will be but a short 5 time before this object of your hopes will be fully realized, and well-filled and heavily-loaded trains be running through the Valley of the Susquehannah. Under such circumstances we can look backward with much satisfaction to what has been done, and forward with the highest hopes to the speedy and certain realization of your and our most earnest wishes. It is not to be supposed that all this has been done without encountering the difficulties that usually attend enterprises of such magnitude and importance. Misrepre- sentation and calumny we expected, and we have been in no degree disappointed. We have relied upon your good sense to correct the one and brand the other. Timid souls have fainted by the way. We regret their weakness. Dishonest ones have tried to avoid the fulfillment of sacred engagements, upon the faith of which we had acted in contracting the work. The laws have furnished us the means to at once defeat and punish their dishonesty. Rival interests have exerted themselves to stay our progress, and they have found among our subscribers a few that were willing to be their tools, even for such a purpose. These are the common incidents of rail road construction, and neither you nor we should be disheartened or discouraged by them. So long as the great body of the stockholders are firm and faithful, we shall not be weakened by the loss of those who were with us, but not of us. Most of the obstacles thus encountered, have been too trivial to meri t particular notice. There are two exceptions that we desire to place fairly before you. The first was the refusal of a number of our subscribers in Morris and Laurens to pay their subscriptions. And the other, the presentation to your Directors of a memorial from several subscribers in Albany asking them to discontinue the work and abandon the contract. We need not advert to the origin and early history of the attempted repudiation by a few in Morris and Laurens. It has had an importance given to it by exaggerated rumors that it never deserved and has now been put effectually at 6 rest by the decision of our courts. It has furnished an opportunity to have every movement from the organization to the present day fully examined, and we can not doubt has satisfied the intelligent men that to our surprise and regret 'were engaged in it, that ihey were misled by exaggerated or false reports, and that in the course pursued they have been most unjust to the company and themselves. We hope and believe that they will henceforth be found on the side of law and order, and that all that has been unpleasant in the matter will soon be entirely forgotten. They owe it to themselves thus to show that their opposition has not arisen from a desire to shirk out of an honorable obligation, and we believe that they will not fail to do so. The report of Judge Willard, the distinguished jurist to whom the Morris and Laurens litigations were referred, is annexed hereto, and we refer to it for our complete vindication, with the highest satisfaction. The Albany memorial has also had a consequence attached to it, that it did not merit. Coming from less than one fiftieth part in number, and less than five per cent in amount of the stockholders of the Company, and showing by its statements that they were greatly in error as to the supposed facts upon which they were acting, it has left us in no doubt as to the reply we should make to the request that we would abandon the contract and suspend the work Being desirous that every stockholder should understand the reasons for our decision, we have delayed a formal an- swer to the memorial until now. Why should we abandon the work ? We made the contract in good faith, and if each subscriber will do his part, we can fulfill every stipulation it contains. The memorial admits the value of the road to Albany, and every stockholder upon the line feels its now absolute necessity so keenly, that he can hardly submit with patience to the necessary delay that attends its construction. The general agricultural and business prosperity renders it easy for our subscribers to pay as fast as the road progresses, 7 and the small amounts in which the stock is generally taken, will enable us to accelerate the work without making the calls burdensome to any. Responsible subscribers have promised us all that we have undertaken to pay, and responsible contractors have agreed therefor to do all that we desire to have done. The suspension of many rail road projects is gradually relieving the labor and money markets, and thus the contractors are to be proportionally benefited. We must go to the memorial itself for reasons for the sus- pension of the work, for elsewhere they are not to be found. The first allegation is, that the road will cost more than was at first expected — that opinions were at an early day expressed by some of the Directors that it could be built for half the present contract price, and assurances given that it would pay ten per cent per annum. But can this objection now be urged with any degree of propriety ? One year has now elapsed since the contract was made, and both parties have in good faith been carrying it out. Had it been intended to raise it, the commonest principle of justice would have required that it should be done at once, and not after twelve months’ acquiescence in the terms of the contract. Did those who now put it forward ever suppose, themselves , that the road would not cost about as much as the average of first class roads ? Are they not well aware that the Albany and Schenectady, Hudson River, Western Massachusetts, New York and Erie, and other similar roads have all cost more per mile than the exaggerated estimate of the memorial now makes the cost of ours ? If they supposed it would pay ten per cent, they must now admit that it will pay five per cent; and even at that rate, what one of the stockholders would wish to incur the great loss that must follow a suspension of the work, and at the same time give up the great public and private benefits amounting to much more than the other five per cent, that will unavoidably follow its construction ? The completion of the work being now secure, it will at this day require some other reason to justify its suspension. 8 But the memorialists expected that “ the board would ‘ abstain from putting the road under contract until such “ an amount of subscriptions had been obtained as should “ ensure its completion upon the most favorable terms, pro- “ tect them against depreciation of bonds, enormous allow - “ ances to contractors, and the dangerous provisions of the “ General Rail Road Act of 1850, sections 10 and 12, “ throwing upon stockholders unlimited personal liability for certain acts of Directors.” The inference from this statement is unavoidable, that they intend to charge the Di- rectors with having in each of these particulars disappointed their just expectations. We have already shown you that we have contracted the road upon terms that “ ensure its completion,” and we hazard nothing in adding, that the terms “ are greatly more favorable” than any that could now be obtained. The “ depreciation of bonds” ^ all borne by the contiactors , and the “ enormous allowances” thus insinuated to have been made to them, must vanish before the statements sub- sequently made in the memorial, that the contractors are ready to abandon and cancel the contract. If it is so advantageous to them and so disastrous to the company, and if we have neglected to protect the memorialists against the dangerous personal liability referred to, is it to be believed that shrewd and experienced contractors, would be willing to abandon itfe “enormous allowances” and all, except upon the condition that they should be paid liberally for the losses and damages they would sustain? Is not the alleged fact of their willingness to give it up, a perfect answer to every charge of extravagance or improvidence in making it? We have supposed that contracts made secure by “ unlimited personal liability” and that involved “ enormous allowances and “ gigantic expenditures,” were not of the class that contractors would announce their readiness to abandon, before any formal application for that purpose had been made to them. But is it true that we have neglected to protect you 9 against personal liability? By having contractors of undoubted wealth, we secured you against responsibility to their employees. By undertaking to pay only such sum as you had promised us, we restricted your liability to such an amount as you had yourselves voluntarily assumed. But there is another feature in the use that is sought to be made of this dreaded personal liability that we must not overlook. At the time they placed their names to the memorial, several of the signers well knew that the legis- lature of the state then in session in their own city, had so amended the general rail road law, as to do away entirely the danger they pretended to fear! Why was it thus used to create unfounded apprehensions in the minds of those that were ignorant of the change? Could it have been for any fair or honorable purpose? In various forms and modified language, the same charges are repeated again and again in the memorial: The high price — the loss of the stock — the hard times — the depre- ciation of bonds, and the personal liability , these form the basis upon which their request, that we shall abandon the work, is founded. We have already shown you how entirely we are protected against these alleged difficulties by the contract we have made, and how wholly inappli- cable they are to the present condition of the company. Had the contractors desired to present their grounds of dissatisfaction with the contract, they could hardly have employed other terms than those used by the memorialists. Surely they can not be applicable to both sides of the same contract ! But we are authorized to say, that the memorial was not read by but a small proportion of those who signed it, and that it does not express the wishes or opinions of many whose names are appended to it. Some were told that the directors would undoubtedly be glad of such an excuse to abandon the work. Others, that the road was hopelessly involved, and the sooner it was stopped the better. Some have said to us that they would not have put their names 2 10 to the paper but for those statements, and that if we can go on with the work, they would much rather lose all they have subscribed , then not have the road built . The memo- rial itself admits that “ the road will be of great value in many points of view ; that it will open a considerable extent of country to our market, and command a respect- able local traffic; that it is highly desirable to stockholders living on the line , and that it had its origin in “ a desire to build up and benefit the trade of Albany ! ” In such a connec- tion, we are thankful for even these admissions. A road that is of so great value in many points of view: that “ will open a considerable extent of country to the Albany market;” that, “ will command a respectable local traffic;” that, “is highly desirable to stockholders on the line;” that originated in the noblest of motives, that will give Albany two grand central roads, and connect it as directly with the southern line of counties, northern Pennsylvania, the coal fields, the iron beds, the timber regions, and the great basins of the Ohio and Mississippi, as it is now wuth Buffalo, is not one to be abandoned, without the weightiest of reasons, and a necessity so irresistible, that human skill, energy and perseverance are inadequate to overcome it. No such reasons — no such necessity now exists! But there is another consideration that is in our judg- ments perfectly conclusive. If we go on, we shall have the road , if we stop it now, it will be many years before any one can be found, bold enough again to undertake it. After the most careful examination, we are fully satisfied that to suspend the work where it now is, would cost the stock- holders nearly if not quite the full amount of their subscrip- tions. The damages to be paid and the litigation in which we would necessarily be involved, would render it the labor of years to wind it up. In every view, whether it be of difficulty, responsibility, or expense, we believe it safer and better to fulfill our contract. In justice to Albany itself we must go on. As the cap- ital of the state, it is supported and sustained by the state 11 feeling and state pride of all our citizens. The southern and western counties feel most deeply the inconvenience that now attend their communication with it; the southern counties particularly have looked to our road as obviating this difficulty. And shall it be understood that a few capi- talists at Albany have disappointed their hopes, and re- fused the advantages brought to their door 1 This then is our answer to the Albany memorial. We can not abandon the contract and suspend the work. Every dictate of policy, prudence or honor forbid it. The reasons urged are in themselves insufficient — the alleged fears are groundless — the supposed facts do not exist. No such change has occurred since the contract was made, as would enable us to abandon it without being justly chargeable with a vacillation and weakness that would prove us unfit for the place we occupy. No such proportion of the stockholders have united in the memorial as to justify us in the belief that it is the desire of more than a very small minority, that the work should be abandoned. We can not turn back without the most flagrant desertion of those that from the commencement have been the warmest friends of the work, that have never faltered while others have been faithless, that through evil report and good re- port have alike upheld our hands, and cheered and en- couraged us on our way. We can not turn back without greater loss, all things being considered, than we shall sustain by going forward, or without inflicting a calamity upon Albany and the country along the line, from which neither would recover for years. We can not stop without losing the road , and that is a loss to which, while we are sustained as we now are, by nine-tenths of the true and faithful stockholders, we will never submit . We have lost no portion of our faith in the feasibility of the road, or its value as an investment, but on the contrary as we have become better acquainted with the country through which it is to pass, that faith has been greatly increased. We have thus submitted to the stockholders a frank and 12 full statement of the present condition of this great work. We expect within the next month that the force upon the line will be greatly increased, and lhat it will henceforth be prosecuted much more rapidly than it has been hitherto. But it must not be forgotlen, that the stockholders have also their duty to perform. We have made the contract upon the faith they have pledged us, that they would pay their subscriptions promptly. Let them encourage us by showing their interest in, and their anxiety for the com- pletion of the road, by disregarding every foolish slander or false report, and by a confidence as full and frank as that we have now placed in them, and they shall see the consummation of their hopes in the completion of the Road, in less time than has now elapsed since their organi- zation was perfected. Albany, May 23d, 1854. E. P. PRENTICE, EDWARD TOMPKINS, ANDREW WHITE, Com . of the Board.