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cents per tie 2,700 00

There also about 500 bars of iron broken and mashed
down, which will require taking up, repairing and
replacing — cost of repairing iron say $5 per bar, 2,500 Ou

All the bridges save one need a mud sill between

the iron and floor beams — this will cost about- • • 1,000 00

Total cost of repairs on Company's portion of the

road $23,2u0 00

Question 6. — State the number and value of locomotives,
passenger, baggage and freight cars, belonging to the road; the
condition and amount required for repairs of several, during the
current year.

Answer 6. — There is at present 25 locomotives on the road, two
of them are entirely worn out, six others nearly worn out; in
fact the repairs will cost as much as they will be worth when re-
paired.



360

They are worth for scrap metal $600 each, 8 in all- • §4,800 00

Two plane engines worth $7,500 each 15,000 00

Three of the others are worth about $1,800 each • ■ 5,400 00

Two others worth $4,000 each 8,000 00

The remaining 5 are worth $5,500 each 27,500 00

Total value of locomotives $60,700 00

It is impossible to state accurately what repairs will

be necessary. It usually costs about $2,000 per

month for ordinary repairs for labor, and from

$700 to $S0O per month for materials.

Tyres wanted the present season for G engines, $450

each -2,700 00

The Company own 10 passenger cars, they all need

new wheels, present value $91)0 each 9.000 00

Seven baggage cars, 5 of these need new wheels and

axels, average value $575 each 4,0*25 00

They also have about one hundred and twenty-eight
house freight, about thirty of them worn out, bal

ance ninety eight average value $'285 each 27,930 00

One hundred and eight hog, platform and stone cars,
of these, thirty-five are worn out, balance seventy-
three average value $225 each 16,425 00

Sixteen lumber cars, of these 4 are worn out, bal-
ance twelve are worth $200 ecch 2,400 00

Twenty-two gravel cars (4 wheels) $65 each 1,430 00

Eight (4 wheel) ditching cars, platform, $60 each • • 480 00

Eleven (4 wheel) hand-lever cars, $40 each 440 00

Three light (4 wheel) hand ditching cars, $35 each- • 105 00

Sixty-nine old cars, worth for scrap $50 each 3,450 00

Total value of cars - $66,685 00

Ordinary repairs to cars about $1,300 per month,

for labor and material $350 per month.
There will be needed the current year 200 car

wheels, to replace those worn out, at $15 50 each, 3,100 00

Total value of rolling stock:

Locomotives 60,700 00

Cars 66,685 00

Total $I27,3S5 00



Question 7. — State the amount of current expenses for operating
the road, other than extraoidinary expenses, repairs, and interest,
for the current year, the percentage thereof upon the gross earn-
ings ot the road, and orobable amount of such gross earnings for
1855?



3(31

Answer 7. — The current expenses vvili be about $11,500 per

month. 12 months $138,01,0 00

Probable gross receipts 245,000 00

Expenses 56 4-5 of gross earnings.

This calculation is made after having expended $145,517 for
extraordinary repairs, and if these repairs are deferred till late in
the season, the expenses will oe greater. And next year, I think,
after the above expenditures have been made, the road can be
worked, it being only a freight road, for 06 per cent, of the gross
earnings.

In addition to the above, it is expected that the sixty-nine cars
will be replaced, that are worn out, at an average cost of $500
each, total, $34,500.

Question 8. — State the additional expense, if any, of operating
the State's portion of the road, over the remainder of the line?

Answer 8. — The State's portion has the heaviest grades and
strongest curvature, I might say the only material curvature is on
this portion of the road. We are compelled in the fall — during
our heaviest business — to keep an assisting engine on Vernon
grade, without which the trains must be reduced 15 per cent.
With such assisting engine, I suppose the increase cost of working
this portion of the road, except the inclined, is about 8 per cent, of
gross expenses of transportation.

Question 9. — State the nature and value of any other property
received by Company >rom the State, and now under its control 1

Answer 9. — I know of no other property received by the Com-
pany, now under its control, except the 28 miles of road, grade,
right of way, depot grounds, and Iron, as enumerated in the sev-
eral former questions, except two old locomotives, these have long
since been replaced.

Question 10. — State the annual expenses of keeping in repair
and operating the inclined plane at Madison?

Answer 10. — After the plane has been relaid with heavy iron,
new timber entire, and a part of segment renewed, at the estimated
cost ot $8,500, the plane can be kept in repair and operated (not

including accidents if any should occur,) for $9,500 00

When the gross receipts of the whole road does not

exceed 250,000 00

Question 11. — State who are the proorietors of Cathcart's pat-
ent for operating the plane. Whether the Company has, or has
not, an exclusive right thereto, and amount of original purchase of
the same?



362

Answer 11. — The Company own the exc'usive right perpetual,
for the use of Cathcart's patent for operating inclined plane. They
paid Cathcart $6,000, made several trips to Washington, defended
several suits in United States Court, and also in Court in this
State, compromised with Hoyt, of Jefferson county, for $1,000.
I suppose the whole cost of patent has been about- • $8,000 00
In addition to this the Company also expended in
preparing plane with cast iron rack or segment
whole length of the plane, timber for the same
to rest in, preparing two locomotives with extra

cylinders, engines and fixtures, about 75,000 00

For patent right ^,000 00

Total cost of patent and fixtures 83,000 00



Question 12. — State whether you are a stockholder in said Com-
pany?

Answer 12. — 1 am not.

Recapitulation of all extraordinary expenditures necessary to
make the road and rolling stock in lair order for doing a business,
gross receipts of $250,000 per annum :

For repoirs of road, renewal of old cars, repairs ot

engines, &c. $192,267 00

J. O. D. LILLY, Suft % M. $ J. R. R.



STATE OF INDIANA, Marion County :

Personally appeared before me, the undersigned Judge of the
9th judicial circuit court, J. O. D. Lilly, who makes oath and
says that the foregoing statement is true, to the best of his knowl-
edge and belief.

J. O. D. LI1.LY, SupU

Subscribed and sworn to before me, this, 10th day of April, 1S55.

THOS. S, STANFIELD,



11 E P O R T

OF THE SECRETARY OF THE MADISON AND INDIAN-
APOLIS RAILROAD COMPANY.



Office of the Mad. Ind. & Pfru R. R. Co., I
Madiso.n, April 3, 1855. {

Dr. E. W. H. Ei.lis, President :

The following are answers to the questions submitted to me in
your favor under date of March 22. 1855:

Question I. — State the aggregate amount of the capital stock
of the company.

Answer. — The books of this company show the capital stock to
consist of 32,956 shares, of $50 each, amounting to the sum of
$1,G47,S00.

Questio7i 2. — State the date of the first mortgage, its amount,
rate of interest, amount of interest now in default and unpaid, and
the semi-annual dates at which the same is payable; also, the pro-
perty covered by said first mortgage, and the period for which it
runs.

Answer. — The first mortgage is dated April 1, 1851; its amount
is six hundred thousand dollars; the rate of interest is seven per
cent, per annum; amount of interest now in default is sixteen
thousand dollars; the semi-annual dates at which the interest is
payable is on the first day of May and November in each year.
The mortgage covers all the following and in future to be acquired
property, real and personal, that is to say, their road completed,
including right of way, and lands occupied thereby, together with
the superstructure and tracks thereon, and all rails and other ma-
terials used thereon, with all bridges, viaducts, culverts, fences,
depot grounds and buildings thereon, wharves and fixtures thereto,
engines, tenders, and cars, now owned and that may be purchased



364

or built by the means acquired from the sale of the bonds therein
provided for, and all tools, materials, and machinery, and all other
personal property, right thereto, or interest therein, together with
all the franchises, rights, and privileges of the said company, of,
into, and concerning said road, and the property aforesaid, and all
the tolls, income, issues, and profits to be had from the same. The
period for which it. runs is ten years from its date.

Question 3. — State the amount of all other indebtedness, funded
and unfunded, and the manner in which the same is secured.

Answer. —The second mortgage was given for the interest of the
State of Indiana in the road. It is dated 12th of August, 1853,
lor the sum of six hundred thousand dollars ©f the two and one-
half per cent, stocks of the said State, and, if paid in stocks, shall
be paid in four equal annual installments, becoming due and pay-
able upon each of the first days of January, 1S54, 1855, 1S5G, and
1857; but the company may pay each of said installments by pay-
ing to the Treasurer of State the sum of seventy-five thousand
dollars in money, with interest thereon from the 13th of January,
1853, at six per cent, per annum. This mortgage is a lien on the
voad from the city of Madison to the city of Indianapolis, and all
the property thereof, including the right of way and land occupied
thereby, together with the superstructure and tracks thereon, and
all bridges, viaducts, culverts, fences, depot grounds, and buildings
thereon, and all engines and cars, and other appurtenances belong-
ing thereto, and all franchises, rights, and privileges of and unto
the same.

The third mortgage is for what is termed income bonds, cover-
ing the entire net income of the road, but subject to the priority
of the mortgage bonds heretofore issued by said company. The
amount said to be issued is six hundred bonds of one thousand dol-
lars each, running twenty years from its date, at seven per cent,
interest per annum, payable semi-annually in the city of New
York, on the first days of October and April in each year, and
dated the first day of October, 1853.

Of these bonds an account has been rendered by Messrs. Wins-
low, Lanier & Co., of New York, as follows:

Sold 265

Delivered as collateral 105

Making 370

Leaving in their hands 230 bonds. Of the 265 bonds sold, 4 have
been taken up by this company.

By a contract with the city of Madison, this company is bound
to pay six per cent, interest on fifty thousand dollars of bonds
issued by said city, as stock in the Columbus and Shelby Railroad,
for ten "years; of which interest the sum of two thousand five



365

hundred dollars have been paid, leaving a balance to be paid of
twenty-seven thousand five hundred dollars. The contract is dated
March. 1853, and the interest payable semi-annually in the city of
New York on the first days of May and November in each
year.

This company is bound by a contract with the Martinsville and
Franklin Railroad Company, to pay seven per cent, interest per
annum, on thirty thousand dollars of bonds issued by the said
Martinsville and Franklin Railroad Company, for the term of five
years. The interest is payable, semi-annually, in the city of New
York, on the first days of May and November in each year. I
am not aware that any interest has been paid.

Of the unfunded liabilities taken from bill book and other evi-
dences, the sum of $iS2,2Se 25. This amount does not include
notes upon which judgment has been obtained, or upon which suit
has been commenced. Of these notes there appears to be the sum
of forty-seven thousand and seventy-five dollars, on which there
are individual endorsements. The accumulated and accruing in-
terest on the notes would not fall much short of six thousand
dollars.

The unsettled claims, as far as I can ascertain and estimate
them, are as follows:

Salaries, wages, and other incidental expenses for re-
pairs and running road $2 r ,000 00

Losses unpaid, incurred while running steamboats- . • • 11,405 00

Taxes claimed by Treasurer of Jefferson county, bal-
ance of year 1853 * 3^55 Q1

Taxes claimed by Treasurer of Jefferson county, bal-
ance of year 1S54 5 5 439 66

Total $40,000 57

Question 4. — State the amount of indebtedness, now in suit or
in judgments against the company.

^Answer.— From the certified copies of the clerks of Jefferson,
Bartholomew, Shelby, and Marion counties, there are judgments,'
and suits commenced, amounting to the sum of (with cost partlv
included) $55,073 21. Costs and interest would be about $1,000.

Question 5. — State the monthly earnings of the road during the
years 1852, 1853, 1854, and during the months of January and
February, 1855. J

Answer.— Below you have a tabular statement of the same ; yet
it must be recollected that during the year 1854 the statement ex-
hibits the whole line of the road from Madison to Peru, for the
months of January, FerJruary, March, April, May, June, July, and
1 D. J.— 25i.



366

August. You have in your possession the amount which was esti-
mated as the earnings of the Peru road during the said months of
1854.



January

February

March

April

May

June

July

August

September

October

November

December

Live Hoga

Mails and Express



1852



Total $476,892 83 i $385,705 14



824
37
40
43
29
38
25
28
48,
39.
35
33.
39
13.



,118 10

,089 76
,426 58
,451 92
,£49 15
,371 96
,51^ 56
169 74
C65 19
791 86
483 57
608 05
540 12
455 27



1853.



$35
35
47
29
25
26
18
23
35
27.
21,
5:3,
22.
11.



441 15
,778 85
.357 06
,539 99
,105 59
845 19
773 84
934 75
434 48
813 42
959 08
760 95
080 45
860 34



$19,089 05
21,858 38
34,205 82
24,071 29
27.146 98
33,412 66
18,117 90
21,892 50
25,439 24
23,592 42
23,439 98
20 355 86
29 652 97
10,113 79



1855.



$18,489 14
14,272 32



£332,388 84 I $32,761 46



Less this amount estimated for earnings of Peru Road, during eight
mouths of 1854 $54,831 10



$277,557 74



To which add transportation and service for other roads, &-c. for the year 1852
To which add transportation aud labor for other roads, for the year 1853



These two items are taken from the published repc
years 1852 and 1853.



$39,540 12
36,519 55

for the



Question 6. — State the amount of taxes assessed against the
company for the years aforesaid.

Answer. — From a transcript from the Auditor's books of the
county of Jefferson, there appears to be assessed, for the year
1852, $5,205 90; for the year 1853, $11,158 95 ; and for the year
1854, $5,439 66. I am not aware that any levy has been made
for the year 1855.

Very respectfully,

JOHN A. REYNOLDS, Secretary.

State of Indiana, Jefferson County, Set.:

John A. Reynolds swears that he is the Secretary of the Madi-
son and Indianapolis Railroad Company, and that the foregoing
answers to the above interrogatories are true, to the best of his
knowledge and belief.

JOHN A. REYNOLDS.



Sworn and subscribed to this seventh day of April, A. D. 1855.
In witness whereof I have hereunto set my name and seal no-
tarial, at the city of Madison, the day and year last aforesaid.

JAMES C. THORN, Notary Public.



REPORT

OF THE COMMISSIONERS APPOINTED TO INVESTIGATE
| THE AFFAIRS OF THE MADISON AND INDIANAPOLIS
J RAILROAD COMPANY.



To the General Assembly of the Slate of Indiana :

The undersigned Commissioners appointed by an act of your hon-
orable body, entitled " an act providing for an investigation of
the affairs of the Madison and Indianapolis Railroad Company, au-
thorizing a compromise therewith if deemed of advantage to the
State, and providing for the company's floating and unfunded debt,
and of certain debts of the Columbus and Shelby Radroad Compa-
ny, and empowering said Madison and Indianapolis Railroad
Company to receive, hold, and transfer stock in the Columbus and
Shelby Railroad Company," Approved March I, 1855; would
respectfully report that on the 22d day of March, 1855, they met
at Indianapolis and qualified themselves to discharge ihe duties
conferred upon them by said act, and immediately proceeded to the
investigation of the affairs of said company. After making a per-
sonal inspection of ihe company's road, a correspondence took
place between them and the Company, which is herewith reported
in the accompanying documents, marked Nos. 1, 2 and 3. In order
to fully understand the affairs of this company and the lecral or
equitable claims of the State upon it, it is necessarv to recur to its
early history. Twenty-eight miles of the South end of the road
was constructed by the State and put into operation, and operated
by the State about four years. The profits from the earnings for
the year 1842, (the last year the State operated the road), amount-
ed to the sum of $1,152. The State then granted the road to the
present company at annual rent of $1,152, for the term of three
years, and subsequently at the same rent granted it again to the
company until lb53, provided the company should complete the
road to Edinburgh before July 1846, and to Indianapolis within two



368

years thereafter. On the first day of April, 1851, theroad then be-
ing completed to Indianapolis, the company mortgaged the whole
road from Madison to Indianapolis, with its side tracks, depots,
water .stations, and its entire equipment, to secure the payment of
its bonds to the amount of six hundred thousand dollars, payable
in New York on the first day of May, 1861, and the interest there-
on semi-annually in New York at the rate of seven per centum
per annum. -

This debt is the first lien upon the road and is all unpaid togeth-
er with an arrear of $25,310, for interest due the first of Novem-
ber, 1854, and the interest accruing since that time, which to the
first of May will be $21,000 — making this debt on the first of May,
1855, $646,310.

On the Pith day of August, 1853, the company purchased
the State's interest in the road for which it agreed to pay either
$600,000 in the two and a half per cent, bonds of the State,
or three hundred thousand dollars in cash, and to secure the pay-
ment of the purchase money, the company then executed to the
State its mortgage upon the whole road and its entire equip-
ment.

On the first day of October, 1S53, the company executed a third
mortgage to secure the payment of $600,000 of additional bonds,
payable in New York in twenty years with interest, at the rate
of seven percent, per annum, payable semi-annually in the city of
New York.

Under this mortgage, bonds to the amount of $261,000 have
been sold by the company and are now outstanding.

Besides the foregoing liens upon the road, there is another large
indebtedness, which may be stated as fellows :

Floating assertained debt $182,286 00

Unsettled claims- 40,000 00

Judgments and claims in suit 55,000 00

Total $277,286 00

This is a domestic debt, owing monthly to the citizens of this
State, and arising from the operating repairs of this road.

The whole amount of the indebtedness of the company on the
first of May, 1855, would stand about thus:

First mortgage April 1, 1851 $600,000

Interest in arrears 46,310

Second mortgage Aug. 12, 1853 300,000

Third mortgage Oct. 1, 1853 ■ 261,000

Domestic debt 277,286

Capital stock issued to stockholders 1,647,800

$3,132,396



369

The State's claim is entitled to priority in payment to any
of this indebtedness except the $646,310 on the first mortgage ;
but we consider that it would not be wise or just for the State to
assert her claim of priority so as to totally defeat her own citizens
in collecting this domestic debt of $277,286. If it would not, then
the debts of the company having priority to the State would be —

First mortgage $646,310

Domestic debt 277,286

$923,596

Making the whole amount that must be paid before the State
could realize anything from the sale of the road, nine hundred and
twenty-three thousand fine hundred and ninety-six dollars.

The failure of the company to pay according to the terms of the
second mortgage, gave the State the right to take possession of the
road and its equipments, and to operate^and receive its earnings,

but to do so she must pay the domestic debt $277,286

Interest in arrear on the first mortgage 46,310

The accruing interest on that debt and exchange per

annum 42,420

And also make the repairs mentioned in the Superin-
tendents report, costing 192,267

Making an outlay, to start with, of about $488,2^3

The probability is that by taking the road and making these ad-
vances, the road would on the 1st of May, 1856, be indebted to the
State besides its mortgage debt to the amount above stated.

Now how could this sum be repaid by the company? The gross
earnings of the road are estimated at $250,000 per annum. If it
becomes merely a freight road, (and its geographical location is
such that it cannot in any reasonable time do much passenger
business), it will cost sixty-six per cent, of its earnings to operate
it and make ordinary repairs, but put the cost of operating it at the
lowest point within the range of the most rigid economy, say fifty-
five per cent., — that would be $137,500, leaving for net profit
$112,500 per annum.

On the 1st of May, 1857, the road would be indebted

to the State for the above mentioned advances- • $488,283

Interest on that sum 29,297

Interest and exchange on the same on first mortgage 42,420

Total $560,000

Deduct net earnings to May I, '57 112.500

Balance due May 1, 1857 $447,500



370

Interest on this amount to May 1, 1858 26,075

Interest and exchange on first mortgage to May 1, '58 42,420

515,995
Deduct net earnings to May I, '58 112,500

403,495

Interest on this balance to May 1, 1859 24,209

Interest and exchange on first mortgage to May 1, '59 42,420

470,124

Deduct net earnings for year ending May 1, 1859- • 112,500

357,624

Interest on this balance to May 1, 1860 21,458

Interest and exchange on first mortgage to May 1, '60 42,420

421,502
Deduct net earnings for year ending May 1, I860- • 112,500

309,002

Interest to May 1, 1861 18,540

Interest and exchange on first mortgage, due May 1,

1861 ". .. 42 420

369,962
Deduct net earnings of this year 1 12,500



257,462

Thus it will be seen that during the time the first mortgage debt
has to run, the net earnings will be insufficient by more than $250,-
000 to reimburse the State the advances she would be compelled
to make. If the cost of operating the road should amount to sixty-
six per cent, of the earnings as estimated by the Superintendent,
the interest on the money advanced, and the interest on the first
mortgage would come within $15,000 or $20,000 of equalizing
the net earnings of the road. It therefore seemed very clear to us
that it would be great folly for the State to enter into the posses-
sion of the road and make advances in the hope of saving its debt
in that way.

The pecuniary condition of this company is a hopeless insolvency,
and to some extent has been rendered so by the legislative policy
of the State, in granting charters to other railroad companies, who
have made more fortunate locations in securing the trade and
travel of the country.

To maintain a successful competition with these rival roads, the
company has expended large amounts of money — more than the
entire road is now worth, which expenditure has become almost
an entire loss. Most of this money has been lost in an unsuccess-



371

ful effort to avoid the inclined plane at Madison, and the building
of branch roads. And after all these prodigal expenditures were
made and business connections formed with other companies, it
was still doomed to foil from its position of a great leading thor-
oughfare to a mere local road. The expense and hazard in trans-
porting over the inclined plane at Madison, and the increased dis-
tance by this route over others to the principal cities on the river,
will forever prevent it from doing any considerable business, other
than that in its own neighborhood.

The present prospects of this road indicate the entire loss of its
capital stock, one million six hundred and forty-seven thousand
and eight hundred dollars, and also the $261,000 of bonds issued
under the third mortgage. And indeed, it seems quite evident from



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