United States. Inland Waterways Commission.

Preliminary report of the Inland Waterways Commission. Message from the President transmitting a preliminary report online

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until 1831. In 1830 the Union Line from New Castle put on a line of
passenger barges, paying the canal company compensation for the
passengers using the canal. This toll charge on passenger traffic
appears to have continued until 1844, when the authority was con-
tested. On February 23, 1844, the Baltimore and Philadelphia
Steamboat Company, popularly known as the Ericsson Line, was
chartered by the Maryland legislature, and from the time of its
incorporation to the present day has operated its boats, carrying
both freight and passengers through the canal. This line runs two
boats daily. The efforts of the canal company to secure amend-
ments to its charter by which the toll on passengers may be renewed
has been resisted by the Ericsson Line. A long controversy has
existed between the managers of the canal company and the officers
of the Baltimore and Philadelphia Steamboat Company (Ericsson
Line).

.CHESAPEAKE AND OHIO CANAL

Description. — The Chesapeake and Ohio Canal is a private canal.
It extends along the Potomac River on the JNJaryland side from
Cumberland, Md., to Wasliington, D. C, at which point there is a
tide lock connecting with the Potomac River. It is a towpath canal,
mules being used as motive power. Its length is 185 miles, which
includes four miles of slack-water navigation. The period of naviga-
tion is eight to nine months — from March to December. The total
cost of construction to May 2, 1907, as reported by the trustees,
was $11,620,337.35. The chief commodity carried is bituminous
coal from mines above Cumberland.

The canal varies in width at the surface from 55 to 65 feet, and from
30 to 42 feet at the bottom, and is constructed for a depth of 6 feet
throiighout. The ascent of 609.7 feet is overcome by 78 locks, with
an average lift of a little over 8 feet, and a tide lock that connects
Rock Creek basin with the Potomac River, The locks are 100 feet
long and 15 feet wide in the clear.

Control. — The affairs of the canal are managed by two trustees — H. L.
Bond, jr., of Baltimore, Md., general attorney for the Baltimore and
Ohio Railroad Company, and Joseph L. Bryan, of Richmond, Va.,
trustees for the bondholders of the issue of 1844, the interest of the
bondholders of the issue of 1878 (referred to below) having been
purchased by the bondholders of 1844, the latter being subrogated
to the rights of the former.* The entire bond issue of 1878, amounting
to $500,000, was held by the Baltimore and Oliio Railroad on June
30, 1906.'' At that date the Baltimore and Ohio Railroad also held
$861,000 of the bond issue of 1844 and $5,800 of the stock of the
Chesapeake and Ohio Canal Transportation Company. Regarding
the bond issue of 1878, the entire amount of wliich is, as stated above,

« State of Maryland v. Brown, 74 Md., 484 (1890).
b Moody's Manual, 1907, p. 296.



STATE AND PRIVATE CANALS 281

o^^^led by the Baltimore and Ohio Railroad, the following; statement
appears in the Sixty-first Annual Report of the President of the
Chesapeake and Ohio Canal Company to the stockholders, dated
January 10, 1889.

By the terms of the act authorizing the issue of these bonds, the holder or holders of
a majority of said bonds are authorized to foreclose the mortgage whenever three succes-
sive coupons shall be in default. Up to this time the holders have not taken action,
but as a majority of these bonds are held by the Baltimore and Ohio Railroad Com-
pany, we do not anticipate that any action will be taken in the near future.

At that data four interest coupons were due and unpaid. The report
continues :

If the bondholders of 1878 were to enforce their lien, the State would probably be
powerless to protect its interest.

In respect to the interest of railroads in the stock of the canal company,
the interest of the State of Maryland in the canal property was sold
to F. S. Landstreet, a director of the Western Maryland Railroad
Company, who was said to be disposed to cooperate \\'ith the present
management of the canal. It is thought that this stock ma}^ event-
ually be turned over to the canal company or its creditors as a part
of the consideration for obtaining a right of way for the railroad over
the canal propert}^. In August, 1907, Mr. Landstreet transferred his
interest in the canal to the Continental Trust Company of Maryland.

For a statement of the interest held by the United States and
others, including that formerly held by the State of Marjdand, see
below, page 283.

Operating agencies. — The canal is under its charter rather a public
highway than a transportation concern, and is not in any sense a
common carrier. The canal company proper owns no boats nor
barges. It has the right to manage the canal and to regulate the
vessels navigating it, and to prescribe charges for such navigation.

According to the schedule of the Chesapeake and Ohio Canal Com-
pany received by the Bureau of Corporations, railroads do not prorate
with the canal companj", nor with an}^ of the transportation agencies
operating on the canal, although efforts have been made to get the
Western Maryland Railroad to prorate. There are about 120 canal
boats operating on the canal, of which 102 are owned by the Consoli-
dation Coal Company of Baltimore, Md., a Maryland corporation.
The capital stock of this company authorized and issued amounts to
$10,250,000, of which until May, 1906, the Baltimore and Ohio Rail-
road owned $5,353,200, a majority," The canal boats owned by
the Consolidation Coal Company are operated by the Canal Towage
Company of Washington, D. C, a West Virginia corporation, capital-
ized for $5,000, the entire issue being owned by the Consolidation
Coal Company, to which the Canal Towage Company pays trippage
calculated on the number of tons carried. These boats carry about
115 tons each. The dividends of the Canal Towage Company were
50 per cent in 1904, 150 per cent in 1905, and 50 per cent in 1906.
The gross earnings of this companv in 1905 were $141,246.73; operat-
ing expenses, $134,380.72; and the net earnings, $8,390.66.

Some 20 boats are operated on the canal by individuals. One
steam freight boat also runs on the canal.

a Moody's Manual, 1907, p. 1011.
31673— S. Doc. 325, 60-1 19



282 KEPORT OF THE INLAND WATERWAYS COMMISSION

Tolls. — The toll on everything except coal is "based on mileage.

First class — 1 cent per ton per mile for the first 20 miles and one-
half cent per ton per mile for each mile in addition to the first 20. Sec-
ond class — 1 cent per ton per mile for the first 20 miles and one-fourth
cent for each mile in addition to the first 20.

Tolls on coal are adjusted in proportion to the delivery rate from
the mine. Rates for the season of 1906 were as follows:

Cents.

Washington, coastwise 10

River forts 20

Alexandria 25

Local consumption in Washington, depending on point of delivery 25 to 50

Williamsport, depending on point of delivery by Western Maryland and Cum-
berland Valley railroads, reshipment from Williamsport 5 to 25

The rate on coal for intermediate deliveries along the line varies
from 25 to 50 cents.

Traffic. — Motive power is furnished by mules. The Canal Towage
Company appears to own its animals. This company usually carries
for all who offer, but it is not a common carrier, and its rates
are therefore in the nature of contractual agreements. Practically
its entire business is the transportation of bituminous coal from
Cumberland, Md., to Washington, D. C. Some little coal is carried to
intermediate points, and some small quantities of other commodities
as return cargoes. Other commodities passing through the canal
are farm products, general merchandise, etc. Freight rates on coal,
including canal tolls from Cumberland are:

To Hancock and Williamsport $0. 70

To Sharpsburg and Shepherdstown 90

To Antietam 1. 00

To Harpers Ferry 1. 05

To Brunswick and Point of Rocks 1. 18

To Point of Rocks and Washington 1. 35

Coal tonnage passing through the canal amounted to 206,629 tons
in 1904, 174,920 tons in 1905, and 197,768 tons in 1906, carried by
the Canal Towage Company.

The total tonnage carried tlu"ough the canal annually during the
past ten years was as follows :

Tons. Tons.



1897 311, 004

1898 320, 145

1899 296, 100

1900 244, 108

1901 284, 857



1902 233, 345

1903 278, 945

1904 287, 705

1905 219,867

1906 225, 142



From a comparison of the above figures, it appears that the bulk
of the business on the canal is carried on by the Canal Towage Com-
pany. At Wasliington the coal is transshipped to barges of the
Consolidation Coal Company and cleared for various Atlantic ports
of the United States.

Financial. — The gross earnings, expenses, and deficits of the canal
company for 1904 and 1905 were as follows:



1904.



1905.



Gross earnings.
Expenses ,

Deficit



$93, 618. 89
117,181.89



$87, 435. 95
104, 208. 92



23, 563. 00



16, 772. 97



STATE AND PRIVATE CANALS



283



No authentic statistics regarding the operations of the company
prior to the time when the present trustees took charge are available.
The outstanding capital is;

Prefen-ed stock, amount issued $4, 375, 000. 00

Common stock, amount issued 3, 898, 124. 44

Bonds and other indebtedness 4, 199, 500. 00

Total 12, 472, 624. 44

History. — This waterway was inspired by George Wasliington, and
had its origin in the formation of the Potomac Company, of which he
was president. As the result of a conference held December 20, 1784,
between delegates from Maryland and Virginia, these two States passed
laws authorizing the formation of a company' for the improvement
of the Potomac River, and each State aided the enterprise by sub-
scribing to the stock of the company. So long as General Wash-
ington remained the head of the company work was vigorously
prosecuted, but the project languished from the time of his resigna-
tion in 1789 to become President of the United States. Shortly
afterwards work was practically abandoned, although a very con-
siderable portion of the work of building a canal around certain falls
in the river had been completed. Commissioners were appointed in
1822 to examine the affairs of the Potomac Company, and upon an
adverse report by them to the legislatures of the States of Maryland
and Virginia, the company, in 1823, signified its willingness to sur-
render its charter to a new company. The project of a canal was
approved by the commissioners, and as the result of a meeting of 200
delegates from Virginia, Maryland, Pennsylvania, and the District of
Columbia at Wasliington in 1823, the Chesapeake and Oliio Canal was
incorporated in 1825 by a series of legislative acts by which an agree-
ment was reached between the States of Virginia, Maryland, and Penn-
svlvania and the United States. The capital stock was to consist of
$6,000,000, divided into 60,000 shares of 8100 each.« The commer-
cial advantage of the canal to the cities of Alexandria and Wash-
ington as opposed to the city of Baltimore aroused the bitterest
political agitation and hostility in the State of Marjdand. Baltimore
considered that her financial and commercial supremacy would be
much impaired by the construction of the canal, and to meet this
competition for the control of the western trade, wiiich up to that
time had been largely transported over the turnpike roads leading
to Baltimore, the project of the Baltimore and Oliio Railroad was
conceived. These two enterprises — the Chesapeake and (5iiio Canal
and the Baltimore and Ohio Railroad — began their career at the
same time. The ceremonies attending the commencement of each
were held on the same day — July 4, 1828 — in Washington and Balti-
more, respectively.

At this time the capital stock subscribed to the canal was as
follows :





Shares.


Value.




Shares.


Value.


United States


10.000
10,000


$1,000,000
1.000.000




20
6,074


$2,000
C07 400


Washington City


Individuals


Maryland


5.000 500,000
2,500 250,000
2,500 2.'in.nm


Total




Alexandria


36,094


3,609,400


Georgetown













o Tenth Census of the United States, Vol. IV, Canals, p. 16.



284 . EEPOET OF THE INLAND WATERWAYS COMMISSION

The railroad stock was largely oversubscribed by individuals.
Afterwards attempts were made to secure aid for the raihoad from
the United States, but they were opposed by the canal influences and
were unsuccessfid. These two enterprises fought each other bitterly,
and their history is a struggle for supremacy. The difficulty of pro-
curing funds to carry on the work delayed operations in both com-
panies.

The United States would make no further contributions to the
canal. In 1834, the State of Maryland loaned the canal $2,000,000;
and in the next few years made further stock subscriptions aggre-
gating $4,500,000; and for this aid received a mortgage on the prop-
erty, tolls, and revenues of the canal. Wlien this had all been
expended the canal had not been completed. The State refused to
make further appropriations or loans, but in 1844, to assist the com-
pany in raising money from outside sources, the State authorized the
company to issue bonds to the amount of $1,700,000, and waived
the liens of the State upon the tolls and revenues of the canal, the
entire net tolls and revenues being pledged for the payment of the
interest and to provide a sinking fund for the redemption of the
bonds at their maturity. The company was authorized to exe-
cute an}^ mortgage necessary to give the fullest effect to the pro-
vision of this act.'* With the money secured from this source the
canal was finally completed in 1851.

Prior to the j^ear 1870 no statistics of traffic on the canal are avail-
able. Under the management of James C. Clarke, who was president
of the company for 1870 and 1871, the business of the canal was
brought to a highly profitable condition, and at the time of his retire-
ment in 1872 nearly the entire output of the Cumberland coal mines
was carried over the canal, but under subsequent management this
tonnage was allowed to pass to the railroads, first to the Baltimore
and Ohio and later to the Pennsylvania. About 1872 a number of
coal companies had consolidated for the purpose of building a short
railroad from the mines to Cumberland, with a view to facilitating
deliveries to the canal, but owing to certain influences this railroad
was never allowed to connect with the canal, the benefit of this im-
provement thus being secured b}^ the railroads. This short railroad
was called the Cumberland and Georges Creek, and is now owned by
the Western Maryland. The coal mines at Cumberland are tapped
by this road and by one other called the Cumberland and Pennsyl-
vania Railroad, controlled by the Consolidation Coal Company.

In 1878 it became necessary for the State of Maryland to extend
further aid to the canal company in consequence of a freshet that had
caused serious damage in 1877. This aicf was given by authorizing
the company to issue preferred bonds to the amount of $500,000, with
a further waiver of the State's liens. These bonds were secured by a
mortgage of the tolls and revenues of the canal and also of its property
and franchises."

In 1889 a severe freshet caused a suspension of all business along
the entire line of the canal, and in this condition of affairs a bill in
equity was filed in the chcuit court for Washington County, Md., by
the trustees acting under the mortgage executed in pursuance of the
act of 1844, and shortly afterwards a similar bill was filed by the

a Maryland v. Brown, 73 Md., 484 (1890).



STATE AND PRIVATE CANALS



285



trustees to whom the mortgage of 1878 was executed. These bills
charged that the canal was in a broken and waste condition, that the
company was in a hopelessl}^ insolvent condition, and that it had to
all intents and purposes abandoned the canal with no prospect of being
able to resume operations. The company admitted the insolvency,
but resisted the appointment of a receiver as prayed in the bills, as did
also the State of Maryland, which had been made a party defendant.
The State insisted on an immediate sale if such were practicable.
Receivers were appointed by the court to examine the condition of the
canal, to estimate the probable cost of putting it in good condition,
and to report whether it was feasible to operate it when repaired. On
theii- report it was decided by the court that it was inexpedient to
repair the canal tlu'ough the agency of receivers, and that the com-
plainants were entitled to the sale of the property and franchises of
the canal fi'ee of all liens and incumbrances. Before this decree was
signed a petition was filed by the trustees of the bond issue of 1844
asking that they be allowed to redeem the bond issue of 1878 and be
subrogated to the rights of the holders of those bonds, and that they
be put in possession of the canal with the right and power to repair
and operate it. The trustees of the bond issue of 1878 assented to
this, but the State resisted the granting of the petition. The petition
was gTanted, however, on appeal fi'om the cu'cuit court. '^ The affairs
of the canal are now managed by a board of trustees appointed by the
court in the interest of the bondholders of 1844. As already stated,
the Baltimore and Ohio Railroad Company, on June 30, 1906, held
the entire bond issue of 1878 and $861,000 of the issue of 1844. At
that time the former interest held by the State of Maryland was
owned by ^Ii". F. S. Landstreet, a director of the Western Maryland
Railroad; but in August, 1907, this interest was transferred to the
Continental Trust Company of Maryland.''

The following is a summary of the aggregate investments by the
State of Maryland in the Chesapeake and Ohio Canal :





Principal.


Interest.


Total.


First-class (mortgage debts and interest in arrears)...
Second-class (preferred stock and dividends in arrears)
Third-flass (fommor. stocks


$2,000,000.00

4,375,000.00

625, 000. 00


$8,168,586.94
15,618,750.00


$10,168,586.94

19,993,750.00

625, 000. 00


Fourth-class (conmion stock) . . . .


163.724.44




163. 724. 44








Total


7,163,724.44


23,787,336.94


30,951,061.38







According to the schedule submitted to the Bureau of Corpora-
tions by the trustees, the State of Maryland has aided the canal to
the extent of $7,163,724.44 and the United States to the extent of
$2,500,000.

The cost of construction to 1851, the year in which the canal was
completed, was $11,071,176.21; the cost, including improvements,
reported to the Bureau of Corporations by the trustees in May, 1907,
was $11,620,337.35, while the Census Report on Transportation by
Water in 1906 states the cost at $14,000,000.

a Maryland v. Brown, 73 Md., 484 (1890).
bSeeante, p. 281.



286 REPORT OF THE INLAND WATERWAYS COMMISSION

The Chesapeake and Ohio Canal connects with the Potomac River
through Rock Creek in Georgetown. The Government has expended
considerable money on the improvement of the Potomac, which is
navigable to Little Falls, 3 5 miles above Georgetown. The Aqueduct
Bridge, however, which crosses the river at Georgetown, 113 miles
above the mouth of the river, has no draw, and prevents the naviga-
tion of large steamers and masted vessels.

CANALS IN VIRGINIA AND NORTH CAROLINA

Private canal corporations doing business in Virginia are required
to make annual reports to the corporation commissioner of that
State. In North Carolina, canals have attracted very little atten-
tion from the State for many years, and there has been very little,
if any, legislation on the subject. As transportation companies they
are brought within the jurisdiction and supervision of the North
Carolina corporation commission, to which they make only an
annual financial statement.

The only canals of any considerable importance in Virginia or
North Carolina are the Dismal Swamp Canal and the Albemarle and
Chesapeake Canal. Both these canals connect the waters of Chesa-
peake Bay with those of Albemarle Sound. Traffic on the Albemarle
and Chesapeake and on the Dismal Swamp Canal is substantially the
same in character. The two canals serve practically the same ter-
ritory. Shippers and consignees have little preference for one of
these routes over the other, since contracts of carriage are made by
the brokers, and shippers have no interest in the particular route the
goods take. These canals furnish means of transporting products
at an average cost considerably less than the cost of rail trapsporta-
tion.

ALBEMARLE AND CHESAPEAKE CANAL

Description. — The Albemarle and Chesapeake Canal forms a link
in the inland water route from Norfolk to Albemarle Sound via
Currituck Sound. The canal proper is about 11 miles in length, and
consists of two distinct sections: the Virginia cut (8i miles) from the
southern branch of Elizabeth River to North Landing River; and
the North Carolina cut (2| miles) from Coanjock Bay, in Currituck
Sound, to North River. The surface width of the canal is 80 feet and
the average depth of water 9 feet. There is one lock, the dimensions
being 220 feet long by 40 feet wide. The original canal was com-
pleted between 1855 and 1860, and it was enlarged between 1890 and
1903. The estimated cost of construction to 1907 is placed at
$1,151,849.18. The canal is open the year round. It is a ship
canal, the motive power employed being steam and "power" boats.

History. — The canal is oAvned by the Albemarle and Chesapeake
Canal Company, which was incorporated under the laws of Virginia,
March 15, 1850, as the Great Bridge Canal Company, and reincor-
porated under the name of the Great Bridge Lumber and Canal Com-
pany March 2, 1854. On February 8, 1855, the legislature of North
Carolina, after reciting the Virginia act of incorporation, passed a
special act incorporating the same company under the same name,
with a proviso that its name might be changed to that of the Albe-
marle and Chesapeake Canal Company, or to any other name, when-



STATE AND PRIVATE CANALS 287

ever the company should be authorized by the legislature of Virginia
to make such change, wliich was done by an act of the legislature of
the latter State February 27, 1856.

The company was originally capitahzed for $80,000, divided into
shares of $100 each. Later acts authorized this to be increased to
$500,000, then to $800,000, and (m 1857 and 1858) to $1,500,000.
The present outstanding capital stock of the company is $558,200,
common stock.

Relations with other canal companies. — The Albemarle and Chesa-
peake Canal Company owns a controlhng interest in the Newbern
and Beaufort Canal Company (formerly the Clubfoot and Harlowe
Canal Company) ; and it is also said to oAvn important interests in the
Fairfield Canal Company, the canals of which companies are short
and relatively unimportant waterways.

Operating agencies. — The secretary of this canal company states:

This company furnishes a waterway for use of any and all coming to it. It has no
connection iu any manner with the charges for transportation, nor can I name any
party or parties who make a specialty of transporting freight through this canal.

The canal company originally owned its own tugboats and allow^ed
no other boat to do any towing on the canal. Finding this unprofit-
able, however, it made a contract with the Albemarle and Chesapeake
Canal Towing Company to do all of the tomng, thus rendering it pos-
sible that there should always be tugboats at each end in order to
expedite business through the canal. In an action brought against the
canal company alleging discrimination, this arrangement was defended
on the ground that it insured satisfactory towing facilities to the gen-
eral public for the entire year. The decree of the court enjoined the
canal company from such discrimination.'* To-day the Albemarle
and Chesapeake Canal Towing Company operates two tugboats on the
canal where ten years ago the company'- was running ten or twelve
tugs. The gross earnings of the towing company in 1905 were
$37,877.23, and the operating expenses were $41,922.44. No dividend
has been paid since 1901. Prior to that date, from 1896, the rate of
dividend varied from 2h per cent in 1900 to 6 per cent in 1898 and
1899, on a capital stock of $100,000.

Sawed lumber on the canal is handled mainly in barges. Logs for
the mills are now carried largely by the railroads, probably for the reason
that the forests lying directly on navigable waters have been worked
out, but before the Norfolk and Southern Railroad was built all this



Online LibraryUnited States. Inland Waterways CommissionPreliminary report of the Inland Waterways Commission. Message from the President transmitting a preliminary report → online text (page 30 of 83)