REPORT

OF THE

BOARD OF DIRECTORS

OF THE

BEAVER MEADOW RAILROAD AND COAL COMPANY

TO THE STOCKHOLDERS,

AT THE SPECIAL MEETING, AUGUST 15, 1839.

TOGETHER WITH

THE PROCEEDINGS OF THE MEETING,

AND

THE BY-LAWS ENACTED.

_________________

PHILADELPHIA:

C. SHERMAN & CO., PRINTERS, 19 ST. JAMES STREET.

1839.

REPORT.

______________

THE Stockholders have been called together for the purpose of laying before them the condition of the Company, and submitting to their consideration such measures as are deemed expedient in the present emergency.

This may be taken as the present Capital of the Company.

An estimate of the Expenditures shows the following investments, viz.

Which amount at least is requisite to carry on the ordinary business of the Company; and to sustain which has cost not only great losses in the shape of extra interests and discounts, and forced sales and advances, but serious injury to the Company, in the care and attention of its officers and agents to the single item of providing for daily payments and to a degree painful to the Directors themselves, who have very often, and to large amounts, advanced both cash and their personal responsibility, to sustain the Company's operations.

These considerations, together with the recent impracticability of negotiating the credits on which the Directors relied, have induced them to urge upon the Stockholders the importance, and even necessity, of supplying such permanent capital as is essential to the prosecution of the business.

The accounts of the Company are presented in an abstract form, with schedules showing the present pecuniary concerns of the Company, the books having been brought up to 1st August and balanced.

In order to avoid any further increase of responsibilities on the part of the Company, a committee recently visited the mines, with instructions to reduce the works to the lowest point consistent with the general safety and benefit of the property.

Thus discharging 138 men, and aiming in the arrangements to still further reduction.

The workmen retained are solely for the purpose of driving the slopes necessary for a successful prosecution of the work the next season, and to keep in good condition the works generally, and to bring to a close such operations only, as a suspension would essentially injure. These however, require funds which must be furnished, amounting for the next four months, to $58,618, including the cost of mining 7500 tons coal, and bringing to market that quantity and 7500 tons already mined, making 15,000 tons, which at the present prices will produce $77,000.

But the funds must he advanced, both with a view to profit and protection of the works.

On a general view of the affairs of the Company, the chief considerations with every stockholder will be,

1st. The quantity of coal within reach.

2d. The cost of mining.

3d. The cost of bringing it to market.

4th. Can it be sold?

1st. The quantity of coal. By the estimates made by the general agent, Mr. Vancleve, who is now in the city, it appears that the two slopes already driven down to a great extent, will, at moderate calculations founded on explorations and the ordinary course of the veins, produce,

The one, 1,564,444 tons.

The other, - - - - - 1,047,407

Together, - - - - - 2,611,851

Being a supply for 26 years, at the rate of 100,000 tons a year.

By the estimates of Mr. Ingham, with the aid of the Mining Engineer, one vein, in an entirely distinct part of the tract, contains 7,000,000 tons. Every exploration hitherto made leads to the conclusion that the quantity of coal may, for practical purposes, be considered as inexhaustible, and such will be the impression of any one who will visit the mines, as the Stockholders present who have been on the spot, will attest.

2d. The cost of mining. This is estimated, at present, at 92 cents per ton.

There is every reason to presume, that with diminished expenses of provisions, and labour, and other charges, the mining can be effected at a cost considerably less than during the present year.

In the progress of the works thus far, vast difficulties have been overcome, and great experience has been gained. Hence, difficulties and expenditures will hereafter be either avoided or greatly reduced, and the future operations will enjoy the facilities attained by the hitherto expensive process of opening the works, and bringing them into efficient use.

3d. The cost of transportation. This is estimated at 87 cents per ton for the last six months.

That the cost of transportation during the past season has been beyond the ordinary expense is obvious from the small quantity transported, compared with the preparation made and supported for a greatly increased business; this various and unavoidable difficulties produced by the obstruction in the canals, during the early part of the season, the impracticability of obtaining men to load the coal, the crowded condition of the landing at Parryville, and the loss of the use of the largest engine, from an accident in the middle of the season, and the recent reduction of the works. This combination of difficulties has increased the cost of transportation 37 cents per ton, as is proved by the experience of former years and that of the last month.

The cost of mining and transporting the coal to market is supposed, after careful estimates, and a comparison as fairly made as circumstances will allow, to be as low as from any other mines, and at the reduced prices of more extensive operations and the economy gained by experience, it is believed that the Beaver Meadow Coal will come fairly into competition with any other.

The recent establishment of the workshops at Weatherly, where an admirable water power is enjoyed with extensive buildings already constructed, will diminish very greatly the expenditures in all the departments, besides giving important facilities in the repairs which may needed. The saving in horse power and human labour is estimated at $5000 a year, and if the Company shall be disposed to occupy it for general work, it may be made a source of revenue every way valuable.

4th. Can the coal be sold?

In this important inquiry the Stockholders may rest assured that all is as they would desire. Wherever the coal has been fairly tried, whether for domestic or manufacturing purposes, or for steam engines, it is but moderate to say that it is pronounced at least equal to any other. In a few instances, and but very few, it has been considered by consumers long used to other kinds of coal, either too soft or too hard. But the testimonials in the hands of the Company may be considered abundantly satisfactory and proving its universal acceptability. (See Appendix.) The recent establishment of an efficient agency for New England promises the best results, and it is believed very large sales will be made in that section of our country, where the consumption of anthracite coal is becoming daily more extended. It is greatly to the interest of the Company that each stockholder should do what he can to extend the knowledge of this coal, and they may do so with the perfect assurance that it will cause them no regret. As a fuel, it combines remarkably the qualities of easy combustion and durability, thus saving both labour and expense in the use of it, and according to the opinion of many, to an extent far beyond any other coal.

The railroad is, no doubt, in the minds of many a cause of anxiety.

The cost of this road is very moderate when compared with those built either in this country or Europe, being up to the present time $380,768.11 and 25-1/2 miles in length, gives $14,932-83/100 per mile, and at this cost includes $57,376-74/100 grading, which was lost by the inundations caused by the Lehigh canal, and for which a claim rests against that Company.

The products of the road in tolls, freight and passengers, now due, is not less than $5000, not included in the accounts, being but just reported; and when it is considered that the Hazleton Company, with from 40 to 60,000 tons annually, will pay ten cents per ton for the use of the road, and the Summit, the Sugar Loaf, and the Stafford Companies soon coming into use, with the more extensive, and to us more important operations of the Little Schuylkill and Susquehanna Company, it is but reasonable to calculate on a large revenue. That the railroad will be extended to Easton, by the various interests connected with it, is highly probable, in which case the value of the present road will be greatly enhanced.

Under any circumstances, the tolls on the road must greatly increase, both from the downward and upward transportation which is daily increasing, although it is not to be forgotten, that repairs are still progressing and calling for new expenditures. These repairs and the general expenses to a certain extent, are subjects of charge to the general business. A proposition has, within a few days, been presented to the Directors of much importance, offering to construct a double track on the space from the planes to the Quakake, on terms highly advantageous.

Whether the present low prices of coal will prevail longer, is more than we can predict; but the common impression among miners and dealers is, that to a great extent, it is a ruinous business, and that the prices must advance to the rates prevailing a year or two since, at which, handsome profits will be again realised in works judiciously managed.

In short, the Company possesses an inexhaustible quantity of coal, of the very best quality, which it can mine and bring to market on good terms. It possesses all the apparatus requisite for a very extensive business. Its agents have acquired skill, and are deemed capable and faithful. It possesses a railroad over which it passes its own coal, and from which a large revenue must be derived. But the investments permanently made exceed its capital, and it is unable but with extreme difficulty and at great sacrifices to carry on the operations, and at the present juncture, must come to a suspension of its works and not only lose all the advantages it possesses, but leave the property to inevitable decay, unless an adequate capital is contributed in the shape of a permanent loan.

It is obvious that this is not a difficulty resulting from losses nor from any recent transactions, but a deficiency arising from the excess of permanent investment beyond the capital of the Company, and a difficulty which has existed all along, and which has been overcome only by the facilities of credit, at all times expensive and now impracticable.

The Directors respectfully present to the consideration of the Stockholders, the By-Laws prepared under advice of their counsel, and only express the disposition which prevails among the members of the Board to contribute, together with other Stockholders, their proportion of such a loan as is proposed.

By order of the Board of Directors,

JOSEPH H. DULLES, Pres't.

BY - LAWS.

AT a meeting of the Stockholders of the Beaver Meadow Railroad and Coal Company, convened by the Board of Directors, in pursuance of the act of incorporation, 15th August, 1839.

Honourable James M. Porter was called to the chair, and William Folwell, Esq. appointed Secretary.

The report of the President and Directors being read, the following By-Laws were unanimously adopted, viz:

SECTION I.

Be it enacted, that the board of directors shall, and are hereby authorised to borrow for the use and on the credit of the Company, any sum not exceeding two hundred thousand dollars, payable on the 1st of August that will be in the year 1844, with interest thereon at the rate of 6 per cent. per annum, payable in half yearly installments on the first days of February and August, in each and every year hereafter until the principal be repaid to the lenders, and that said board of directors shall issue certificates for said loan in such sums as may be required, and that the holders of such certificates shall be entitled, at their option, at any time before the 1st of August, 1844, to convert their said certificates into the stock of the said Company, to the extent of the capital stock now or hereafter to be authorised by law. Such applications to convert, to take precedence according to the order of time in which they way be made.

SECTION II.

And be it further enacted, that the said board of directors shall have power to give a bond or writing obligatory under the seal of the Company, to one or more trustees, a penal sum double the amount of the said loan conditioned for the punctual payment of the principal and interest, on the several days and times above specified for the payment of the same, and also a warrant of attorney to confess judgment thereon, and said board of directors shall also have power to make and execute, under the corporate seal of this Company, unto the same or any other trustee or trustees, a mortgage of all and singular the real estate of the said Company, reciting the said bond and containing the same condition or defeasance.

SECTION III.

And be it further enacted, that the said board of directors shall have full power on behalf of this Company to petition the legislature for any law or laws which counsel may advise, for the further security of the said loan; arid upon the passing of such law or laws, to bind this Company by accepting the same.

SECTION IV.

And be it further enacted, that the said board of directors shall have power for the further security of the said loan, to make and execute, under the corporate seal of the said Company, unto the same or any other trustee or trustees, an assignment or conveyance of all the personal property of the said Company upon trust, should the said Company make default in the repayment of the principal of the said loan upon the day specified in the first section of this act, for the repayment of the same, or should make default, for the space of time hereinafter mentioned, in the payment of any installment of interest, that then, but not before, the said trustee or trustees shall take possession of the said personal property, and make sale thereof, either at public or private sale, and apply the proceeds of such sale to the payment of said loan and interest to the holders of the certificates thereof; or at the discretion of the said trustee or trustees, he or they shall hold the said personal property for the use and benefit of the said loan-holders and shall permit the same to be used in mining, and for the purpose of transportation, in such manner as shall appear to such trustee or trustees most beneficial to the holders of such loan.

SECTION V.

And whereas the said board of directors did, on the 12th day of June, 1837, borrow the sum of $50,000 on the credit of the said Company, to be repaid on the 1st July. 1842; now, therefore, be it further enacted, that such of the holders of the loan of 12th June, 1837, as may, within ten days from the passage of this Act surrender their certificates, and lend the further sum of ten per cent, on the respective amounts of loan held by them, shall have certificates issued to them for the amount of their said former certificates, and ten per cent, added, upon the terms of the loan authorised by this Act; and in case any of such certificate-holders of said loan of June, 1837, shall take the benefits of this provision, they shall be put, in all respects, on the same footing as the subscribers to the loan authorised by this Act, and the penalties in the securities aforesaid, to wit, in the said bond warrant and mortgage shall be enlarged in or by a sum double the amount of the aggregate of the certificates issued under the provisions of this section.

SECTION VI.

And be it further enacted, that the said board of directors may stipulate, as part of the said contract of loan, that upon the failure of the payment of any installment of the interest thereof, for sixty, days after the same shall have fallen due, that then the whole principal shall be deemed to be due immediately after the expiration of the said sixty days, in such manner that a scire facias may be issued forthwith on the said mortgage, and so that the other securities may immediately thereupon be enforced: and the said board of directors shall have power to insert such clauses in the said securities, as will carry the intention herein expressed fully into effect.

SECTION VII.

And be it further enacted, that the said board of directors shall have power to apply to the legislature for any law or laws to enlarge the capital stock of the said Company, provided that said capital stock shall not, when so enlarged, exceed in the whole one million of dollars.

The following resolutions were then read, and unanimously adopted.

Resolved, That it be earnestly recommended that the stockholders subscribe to the loan now authorised, at the rate of ten dollars per share upon the amount of stock held by each, payable in monthly installments of two dollars and a half per share.

It was further

Resolved, That the Report of the Board of Directors, together with such documentary evidence accompanying the same as shall be deemed advisable by the directors, be printed in pamphlet form for the use of the stockholders.

Resolved, That the meeting do now adjourn.

WM. FOLWELL, Secretary.

At a meeting of the directors of the company held the 19th of August, it was resolved that 250 copies of the report made to the stockholders at the general meeting held on the 15th instant be printed.

Also that books of subscription for the loan authorised by the stockholders, be opened at the office of the company, and that the same remain open daily, from ten to two o'clock, till the 15th day of September, 1839.

JOHN ECKY, Secretary.

APPENDIX.

THE following extracts from the correspondence of the Company, having been called for at the Stockholders' meeting, were read from the originals

"Boston, April 2d, 1839.

"Your coal is so much liked by the manufacturers, that we think it probable we can sell several cargoes."

"Boston, April 2d, 1839.

" We made trial of the Beaver Meadow coal, and are pleased with it, and have concluded that if you will furnish us as good an article as the sample proved to be, that we will take a year's stock of it."

"Providence, April 23d, 1839.

"When in Philadelphia, we stated to you that we sold twenty-five tons to the bleaching establishment of this city, to burn under their steam-boilers, but that when we left home they had not given it a sufficient trial to decide upon its merits. We have since conversed with them, and they say they like it well, that it is very free from slate and cinders, but complain of its being rather fine, and others have made the same complaint." [This evil is remedied by the substitution of an entire set of new screens at the mines.]

"Paterson, June 20th, 1839.

" The Beaver Meadow coal, which I am receiving from Parryville on account of my order, we find of excellent quality, and those of our manufacturing establishments who have tried it, particularly in the foundries, find it equal to the best Lehigh coal which they have been using heretofore exclusively."

"Boston, July 11th, 1839.

"The trial of our coals on board the Portland was successful in all points except economy, and that we could not get at, because they burnt it with their grates full as they would hold but it lasted as long as the Lackawanna. It burnt with but little gas from the smoke-pipes, with but little clinkers, and it kept up steam while firing up, which the Lackawanna does not. In fact the firemen, engineers, and all, gave it their decided preference to any coal they ever used."

" Providence, July 16th, 1839.

The trial of the cargo ordered has given the Company satisfaction, and the agent says if he had known our coal in the spring as well as he does now, he should have ordered largely of it."

Again--

"I was yesterday at the Revere Copper Company at Canton, and with W. Lincoln tried our coal in melting copper, and was very successful, and they now give ours a decided preference to the Lehigh or Lackawanna. The furnace was heated in half an hour, better than they had been doing with wood and soft coal in one hour and a half (this was the furnace where I advised the trial, and they thought nothing but soft coal would do,) but in their heating furnaces, where they have used Lackawanna and Lehigh, they prefer ours. There is but one other furnace that they have not tried it in -- that is their air-blast furnace -- they now use charcoal and Lehigh, but I am satisfied, from the construction of the furnace, that the Beaver Meadow will be just what they want."

The above extracts are from letters written in New England, and in the ordinary course of business. The following are from the circulars of the Beaver Meadow Company's Agent at Jersey City.

"Jersey City Glass- Works, March 9th, 1839.

"Having made use of the Beaver Meadow coal for our steam-boilers for several months, we have no hesitation in saying that we give it the preference to any other coal we have used for that purpose.

"P. C. DUMMER & Co.,

"New York, March 9th, 1839.

"We have the past season used pretty much entirely your Beaver Meadow coal in our Olmsted stoves, and are decidedly of opinion that it is preferable to the Lehigh coal, as it is rather easier ignited, and quite as free (if not more so,) from clinkers. We have recommended this kind of coal to our customers this season altogether.

"SMITH & SHERMAN,

"Proprietors of the Olmsted Coal Stove Patent,

"210 Water Street."

"New York, March 9th, 1839.

"I have sold not less than five hundred tons of Beaver Meadow coal at retail, and I can truly state it has given satisfaction without an exception, to all those who have used it. I can state, and I am sure with safety, that it is the purest coal mined.

"W. B. JENKINS."

"New York, March 9th, 1839.

The Beaver Meadow coal that I have had and used from you, is the best coal I ever used in stoves.

"J. L. MOORE."

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