REPORT
OF THE
BOARD OF DIRECTORS
TO THE STOCKHOLDERS
OF THE
BEAVER MEADOW RAIL ROAD &
COAL CO.
JANUARY 9, 1843,
TOGETHER WITH THE PROCEEDINGS OF THE MEETING HELD ON
THE SAME DATE.
PHILADELPHIA:
PROCEEDINGS OF THE
STOCKHOLDERS' MEETING,
At an Annual Meeting of
the Stockholders of the BEAVER MEADOW RAIL ROAD AND COAL COMPANY, held at their
office, January 9th, 1843, CLAYTON NEWBOLD, Jr. was called to the Chair, and
BENJAMIN S. RILEY appointed Secretary.
The
report of the President and Managers was read, which, on motion made and
seconded, was accepted.
On
motion, made and seconded, it was Resolved, That a committee of three be
appointed to examine the report of the President and Managers. Committee --
John Cook, Benjamin Davis, and Joseph Perot, to report to a meeting of the
Stockholders, to be held on the 13th of February.
On
motion, made and seconded, it was Resolved, That the By-laws be so amended, as that
the annual report be made on the last Monday in December, and published for the
use of the Stockholders, before the annual meeting in January.
On
motion, made and seconded, it was Resolved, That the Directors be, and they are
instructed to have two hundred copies of so much of the Report just read, as
they may deem proper, published for the use of the Stockholders.
Benjamin
S. Riley and Joseph H. DuIles, were announced as having been appointed to act
as Judges of Election, to be held this day.
On
motion, made and seconded, it was Resolved, That the meeting now adjourn to
the.l3th day of February.
(Signed) BENJAMIN S. RILEY, Sec'y.
At
a meeting of the Stockholders of the Beaver Meadow Rail Road and Coal Company,
held according to law and public notice, at the office of said Company, on the
ninth day of January, 1843, the following persons were duly elected for the
ensuing year:
HENRY
BUDD, President. Directors.
DAVID
WEATHERLY GIDEON
SCULL
JOHN
LIVEZEY FRANCIS
R. WHARTON
JACOB
R. SMITH JAMES
ROWLAND
CHURCHILL
HOUSTON JOHN
W.ODENHETMER
Report Of the
President and Directors to the Stockholders of the Beaver Meadow Rail Road and
Coal Company.
The
last Annual Report of the affairs of this Company was presented by Robert
Pearsall, Esq. who was then President, but whose after engagements induced him
to resign the office, on the 10th day of October, 1842. The vacancy thus
occurring was supplied by the election of the present incumbent, to serve for
the remainder of the year. At the commencement of the season the prospects were
extremely inauspicious to the prosperity of almost every kind of business, and
perhaps to none more so than that of mining and selling Coal. Uncertainty and
distrust seemed to pervade the whole community, affecting more sensibly the
interests of nearly all corporations, and producing a material curtailment in
the operations of the strongest, while the efforts of the weaker were either
paralyzed for the time; or, prosecuted under an impending bankruptcy that
threatened to overwhelm them at any moment. The closing of the past year
records the downfall of many a trading as well as monied institution. The usual
banking facilities were for a time entirely suspended; and the paper currency,
the only circulating medium, although regarded with much suspicion, was to be
obtained only at ruinous rates of discount; whilst the risk of using it in the
ordinary transactions of business, subjected the holder to the danger of a
greater inconvenience, if not to a certain loss -- as the Banks whence it
issued in the morning, would not, in most instances, agree to receive it again
on the same day.
Under
this depression it may be already inferred, that the business of the Beaver
Meadow Rail Road and Coal Company must at least have been considerably
restrained, if not entirely prostrated. The latter, however, was not the case:
In the early part of the year the operations were greatly retarded for want of
ready means to conduct them, and as a consequence, the loss of some of the best sales, and at the highest prices
of the season, is much to be regretted. There being then no visible source where the money could be
procured to pay the freights and tolls on the Lehigh and Pennsylvania Canals.
The current assets or means of the Company were represented by the preceding
report to the Stockholders at $46.104.33, as will appear by the following copy
of the statement of assets then made ---
Owing,
it is presumed, to the haste with which this statement was prepared, it was
discovered a short time after, that in making a selection from other accounts
of the different assets, credit was given for 8062 tons of Coal, on hand on the
28th of Dec'r. 1841, amounting to $28,286.50, as so much available capital,
without deducting that amount from the item "Good Notes and Debts
receivable," amounting to $67.935.48, in which it was included. Thus
reducing the current means to $17,817.83, instead of $46,104.33, and that too
after all the arrangements had been made for the ensuing year.
To counteract the effects of this oversight, to
say nothing of the necessity of conforming also to the state of the times, it
will be readily perceived, must have required some skill as well as sacrifice
on the part of the Managers -- at the same time, it should in justice be
remarked, that previous to the occurrence of the error, the regular accounts of
the Secretary and Treasurer were examined by the Committee of Accounts and
reported to be correct; and that the mistake was made as before observed, in
preparing the different statements. On the discovery of this very unpleasant
difficulty, an appeal for relief was made to the Stockholders, in a circular
prepared for the occasion; but there appeared no disposition of a general
character to aid the financial affairs of the institution; -- and the Directors
were compelled to meet this, as they have every other emergency, in the best
manner they could under the circumstances of the case, which were, without
doubt, sufficiently humiliating and embarrassing; and while the interests of
the Stockholders rendered a reasonable assistance on their part not only a
matter of interest, but also of absolute justice. About the 20th of April last,
however,after several ineffectual attempts to procure means by loan and
otherwise, an arrangement was made involving the personal responsibility of
several gentlemen of the Board, by which a sum of money was obtained to start
and carry on the operations of the Company, which resulted in the sale of
upwards of Forty‑five Thousand Tons of Coal. With more favourable
circumstances attending, the quantity might have been extended to at least
Sixty Thousand Tons; but, viewing the case in all its peculiarities, it may be
said to afford good cause to expect a better return from the business of the
coming year.
Perhaps it may be proper in this place to remind
the Stockholders, that at a meeting, held the 15th day of August, 1839, they
delegated authority to the Directors, to borrow for the use and on the credit
of the Company, any sum not exceeding Two hundred thousand dollars, with power
and instructions to give a bond or writing obligatory under the seal of the
Company, to one or more trustees, conditioned for the punctual payment of the
principal and interest on the several days and times when they may become due;
also, that at the same time, they further granted the right to the holders of a
loan of Fifty thousand dollars, made the 12th of June, 1837, on the credit of
the Company, to be repaid on the 1st day of July, 1842, that such of the
holders of the loan of the 12th of June, 1837, as surrendered their
certificates and lent the further sum of Ten per cent. on the respective
amounts of loan held by them, should have certificates issued to them for the
amount of their former said certificates, and Ten per cent. added, upon the
terms of the loan of Two hundred thousand dollars mentioned above, with all the
benefits thereof. A loan was accordingly authorized to the amount of Two
Hundred and Fifty Thousand Dollars, to become due on the 1st of August, 1844,
with interest thereon, at 6 per cent. per annum, payable half yearly, on the
first days of February and August, in each and every year until the principal
be repaid to the lenders. Of this Loan, there have been subscriptions to the
amount of $210,976.50, leaving a balance not taken of $39,023.50. It is
believed that the Stockholders could essentially promote their interest by
subscribing to the remainder of this loan, and placing the amount in the
business capital of the Company. Exclusive of the advantage their Stock would
thereby derive -- it maybe remarked, that the mortgage given is considered ample security for the loan, and the
conditions accompanying it required that, if the interest not be paid within sixty days after any
instalment shall become due, that then the principal shall be considered as
due, and the holders will then have the right of enforcing payment under the
bond. These considerations should claim the particular attention of the
Stockholders. The interest has heretofore been punctually paid in cash, with
the exception of the last instalment, when for want of money, the Directors
were compelled to make an arrangement with a part of the loan holders, to
receive theirs in Coal; the balance is not yet settled. Every effort on the
part of the Board will be made to meet the payment due 1st of Feb'y. next;
which would be rendered perfectly easy, without any interference with the very
limited means now embraced in the current transactions, if a subscription could
be obtained for a sufficient portion of the remaining loan.
With
the exception of a few instances, the mining, transportation, and sale of Coal,
has, almost from its beginning, been an unprofitable business; arising, it is
believed, in a great measure, from the competition of a heretofore succession
of wild and irresponsible operators, who create a supply far beyond the
necessary demand, to be sold at prices bringing ruin to themselves, and preventing
others from pursuing the business to any advantage.
So
long as such a system prevails to any extent, so long will Coal remain at a
price entirely too low to compensate for the investment of capital. Want of
confidence and scarcity of money are, no doubt, great enemies to a successful
and extensive business; yet it is to be hoped, that the former abuse of all
mercantile confidence is nearly at an end, and that the honest operator who
designs to meet his engagements, will not be under the necessity of contending
with those who continue to live for a season on credit alone, but who are
without the prudence and regard requisite to the management of so delicate a
capital.
The
price of Coal it may be repeated is too low. -- As an indispensable fuel, it is
intrinsically worth much more than it has been selling at for years past; and
the consumer himself will acknowledge this fact, when he reflects what, his
fuel would have cost him were Coal still imbedded in its formerly inaccessible
and impenetrable mountains.
For several years the mining of Coal for the
Beaver Meadow Company and its transportation to Shipping Port, have been
effected by contract with Messrs. Vancleve & Co. at
Beaver Meadow Company, and the Company is now under contract with the same
gentlemen, for the mining and
transportation of the large quantity of Coal for the coming
season. This arrangement is no doubt the best that can be made under present
circumstances. Another system of management has, however, presented itself
favourably to the minds of the Directors. The Beaver Meadow Coal region is a
large field for improvement, where enterprise and industry would meet with
success. It is too extensive for but one concern, with limited powers, to
afford employment to a population consistent with the extent of its resources.
The lands belonging to the Company there, are very valuable; and it is believed
their wealth would be more effectually developed by renting the mines, or at
least a portion of them, to individuals, at a certain fixed price per ton for
the Coal in the mines, and reserving to the Company the additional revenue
arising from the transportation of the Coal, and from the tolls on the Rail
Road.
To
give to others the advantages here proposed would not be recommended, were it
possible for the Company to procure the means requisite to prosecute its
operations to their utmost and most profitable degree. If the sales cannot be
made to exceed their former average, it certainly must be thought extremely
imprudent to have expended nearly $900,000, for the purpose of mining and
sending to market some 30 or 40,000 tons of Coal per annum, when the business
on the same amount of outlay should treble either quantity. The operations of
the Company should at all times be equivalent to the capital invested, and it
rests with good management, perseverance, and a sufficiency of pecuniary means
to produce this important result. It is thought arrangements could be made to
facilitate this object that would offer strong inducements to the Stockholders,
as well as to the individuals, who might become interested. Some of the
advantages of the plan would be at once to simplify a business about which
there should be no mystery -- render the profit, be it much or little,
perfectly sure, and enable the affairs of the Institution to be transacted with
considerable diminution of expense. Indeed there appears to be no reason
whatever why this system should not be speedily adopted; the quality of the
Coal is certainly inferior to none other; the expense of raising it is said to
be much less than in many other locations, while the facilities for reaching
the markets of New York and Philadelphia are easy and economical.
The Managers are deeply impressed with the
necessity of this change, so soon as practicable, and think it should claim the
consideration of every Stockholder, who should as far as possible for him to
do, give publicity to the resources of the lands of the Beaver Meadow Company, with a view to attract thereto
the attention of operators.
Heretofore
the permanent expenditures required by the Mines, Rail Road, Landings, &c.,
in consequence of preparations for business, repairs of damages by Flood, and
other causes, have entirely absorbed all profit arising from the regular
operations of the Company. But it is now believed, that any further outlay of
importance in that respect will not be called for soon; for included in the
price agreed upon for mining and transportation of the Coal for the coming
year, is the keeping in perfect order of the mines and mine cars, pumps,
engines and screens, without any additional expense to the Company.
The
mines are now reported to be in the best possible condition; the slopes driven
down to the most advantageous depth for mining, the stationary engines and
pumps in good order and in constant operation. Referring to the last report for
a minute account of the different slopes, and a more particular description of
the mines it may be further observed, that their character is not greatly
changed since that date‑ -- no new openings having been made, although a
considerable expense has been incurred, as will appear from an annexed
statement of losses and disbursements, in increasing the power of the
Stationary Engine at Slope No. 3, and placing a new Engine and pump at Slope
No. 5, where the water had formerly been raised from the mines by means of
water-cars. The quantity of Coal is diminished, of course, in proportion to the
sales of the year, leaving still a supply which may be deemed almost
inexhaustible, and which has been estimated at many millions of tons. The same
careful management has been observed in working the mines, that has always
heretofore prevailed.
The
Transportation property, consisting of Locomotive Engines and Cars, with the
exception of the Quakake Engine, which remains in about the same state as when
last alluded to, is also represented in the best order, being kept in that
condition by Messrs. Vancleve & Co. agreeably to the terms of their
contract, and is capable of transporting from the mines to Shipping Port, on
the Lehigh River, Eighty Thousand tons of Coal, during the running portion of
the year.
The
opening of the mines to individual enterprise, would render the Beaver Meadow
Rail Road a highly valuable property to the Stockholders. For a considerable
distance, its peculiar locality seems to defy all attempts at competition for
the increasing business of a region, almost of necessity tributary to it by
nature itself. At the distance of four miles from the mines it descends the mountain
by means of two inclined planes, and follows the ravine of the Quakake Creek,
until it reaches the Lehigh River, and continues thence to a point opposite
Mauch Chunk. Here the Beaver Meadow Company have constructed their shipping
port, and there appears to be no point between Mauch Chunk and the mouth of the
Quakake Creek, that will admit with any degree of economy or safety of the
establishment of another.
Hence,
if the hopes of the Managers be realized -- that the renting of the mines
should be adopted at Beaver Meadow, in a manner similar to that of other Coal
regions, a much increased business for the whole distance of the road must
necessarily ensue; anticipating, however, the other event, which is very
improbable, that all the Coal descending the Valley of the Quakake should be
shipped at Penn Haven, at the mouth of the creek, still, the tolls derived from
the enlarged trade on that portion of the road that must inevitably be used,
would constitute a very large and important item of profit. The accounts of the
past year showing a surplus of receipts, over the expenditures for repairs on
the road, of Seven thousand four hundred and ninety dollars and sixty‑five
cents, will afford some idea of what may be expected in the course of time. The
road is under the control of a special agent, and is kept at all times in the
best possible order, which may be said to effectually render it perpetual, so
long as the same attention is paid to its condition.
Landings, Work Shops, Engine Houses,
Canal Boats, and all other property belonging to the Company, are reported to
be in good condition. In fact, it would be nearly impossible to point to any
part of its property as defective from want, of proper care.
Statement of the
Capital Stock, Loan, &c., of the Company,
December 28, 1842.
Leaving
an actual deficiency of assets on that date, agreeably to the foregoing
statement, of $4.906.29, exclusive of acceptances on account of contract with
Vancleve & Co. for the present year, for which no Coal has yet been
received; but which, however, increases the apparent deficiency at this time to
$16,915.46. Estimating the current means of the Company, at the beginning of
1842, at $17,817.83, and the deficiency at the close of the same year at
$4.906.29, there would appear to be falling off of means on the business of the
year, of $22,724.12, which, may be accounted for by the following statement of
losses and disbursements.
Dec'r.
28th,
1842.
It
is to be regretted, that the foregoing statements do not exhibit a brighter
picture of the transactions of the year; at the same time it should be
observed, that the balance against the Coal account does not prove that there
has been an actual loss on the Coal operations of 1842; on the contrary, for
that particular year a small profit appears to have been realized. It should be
borne in mind, that all the Coal remaining in hand at the close of 1841, was
charged to the account at the higher prices then prevailing, together with the
accumulated dust of the year, which throws the loss thereof apparently on the
business of the last year, which should properly belong to that of the one
preceding it. If the quantity of Coal can be sold the coming season, that is
calculated upon, even at a small profit, it is hoped by the close of the
present year, that a more favorable report can be rendered to the Stockholders.
To advance encouraging opinions of the affairs
of any incorporated company at this time, would almost render their author
liable at best to the more charitable suspicion of a feeble or perverted
judgement, if not to the server charge of dishonesty of purpose; and the proven
fallacy of so many reports of different institutions, may in part justify the
feeling. In regard to the Beaver Meadow Rail Road and Coal Company, its
Stockholders are invited, and strongly urged, to investigate personally and
freely into all its concerns as an incumbent duty, as well as for the
protection of their interests; and had this simple duty of inquiry been
exercised in times gone by, there is no doubt that a great portion of past
disasters might have been avoided.
A
brief review of the property, position and prospects of this Company‑‑
-- its extent of land, -- the superior quality and unlimited quantity of Coal
contained therein, -- the condition of its mines -- their favourable locality
for being worked, and their contiguity to market -- its stationary and
Locomotive power -- its Rail Road and its prospective worth -- its landings,
dwellings, cars, canal boats, work shops -- in fact, its every convenience for
an extensive and economical business, cannot fail, it is believed, to convince
every one who will spare the time to examine for himself, that it is not only
possible, but highly probable, that in a reasonably short time, it may be
permanently resuscitated, and pay a fair dividend on its shares. The fact,
however, cannot be disguised, that all exertion must prove abortive, unless the
means are afforded for procuring money, to enable the directors to derive for
the association all the advantages that the condition of its affairs otherwise
promises. As before partly stated, no profits have been made that have not been
absorbed by permanent expenditure, or been applied to reduce former
liabilities, still leaving the transactions of the Board to be limited by the
probabilities of meeting its engagements punctually from the proceeds of the
sales of Coal, and contracting its obligations upon the credit thus based. The
existence of the Company by this system of credit may, no doubt, be prolonged
by a strict caution to keep the payment of its liabilities always farther off
than its receipts of money; yet it is plain to all, that a sufficient ready
capital is absolutely requisite for the successful and economical prosecution
of every business operation. In connection with, or in place of, the
subscription to the loan alluded to in the earlier part of this report it may
be remarked, that an assessment of a small percentage on each share of stock
would produce a sum of money that would yield, it is believed, benefits to the
Stockholders more than quadruple the amount necessary to be advanced, as could
be clearly shown to any who may apply at the proper source for more particular
information. And yet a crisis may occur, as there did last spring, when the
whole concern may not only as then tremble,
but in reality fall to the ground for want of a small appropriation of this
kind by the Stockholders generally. It is with much delicacy that this subject
is here adverted to, rendered keener perhaps from the lack of compliance with
former applications; but a responsibility deeply felt, requires, in the exercise
of an imperative duty, that every person interested in the Company should know
the position of his interest; and that its protection in a great measure, in
this as well as other instances, depends upon his own attention; and it is to
be hoped, that should the Board at a future date deem it expedient to make an
assessment of a few dollars on each share of stock, that the holders thereof
will have informed themselves of the propriety of the act, and understand that
it will be prompted by a single desire to promote their interest, and that they
will be prepared cheerfully and faithfully to respond to the measure.
HENRY BUDD, President
Jan'y. 9th, 1843..