No. 49
IN SENATE,
February 27, 1840.
REPORT
Of the committee on rail-roads, on petitions for the construction
of the Canajoharie and Catskill rail-road by the State, &c.
Mr. Furman, from the committee on rail-roads, to whom was referred
several petitions from the inhabitants of Greene, Ulster, Schoharie
and Albany counties, praying for a law to authorize the construction
of the Canajoharie and Catskill rail-road by the State; and also
the memorial of the president and directors of that company for
an amendment of the act entitled "An act to aid in the construction
of said road," passed April 18, 1838
REPORTS:
That from a patient investigation of the subject matter of
the first class of those petitions, the committee have come to
the conclusion that it would be inexpedient at this time to adopt
the prayer of the same; and that the construction of the road
should not now be adopted by the State.
The memorial of the president and directors of that company
now remains to be disposed of, and will receive the attention
it merits,
Of the importance of this work; not only to the country through
which it passes, but also to the western part of this State and
of the city of NewYork, this committee are aware; and that the
Legislature have heretofore regarded this work with some favor,
is evidenced by the acts passed for its incorporation and for
granting from the public credit to insure its completion. But,
however apparent these circumstances may have been, the committee
have deemed it their duty to examine somewhat in detail the situation
of this company, in order to lay before the Senate the reasons
which induce them to the conclusion they have adopted.
The act of April 18, 1838, an amendment of which is now sought
by the last mentioned memorial, was founded on petitions which
had their origin in the desire of the people more immediately
interested in the construction of this road, that the same should
be formed more rapidly than the ability of the company would warrant.
The act in question provided that when that company should have
expended on their road fifty thousand dollars Out Of Moneys raised
from their stockholders, on their stock, the Comptroller should
issue to them special certificates of stock to the amount of one
hundred thousand dollars bearing an interest at five per cent,
payable quarterly; and that when it should be shown that the amount
so received had been expended together with the additional sum
of seventy-five thousand dollars raised from their capital stock,
the Comptroller should issue to them such certificates for the
further sum of fifty thousand dollars; and so on in the same proportion
to the aggregate sum of three hundred thousand dollars. And under
this act that company have received from the Comptroller, and
expended upon the construction of their road, stock to the amount
of one hundred and fifty thousand dollars; and consequently the
same amount still remains to be issued to them. And it is to change
the terms upon which this balance shall be delivered to them,
that this company now pray the intervention of this Legislature.
They say, that the pecuniary difficulties which induced them to
apply, and the Legislature to grant the desired aid in the first
instance, have been on the increase ever since throughout the
whole community; a fact which but few will deny; and that terms
which would, at the passage of that act, have been judicious and
proper, have now by reason of the change of times become exceeding
onerous and oppressive: not that they admit, by any means, that
any reason existed for making the subsequent advances of the credit
of the State to them upon a different principle from those made
to other associations of the same nature at the same period. And
those were among the reasons which induced them to make their
application at the last session of the Legislature for a law to
authorize the Comptroller to issue those special certificates
in sums of equal amount to their collections from their stockholders;
an act for which purpose passed the House of Assembly with great
unanimity, but was not acted on by the Senate. During the time
this last mentioned act was pending in the Legislature, it was
urged that there had been some error in the passage of the original
act, and that in place of requiring a previous expenditure of
fifty thousand dollars by that corporation, it was intended that
the sum of one hundred and fifty thousand dollars should have
been inserted. On this point it should be remarked in justice
to this company, that before receiving the first installment of
stock from the Comptroller, under that act, they did prove to
him a previous expenditure, exceeding in amount the sum of one
hundred and fifty thousand dollars, in the construction of their
road; and also that it clearly appears from the examination which
took place before a committee of the Senate during the last session,
that this company had no agency in that omission, and that it
arose solely from a misunderstanding on the part of the clerks
of the Legislature; and further, that the officers of that company
did not avail themselves of the aid thus granted under that act,
until they had been advised that they Would be justified in so
doing, by two gentlemen who had successively held the important
office of Attorney-General of this State, as this committee have
been informed.
Under this state of circumstances, and by reason of continued
and increased embarrassments under which the country is laboring,
and the strong desire manifested by the people of Greene, Ulster,
Schoharie and Albany counties, that the road should be completed,
this company have renewed their application for a mitigation of
the terms under which the balance of that loan may be issued to
them, and they now present their petition, with about twenty five
miles of their road finished, and materials on hand and prepared
for a large portion of the remainder, in addition to which they
now own the land requisite for about three-fourths of the whole
distance. The extent which they have now constructed is by far
the most expensive of their whole route; on it they have seven
bridges across the Catskill, two of which with a part of the road
they were so unfortunate as to lose by a freshet during the winter
of 1839, which damages they have since repaired. The engineer,
who has the construction of this road under his supervision, expresses
it as his belief that one half the expense of grading the whole
road has been already incurred, and that the remaining forty-four
miles will not exceed in cost the first twenty six miles.
As to the value of this work, and the amount of business to be
done upon it; Major McNiel and Judge Wright, both highly competent
engineers, and whose extensive information in matters of this
nature gives value and importance to their opinions, have expressed
it as their judgment, that this road, without diverting any business
from the Erie canal, will do sufficient to render it a profitable
investment to its stockholders, which would seem to be evident
in adverting to the extent of country affected and benefited by
it, by which we find the counties of Greene, Ulster, Schoharie,
Deleware and Otsego, and part of the counties of Chenango and
Albany, will also be accommodated by this road. Another advantage
to be derived from- its construction will be that goods and produce
detained on the Erie canal by the setting in of winter, will be
able to reach the New-York market by means of this road before
the Hudson river closes at Catskill. And that this work will be
productive to the company, is evident from the fact that they
had used their cars with horses on this road for a few days during
the last autumn for the distance of seventeen miles, making however
but one trip per day, and for the travel during that very short
period they received over nine hundred dollars,
The whole costs of this rail-road complete, including the disasters
they have met with, will be between seven hundred and fifty and
eight hundred thousand dollars; and that to put it in complete
order with cars and engines, the cost will be about nine hundred
thousand dollars; and this company show by the report of their
treasurer that they have expended the sum of three hundred and
ninety-six thousand three hundred and thirty dollars and seventy-one
cents, to which, if the value of the land gratuitously released
to them is added, amounting to one hundred and thirty thousand
dollars, making a total of five hundred and twenty-six thousand
three hundred and thirty dollars and seventy-one cents.
The act in aid of this rail-road corporation as it now stands,
requires them to expend out of moneys raised from the stockholders
upon their capital stock, one dollar and fifty cents, before they
can receive a dollar from the State, and in order to receive the
last fifty thousand dollars, which they obtained under that loan
of credit, the company strained their stockholders to the utmost,
and as much as they could possibly bear. They now desire to draw
the remaining portion of the State aid in the proportion of two
dollars from the State for each dollar advanced by them, and to
receive the same in sums of fifty thousand dollars, and as fast
as they can show the expenditure of the previous sum and they
are of opinion that the balance so remaining of the one hundred
and fifty thousand dollars of that loan of the public credit,
together with such amount as they would be able to collect from
their stockholders, would be as much probably as they could judiciously
expend during the ensuing season, and would enable them to extend
their road to Schoharie and render it beyond question productive
of a fair profit to those interested.
The state of facts thus exhibited before the committee, induced
in their minds an opinion that no sufficient reason existed in
the year 1838, for the distinction made between this company and
the other incorporations to which the State then granted their
aid; and that after ascertaining the amount of expenditures to
be previously shown by the association before granting any aid
on the part of the State, the amount to be received from the State
should be equal to the amount to be advanced by the stockholders
upon their capital stock. And in this view an expenditure of one
hundred and fifty thousand dollars is shown before they received
one hundred thousand dollars, and then for the remaining advances
on the part of the State of fifty thousand dollars each, the company
should raise an equal amount; and not, as was required in this
case, an advance of seventy-five thousand dollars.
The committee cannot divest their minds of the impression that
it will not be judicious to accede entirely to the wishes of the
memorialists, in allowing them to receive the remaining portion
of the public aid in double the amount to be advanced by themselves;
but they do think that this company should now be permitted to
draw the balance in equal proportions with the amount to be raised
by their stockholders, and should for that purpose be allowed
the benefit of the excess which they have advanced over and above
that equal proportion; and in that view of the case the committee
ask leave to introduce a bill amendatory of the act of April 18,
1838,
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