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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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