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2d Session.

No. 39.

REPORT

OF

THE SECRETARY OF THE TREASURY,

COMMUNICATING

Information in relation to the stock of the Louisville and Portland Canal

Company.

FEBRUARY 19, 1851.
Read, and ordered to be printed.

TREASURY DEPARTMENT,

February 17, 1851. SIR: In obedience to the resolution of the Senate of the 15th instant, requesting certain information respecting the Louisville and Portland canal, and of the stock held in it by the United States, I have the honor to report, that the original capital of said company was divided into 6,000 shares, of one hundred dollars each, agreeably to the charter granted in 1825 by the State of Kentucky, which, by the act of that legislature of 21st December, 1829, was increased 1,000 shares; making the whole capital 700,000 dollars, under which the canal was completed and opened on the 224 December, 1830. On the original stock the United States subscribed 1,000 shares in 1825; and, afterwards, under the act of Congress of March 2, 1829, the United States subscribed the further number of 1,335 shares, which had been forfeited by individual subscribers from want of confidence in the success of the enterprise; for which 2,335 shares there was paid in money 233,500 dollars.

The company, finding itself embarrassed in its pecuniary affairs, again applied to the legislature, who, on the 12th of December, 1831, passed an act authorizing it “so to extend their capital stock as will be sufficient to pay all the cost and expenses of constructing said canal, and the interest on the sums expended by the company in the construction, up to the time the said canal was opened and vessels passed through the same; and they may sell so many additional shares, at $100, as will pay said cost and interest."

Under this new act, the company increased its capital to 10,000 shares; and, agreeably to the authority therein granted, allotted interest to the previous stockholders, payable in new stock; under which allotment the United States were allowed 56,700 dollars, equal to 567 shares of stockmaking the whole quantity owned by the government 2,902 shares, which it still retains.

No money dividends were paid by the company until 1834, and the whole amount of such dividends, received by the United States on their stock, is as follows: 1834, Jan. 6.- Cash

$14, 010 July 7.-Cash 1835, Jan. 5.-Cash

8, 706

8,706 July 3.-Cash 1836, Jan. 4.- Cash

11, 608

11, 608 July 15.-Cash. 1837, Jan. 2.- Cash

11,608

11, 608 July 3.-Cash1838, Jan. 1.-Cash

17,412 July 2.-Cash

20, 314

17, 412 1839, Jan. 7.-Cash

14,510 July 6.-Cash 1840, Jan. 6.-Cash

26, 118

23, 216 July 6.-Cash 1841, Jan. 4.-Cash

14,510

20,314 July 5.-Cash. 1842, Jan. 3.-Cash

11,608 14,510

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Total

257, 778

This amount is exclusive of the 567 shares issued to the United States, as before stated, in lieu of dividends from the commencement of the work until it was completed for the passage of boats.

In January, 1842, the company petitioned the legislature of Kentucky for an amendment to their charter, under apprehensions thus expressed in its own language: “In the repeated applications to Congress for another canal, the hostility exhibited to the company from various quarters, and the apathy with which such applications to destroy its rights is received in Congress and elsewhere, together with the general expectation that the navigation of this important section of the Union should be free, under these circumstances it has been deemed prudent by many who are largely interested, that although, if fully assured of the safety and stability of all the rights and immunities granted them by charter, the stock would be a good investment at $250 per share, yet, from the indications of government and individual interference, they would be content to receive a sum much below the intrinsic value of their stock."

In compliance with this petition, the legislature passed an act on the 21st of February, 1842, authorizing the directors, with the approbation of the stockholders, to appropriate the future net income of the company in purchasing up the shares other than those owned by the United States, at rates not exceeding $150 per share for the first year, with the addition of six per cent. interest, or $9 per share, for each succeeding year; which shares thus purchased the company were to hold in trust, and to vote upon them at all elections, until the whole were purchased, when they were to be transferred to the United States on condition that the latter in future should levy tolls for the use of said canal only sufficient to keep the same in repair, to pay all necessary superintendence, custody, and expenses, and make all necessary improvements, so as fully to answer the purposes of its establishment, and further to protect and guard the interest of com

merce.

This amendment to the charter was ratified and accepted by the unanimous vote of the stockholders at a general meeting, held on the 4th of July, 1842; but there appears to be no record in the department which shows whether the parties holding at that time the proxy of the United States voted on the question, but the natural inference is that they did; and if so, it must have been in its favor, as the ratification was reported as being unanimous.

Since then, the operations of the company have been exerted to purchasing the stock, with the object of making the canal free. The last report which is on the files of the department is up to the 1st of January, 1819, when it appears, out of 7,098 shares belonging to individuals, 3,644 had been thus purchased up by the net income of the company, and 3,454 were still outstanding in private hands. The cash balance, however, on hand at that time was $126,684, which, at the rate for that year of $204 per share, would purchase about 620 shares, which was ordered to be done, and would increase the number of shares bought up to 4,264, and leave outstanding 2,834. If, as was no doubt the case, a like number of shares were purchased in January, 1850 and '51, the whole amount now outstanding would be 1,600 shares; and with the annually increasing price for the shares, will require something less than three years in order to extinguish all the stock belonging to individuals, and leave the United States as the sole stockholder, and, of course, the exclusive owners of the canal.

The preceding contains full information on all the points embraced in the resolution of the Senate, with the exception of the exact amount of stock held at this time by individual stockholders, which information the department is unable to furnish at present with more exactness than the above, but which it is believed can vary but to a very small extent from the actual number now outstanding. Very respectfully, your obedient servant,

THO. CORWIN,

Secretary of the Treasury. Hon. W. R. KING,

President of the Senate.

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1

2d Session.

No. 39.

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TREASURY DEPARTMENT,

February 24, 1851. Sir: Since the communication from this department of the 17th instant in reply to the resolution of the Senate calling for information as regards the Louisville and Portland canal, the department has received the two last annual statements of the company; and in addition to the information contained in the preceding communication, it now has the honor to add that the whole number of shares belonging to individuals which had been redeemed from the net revenue of the company up to that date was 4,748, besides which there was a cash balance then on hand of $88,522 87, with which it was ordered 400 additional shares should be purchasedwhen the statement of the stock would stand as follows: Belonging to the United States

2,902 shares. Redeemed by the net revenue of the company,

5,148 Outstanding in the name of individuals, and subject to be redeemed

1,850

Total

· 10,000

The amount received for tolls during the last four years was as follows: In 1847

$139,900 72 In 1848

158,067 96 In 1849

129,953 46 In 1850

115,707 88

Very respectfully, your obedient servant,

THO. CORWIN,

Secretary of the Treasury. Hon. W. R. King,

President pro tempore of the U. S. Serate.

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