Wikipedia:WikiProject Trains/ICC valuations/Durham and South Carolina Railroad

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The railroad of Durham & South Carolina Railroad Company, hereinafter called the carrier, is a single-track standard-gauge steam railroad, located in the central part of North Carolina. The owned mileage extends southerly from a connection with Durham and Southern Railway Company at Durham, to Duncan, N. C., a distance of 38.077 miles. The carrier also owns yard tracks and sidetracks, totaling 4.586 miles. Its road thus embraces 42.663 miles of all tracks owned. From the connection with the Durham and Southern Railway Company the carrier operates into Durham over the tracks of that company and those of the Seaboard Air Line Railway Company, respectively, to a small station owned by the carrier, about 0.25 mile east of the union station. In Appendix 1 will be found a general description of the property of the carrier.

Corporate history.—The carrier was incorporated on January 20, 1905, by special act of North Carolina, for the purpose of constructing certain railroad property and to acquire the franchises and property of the Mount Hope Valley Railroad Company, hereinafter called the Valley, which was incorporated under the general laws of North Carolina on August 1, 1904.

The charter of the Valley authorized the construction of a railroad about 20 miles in length, between a point on the Raleigh and Augusta Air Line Railroad, near the Wakefield and Chatham County line, to some point in the southern part of Orange County, N. C. There is no record of this company ever having commenced the construction of its road.

All of the carrier's outstanding capital stock is owned by the Chatham Lumber Company, hereinafter called the Chatham, which in turn is controlled by the Williams and McLeithen Lumber Company, hereinafter called the Williams. The principal office of the carrier is at Durham. The detailed facts as to the development of the fixed physical property are given in Appendix 2.

APPENDIX 2

DEVELOPMENT OF FIXED PHYSICAL PROPERTY

The property of the carrier was acquired by construction and built under contract. The original road, extending from the line of Durham and Southern Railway Company junction to Bonsal, about 27.51 miles, was completed and opened for operation in June, 1906. An extension, extending from Bonsal to Duncan, about 10 miles, was completed and opened to traffic in December, 1913.

Construction of the original road was commenced by the Chatham under a contract dated June 16, 1905. Under the terms of this contract, the Chatham was to receive $300,000 of the carrier's capital stock and $300,000 of its mortgage bonds, in return for which the Chatham was to construct and equip, ready for operation, the original road between the points named. On December 8, 1905, the Chatham was released from the full performance of its contract, the carrier paying that company $300,000 of its mortgage bonds for the cost of material furnished and construction finished at the latter date.

A new contract was then entered into with W. B. Bonsal, president of the carrier and of the Williams, and J. M. Barr, a director of the Chatham, to complete the unfinished construction and equip the road in the manner called for in the contract of the carrier, under the following terms: That upon completion of the contract the carrier would issue to Bonsal and his associates $300,000 of its capital stock fully paid and nonassessable. The road was completed under this contract. What proportion of the construction was performed by the carrier and what proportion by Bonsal and his associates could not be ascertained from obtainable records.

The extension from Bonsal to Duncan was built by the Williams under contract for $200,000 of the capital stock of the carrier. At the time the contract was made and the construction performed, Ernest Williams was president of both companies.

The Valley was authorized to issue $100,000 of capital stock, and subscriptions for $22,000 were made, but there is no record of any assessments having been levied thereon.

On April 24, 1905, the Valley ceased to exist, the stockholders having sold and conveyed all its property, real and personal, franchises, and rights to the carrier. The total assets of the Valley appear to have consisted of its franchises and rights. The price paid by the carrier was not obtainable.

HISTORY OF CAPITAL FINANCING