Santa Fe Railway Historical & Modeling Society : Splinters Volume 7

GULF, COLORADO AND SANTA FE RAILWAY COMPANY

EARLY ISSUES OF CAPITAL STOCK (continued)

Elinore McDonough

Galveston, Texas

May 25, 1927

At the meeting of the Board of Directors held on Dec. 28, 1874, the following resolution was adopted:

"RESOLVED - That the line of construction from the City League to the crossing of the Galveston, Harrisburg & San Antonio Rail Road, on the most direct practical route, be put under survey immediately.

"RESOLVED - That the following Directors guarantee the expense of said survey, Pro-rata - viz. H. rosenberg, R. S. Willis, John Sealy, M. Kopperl, A. C. Crawford, James Sorley, D. The. Ayres & N. N. John - and A. P. Lufkin, Stockholder - any funds advanced by them to be refunded out of the first collections on stock subscriptions."

At the meeting of the Board of Directors held on Feb. 8, 1875, the President was authorized to appoint a committee to confer with the incorporated companies of the city in regard to their proposed subscriptions to the capital stock, and also to solicit additional stock subscriptions.

The minutes of the meeting of the Board of directors held on March 15, 1875, show that the Directors named in the meeting of Dec. 25, 1874, had each contributed the sum of $200.00----or $1,600.00 in all---to defray the expense of the first survey of the line. Mr. A. C. Crawford is not included in the list of those contributing, as he had previously resigned as Vice-President and Director. However, at this same meeting of March 15, 1875, another committee was named to solicit stock subscriptions, particularly "to wait on those Companies who have not yet taken action on subscribing to the Capital Stock of this Company". And at an adjourned meeting of Directors, held on March 25, 1875, it was agreed that the amount of stock then subscribed for was insufficient to warrant commencing construction of the road; and the President was requested to call a meeting of property holders of the city, and all others likely to be interested in the building of the road, to meet in the secretary's office on the evening of Ma! rch 27, 1875.

The report of this meeting is given in some detail in two newspaper clippings, pasted into Minute Book No. 1 on Page 44. One clipping is from the Galveston Mercury, a paper no longer in existence. The other, apparently, is from the Galveston News. Among those who spoke at the meeting were Mr. H. Rosenberg, President of the Railway Company, who presided, Capt. Quin, Mr. John Sealy, General Bragg, Capt. Lufkin, Major Tevis, Mr. Ranger, and Mr. R. S. Willis. It was agreed that further stock subscriptions of $100,000.00 would be necessary before construction of the road could be begun, with any guarantee of its completion. And the fact was stressed that unless thirty miles of the road should be completed before Nov. 14th, of that same year, that the charter would be forfeited. An attention was also called to the operations of Commodore Morgan, who was dredging a channel to Constitution Bend, and who had been promised Federal aid in his work. He was then trying to induce the International and Great Northern ! Railroad Company to extend their line to Constitution Bend, to connect with the line of steamships he was planning to establish. It was highly important, therefore, that the Santa Fe complete its line to the proposed connection with the International and Great Northern before Commodore Morgan should accomplish his plans. The article in the Galveston Mercury contains the following paragraph:

"Mr. Willis, on behalf of the directors, stated that if the amount necessary to enable operations to be commenced was not subscribed within the next week, the directors would abandon the enterprise, and he made this statement now in order that the situation might be comprehended, and that the shareholders and the public might not be surprised at the action directors might be obliged to take".

At the suggestion of Major Tevis, committees were appointed to make a thorough canvass of the city for stock subscriptions, and to report at another meeting to be held on the Wednesday night following.

This second meeting----also reported by a clipping from the Galveston News----was held on the night of March 31,1875, in the armory of the Galveston Artillery. While the committees reporting had not succeeded in raising the full amount of $100,000.00, the results of their efforts were considered reasonably satisfactory, and after additional subscriptions had been received from people in the hall, it was decided to name another committee to continue the work of obtaining stock subscriptions. Capt. Quin stated that the subscriptions then on hand "made the total subscription to the stock from corporations and individuals about $271,000, which with $500,000 in bonds from the county, increased the amount to $771,000".

(NOTE: Apparently, the Railway Company did not succeed in collecting all these stock subscriptions, as a check of the first stock books shows a total of $710,300.00 of stock issued at the time of the Trustee's sale April 15, 1879.)

Capt. Quin's motion was unanimously carried, "that it was the sense of the meeting to put the road as far as Arcola under construction forthwith". General Bragg assured the meeting that construction work could be started on two days' notice, and spoke in glowing terms of the country the road was to traverse, not only that near to Galveston, but the mineral regions of West Texas, and the great country out to the Pacific Coast, where the road would terminate at the harbor of San Diego.

There was mention made at this meeting, also, of a plan to obtain authority from the State Legislature "that the city might be taxed $500,000 to build the road". It appears to have been only a suggestion, that went no further.

There is embodied in the minutes of the meeting of the Board of Directors held on April 3, 1875, the following contract with Richardson, Belo & Co., publishers of the Galveston News:

"It is hereby understood and agreed that the stock in the Gulf, Colorado & Santa Fe R.W.C. subscribed for by Richardson, Belo & Co., amounting to one hundred shares, of one hundred dollars each, shall be paid by them in advertising & job printing for said Company - and that no portion of the said Stock subscription of ten thousand dollars shall be payable in Cash by the said Richardson, Belo & Co. - Should said Railway Company not require advertising & printing in sufficient quantities to meet installments when called for, the amount will stand open until such time as the Company may need it - Whenever the said Account shall amount to a sum sufficient to cover any installment, a certificate shall be issued for same in liquidation of said account--- All work under this agreement shall be charged for at ruling rates in Galveston".

There is embodied in the minutes of the Directors' meeting of April 7, 1875, a letter from the Galveston City Company, offering a donation of Ten Thousand Dollars, "to encourage the early construction of the Gulf, Colorado & Santa Fe Railroad". And at that same meeting the following resolution was adopted:

"That the Secretary proceed to collect the three installments, of five per cent each, (say fifteen per cent) on stock subscriptions, from such persons & companies as have not yet paid the same".

At the meeting of the Board of Directors held on May 31, 1875, it was ordered that the fourth installment on stock subscriptions (fifteen per cent) be called for payment.

The following entry appears in the minutes of the meeting of the Board of directors held on Oct. 2, 1875:

"On motion of Mr. Sealy a Special Committee consisting of Messrs Sorley and Hancock were appointed to select a design and have printed or engraved certificates of Stock for this Company".

There have been no stock certificates issued prior to this time. Certificate No. 1, in favor of Henry Rosenberg, President of the road, for fifty shares, is dated Nov. 1, 1875.

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