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HOUSE.....No. 49.

[Reported by the Committee on Finance.]

Commonwealth of Massachusetts.

HOUSE OF REPRESENTATIVES, Feb. 24, 1848.

The Committee on Finance have been instructed, by an order of the House, to "consider the expediency of the gradual but entire disposal of the Stock owned by the Commonwealth in the Western Railroad: provided, it may be done for not less than the par value of said Stock."

In obedience to this direction, the Committee have had that matter under consideration, and ask leave to submit the following

REPORT.

The Act to establish the Western Railroad Corporation, the initiatory legislative measure which set that great public improvement of our Commonwealth in operation, was passed March 15th, 1833. By this original act, the capital stock of the corporation was fixed at two millions of dollars.

The next act in relation to the capital of the Western Rail

road was passed April 4th, 1836. By that act, the Commonwealth extended its enlarged and liberal aid to that great enterprise.

The act provided for an increase of the capital stock, to the amount of one million of dollars, making the whole capital three millions of dollars. The treasurer of the Commonwealth was directed to subscribe, in the name and behalf of the Commonwealth, for ten thousand shares of stock, being an amount equivalent to the million of dollars of new stock which was authorized by this last act to be issued. Thus our state became a partner in the enterprise, to one full third part of the capital invested. A passing compliment may well be paid to the sagacity, the foresight, and the public spirit of the administration of our state affairs in 1836, for the unstinted aid which they granted to this magnificent work; granted, too, when the project was invested with gloom and despondency; and when, but for that aid, it might have entirely failed.

To meet the payments for this stock, an act was passed, April 15, 1837, authorizing the treasurer of the Commonwealth to issue scrip, not exceeding one million of dollars, at five per cent. interest, redeemable in twenty years. In this same act, provision was made for the establishment of a sinking fund, for the future purchase or final redemption of the scrip which it authorizes to be issued, and for the payment of accruing interest on the said scrip. The various items of income which have been, from time to time, appropriated to this fund, amount now to nearly one half of the scrip issued; and it is confidently believed that, in 1857, when the scrip falls due, there will be a corresponding amount to meet it, in the sinking fund.

The fact that such ample prospective provision was made, to pay for this original subscription to the stock of the Western Railroad, would seem to imply an intention, or expectation, on the part of the legislature by which that provision was made, that the Commonwealth would retain that stock, as a permanent property. The creation of a debt of twenty years' standing, to pay for it, and the establishment of a sinking fund, for the ultimate liquidation of that debt, would lead to the inference that the railroad stock itself was not relied upon to meet its own

cost; but was to be treasured up among the assets of the state, yielding what income it might, and preserved as a memorial of the enterprise and energy, with which the state had lent her powerful aid to the consummation of this noble public work.

By an act passed March 25th, 1845, the Western Railroad Corporation was authorized to increase its capital stock, from time to time, to an amount equal to sums paid into the sinking fund established for the final liquidation of the scrip issued in aid of that corporation, by the Commonwealth. Being the owner of one third of the original three millions of capital, the Commonwealth had, of course, the right to take one third of any new stock which might be issued, or not to take it. The option, in this last act, was left with the governor; and, on the 26th March, the day after the passage of the last-mentioned act, another act was passed, giving the governor authority to sell any additional stock taken under that act. Under these acts for the increase of capital of that corporation, four hundred and forty-one shares, amounting, at their par value, to forty-four thousand and one hundred dollars, were taken by the Commonwealth. These shares the governor has authority to cause to be sold, whenever he may deem such sale expedient.

The Western Railroad was further authorized, by an act of the last session of the legislature, (April 24th, 1847,) to increase its capital stock in the sum of one million and six hundred thousand dollars. Under this act, the Commonwealth has taken thirteen hundred and twenty-three shares, amounting, at their par value, to one hundred and thirty-two thousand and three hundred dollars. As the state had a right to its portion of this stock, as the stock was ranging much above par in the market, and as the prospects of the corporation were highly flattering, it was deemed advisable that the state should not forego the advantage of its right, to take its portion of this new stock. If it should be deemed advisable, hereafter, to retain this surplus stock, it may be paid for from moneys belonging to the school fund or the sinking funds, which are now drawing lower rates of interest than the stock will probably pay; or if, on the other hand, it should be thought expedient to sell it, it may, at a proper time, be disposed of at a price above its par value.

The committee have thus given, for the information of the House, a brief account of the connection of the Commonwealth with the Western Railroad Corporation, as one of its stockholders. In addition to the original million of dollars, the state now holds one hundred and seventy-six thousand and four hundred dollars of its stock.

Even if a prudent and sagacious management of the state finances should appear to suggest future measures for the disposal, in whole or in part, of the stock in the Western Railroad Corporation, held by the Commonwealth, the committee are clearly of opinion that the present is not a time appropriate to the adoption of such measures. The state of the money-market is such, that all stocks, securities, and other properties, even those deemed the most safe and secure, will not command their intrinsic value in money. If a large amount of this stock was thrown into the market, it would unquestionably tend to diminish its market value, more especially, when it is known that the stock so offered is the property of the Commonwealth, the largest stockholder, and abundantly able to hold it through the present exigency in money affairs. In a time like the present, so sensitive is the state of money concerns, that it is not unlikely that even a protracted discussion, at the present session of the legislature, might unfavorably affect the market value of this stock.

Under these views of the matter, the Committee of Finance do not deem it advisable for the House to take any further measures in the premises; and they respectfully ask to be discharged from further consideration of the subject.

For the Committee,

WILLIAM HAYDEN, Chairman.

HOUSE....No. 50.

[Reported by the Committee on Railways and Canals, on the petition of A. W. Porter, and others.]

Commonwealth of Massachusetts.

In the Year One Thousand Eight Hundred and FortyEight.

AN ACT

Entitled An Act to incorporate the New London, Willimantic, and Palmer Railroad Corporation.

BE it enacted by the Senate and House of Representatives, in General Court assembled, and by the authority of the same, as follows:

1 SECT. 1. Andrew Porter, Franklin Newell, Elisha 2 Converse, Sylvester Parks, William N. Flynt, their 3 associates and successors, are hereby made a corpora

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