42 Board of Public Works

Schley and Reynolds expressed great optimism with respect to the B & O, stating
that "the completion of the western connections of the Baltimore and Ohio Railroad,
open up a prospect of immense usefulness and profit to that great work; and the time
is foreseen, when the state's investment in the stock, already productive, will be re-
imbursing." A review of the railroad's tolls indicated that they were "equitable, and
generally free from partial discrimination or popular complaint," although some mod-
ifications might be desirable in the future.³⁰

The main part of the report, supplemented by four attached exhibits, concerned
the C & 0 Canal Company, the financial and working condition of which, the two
commissioners stated, "are alike deplorable." They noted that for the first time in five
years the company's expenses for the calendar year 1857 had exceeded its revenues—
by $112,921. Moreover, the company had been forced to expend $89,180 to repair
breaches to two dams and "other casualties" not specified in the report. The commis-
sioners believed, however, that when the masonry dams then under construction were
completed a recurrence of such extraordinary expenses "need not be apprehended."
Finally, the commissioners promised they would "be assiduous to prevent a competition
in the rates of tolls between the Internal Improvement Companies, that may prove
injurious to the interests of the State."³¹

The four exhibits appended to the commissioners' report illustrated both how
precarious the canal's fiscal situation was and how heavy the state's investment in it
had become. Exhibit 1 showed the aggregate investment of the state in the company,
which totaled $14,121,061, as follows:

First-class mortgage debts, including interest due and in arrears $4,888,587
Second-class preferred stock, including guaranteed dividends in 8,443,750

arrears

Third-class common stock 625,000
Value of stock and debt of the Potomac Company, exchanged for 163,724

stock in C & O Canal Company

Total $14,121,06.1

The exhibit also noted that $3,080,040 in other debt (including accrued interest), au-
thorized by the General Assembly in 1844 to finance completion of the canal to Cum-
berland,³² took precedence over the liens of the state.

Exhibit 2 was an income and expense statement for calendar year 1857, showing
revenues of $99,590, and expenses of $212,511.

Exhibit 3 was a cash-flow statement and showed how really bad conditions were.
Total receipts by the company during 1857 amounted to $164,010, of which $76,500
were from temporary loans, only $82,274 being from tolls. Disbursements, on the other
hand, amounted to $217,547. The initial cash balance of $61,874 in the company treas-
ury on 1 January 1857 had dwindled by 31 December to $8,337 and were it not for
"temporary loans" would have evaporated completely.

On 18 March 1858, twelve days after submission of this report, the four commis-
sioners attended a general meeting of C & 0 stockholders, which they had called in
February. Upon Schley's motion, but against the objection of Peter, who thought the
meeting itself to be illegal, all of the directors and principal officers of the company
were fired and new ones were appointed.³³