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ANNUAL REPORTS OF THE MINEHILL AND
SCHUYLKILL HAVEN RAILROAD COMPANY: 1844-1864
by
Gary Giroux, Texas A&M University
The Minehill and Schuylkill Haven
Railroad Company (MSH) was one of the
first commercial carrier railroads chartered
in the U.S. The stock traded on the
Philadelphia Stock Exchange and the company
managers faithfully issued annual
reports to the stockholders beginning in
1828. Fifteen annual reports were discovered
at the Library Company of Philadelphia,
covering most years from 1844-1864. The
purpose of this paper is to conduct a content
analysis of these annual reports.
Few articles describe the financial
reporting characteristics of specific 19th
century railroads. Several histories exist of
early major railroads (Baltimore and Ohio,
Pennsylvania, New York Central, and Erie),
but with limited accounting analysis. Each
railroad responded to financial circumstances
and problems in unique ways.
Particularly important was the financing of
railroads, largely through the burgeoning
capital markets. What information was presented
to demonstrate credibility to corporate
stakeholders? What compensation (cash
and stock dividends, interest payments)
must be made and why? Before much headway
is made on generalizing the contributions
of railroads to accounting, these specific
stories must be told.
Minehill and Schuylkill Haven Railroad
Company
The early history of MSH was described
in the earliest annual reports of the company,
which is presented below. No financial
statements were presented before the 1848
Report and little financial information of
any kind discussed.
The Pennsylvania State Assembly
granted a charter to establish the Minehill
and Schuylkill Haven Railroad Company in
1828, with capital of $25,000 to "constitute
a railroad from the canal at Schuylkill
Haven, up the valley of the West Branch to
the coal seams in the Mine Hill, a distance of
nine miles." Initial track construction was
completed in 1831 at a cost of $186,000.
Coal was hauled in cars pulled by horse and
mule teams, 17,559 tons in 1831.
The lines were expanded as new coal
fields were opened. Locomotives were first
acquired in 1847, requiring improved infrastructure.
During 1863, 1.5 million tons of
coal were hauled, a total of 25 million tons
over 32 years (1831-63). The end of the line
connected to the docks of Schuylkill
Navigation Co. or the rail of the
Philadelphia & Reading Railroad Company
at Schuylkill Haven. MSH was acquired by
the Philadelphia & Reading in the 1930s.
Thus, the MSH continued in existence for
over 100 years.
The initial $25,000 in stock (1828) was
subscribed by local coal land owners and company
managers. As more capital was needed,
mortgages were obtained from Philadelphia
capitalists. The mortgages were convertible
to common stock. The stock traded on the
Philadelphia Stock Exchange, the first stock
exchange founded in the U.S. (1790) and the
premier stock exchange at the time the company
was chartered.
Schuylkill Haven & Lehigh River
Railroad was acquired by MSH in 1863. Also
in 1863, MSH managers agreed to lease the
railroad to the Philadelphia and Reading
Railroad for an annual fee of 8% of total
assets. MSH stock price rose from 48½ at the
start of 1863 to 62½ in December. No mention
was made in the 1864 annual report of
the consequences of the Civil War. The 1879
balance sheet of the Philadelphia and Reading
showed $175,300 of MSH stock as an asset
(Previts and Merino, 1979, pp. 82-83).
The Accounting Historians Notebook, April, 1998 9
