Wikipedia:WikiProject Trains/ICC valuations/Southern Railway in Mississippi

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Corporate history.—The carrier was incorporated August 31, 1894, under the general laws of Mississippi, in the interest of the Southern for the purpose of acquiring that part lying within Mississippi of the property of the Georgia Pacific Railway Company, whose entire property had just been sold at foreclosure to parties who organized the Southern and conveyed to it the rest of the Georgia Pacific property. This separate incorporation of the carrier was necessary to meet a provision in the laws of Mississippi prohibiting a foreign corporation from holding and operating property within the State. The carrier is controlled through ownership of its entire capital stock, by the National Investment Company, which is in turn controlled by the Southern.

Further data under this heading and detailed facts as to the development of fixed physical property are given in Appendix 2.

History of corporate financing, capital stock, and long-term debt.

APPENDIX 2

For data relating to predecessors of the carrier, reference is made to the report of the accounting section.

CORPORATE HISTORY

The property of the carrier was operated by the Southern as part of that company's system of roads from September 1, 1894, when the carrier acquired the property, until December 31, 1908, apparently through stock control, as no agreement was found of record. The Southern also operated the property of the Delta Southern Railway, another Mississippi corporation controlled by the Southern, from March 26, 1906, the date that property was put in operation, until December 31, 1908. The net income to December 31, 1908, resulting from the operation of the property of the carrier and the Delta Southern Railway by the Southern, was recorded in the accounts of the carrier through an open account with the Southern, as will be seen later, and was classified by the carrier in its reports filed with this commission as nonoperating income. The amount of deficits that accrued to December 31, 1908, on account of the operation of the property of the Delta Southern Railway was credited to the profit and loss account of the carrier and was charged to the former in an open account.

On January 1, 1909, the carrier took over from the Southern all of its property except 9.757 miles of road extending from the Alabama-Mississippi State line to Columbus, and the 54.421 miles of road owned by the Delta Southern Railway. These properties, comprising 282.110 miles of road, were operated by the carrier from January 1, 1909, to the date of valuation, the property of the Delta Southern Railway being operated by the carrier as agent. The 9.757 miles of road, referred to above, remained in the hands of the Southern and were operated by it as agent for the carrier until the date of valuation.

The legal relationship of the carrier and the Southern and that of the Delta Southern Railway and the carrier, after December 31, 1908, was, in each case, that of the principal and agent, as is more fully set forth under the caption, Leased Railway Property, but the amounts that exchanged hands between them for the use of the property involved were accounted for in their records as nonoperating income, and in their reports filed with this commission as income from lease of road or rent for lease of road.

The examination of the records of the Southern also discloses that the results from the operation of the properties of the carrier and the Delta Southern Railway prior to December 31, 1908, and from the operation of the 9.757 miles of road of the carrier, referred to above, subsequent to that date, were included in the operating income of the Southern.

The results from the operation of the property of the Delta Southern Railway subsequent to December 31, 1908, were included in the operating income account of the carrier.

DEVELOPMENT OF FIXED PHYSICAL PROPERTY

The carrier acquired its entire property of [?] miles through purchase, after foreclosure proceedings, of the property lying within Mississippi formerly owned by the Georgia Pacific Railway Company. The title of the carrier to this property was perfected by deed under date of January 9, 1896, from Samuel Spencer, receiver of the Georgia Pacific Railway Company, Central Trust Company of New York, trustee, and Charles H. Coster and Anthony J. Thomas, purchasers under the foreclosure sale. However, the carrier came into possession of this property on September 1, 1894, and has operated it from that date. No extensions to this property as purchased have been made, but considerable has been expended for additions and betterments.

HISTORY OF CORPORATE FINANCING

LEASED RAILWAY PROPERTY

The following property was leased to the carrier by others or leased by the carrier to others:

Properly owned and operated by other carriers and used jointly by them and the carrier.—The carrier uses jointly with the owners, interchange tracks of the Mobile and Ohio Railroad Company at West Point, and similar tracks of The Yazoo and Mississippi Valley Railroad Company at Moorhead, Miss.

Property of the carrier operated by the Southern as agent for the carrier.—In its annual reports, the carrier states that the Southern operated 9.757 miles of road owned by the carrier, extending from the Alabama-Mississippi State line to Columbus, from January 1, 1909, to date of valuation, as agent for the carrier. No formally executed agreement between the carrier and the Southern covering the operation of this property was found of record. The examination of the records of the Southern and the carrier disclosed that the amounts that changed hands between them were accounted for in their respective records as if the property in question was leased to the Southern.

Property of others solely operated by the carrier.—The carrier operated the property of the Delta Southern Railway from January 1, 1909, to date of valuation, under an agreement dated February 11, 1909, whereby the carrier agreed, among other things, to account to the Delta Southern Railway for all income, and revenues derived from the operations of its property and the latter agreed to indemnify and save harmless the carrier against any and all claims, demands, suits, judgments, etc., accruing on account of the operation of the property. The examination of the records of the carrier and the Delta Southern Railway disclosed that the accounting for the amounts that exchanged hands between those companies was handled in their respective records as if the property of the latter was leased to the carrier.

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