At the last annual meeting, it was expected that the road would be stopped at Sparta. For reasons stated in the annual report, it was thought that the policy would be forced upon the Company of suspending further calls upon the Stockholders selling the surplus iron for the road beyond Sparta, and arresting the road at that point until a more auspicions period for its further progress. This policy was very unacceptable to a majority of the Stockholders' and it was considered the duty of the Directors to make further efforts to provide means and go on with the Work. The Company had purchased and paid for the iron to reach Milledgeville, and by great exertions, an adsdition was made to the stock subscriptions of about $400,000. Circumstances referred to by the Engineer in his report, caused labor to be unexpectedly abundant about the first of Jannary, and the means provided, were, by his estimate, deemed fully sufficient to complete the work to Macon.—Nothing seemed necessary to ensure the rapid and uninterrupted progress of the work to completion, except the iron for the road from or near Milledgeville to Macon; and it was hoped that, before the road should reach that point, the ports would be opened, and that the iron could be procured in time for uninterrupted progress. At any rate, Milledgeville would have been an important and profitable point, as stated by the Engineer, and the road completed to that point, would have answered many of the most important objects for which the main enterprize was designed.

Under these circumstances the Board deemed it an imperative duty to the Stockholders and to the country to proceed with the work, and the whole road to Macon was placed under contract with responsible contractors, with heavy force, as stated in the Engineer's report. A track-laying force was also set to work at Warrenton, and but for unforeseen interruption was expected to reach Sparta early in the past summer.

Sad experience, however, soon convinced us of the uncertainty of all private enterprises in the midst of the calamities of war. Early in April the work was suddenly arrested by the forcible seizure of the whole of the iron of the company, except a few miles already laid down, and a small quantity already hauled to the track for the track laying force engaged in the work. The whole iron left to us will not cover more than ten miles a distance too short to be run with any profit to the company. In a time of war private rights are often made to yield to the necessities of Government, but it must have been a most extraordinary public exigency to justify such an invasion of private rights as that involved in the seizure of this iron. A case can scarcely be conceived where the damage would be greater in proportion to the market value of the property seized. It had been specially provided for a particular purpose—was actually being used for that purpose—could not be replaced at, any price, and its loss not only involved its own value, but the loss of profit upon the entire capital expended in the enterprise.

The case differs nothing in principle, and but little in degree, from a seizure of iron upon a finished road in actual operation! If not in actual profitable use, it was in the process of being made so, and, but for the seizure, would shortly after have been in profitable use to Sparta, and with hope of but little delay at that point.

In view of the vital importance to the company of this seizure, the most strenuous and persevering efforts were made to induce the Department to release at least a few hundred tons to reach Culverton, where the road would have been of some use to the citizens of Hancock. But every appeal upon this subject was entirely disregarded, and the further appeal recommended by the Engineer would be hopeless. Whatever may be the importance to the Company, the Department shows little disposition to release iron which it can forcibly hold at 3 3/4 cents per pound, when, in open market, iron is worth from 12 to 15!

Under these circumstances of oppression to the Company, it was reasonably supposed that, at least, the fair market value of the iron would have been allowed, but not so; the iron was valued by the Government agent at $80 per ton, which it now seems was intended to include all expenses and duties! It was about the price of pig iron at the time, was 25 per cent. less than the market price of railroad iron in the hands of those who had it to sell, and is not half the value of the article at present 1

Iron, like other articles, has been rapidly rising, and from the same causes. The demand is much in excess of the supply, and whilst the demand is urgent, the supply cannot be increased in consequence of the blockade. Another cause of advance is the depreciation of our local currency compared with a specie basis, or foreign exchange. Our currency is in good credit at home, but as a fund to replace our iron, it serve us but little purpose. It will probably appreciate after peace, but too slowly for our purpose, as our demand will be urgent. It is impossible, therefore, now to estimate what our damage will be, in consequence of this unfortunate seizure, but independent of the loss of interest on our whole expended capital, it will probably be heavy.

It is not the intention of the Board to criticise harshly the action of the Government. In a time of war encroachments upon individual rights are often submitted to, and sometimes necessary; but a just Government, in peace or war, will make these sacrifices as equal as possible. If the exigencies of the public are so urgent as to justify the forcible seizure of the property of the citizen, the principle of indemnity should be recognized, and the public should make just compensation for the injury done. There is no justice or propriety in making individuals or classes the victims of a forced economy for the benefit of the rest of their fellow citizens. After some hesitation, it was deemed best to accept the amount offered by the Government officials in this exparte and oppressive proceeding, and appeal to the justice of Congress for at least some mitigation of the losses thus forced, upon the Company. Full indemnity for the damage done us we do not expect, but that the market price of iron at the time of seizure will at least be awarded to us, we do hope and expect.

As contracts had been made, we had no alternative but to proceed with the work, and the work of preparing the road-bed is making satisfactory progress. The grading to Milledgeville will be done in a few months, and the whole road-bed to Macon will probably be done during the next year. There is, however, now no object in pushing the work. We cannot replace our iron until peace shall be again restored to the country. If to be purchased now, it would cost us $250 per ton, and after procured, would most likely be seized by the Government. This state of uncertainty is not very encouraging, but the position has been forced upon us, and we can only submit. The policy will be to finish the road-bed complete, ready for the iron, and on the restoration of peace, to purchase the iron, and complete the work as rapidly as possible. For this purpose our stock subscriptions are believed to be ample. They now amount to over $1,600,000, which making all fair allowances for loss, will more than cover the estimate of the Engineer, independent of outfit, and should furnish a part of that.

Should the former prosperity of the country be restored by peace, the Directors have full confidence that the road, on completion, will be a profitable one to the Stockholders, besides, answering all the valuable purposes designed by its original projectors. The line from Vicksburg to Montgomery is making rapid progress, and will soon be completed to Selma; and the short road from Greensborough, N.C., to Danville, Va., is also progressing under the auspices of the Confederate States. These roads are important to our road, as hastening the line between Richmond and the Southwest and the Gulf States. For further details, the Stockholders are referred to the report of the Engineer and the financial statement of the Treasurer, hereto annexed. It will be seen by the latter document that the Company is well supplied With ready means. In fact, the Stockholders have paid rather faster than was desirable, and, to save interest $100,000 of South Carolina Railroad bonds were purchased, at a premium of 10 per cent., which could now be sold for a considerable profit.

GENTLEMEN—The operations in the Engineering Department are herewith respectfully submitted.

The work of graduation since the last Report has been vigorously continued, not only with the forces then on the road, but, with large additions. Notwithstanding the hesitation and distrust felt by all at the commencement of the work, the policy of the Board in ordering the extension has been shown to be judicious, and has been attended with the happiest results. The caution of other companies inducing them to suspend and curtail operations, rendered work difficult to be obtained, and enabled us to let our contracts to advantage. The line between Sparta, and Macon was contracted to Messrs. Orr, Lockett, Thompson, Jossey, Collins, Phillips and Gilbert, Lane and Brown, Culver, Bowen, and some smaller contractors. The forces now engaged on the road number one thousand hands, working two hundred and ten carts. The prices paid are the same as those under the first contracts, with a variation only in the mode of payments, the price being sixteen cents per cubic yard each way, without reference to haul, three eights to be taken in the stock of the company, thereby increasing subscription to the capital stock to that extent. The time, designated for the completion of the work is 1st January, 1864.

With the large force mentioned above we have made great progress, and I am pleased to report the completion of the graduation, masonry and bridging of the line between Warrenton and Sparta, twenty-one miles. Two small, points of rock remain in cuts near Culverton, which could not be removed for want of powder.

The grading and masonry between Sparta and Miledgeville is also well advanced, being fully two-thirds finished. Some of the contractors have already “completed their work between these points, and moved their forces west of Milledgeville. Others will soon follow, and should nothing unforeseen occur, we may look forward with certainty to the completion of the graduation by the time prescribed by the contract. The grading of these seventy-five miles is as heavy as that of any other running road in the State, and the execution of such a work during the gloomiest days of our revolution may well exceite admiration.

The line between Warrenton and Sparta crosses many large creeks and streams running into the Ogeeche, as also the river itself. A Howe truss bridge on granite piers spans the river, but in crossing the other streams, Golden, Whetstone, Rocky Comfort, Ivey Branch, Long, Howell, Fulsom, Dry, Little Ogeeche, and Two Mile Creeks, I was compelled to resort to trestle work, not in consequence of difficulty in procuring material for the heavy embankments, but also, from the inability of building the arched culverts necessary for passing these streams. With the completion of the track this work can be economically done, however, by using cars for filling the embankments and procuring the rock for the culverts from the more convenient quarries. The culverts will be ten in number, ranging from fifteen to thirty feet span; the amount of two hundred and fifty thousand yards of earth will be required for making the embankments. The masonry between Sparta and Milledgeville can be made thorough, and there will be but five hundred feet of this temporary and objectionable trestle, this over Town and Rocky Creeks. In consequence of the line following a ridge to the Oconee; small square culverts will suffice for the drainage.

The Oconee river will be crossed by a Howe bridge of five hundred feet; it being useless to attempt the erection of the bridge at this time, we shall put up the piers and abutments for the same. A similar course will be adopted in reference to the bridging between Milledgeville and Macon.

The progress of the track laying has not kept pace with that of the grading; we have but seven miles laid and rnnniug. Our iron, with the exception of ten miles, was seized by the Government in April last, and we have had no inducement to put down the small balance on hand.—We therefore brought our track-laying to a close, and have devoted the dry months of the summer to clearing with the train some wet cuts near Warrenton. So soon as the approach of winter shall stop this work, we will resume the track laying, and can finish to the Ogeechee in two weeks time. Unless some arrangement can be made with the Government to release five or ten miles of iron, so that we may reach either Culverton or Sparta, I doubt the policy of running regular trains over this short distance to the Ogeechee.

The seizure of the iron has been a serious drawback to the road, as, without the track, the work expended on the grading would be dead capital. Could we have made a connection with the Central Railroad at Milledgeville, as anticipated when the iron was purchased, we should have done a good business.

The right of way has been, secured from Warrenton to Milledgeville, except in three or four instances. The city of Milledgeville has donated to the Company the free passage through the city lots and streets and many parties between Milledgeville and Macon have also granted us the right of way. I am happy to state that the liberality shown in the matter, by all on the line, attest their interest in the success of the road.

The Central Railroad has generously acceded to a proposition for a junction of tracks and an exchange of freight and passengers in Milledgeville; a measure of great convenience to the public, and of much advantage to each road. The statement attached shows the amount of payments at the date of the last estimate on the 10th August; to this must be added the amount due on the 10th of this month, approximately fifty thousand dollars:

Graduation and masonry . . . . . $360,416 45 Bridge and trestling . . . . . 21,000 00 Superstructure of bridges . . . . . 1,025 27 Spikes . . . . . 2,293 41 Laying Track . . . . . 2,890 00 Cross-ties . . . . . 3,037 73 Division Houses . . . . . 537 36 Right of way . . . . . 6,686 73 Real estate . . . . . 12,884 00 Iron rails, say for ten miles . . . . . 42,500 00 Engineering . . . . . 20,000 00   474,269 95 Add as above . . . . . 50,000 00 Total . . . . . 514,269 95

A portion of the line near Macon not being definitely located, I cannot present any more accurate statements of the cost of the whole road than has been hitherto submitted, but the progress of the work thus far shows that it will vary but little from the first estimate.