THE EAST TENNESSEE LAND COMPANY
From: "One Year of Harriman, Tennessee. Established by The East Tennessee Land Company, February 26, 1890."
EAST TENNESSEE LAND CO.
Its Origin and Management
The East Tennessee Land Company was chartered under the general laws of the State of Tennessee on the 25th of May, 1889, and was organized on the 10th of June succeeding with the following list of officers:--
PRESIDENT--Clinton B. FISK
FIRST VICE PRESIDENT--John HOPEWELL, Jr.
SECOND VICE PRESIDENT--Frederick GATES
No public announcement of the Company's organization, or of its plans and purposes, was made until the ensuing autumn; and the first prospectus of the Company was not issued until December of that year. The Company was a natural growth, resulting from familiarity on the part of several gentlemen with the region wherein it proposed to operate, and their belief that certain conditions were there found in combination which promised an unusual degree of business success. Some such organization was necessary for the development, over such a wide and thinly settled area, of social relations that should render possible the best business endeavors. General interest in the region itself, and confidence in the organization, were soon commanded, and the Company became known in a short time as possessing and controlling a large area of territory, rich in mineral resources.
The capital of the Company was placed at $3,000,000, while the estimated cost of its properties was about $2,000,000, leaving $1,000,000 for an improvement fund. The conservative gentlemen composing its management resolved that its financial basis should be sold, and that its capital stock, to a degree exceptional with such companies, should represent actual values and insure large returns.
General FISK died July 9, 1890, after giving the Company a year's active and able service, and he was succeeded as President by Hon. Thomas L. JAMES, ex-Postmaster-General.
When the Company's active operations began, it had acquired the control, by title-deeds, by options and by contracts, of nearly 300,000 acres of land, situated mainly upon the Cumberland Plateau and at the immediate base of it, in the counties of Morgan, Cumberland, Roane, Fentress, White and Putnam, upon both sides of the Emory river and the Cincinnati Southern Railway, with about 13,000 acres near the North Carolina border, in Carter county.
Its holdings in fee simple on the 1st of March, 1891, were 121,971 acres, its options at that time 10,914 acres, and its contracts in force 116,731 acres. Some of its original options and contracts were allowed to lapse, because of imperfect title or insufficient acreage, but on the other hand, many new and more valuable contracts have been made for mineral, agricultural and timber lands. The holdings acquired in fee embrace all the iron properties, and also the best portion of the agricultural lands. As rapidly as possible, with prudence, the Company is closing the contracts which remain, and the extent and value of its landed territory are already enormous.
THREE DISTINCT IRON PROPERTIES,
two in Roane county and one in Carter County. The Carter county iron deposits are chiefly the Bessemer, or magnetic, and are believed by experts to contain vast quantities of the best ore for steel-making by the Bessemer process. Large deposits of brown hematite are also found upon this property, with considerable manganese.
One of the iron properties in Roane county has three mines in active operation, known as Hackler's Gap, the Eureka, and the Round Island mines. At each of these red fossiliferous ores are taken out, from a deposit which averages six and a half to seven feet thick, is half a mile wide and about five and a half miles long. This ore deposit lies just south of the Tennessee river and very near the surface, having as a rule not more than six feet of soil and shale above it. It contains both hard and soft ore, the soft predominating, and its average analysis yields fifty-three per cent, of pure iron. It is obtained mainly by the process known as "stripping;" and by a tram-way from the Round Island mine, or by a narrow gauge road from the Hackler's Gap and Eureka mines, is transported cheaply to the Tennessee river, loaded upon barges, and thence delivered to furnaces at Rockwood, Dayton, Chattanooga and South Pittsburg. It is the expectation of the Company to speedily make these mines directly tributary to the manufacturing development at Harriman, by constructing or securing the construction of a standard gauge railroad from Harriman to the Tennessee river, and when this is done the out-put of these mines can be made extremely large and profitable. A part of this ore property has been under development several years, but the Round Island mine was opened after purchase by the East Tennessee Land Company. About 1,000 acres of this remarkable deposit are owned in fee by this company, and about 1,500 acres are leased for a term of years, chiefly by the Round Island Ore Company, in which the East Tennessee Land Company, has recently acquired a controlling interest. These three mines are operated by this Company, and employ about 500 men.
The third iron property of the Company commences in the Emory Valley, near Harriman, and reaches eastward several miles, upon the Company's own lands. This yields hard hematite ore, found in veins nearly vertical, in the lesser ridges which parallel Walden's Ridge. The ease with which these hard ores can be mined, their high grade and their unusual fluxing character, with the presence of abundant limestone in the same ridges, and the nearness of the whole exceptional deposit to the new city of Harriman, hereinafter described, render it reasonably certain that iron can be made from them, or from a mixture therewith of the soft ores previously referred to, more cheaply than at any other point in the South. Expert reports upon this question, the result of careful examination by thoroughly competent men, show this to be a very moderate statement, and some of the experts in their special reports to the East Tennessee Land Company have indicated the probability of the manufacturers of pig iron at Harriman very much cheaper than it can be done at any other point in the South. And it is now an established fact that iron can be made in the South of good quality and at much less cost of production than elsewhere in the country. It is already demonstrated that the iron made from these ores is of the best quality; and steel made from them, by the new Basic and the open hearth process, has been produced with results more satisfactory than from any other ores thus far tested.
THE COAL PROPERTIES OF THE COMPANY
are even much more extensive. Coal underlies the entire Cumberland Plateau, and crops out continuously in Walden's Ridge, which forms the eastern boundary of that tableland. The only coal property of this Company thus far developed by actual mining work and now being operated is at Harriman, and is known as the Byrd Mine. This is a four-feet vein, vertically at the side of Emory Gap, where the formation has been disturbed. It is an excellent coal for steam purposes, exceptionally good for the forge, and produces a fair quantity of coke. The mine was opened originally by Col. BYRD, for use upon his plantation; hence the name. The East Tennessee Land Company, have increased its capacity, and have taken from it during the past ten months an amount sufficient to meet the local demand. By a trolley system the mine cars are now run out of the mine and across the Emory river to a tip-house, where the coal is banked, or where it can be dumped directory into the cars of the Belt Line Railway, and by these carried to the factories and furnaces located along the railway and within from one to three miles of the mine itself.
The section of the Cumberland Plateau lying east of the Emory river offers the best coals found in all that region. A portion that has become known as the Brushy Mountain coal field, comprises at least 20,000 acres of this Company's land. Brushy Mountain has all the upper coal measures, geologically higher than those of the Cumberland Plateau in general, and a section of that field shows thirteen coal veins, above drainage level, with an aggregate thickness of 40 feet 4 inches of coal. Three of these are cannel coal, not known to exist in that region until discovered by this Company. The Jellico and Dean veins of this field furnish the best coking coal.
This coal field commences within ten miles of Harriman and is to be accessible by the Brushy Moutain Railroad, now building by the Harriman Coal and Iron Railroad Company, which road makes off the line of the East Tennessee, Virginia and Georgia Road at Little Emory Gap, four miles from Harriman, and will traverse the entire length of the coal field. As soon as this railroad is completed to the Brushy Mountain, arrangements will be perfected for the opening up of extensive coal mines on a large scale, and it is believed that the demand for the coke which can be made from the coals in the Brushy Mountain will be very large, as this coke is undoubtedly better than any that cane be manufactured from coals found south of Harriman, being far superior to the coke made in the Birmingham district.
THE FARMING LANDS
of this Company lie chiefly on the Plateau but comprise several thousand acres in the Emory Valley. The soil varies from a sandy to a clay form, with clay subsoil prevailing, underlaid as to the tableland by a sandstone formation. Upon the Plateau it has had little cultivation, and that of the poorest kind. Wide areas there are still covered with virgin timber and unsettled. The seasons are favorable, winter being short, spring coming early, and the autumnal frosts delayed a month later than in New York. Grain, grasses, fruits and vegetables of all kinds grow well when properly cared for. The Plateau is naturally a grazing country. Markets are at easy command, and much of the acreage is now fairly accessible by railway. These plateau lands afford a magnificent opportunity for sheep and cattle raising upon a large and successful scale, and are beginning to attract the attention of wool growers and cattle men throughout the country.
The Company has purchased no lands for their timber alone, but the timber upon large portions of its territory is of great value, including portions of its territory is of great value, including several varieties of oak, ash and other hard woods, besides pine, poplar, chestnut and sycamore.
Clay suitable for brick making and for pipe making is abundant, and five clay has been found of excellent quality and inexhaustible quantity. An expert report made to the East Tennessee Land Company, by Mr. William JOHNSON, of Leeds, England, shows that the clays in the immediate neighborhood of Harriman are unexcelled for the manufacture of fine pressed brick and fire brick.
ITS FINANCIAL RECORD
At the close of its first fiscal year, March 31, 1890, the total payments made and to be made, by the Company, on the acreage previously stated, were $2,095,879.30, and of this amount there were still unpaid and to mature $1,025,791.25. Other liabilities, in the form of bills and accounts payable, aggregated $95,395.72; and the financial statement made up from conservative inventories, showed real estate assets of $2,674,297.73; bills receivable, $286,854.20; person property (railroads, cars, etc.), $78,752.42; improvements (grading not included), $14,593.29; accounts receivable (unpaid subscriptions on stock), $104,201.61; treasury stock (received in part payment for land), $128,175; and actual cash on hand, $377,771.76, deomonstrating a clear gain in assets of $895,084.04.
In June following, $2,000,000 of the Company's capital stock had been sold at par, and by vote of the Board of Directors the third million dollars of stock was withdrawn from sale, it being deemed unwise to sell a third interest in the Company's properties for the low price represented by that stock, the sale of which above par was deemed of doubtful legality. The issue of
was determined upon instead, and $1,000,000 thereof were authorized for sale, and their issue began November last.
These bonds bear six per cent yearly interest, payable semi-annually (Oct. 1st and April 1st), and are the first lien, in the nature of an equitable mortgage, upon all the Company's lands, farms, coal fields, iron mines, town and city sites, railways, buildings, and other improvements subject to the proviso that they shall not be construed to prevent the buying and selling of real estate by the Company in the transaction of its ordinary business. They are further secured by $1,000,000 of the Company's capital stock--the third million unsold--issued as collateral by the Central Trust Company of New York, in whose hands it will remain until the bonds are redeemed.
Though originally made payable in five years or twenty years at the Company's option, by a vote of the Board of Directors these bonds are redeemable only in fifteen years, and become gold-bearing both as to interest and principal. They also are made receivable by the Company, in lieu of cash, on the one-third down payment on lots or land until July 1st, 1891, at a premium of over eleven per cent.
By provision of the Company's by-laws, capital stock was made receivable by the Company upon the down payment (one-third) for lots or land, and stock thus received becomes treasury stock, or property, which may be sold at any price it will bring. Soon after the full $2,000,000 of capital stock had been sold, this treasury stock was put at 20 per cent, premium, or $60 per share, and that price has been since established.
In December the issue of profit-sharing certificates to the number of 400 was authorized, each being of the par value of $500, and a like amount of debenture bonds being set aside for every certificate sold. These carry two kinds of coupons--principal coupons (five of $100 each) and profit-sharing coupons (five of $50 each), either or both of which are payable in real estate at the election of the holder, and one of which, by provision of the certificates must be paid. The certificates are made convertible into bonds. On the 1st of March, 181, there had been sold and set aside as security for these certificates, bonds to the amount of $288,000.
A three per cent dividend was declared at the Company's annual meeting, May 7th, 1890, and was paid on the 30th of July. A second semi-annual dividend of like amount was paid January 30th, 1891, thus making for the Company a most remarkable financial showing and result. A company, organized on the 10th of June, 1889, and only coming before the public with the active development of its plans some months later, was yet able, by reason of its judicious management and the large scale of its lots at Harriman, to declare before the 1st of January, 1891, and yet show an excess of profits of many hundreds of thousands of dollars. In the history of land development and town building enterprises the success of the East Tennessee Land Company has been equalled only by that of the Elyton Land Company, which virtually built up Birmingham, Ala. It is believed that the opportunities for the establishment of a great manufacturing city at Harriman equal, if they do not surpass, those that existed at Birmingham when the Elyton Company began its work.