Transcription of February 2, 1861 Mountain Democrat

Telegraph Matters – Report of the Late Secretary.

To the Stockholders of the Placerville and Humboldt Telegraph Company.
GENTLEMEN: Most of you invested your money in the summer and fall of 1858 for the purpose of having it applied toward constructing an overland telegraph line, starting from Placerville. From that time to the present very few of you have ever received any information relative to the manner in which it has been managed, its past and present financial condition, and totally remain ignorant of its future prospects. With the view of giving information to those interested, I purpose having published the following statement of facts.
F. A. Bee became your President at your first organization – a position he has retained all the while; and for about the first sixteen months he also acted both as collector and disburser of the funds raised in subscription of stock. No objections ever being made by you, he assumed the entire management and control of the enterprise. Your failure to place any checks upon his movements manifested a degree of confidence in his capacity and integrity that might be regarded as extremely flattering to him. Some of you still feel satisfied to allow him to continue as heretofore, and a few of you, who have recently become the owners of a share or two of stock each, are anxious that he be entrusted with unlimited power.

The following will give you some facts of the past:

According to the admission of Mr. Bee, he collected for you thirteen thousand two hundred dollars; and it is now about twelve months since he has acted in the capacity of collector. Yet, up to this late day, there can be no book or statement found in the office of the Company, that will give the correct amount of his expenditures; therefore, no knowledge can be obtained as to the cost of your line. He made a report at your meeting in September, 1859, purporting to have given the cost of the line from Placerville to Genoa, but that report has never been made a matter of record, neither has it ever seen or heard of by the Company since the night it was submitted to them. Shortly after this report was submitted by Mr. Bee, he left for the Atlantic States, leaving no books or papers in possession of the Company that would answer as the least guide toward ascertaining the amount of his expenditures. During his absence many of made inquiries, almost daily, as to the cost of the line, its financial condition, etc. We all knew that there were some debts against the Company, and that the line had cost something, but the amount, in either case, we had no means of ascertaining. Information could only be gathered by those who had been engaged in its construction, and from such information we supposed that the line had cost somewhere between eight and ten thousand dollars, and the indebtedness was about one thousand or twelve hundred dollars. On paying the old debts, we learn that our estimate was not far out of the way. Under these circumstances, the Board of Directors felt it their duty to require of Mr. Bee, on his return, an account of his matters with the Company, which they immediately did. In rendering his account, he charges the Company with five thousand dollars for his services, and $1,781.86 as paid to J. D. Lord of Sacramento, for wire, and $187 as paid to Hubbard & Strong, of Sacramento, for wire and closing with a balance due him from the Company $1,278.21. J. D. Lord & Co. were written to, asking for a statement of the amount of the wire bought of them by Mr. Bee for the use of your line from the time of its first commencement to date. In answer he states $1,251.84 : $24.64 still unpaid. Hubbard & Strong were also written in like manner and they answer, "never sold a pound."

The Board of Directors appointed three practical business men and expert accountants. Messrs. Geo. M. Condee, Geo. F. Jones and Theo F. Tracey, to examine into the account of Mr. Bee and other officers and agents of the Company. The following is an extract from their report:

"We have diligently and thoroughly examined all the accounts and books appertaining to the transactions of your President, F. A. Bee, and it is impossible for us to arrive at a satisfactory conclusion as to the manner in which he has collected and expended the funds of the company. The manner in which he renders his account is not satisfactory to your committee, and we urgently recommend to you the important and absolute necessity of referring the matter to some special agent, or to the meeting of the stockholders, or to whoever you, in your wisdom, may consider proper, with such powers as will lead to a definite and just settlement. We have not had the power to pass upon the correctness or incorrectness of any accounts that might be presented to us but have understood our duty to be that of an Investigating Committee, and to point out whatever inconsistencies that we might discover, and make such recommendations as the result of our search would justly prompt us to do. It will be seen by the summing up of the account as presented by the President, on another sheet, that the Company is indebted to him in the amount of $1,938.91. This, in the opinion of the Committee, is gravely incorrect. The following presents a statement which shows something differently, and which we believe presents nearer the true figures as between the Company and your President:

F. A. Bee, in account of the Placerville and St. Joseph Telegraph Company
To amount collected as per assessment on stock		$13,200
To amount of stock placed in his hands		$19,500
Total		$32,700
By expenditures on line as per vouchers	$6,001.21
By amount stock issued as per statement	$13,200
By amount stock returned	$4,600
Salary claimed by him as per bill Included in this report	$5,000
Total	$28,801.21
Difference		$3,898.79
Add for amt. of goods as per bil		$218.50
Due from Bee		$4,117.29

Mr. Bee made an entry on a book to-day which purports to be one giving the names of those to whom stock has been issued. That presents the appearance of eight shares of stock named to him, and if this stock should be issued to him, it would increase the above amount to $5,317.29.

Mr. Bee charges the Company with $6,055.70, and presents no evidence of payment. Also, brings a charge against the company of $5,000, as salary while acting for the Company, both of which charges should be adjusted some way or another as early as possible. We believe it to be unjust to allow the sum of $5,000, particularly when he fails to give satisfactory evidence of what has become of the funds collected by him for the Company."

The report containing the above extract was presented to the Board of Directors on the night of September 1, 1860. Your meeting, of the 2d September last being so near at hand, the Board referred the report to you. You, without endorsing or even reading the report, referred it to the Board of Directors, you elected at that meeting, for adjustment. This Board has acted upon it. Their action makes Mr. Bee the owner of fifteen shares of stock, valued at $100 each, and still due him from the Company $1,958.24. Now, here is a calculation for you. Mr. Bee, in presenting his account, charges the Company with over $700 more for wire than he bought and paid for. In the same account the committee mark several changes as having been made twice, and some as high as three times; charges for services $5,000, having a balance due him $1,938.91. The Board, with the report of the Committee before them, with the knowledge of the difference between the amount of wire charged and the amount paid for, reduces the amount Mr. Bee charges for services from $5,000 to $2,400; and then bring in a balance of due Bee from the Company of $1,958.24, and the owner of $1,500 shares of stock of the Company. At the same time, unable to find the slightest shadow of evidence on the books of the Company, when Bee ever paid one cent into the Company.

As it has been intimated that A. W. Bee would present a bill for services rendered, it may not be improper, perhaps, to say a word or two in regard to his connection with the Company. It is claimed, both by himself and brother, F. A. Bee, that he has been the agent of the Company for two years; yet there is nothing to be found on record or on file that will substantiate the fact. His name appears but twice within the lids of the books. The first is where one share of stock was issued to him; the other and last, when he was made a Director in 1859. The one share of stock, which he appears to be the owner of, has, according to the books of the Company, never been paid for. I understand that A. W. Bee has on two occasions been appointed by the President and Secretary of the Company to perform two special acts. One in 1858, authorizing him to sell stock for the Company. The other in 1860, to put in a bid for a contract with Government. Neither of these appointments were ever ratified by the Board, and no report has ever been made by him to the Company giving the amount of stock sold by him, or report of any kind. Had he been the legally appointed agent of the Company, with such powers as it is now claimed he has held, why the necessity of sending him the special authority last Summer? In 1859, A. D. Waldron was appointed by the Board of Directors to act as their Eastern Agent, and no other. There would be more consistency in his coming back and demanding a salary, than there would be in A. W. Bee's for two years' services.

The following is a copy of the financial portion of the report I had prepared for your meeting of the 25th; for reasons unknown to me you never asked for its reading, and as the stock was almost entirely represented by proxies, a few stockholders present, I cared but little whether it was read or not:

The gross receipts of the line from		$13,186.51
August 1, 1860 to January 1, 1861
Amount expended by the operators
for salaries, offices, repairing lines, etc.		$9,214.37
Amount remitted to me		$3,972.14
Cash on hand August 1, 1860		$2,444.66
Total		$6,416.80
Paid for office rent, furniture, stationery, etc.	$142.27
Paid express charges	$20.75
Paid printing bills	$55.00
Paid on account for wire	$2,523.76
Paid on account of insulators	$164.41
Paid for horse and wagon	$150.00
Paid for keeping horse	$5.00
Paid stage fare of operators to Carson Valley	$115.00
Paid old accounts	$104.75
Paid labor, provisions, etc, repairing line	$439.79
Paid operators, on account	$257.60
Paid Salary of Secretary from
September, 1859 to September, 1860 at $50 per month	$600.00
Paid Salary of Secretary from
September, 1860 to January, 1861 at $100 per month	$500.00
Paid on account of President's salary from
September, 1860 to December, 1861 at $100 per month	$402.82
Paid balance salary of Superintendant	$448.85
Cash on hand	$546.80
		$6,416.80
Four hundred dollars have been paid on account for
wire, by draft, which will increase the cost of wire to		$2,923.76
There is due to the company from stockholders who
have not paid for their stock		$1,120.00
Notes payable to the Company		$1,134.29
Accounts due to the Company		$528.50
Horse and wagon		$150.00

There is scrip of the Company still out $845. There are also some bills against the Company for freight, etc. but the exact amount cannot be ascertained, as they have not all been prepared, but will not, I believe, six or eight hundred dollars. This is about the indebtedness of the Company, except as far as it refers to Messrs. Bee's accounts, and the accounts of the "Investigating Committee", which amounts to about $300. There is also the bill of the late Treasurer for $300, which will reduce the cash balance to $246.80.

There has been one hundred and thirty-five shares of Stock issued at One Hundred Dollars each, according to the Stockbook. Adding the amount allowed to Mr. Bee, will increase it to one hundred and fifty.

In publishing the foregoing, my object has not been to gratify any feelings of dissatisfaction, but I have believed it to be my imperative duty, under the circumstances, and that alone has prompted me to do so. I know that some of the friends of parties named therein will pretend to attribute it to feelings and malice that I have resorted to this method for revenge, but such is not the case. A like publication to the Stockholders has been talked of by a portion of the Board for months; but it was hoped that the affairs of the Company could be harmoniously settled, which would have saved the necessity of this. I have endeavored to abstain from using any language that could be construed as personal, farther than the plain statement of facts would make it; and have made no statement but what can be proven as a fact by the books and records of the Company.

Respectfully, your late Secretary, M. R. Elstner
Placerville, January 27, 1861