Louisville Cincinnati & Charleston RR Bond 1838

1838Ê State of South Carolina guaranteed bond for the Louisville Cincinnati & Charleston Railraod.Ê This is earliest known railroad bond certificate. Wonderful scripophily document features two nice vignettes of very early locomotive steam engines.Ê This railroad had an interesting history.Ê South Carolina was one of the first states to realize the economic benefits of railroads, loaning $100,000 to the South Carolina Canal & Railroad Company (chartered in 1827) to build a 136-mile road from Charleston to Hamburg, which was completed in 1833. It was then the longest line in America. In 1835, hoping to further improve the transportation of cotton from the Deep South northward, a new railroad was chartered, the Louisville, Cincinnati & Charleston. In 1838, to encourage the expansion of the road to the state capital, Columbia, the State of South Carolina agreed to guarantee the issue of 200,000 Pounds of 5% Sterling Railroad Bonds for every $500,000 worth of shares sold. The bonds, due in 1866, were to be sold in Europe through the Agency of the Bank of the United States. These are the first known state guaranteed railroad bonds. Because of the steadily worsening condition of the Bank of the United States, a second group of bonds was issued through a different agency, of the House of Mess. Palmer, Mackillop, Dent & Co. of London. As time went on the financial climate did not favor the cooperation of other states in expanding South Carolinas railroads. In 1844 the LCC became part of the South Carolina Railroad, which assumed the debt of the earlier company. The Confederate War prevented the South Carolina Rail Road from making interest payments, and in January of 1866 the bonds came due. Neither the State, nor the railroad could pay the principal. (Source: Stephen L. Goldsmith and Douglas Ball).Ê This antique stock certificate is in VF+ condition.Ê A very clean early southern railroad bond.Ê