Wikipedia:WikiProject Trains/ICC valuations/Grand Canyon Railway

Interstate Commerce Commission, Valuation Reports, Volume 127

Location and General Description of Property
The railroad of The Grand Canyon Railway Company, hereinafter called the Grand Canyon Railway, is a single-track standard-gauge steam railroad, located in the northwestern part of Arizona. The main line extends from a connection with the line of The Atchison, Topeka and Santa Fe Railway Company at Williams, Ariz., to Grand Canyon, Ariz., a distance of 63.810 miles. The Grand Canyon Railway also owns 13.232 miles of yard tracks and sidings. Its road thus embraces 77.042 miles of all tracks owned.

Introductory
The Grand Canyon Railway is a corporation of the State of Arizona, having its principal office at Williams, Ariz., and a local office at Los Angeles, Calif. It is controlled by The Atchison, Topeka and Santa Fe Railway Company through ownership of a majority of the outstanding capital stock. On the other hand, the records reviewed do not indicate that this company itself controls any other common-carrier corporation. The property of the Grand Canyon Railway has always been operated by its own organization, but under the administration of The Atchison, Topeka and Santa Fe Railway Company.

Corporate History
The Grand Canyon Railway was incorporated under the laws of the then Territory of Arizona for a period of 50 years, the certificate of incorporation being filed with the secretary August 10, 1901. It was organized to acquire at foreclosure sale and operate the property of The Santa Fe and Grand Canyon Railroad Company, an insolvent corporation. Under a judgment and decree of the district court of Coconino County, Ariz., these properties had been purchased on July 20, 1901, by Edward D. Kenna, Byron L. Smith, and James H. Eckles of Chicago, Ill., a reorganization committee, acting for the bondholders of the insolvent corporation. The incorporators were the three members of this committee, together with G. N. Sperry and T. J. Norton of Los Angeles, Calif., all of whom represented the Santa Fe Pacific Railroad Company, a subsidiary of The Atchison, Topeka and Santa Fe Railway Company.

Development of Fixed Physical Property
From the reorganization committee, by deed dated August 15, 1901, the Grand Canyon Railway acquired title to 63.810 miles of main line extending from Williams to Grand Canyon, Ariz. This was the property previously owned by The Santa Fe and Grand Canyon Railroad Company, together with additions made by the committee. In addition, the Grand Canyon also owns 13.232 miles of yard tracks and sidings. All property expenditures subsequent to the date of purchase by the Grand Canyon Railway have been classed as additions and betterments. This work consisted principally of widening embankments, ballasting the entire line, and constructing depots, hotels, curio buildings, passing tracks, and other facilities.

Under an agreement dated July 1, 1912, the Grand Canyon Railway has the joint use of the terminal facilities of The Atchison, Topeka and Santa Fe Railway at Williams, Ariz. These include various terminal buildings, 101 acres of land, and 4.94 miles of tracks, of which 0.53 mile is classed as main-line mileage.

Leased Railway Property
Under an agreement dated July 1, 1912, the Grand Canyon Railway has the joint use of the terminal facilities of The Atchison, Topeka and Santa Fe Railway Company at Williams, Ariz. These facilities include 101 acres of land and 4.94 miles of track, of which 0.53 mile is classed as main track. A passenger depot, a scale house, a roundhouse, and a fuel-oil service are the other principal features. For the use of these facilities and in partial reimbursement of cost of operation incurred by The Atchison, Topeka and Santa Fe Railway Company, the Grand Canyon Railway makes payment at the rate of $20,000 per annum, an amount arrived at by using as a basis actual expenditures for the months of October, November, and December, 1911. Of the payment, $7,172.08 represents a rental of 2.5 per cent on a valuation of $286,883.24 as the investment cost of The Atchison, Topeka and Santa Fe Railway Company to July 1, 1912. The remainder consists of taxes, insurance, maintenance, and operating expenses divided in different proportions between the two carriers. While the agreement permits an adjustment in the rate of payment under varying operating conditions, no change had been made up to date of valuation.

At Grand Canyon the Grand Canyon Railway has the use of lands under agreements, permits, or leases from the United States Government. On these lands certain structures have been located by the Grand Canyon Railway. Under the terms of the permits applying to government lands at Grand Canyon, classified as used for purposes other than common carrier, the Grand Canyon Railway pays an annual rental of $320.60. The principal item is $200 paid for 40 acres of land as hotel grounds, six other items of nominal rental making up the remainder. There are also permits prescribing no cash rental, but all require compliance with the laws and regulations governing national forests respecting the protection of game, precautions against fires, and other requirements.

The Santa Fe and Grand Canyon Railroad Company
Introductory

The Santa Fe and Grand Canyon Railroad Company, a corporation of Arizona, owned a standard-gauge railroad extending from Williams, in a general northerly direction, to a point about 8.62 miles north of Anita Junction, with a branch line from Anita Junction to Anita, all in Arizona. The corporation became insolvent and on July 20, 1901, the bondholders, through a reorganization committee, bought in the property. After making the purchase, the committee had the line extended and put into operation to Grand Canyon on the rim of the Grand Canyon of the Colorado River and then on August 15, 1901, transferred the property to the Grand Canyon Railway, which had meanwhile been organized to take it over. According to the records of the Grand Canyon Railway, the mileage at that date was as follows: Williams to Grand Canyon 63.58 miles, Anita Junction to Anita 2.87 miles, total 66.45 miles.

Corporate History

The books of account of this company could not be located. The information pertaining to the corporation, as outlined in this report, has been obtained from the minutes of the meetings of the stockholders and directors and from fragmentary correspondence files. The company was incorporated under the statutes of the then Territory of Arizona for a period of 50 years and on July 31, 1897, its articles of incorporation were filed with the secretary of the Territory. The purpose of the incorporation was to construct and operate a railroad and telegraph line from Williams to the rim of the Grand Canyon of the Colorado River, with the intent to serve various mines located in the district and to encourage and develop passenger traffic to the Grand Canyon. The incorporators were Thos. R. Lombard and four other persons, all residents of Chicago, 1ll., and representing the firm of Lombard, Goode & Company, of New York, which was extensively interested in copper mines in Arizona.

From the beginning the promoters had great difficulty in financing the construction work, and during August, 1900, various mechanics' and merchants' liens were filed against the property. Further, The Santa Fe and Grand Canyon Railroad Company had bonds outstanding and on those no interest had been paid. The trustee under the mortgage therefore instituted foreclosure proceedings which resulted in the appointment of E. B. Gage as receiver, effective midnight of September 5, 1900.

The properties remained in the hands of the receiver until July 20, 1901, when they were sold under judicial sale to Edward D. Kenna, Byron L. Smith, and James H. Eckels, a reorganization committee formed in the interest of the bondholders by the Santa Fe Pacific Railroad Company, the largest individual owner of the outstanding bonds.

Title rested in the reorganization committee until August 15, 1901, when the properties were conveyed by deed to the Grand Canyon Railway, a new corporation organized for the purpose of acquiring them. Operation of the proper ties by the new company commenced September 1, 1901. Subsequent to the sale of its property, the company became dissolved through a failure to comply with the statutes of Arizona requiring annual reports and payment of registration fees.

Development of Fixed Physical Property

The railroad of the company was constructed and equipped under a con tract with Lombard, Goode & Company, dated May 24, 1898, which the latter assigned to the Tusayan Development Company, an affiliated company. Payments to the contractor were made with securities. Actual construction seems to have commenced early in 1899, and on April 12, 1900, the railroad was sufficiently completed to permit of its being opened for operation from Williams to Anita Junction, a distance of about 45 miles, and from Anita Junction to Anita, a distance of 2.87 miles. About 8 more miles of railroad had been completed by July 20, 1901, the date of the sale to the reorganization committee. After its purchase of the properties, the committee completed the construction of the road to the rim of the Grand Canyon, making the total construction nearly 64 miles of main line and 2.87 miles of branch line.