EARLY AMERICAN CORPORATE REPORTING AND EUROPEAN CAPITAL MARKETS: THE CASE OF THE ILLINOIS CENTRAL RAILROAD, 1851-1861

This study of the annual reports of the Illinois Central Railroad (IC) from the 1850s supports a onclusion that the statements, as to form and content, were developed to serve the needs of two Classes of investors and to inform the general community of the activities of the company. The need to report to the public as to the success of the company's role in its "social contract" to develop the state required details of a demographic nature, which were provided by the land commissioner. Operating results provided evidence of the ability to service the debts held by European investors and to inform British venture capitalists of the extent of the company's operations. This communication with the distant capital providers was a new development in financial reporting as the capital-intensive railroads experienced management and ownership separation on a scale not seen before. In summary, the IC provided annual reports more detailed and informative than those of other corporations of the period because of a need to provide European investors with evidence of management's activities.