324 THE GROUNDSWELL. 



lives that money can purchase, acts with peculiar advantages under a 

 popular government. If that eternal vigilance, which has been called 

 the price of liberty, is not exercised ; if an aggressive power is not 

 boldly met and restrained by wise and reasonable legislation, we are 

 inviting those bad and lawless remedies which are too often worse 

 than the injustice they assail. 



Among the many charges that have been preferred against the 

 managers of American railroads the mention of a few will be suffi 

 cient for the purposes of this address. Mr. Rufus Hatch, in his cir 

 cular upon &quot; Frauds in Eailroad Management,&quot; offers statements to 

 show that at the time of his publication the watering of the stock 

 of the Hudson Eiver and the New York Central Railroads amounted 

 to $57,576,700, which exceeded the capital actually paid in by $7,- 

 368,400. He likewise asserts that the watering in the Cleveland, 

 Painesville and Ashtabula, the Buffalo and Erie, and the Cleveland 

 and Toledo, together with the excess of new capital over old, amounted 

 to $20,065,870 ; and this watering of the Lake Shore, added to that of 

 the Hudson Kiver and New York Central, amounted to $77,644,770, 

 equaling $79,000 a mile for the whole distance from Chicago to New 

 York, and paying on every mile an annual dividend of $6,325. 



Mr. Geo. O. Jones, at a recent hearing before the Congressional 

 Committee on Transportation, corroborated these statements, and 

 estimates that New York pays $10,000,000 a year on watered stock. 

 It is also charged against some of the managers of the great line of 

 railroad that, while Congress has granted immense tracts of land in 

 order to reduce the cost of roads and the fares for transportation, 

 means have been employed to separate the railroads from these grants 

 for the purpose of dishonestly appropriating these benefits. Eailroads 

 thus favored by the government have been constructed at great cost, 

 through the issue of bonds, and then leased to lines of which their 

 managers had the control. Rings have thus obtained possession of 

 land and shares at nominal prices, and have imposed upon the people 

 such taxes as their directors might choose to levy. 



It is charged that while our several States have granted charters 

 authorizing railroad corporations to take the land of any citizens, and 

 to issue shares for the construction of their roads, and permitting 

 them to collect a liberal interest for all moneys invested, shares have 

 been issued gratuitously to stockholders, with the view of exacting 

 interest upon fictitious values ; and also that officers or influential 

 shareholders who have been interested in express companies, mineral 



