THE FARMER'S WAR AGAINST MONOPOLIES. 55 



In the early days of railroad financiering it was 

 customary to make sure that funds would be forth- 

 coming in sufficient quantities to finish the undertaking 

 before embarking in it. But the times have changed 

 since then. In the Western States the public guarantee 

 the cost and furnish the means of paying for the road 

 by the land grants we have been considering. In the 

 Eastern States other expedients are resorted to. In 

 both sections, however, many of the tactics employed 

 are the same. 



Funds must necessarily be procured before the work 

 can be begun, and the manner in which these are 

 generally obtained reveals at once a mastery of the 

 science of railroad financiering. The road for which 

 aid is sought promises well, but it does not yet exist. 

 It is to be constructed. Yet in spite of this the direc- 

 tors of the scheme proceed to pledge the road for the 

 cost of its construction ; or in other words they mort- 

 gage a work which does not exist. The stock is worth 

 nothing, but there is another means at hand. Bonds 

 are created and put in the market at a certain stated 

 price. They are usually placed in the hands of some 

 leading banking house in the principal financial centres 

 of the country to be sold. The bonds are sold, and the 

 work of constructing the road goes on with the money 

 obtained for them. " The stock itself then passes as a 

 gratuity into the hands of those advancing money 

 upon the bonds. The result is, that by this ingenious 

 expedient the capitalist holds a mortgage, paying a 

 secured and liberal interest, on his own property, 

 which has been conveyed to him forever for nothing. 

 The stock is at once nothing and everything. Given 

 away, the donees own and manage the road, and, re- 



