THE FARMER'S WAR AGAINST MONOPOLIES. 63 



The history of the Credit Mobilier is instructive upon 

 another point. It presents to us a skilful and success- 

 ful instance of what is now a common practice with 

 railroad companies the fictitious increased watering 

 of the stock of the company. 



Stock watering has become so common, and has been 

 indulged in with such success, that many persons have 

 come to regard it as a legitimate transaction. A com- 

 petent writer has defined the practice as "the re- 

 appraisal by its owners of a corporate property which 

 has, or is alleged to have, increased in value on their 

 hands, without any new outlay, and the issue to them- 

 selves of new evidences of value equal to such supposed 

 increase." But the popular definition and the true 

 one would be the increase of the stock of a corpora- 

 tion at the expense of the public, and for the purpose 

 of earning dividends upon money never invested. 



It will be well to consider how this operation of 

 " watering " the stock of a road is performed. Such 

 knowledge will be of value farther on. 



" The history of the companies which have been 

 consolidated into what is known as the Pittsburg, Fort 

 Wayne and Chicago Railroad, furnishes a very fair 

 illustration. Here the process of watering was early 

 commenced as a simple and desperate expedient for 

 raising money at an enormous discount for the purpose 

 of completing an enterprise of doubtful success. In the 

 earliest history of one of these companies we read : < The 

 stock subscriptions which were paid in cash into the 

 treasury of the company were very small amounting, 

 perhaps, in all, to less than three per cent, on the final 

 cost of building and equipping the road. The stock 

 subscriptions were paid for mostly in uncultivated 



