THE FARMER'S WAR AGAINST MONOPOLIES. 175 



subscriptions were insufficient to complete the under- 

 taking, they mortgaged the road and issued bonds repre- 

 senting the indebtedness they thus assumed. These 

 various steps represented legitimate transactions, and 

 were fair and proper. 



As the country grew in wealth and population, the 

 railroad system grew with it, and, unfortunately, sun- 

 dry elements of demoralization crept into the system. 

 Men became wiser in their generation, and railroad 

 managers were quick to improve upon the progress of 

 the age. A new system of constructing roads was in- 

 troduced. Railroad bonds had become so popular with 

 the public that the corporations came to the conclusion 

 that they could be put to a use never dreamed of by 

 the originators of the earlier railroads. The new plan 

 was to mortgage the road before it was built, and before 

 its incorporators had subscribed a dollar towards its 

 construction. "With the proceeds of the mortgage bonds 

 the road could be built, the public paying for it, and 

 the incorporators being put to no expense. The holders 

 of the bonds thus became the real owners of the road, 

 but the actual possession was with the incorporators. 

 The bonds being sold, and the road mortgaged, the 

 stock was issued and divided among the incorporators. 

 When it became valuable, that is after the road had 

 been built at the expense of the bondholders, the incor- 

 porators could sell their shares, the entire proceeds of 

 which were so much gain to them. This was financier- 

 ing extraordinary, and it became so popular and so pro- 

 fitable that it entirely superseded the old-fashioned 

 method by which the stockholders built their roads 

 with their own money. 



The next step in advance was to secure the land 



