MONOPOLY OF TRANSPORTATION. 579 



In the early days of railroad financiering it was cus- 

 tomary to make sure that funds were forthcoming in 

 sufficient quantities to finish the undertaking before 

 embarking in it But the times and manner of construct- 

 ing roads have changed since then. In the Western and 

 many of the Southern States, large grants of the public 

 lands, and, in some instances, of subsidies of government 

 bonds, have materially aided in the construction of the 

 numerous railroads, spreading like a net-work over these 

 States and the Territories. In many cases counties have 

 impoverished themselves for years by voting bond subsi- 

 dies for the construction of railroads. 



Cities, towns and townships have also voted large 

 amounts of bonds to aid in their construction. To build a 

 railroad 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. To begin with, it must be made to appear 

 that the road for which aid is sought promises well. But, 

 then, it does not yet exist. It is to be constructed. In 

 spite of this, however, the directors of the scheme proceed 

 to pledge the road for the cost of its construction; or in 

 other words they mortgage a road that 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 lead- 

 ing banking house in the principal financial centers of the 

 country to be sold, and the work of constructing the road 

 goes on with the money obtained for them. u 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 ^.way, the 



