592 THE IMPENDING REVOLUTION. 



whole of which interest and dividends were paid. At the 

 same time the cost of the road stood upon the books of the 

 company at less than $70,000 per mile, while in evidence 

 of property each mile was charged with no less than 

 $122,000. According to the books of the company, over 

 $50,000 of absolute water has been poured out over each 

 mile of road between New York and Buffalo. ' ' 



In 1871 the Lake Shore & Michigan Southern had a 

 nominal capital of $73,000,000 of which $20,000,000 was 

 water. 



In 1868, the sworn statement of the secretary of the 

 Erie railway discovered the fact that from July i , to the 

 24th of the following October, the company had increased 

 their capital stock from $34,265,300 to $57,766,300, or by 

 235,000 shares in four months. 



This unwarranted issue of stock created a panic in the 

 stock market, caused millions of money to be locked up, 

 and resulted in such a stringency of the money market, 

 that it was only when the government threatened to issue 

 $50,000,000 of currency to relieve the community that the 

 conspirators were checked. 



Another way of watering the stock of a railroad is 

 illustrated in the history of the Credit Mobilier of Union 

 Pacific fame. The stockholders of the road are also stock- 

 holders of a construction company, sprinkled with enough 

 Congressmen and Senators to insure favorable legislation. 

 This is especially true when government aid is required in 

 the construction of the road. The stockholders then pro- 

 ceed to let the contract for the building of the road to the 

 construction company (which is themselves), at an enor- 

 mous profit, which becomes a source of magnificent income 

 to the company, as well as a future charge upon the traffic 

 of the road, or rather upon the people who use it. Thus, 

 while many of the Eastern roads were constructed at a 

 cost of less than $50,000 per mile, the Union Pacific, 



