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rows that in times past we have shared there was everything in their words together in this unhappy Venice." and will to restore their old friendship,
Here the signora ended perforce the and keep it; and when the gate with a speech, which had been long for her, loud clang closed upon Tonelli, going and the Paronsina burst into a passion from them, they all felt that it had irreof weeping, - not more at her mamma's vocably perished. words than out of self-pity, and from I do not say that there was not always the national sensibility.
a decent and affectionate bearing on Tonelli took the chain, and reverently the part of the Paronsina and her kissed it and the hands that gave it. mother towards Tonelli and his wife : He had a helpless sense of the injustice I acknowledge that it was but too the signora's words and the Paronsina's careful and faultless a tenderness, ever tears did him; he knew that they put conscious of its own fragility. Far him with feminine excess further in more natural was the satisfaction they the wrong than even his own weak- took in the delayed fruitfulness of Toness had; but he tried to express nelli's marriage, and then in the fact nothing of this, - it was but part of the that his child was a girl, and not a boy. miserable maze in which his life was It was but human that they should involved. With what courage he might doubt his happiness, and that the signora he owned his error, but protested his should always say, when hard pressed faithful friendship, and poured out all with questions upon the matter : “Yes, his troubles, - his love for Carlotta, his Tonelli is married; but if it were to do regret for them, his shame and remorse again, I think he would do it to-morrow for himself. They forgave him, and rather than to-day.”
A", happy day, refuse to go!
Hang in the heavens forever so!
Ah, happy day, refuse to go!
Ah, happy day, refuse to go!
THE GREAT ERIE IMBROGLIO.
contest awaits the next election of freightage throughout every rood of soil the board of directors.
in the State whereof with one exception Until the second Tuesday of October he is the wealthiest citizen. The prowe shall have plenty of surmises; there gramme was broad, and with many ramwill possibly be very strange and con- ifications. If completed, it would affect flicting tactics, the purposes of the cap- disastrously, not only the producing class italists who have ventured many mil- and the national commerce, but the very lions in the fight will become more and share-gamblers who have been most more enigmatical and inscrutable ; but clamorous in its favor. Nevertheless, of the real import of the war the right the scheme was defended so sagaciousfully curious public will have no certain ly, so secretly, and with such incomknowledge before the autumnal meeting parable sophistry, that for many months of the Erie shareholders.
its full measure was most imperfectly In our present review of the recent comprehended, while it encountered ondevelopments regarding the Erie Rail- ly halting and spasmodic opposition. road, therefore, no attempt will be made The general public first became cogto forecast the future. Neither shall nizant of the monopoly programme dur- • we essay to explain the aspect which ing the initial session of the recent affairs have seemed to assume since Constitutional Convention of New York. the passage of the anti-consolidation At that time a strenuous effort was bill through the New York Legislature. made to estop finally and comprehenIt suffices that what has already trans- sively all combinations looking toward pired of the immediate or habitual pol- exorbitant charges in railroad transicy of the principal actors in this unfin- portation ; and the subsequent result of ished drama is of a nature so notably the struggle was the insertion among representative of railway management the proposed amendments of a clause and stock operations in America as to forbidding the Legislature from authorizjustify careful examination, whatever ing “the consolidation of railroad cormay be the incongruities in sequel. porations owning parallel or competing
The primary fact, the overshadowing lines of road.” The measure naturally fact, the fact which should be kept provoked a very considerable discussion, steadfastly in the foreground in all spec- and in the course of its advocacy there ulations upon the conflict, is that Cor- gradually transpired certain facts and nelius Vanderbilt had resolved to secure hypotheses of which the following are control of the Erie Railroad, in order to the most trustworthy.
By a series of rapid and enormous
$6,000,000 purchases of stock, the Vanderbilt family had acquired the control, not only of With previous sum total of capital
71,137,000 the Harlem and Hudson River Railroads Capital of consolidation . $ 90,000,000 connecting the commercial with the legislative capital of the State, but also of
But this magnificent project had one the New York Central, which traverses important drawback. The increasing the inland counties from Albany to Buf- business upon the coalescing roads, falo.
though certain, is essentially slow. It The capital stock of these lines may earnings could allow of current divi
was inconceivable that the ordinary be thus tabulated :
dends on so vast an augmentation of Present capital, — Hudson
• $ 14,000,000 capital. The statistics of railroads are Bonds outstanding Jan. 1, 1868 5,000,000 subject to the tyranny of arithmetic. Present capital, - Harlem
6,800,000 Bonds outstanding Jan. 1, 1868.
If the subtrahend remain the same, and Present capital, – New York Central 28,990,000 the subtractor be multiplied, 33} or 50 Bonds outstanding Jan. 1, 1863
per cent, the remainder will be definiteGiving in sum total
ly decreased. It was evident that the The fourteen millions credited to profitableness of the programme deHudson in the above summary repre- pended upon the possible elasticity of sents only ten and a half millions of the rates of transportation. At this actual money, and owes its creation to
dilemma Mr. Vanderbilt showed himself one of those peculiar financial expedi
in no wise disconcerted. Dividends ents by which shrewd American capital- must be provided for, and he would ists acquire the enviable title of railroad
therefore advance the tariff. kings. When the head of the dynasty
Experts in railroads are generally which now dominates over the threc
greed that the expense of freightage is affined companies made his first move
seventy-five per cent on earnings. It toward empire by securing possession costs a trifle less to carry passengers, of the river route, he inaugurated a sys; dise ; but the average is about three
somewhat more to transport merchantem of economical management, special traffic arrangements, and vast construc
fourths of gross income, while out of the tion outlays which afforded a specious residual twenty-five per cent must propretext for augmenting the capital stock. ceed the money for repairs and replaceIt was therefore voted that the then cap
ment, the interest on bonds, the continital of seven millions should be increased gent fund,* and the dividends. Now it to fourteen by an issue of bonus shares
would put the company to no greater at fifty per cent. Each stockholder expense to carry a ton of wheat at eight paid in fisty dollars, and received scrip, cents than at sour, while a merely marthe par value of which was one hundred, ginal increase on rates of goods in bulk but which sold in Wall Street at forty-five and of passenger travel would secure premium. This splendid manæuvre, by quite satisfactory profits on the new
shares. which the company obtained three and a half millions for the construction
Such an enhancement of current rates and repair fund, while the stockholders
* Under the impress of modern ideas, this item doubled their money, presented features has recently acquired starting proportions. The
Union Pacific, for instance, paid not less than too large and captivating to lapse into
$ 500,000 for services rendered to the company by desuetude. It was now proposed to re- lobbyists at Washington. It recently cost the Mis. peat the same operation along all the souri Paciác Railroad $ 192,178 to secure the poseslines, which at the same time were to
sion of that road by State legislation. The New
York Central credits $ 250,000 to the contingent fund be consolidated. The scrip dividend in
for experiscs at Albany in 1866-67. In view of these this second scheme was to be 33) per facts, it seems just to modify the popular prejudice cent.
against the Camden and Amboy Railroad, which has
certainly attained its ends in Congress and at TrenThis would give :
tuu by a far more economical expenditure.
was therefore a necessary feature of the to which he should finally adopt. It is scheme. From one aspect this pro
a historical fact, that he made essays in gramme was not only plausible, but fea- both these particulars. We have now sible. Against the irritation incident to to consider the special embarrassments an advance in charges stood the habit of the problem. ual lethargy of the citizens of the United The Erie is one of the most imporStates, who pay six cents as readily as tant links in the great chain of interior five for a ride in a street car, ten cents railway connection between the produas quickly as six in omnibuses, and cing and the consuming States. It was forty cents for expressage where they built under the impulsion of popular once paid twenty-five ; while even if excitement, amid keen opposition, and popular excitement should so far de with the disadvantage, at the start, of velop itself as to prompt Albany legis- being enormously expensive. Its broad lation, there was “influence" at hand and massive line sweeps through a quite adequate to check agitation. country of singular picturesqueness,
It was the ever-present danger of while, for every glory of river gorge and competition which constituted the im- mountain slope its stockholders have portant obstacle to the measure. As had to pay enormously in deep cuts, long as the Erie Railroad occupied the solid causeways, and firm-built bridges. position of an active rival, it was impos- There is scarcely a road in the country sible either to effect dividends on the which will compare with it for unavoidfictitious stock, or even to insure large able and immense engineering exreturns on the genuine capital. In pre- penses. Moreover, its splendid gauge, vious years, and on a minor scale, an while undeniably the most luxurious to agreement had been entered into, not travellers, and admitting of excessive only with this line, but also with the freighting, is notoriously costly, both in Pennsylvania Central, by which the gen- construction and repairs. Still further : eral rates had been kept up very much the central idea of the New York and above a reasonable maximum. Goods Erie, as it was originally called, was the shipped from St. Louis to New York at modern one' of comparatively straight the average charge of $ 2.62 were carried lines, and through trade, rather than infrom the same point to Baltimore for termediate traffic. This principle un$ 1.10. From Chicago there was a derlay the construction of the Illinois like invidious distinction of sixty-two Central, and is seen in most remarkcents; from Cincinnati, of eighty cents. able activity in the Pacific railroads. On large importations the difference Experience has demonstrated the wisamounted to immense sums, and was dom of the theory. It has been seen threatening disaster to the mercantile that population accepts the fresh chaninterests of the metropolis.
nels, that cities rapidly spring up, that Nevertheless, this exorbitant tax was manufacture as well as agriculture cenfound utterly insufficient for the pur- tralizes itself around the new highways, poses of the prospective consolidation, and real estate triples and quadruples and a more intimate alliance became its value everywhere within sound of of paramount importance. One of two the locomotive whistle. But all these courses was open to the president of immeasurable changes come after the the New York Central. He must completion of the roads; and, in the ineither secure the unlimited co-oper- terval, the rewards to invested capital ation of the Erie direction by treaty, are in inverse ratio to desert. It has or he must control the road by buying happened, therefore, that what is averup a majority of the stock. Each of agely true of the first stockholders, these alternatives presented peculiar even of such roads as pass through a difficulties, and subsequent events comparatively well-populated country would seem to prove that his mind has from the first, was exasperatingly true of been in a state of painful indecision as the original share-owners of Erie. The VOL. XXII. NO. 129.
agriculturists and land-owners through- curious phenomena in railway annals. out all the inland lower tier of counties The really profitable roads in America were enriched, New York City was en- are seldom quoted on the stock-list. riched, but the stockholders were hope. The old Camden and Amboy never lessly ruined. Mr. Greeley recently was. Neither is Panama stock; neistated that on five thousand dollars, ther is Central Pacific. Other roads, which he invested out of pure public like the Illinois Central, are only parspirit, his loss was forty per cent, and tially used for speculation; a very conit is believed that his case was compar- siderable portion of the shares being atively a fortunate one.
absorbed for trust funds, or held by But there is a worse fact beyond. local capitalists. But it has resulted to Ordinarily the capitalist who steps in Erie, by reason of its unparalleled exand buys the shares which have proved penditures, its indubitably incompetent fatal to former investment succeeds in management * and the redistribution bringing up the property to a dividend- of its shares, that the sum total of its paying basis. In the case of the New stock in all its vast volume has become York and Erie this was never accom- "street" property. Discarded as a leplished. Had Dr. Kane discovered an gitimate investment, it has been taken orange-grove on the borders of the up by the lower or lesser operators on Central Polar Sea, he would not have 'Change and employed for "corners," to been more astonished than would have control elections, for all possible uses been a holder of the old Erie stock by but that for which it was originally crethe announcement of a six-per-centated. With no deeper significance than dividend. The road was not merely a ball in the game of financial battleexpensive in building, but it had the dore and shuttlecock, or counters in misfortune of requiring large sums for rouge et noire, it has acquired a notorepair and improvement, while its direc- riety the most shameful and infamous. tion never appears to have acted in the The hard practical argot of Wall Street best interests of the company. Al- has a certain odd admixture of metathough it had received a State gift of phor in its texture. Like the grammathree millions, it was always in debt, rian of verse, it deals in “longs” and from which it extricated itself only by "shorts." A share-bidder who rises or fresh emissions of stock or bonds, that falls with the market is described as depressed, while flooding, the market. “riding in the saddle.” A broker who
This exceptional phase finally result temporarily yields to the storm of aded in the bankruptcy of the company. verse fortune is said to “squat." True The mortgages were foreclosed, the to this rude tendency for figurative lanproperty passed into the hands of re- guage, the stock board has shown its ceivers, a reorganization of the corpora- contempt for the creature of its shametion was effected, and under a new less uses by affixing to Erie the terse name, but with much the same manage- Saxon epithet which King James's ment as before, the road made a fresh * This vague phrase has a very definite meaning appeal to public confidence. The con- among railway men, especially as regards Erie. It fidence, however, never came. That includes quite a variety of improprieties, such as the
borrowing of money to pay dividends, the conceallarge portion of the well-to-do and opu- ment of debts from the published reports, the Wall lent classes which buys stocks for the Street operations of responsible directors, secret arsake of dividends alone refused to in
rangements with contractors, &c., &c. It is asserted
that, although no salary attaches to the position of vest in the new scrip. The contractors director, yet no man of intellect, however poor on were “suspect,” the employees and di- assuming office, has ever left the Erie board other rectors were “suspect”; an atmosphere than rich. A former secretary, who had never been
more than a newspaper reporter until accepting place of distrust closed in around the com- in the company, died worth half a million. Any one pany, as the spring fog closes around familiar with the history of the Napoleon Transportathe Erie ferry-boats. This disastrous tion Company, connected with the Camden and Am
boy Railroad, will comprehend how this opulence is suspicion gave birth to one of the most generally attained.