The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-08-29
Tn, Err. Ra,srono C,o.p.r,U.


TIE extracts from the files of the Herald.
which We publsh elsewhere, will be read with
peculiar interest by those aEooog our fellow
citizens who have bought or sold Eric Railroad
etock within the last few months and We think
we may safely add tsat with the exception OF a
few clergymen and PERMITS, there few in
dividuals in the community whom bs-resrric
ton win exclude frem the benefit Of cur re
norks. We make them not with any lew to
aid any Of the gamblers who make living BY
bosterDg up or knocking down fancy stocks:
in respect OF Erie, the vocation Of at least one
OF he classes If sSeckjobbng is pretty well
nigh gone, ond the experiments of the Others
a'e becoming daily more per,lous. But while
The C nversation IN nine oUs Of ten male as
scnhlages in the city turns on the future OF the
Erie Railroad Company. it can hardly be passed
over IL si'cico by the press, and at all hazards,
the tTR!h must be told The community have
Alright TO see before them the history Of this
mammoth concern, in which 90 many fortunes
have bren swallowed up, and 50 may families
ruined, not onIy Tor their present guidance iu 4
kipg an investment fox their money, but for
the valuable lesson whichvevery tale of gigantic
fraud is ture to teach. II, in referring to the
subject, We have occasion 10 draw attention to
9ur oHn fler, 10 rem nj the public OF the course
We have pursued with regard to the ell erprise
in question, ana to congratulate ourselves on
the general correctness Of toe opinions we have
expressed during period OF Sly or eight years,
We trust that the uniform Misrepresentation OF
which We have been the victim from SO many
quarters will be our excuse
When the notion OF the Erie Railroad was
t'rsi started, the projectors gave il out that if
loan OF three millions could be obtained from
The State the road could be carried ont. 1t
was secured; subscriptions for one Ilitliou and
a half OF stock were taken up; aad at ! subse-
quent day, debt OF some 100000 was con
tract,d. Wien this money, amounting to
some S5,200,00o, was spent, the whole enter
prise WAS brou. h to stand. very small
portion Of the road wes built. ald it was i'm
possible TO borrow more money, or to is-ue
more stock. So the concern was abandoned
for some Years. In 1915, new set of railroad
men examiL ed tn state Of affairs Of the com-
paDy. and announced that if the State would
reliI quish its clam for the three millions of
dollars il had advanced, six more millions would
complete the road, aud equip it. This was
already twice the estimate of the original
projectors but the idea of line to Du :
kirk was popular, and the State did
waive its claim, and accede in every par
ticular to the request Of the managers.
Three millions OF stock were subscribed; the
old nj Zoo t.o c,r LolS
reduced to bali their value, and consolidated
with the new issue: the old debt was assumed;
and authority was obtained for the issue Of first
mortgage bonds TO the amount Of S3,0oo00o
This FIRST issue was made under the authority
of the State; ard the agent was bound to re-
Even at that tine. rumors OF iuggle by
which ihis provision OF the law was evaded
were prevalent: but to oil appearance, the
company had not only the work done
by their predecessors, but six millions Of dol
lars IN hand--tbe SUN they fixed themselves NJ
amply sufficient 20 complete the work. They
had not been many months et work before facts
came TO our knowledse which led us to animad-
vert severely on the management, and 10 eau
ton the public against the enterprise rs IN in.
vestment. Our warning had apparently but
little effect on the public mind, and some time
before the road was completed, negotiations |
we're made for the issue Of four millions OF 80.
cond mortgage bonds. Even this addition 10
their funds proved insufficient Shortly after |
wards, tie con pany again appeared ia the |
market as borrowers with three millions and q
half OF income bonds and this was also taken |
up at some discount by capitalists. Meanwhile.
the directors were freely using the privilege |
granted them by the charter aud issuing fresh |
stock. They were allowed to increase their
capital to ten millions of dollars: and
though il is impossible to state when the add |
tions were made, or at what price the new stock |
was sold, il is now generally believer that a
figure greater than that allowed by the charter
has been reachtd.s
The convertible bonds were the means OF
the road. II was then anuouaced
that in spite of Incredible difficulties the great
work had bee1 achieved, and the dark day wa
over. The Erie was hencelorth to be q lender
instead Of a borrower and stockholders were ali
TO bless themselves for having been wise
enough to invest their money 10 its stock. A |
chorus If exultation arose from every side
ave one. Tho HERALD, still ipcreouloas /
pointed TO the woful discrepancy between
the estimates Of the projectors and the |
sums actually expcyded, and tried yainlv