Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1875-10-16
TILE E1STER.N RAILR04U.

ANOTHER CHAPTER IN ITS HISTORY How THE
MAINE CENTRAL RAILROAD WAS CAPTURED.
Some of the causes which have led TO the recent
collapse of the Eastern Railroad Company are
probably better known and understood here than
by the unlucky stockholders Of that corporation
The financial condition of the company has been
tolersbly wen known in the railroad circles ofths
State for several months and only surprise is f,lt
that the explosion could have been SO long post
poned. It may be interesting and profitable for
the Eastern stockholders to know the real history
of one of the remarkable investments of their sa-
gacions Directors and for their sake the following
brief summary Of it is given. What are spoken of
a. facts are known and can be proved to be facts;
for the rest. there is the authority of common
port and general belief
The disasters of the Eastern Railroad are due,
primarily, to the bitter and long-con inued strug.
gle between the company AMI the Boston and
Maine Railroad for the control Of the traffic of the
State of Maine, and in the second place to reck-
less and unthipkpg policy inspired by the success
Of the various combinations OF Commodore Van
derbilt and other equally notorious railway oper-
ators. They began with the Capture of the
Portland, Saco and Portsmouth Railroad several
years ago; they have eliminated in the "capture"
Of the Maine Central Railroad, for another such a
The question whether one railroad company is
justified legally, or in any way, in using its own
funds or those Of its creditors in purchasing stock
in another company for the purpose of controlling
its organization and shaping its policy, is one with
which we have nothing to do now. 1t is ques-
tior, however, that one would have supposed
should have received the most careful attention Of
stockholders and creditors. 1t may have received
such attention, for the public has, from time to
time, been plainly notified OF what was going on,
anl I'D; rf al hoo .ya2
Indeed, if the comments Of the newspapers of Bos-
ton at the time of the capture" OF the Maine
Central fairly reflects the course of public senti
ment in that city, that brilliant operation may be
said to have been warmly approved But this
question may be left TO other tribunals; our pres
ent object is to show how the thing was done.
After the completion of the Boston and Maine
Extension" to Portland it was found that public
entimert in Maine was resolutely bent upon
giving that railroad equal facilities with the Eas-
Tern for the traffic Of the Maine Central, that IN
less some new combination was effected, the
Eastern was likely to lose considerable portion
of the "throrgh business" which it had fought so
hard to control. The only way, therefore, vi
avoiding the interf, renee Of courts and legisla-
lures seemed to be 10 the purchase of the con-
trolling interest of the Maine Central stock by
friends of the Eastern, and then to swallow it up
by virtue of some scheme of Consolidation" The
original plan was unobjectionable enough, though
possibly unwiss. 1t did not contemplate, as we
Eastern itself, but simply to secure control by
the friends of that company. The scheme was
ingenously attractive, too. At that time the Eas-
tern stock was above par, and the Maine Central
stock was selling in the neighborhood OF thirty
dollars share. The "bait' to secure the active
cooperation of capitalists was the promise that if
the control was effected the stock should be merged
IN that of the Eastern Company in a way that will
be shown hereafter; and that large profit could
be surely and speedily made.
Acting upon this programme, which, it must be
confessed, was artistic and attractive, certain agents
were sent abroad TO scour the State of Maine for
Maine Central stock, and SO thoroughly and judi
cioasy did they work that in a few weeks they
sent the market price Of the stock from thirty up
10 sixty dollars the share. Unfortunately, how
ever, even this high price did prove sufficient
temptation to certain large and influential stock
holders Of the Maine Central; and at this point
begins the questionable part Of the proceeding,
the origin also Of much Of the trouble, viz Com
ceslments and Misrepresentation, which have had
so large an influence in bringing the Eastern to
its present unfortunate condition. 1t was found at
this juncture that certain large block of stock,
the purchase Of which was absolutely necessary
for the succes sful completion Of the scheme could
not be bought for less than par. The market
psice Of the stock though highly stimulated by the
astute agents for its purchase was still only about
sixty, and no individual, however friendly OF how
sednced by the attractiveness OF the scheme, could
be expected TO purchase stock so much above it,
value.
Really, in this emergency there seemed to be nc
other course left for the Eastern Directors but &c
buy the stock In question for their own company
and buy il they did, if their own repeated state
tusnss ear be t.asisd, in just that way. Inc otne
large holders Of the stock were directors Oh 'h'