The midland journal. (Rising Sun, Md.) 1885-1947, 1892-01-08
Assistance to Railroads.

The bonds issued by the government
to these roadside roads before re-
ierred to-amounted to $4,000 per
mile, with exception Of four hundred
and fifty miles of the more mountainous
and desert portion; were assisted to the
extent of $4,000 per mile, and the
remaining one hundred and fifty miles
to the extent of $4,000 per mile. Later
in the history Of this legislation, as we
have seen, the government consented
to allow this enormous lien against the
roads to become second mortgage,
while the companies were permitted to
issue their own bonds to a like amount
per mile. This action was taken 10 the
belief that the cost OF constructing the
roads would be even greater than the
money made available by the sale Of
the bonds, and that therefore the
second mortgage would be sufficient
security. Further money, if needed
was to be raised by the issuing and sale
Of stock; but every dollar Of such stock
issued was to be paid for in full, and
used in the actual construction of the
road. This provision was for the two
fold purpose Of protecting the govern
ment lien and the public against over.
capitalization. The Union Pacific
company organized the Credit Mobilier
from its own members, and then let the
contract of building the road to this
company. This scheme of robbery
debauched a majority of the congress
men Of that day, and became the scan
dial Of the country. The company
received in paid up capital only $780,
$50, and although its charter from the
government expressly forbid, issued
stock to the enormous extent of $780,
10000. The line of the Union Pacific
Railroad extends from Omaha, Neb., to
Ogden, Utah, distance of LOSSES
miles. This road cost the company
nearly $4,000, O00-an average of
about $4,000 per mile, and hence less
than the sum Of the first and second
mortgage bond issues. The company
made it cost, by false capitalization,
nearly $4,000, O00--an average
fictitious valuation of over SGT 900 per
mile. In fact they multiplied the cost
of the road by three. Peter A. Dey,
one of Iowa's able Railroad Commission
ers, was then chief engineer in the CON
struction of the Union Pacific Railroad,
and was forced to resign because he re-
fused to estimate the cost of construct
ing the road atabove $50, 900 per mile.
Dey was succeeded by General G. M.
Dodge, former Iowa man, who is held
In high repute in railroad circles
General Dodge was a stockholder in
the Credit Mobilier, and hence there
was no further trouble in securing esti.
mates high enough to suit the company
among the names Of the millionaires
in the list given by Mr.. Shearman are
the names of Leland Stanford, C. P.
Huntingdon. Charles Croker and Mark
Hopkins. These gentlemanly high
waymen built the Central and the
Western Pacific railroads, the first ex-
tending from Ogden, Utah, to Sacra-
meHto, California, and the last from
Sacramento to San Francisco, the
length Of the two roads being 86O6
miles. The actual cost of construction
was $4,000, 900; the actual paid up
stock was less than $3.50, 900; but, de-
spite the prohibition in the charter
which required stock issued to be paid
in full, these gentlemen issued 1884,.
100000 of stock. The first mortgage
bonds of the company and the second
mortgage bonds of the government
amounted to $40 zoe, 600. Hence for a
road costing $40, 100000. stocks and
bonds were issued to the extent of $124,.
100000 an over valuation of $84,20O,.
0OO-an average of 100000 per mile
which the company wrongiully and
feloniously pocketed. The worthless
above mentioned divided among them.
selves 100000 in gold and $751;
100000 worth of stock, from which
they drew dividends amounting to more
than $4,000, 900, and then sold at high
figures. Here we have true picture
Of wonderful millionaire fnanciers, and
how are acquired the "sacred vested"
interests SO dear and SO precious.
The aided portion of the Kansas
Pacific was little less than four hun
dred miles. It's paid up stock consisted
of $250,000 worth of Leayenworth
County, Kansas, bonds; but the com
pany, following the lead of other