St. Paul daily globe., 1896-03-07
THE "NApOLEoNs OF FINANCE.

THE "NAPOLEONS OF FINANCE"
Along with many instances of large
financial operations successfully con-
Quoted by men who have combined
ability with prudence, we have had.
since the war especially, an unpleas-
ant number of ambitious men with
ability, but without prudence, who
have run brief career as "Napoleons
of finance and finally, and soon, met
their Waterloo and gone into exile on
some st. Helena. They have been
brilliant meteors, dazzling the invest
ing public by their brilliancy, and, ex-
ploding, carrying devastation to all
who had yielded to the fascination and
their own desire to take a shorter cut
to wealth. During their career they
have been hailed as ''Napo1eons," and
in their disaster they have been reviled.
The conditions in this country, it's
rapid and marvellous development, it's
abounding resources, have stimulated
plausibility to the most visionary
schemes Of wealth. getting. Especially
has this been the case with our rail
ways, and it is with them that more
"Napoleons" have arisen and fallen
than in any other field of enterprise.
The Baltimore & Ohio Railway COM
pany furnishes a good illustration. Aft
er it had passed the preliminary all
ments that all railways encounter,
their diseases of infancy, it became.
under the management of capable.
sagacious and prudent men, an ex-
tremely valuable property. This phase
of its career eliminated with the pres
idency of the elder Garrett Conserv-
atlve management had brought wealth
to its owners, and it's stocks and bonds
were for many years regarded as one
of the surest investments of the coun-
try, aside, possibly from governments
So secure was the confidence thus es-
tablished that Johns Hopkins invested
the money which forms now the sup
port of the university that carries his
name, in the securities of this COM
pany. To the management of the road
the younger Garrett succeeded when
his father died. He was young and
ambitious. The old line was a Utica
too pent for him. The "boom" was in
the air. Everywhere men were bal
enormous wealth was to come. Man
ufacturers. catching the infection. were
expanding their business on credit lines
largely. The railways were absorbing,
extending, leasing, aiding independent
construction ancillary to their systems,
endeavoring to build up vast systems
stretching across the continent if pos
sible, or tapping sources of possible or
probable traffic Young Garrett caught
this fever. The conservatism that had
built up the company, made it as safe
as consols, was abandoned and an era
OF extensions and expansions begun.
The legitimate territory of other com
pan1es was invaded and other lines
leased without expectation of COM
pensatory traffic, but as an assertion
of power, as Napoleon campaigned the
nations of Europe.
The result was inevitable. Debts
piled up, obligations augmented and
profitless lines ate out the heart of in
come. The night of vast visions the
dreams Of power and wealth. passed
and faded. The balloon collapsed. Ex-
penses might be reduced, but fixed
charges could not be. The momentum
carried the company resistlessly into
insolvency. The result is that this
staid old company, the ark of investors.
yet very valuable. goes into the hands
of receiver to undergo the usual proc
ess of trimming down, looping off, reor-
ganization, in which paper values will
melt away like snowf1akes falling in
a river. Another history of the career
of another Napoleon of railway finance
is written up and closed.