The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1901-07-26
HISTORY OF
The ERIE ROAD
FINANCIAL UPS AND DOWNS 1T
ENCOUNTERED.
After Being Used as a Football in
the Financial World for Years It
Now Seems That It Has at Last
Achieved a Permanent Place
Among the Paying Railroad Pro-
perties of the Country-Number of
Reorganizations It Has Under
gone.

| HOLLAND" the brilliant New York
| newspaper correspondent, writing of
| the ups and downs of the Erie COM
pany says:
| At the time of the panic in the money
| market in December 1899, when rates
| were for an hour or so quoted as high
| as $50 per cent, and when there was the
| closest scrutiny of securities offered
| for loans, a broker called upon one of
| the most conservative bankers of Wall
street to beg for a loan of about $780,
| 600. He was i'm great straits 1t was
| necessary that he obtain this money, no
| matter what the rate, or else be forced
| TO throw himself upon the mercy of
| his creditors. In the considerable block
| of stock of various kinds that he offer
ed as security, was one batch of Erie
| railroad shares. and although the bank
| president threw out certain industrial
| securities as being unsatisfactory, he
| accepted without a question the Erie
railroad shares and made the loan with
| a considerable part of securities based
| upon the possession of this Erie stock.
| He was asked about that soon after
| the loan was made. and replied that,
| Notwithstanding poor old Erie had
| not paid an honestly-earned dividend
| for many years, and Notwithstanding
the fact that an event in a
|
for years likened to the day
when Erie common shall pay a
| dividend, nevertheless, Erie stock
| taken at fair estimate of its market
value. is deemed as good security as
! a banker could have. That is because
| IL is a quick asset 1t could always
| be sold upon the instant. There was
| a vague contingent reminder, or pos
| sibly of future hope, shown by that
| stock that gave 1T a market value
| which though comparatively small
| was always certain.
| INDICATIONS OF PROSPERITY.
| Thus, although until recently the
| credit of this corporation has been so
| poor that it was obliged to submit to
| heavy discounts before it could market
| its bonds, nevertheless 1t has possessed
a certain kind of credit of value to
| those who seek to borrow money, which
| has not been the lot of certain in
| dustrial securities that ostensbly
represent good dividend-paying proper
| ties.
Although the action of the Erie dircc-
| tors on Wednesday, in declaring divi-
| dend on the first preferred shares, cam
not be compared in Importance or far
| reaching consequence with the creation
| of that board of railroad managers
| nominally directors of the Northern
| Pacific, but actually as a board. the
| directors, absolute and impartial of the
entire railroad systems west of the Mis-
| siSSippi and north of st. Louis, never
theless, the return after many years
| of misfortune, after several bankrupt
| cicS and congratulations of the Eric
| corporation, To a dividend-paying posi-
| tion, even for comparatively small
| part of it's stock, is, after ALL one of
| the most impressive indications of the
| healthfulneSS of the new conditions, Of
the prosperity of the country and of
the wise and philosophic economy,
often involving colossal expenditures,
| which are the chief characteristics of
| modern railroad management.
| Poor old Erie" is no longer spoken
of with that manner half humiliating
and Contemptuous which so long 4
| time characterized all the references to
| it.
THE GENIUS OF JAY GOULD.
As the corporation was the first char
| tered To convey traffic by rail between
| the Atlantic and the great lakes, so ii
is now practically the last of these i'm
| portant corporations to return to a
| dividend-paying basis. When it is
| borne in mind that II is about as long
a time since the Erie corporation paid
! any dividend as was the case with the
! Missouri Pacific, which recently re-
| turned to a dividend basis. then il will
be the better understood what this
action of the Erie directors signify.
| And yet there are important differ
| enCeS between the career of the Mis-
souri, Pacific and that of the Erie, al
! though in one respect certain features
| of these careers are identical and not
entirely happily identical The Mis-
| souri, Pacific was the creat ton of Jay
Gould: the Erie was the disastrous and
as the records of legislatures and of
| courts will prove, the shameful foot
| ball of Jay Gould. But his ownership
| of the Erie came to him at a period
when he was tearing down, when he
| was a destructive reformer, and at a
| time when men estimated him as a
master Wrecker, but as having no
| great creative capacity. His achieve
ments with the Western Union and
| the New York elevated are cited as
| among the proofs that Mr. Gould was
of that rare and higher order of in
| tellect which is able to compass both
destructive work and constructive un-
| dertakings of the most difficult char
| acter.
BUILDING THE SOUTHWEST.
| But it was with the Missouri Pacific
| that his highest genius was developed
| and has been admirably supplemented
| by the work of his son, the present
president of the organization, George
| Gould. The Erie railroad was a vet
| eran when the Missouri Pacific was
created The development of the Mis-
| souri, Pacific built up much of the pros
| perity Of the southwest, a prosperity
which has reacted, so that now at
| last the Missouri Pacific is able to pay
a dividend upon honest earnings, and
also to promise continued payment un-
| less there should come such general
decentralization as would be sure to af-
feet all railroads.
But the Erie followed rather than
created developments, it was designed
| first to supplement the rapidly grow
ing lake traffic from and to the
west and was originally built with
| the consent of the state of New Yark
as direct and acknowledged COM
| petitor of the Erie canal.
| There are some shorter romanCes Of
railroad construction than any that
are contained in the Erie's history, as,
| for instance, the building in the dead
| Of winter of a railroad through the
Adirondack region by Or. Seward, an
| achievement that may be likened
to the retreat of the Ten Thousand
to Hannibal's passage of the Alps or to
Benedict Arnold's march in the winter
time across the wilderness of Maine
| for the purpose of capturing Quebec
| But the whole history of the Erie is
| full of romance, One of them furnishes
| the first illustration of the manner i'm
| which railroad corporation circum-
vented legislatures and accomplished
| in legal manner the very thing the
statute prohibited. But for that piece
of strategy the Erie railroad today
would have its terminal at Piedmont
on-the- Hudson. opposite Tarrytown,
instead of at Pavonia, directly opposite
New York city,
THE TAKING OF NEW ENGLAND.
The men who controlled the Erie
conceived long before A. A. Mcleod at
| temnted 10 COnSIImmatp "a lika nlan the