Year: 1875

Ia OrLiduu CORRESPONDENCE OF t0e Boston
journal gives the history of the Eastern
Railroad managers in connection with the
Maine Central. The story is by no means
new one, but is of interest just now because
of the recent developments concerning the
Eastern Railroad management. When the
Boston & Maine was completed through to
Portland, the Eastern, in order to control
the business of the Maine Central, undertook
to capture it. To keep clear of the courts
and the Legislature, it was necessary, in Or
der to get control of the Maine Central, that
majority of its stock should be owned by
friends of the Eastern, which being done,
some kind of a consolidation could be
effected. They first attempted to control the
Maine Central through It's leading stock
holders. The Eastern was then selling at
par while the Maine Central could be pur-
chased for $25 to $50 per share. The East
ern managers proposed to merge the stock of
for the Central and $100 fer the Eastern. To
show that the Eastern was financially sound,
statement was furnished the Maine Cen
tral people which, it since proves, was false,
aud because it was false the contract which
resulted from that favorable showing, was
broken last December bv the Maine Central
directors. This proposition of the Eastern
managers caused an active demand for Maine
Central stock which quickly went up to $50.
Things went on tor time, but at length the
Mama Cantral nnOnla honan fO find hot
everything was not so lovely, and as the re-
suit a number Of the leading stockholders
who controlled majority of the stock made
solemn compact that they would stand to-
gether to protect their rights and take care
of their property. Out of this combination
the movement was developed by which the
compact of 1872 was broken and business
contract made with the Boston & Maine.


The next move Of the Eastern men was to
get control of the stock themselves. The
Central men could be fooled no longer. This
could only be done by the purchase of stock.
The Eastern directors had all that they cared
for as individuals at the ruling price. The
Central people in the combination pledged
each other good faith. Time passed; but as
the annual meeting Of the Maine Central
drew near, there were rumors il the air that
the Eastern men were moving to get control
by purchase Of stock. Next there came a
rumor that one of the combination who was
carrying large block of stock was negotiat
ing with the Eastern. The story proved to
be true; but it was also true that he got a
round price for his stock, aud there is little
doubt but that it was paid for out Of the
proceeds of bonds sold by the Eastern to
liquidate the floating debt of the Company.
1t is said that the Eastern Railroad owned
10000 shares of Maine Central stock last
March. If this block cost the road some
thing near par, or even $75 share, it may
be seen at once how the floating debt of the
Eastern has increased so rapidly the past
year. The Eastern stockholders will prob
ably never know how much was paid for the
Maine Central stock by their directors, but
they may be satisfied that the difference be-
tween its cost to them and its present value
as an asset is a very large sum. The capture
of the Maine Central by such reckless means
and at so great cost, was, beyond question,
the crowning folly of the Eastern managers.
and more than any other single blunder has
put the great corporation on the verge of
bankruptcy.