The Railroad Question Part 4

We now enter upon the third period of the history of American railroads, the period of combinations. During the time of great activity in railroad construction following the War of the Rebellion many abuses in railroad management had been developed, which caused general complaint and led to what is known as the Granger movement. Laws were demanded, especially in the agricultural States of the West, which should regulate the rates, methods of operation, and the political relations of the railroads. The friends of this movement were successful in the political contests that followed, and Granger legislatures were elected in the States of Illinois, Wisconsin, Iowa and Minnesota. Laws were pa.s.sed fixing the rates on different cla.s.ses of roads and providing penalties for their violation. The companies contested these acts in the courts, but were defeated at every step, until in 1877 the Supreme Court of the United States sustained the const.i.tutionality of the Granger laws. In the meantime railroad managers tried their utmost to render, by shrewd manipulation, these laws obnoxious, and they finally succeeded in having them repealed or so amended as to render them largely ineffectual.

It was the princ.i.p.al object of the Granger movement to do away with the many discriminating tariffs which so injuriously affected local points.

It is true, discriminations between individuals were practiced at business centers, but rates upon the whole were low at such points as compared with those which obtained at local stations. While the Granger contest was still going on in the West, a new evil developed in the East, which became characteristic of the period and finally grew into one of the most intolerable abuses of railroad management. Railroad men had gradually learned that it was in their power to maintain high rates at compet.i.tive as well as at non-compet.i.tive points, provided all the roads centering at such points could be induced to cooperate, or rather to conspire for that purpose. The final solution of the problem was, after some experimentation, found in the device to control the prices of transportation generally known as the pool. It is doubtful whether any contrivance connected with railroad management ever threatened to subvert long-established principles of the common law more completely than this. Within a few years it extended its dominion over the whole country, exacting a heavy tribute from its commerce, until the people's patience finally became exhausted and their determined demand for railroad reform led to the enactment of the Interstate Commerce Act in 1887.

When this act pa.s.sed, dire results were predicted by nearly every railroad man in the country. Prophecies were freely made that it would ruin half of the roads and seriously cripple and sadly interfere with the usefulness of the other half, that it would derange the business of the country, greatly depreciate all railroad securities and put an end to railroad construction. Nearly seven years have pa.s.sed since the adoption of the law, but not one of these prophecies has come to pa.s.s.

There are at present probably less bankrupt roads in the United States than there have been at any time for twenty years, our business interests have been improved, the securities of honestly managed roads are in better repute than they were previous to the pa.s.sage of the law, and the railroad mileage of the country is increasing at the rate of about 6,000 miles a year. If any branch of business has suffered in consequence of the enactment of the law, it is the branch monopolized by Wall Street. Since 1885, the time when the Interstate Commerce Bill was first seriously agitated, the aggregate of railroad securities has increased nearly $2,500,000,000, or about one-third. This certainly does not look as if capital had been seriously frightened by the Interstate Commerce Act. There are other proofs of railroad prosperity. In 1885 the gross earnings of the railroads of the United States were $772,568,833, or 9.9 per cent. on their reported capital. In 1886 their gross earnings were $829,940,836, or 10.2 per cent. on the reported railroad capital.

In 1890 the gross earnings had increased to $1,097,847,428, and equaled 10.8 per cent. on the reported capital. This includes even the capitalization of new lines and others not reporting operations. Mr.

Poor gives the reported cost of the lines actually operated as $8,519,670,421, against $10,122,635,900 reported cost of all the railroads built. Omitting from the computation the lines not reporting operations, the gross earnings of the roads actually operated equaled 12.7 per cent. and their net earnings 4 per cent. on the actual cost of the lines which reported. The gross earnings for 1891 were $1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.

The gross earnings per mile have increased from $6,265 in 1885, and $6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the capitalization per mile of road was $55,059 and the net earnings per mile were $2,185. In 1890 the capitalization per mile had decreased to $53,783, while the net earnings per mile increased to $2,195. The railroad mileage of the country has grown from 128,361 in 1885 to 166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.

The railroad system of the United States has had a phenomenal growth, especially since 1870, since which time nearly 120,000 miles of road, or more than two-thirds of the total mileage, have been constructed. The table below shows the number of miles of railroad constructed and in operation, by quinquennial periods from 1830 to the close of 1890, inclusive:

YEAR. MILES IN OPERATION. INCREASE.

1830 23 1835 1,098 1,075 1840 2,818 1,720 1845 4,633 1,815 1850 9,021 4,388 1855 18,374 9,353 1860 30,626 12,252 1865 35,085 4,459 1870 52,922 17,837 1875 74,096 21,174 1880 93,296 19,200 1885 128,361 35,065 1890 166,817 38,456

It will be noticed that in the sixty years covered by the above table there are but two quinquennial periods which show a falling-off in the rate of growth, viz.: 1860-65 and 1875-80. During the former period railroad construction was partially checked by the War of the Rebellion, during the latter by the general financial depression following the panic of 1873.

The length of railroads in the world has grown from 206 miles in 1830 to about 400,000 miles in 1892. The following table shows the growth of railroad mileage by quinquennial periods:

YEAR. MILES.

1830 206 1835 1,502 1840 5,335 1845 10,825 1850 23,625 1855 42,340 1860 66,413 1865 90,280 1870 131,638 1875 182,927 1880 231,190 1885 303,172 1890 385,000

From this table it is seen that the railroad mileage of the world has doubled during the past fifteen years, and that its average annual increase is at present not far from 17,000 miles. There is no doubt that the extent of railroad construction has everywhere exceeded all antic.i.p.ations. So fast has the railroad system expanded in the most highly civilized countries that it soon outgrew in nearly all of them the laws originally adopted for railroad control. In time an almost universal demand arose for reform, and the most progressive governments were not slow in heeding it. For the past fifteen years there has been a decided drift on the European continent toward state ownership of railroads, or to such strict control of the transportation business as virtually deprives the operating companies of the power to do injustice to the public.

The railroad is a.s.suming more and more the character of an international highway. A movement is on foot to connect the railroad systems of the United States with those of South America by an intercontinental or "Pan-American" railroad. Appropriations have been made by the United States and several of the South American republics for a preliminary survey of the proposed line. Three different surveying parties are in the field, one in Central America and the other two in the United States of Colombia and Ecuador. The progress so far reported by them is encouraging, and there is now some hope that before the close of the nineteenth century one may be able to travel by railroad from New York to Valparaiso without even a change of cars.

It has also been proposed to span Behring Strait and connect North America with Asia and Europe by an international railway. This line, if constructed, would be simply an extension of the proposed Pan-American railroad and would follow the western coast of the United States as far as Behring Strait, then cross over into Asia, traverse Siberia and finally reach London via St. Petersburg, Berlin and Paris. It is very questionable whether such a line is at present feasible either from a technical or financial point of view, but the time will probably come when the railroad track will connect New York and London.

CHAPTER IV.

MONOPOLY IN TRANSPORTATION.

From time immemorial efforts have been made by designing men to control either commerce or its avenues, the highways on the land and on the sea, by a power which law, custom, ingenuity, artifice or some other agency had placed into their hands.

The ancient Phoenicians early aimed at and finally obtained the empire of the sea by making themselves masters of the most commodious harbors of the Mediterranean Sea and the Arabian Gulf. They established a regular intercourse with the countries bordering on the Mediterranean as well as with India and the eastern coast of Africa. From these latter countries they imported many valuable commodities which were not known to the people of other parts of the world, and during a long period they held this lucrative branch of commerce without a rival. The character and the situation of the Phoenicians aided them greatly in acquiring this mastery of commerce. Neither their manners and customs nor their inst.i.tutions showed any marked national peculiarity; they had no unsocial prejudices and they mingled with the people of other countries without the least scruple or repugnance. As their native country was small and quite barren, they early learned to rely upon commerce as the best source of riches and power. Like the other Semitic tribes, the Phoenicians were noted for their energy and ac.u.men, and while they were not a literary people in the strict sense of the word, ancient civilization received probably a more powerful impetus through their commercial supremacy than through any other agency.

During the reign of King Solomon the Jews made an attempt to wrest from the Phoenicians at least a part of the world's trade. Solomon built ships and imported Phoenician sailors for his fleet. For a time it seemed as if the Israelites might become the rivals of their teachers in the art of navigation and in the mysteries of trade; but their peculiar religious customs in that early day proved a serious impediment to commercial ascendancy, as it rendered them incapable of that unreserved intercourse with strangers so essential in commerce.

The monopoly of the sea, at least of the Mediterranean, pa.s.sed to the Carthaginians, their descendants. The latter extended their navigation toward the west and north. They planted colonies and opened new harbors, and up to the time of the Punic wars kept almost the entire trade of the countries bordering on the Mediterranean in their hands.

After the downfall of Carthage the control of the commerce of Southern Europe and Northern Africa descended to the Romans. When Rome became the capital of the world, it gathered the wealth and valuable productions of all its provinces. Under the consuls and the earlier emperors the vigilance of the Roman magistrates and the spirit of the Roman government gave every possible security to commerce and prevented for a time the rise of monopoly. Nowhere was national union so complete or commercial intercourse so perfect as in the Roman empire. The intelligence and the power of Rome stimulated and regulated the industry of her people and permitted them to enjoy the fruits of their efforts without public or private restrictions.

We have seen that the intercourse of Rome and her provinces was facilitated by the construction of roads and the establishment of imperial posts. During the decline of the empire the maintenance of these posts led, however, to a grave abuse. We are informed by Gibbon in his "Decline and Fall of the Roman Empire":

"But these beneficial establishments were accidentally connected with a pernicious and intolerable abuse. Two or three hundred agents or messengers were employed, under the jurisdiction of the master of the offices, to announce the names of the annual consuls and the edicts or victories of the emperors. They insensibly a.s.sumed the license of reporting whatever they could observe of the conduct either of the magistrates or private citizens, and were soon considered as the eyes of the monarch and the scourge of the people. Under the warm influence of a feeble reign they multiplied to the incredible number of ten thousand, disdained the mild though frequent admonitions of the laws, and exercised in the profitable management of the posts a rapacious and insolent oppression. These official spies, who regularly corresponded with the palace, were encouraged by favor and reward anxiously to watch the progress of every treasonable design, from the faint and latent symptoms of disaffection to the actual preparation of an open revolt.

Their careless or criminal violation of truth was covered by the consecrated mask of zeal; and they might securely aim their poisoned arrows at the breast either of the guilty or the innocent, who had provoked their resentment."

After the downfall of the Romans, commerce remained paralyzed during the period of Gothic ignorance and barbarism. The crusades for the recovery of the Holy Land from the Saracens, in the eleventh and following centuries, opened again communication between the east and the west by leading mult.i.tudes from every European country into Asia; and though the object of these expeditions was conquest, and not commerce, their commercial effects were both beneficial and permanent. The crusades were especially favorable to the commercial pursuits of the Italian states.

The vast armies which marched from all parts of Europe toward Asia gave encouragement to the shipping of Venice, Genoa, and Pisa, which sometimes transported them, and always supplied them with provisions and military stores. Besides the immense sums which these states received on this account, they obtained commercial privileges of great consequence in the settlements which the crusaders made in the East. All the commodities which they imported or exported were exempted from every imposition, the property of entire suburbs in some of the maritime towns, and of large streets in others, was vested in them, and all questions arising among persons residing within their precincts, or who traded under their protection, were decided by their own laws and by judges of their own appointment. When the crusaders took Constantinople, the Venetians did not neglect to secure to themselves many advantages from that event. Nearly all the branches of commerce were in time transferred from Constantinople to their city. At the end of the crusade period Venice had monopolized nearly all the foreign trade of Europe.

She supplied the people of Italy, France and Germany with those commodities with which the crusaders by their intercourse with more refined nations had become acquainted. The possession of many Eastern ports and the maintenance of a powerful navy made it possible for the Venetians to retain their monopoly for several centuries.

The growth of commerce in Central Europe was but slow, owing to the dangers to which it was exposed in those days of feudalism. The mountain fastnesses of robber knights, which controlled every road and navigable river, were so many toll-gates at which the wayfaring merchant was stopped to pay tribute. In time this system of plunder grew to such an extent that hundreds of feudal lords relied upon it for their support.

Such a tax upon commerce greatly enhanced the value of all commodities, and this deplorable state of things lasted until the cities made their power felt by forming alliances for mutual protection. One of these alliances, the Rhenish League, comprised in time seventy towns, and the ruins of the strong castles destroyed by its forces still exist along the Rhine, picturesque memorials of these lawless times.

Perhaps the most powerful commercial union of the middle ages was the Hanseatic League. To protect their commerce, the cities of Hamburg and Lubeck formed about the middle of the thirteenth century an alliance for mutual defense. The advantages derived from this union attracted other towns to the confederacy. In a short time about eighty of the largest cities lying between the Baltic and the Rhine joined this famous league, which in time became so formidable that its alliance was courted and its enmity was dreaded by the greatest monarchs. The League divided its territory into several districts. Its members, like railway a.s.sociations of the present day, made their own laws, and met for this purpose at regular intervals in the city of Lubeck. The original object of the League, mutual a.s.sistance against outside attacks, was soon lost sight of, and its constantly growing power was used to obtain still greater commercial privileges in the adjoining countries, and even to force their rulers to concede to its members a commercial monopoly. In 1361 a controversy arose between the League and the King of Denmark, which led to a long and bitter war between them. This war was partic.i.p.ated in by no less than seventy-seven cities on the part of the League. It terminated in 1370, leaving the Hansa master of the situation. For many years after this the League exerted its power in Denmark, Sweden and Norway, and the rulers of these countries were compelled to respect the wishes and even submit to the orders of these proud merchants. The countries bordering on the Baltic Sea remained the domain of the League for several centuries. They gathered there immense quant.i.ties of raw material, which they sold in the various ports of Europe. The influence of the League even reached as far as Novgorod in the east and London in the west. In both cities the League had its quarters, and within them it virtually exercised the right of sovereignty. Its main market was at Bruges in Flanders, which was then a bee-hive of industry and thrift.

There the Italian traders came with the products of the east, such as spices, perfumes, oil, sugar, cotton and silk, to exchange them for the raw materials of the north. While taxes and imposts everywhere else hara.s.sed merchants, commerce was free in the cities of Flanders, owing to the liberality, or rather shrewdness, of her rulers. In Bruges the members of the Hansa met the merchants of Venice on equal terms, and the exchange of the products of the north for those of the east and south could be effected there to the greatest advantage of both.

While it must be admitted that the Hanseatic League developed the resources of Northern Europe, and that, even at the time of its greatest power, there was always compet.i.tion among its own members, the fact remains that it abused its power by the suppression of all outside compet.i.tion, and that it usurped rights which belong only to the state, thus often producing abuses as great as those which it was organized to remedy. Its final downfall was caused by the development of national power in the northern kingdoms and the growth of commerce and navigation in Great Britain. A stubborn a.s.sertion of antiquated privileges on the part of the Hansa involved it in a feud with the ill.u.s.trious and lion-hearted Queen Elizabeth of England. In 1589 the Queen caused sixty of their vessels to be captured on the Tagus, and later even took possession of their hall and wharves in London. After this the League's decline was very rapid, though its organization was kept up till 1669, when its delegates held their last session.

Contemporary with the decline of the Hanseatic commerce in the north was that of the Italian cities, especially Venice, in the south. They had prospered by their commerce with the Levant until Vasco de Gama discovered the sea route to East India in 1497. His countrymen, the Portuguese, soon utilized this discovery. They took possession of the coast of India and of the islands to the south of it. They also succeeded in excluding the Arabs from the commerce with that country, of which up to that time they had had exclusive control. For this purpose they built fortresses and factories on the west coast of Hindostan, took possession of the island of Socotra in the Arabian, and of Ormus in the Persian Gulf, and forced the Indian princes to grant them the exclusive privilege of trading with their subjects. They also captured the city of Malacca, where the trade between China, j.a.pan, the Philippine Islands, the Moluccas and India had concentrated itself. In this way they got in a comparatively short time control of the commerce of India, Arabia, and even Egypt. By forcing the Venetians and their commercial allies out of those markets, they secured for themselves a monopoly of the commerce between Europe and the east. The political ascendancy of the Turks in the islands situated in, and in the countries bordering on, the Eastern Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to the Venetians and greatly aided the Portuguese in establishing their commercial supremacy. Less profitable for the latter was the possession of their American colonies. They, as well as the Spaniards, adopted here a policy which ultimately brought commercial and industrial ruin upon both. Entirely neglecting agriculture and relying on the mineral resources of their transatlantic colonies, which were believed to be inexhaustible, they strove to ama.s.s riches by reserving for themselves the exclusive privilege of supplying them with the manufactures of Europe in exchange for American gold. Neglecting home industries, they bought their supplies as well as those of their colonies in France, Holland and England. A spirit of speculation and adventure enervated their people, and led in time to commercial bankruptcy and political disaster.

Spain also drained her treasury by her wars with her Dutch dependencies, and the loss of her northern provinces was a serious blow to her commerce. Antwerp, which had become the successor of Bruges as the commercial emporium of the north, began to decline, and Amsterdam, the metropolis of the new Dutch republic, became heir to its glory and its riches. The young republic at once commenced to compete in the carrying trade with Spain and Portugal, and to make inroads into the eastern commerce of the latter.

The Dutch East India Company, which was organized in 1602, sent a fleet of fourteen vessels into the Indian Archipelago to found colonies in Java, Sumatra and the Moluccas. In a short time they had monopolized the entire spice trade, which immediately became a source of great wealth.

A cargo of five vessels, which returned to Amsterdam in 1603, consisted of over two million pounds of spices. This cargo was purchased for 588,874 florins and was sold for 2,000,000 florins. It is under these circ.u.mstances not surprising that the dividends of the company's stockholders often amounted to 75 per cent., and never went below 12-1/2 per cent. previous to 1720. Holland's colonial trade made Amsterdam the commercial metropolis of Europe. It became the grain market from which Spain, Italy and other countries drew their supplies. All the products of the world found purchasers here, and a well-developed banking system greatly facilitated the exchange. The rapid acc.u.mulation of fortunes by the Dutch merchants and bankers was without precedent in Europe. Besides this, the progress which Holland made in ship-building and navigation and the advantages which she derived from her colonial trade placed her in a position to outstrip all other nations in the carrying trade of Europe. During the first half of the seventeenth century the Dutch were justly called the freighters of Europe. But the injury which their policy did to the commercial and manufacturing interests of other European nations led both England and France to adopt measures well calculated to accomplish, in a short time, their commercial emanc.i.p.ation. Louis XIV., in order to build up French shipping, collected a tonnage from every foreign ship which entered a French harbor. England went still further. In 1651 Oliver Cromwell promulgated the Navigation Act, by which foreign ships were prohibited from importing into England any goods except such as were produced or manufactured in their own countries. This was a heavy blow at the Dutch, who were thus deprived of the privilege of effecting the exchange of commercial commodities between England and her colonies as well as the continent. The war which the Dutch Republic waged against England, to force her to revoke this act, resulted in favor of the latter and ended the commercial supremacy of the Dutch in Europe.

England, which before this time had played but a secondary role as a commercial power, rose fast to prominence after her successful struggle with the Dutch. She commenced to strengthen her industries by the adoption of a high tariff policy, and her merchants were encouraged to enter into commercial relations with colonists and foreigners. The privileges which had been given to foreign tradesmen were revoked, while ship-building and navigation were greatly favored by the government. As England gained greater strength as a naval power, her foreign policy became more aggressive.

In 1600 the "Company of Merchants of London Trading to the East Indies"

obtained a charter, and, in spite of Dutch and Portuguese opposition, soon gained a foothold on the Moluccas and the coast of Malabar, whence it extended in time its dominion to Surat, Bombay, Madras and Calcutta.

Here they built forts and established their commerce. From these places the company pushed into the interior, until finally, after repeated struggles with the natives and European rivals, the whole of Hindostan came under English dominion. As its power increased, the company commenced to abuse shamefully the monopoly which it had been granted, by inaugurating a system of plunder and oppression which is perhaps without its equal in the annals of history. These growing abuses led to frequent revolts and seriously imperiled England's dominion in these territories.

To remedy these evils, Parliament at the close of the seventeenth century annulled the charter of the company and declared the commerce with the East Indies open to all of the King's subjects. A number of small companies were formed, but in 1702 they all combined and organized the East India Company. Monopoly was again established, but the patience of the natives was exhausted, and England's interests in Hindostan were in a critical condition. At this juncture the East India Company adopted a policy of moderation, and this, together with the aid which the government gave to the company, enabled it to strengthen again its weakened commercial relations and to further enlarge its territory. But the temptation to abuse its power was too great for this strong corporation to be long resisted. Abuses again crept into its management and continued to grow until its charter was finally repealed.

The policy adopted by Great Britain for the government of her American colonies during the eighteenth century was less rapacious, but scarcely more just than that pursued in her eastern possessions. To retain those colonies as commercial no less than as political dependencies, Parliament enacted laws compelling their people to trade with the mother country exclusively and laying restraint on their manufactures. But the American pioneers felt that they had brought with them across the ocean the rights of Englishmen; they objected to taxation without representation, and the men who for opinion's sake had left comfortable homes to brave upon a distant sh.o.r.e the dangers of frontier life were prepared, if necessary, to emphasize their objection by armed resistance. England, intent upon maintaining her barbaric system of discriminative duties and commercial monopolies, blindly attempted coercion, but the war which resulted wrested from the English crown its brightest jewel, and the War of 1812 established upon American soil the principle of industrial and commercial liberty.

It must not be supposed, however, that America and the United States in particular have been free from monopolies growing out of the transportation business. Nothing would be farther from the truth. There is no law so stringent but that it will be violated; there is no government so vigilant but that it will at times be imposed upon. It is true, our government sanctions no monopoly, but the very liberty of action which exists here among corporations as well as individuals offers to organized wealth and power a wide field for abuses.

We have seen in the foregoing that almost from time immemorial efforts have been made to monopolize transportation and trade, and that these efforts were successful whenever either from ignorance or weakness the ma.s.ses fell into political apathy. There is a natural tendency among men to utilize commercial advantages to the detriment of others. In modern times the opportunities for building up large monopolies have greatly increased and have been turned to the most profitable account by designing men. Great and even unbearable abuses have always followed where the greed and ambition of such men have not been checked by governmental agencies. In this respect the people of the United States have had about the same experience as the rest of mankind. Ever since the introduction of railroads into this country there has been a well-marked drift toward monopolizing the transportation business.

As long as the dangers of monopoly remained unknown to the American people, legislation for the control of railroads and other public carriers was both scarce and crude, and shrewd railroad men were not slow in taking advantage of the situation. It is foreign to the design of this treatise to give a complete history of railroad monopoly in the United States. The author will therefore confine himself to showing that transportation companies will, like the great commercial organizations of the past, when left to follow their instincts, invariably use their power to oppress the public by exacting excessive charges for their services, or to discriminate against the many by extending special privileges to the few. Hundreds of cases might be given to ill.u.s.trate the above rule, but a history of two of these corporations will suffice to show to what extent corporate abuses can be carried, and to serve as a warning against the adoption of any "_laissez faire_" policy in the railroad legislation of the future. The corporations selected for this purpose are the Camden and Amboy Railroad and the Standard Oil Companies, both typical representatives of the Rob Roy policy which organized wealth has pursued since the dawn of civilization, when not prevented by the wisdom and strength of a good government.

THE CAMDEN AND AMBOY RAILROAD COMPANY.

For almost forty years the Camden and Amboy Railroad was the only direct route between the cities of New York and Philadelphia. It is doubtful whether previous to the war a more important or a more remunerative road existed in the United States, for, besides connecting the two largest cities in the Union, it formed part of the direct land route from the East to the South.

The efforts to open a direct through route between New York and Philadelphia date back to the year 1812, when the construction of a ca.n.a.l between the Hudson and the Delaware was proposed, but an ill-advised jealousy of the State of Pennsylvania delayed for many years the realization of the project. When this obstacle was finally overcome, a change of sentiment had taken place in New Jersey. Railroads had just made their appearance in the United States, and a large number of the people of New Jersey preferred a railroad to a ca.n.a.l.

The matter was finally compromised in the legislature of New Jersey, which on the 4th of February, 1830, simultaneously granted charters to the Delaware and Raritan Ca.n.a.l Company and the Camden and Amboy Transportation Company, fixing the capital stock of each company at $1,000,000, with the right to increase it to $1,500,000. The charter further stipulated what taxes should be paid to the State, and also contained the provision that within five miles of the starting-point and within three miles of the terminus of each line no other railroad or ca.n.a.l should be built. It was believed the existence of both a water and a land route would be sufficient to maintain compet.i.tion on this important thoroughfare of interstate traffic. The construction of the railroad, which had been surveyed in almost a straight line between its termini, was at once commenced. A number of well-to-do and practical men took hold of the enterprise, among them one John Stevens, who together with his three sons took one-half of the capital stock. The ca.n.a.l project did not do so well at first. At the middle of the year 1830 only about one-twelfth of its capital stock had been sold, and there was great danger that the company might forfeit its charter, as the time allowed for the subscription of its stock was nearing its end. At this juncture Robert Field Stockton, a young man of ability, enthusiasm and wealth, came to the rescue of the ca.n.a.l company. He not only bought for himself a goodly share of the ca.n.a.l stock, but also prevailed on his rich father-in-law, Mr. John Porter, to invest $400,000 in the enterprise. The financial difficulties of the company were thus removed.

At the next session of the legislature Mr. Stockton secured an amendment to their charter which apparently only authorized the enlargement of the ca.n.a.l, but in reality empowered the ca.n.a.l company to construct a second railway.