dy, we should have to place it somewhat below $3,000,000. While
such an estimate may be too low, the amount of its funded indebtedness
in 1851, which was $5,640,000, probably more than covers the amount
actually expended in the construction of the road. In 1851 the capital
stock of the Hudson River road was $4,000,000. In 1853 the funded debt
had increased to $7,000,000, and in 1862 to $9,000,000. In 1869 the
bonded indebtedness had decreased to $4,309,000, but the capital stock
had grown to over $16,000,000. Between 1853 and 1869 the company
increased its stock and bonded indebtedness nearly $11,000,000, while
the assessments paid by its stock and bondholders during this time did
not exceed $1,000,000. Improvements were made, but these were chiefly
paid for out of the surplus earnings of the road. It has been shown by
experts that $6,640,000 is a high estimate of the actual original cost
of the Hudson River road to its stock-and bondholders, and that
securities to the amount of more than $13,000,000 represented surplus
earnings and water. At the time of the consolidation of the Hudson River
and New York Central railroads the capital stock of the two roads had
grown to $44,800,000. Under the consolidation agreement the stock was
fixed at $45,000,000. The new company also assumed all the bonded and
other indebtedness of both roads. If the consolidation manipulators had
paused here, the capital of the new company would have been somewhat
less than $60,000,000, or more than three times the cost of the
property. But the road was, under existing rates, capable of earning
dividends on a much larger capital, and this emergency was met by the
issuance of consolidation certificates to the amount of $45,000,000. The
total capital of the road was thus increased to and made to pay
dividends on over $103,000,000, while the total cost of the road and its
equipment, as claimed by the company in 1870, was less than $60,000,000,
their estimate being based upon assumed consolidation values and the
expenditures made from surplus earnings. During the same year the gross
earnings of the company were $22,363,320, and their net earnings
$8,295,240. In 1880 the gross earnings had increased to $33,175,913,
and the net earnings to $15,326,019. The company was able to declare in
that year 11.82 per cent. dividend on its $89,500,000 of fictitious
stock. In 1890 its gross earnings were $37,008,403, or $26,050 per mile,
while its total net earnings we