re $12,516,273. The gross earnings have
largely increased during the years 1891 and 1892. It is safe to say that
$2,000,000 per annum would pay very liberal interest and dividends on
the amount of money expended upon the construction of the New York
Central and Hudson River Railroad from the proceeds of its bonds and
stocks. By the creation of fictitious values the managers of the company
have attempted to impose an exorbitant tax upon the commerce and travel
of the country for all time to come. The Government guarantees an
inventor a monopoly only for a limited space of time, upon the
expiration of which his invention becomes the common property of the
people; but railroad managers endeavor to collect, under the protection
of our laws, an exorbitant royalty from our people forever.

The case of the New York Central and Hudson River Railroad Company is
only one of the innumerable instances of stock watering in the history
of American railroads. Indeed, it can be shown that stock-watering
reached a still higher degree of development in the case of the Erie
road. It has been demonstrated that the actual original cost to the
stock-and bondholders of the New York Central Railroad Company, which
was, with its branch lines, 593 miles long, did not, including the
Athens branch, exceed $10,000,000. Its cost to its owners, in 1869,
including the bonuses, premiums, commissions and fictitious equalization
values of several transfers, was reported by them to be only
$37,600,000, or about $63,400 per mile. At about the same time the main
stem of the Erie Railway, extending from New York to Dunkirk, a distance
of 459 miles, was represented by a capital of $108,807,687, or $237,000
per mile. Considering the inferiority of this road to the New York
Central, we are forced to the conclusion that nearly 85 per cent. of the
capital of the road represented water, or, in other words, that the
commerce of the United States was taxed to pay dividends on about
$90,000,000 of watered securities. In 1863 the Erie Railroad had
outstanding $11,437,500 of common stock. In 1864 this had been increased
to $15,693,000, in 1868 to $37,765,000, and in 1869 to $70,000,000. Not
one-tenth of this enormous increase of capital was ever expended on the
property of the road. The stock was sold at from 20 to 40 cents on the
dollar, and the proceeds disappeared in the hands of its managers. To
what extent this freebootery was carried will probably never be known.