apples had been thrown into the
measure with sound fruit, and buyers refused the whole as a mere heap
of corruption. And it was generally believed that the men who
perpetrated this mischief under the names of 'construction,' 'requisite
consolidation,' 'absorption of necessary branches,' etc., had made a
great deal of money by it and had not made it honestly. But it was all
done pursuant to legal forms and by boards of directors, so that the
defrauded stockholders were without remedy."

Mr. Clews then gives us a more detailed account of the way in which
branch roads are built and absorbed, viz.:

"Given a useful, well constructed, dividend-paying road, a
body of people with some capital and political influence,
aided by some of the directors of this prosperous line;
construct a branch road to some outside point; the more
important such point the better, but that is of small
consequence. The road gets itself built; it is bonded for
more than it cost, and it cost twice as much as it ought,
since the constructors were all together in the ring and
have favored each other. Then the capital stock is fixed at
so much, and this is mostly distributed among the
constructors. The road then, swelled to a fictitious price
of three or four to one, and not worth anything to start
with, is ripe for absorption and consolidation. Its
directors and those of the main line meet, confer and vote
the measure through. They all profit by it, more or less,
but their profits are enormously in excess of the trifling
losses due to the shrinkage of values of the shares of the
main line. A director of the main line may perhaps lose
$20,000 on a thousand shares, but what is this when compared
to a gain of hundreds of thousands in his holdings of the
branch road, whose liabilities are assumed by his victimized
corporation? And such a director would not be equal to the
demands of his covetousness if he had not sold thousands of
shares short, in anticipation of the fall which the
transactions of himself and his associates were inevitably
bound to produce."

Mr. Clews concludes his article with the following passage:

"The profits realized on the speculative constructions are
enormous and have constituted the chief source of the
phenomenal fortunes piled up by our railroad millio