American railway-companies have never been troubled with too much money.
They have usually commenced with a great desire for economy, selecting a
"cheap" engineer, and getting a low estimate of the probable cost. A
portion of the amount is subscribed for in stock, and the next thing is to
run in debt. "First mortgage bonds" are issued and sold. The proceeds are
expended, and the road is not half done. Another issue is sold at a great
discount, and yet another, if possible. As the road approaches completion,
the desperate Directors raise money by the most desperate expedients, such
as would bankrupt any merchant in the country in his private business.
Sometimes the road has vitality enough to work itself out of its troubles;
but in other cases, unfortunately too numerous, it passes into the hands of
the bond-holders, and all it can earn goes to remunerate trustees, and pay
legal expenses, commissions, etc.
The financial mistakes of our railways have been, endeavoring to do too
much with too little money, and crippling themselves with a load of debt
that no project could stand under. This has led, as a matter of course, to
the second evil,--Imperfect construction. The projectors of a new railway
have thus reasoned with themselves:--"The average cost of our railways has
been between forty and fifty thousand dollars per mile, and this one, no
doubt, will reach those figures before we get through. But it will never do
to talk so, or we could not get the money to build it.
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