such an arrangement, although it had no railroad connection whatever with the Erie, and the prospects of having one were by no means bright. It was not so much the railroad connection that the company desired as it was a guarantee of a large amount of its bonds, which were by no means a very desirable investment just then. At last, on June 3, 1867, a meeting of the Executive Committee of the Erie Railway Company was called to consider an application from the Boston, Hartford and Erie Railroad Company that the Erie guarantee the payment of interest on $6,000,000 of the Boston, Hartford and Erie bonds, on the promise of the Eastern company to set aside a certain amount of the receipts from its coal traffic to secure the Erie in its guarantee; in other words, giving a mortgage on receipts that could not materialize until the railroad was built, and which then depended entirely on the amount of the Erie's coal traffic itself, from which the business of the proposed Boston, Hartford and Erie Railroad was to be obtained. On that date A. S. Diven offered a resolution that such an arrangement be agreed to, guaranteeing the interest on $4,000,000 of the Boston, Hartford and Erie bonds, on the security of future traffic, the receipts from which were to be set aside for repaying the Erie guarantee, and the resolution, with some amendments, was adopted June 5th. Directors Cushman, Davis, Diven, Drew, Gale, Gregory, Lane, Marsh, and Skidmore voted for it, and Berdell, Arnot, Pierson, Lanier, Murray, and Phelps against it. A contract embodying the arrangement was made and signed October 8, 1867, by the representatives of the two companies.

The report of the Boston, Hartford and Erie Railroad Company for 1867 stated that 245 miles of the road were ironed and in operation, with twelve locomotives, twelve passenger cars, and sixty mercantile cars as its rolling stock. There were ten mortgages on the road and its franchises, and the funded and floating debt was $10,326,406. The road had cost nearly $20,000,000. The total income of the company in 1867 was $369,577. It was a well-known fact that the stock and bonds of the company had been sold and hypothecated far below 100 cents on the dollar. The guaranteeing of these bonds by

the Erie Railway Company secured also to the manipulators of the Boston, Hartford and Erie Railroad Company a loan of $3,000,000 from the State of Massachusetts. The comforting announcement was also made in the public prints that" the Boston, Hartford and Erie has only to build a little more than 100 miles of railroad between Hartford and Fishkill, when a broad gauge will be in operation from Boston to St. Louis." If there ever was a pig-in-a-poke transaction this of Erie's with that Boston clique was certainly the one.

Cornelius Vanderbilt added the New York Central Railroad to his possessions in 1867, and he then turned his eyes again on Erie. He resolved to get control of that Company also. He counted on the aid of the Boston, Hartford and Erie people in this project, and favored the election of John S. Eldridge to the Presidency of Erie. This was objected to by President Berdell, and resulted in a break in the relations between him and Vanderbilt. Berdell opposed strenuously all of the action of the Company in the matter of the Boston, Hartford and Erie bond guarantee, and warned the Company of its consequences -a warning that if heeded would have saved the Erie millions of dollars. Vanderbilt was still vengeful toward Daniel Drew for cornering him in Erie in 1866 and stripping him of a good share of his millions, but as the Erie election for 1867 approached, Drew made his peace with Vanderbilt by promising to let up on his opposition to the Commodore's getting control of the Erie, and to aid him toward that consummation. Rumors reached the Street that a compromise, if not an alliance, had been made. between the two arch speculators. This was sufficient to disquiet the Street, for, with Drew and Vanderbilt working together, no one could foresee what might happen. When the Erie election came, however, and (October 8, 1867) the influence and strength of Vanderbilt in Erie affairs were manifested by the defeat of Daniel Drew as Director, and the election of Frank Work, a well-known Vanderbilt lieutenant, to a seat in the Board, and the subsequent choice of John S. Eldridge as President of the Company, any apprehension that might have existed. of a Drew-Vanderbilt alliance was dispelled, and it

At this surprising election, Jay Gould and James Fisk, Jr., were made members of the Board. They were practically unknown outside of Wall Street, where, as a member of the firm of Smith, Gould, Martin & Co., Jay Gould had attracted attention as a shrewd and long-headed operator. Fisk was familiar as the blustering, dashing, over-dressed head of the house of Fisk & Belden, brokers. It is not recalled that there had been more than a passing acquaintance between Gould and Fisk until their election as Erie Directors. This remarkable Board of Directors was made up in full as follows: John S. Eldridge, Eben D. Jordan, Josiah Bardwell, James S. Whitney, of Boston; J. C. Bancroft Davis, Alexander S. Diven, William Evans, James Fisk, Jr., Jay Gould, Dudley S. Gregory, George M. Graves, Frederick A. Lane, Homer Ramsdell, William B. Skidmore, Henry Thompson, Frank Work, Levi Underwood.

this and other Levi UnderLevi Under

He was a

The Boston interests were strongly represented in the Board, and Homer Ramsdell was the conserver of Newburgh's interests. The new Directors Henry Thompson (who was a brother-in-law of Eldridge) and Frederick A. Lane became conspicuous figures in events that were soon to make the name of Erie familiar in the most remote corners of lands, and not to its honor or credit. wood was an ex-Lieut. Gov. of Vermont. friend of Vanderbilt. Jay Gould was so little known then that the newspapers, in printing the names of the new Erie Directors, printed his as " J. Gould," whether the J. stood for John, James, Joseph, or Jeremiah few of them could have told; and some of the papers printed Fisk's name with a final " e, and two recorded the future" Prince of Erie " under the cold and irresponsive name of "Fish." plain J. Gould and unfamiliar Fiske or Fish found their names in the papers, correctly and in full, before many weeks had passed away from the election of that historic Erie Board.

But

The administration of President Berdell may be said to have marked a period of transition in methods of operation and equipment of the railroad-the

in their changes from old to new systems of railroading, such as the use of coal instead of wood as fuel for locomotives, steel instead of iron in the mechanism of rolling stock, and the introduction of automatic couplers on passenger trains, and safety and labor-saving attachments of various kinds. The dawn of greater expansion of the Erie system also came with the Berdell management. The official records of this administration for the years 1864, 1865, and 1866 are therefore of more than ordinary historical value in the story of Erie's career, as the following extracts from them will show:

1864.

The

In 1863 the Directors had called the attention of the stockholders to the fact that increased motive power and rolling stock were necessary. There was still existing this same necessity. The road was comparatively well supplied with cars, except pas. senger and coal cars, but there was a great deficiency in locomotives. Extra service was required of them, and the shops were inadequate to keep them in repair, even when any could be spared for that purpose, and more shops had to be provided. room did not anticipate so large an increase in the rolling stock as had been found necessary for the increased and constantly increasing business offered. To meet this want the Company began the erection of new shops at Susquehanna, Pa. Lack of motive power had made the running of the railroad more expensive than it otherwise would have been. Contracts were made in 1864 for sixty-seven engines of the most approved pattern, to burn coal. The Company was building coal cars in its own shops at the rate of three a day. Passenger cars were also being built in the Company's shops upon "the most approved plans, in a manner that is confidently believed," said the report, "will compare in the most favorable manner with any similar kinds of cars on any road. It is expected that the requirements of the travelling public will be fully met in the increased comfort of these truly complete coaches."

With less provision for increased capacity than was being made, the large amount of business thrown upon the road by the opening of the Atlantic and

Great Western Railway would become a source of embarrassment instead of profit. The managers of that road had already complained of the Erie's inability to do the business resulting from the connection, although the Atlantic and Great Western had not yet been operated as a through line to Cincinnati or St. Louis. "We are assured by the managers of the roads forming the broad gauge connection to the Ohio and Mississippi rivers that by May or June (1865) their roads will be fully equipped. And with this assurance the managers of this Company would hardly be held excusable for failure to prepare for so important an accession to its permanent business."

The report announced that "the Buffalo, Bradford and Pittsburgh Railroad, connecting with the Erie Railway at Carrollton Station, 405 miles from New York and 54 miles from Dunkirk, will be open for use during the coming summer. This road from its connection with the Erie to Lafayette is about 24 miles in length, and will ultimately, and at no distant period, be carried into the very heart of the great bituminous coal region of the State of Pennsylvania. When opened to Lafayette, it will reach a point where coal, iron, and lumber can be obtained in almost inexhaustible quantities. It will become the natural outlet for the coal and iron from that great mineral region to New York, Canada, and the Western States, and will be a source of largely increased business to the Erie Railway. The growing scarcity of wood for locomotives has been a source of much anxiety, but with the opening of the Buffalo, Bradford and Pittsburgh Railroad, and the supply of coal from other tributaries of the Erie, a source of much disquietude will be removed, as the supply of coal will be ample for fuel, and the cost between the supply of wood and coal for locomotive use will be at least one-third in favor of the latter article."

Increase in expenses was explained by a great advance in the price of coal," of which a large amount is now used in the engines"; by increase in the cost of repairs, due to "the large amount of new iron laid down in 1864," 20,480 tons having been put down at a cost of $2,132,725.01, while in 1863, 13,967 tons cost but $817,609.67, a difference of only 6,513 tons, but a difference in cost of $1,315,115.34.

The average cost of railroad iron in 1863 was $58.66 a ton; in 1864 it was $105. The amount of new iron estimated to be required for 1865 was 10,000 tons, at the existing price, $105 a ton.

1865.

Increase in freight traffic, particularly through West and way East, and in passenger traffic of all classes, but particularly way, was noted. Increased expenses were due to enhanced cost of fuel; substitution of steel for iron in renewal of axles and tires; and general improvement of bridges, ties, and ballasting. There had been a great decrease in the cost of railroad iron, it having fallen to $90 a ton. Thus 20, 170 tons were laid in 1865 at a cost of $1,815,300, against 20,480 tons in 1864 that cost $2,132,725.01. During the winter and spring of the year there had been severe floods, more destructive in their effects than any that had ever occurred along the line. The new shops at Susquehanna were progressing, and $379,056.13 had been expended on them during the year. Depot, engine-houses, and shops were building at Salamanca, and had thus far cost $77,145.72. The ferry-boat" Pavonia" was built and cost $121,216.

The branch roads leased and operated were the Buffalo Division, Corning to Buffalo, 140 miles; Rochester Division, 18 miles; Canandaigua and Elmira, 66 miles; Hawley Branch, 16 miles; total, 240 miles, which, with main line, Jersey City to Dunkirk, 460 miles; Piermont Branch, 18 miles; Newburgh Branch, 19 miles; Northwestern Division, Hornellsville to Attica, 60 miles, gave 797 miles of track in the Erie system. track in the Erie system. The Wallkill Valley Railroad was operated, but not leased.

"Negotiations are now in progress for the transfer of freight at New York and Jersey City by contract, based on the actual tonnage. It is expected that this will result in large reduction of expenses at these points. If so, similar contracts will be made at other large stations.'

1866.

"The $3,000,000 first mortgage bonds mature and become payable July, 1867. Previous to their maturity it is the intention of the Company to invite

proposals for their extension for thirty years at 7 per cent. under authority given by the State of New York." Such notice was given April 1, 1867.

"The road was never in a better condition to transact business with economy and dispatch, and although the net results of last year have fallen short of expectation of the Board, yet that result is mainly attributable to causes which will be inoperative in the future, prominent among these the fact of the suspension of the transportation of coal for the Pennsylvania Coal Company for a period of three months and a half, resulting not only in loss of profits due to that business, but also involving this Company in a penalty of upward of $98,000, the liquidated damages for non-compliance with the contract between the two companies. This contract has since been modified and arranged to the mutual satisfaction of both parties.

"Ruinous competition between competing lines during the first six months of the year also seriously lessened the profits of the year. The heavy government and local taxes have been a serious drain on the revenues of the Company. The dilapidated condition of the Buffalo Branch and its equipment at the time they came into the possession of the Company, have cost upward of $1,000,000 to put in good condition."

Hugh Riddle, General Superintendent of the railroad, reported December 31, 1866, that "the condition of the motive power and equipment of the road will, I am confident, compare favorably with any

road in the country, and reflect credit on the officers in charge of that department. The track, roadway, and bridges throughout the whole extent of your road have very perceptibly improved during the past year, until I feel warranted in saying that the Erie Railway is in better condition and better equipped than at any period during the past ten years. Trains have run with great regularity and exemption from accidents, with the exception of a few casualties attending the movement of oil in bulk." (This report of the condition of the railroad and its equipment is interesting in view of the report made on the same subject a few months later, as will appear. Author.)

Miller's car platform, coupler, and buffer was adopted on passenger trains, and was described as "a movement in the right direction, and has already in several instances averted serious damage and perhaps loss of life." (Miller's platform, coupler, and buffer, the invention of Dr. Ezra Miller, of Mahwah, N. J., will be remembered as the first great improvement in that class of railroad equipment. By it the platforms were brought close together, easing the jolting and jerking in starting and stopping of trains, and forming a perfectly smooth and safe passageway from one coach to another. As it was a continuation of, and on a direct line with, the sills of the coaches, the danger of telescoping of trains in case of collision was greatly lessened. This attachment was not superseded by anything better for a score of years.-Author.)

WHILE Daniel Drew's apparent fall was by no means a cause for regret to the true friends of the Erie Railway Company, it had to them a dreadful significance as the beginning of that ascendancy of the Vanderbilt interest in the Company that they had long feared. Vanderbilt domination meant entire subordination of the Erie and its interests to the New York Central. It was not long, however, before the outside friends of Erie were still further mystified by the resignation of one of Vanderbilt's partisans in the Directory (Underwood), and the election of the deposed Drew to the vacancy, a move that was promptly followed by the great speculator's appointment to his old place as Treasurer. It is held to-day by many who say they have good reason to know, that the rumored alliance of Drew and Vanderbilt was not merely a rumor, and that the deposing of Drew by Vanderbilt at the October election was simply a collusive trick to deceive the public. As proof of this they point to the quick restoration of Drew to place and power in the new Erie management. Others who claim to know as much about the truth of the situation as any one else declare that the overthrow of Drew by Vanderbilt was bona fide, and that Drew, ever wily, diplomatic, and plausible, had secured his own restoration to power. The weight of evidence is in favor of the ante-election compact; but no matter which was the fact, the result could be but the same to Erie-misfortune, shame, pillage. Vanderbilt and Drew operated in the Street together-or, at least, not in opposition -for nearly half a year. Then suddenly it became known on the Street that Vanderbilt had resolved

to get absolute control of the Erie Railway Company as the best means to carry out his private ends as well as to control matters in relation to the New York and Chicago connection. This determination, it was further asserted, had been brought about by the fact that the new President of the Erie Railway Company had not carried out his part of the programme agreed upon between him and Vanderbilt. It seems that as time passed the new President had become greatly impressed with the genius of Daniel Drew, and as the Vanderbilt succession to Erie had not assumed a condition of certainty that warranted longer alliance with the Vanderbilt interest, the manipulator of the Boston, Hartford and Erie scheme transferred his allegiance to the sagacious Drew.

General Diven brought before the Board of Directors, December 4, 1867, the question of the broadgauge connection with Chicago, and offered a resolution authorizing the President, Vice-President, and Treasurer of the Erie Railway Company be a committee to act on such recommendations as the committee might make in the matter. The resolution was adopted. This committee made its report February 18, 1868, which was an agreement with the Michigan Southern and Northern Indiana Railroad Company for the laying of a third rail from the Atlantic and Great Western Railroad from Cleveland to Toledo and westward, thus forming a broad-gauge route to Chicago, and for operating the line. agreement was approved and signed by President Edridge, of the Erie, and E. B. Phillips, President

The