Thus the Company had received but $22,000 on stock payments during the year. The total receipts. were little more than $30,000, and the expenditures over $207,000. A more discouraging situation could not well be imagined. President King made strenuous efforts to extricate the Company from its depth of trouble, but without success, and, in the spring of 1837, all work in the Delaware Valley and elsewhere was ordered discontinued. The Company's debt was then only $13,000, but there was much less than that actually in the treasury. The prospects for a railroad from the Hudson to Lake Erie were dark indeed.

The King administration steadily became unpopular at large, and there was not entire and perfect. unison of feeling among its own members.

Work

had not seemed to prosper under Mr. King's management, and he had at last become a convert to the idea that a work of the magnitude of the one the Company had in hand could not be successfully constructed by a private corporation, and that the work should be done by the State. The stockholders were discouraged, and the financial depression in

the country was becoming greater. A number of leading officers of the Company had resigned. At the annual election for the Directors in October, 1837, the votes of stockholders who had not paid the instalments called for were refused. A memorial from President King and the Directors asking an amendment to the relief act of 1836 was presented to the Senate during the session of 1837. The memorial asked for further aid for the railroad because of the pecuniary disaster that had overtaken many of its large stockholders, preventing them from paying the amounts of their subscriptions to the stock. The report of the Railroad Committee on it declared its sympathy with the situation the Company found itself in, but claimed that "the same causes which now embarrass the progress of the work, and, in fact, agitate the whole commercial world, have so greatly discouraged the financial affairs of the country as to render it inexpedient, if not impracticable, for the State to afford the immediate aid requested by the memorialists." And none was granted.

The official report of 1837, made January 8, 1838, was signed by P. G. Stuyvesant and William Beach Lawrence, as “Directors and Members of the Erie Company." President King was in England using his influence as a financier to stay the tide of the commercial panic in this country, which he succeeded in doing by inducing the Bank of England to advance a large amount of specie to New York banks to enable the resumption of specie payments and restore confidence here. Officially, following was the status of the New York and Erie Railroad Company at the close of 1837:

During 1837, and especially in the month of February, 2,200 additional shares of stock were subscribed, 1,355 of which instalments were paid in cash to the amount of $20,137.50. On previous subscriptions $59.887.50 were paid during 1837. The total number of shares subscribed for since the organization of the company was 25,832. On these, calls for 15 per cent. of the face had been made up to 1837, and cash to the amount of $325,907.50 had been paid on 24,987 shares, leaving due on the calls on these shares $48,897.50. On the remaining 845 shares nothing had been paid. No other contracts have been made on the line; on the contrary, the directors had found such difficulty during the commercial embarrassments of the year in collecting instalments on stock that they had deemed it their duty in, and shortly before, the month of May, 1837, to discharge the contractors and sus

of his duty. Samuel P. Lyman's services were considered none the less valuable because he had gifts for lobbying and a graceful way of using them. And at about this time there was need of a suave and capable agent of Erie at Albany. One of Lyman's first efforts as Commissioner was the making of a report, November 21, 1838, that if the Company pleased it could locate and put under contract three hundred miles of the road by May 1, 1839, from Tappan to Goshen, Binghamton to Hornellsville or Bath, and from the Genesee River to Dunkirk, and that the Delaware Valley was fairly under contract. The report suggested State Directors to be associated with the Company Directors.

This was a direct thrust at the policy of President King, who had returned from Europe strong in the belief that the Company positively had no prospects. He was using his influence to have the State itself take charge of the New York and Erie Railroad and complete it as a public work, on the ground that in that way only could the road be finished. Lyman's utterance was the voicing of the Lord policy. However, President King sent Commissioner Lyman to Albany during the session of the Legislature for 1839, with the outline of legislation having in view the making of the New York and Erie Railroad a State work, and with instructions to push it to a successful issue if it could possibly be done. Information came to President King toward the close of the session that his agent had been working steadfastly against such legislation, whereupon he censured Lyman and Lyman resigned.

Eleazar Lord's influence apparently soon became once more paramount in the Company's affairs. The contracts on the ten miles from Piermont and the ten miles from Dunkirk were let, and then Mr. Lord proposed to the Board that the work be further advanced, on a plan he had in mind, by letting contracts for its construction from the point where the ten-mile contract from Tappan ended to the village of Goshen, thirty-six miles. For the accomplishment of this he submitted his plan as being one most likely to prove successful. It called for authority from the Board to solicit subscriptions from the citizens of Rockland and Orange counties, until a sum sufficient, with a corresponding amount thus earned

from the State, to commence and carry on the work, was collected; the subscriptions to be paid monthly. He proposed a contract of such form that the contractors should have no claim for damages under it if the required instalments were not paid by the subscribers. In addition to this, the Company was to issue special certificates for the stock, entitling them to interest on it, to be paid out of the earnings on that part of the road after it should be put in operation, until such time as the road was completed to Erie. The Board of Directors acquiesced in this proposition, and official action in its favor was taken. Eleazar Lord was appointed Commissioner to carry out the details of the plan, the scope of which was subsequently extended so that the work was to be put under contract also as far as Middletown, nine miles west of Goshen. At this meeting of the Board of Directors, July 14, 1838, it was also

Resolved, That as soon as the sum of fifty thousand dollars shall be subscribed in any of the Southern Tier of counties, and instalments of 15 per cent. paid in thereon, in cash, and deposited in bank subject to the orders of the Company, a competent engineer with suitable assistants shall be forthwith sent into such county to survey the line of the road therein and prepare it for location; and that the said 15 per cent., or so much as shall be necessary, shall be applied toward the expense of such survey, and that the residue thereof, and of all future instalments to be paid on such stock, together with such corresponding amount as may in consequence be received from the State, shall be applied exclusively to the construction of the road through such county, and, if any such counties shall see fit to anticipate the payments of future instalments on their subscriptions, they shall be allowed interest thereon at the rate of 6 per cent. per annum, until calls shall be made by the Board to the same extent upon the stockholders at large.

At the same time, on motion of Mr. Lord, the Board passed a resolution which provided that the railroad should be constructed of six-foot gauge instead of the four-foot-eight-and-a-half-inch gauge, which was the standard for all roads then building in this country. There were several reasons for this innovation. H. C. Seymour, the Chief Engineer, and S. S. Post were the original controlling minds in Erie practical affairs. These advisers advocated the six-foot gauge because it was favored by all English railroad builders, who were then regarded as masters of the economies of engineering science. Then, the grades of the proposed New York and Eric Railroad were to be of extraordinary degree,

same.

But, if none of the arguments in favor of the adoption of it had been made, the New York and Erie Railroad would have had the broad gauge just the Eleazar Lord had an idea of his own about the six-foot gauge, and it was this that most moved him to favor and insist upon it. There was an apprehension in his mind that a change in a certain. provision of the charter of the Company would be sought at some future time. The avowed object of the originators of the project for a railroad such as the Erie was to be was, besides the opening up and developing an isolated portion of the State of New York, to enhance the trade and commerce of New York City by giving it communication with markets in New York State and the West which were tributary, or likely to be, to Philadelphia, Baltimore, and Boston, through public improvements then going forward. Consequently, it was intended that the New York and Erie Railroad should be entirely independent of any connection that might, although indirectly, lead the desired new trade away from New York. The Camden and Amboy Railroad was then building, as was a local road from Jersey City to Paterson. A railroad from the New York State line, near Elmira, leading southward into Pennsylvania, its ultimate terminus to be Baltimore, was about to be begun. Boston was hastening its con

nection by rail with Albany, there to meet the Canal and projected Central New York railroads. Hence the charter for the New York and Erie Railroad expressly prohibited, under penalty of its forfeiture, connection with any railroad leading into New Jersey, Pennsylvania, or Ohio, on the childish. theory that thus traffic could not be diverted from the Erie.

This was in 1832, and in 1838, when the New York and Erie Railroad Company was committed to the six-foot gauge, those railroads, and others, were either entirely or partially in operation, and had the lesser gauge. The charter provision prohibiting outside connection might be easily changed some day. To change a great railroad's gauge so that connection with other roads might be made would not be so easy. Hence Mr. Lord's adoption of the broad gauge. Eleazar Lord looked a long way ahead, but he did not look far enough. If he had, he might not have insisted on his six-foot gauge. It came to be responsible, in a great measure, for much of the Erie's subsequent financial tribulation. While the Western terminus of the New York and Erie Railroad was still at Middletown, in 1845, the then Chief Engineer, Major T. S. Brown, returned from Europe, whither he had been sent to study the best methods of railroad building, and he reported that English engineers were discouraging the six-foot gauge, and that some of the railroads in that country had abandoned it. A. S. Diven, of the board of Directors, was in favor of reducing the gauge of the Erie before the work got further along. Major Brown, in response to a request of the Board, estimated that the change of the gauge of the fifty-four miles of track between Piermont and Middletown would cost not more than $250,000. Director Diven offered a resolution that the gauge be changed to the narrow, or what is now the standard, gauge. James Brown and Homer Ramsdell were the only members of the Board besides Mr. Diven who voted for the resolution, and the six-foot gauge remained. The road was completed with that width of track. When, at last, it became necessary to make the road and its branches standard gauge or go out of business, nearly forty years later, the change cost far up into the millions of dollars, this being actual outlay; not taking into