BarbarousMexico JOHN KENNETH TURNER

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BARBAROUS MEXICO
the scheme and carried it to an exceedingly successful
termination for himself.
Harriman owned some Mexican Central stock, but
fifty-one per cent of this property was in the personal
possession of H. Clay Pierce. When the first rumblings
of the 1907 panic were heard Pierce was persuaded to
hypothecate his entire holdings to Harriman.
After getting control of from eighty to eighty-five
per cent of the Mexican Central property Harriman sent
Samuel Morse Felton, one of the ablest railroad maniplators
in the United States, to talk Diaz over to the
merger scheme. Where Limantour had failed Felton
succeeded and the world was informed that the Mexican
government had accomplished a great financial feat by
securing the ownership and control of its railroad lines.
It was announced that the government had actually
secured fifty-one per cent of the stock of the company.
Also the government was put in nominal control of the
situation.
But—in the deal Harriman succeeded in placing such
heavy obligations upon the new company that his heirs
are almost sure to foreclose in the course of time.
The Mexican Central and Mexican National systems
are both cheaply built roads; their rolling stock is of
very low grade. Their entire joint mileage at the time
of the merger was 5,400 miles, and yet under the merger
they were capitalized at $615,000,000 gold, or $112,000
per mile. Oceans of water there. The Mexican Central
was 30 years old, yet had never paid a penny. The
Mexican National was over 25 years old, yet it had paid
less than two per cent. Yet in the over-capitalized merger
we find that the company binds itself to pay four
and one-half per cent on $225,000,000 worth of bonds