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92 BETWEEN THE OCEAN AND THE LAKES
the appointed time. That the treasury was empty of into stock of the Company at any time b
its $3,000,000 after such an achievement was not rity, the issue to be secured by a mortgage upon the
strange. But empty it was, and there seemed no entire property of the Company between Piermont
visible prospect of its replenishment. There was no and Lake Erie, and subject only to the lien created
promise that the railroad could get any farther on by the State mortgage bonds of $3,000,000. Out of
its way toward Lake Erie. It was asif the limit of this issue of bonds the contractors were to receive
all effort had been reached; as if the end had really their pay for building the road from Binghamton to
come at last.
Corning.
Alexander S. Diven, then of Elmira, had been for By this financing the Company's purpose was to
years inclose touch with matters pertaining to the not only obtain the money to pay the contractors, but
concerns of the Company. In this emergency his to fund the floatingdebt, which was then $833,833,
genius came to the solution of the vexing and seri- and extend the railroad westward to Hornellsville,
ous problem that confronted the undertaking. He to connect with the railroad then building between
formed a company, which might in these days be that place and Buffalo, " by making as early conneccalled
a construction syndicate, consisting of John tion as may be with which important branch road,"
Arnot of Elmira, John Magec and Constant Cook of the Company's address to the public on this subject
Bath, N. Y., Charles Cook of Havana, N. Y., and said, " the very great advantages of a continuous line
himself. He afterward disposed of his interest in the to the lake are secured, and before the main line can
company to John H. Cheddell of Auburn, N. Y. be extended to Dunkirk." It was estimated by the
James S. T. Stranahan subsequently became inter- Company's engineer that the work between Bingested
in it.
hamton and Hornellsville would cost $2,500,000, and
the Directors figuredthat with the proceeds of the
The original contract with these men was for the bonds the work could be clone and the rolling stock
grading of the road and furnishing of all the material, necessary to the increased mileage be amply proexcept
the iron rails, and laying of the track from vided. The total liabilities of the Company at this
Binghamton to Corning—seventy-seven miles—the time were $9,802,433.
contractors agreeing to take their pay in an issue of The arrangement with the construction company
paper of the Railroad Company known as " income rescued the railroad from inevitable suspension of
certificates," payable solely from the net income of further construction, awakened a new interest in it,
the railroad east of Corning; the principal to be paid and insured its completion to the lake without furin
six, seven, eight, nine and ten years; the road to be ther interruption. But it tightened the grasp of
completed to Owego—twenty-two miles—by June 1, bonded debt on the Company. And it made the
1849; to Elmira—fifty-eight miles—by October 1, fortunes of the men who took the bonds as the price
1849; an|J to Corning by December 31, 1849. Sub- of their contract for carrying the railroad less than
sequently, with a view to a further and more rapid eighty miles beyond Binghamton, the road having
extension of the railroad west of Corning than was been opened to Owego, Elmira and Corning on the
contemplated at the time the contract was made, an dates provided in the contract.
arrangement was perfected by which the contractors There had been an improvement in business affairs
agreed to a modification of the terms, by which throughout the country in the meantime, and conmodification
all the income certificates that had been fidence in the prospects of Erie became stronger.
issued to them on account of the contract were re- When the railroad was finishedto Corning the Directtired,
and the entire series of such certificates can- ors invited contracts for the remainder of the road
celled. In place of those certificates the Railroad to Dunkirk, 169 miles, which the engineers estimated
Company proposed a second issue of mortgage could be built for $3,750,000. To raise a fund to
bonds, to the amount of $4,000,000, to run ten years complete this work and meet other requirements for
at 7 per cent, interest per annum, and convertible proper operations on the railroad, the Directors