Southwestern, in its present condition, was a failure. It was an
incomplete line, trying vainly to hold its own against great and
powerful systems overlapping it at either end. The remedy lay in
extension. The acquisition of a controlling interest in three short
roads, which, pieced together, would bridge the gap between the Missouri
River and Chicago, would place the Pacific Southwestern upon an equal
footing with its competitors as a grain carrier. By standardizing the
Plug Mountain narrow gauge and extending it to Salt Lake and beyond, the
line would secure a western outlet, and would be in a position to demand
its share of transcontinental business.

To finance these two extensions a capital of thirty-five million
dollars would be needed; five million dollars for the purchase of the
majority stock in the three short roads, and the remainder for the
western outlet. These assertions were not guesses: by referring to
exhibits marked "a" "b" and "f," his hearers would find accurate
estimates of cost, not only of construction, but also of stock
purchases.

As to the manner of providing the capital, he had only a suggestion to
offer. The five million dollars necessary for the acquirement of a
controlling interest in the three short roads would be a fair
investment. It could be covered immediately by a reissue--share for
share--of the reorganization stock of the P. S-W., which would amply
secure the investors, since the stock of the most prosperous of the
three local roads was listed at twenty-eight, ten points lower than the
present market quotation of P. S-W.

The thirty million dollar extension fund might be raised by issuing
second mortgage bonds upon the entire system, or the new line itself