in August, 1831, when the De Witt Clinton locomotive made its
trial trip over the primitive rails of the seventeen-mile Mohawk
and Hudson road--a far cry even from that other day, thirty-eight
years later, when the sagacious Commodore startled the financial
world by his New York Central and Hudson River Railroad, with a
capital of ninety million dollars.



CHAPTER III. THE GREAT PENNSYLVANIA SYSTEM

In the early forties the commercial importance of Philadelphia
was menaced from two directions. A steadily increasing volume of
trade was passing through the Erie Canal from the Central West to
the northern seaboard, while traffic over the new Baltimore and
Ohio Railroad promised a great commercial future to the rival
city of Baltimore. With commendable enterprise the Baltimore and
Ohio Company was even then reaching out for connections with
Pittsburgh in the hope of diverting western trade from eastern
Pennsylvania. Moreover the financial prestige of Philadelphia had
suffered from recent events. The panic of 1837, the contest of
the United States Bank with President Jackson, its defeat, and
its subsequent failure as a state bank, the consequent distress
in local financial circles--all conspired to shift the monetary
center of the country to New York.

It was at this time that Philadelphia capitalists began to bestir
themselves in an attempt to recover their lost opportunities.
Philadelphia must share in this trade with the Central West. The
designs of the Baltimore and Ohio Company must be defeated by