guaranteed large annual rentals. In practically all these cases
the Metropolitan, in order to secure physical possession, agreed
to pay rentals that far exceeded the earning capacity of the
road. What is the explanation of such insane finance? We do not
have the precise facts in the matter of the New York railways;
but similar operations in Chicago, which have been officially
made public, shed the utmost light upon the situation. In order
to get possession of a single road in Chicago, Widener and Elkins
guaranteed a thirty-five per cent dividend; to get one
Philadelphia line, they guaranteed 65 1/2 per cent on capital
paid in. This, of course, was not business; the motives actuating
the syndicate were purely speculative. In Chicago, Widener and
Elkins quietly made large purchases of the stock in these roads
before they leased them to the parent company. The exceedingly
profitable lease naturally gave such stocks a high value, in case
they preferred to sell; if they held them, they reaped huge
rewards from the leases which they had themselves decreed.
Perhaps their most remarkable exploit was the lease of the West
Division Railway Company of Chicago to the West Chicago Street
Railroad. Widener and Elkins controlled the West Division
Railway; their partner, Charles T. Yerkes, controlled the latter
corporation. The negotiation of a lease, therefore, was a purely
informal matter; the partners were merely dealing with one
another; yet Widener and Elkins received a fee of $5,000,000 as
personal compensation for negotiating this lease!

But this whole leasing system, both in New York and Chicago,
entailed scandals perhaps even more reprehensible. All these
leased properties, when taken over, were horse-car lines, and
their transformation into electrically propelled systems involved