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266 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 manipulators 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