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 could be bonded mile for mile under a separate charter. Ford modestly disclaimed any intention of dictating the financial policy; this was not in his line. But again he would submit facts. The grain crop in the West was phenomenally large in prospect. With its own eastern terminal in Chicago, the Pacific Southwestern could control the grain shipments in its own territory. With the moving of the grain, the depressed P. S-W. stock would inevitably recover, and on a rising market the new issue of bonds could doubtless be floated.
The enthusiast closed his argument with a hasty summing-up of the benefits which must, in the nature of things, accrue. From being an alien link in the great transcontinental chain, the Pacific Southwestern would rise at a bound to the dignity of a great railway system; a power to be reckoned with among the other great systems gridironing the West. Its earnings would be enhanced at every point; cross lines which now fed its competitors would become its allies; the local lines to be welded into the eastern end of the system would share at once in the prosperity of a strong through line.
For the western extension he could speak from personal knowledge of the region to be penetrated. Apart from the new line's prime object—that of providing an outlet for the system—there was a goodly heritage of local business awaiting the first railroad to reach the untapped territory. Mines, valueless now for the lack of transportation facilities, would become abundant producers; and there were many fertile valleys and mesas to attract the ranchman, who would find on the western slopes of the mountains an unfailing water supply for his reservoirs and ditches. Ford did not hesitate to predict that within a short time the extension would earn more, mile for mile, than the grain-belt portion of the system.
When he sat down he felt that his cause was lost. There was no enthusiasm, no approval, in the faces of his auditors. After a short and informal discussion, in which the engineer was called on to explain his plans and estimates in detail to one and another of the members, Magnus, the bank president, sufficiently summed up the sense of the meeting when he said:
"There is no question about the ingenuity of your plan, Mr. Ford. You must have given a great deal of time and thought to it. But it is rather too large for us, I'm afraid, and there are too many contingencies. Your province, I understand, is the building and operating of railroads, and it is nothing to your discredit that you are unfamiliar with the difficulties of financing an undertaking as vast as this proposal of yours."
"I don't deny the difficulties," said Ford. "But they wouldn't seem to be insuperable."
"Not from your point of view," rejoined the banker suavely. "But you will admit that they are very considerable. The opposition on the part of the competing systems would be something tremendous. No stone would be left unturned in the effort to dismount us. To go no further into the matter than the proposed purchase of the majority stocks in the three short roads: at the first signal in that field you would find those stocks flying skyward in ten-point advances, and your five millions wouldn't be a drop in the bucket. In view of the difficulties, I think I voice the conviction of the board when I say that the plan is too hazardous."
The nods of assent were too numerous to leave Ford any hope of turning the tide in his favor. He rose, gathered up his papers, and reached for his hat.