At this time the Panama Railroad was under the control of the official liquidator of the French Panama Canal Company. The railroad had already decided to operate a line of steamships between New York and Colon, and it accepted readily Mr. Johnson’s offer from the West. Yet Johnson himself lacked capital—as his own statement admits. To raise the necessary capital a new company—the North American Navigation Company—was at once organized, and subscriptions were solicited from San Francisco business men. Not all those approached were enthusiastic. Some merchants were afraid of antagonizing the Southern Pacific, some had an interest in it. James G. Fair said: “I am holding some millions of dollars in Southern Pacific bonds. Do you want me to put my eggs in a basket, get on a fence and chuck stones at it?”[441] On the other hand, the promoters of the new company were able to make a strong plea based on the unsatisfactory conditions of water transportation in previous years. For the first time in fifteen years San Francisco shippers had a remedy in their own hands. With the successful operation of this company, San Francisco need fear no excessive prohibitory rates from the Transcontinental or similar associations; the relief in transportation will be immediate and ample, which, together with sailing ships via Cape Horn, solves the immediate question of cheap transportation, freedom from excessive freights, and makes our city again the distributing point, instead of an isolated terminus of a long haul by rail.[442] The Raising of Funds The original intention was to raise a fund of $100,000, and it appears that the Panama Railroad agreed to enter into a contract with the North American Navigation Company providing that sum were subscribed. When $80,000 had been promised, however, the promoters solicited the aid of the recently formed Traffic Association, and upon its advice increased their capital to the sum of $200,000. As is frequently the case, in such campaigns no subscriptions were binding until the whole amount should have been subscribed. Before this point was reached the promoters nevertheless concluded their contract with the Panama Railroad. Perhaps they were over-optimistic, perhaps they felt that the chance of making such a contract should not be allowed to pass—at any rate they signed the contract and thereby agreed to dispatch steamers from San Francisco on fixed dates to connect with the rail line at the Isthmus. The text of the contract was not divulged, but the public was informed that it was to go into effect March 8, 1893, and that it gave to the North American Navigation Company the exclusive right of through billing between New York and San Francisco by way of the Isthmus of Panama.[443]