Leaving aside the matter of the propriety of Mr. McLeod’s action, it is plain that the method which he employed was an extremely expensive one, in that it raised the necessary cash by temporary loans at high rates from brokers in New York and Philadelphia instead of by the sale of stocks or bonds, or by the use of funds which the company might have had on hand. According to President Harris, the average charges paid on the floating debt in 1892, a large portion of which had been accumulated in these operations, was 9 per cent. If the control over the corporations acquired had been desired for temporary reasons the operation would have been a stock speculation pure and simple, and the Reading would have trusted to the possible rise in price of the securities purchased to cancel the expense of advances to the brokers who did the buying; but in this case the control was designed to be permanent, not temporary, and Mr. McLeod expected results which could be obtained only after a series of years. This brings us to the beginning of 1893. Mr. McLeod had succeeded in carrying out his plans for a combination of coal producing roads and for the extension of the Reading into New England, but had seen his first project bitterly attacked, and his second scheme become a burden because of the insufficient funds behind it. Matters came to a head in February with an attempt to borrow on $10,000,000 collateral trust bonds. Speyer & Co. accepted the issue, but the Drexels refused to handle it, and began to sell the company’s securities at any price.[249] Quotations dropped from 46¾ to 40⅝ on February 17, and continued to fall the two succeeding days, reaching 28 on February 20. On this last day application was made to the United States Circuit Court in Philadelphia, and Messrs. McLeod, Wilbur, and Paxon were appointed receivers. “I am very sorry,” said President McLeod, “that we were driven to the necessity for a receivership, but it was the only thing to do. Our credit was attacked in a way which made it impossible for us to meet our obligations, and we had the receivership established before the property was further injured.... The trouble was brought about by the fact that we were doing an enormous business on a small capital, and when this attack was made ... it hurt our credit so that we could not borrow money.”[250] Lack of capital was the repeated cry of the management. At a later date Mr. McLeod again said, “When I leased the Lehigh Valley and the Jersey Central and took over their coal operations ... I found that I had $13,000,000 invested in coal and in carrying the customers of the companies. The Reading did not have that much capital, and I had to borrow $8,000,000 of that $13,000,000. Then the panic of 1893 came on. I had arranged to fund that $8,000,000 of floating debt by selling securities, etc., giving me a working capital of $17,500,000, but the parties who were to furnish the money