A word or two as to the methods by which such operations are carried on, and the system which makes them possible. From the very first, railroads have been built and operated by corporations. A number of investors, too large to attend personally to the management of the enterprise, took shares of stock and elected officers to represent them. These officers had almost absolute power; but while matters were in this simple stage, there was no great opportunity for its abuse. The losses of investors were due to _bona fide_ errors of judgment rather than to misuse of power. But soon the corporations found it convenient to borrow money by mortgaging their property. We then had two classes of investors--stockholders and bondholders, the former taking the risks and having the full control of the property, the latter receiving a relatively sure though perhaps smaller return, but having no control over the management as long as their interest was regularly paid. Of course there is always some danger when the men who furnish the money do not have much control of the enterprise; but as long as the relations of stock and bonds were in practice what they pretended to be in theory, the resulting evils were not very great. Matters soon reached another stage. The amount of money furnished by the bondholders increased out of all proportion to that furnished by the stockholders. Sometimes the nominal amount of stock was unduly small; more commonly only a very small part of the nominal value was ever paid in.[28] The stock was nearly all water, simply issued by the directors as a means of keeping control of the property. After the crisis of 1857, people had become shy of buying railroad stock; but they bought railroad bonds because they thought they were safe. This was the case only when there was an actual investment of stockholders behind them; without this assurance, bonds were more unsafe than stock had been, because the bondholders had still less immediate control over the directors and officials. If there was money to be made at the time, the directors made it; if there was loss in the end, it fell upon the bondholders.