franchise of the Chicago and
Atlantic Railway. Two years later it obtained control of the Cincinnati,
Hamilton and Dayton and found itself in a position in which it could
compete for through traffic with the Pennsylvania and the New York
Central.

But in carrying through these extensive plans, the Erie again became
involved in financial difficulties; the sensational Grant and Ward
failure in Wall Street in 1884 was a severe blow to the company's
credit, as this firm was at that time doing important financing for the
Erie. The English security holders stepped to the front again, demanded
President Jewett's resignation, and elected John King in his stead.

In 1885 and 1886 a financial readjustment took place, but the company
continued to carry the bulk of the heavy load of obligations which had
been created during the years of the Drew and Gould managements. It was
surely an evidence of the inherent worth of the property that during
the half dozen or more years following, the Erie succeeded in struggling
along in the face of all its financial and other handicaps and at the
same time showed substantial growth in the volume of its business. The
company was kept above water until 1893 without again appealing to the
courts; but by that time the indebtedness had once more mounted, and in
July of that year Erie receivers were appointed for the fourth time in
its history.

The name of Pierpont Morgan is closely identified with the story of the
railroad during this latest reorganization period. Morgan's firm came
to the front in 1894, with the powerful backing of the large English
interests, and proposed a plan which involved heavy sacrifices by many
of the security holders but which was designed to insure the permanent
future of the property. The plan was vigorously opposed, however, by
Edward H. Harriman, August Belmont, and other powerful interests, and it
was not until August, 1896, that a final compromise was effected and a
reorganization was carried through. But at last the Erie was taken out
of receivership, and an entirely new company, intelligently designed and
having ample working capital for future development, was formed with E.
B. Thomas at its head. This new president, like Daniel Willard of
the Baltimore and Ohio and many of the modern railroad leaders, was a
practical railroad man who had worked up from the ranks and who had no
large financial interest or banking connections to divert his attention
from the rea