d, when peace was restored
in 1865, the Baltimore and Ohio resumed its policy of aggressive
expansion.

Before very long the road, with its connections constructed or
purchased, reached the cities of Pittsburgh, Sandusky, and Chicago, and
further strengthened its connections with Cincinnati and St. Louis. It
acquired steamboats, grain elevators, and docks; it constructed hotels
as mountain summer resorts; it built dry docks in Baltimore; and finally
it proceeded to organize and operate an express company, a telegraph
company, and a sleeping-car company. To carry out these ambitious plans
the capital stock and debt were of course increased again and again,
and in the course of these operations a large part of the new securities
issued was sold to English investors. Notwithstanding these great
increases in liabilities, the company continued to report large
surpluses and to pay large dividends, generally ten per cent annually.
In fact, this liberal rate was, with brief exceptions, paid right
through the Civil War period, in spite of the fact that large parts
of the line were frequently destroyed and traffic was often at a
standstill. With such prosperity under such conditions Garrett's
reputation as a railroad manager naturally suffered no eclipse.

In the course of the Civil War, as already noted, through traffic routes
from New York to Chicago had been established, and in the succeeding
years the consolidations of the great competing systems into trunk lines
had taken place. The struggle of the Baltimore and Ohio for its share
of Western business led to fierce rivalry with the Pennsylvania. This
competition became so severe and intense that, in 1874, the Pennsylvania
road refused to carry the Baltimore and Ohio cars over its line to New
York on any terms whatever. Since this was the only way in which the
Baltimore and Ohio could reach New York, the situation was a serious
one. Garrett retaliated by making destructive reductions in passenger
rates from Washington and Baltimore to Western points. The cuts were
soon made on other roads and affected both freight and passengers. All
the lines became involved. Passenger fares from Chicago to Baltimore and
Washington were reduced from nineteen dollars to nine dollars, and those
to New York and Boston from twenty-two to fifteen dollars. Still the
fight continued, and before the end of 1875 it was possible to travel
from Chicago to New York first class for twelve dollars and to