ship
grain to New York for as low a rate as twelve cents.

Despite the fact that competition had cut earnings almost to the point
of extinction, the Baltimore and Ohio continued to report surprisingly
good profits. The company borrowed additional funds from time to time
but continued to pay the liberal ten per cent dividend until 1877,
when it somewhat reduced the rate. These dividend payments indicated,
however, a prosperity that was only apparent, and they did not greatly
deceive the bankers, for the credit of the Baltimore and Ohio weakened
from day to day. The fact is that the reports of operations inspired
little public confidence; to the farseeing, there were danger signals
ahead. Nevertheless the ten per cent dividends were resumed in 1879 and
continued at this rate without interruption until 1886.

On the death of John W. Garrett in 1884, his son Robert, who succeeded
him as president, continued the same policy of competition and
aggression. With the object of gaining an entrance into Philadelphia and
through that gateway of reaching New York, he started work on a branch
from Baltimore to Philadelphia to meet, at the northern boundary
of Maryland, the Baltimore and Philadelphia Railroad--a line which
independent interests were then building through Delaware with the
intention of obtaining an entrance into Philadelphia. The Pennsylvania
interests strongly opposed Garrett's new project and many years before
had gone so far, in their determination to block the Baltimore and Ohio
from acquiring control of the Philadelphia, Wilmington and Baltimore
Railroad, as to purchase that road themselves. Despite this opposition
the Baltimore and Ohio went forward with their plans and secured an
entry into Philadelphia by acquiring control of the Schuylkill East Side
Railway, which was a short terminal road of great strategic value.
North of Philadelphia the company arranged a traffic contract with
the Philadelphia and Reading, whose lines extended to Bound Brook, New
Jersey, and also with the Central Railroad of New Jersey beyond Bound
Brook to Jersey City. Afterward, by purchasing the Staten Island Rapid
Transit Company the Baltimore and Ohio acquired extensive terminals at
tidewater on Staten Island and constructed a connection in New Jersey
with the New Jersey Central. Thus, after many years of struggle and at
heavy cost, the Baltimore and Ohio finally secured an entry into the New
York district independently of the Pennsy