its Pacific entrance, the canal merged in a great sea. This had been indubitably defined as the Caribbean. The peculiar ity of the strait's orientation, concluded the lieutenant, was in perfect agreement with the plans of the canal commission, since at this point the curve of the Isthmus throws the Pacific Ocean to the east of the Atlantic. The admiral then called a council of his captains, to whom Mr. Lee repeated his observations. After serious consideration it was agreed to attempt the passage of this natural canal. The success of the essay had enabled the flag-ship and her attendant battleships to reach Cuban waters in time to change the odds of battle and to secure to the American fleet an overwhelming victory.

As for the ship's peculiar position off the Isthmus, Mr. Lee's explanation has come to be generally accepted. He argued that the peculiar electric currents in the atmosphere, which induced the storms encountered far out at sea, also affected the compass, deflecting the needle from the pole in such a manner as to throw the ships out of their course to the eastward; an error impossible to discover while the dust clouds obscured the sun.

The ink was scarcely dry in the accounts of how all this had happened before the public was clamoring to know why it had happened. "What was the cause of this strange eruption?" demanded the newspapers, and each called to its aid in answering the question learned men and casual travelers, publicists and story-writers, engineers and correspondents. Scientists journeyed to Panama to study the conditions and try to read the barren face of the canal zone. Men and women with active imaginations went there, too. And the scientists came home and propounded scientific theories, and the people with imaginations came home and let loose their fancies. And none of them ever came near the root of the matter.

Professor Pennypacker's name was never mentioned in these connections.

It was never set up in huge type in newspaper headlines. Richard Dole's was, and so was Lieutenant Lee's. Certain deeply scientific journals printed paragraphs commenting on the work of Ithuriel Pennypacker, Ph.D., S. D., and on his loss to the cause of tertiary fossils.

But Richard Dole wrote to Miss Helen Bowles, "I fancy if we could get a word with the old professor now we'd find out a thing or two. Of course, you know I don't run on in public about him or his theories, though there seems to have been something in them, does n't there? But the poor old chap was right when he said you can't bet on what Nature 'll do when you get her started. And, mind you, I don't say he started her off, I know he did n't set out to, anyhow. But he went off one morning two days before the grand blow-out, and one of our fellows went with him to fix a drill. The professor wanted to get into the inside of a big chunk of limestone. Well, he did. Everything worked all right. When the professor came home, he said he guessed the explosion had queered that underground river of his, it seemed to be moving on further. (Of course he did n't put it just like that, but I'm giving you the sense.) I was starting off on that little hunting trip, and I confess I did n't pay much attention. Now I get to wondering sometimes. There were fissures in that region; one of 'em looked deep enough to lead to the 'earth core,' if it stopped anywhere this side of China. I wonder whether the professor's underground river took that road. You know his theories about cold water 'superimposed' on his big natural 'boiler.'

"But anyhow, if he had anything to do with it, I for one bless his old soul. The canal is done, and you bet I'm letting no grass grow under my feet in settling up affairs down here."

Miss Bowles gave a little gasp as she read the last lines. She was sitting in a sunny breakfast room of that inland city whither a worried aunt had hurried her at the first outbreak of war. That jour

ney, weeks ago, the girl remembered well. She had sat at her car window, and with unseeing eyes had watched the familiar landscape race past to the pace of unfamiliar thoughts. All through that ride the window sashes had framed for her two pictures; one of a young man pacing the deck of his speeding ship, the other of a young man at work on a great canal. And in both she had been equally interested. Now the war was waged; the morning paper she had just laid down spoke of the first overtures toward peace. It had assumed proportions hardly greater than those of an international episode. The canal, too, was done, and

Miss Bowles blushed. Such suddenness bewildered her. She felt hurried; the play had not been quite fair. Then she turned to the paper again. Three columns devoted to New York's gigantic preparations for the reception of the Virginia stared up at her. Admiral Dowling and his officers were to be given the freedom of the city. The account ran on in glowing terms. Miss Bowles stirred her coffee thoughtfully. She was glad she had not tried to decide herself. They were both so nice that it really did not matter which.

The maid laid two telegrams by her plate. Miss Bowles picked up the top one, and tore it open. It was dated at Norfolk, Virginia.

Furlough at New York expect me Wednesday 4.15.

E. F. LEE.

Mechanically she tore open the second. It was sent from Miami, Florida, and had been delayed.

Coming hurrah see you Wednesday at

4.30.

R. DOLE.

Miss Bowles sat back in her chair with a little cry. Then she looked again at the telegrams.

"Mary," she said, "will you get me the N. Y. C. timetable on uncle's desk? Thank you." She ran over the pages hurriedly. "I knew it," she declared aloud; "he had the old schedule. Both those trains are due now at 4.30!"

Thirty-three hours later Miss Bowles was pacing the walks of her aunt's garden, in the company of a happy-faced young man.

"I wonder my hair did n't turn gray in a night," she said plaintively. "I expected nothing less. You see, until the telegrams came I did n't know, and then I was so afraid it would n't be you."

As for the Panama Canal, the question of its ownership is still a mooted point in the hands of the Hague Tribunal.

THE railway was invented by George Stephenson in 1814, but it was not until 1825 that investment in the shares of such enterprises came to public notice. The opening in 1825 of the Stockton and Darlington Railway, the first completed enterprise of the kind in history, first drew to that investment field the attention of the British public. The "boom," as we should call it nowadays, in stocks of that and other projected enterprises, was short-lived, partly because the railway was an experiment, but chiefly because English capital had not yet recovered sufficiently from the long and exhausting strain of the Napoleonic wars to provide a sufficient surplus for new ventures on an extensive scale. During the subsequent decade, however, railway extension continued at a modest rate of progress, but with much pertinacity, the requisite capital being raised, as is usual in periods of reaction, from among a few wealthy men who had made a thorough study of the undertakings, and were content to devote to them their private fortunes or the accruing surplus of their own trade enterprises, and await results with patience. As a consequence, the authorizing and surveying of new railway routes progressed, while the large profits of lines already in operation, and the steady advance in quoted values of projected enterprises, more and more drew the attention of investors and speculators to the possibilities of the field.

Between 1835 and 1837, three familiar elements in a "railway boom" came simultaneously upon the scene. The thrifty public, after a decade of apprehension, economy, and accumulation, found its savings once more overflowing the field of local investment. The railway projects, meantime, found their way into

Parliament, where the advantages of rival schemes, discussed by the advocates of each, obtained wide audience. Simultaneously there came into public view the first of the long line of "railway promoters," George Hudson, a York linendraper, whose daring, imagination, and persuasiveness gave to the schemes the fillip which is always essential in removing the outside public's instinct of mistrust. For other reasons, chiefly, than the railway mania, the "boom" of the thirties broke down in the panic of 1837; but by this time the industrial opportunities of the railway were so manifest that capital was obtained to pursue construction, even under the heavy handicap of financial depression.

The ensuing years witnessed the linking of London with the provinces; half a dozen years later, the time was ripe for investment on an extensive scale in railways, completed or uncompleted. Mr. Grinling, in his History of the Great Northern Railway, has thus described the resultant rush of outside capital into English railway securities:

"During this autumn of 1843, the money market in London was in a remarkably easy state. The amount of bullion in the Bank, which two years before had been as low as four and a half millions, had trebled itself in amount. The rate of discount was 2 per cent, and Consols were above par. Money was very abundant, and the investments in foreign securities, in which it had until recently found full employment, had suddenly become extremely unpopular owing to 'repudiations' on the part of several South American States. Hitherto the London brokers had left railway shares severely alone, and the lines so far constructed in England had been promoted, not by finan

ciers, but by solid commercial men, bankers, manufacturers, and merchants,

who were interested in them, not as investments primarily, but as likely to improve trade in general, and their own business in particular. But, now that other fields of investment were proving unfruitful, the attention of 'the City' began to turn to railway promotion; it was discovered to be a branch of speculative finance from which 10 per cent dividends might be hopefully expected,

for were not the London and Birmingham, Grand Junction and York, and North Midland paying this, and the Stockton and Darlington 15 per cent?—and so, all at once. as it seemed, a condition of most intense apathy in regard to railway projection gave way to one of keen interest, rapidly passing through enthusiasm to a new and overpowering mania."

This description gives an idea of the economic reason for the rise of railway securities as investments. In brief, the accumulation of private capital had been so great, in the period of unusually prolonged peace and unprecedented industrial activity following the Napoleonic period, that it overflowed the ordinary channels of investment, and did so at the time when the very industrial expansion, from which arose the surplus investment fund, urgently called for the new transportation facilities which now could not be provided save through extensive use of private capital. From that time up to the period of wild promotion and speculation in the early seventies, the movement progressed continuously; hastened or impeded by the vicissitudes of financial prosperity or adversity, but on the whole continuous, as appears from the table in the next column, drawn up in 1883 by a French statistician, and reprinted, with expression of confidence in its exactness, in Poor's Manual of Railways for the ensuing year. Since the year 1880, railway mileage has doubled in the United States, and a similar increase has occurred elsewhere in the world. The increase in volume of securities of

What is to be said of the relative advantage or disadvantage of these securities for the investment of private funds, compared with other investment fields? Judged solely by the criterion of safety, the best investment of capital is in an enterprise with which the investor is familiar, and of whose prospects he can keep himself constantly and accurately informed. Real property or real estate mortgages will fall within this category when the capitalist is personally conversant with the field; so of investment in merchants' paper by a merchant, or in his own business by the head of any commercial undertaking. Such investments do not touch the present discussion; because the investor who considers railway securities is probably looking for something which can be instantly turned into cash, as the above-named investments usually cannot; and he is, moreover, either desirous of putting some of his eggs in another than the familiar basket, or else is no better acquainted with the merits of real property and merchants' paper than with any other field of investment. Railway securities, in so far as they have been introduced on stock exchanges, have the advantage of a ready market; this they enjoy, however, in common with government securities, and the mass of industrial stocks and bonds.

As to government securities, it is to be observed that if they are issued by a gov

ernment in unquestionable credit, their price is apt to be so high as to reduce the net income yield to a very low figure; whereas, if they are placed by an unstable government, or by a state confronted with war, revolution, or financial disaster, the buyer may secure a seeming bargain, but with a risk of total loss. This risk is not so slight as may be supposed; repudiation of all or part of a public debt has not, even in very recent history, been confined to states subjected, like the Central and South American republics, to alternating military dictatorships and anarchy. Within a dozen years, governments as respectable as those of Portugal and Greece have defaulted on their coupons; somewhat farther back, numerous American states and municipalities, with more or less excuse, have done the same; and the recommendation to do so for the national debt was actually incorporated, only forty years ago, in the message of a president of the United States. Public securities of Japan and Russia have lately, it is true, sold in the market on a 5 or 6 per cent basis; but they did so only because, in the one case, the Continental bankers publicly expressed the belief that Japan would break down financially under the strain of war, and in the other, because the impaired credit of Russia, in the throes of revolution, prevented her ministers from making terms with the bankers which should enable her even to meet her recurrent revenue deficit.

Industrial securities, on the other hand, incur the objection that at the present stage of their development they are, and probably will for a good many years remain, an experiment. Rules and methods employed by a manufacturer with a single mill, catering to a particular line of trade, and borrowing, largely on the credit of his personal record and experience, from banks of his own neighborhood, are necessarily and very radically altered when a dozen or a hundred of such establishments are combined into one great corporation under a central management. Expedients well established in the case of

the independent manufacturer are no longer adequate; the new corporations learned in 1903 that they could not even borrow working capital on the plan pursued by their constituent companies before the amalgamation. Furthermore, these companies have not yet reached the stage of tried experience which will make their financial machinery as simple and as easily understood as that of a well-managed railway.

Yet it is not wholly this consideration which places these securities at a disadvantage, compared with railway investments. Even to-day, the problems confronting the railway business are as complex and bewildering as in most other industries. The influence of good or bad times on profits of railways is no more obvious and direct than their influence on steel or sugar or copper manufacture. The question of transportation rates governs the outcome in net railway profits, and rates are regulated, not only by competition, but by restrictions of public law. Railways, furthermore, are compelled, more generally than any other industry, to embark in new undertakings which are experimental, which must, for a time, at least, be not only unproductive, but a positive drain on the company's general finances, and which may never turn out remunerative. New branches and extensions, planned with the idea of "opening up" districts whose resultant new population will provide future profits, are an inevitable incident of railway development. No doubt somewhat similar experiments play their part in the career of a manufacturing company; but with this difference, that if the venture turns out badly, the manufacturer is at liberty instantly to abandon the disappointing field. The railway, on the contrary, must continue the experiment and make the best of it.

But, from the investor's point of view, the very important offset to all this was the early adoption, by the railways, of the practice of making full and frequent reports of earnings to their shareholders.