Railroads

From the fortnight's clatter of suppositions--as to the reason for Wheeling & Lake Erie stocks hopping from $27.50 a share on Jan. 3 to $130 a share last week when the practical market corner in this stock was at its tightest, and the reason for other railroad stocks popping like heated popcorn kernels --these facts became certain last week:

Wheeling & Lake Erie's. controlling shares owned by John D. Rockfeller Sr. were sold to the New York Central (Patrick E. Crowley, President), the Baltimore & Ohio (Daniel Willard, President) and the Nickel Plate R. R.* (Van Sweringen brothers, owners).

Western Maryland's controlling shares owned by John D. Rockefeller Sr. were sold to the B. & O. A 25-year-old ordinance of the City of Baltimore, which once owned the Western Maryland, provides that this road be sold to no railroad that has main terminals in Baltimore or Philadelphia. The intent has been to provide several railroad channels for traffic to the Port of Baltimore. This may handicap the present sale.

Chesapeake & Ohio (controlled by the Van Sweringens and their Nickel Plate R. R.) voted $59,502,400 to buy control of the Pere Marquette (now controlled by Van Sweringens) and the Erie (now controlled by Van Sweringens with the aid of George F. Baker Sr.).

Nickel R. R. (controlled by the Van Sweringens) was quiescent.

Implications. The implications of these facts are:

1) The Van Sweringens, foiled by the Interstate Commerce Commission at previous attempts to create the Nickel Plate System out of the Nickel Plate R. R., the C. & O., the Hocking Valley (owned by the C. & O., and so by the Van Sweringens), the Erie and the Pere Marquette, are trying a new alignment of their controlled roads. Apparent emphasis now is on the C. & O. But the Nickel Plate R. R. controls the C. & O.

2) Leonor Fresnel Loree, ablest railroad analyst in the U. S., is apparently blocked from creating a great fifth trunk system in the East, in rivalry to the New York Central, Pennsylvania, B. & O. and proposed Nickel Plate System. He controls the Wabash (Mississippi River and Great Lakes Ports to Buffalo; it reaches the Port of New York over the Delaware, Lackawanna & Western), the Buffalo, Rochester & Pittsburgh (connecting those cities), the Delaware & Hudson (upstate New York to the St. Lawrence). The B. & O. and the New York Central own control of the Philadelphia & Reading. In this particular road Mr. Loree has potent rights. This is important, for the Philadelphia & Reading controls the Central R. R. of New Jersey, the railroad that owns the finest port facilities in New York Harbor. The Western Maryland sale keeps Mr. Loree away from the South. The Wheeling & Lake Erie sale is not so important to him.

3) New York Central gets its own trackage into Baltimore.

4) The Van Sweringens add another knot to their projects.

5) The B. & O., which would have been the shortest of the Eastern trunk systems (about 6,000 miles) can approximate the mileage of the others.

6) The Pennsylvania (W. W. Atterbury) is left isolated, except for its relations through the banking house of Kuhn, Loeb & Co. with Mr. Loree and his aims. Because Mr. Loree is the railroad adviser to Mrs. Edward H. Harriman, widow of the man who organized the Union Pacific and the Illinois Central as most potent roads, such relations are important for a transcontinental trunk system. George Jay Gould tried this at one time. But the panic of 1907 wrecked him financially, destroyed his aims.

The name of two brothers Van Sweringen is accented in countless columns dealing with rail mergers, gigantic, planned, accomplished. Newswriters refer to them as giants, geniuses, masterminds; tell and retell the story of their amazing career. O. P. Van Sweringen was born 47 years ago, his brother two years later, in Wooster, Ohio. Denied extensive education, they sold newspapers, saved, moved to Cleveland, worked as office boys, saved more. Borrowing, they purchased a wooded tract near Cleveland, pronounced it the future residence district. Borrowing more, they made their land accessible by rapid transit, bought more land. They still buy. Twelve square miles of residence property (homes worth $25,000 or more) have been or are being developed through their office. Their practice in talking sparingly, pointedly with Cleveland bankers has made it easier for them when they venture to New York. Neither has married. When not on their private car they live quietly in one of two residences near Cleveland. Pre-eminent in financial circles, they are unknown quantities in so-called "society." Hostesses have sighed, invited them, received polite regrets, sighed, invited them again. They never accept. Perhaps they fear boredom. Perhaps they are merely preserving vitality.

Strange, affecting stories are told of their inseparability, their confidence, understanding of each other. Every move seems the result of joint thought and decision. It is thought that O. P. usually takes the lead, but if O. P. may speak for M. J. so may M. J. speak for O. P. With two minds made up, they are difficult to swerve. It is gossiped that even their personal checkbook is a joint affair, either signature being valid.

*Full name: New York, Chicago & St. Louis R. R. This is but one factor of the Van Sweringen's Nickel Plate System.