Black Diamond

The jagged sluice of the Lehigh River cuts through the Allegheny Mountains of northern Pennsylvania. Thither from great passenger stations and greater freight terminals on New York Harbor run the rails of the Lehigh Valley Railroad, clean as carving knives. Across north central New Jersey they go--through manufacturing city butted against manufacturing city.

Where the Lehigh River joins the Delaware they strap New Jersey to Pennsylvania. Then up through the cliff-hugged Lehigh Valley they climb, where trees remain. Up where Moravian missionaries once established their settlements among the Iroquois, there is smoky Bethlehem (Bethlehem Steel Corp.) and Allentown. Beyond them cement mills sit greyly beside the Lehigh railroad tracks. Local stations are one, two, three and four miles apart. From Mauch Chunk (pronounced Mok Tchunk) a network of branches spread westward from the main line up among the anthracite coal mines, whose hard, black products give the Lehigh Valley Railroad its soubriquet of "Black Diamond." At Mauch Chunk the main line gradient becomes so steep that a "helper" engine must help pull on the trains. Thence the roadbed becomes a chute between cliffs, trees, coal tupples and culm banks into Wilkes-Barre,/- on the Susquehanna River. And so onward, between Senaco and Cayuga of the Finger Lakes in Central New York--trees, orchards, vineyards, farms. Due west of the lakes is Buffalo, great transshipping port for coal and grain.

Over the main line of the Lehigh Valley Railroad Buffalo is 447 miles from Manhattan. Intervening is a country marvelously rich in farm, mine and factory products. They furnish a revenue of approximately $75,000,000 a year to the railroad. Of that sum about $8,000,000 is net profit. Control of so profitable a road is worth fighting for. And men, sitting in Philadelphia for the corporation's annual meeting of stockholders last week, did fight for it.

Leanor Fresnel Loree, the indefatigable, wished the road as part of his much discussed fifth eastern railroad system. In buying Lehigh Valley shares and securing proxies to vote at the Philadelphia meeting, Mr. Loree had back of him the fortunes of the Harriman family (he was a close associate of the late Edward Henry Harriman), and the even greater powers of the Pennsylvania Railroad, Kuhn, Loeb & Co. He himself did not attend the meeting, remaining at his home at West Orange, N.J.

A richer man than Mr. Loree and, upon the event, a more potent in Lehigh Valley finances, did go to Philadelphia -- hastily. He was venerable Edward Townsend Stotesbury, 79, head of Drexel & Co. in Philadelphia and partner of J. P. Morgan & Co. in Manhattan. In Florida for winter's holiday, he risked no contretemps but took train in time to hearten by his pre ence at the meeting President Edward Eugene Loomis of the Lehigh Valley.

President Loomis, with Mr. Stotesbury and the much older George Fisher Baker, had written letters to stockholders asking voting proxies against Mr. Loree's possible control of the road. The New York Central, the First National Bank of Manhattan and J. P. Morgan & Co. were of course their backlogs. But even that array assured no victory. Mr. Loree's men had made house-to-house solicitations among stockholders.

At the Philadelphia meeting time came for counting of votes. Mr. Stotesbury, exhausted by travel and controversy, and President Loomis withdrew to the directors' room to wait restively for decision -- Loree v. Loomis, Kuhn, Loeb v. J. P. Morgan. Pennsylvania v. New York Central. Whichever group won in the count could dictate in large measure the railroad's bank dealings and its business relations with other roads. Most importantly, it would have the say in pending railroad consolidations. There was no question of ousting Mr. Loomis from the presidency. Hours passed. Then came the tally: Loree interests 499,317 votes, Loomis interests 516,354 votes. Leonor Fresnel Loree had again been foiled in another of his railroad projects.*

President Loomis, who has been a railroader for almost as many years as Mr. Loree,/- put on his overcoat and left the meeting. His comment: "It seems to me this vote shows that I represent the Lehigh Valley Railroad. The principal thing I have objected to all along is that Mr. Loree has been claiming control."

Mr. Loree also had comment to make. Said he, at his home: "I am well satisfied with the outcome. We elected our candidates to the Lehigh Valley board,**and that in itself will give us a voice in the management of the road. I am also well satisfied with the present management of the Lehigh Valley."

/-Named after the Hon. John Wilkes Col. Isaac Barre, two members of the English Parliament in King George III's reign, who denounced his oppression of the American Colonies. Northward from Wilkes-Barre, through Western New York to Montreal goes the Delaware & Hudson, of which Leanor Fresnel Loree is president. Also, through the Wilkes-Barre region passes the Delaware, Lackawanna & Western on its way, roughly parellel to the Lehigh Valley Railroad, between Buffalo and New York Harbor.

*Significant in the voting was the revelation that the Wabash (a Kuhn, Loeb road, William Henry Williams, chairman and Mr. Loree's good friend), which has never paid common stock dividends since its reorganization in 1915, had bought 467,000 shares of Lehigh Valley stock.

/-In his case since 1883, in Mr. Loree's since 1877.

**Alan C. Dodson, a potent operator of coal mines along the railroad, and Effingham B. Morris, Jr., lawyer son of President Effingham B. Morris of the Philadelphia Girard Trust Co. The elder Mr. Morris is one of the most active of Pennsylvania Railroad directors.