Sale of the B. R. & P.

Before Leonor Fresnel Loree last spring was forced to abandon his threat of a fifth Eastern railroad system, he had an option on the Buffalo, Rochester & Pittsburgh Railway. This is a 600-mi., Y-shaped road joining Pennsylvania's soft coal and steel districts to Lakes Erie and Ontario. It lay as an important joint for him to connect his Delaware & Hudson, the Wabash (which he controlled) and the Lehigh Valley (which he thought he controlled). It was a pretty railroad layout and promised to compete with the New York Central, the Pennsylvania and the Baltimore & Ohio established systems, and with the Van Sweringen brothers' pattern of the fourth system.

Mr. Loree had his option to buy control of the B. R. & P. He had had it more than a year. It lapsed; he renewed it, expensively, by payment of a goodly "binder" sum.

Forces only partly known, like hidden electromagnets, were dragging against his fifth system. The New York Central wanted him out of their territory; it wanted the B. R. & P. as a cross-country, north-south connecting line. The B. & O. wanted the same B. R. & P. to reach the eastern Great Lakes. The Van Sweringens, close friends and complements of the N. Y. C., apparently stood by. Only the Pennsylvania sided with Mr. Loree's aspirations. Even so, financial and railroad men believe (such things are impossible to ascertain), Pennsylvania's President William Wallace Atterbury, while fanning Mr. Loree's fire with one hand, had his other hand on Mr. Loree's chestnuts. Whatever the opposing forces were, the Interstate Commerce Commission frowned against the Loree B. R. & P. purchase. He let his second (renewed) option lapse. The B. R. & P. was on the open market.

Then last spring Mr. Loree in a vicious, nerve-wracking stock-voting contest for control of the Lehigh Valley lost to Lehigh's President Edward Eugene Loomis. The fifth system thus could no longer be. Leonor Fresnel Loree, hard-bitten railroader that he is, was thwarted, vanquished.* At once he sold his Lehigh Valley and Wabash stocks to the Pennsyl-vania.

Meanwhile, and all summer long, the Van Sweringen brothers -- Oris Paxton, 49, and Mantis James, 47--sat high in their 54-story steel & limestone railroad tower domineering over Cleveland. Their apart- ment there in the air is charming.+ Charming, too, are they as individuals--courteous, manly, straightforward. Babbitt Clevelanders state that they are not jovial, that they are aloof. They play (chiefly at golf) more for physical and mental exercise than for sport. As railroad financiers they are great tacticians, but not yet great strategists. They gained control of the Nickel Plate, the Chesapeake & Ohio, the Hocking Valley and the Erie; they have gained a share (with N. Y. C. and B. & O.) in the Lake Erie & Wheeling. They have had the strategic plan of making those railroads into the fourth eastern system. N. Y. C. has helped them; the B. & O. has removed obstacles; the Pennsylvania has not interfered, overtly. Yet after four years of intricate crocheting at their orris of railroad lines, they have not yet succeeded. The transportation system that they prophesied and prayed for has not yet come true. Their financial finesse has been too involved for the I. C. C. to approve. J. P. Morgan, their good friend, their other good friends consider, has not guided them deftly.

Last week, suddenly, they hooked another line into their great design. It was the Buffalo, Rochester & Pittsburgh Railway, which Leonor Fresnel Loree lost months ago.

The B. R. & P. has $16,500,000 worth of common and preferred stock outstanding. A. Iselin & Co. and Roosevelt & Son, investment bankers, owned two-thirds of the stock. The par of both kinds (preferred and common) is $100. On the stock markets early last week the shares were considered worth only $80 each. The Van Sweringens offered the Iselin-Roosevelt group the full $100, and gained the purchase. B. R. & P. shares are not worth $100. But so great is general confidence in Van Sweringen financing that stock buyers at once offered $98 a share for what minority stock might reach the market.

*Simultaneously in the Southwest he was trying to consolidate the Kansas City SDuthern, the Missouri-Kansas-Texas and St. Louis Southwestern. There, too, he has been thwarted, not yet necessarily vanquished.

+The mansion of their vast farm overhangs the wooded Chagrin River Valley, 15 miles east of Cleveland.