B.&O.'s Portion

While last week Pennsylvania R. R. angrily answered the I. C. C.'s charges of monopoly, Baltimore & Ohio peacefully proceeded along the lines laid by the I. C. C.'s consolidation plan. Better to fight its two great rivals, New York Central and Pennsylvania, B. & O. has long wished a westward extension. At first it eyed Wabash. But the I. C. C. assigned to it not Wabash but the long-sickly Chicago & Alton.

Operated by C. & A. are about 1,000 mi. of track between Chicago, St. Louis and Kansas City. Mine products are its chief traffic, 40% of its tonnage. In 1922, sapped by Government control, burdened with a big funded debt, hampered by strikes in its shops, weakened by loss of business owing to coal strikes, the line tumbled into receivership, has lain there ever since. But its equipment has been kept in better than average condition, its double tracks between Chicago and St. Louis transport about half the passenger traffic there.

Last week B. & O. announced that, acting through the great railroad house of Kuhn, Loeb & Co., it had acquired control of C. & A. The total cost to B. & O. was estimated at $21,500,000 against the I. C. C.'s 1928 valuation of C. & A. at $75,000,000.

The deal was done entirely through the purchase of bonds, which carry voting control. Puzzling in the case was unusual strength in C. & A. stock issues early last week with both the common and preferred selling at 7 1/4, before dropping to 3 7/8 (common) and 3 (preferred). Even the wary New York Times said flatly: "There will be nothing left for stockholders."

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