Deals & Developments

Fox Leases. Spoyros Skouras and his brother George built up a chain of motion picture houses in the Middle West, sold them to Warner Bros., but kept some theatres in & around St. Louis. Last January the Brothers Skouras resigned from Warner Bros., began building up a new chain. At the start of last week they had 26. At the end of last week they had 73. The 47 new theatres were rented from Fox Theatres Corp. on 26-year contracts, consist of all Fox's Manhattan-Brooklyn-Long Island chain except for the de luxe houses. Fox had tried previously to sell the chain to Radio-Keith-Orpheum, then to Paramount-Publix.

Last week Fox Film Corp. reported net income for the first half of 1931 at $120,152 against $6,785,897 in the same period of last year.

Bad Bridge Bonds, Knight, Dysart & Gamble, St. Louis investment banking house, was sued last week by two clients who had purchased from them $38,700 of New Orleans-Pontchartrain Bridge Co. debenture bonds. The bonds defaulted in 1929, the company is now in receivership. The two plaintiffs, both laundrymen of St. Louis, said their life savings had been swept away. The suit against the bankers was based on charges of fraud. The laundrymen claimed the bankers had represented the bridge company as owning a franchise which protected it from competition for 20 years. Actually when the bonds were being sold the Louisiana State Legislature had already passed bills providing for two free bridges a few miles away. These were pet projects of mercurial Huey Pierce Long, Governor of Louisiana and Senator-elect, who also fostered the public ferries which have added to the bridge company's troubles.

Attorneys for the plaintiffs said they expected other suits to be filed by St. Louis investors who bought in all some $1,000,000 of the debenture and first mortgage bonds. Partners of Knight, Dysart & Gamble include Harry F. Knight and his son Harry Hall Knight, original backers of Lindbergh's flight to Paris in 1927.

Rail Plan Filed, Last January President Hoover acted as spokesman for the four great eastern trunk lines (New York Central, Pennsylvania, Chesapeake & Ohio, Baltimore & Ohio). He announced that they had agreed on a consolidation plan after ten years of bitter fighting (TIME, Jan. 12). Last week, after many rumors in the intervening months of insuperable obstacles, the four roads filed their plan with the I. C. C. It was the same plan that was proposed last January except that definite agreements had been reached on delicate points before left high in air. Important were:

1) Chesapeake & Ohio will be granted use of tracks into Pennsylvania Terminal in New York City.

2) Baltimore & Ohio is to get Western Maryland, which the I. C. C. has ordered should be surrendered by B. & 0.

3) Chesapeake & Ohio is to acquire Bessemer & Lake Erie from U. S. Steel Corp.', and Lehigh from Pennsylvania.

4) The Virginian is to be owned jointly by Pennsylvania and Chesapeake & Ohio, but New York Central is to have joint rates and through routes over it.

Greatest hindrance to the plan was known to be Pennsylvania's request for trackage rights over the Nickel Plate along Lake Erie. Although this is a C. & O. road New York Central was unwilling to grant such a privilege to its powerful rival. In the plan filed with the Commission last week no mention was made of this embarrassing point and opinion was that it had been tacitly ignored for the moment by Pennsylvania in return for silence on New York Central's part on other points.

Its sponsors claimed the plan created four systems as nearly balanced as to size, mileage, earning power as possible. All details of subsidiary acquisition were left to be decided later and the Commission was asked to scrap its own five-system plan proposed in 1929.

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