Deep Water to Deep Water

The year that Roosevelt I ran for reelection, Henry Huttleston Rogers

decided to build a Class I railroad out of his own pocket, which was exceedingly well lined with Standard Oil millions. Right through the Panic of 1907 he continued to sink those millions into what is now the Virginian Railway, a 600-mi. line running from deep water at Hampton Roads, Va. through the Pocahontas and New River coal fields to West Deepwater, W. Va. It cost Oilman Rogers between $30,000,000 and $40,000,000 and was one of the few railroads financed entirely by one man.

His venture turned out better than that of his fellow Standard Oilman, Henry Morrison Flagler, who insisted on building his Class I railroad over 114 miles of deep water to reach shallow water at Key West. Flagler's Florida East Coast is in the hands of the courts, and since the last hurricane (TIME, Sept. 16) it has been seriously suggested that its over-water section beyond the Florida mainland would make a better motor road than a railroad.* But the Rogers' Virginian was so solvent last week that a banking group headed by Brown Harriman & Co. easily marketed a $10,000,000 issue of the road's 6% preferred stock at the thumping fat price of $112 per share.

It was the first time that the public had ever been offered an interest in Virginian, though bonds have been sold since the death of Oilman Rogers. For more than 15 years all the preferred stock, which has voting rights, together with most of the common, has been held by a voting trust. The trust was terminated last month, and the bankers bought their block of preferred from private owners, the Rogers family presumably, since the founder's heirs virtually owned the Virginian outright. No new money for the rich carrier was involved.

The Virginian is a good road, not a big one. Operating revenues last year were only $14,400,000 but, after all charges, $3,574,000 was retained as clear profit. Its capitalization is conservative: 51% bonds, 49% stock.

But any investor who ever rode a Virginian passenger train would probably refuse the road's preferred stock as a gift. One antiquated train is scheduled each way daily. If regulatory bodies would consent, even that train would not run. Less than 1% of Virginian's revenues are derived from passenger, mail and express service.

For handling coal, which is 90% of the Virginian's freight tonnage, the road has the most efficient equipment developed. Its steam locomotives are among the world's biggest, its electric locomotives on the 134 miles of electrified line over the hump of the Alleghenies are the world's most powerful. At its docks on Hampton Roads it can load ships at the rate of 10.800 tons per hour. Between the coal fields and deep water its route is the shortest, its grades the easiest And its operating ratio, prime index of railroad efficiency, is the lowest of any major U. S. carrier (last year: 46%). Chesapeake & Ohio, another model road with enormous coal tonnage, is proud of a ratio between outgo and intake on operations of 55 1/2%.

One-commodity roads are supposed to be especially vulnerable, but in the last five years the Southern bituminous carriers have been the brightest stars in the dark railroad sky. Norfolk & Western is the highest-priced active rail on the New York stock exchange, pays $8 in dividends exclusive of extras, sells at $215 per share. Chesapeake & Ohio not only maintained its boomtime rate throughout Depression, but boosted it. Virginian skipped common payment for a while (though it is now on a $4 basis), quickly made up its one lapse on the preferred. And it never failed to cover interest charges by at least a 50% margin.

Virginian's board chairman is Adrian Hoffman Larkin, executor of the Rogers' estate. Active head is President Carl Bucholtz, a heavy, thick-set baldish bachelor who makes his home in Norfolk's old Monticello Hotel. A graduate of Baltimore & Ohio, Missouri Pacific and Erie, he often eats perched on a stool in the hotel's coffee shop, is rated a good judge of fine whiskeys, has never been photographed, wastebaskets all inquiries from Who's Who, which does not list him.

*His son and namesake who died last July reverted to the older form of the family name: Huddleston. *With no money to repair the hurricane damage along its viaduct right-of-way, Florida East Coast has not run a train to Key West since Labor Day.

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