Out One, Out All

For more than a year Manhattan's Guaranty Trust Co. has been smoothly squelching Financier Robert Young in a spectacular battle for control of the rich Chesapeake & Ohio Ry. (TIME, April 25 et seq.). Robert Young controlled the common stock of Alleghany Corp., top holding company of the oldtime Van Sweringen railroad domain. But Guaranty was trustee for three Alleghany bond issues under an indenture which specified that whenever the collateral (including Alleghany's C. & O. holdings) behind them fell below 150% of their face value, the bank could impound it. When the collateral so fell, the bank impounded it.

Fortnight ago angry Financier Young demanded that Guaranty reappraise the collateral. It did so, found that one of the three issues was "above water." This put Financier Young partly back in the saddle. Then last week, to Wall Street's surprise, Guaranty put him all the way back by resigning as trustee of the other two issues. Announced reason: "Interests of the holders of the bonds . . . may now conflict with the position of the trustee. ..."

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