St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1889-09-08
UNION OF SHAREHOLDERS.
Shrewd McCo0k's Latest Scheme for
a Gigantic Railroad
Trust.
THE LAW CANNOT BREAK IT.
The Rock Island and Kansas City
Roads Stand by Ex- chairman
Abbott.

CHICAGO, Sept. John J.. McCook,
who was the secretary of the bankers
meeting in New York last January,
which suggested the formation of the
Gentlemen's association, and who a
short time ago suggested the formation
of a railway trust. has written a conf
dental communication to DreXel, Nor
gan q Co., Brown-Bros. 81 Co. and Kid
der. Peabody q Co., the New York
bankers triangle, regarding his trust
scheme. In this communication Mr..
MeCook says that the position taken by
the above-named firms last January
were largely influential in the eStabi .Sh-
ment of the Interstate Commerce Rail-
way association, which, he says, has rem
dered good and efficient services up
to this time, but the stability and per-
manence of which is now seriously
threatened. The recent cut in grain
rates by the Baltimore q Ohio and the
retirement of the Alton, suggested to
him the propriety of asking prominent
railroad managers and shareholders as
to whether the time had not come for a
Union" of s~hareholding interests upon
a proprietary basis, which would be
more permanent and effective than
II "GENTLEMAN'S ASSOCIATION"
As such union in any form, Mr.. Me
Cook says, is likely to receive hostile
comment from the public and the press,
until its objects and methods are fully
understood, he presented his suggestion
in the baldest and least attractive form,
so as to draw out and give in advance
the benefit of average criticism which
might be useful in shaping and fOrmu-
lating the final plan to be
ADOPTED. Many of the officers
of the lines now represented
in the gentleman's association, Mr.. Nc
Cook says in his communication 10 the
bankers ''triangle," while hesitating to
say O do anything which would dis
turb the railroad situation. feel sub
Stantially as he does about the neceS-
sity for further and early action. He
produces a letter from a president of
n of the roads in the gentleman's as
ISOLATION, whose name he does not give,
who admits that the gentleman'S asSO-
citation is a failure, and says he can see
no escape from an ultimate formation
of a railroad trust. This official, Mr..
McCOok says, expresses the feeling Of
most managers who IN good faith en-
tered the association. He further states
that unless the action of the Bur-
lington & Northern preeipitates I'M
expected trouble, the association might
be able to maintain itself and
sustain fair rates until the present crop
is marketed, but when a shortage of
tonnage is again felt by the railroads
they will again surely resort to the dis
astrous cut-rate methods practiced in
the past. He suggests as a name for
this trust or organization "North Amer
lean Railway Investors union" The
agreement and organization. he sug-
geStS, must be sufficiently comprehenS-
i've to
INCLUDE THE CANADIAN LINES,
as we'll as those within the United
States. Such a ''union" must.be COM
posed of the shareholders and not of the
corporations themselves, and when the
control of a majority of the shares of
any two or three important lines has
been secured, he thinks. the control of
others will follow. Mr.. McCook con-
cludeS his argum+n mt as follows:
From a legal standpoint, such an organiza-
ton. if properly constituted, cannot be over
thrown while American citizens retain the
right to hold property, and so long as the
constitution of the United States, sustained
by the decisions OF the supreme court, pro-
hibits the enactment by the legislatures of
The several states of any law impairing the
obligation of a contract. The business ques-
tons involved will be quickly settled, and
puD1c sentiment VIII De sauSneQ Dy the
working out of this plan. which will give as
good, if not better results to passengers,
shippers and the general public than any now
shown by the proprietary lines controlled by
the trunk line companies, extending from
Buffalo. Pittsburg and Ohio river points to
the different cities of the West. The regula-
ton and control by such a proprietary
union" when once established will destroy
the inducements for cutting rates, and such
a rate war is no more likely to be started be-
tween lines in the union than between the
Michigan Central and Lake Shore lines, con-
trolled by the New York Central, or between
the Fort Wayne and Panhandle lines, con-
trolled by the Pennsylvania road. In other
words, the existing lines will get all the traf-
fc that exists, they will handle it promptly
i~sfaction to the public and better returns to
tha investors