The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-06-25
A $5O,OOO,OOO DINNER
WHAT A CHANCE REMARK AT A
NEW YORK RESTAURANT
DID
CHANGED A ROADS DESTINY

The Negotiations OF the baltimore
81 Ohio for the Purchase OF the
Philadelphia, Wilmington - Bal
timore, and How They Were
Tipped of at n Dinner-The Penn
syIvnnia "Cut In" and Bought.
How a chance remark at dinner chang
ed the future of a great railroad and cos
its stockholders $4,000, 600 has been recall
ed to the minds of railroad men by the
return of A. ]. Cassatt to the Penasyl-
vania Railroad company as its president,
seventeen years after he had laid aside
the active duties of railroad management.
The famous coup by which the Philadel-
phia, Wilmington & Baltimore railroad
was snatched from the clutches of the
Baltimore & Ohio by the Pennsylvania
will ever stand as one of the most re-
markabe incidents in railroad history.
The P, w. & BIO designate 1t by the
railroad phrase-ran through three states,
connecting their principal cities. Its stock
was so gilt edged that it seldom reached
the market Both the Pennsylvania and
the Baltimore & Ohio paid roundly for
the privilege of using its tracks, while
its stockholders got per cent dividends.
Both rivals had tried at various times to
buy 1t, but found the price prohibitory.
Never satisfactory at the best the ar
rangement the Pennsylvania had with the
Philadelphia, Wilmington & Baltimore
was made more calling because Robert
Garrett, for the Baltimore & Ohio, had
succeeded in establishing a through pas
senger service between Washington and
New York, using the Philadelphia, Will
mington & Baltimore tracks and short
three-mile junction railroad in Phi.adel-
phia, owned jointly by the Philadelphia,
Wilmington & Baltimore, the Pennsyi-
vania and the Philadelphia & Reading.
BY means of the junction line the Balti-
more & Ohio trains were transferred to
the Philadelphia & Reading road and
thence to the New Jersey Central, which
delivered them in Jersey City. Mr.. Cas-
satt was first vice president of the Penn
sylvania, and he renewed the efforts to
purchase the Philadelphia, Wilmington IL
Baltimore. but without success, and thea
applied to the courts to cut off the, Bal
timore & Ohio's through line
The junction road took the trains d.
rectly through the Pennsylvania West
Philadelphia yard and it goes without
saying that when the Baltimore & Ohio
flyer struck that yard it found 1t full
of trains, which were being shunted III
so many directions as to make the Wash
ington passengers dizzy. Every train
eventually got through, but it took a
good many hearings in court to make the
judge thoroughly understand that a shift
ing yard was no place to run fast trains,
and was never so intended.
Do O. off 1c 1oI hot
the only thing to do was to purchase the
Philadelphia, Wilmington & Baltimore,
and Robert Garrett, in February, 1881,
came to New York for that purpose and
entered into negotiations with the Thayer
estate and others for the purchase of
stock at about so a share His negotia-
tions were successful and nearing com
pletion. and then one night there was a
dinner at Delmonicos.
In a burst of enthusiasm Mr.. Garrett
confided to another guest at his elbow
that the Baltimore & Ohio at last had thc
Pennsylvania under it's feet, through the
purchase of the Philadelphia. Whining
ton & Baltimore. This news, so omniaus
for the Pennsylvania, reached Mr.. Cas-
salts ears as he was sitting near by.
Getting all the details available he quiet
ly took his leave, and without losing a
moment was at work to defeat Mr.. Gar
rett's plans.
A few days later the financial world
was startled by the announcement that
the Baltimore & Ohio had obtained
controlling interest in the Philadelphia,
Wilmington & Baltimore, and that Jay
Gould was to become one of the direc-
tors Mr.. Cassatt quietly smiled
In less than two weeks after the first
announcement was made the annual
-
Eylvania railroad was held in Philadel-
phia. After the transaction of other bust
ness had been completed the president
Mr.. Roberts, began this quiet statement:
II would call the attention of the stock
holders to what has been done very rec
emily. The Philadelphia, Wilmington &
Baltimore Railroad company was abou-
passing into control of interests or COM
panies whose interests were inimical to
the interests of the Pennsylvania Rail-
road company. All the necessary steps
had been taken to perfect this; in fact
it was considered matter accomplish
ed. Fearing the disastrous results such
change of the ownership of this prop
erty might have on the property of the
Pennsylvania Railroad company, the
management has, by the executive aid OF
the directors, thought it wise to take in
to consideration the fact as to whether
that property should be secured or held
under the control of the Pennsylvania
Railroad company.
After a thorough invl st:ga ion OF all
the surroundings the executive off GERS
met tie parties controlling a majority or
large proportion of the capital stock of
that company, and did then and there
conclude the contract with that commit
tee repI esenting the sha, eholders OF tie
ID5,4I, l.NT,,l
Railroad company for its control, Or so
much thereof as the shareholders might
desire to sell. That contra-t was closed
last night about IL o'clock and confirmed
by the board of directors. This matter,
of so much Importance to the. sha. hold
ers, involves so large an interest. and
direct outlay of money that we thought
it fit and proper that the sharl holders
should be informed of what had been
done"
The simple statement of the fact only
whetted curiosity to know the details
These were not forthcoming at that time,
but they came out by degrees later
1t was learned that the Thayer syndi-
cate, of Boston, had put up a 70 felt of
Sl,O00,0o0 to deliver the control o. the cap
ital stock of the Phi lad lpaia, Whining
ton & Baltimore Railroad company to
Messrs. Garrett and Haven by March 15
1t was also discovered that they did not
then have majority of the stock to de-
liver. Negotiations had b en- put on f OF
10 prevent the syndicate from securing
the stock. 1t has always been said that
Jay Gould threw his interest in with the
Pennsylvania, and by the aid of his nu-
merous brokers absorbed all the available
stock, and then made terms with TIL y>r
The syndicate had acre d to deliver to
Garrett at $40 share, and it is easy to
see that the holders Of the stock which
Thayer expected to deliver did not need
much persuasion to take $7S. Nor was it