The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1900-01-31
THE BIG RAILROAD DEAL.
w. X. VANDERBILT AND A. ]. CAS-
SATT THE MASTERS.
They Agree to Remove Troublesome
Rate Disturbers and Control from
Mississippi to the Seaboard.

WASHINGTON d. c., Jan. 12.-
THE most important railroad deal of
this generation was closed the other
day in New York without notoriety."
said a prominent New Yorker at the
Arlington this afternoon. Il am sur
prised that the newspapers did not re-
cognize it's significance for it gives the
New York Central and the Pennsylva-
mia companies control of traffic bet
ween Chicago, St. Louis, Cincinnati
Pittsburg and all of the principal points
in the Mississippi valley and the sea-
board. William x. Vanderbilt and
Alexander j. Cassatt are masters of
| the transportation problem this side
Of the Mississippi river.
when Cornelius Vanderbilt died and
his brother William K. Vanderbilt,
took charge of the New York Central
system he found that the earnings of
the various corporations comprising the
Vanderbilt system were much reduced
by unnecessary and unreasonable COM
petition, and that their rivals were
suffering in an equal manner, and even
to a larger extent, owing to the de-
cision of the Supreme Court forbidding
! pools. For example, one little cut in
! the freight schedule made by the re-
| ceivers of the Baltimore & Ohio rail-
| road cost that corporation $4,000, 900 and
! cost the Pennsylvania company at
least $13,OOO,OOO and the public never
knew the difference, nobody was bene-
! fitted, but the stockholders of both roads
suffered severely.
1.-The first thing Mr.. Vanderbilt did
toward laying out his plan for COM
bination to prevent such mistakes was
to invite William Rockefeller into the
| al oh
the latter did not own a single share
of stock in the corporation. He felt
the need of a wise, clear headed advi-
ser, who had never been identified with
with the family property or the New
| York Central system, and therefore was
able to consider their interests from
disinterested point of view. Mr.. Rock
Teller approved of his scheme and en-
tered heartily into it,
Mr.. Vanderbilt arranged an inter
view with Mr.. Cassatt, who has just
succeeded to the presidency of the
Pennsylvania system. Frank Thomp-
son understood this situation, but he
was not a man of courage or indepen-
dent spirit He did not like to take
risks and preferred to follow rather
than lead his board of directors. Mr..
| Thompson was sensitive to criticism,
both from his friends and his oppo-
nents Mr.. Cassatt is entirely diffe-
rent. He is big Drained, broad minded
and self-cOnfident, willing to take the
risk of any scheme his judgement ap-
proves and does not fear criticism if
he fails.
I'm fifteen minutes after those three
men came together the arrangement
was as good as made. Pools had been
pronounced illegal. There was no pos
sible way under which the great trunk
lines, with their feeders, could be
brought into an arrangement to res
tore and maintain rates except by pur-
chase, and Mr.. Vanderbilt said to Mr..
Cassatt You buy the Baltimore &,
Ohio and the Chesapeake & Ohio and
We will buy the Big Four and the Lake
Erie & Western. Then we, together,
will control the traffic between the
Mississippi river and the Atlantic
ocean, All right said Mr.. Cassatt,
I am with you and without any other
agreement or further consultation the
two men sent for their brokers and be-
gan quietly to pick up the stock of the
railroad referred to- Whenever a share
was offered on the market they pur-
chased it, and it was done so skillfully
that the price was not disturbed in the
slightest degree. There has been no
more than the usual variations in the
IPuOldllOIS VI lIle SlOCh OF any OF Ile
properties. Mr.. Cassatt bought one
block of 100000 shares of the Baltimore
& Ohio stock, however through Jacob
Shift, of the firm of Kuhn Loeb & Co
and James ]. Hill president of the
Great Northern. 1t was done with
borrowed money with the faith that the
directory of the Pennsylvania would ap-
prove the action of it's president and
provide the funds to pay for the stock
he had bought.
II am sure that no great financia!
transaction was ever carried through
by so few men or with such secrecy.
There were not half dozen persons all
told in the secret, and even the mana
gers of the railways mostly interested
did not have the slightest suspicion of
what was going on.
THE directors of the Pennsylvania
railroad have approved Mr.. Cassatt's
course, and have provided for an issue
of bonds to pay for the stock of the
Chesapeake q Ohio and the Baltimore
q Ohio that he purchased. He did not
get full majority of the stock of either
road, but has sufficient to enable him
to control the policy of both and select
the managers. There is no intention
TO consolidate the properties The only
purpose of Mr.. Vanderbilt and Mr.
Cassatt is to establish and maintain
fair rates that will be just to the pub
lie and protect the interests of their
stockholders"