Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-02-13
CONTROL Of RAIL WAYS
Far Reaching Operations of
the Penna. Company.
RESOLUTION OF INQUIRY
Demand for Investigation Charged
to John w. Gates.
LITTLE EFFECT ON MARKET
How Robert Garrett Lost the P, W.
and B.-Through Premature
Boastfulness.
LITTLE EFFECT ON MARKET
BY WILLIAM E. CURTIS
Special Correspondence Of The Star and Chicago
Record Herald.

in Philadelphia and New York that the
resolution to investigate the Pennsylvania
Railroad Company was introduced in the
House of Representatives last week at the
instigation Of John w. Gates for the pur-
pose of disturbing the stock market and
that a large number of members were glad
to vote for 1t because their passes have been
cut Off
The effect on the market was not serious.
There was brief period of decentralization
and sharp decline in several stocks, none
OF which, however, except Reading COM
mon. was In any way affected directly or
indirectly by the resolution. Reading COM
mon, which is a sort of second cousin to the
Pennsylvania road, fell from 141 to 134 in
few moments. but instantly recovered all
but three points, and this could not have
been due to the congressional Intervention
or agitation, because the Pennsylvania COM
pany does not own a share. Great North
ern shares fell points, st. Louis and
Southwestern, 81; Colorado Fuel and Iron,
57s and Anaconda Copper Mines, points.
1t is difficult to see why the price of the
shares named should have been affected by
the resolution of the gentleman from Texas,
but there is some occult influence governing
the values of stocks in Wall street which
laymen do not understand.
Frankness of the Pennsylvania.
The President has answered the resolution
with material furnished by the interstate
commerce commission, and that infornla-
ton was all taken from the annual reports
Of the Pennsylvania company, which are
not only published for the use of the stock
holders IN pamphlet form, but regularly ap-
pear as advertisements in the newspapers
of the principal cities of the country for the
benefit of all whom it may concern Mr..
Gillespie of Texas or any other member OF
Congress could have obtained all this IN
for, bJra ,Ar,Ii,, TO hn TIA
of the Pennsylvania company. No railroad
so far as l am aware, has fewer secrets
than the Pennsylvania, and its reports are
always of great interest because they re-
view in detail the work of each year and
announce with equal frankneSs the plans
for the future. This has been the custom
from the beginning of the organization and
If it were departed from there would be
panic In Philadelphia Like the Boston and
Albany, the Maine Central, the New York,
New Haven and Hartford, and some other
roads, the stock of the Pennsylvania COM
pany is held in small blocks by thousands
of widows. old maids and Quaker families
in the eastern part of that state. There are
altogether, 1900 stockholders and the
average holding is about sixty shares.
Large blocks are owned by savings banks,
trust companies insurance companies es-
tates, colleges universities, schools, hos
pitfalls, orphan asylums and other fiduciary
and benevolent institutions 1t Is popular
for trust funds because it is not specula-
tive stock. The largest stockholders are the
insurance and trust companies and savings
banks of Philadelphia. The big insurance
companies of New York also own enormous
blocks of stocks and bonds. According to
the latest reports the Equitable had ST.
122, 800; the Mutual Life, So Ola, 00o, and
the New York Life, $25,921 900 of Pennsyl-
vania railroad stocks and bonds. You Will
realize. therefore, that there must be an
enormous number of small holders to bring
the average Of the $4,000 down as low as
$1,000
Investments in Other Companies.
The total amount of the stock of tho
Pennsylvania company authorized is $780,
coo, 0GO of which $500, 5l3,3 800 has been is
sued and is outstanding. OF this some
thing over $500, coo 900 is invested in other
railways, as follows:
Total Stock. Pa Co. Owns;
Baltimore aud Ohio. .s1s4 253, 464 81 $50 600
Norfolk and Western. 100000 80 $50 ooo
Chesapeake and Ohio. GO, I99, 400 10, $50 900
p idiD' WI & BAIT. 2ss5o,455 2s,4sS57s
E Eo1she Island s7oaeoS
In addition to these holdings by the
Pennsylvania company as corporation, It's
officers and stockholders have large indl-
vidual interests in the several railroads
named which are naturally voted together
The New York Central Railroad COMPANY
owns large blocks of stock In the Norfolk
and Western, the Baltimore and Ohio and
the Chesapeake and Ohio. The Lake Shore,
which is owned by the New York Central.
and the Baltimore and Ohio together own
a majority Of the stock of the Reading rail-
road, and the latter, in turn, owns the Jer-
sey Central and the Lehigh valley, Wnile
the Pennsylvania and the New YORK Cen
trail own controlling interest in the New
York, New Haven and Hartford ana the
Boston and Albany. The New York Central
owns the Big -Four, the Michigan central,
Canada Southern, Chicago and Northwest
ern and several other lines In ONO INDIANA
and other parts of the west. the Pennsyl-
varia also owns several other roads in the
same territory.
How Robert Garrett Was Beaten.
The Pennsylvania company has owned
the Northern Central and the Pittsburg and
Erie a great many years and It had a
| long and lively contest with the Baltimore
and Ohio for the control of the Philadel-
| phia, Wilmington and Baltimore. You may
remember several sensational stories which
were published ten or twelve years ago
about the manner in which the Pennsylva-
| MA finally obtained that property. The
| generally accepted version was that Robert
| Garrett, then president or the baltimore
| and Ohio. while In his cups at cub IN
| Baltimore or Philadelphia (and some said 1t
| was at the Brevoort House In New York;
| declared that he was on his way to Bos-
| ton to purchase the shares In that ROAD
| which belonged to the Whitney estate and
thus secure control. This boast, 1t was
| said. was reported to the Pennsylvania peo-
| pie. who rushed down to Boston and bought
| the STOCK De1OT6 ClT 1diiSNt 6ot tiicIS. =
| have it today from the very highest au-
| thority that this Is not true Mr.. Garrett,
| confident of his ability to secure the stock OF
| the Whitney estate, called at the Pennsyl-
vania general offices one day and boosted
| of that fact to Mr.. Roberts, president of
| the latter road. Mr.. Roberts called In Mr..
| Cassatt, who was then second vice presi-
| dent of the company, and sent him to Bos-
| ton on the first train to see the trustees
| of the Whitney estate and secure the stock
| If possible. Mr. Cassatt was successful, and
| while Mr. Garrett WAS still lingering with
| his friends at the Brevoort House In New
| York, was already returning from Boston
| with the stock In his pocket. 1t cost the
| Pennsylvania company s14,00o.0Oo, but gave
| them a through line from Philadelphia to
/ Washington which otherwise would have
| been very difficult, II not impossible, to OBJ
| tain, because the legislature of Maryland.
| being controlled by the Baltimore and Ohio
| company. would not grant a charter to q
/ rival corporation. AS soon as Mr.. Cassatt
got the stock he wired President Roberts.
| and the latter telegraphed the directors OF
the Pennsylvania company to meet him
at hotel In New York on business OF i'm
| perative Importance. which was the rails
| Ing OF the 100000 to pay for IT. II
| was the first and only time that the direc-
tors Of the Peunaylyanis railroad aver held