The Republican. [volume] (Oakland, Md.) 1877-current, 1906-06-14
Vii / st oiaG GET
3. & 0.RkiLE0AD.
Gigantic Deal Said t. Be ConiempIa-
tea ~ Which Pennsylvania Relin-
Guishes RciGin6.

Gulshes Holding.
Release of the Baltimore and Ohio
Railroad from Pennsylvania Railroad
domination and passing of its control to
the Reading, through the sale to that
company of the big Pennsylvania hold
ings of Baltimore and Ohio stock, is a
proposition that is understood to have
taken tentative shape within a few
DAYS.
Information is that George F. Baker,
H. c. FahnstOck and the First National
Bank group of New York believe that
conditions are ripe and favorable for a
gigantic railroad deal. aiming at re-
adjustment of the trunk line situation.
This group of financiers, at once in
fluential and aggressive, is known for
daring and success in carrying out I'M
expected railroad deals. 1t will be re-
membered how they put through in one
night the sale of control of the New
Jersey Central to the Reading.
From sources which should have re-
liable inside information it is stated
that George F. Baker has privately
suggested to some of his closest bust
ness associates how this contemplated
deal to put the Baltimore and Ohio I'M
der control of the Reading can be shap-
ed Up and forced through. From the
First National Bank interests emanat-
ed the suggestion of few days ago
that George F. Baer should succeed A.
!. Cassatt as president of the Pennsyl-
vania.
That plan has not been modified.
From what is learned the project has
simply assumed a new and more tangi-
bic form. This is to establish an indie
pendent trunk line system by throwing
the Baltimore and Ohio, Philadelphia
and Reading and New Jersey Central
Railroads into one great combination,
with President Baer at the head.
This would make a railroad system
connecting all the great cities of the
United States from New York, Phila-
delphia and Baltimore. on the Atlantic
seaboard, to Chicago and st. Louis, in
the West. The combined mileage
would be 1923. Such combination
would be natural one from the ply
steal standpoint, as the Reading, Jersey
Central and Baltimore and Ohio go to-
oct her in an o,,a,-o tipu ,t,o,,
Financial interests are coming fast
to believe that one outcome of the rail-
road coal investigation being made by
the Interstate Commerce Commission.
will be to crystalize the public demand
that the Pennsylvania shall surrender
its control of competing and parallel
lines in the South the Baltimore and
Ohio, Norfolk and Western and Ches-
apeake and Ohio.
Taking advantage Of this and the
continual need Of the Pennsylvania for
new capital to a large amount, it is be-
Geved that no great obstacles would be
encountered in carrying out this sug-
gested deal, an important part of which
is that the Pennsylvania Railroad Com
pany the ST, $780, 600 of Baltimore and
Ohio stock held by the Pennsylvania and
its subsidiary companies.
II is pointed out that the recent Dor
rowing by the Pennsylvania of $780,
0)0, 600 in Paris at much higher in
terest rate than the company has been
paying indicates that the Pennsylvania
has run close to the limit of its credit
in New York and the United States.
Under the Baer management the
Reading has not been in the market for
money, as almost ali other railroads
have been. The company's credit is
50 good that Reading common stock,
on / per cent. basis, is now selling
in the New York market more than
eight.points higher than Pennsylvania,
which pays 6 per cent. dividends.
Should the talked-of deal be carried
oIt, indications are that the Reading
could easily float collateral tlust bonds,
secured by the Baltimore and Ohio
stock bought, just as it did when it
purchased 81, 5O4, 900 of New Jersey
Central stock at 100, and financed the
deal by issuing $23, 600, coo Reading
Jersey Central collateral per cent.
bonds.
The fact that the Baltimore and Ohio
owns q big block Of Reading stock
would not, it is believed, Interfere with
the project of having the Reading buy
control Of the larger railroad. Henry
C. Prick is. understood to be the largest
individual stockholder Of the Reading.
1t is suggested an arrangement could be
made between the Vanderbilts and J.
Pierpont. Morgan for Mr.. Frick to take
over the Baltimore and Ohio holding of
Il 1