Shepherdstown register. [volume] (Shepherdstown, Va. [W. Va.]) 1849-1955, 1906-05-10
A Rake-off Of $500, 900.

An interesting example of high fl
nanciering in accordance with modern
methods has just been exposed before
the Interstate Commerce Commission,
and the way in which the Gary syn
dictate got rake.of OF $S 500, 900 in
one deal by unloading coal lands on
the Norfolk & Western Railway is re.
vealed. Ebert Fl. Gary, shining
light in the Steel Trust, is the virtu-
GUS gentleman who managed the trans-
action. The history of the deal, as
brought out by the hearings before
the commission, is about as follows:
For several years the Philadelphia
firm of E. W. Clark & Co. has con-
trolled the Flat Top Association,
which owned 100000 acres of coal
land in West Virginia. Colonel Isaac
T. Mann, of Bramwell, W. Va, was
wise enough to see that money could
be made more quickly by buying and
selling the Flat Top lands than by
mining the coal. He made an offer
of $4,000, 900 to Clarke & Co. for the
property. This was declined. Later
be offered $l1 100000, and got the
stock of the association. This was in
the spring of 1901. If the Pennsyl-
vania Railroad officials, who control
the Norfolk and Western, wanted to
acquire the property at that time,
they had the same chance to buy it
for $ll 900, 900 as Colonel Mann. A
few weeks later they declined def
mite offer of the property for $l2, 0OO,.
900, but within seven months bought
it for $20,50O,O00. After Colonel
Mann had offered his bargain to the
Norfolk and Western at profit of
million, and when refused, be grew
wiser. He interested" Judge Gary,
of the Steel Trust. The United States
Steel Corporation is powerful inAu-
ence in the financial wo Id, and it has
close business relations with the Penn.
sylvania Railroad, which controls the
Norfolk and Western. Chairman Ga
ry formed a syndicate, which took over
the property for $l3,500,000 Col
onel's Mann's million had grown to
So, 100000.
But Judge Gary could afford to be
generous. He knew something about
interesting" people, too. Just whom
he interested does not appear from
the records disclosed up to date, but
the men who pull the strings behind
the Norfolk and Western caused the
company to pay to the Gary syndicate,
on December 81, 1901, $20,500,O00
for the Flat Top Coal lands, which
were offered to the company in May
of the same year for $l2 600 900 To
effect the transfer, the Pocahontas
Company was organized, with a capt.
tai of 100000. Purchase bonds
to the amount OF $20,000,000 were
guaranteed by the Norfolk and West
ern, which paid million in cash and
got the stock, with 100000 of the
bonds. The men who engineered the
deal split up the rest to unload on a
confding public or to hold. The Po-
cahontas Company can neither mine,
buy or sell coal under its charter. All
it can do is to own the land and COL
lect the royalties.
On the date that the Norfolk and
Western bought the Pocahontas Coal
Company the latter concern leased to
the United States Coal aud Coke Com
pany, controlled by the Steel Trust,
a tract of $4,000 acres at royalty of
10 cents ton for the coal mined.
Thus Judge Gary protected the trust
without a cent of outlay, and at the
same time the Norfolk and Westerns
Pocahontas bonds were made to look
pretty good to the investor.