The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1906-01-21
FIGHT WAKEFIELD
OVER RAILROADS
Scheme to Prove Governor
Poor Business Man.
B. & 0. AND CANAL MEANS
German Following Insists Washington
Branch Owns Terminals of Road
in This City.

BALTIMORE, Jan. 20.-Honors are
even at Annapolis up to date. Governor
Warfield and the German regulars in
the senate had their first brush last
week without apparent injury to either
side. As was predicted in this cor
respondence. the first move was an order
looking 10 an investigation of the sale of
the Chesapeake and Ohio canal, and fol-
lowing this came a request for informa-
ton from the attorney general as to the
status of the suit the Legislature OF 1900
directed 10 be made into the affairs OF
the Washington branch of the Balti-
more and Ohio railroad.
The object OF both is apparent. First.
(, is intended TO reflect on the business
acumen of the governor by demonstrat-
ing that he disposed of the States in
terest in the canal at price below its
value II will be shown that back in
the nineties, an offer of several millions
was turned down for this property. and
that during Governor Lowndes' admin
istration a lump sum of S40O, 900 was re-
fused; Yet this board Of public works
disposed of the holdings for $4,000.
Collision on Canal.
It will also be claimed that the West
ern Maryland and Baltimore and Ohio
were in collision when the bid was
made, and there was, therefore, no COM
petition. Then, to prove that the stock
was worth far more than II brought. the
Observation-Disclosures will endeaVor TO
prove that since acquiring control the
combination has sold a strip of land In
the District Of Columbia for 100000, and
stTl another tract in HagerstoWn Tor
s4O0,000
After bringing out these alleged facts
the opponents of the governor viii train
their guns on the Washington branch
of the Baltimore and Ohio. 1t Is the
avowed purpose OF the executive 10 sen
these securities proe.cec an adequate
price is obtained, and the Baltimore and
Ohio is ready 10 buy. but the State di-
rectors in the corporation claim this
should not be done until every legal eff
fort Is exhausted TO compel the com
pany TO make an accounting for the
money due the State in dividends passed
since 1890 on the stock IN this road.
Senator Rayner, who was the attor-
ney general OF the State IN 1900. was
directed To enter suit, but for reasons
best known to himself he did not press
the case. 1t is unof1cially stated that
the conclusion that the States position
did not warrant legal proceedings. In
other words. he was not sure Of his
ground The State had only an even
chance of winning and ne did not >are
to risk a suit for fear that in the event
OF a decision in favor of the railroad
company the stock would be Of very
much less value than it is even now
Bryan Agrees.
This opinion, it is understood. was
communicated TO his successor, Attorney
General Bryan. who entertains sim
liar opinion. and hence is chary about
going into court. Nevertheless. the
States directors insist upon q prOsecu-
ton OF the case, Their information be-
ing that the State can force the corpora
ton 10 disgorge. They claim 10 be in
position 10 prove that the Washington
terminals. now of immense value, be-
long wholly TO the Washington branch
road. whose entire revenues are being
diverted 10 the payment of the improve
ments II this is true, they say, then
the stock in the branch must eventually
become of great value and should there
fcre not be sacrificed.
On the other hand. they claim that
should be charged with the improve
ment, just as is the Pennsylvania Rail-
road Company charged as a whole with
its share. The diversion of the receipts
of the Washington branch, a strip Of
forty miles, they claim. Is unjust, as it
deprives the stockholders of their divi-
dends which We're earned. The amount
due up 10 this time-and he dividend is
cumulative-amouu to nearly 500, coo.
Should the courts decide either way, the
directors claim the stock must enhance
in value.
The purpose in view in asking the at
tOrney general for information is to
force the issue and pending a decision
to start off the sale under this admins
tration.
The proposed sale Of the Northern
Central annuity is simply a question
of eXpediency. The point is made that
as the State is not in need Of funds
there is no necessity for disposing OF
this valuable asset. which represents
an investment OF S1,50O,OOO netting 6
per cent, unless il can be disposed OF
at big profit. say on basis Of > per
cent. The governor says such a value
is fictitious, as gilt edge stocks bring
only from to ~ per cent He values
this investment and the Baltimore and
Ohio preferred stock at $4,000. 600
while Senator German claims they
should bring not less than $1,000. 900.
Opposing Sale.
AS the Legislature by an act, dele
gated TO the board Of public works the
authority to dispose of all investments
in corporations. IL now seeks to pre-
Tent the sale by trying to work up a
sentiment in opposition or by placing
on them a prohibitive price. The gov
crnor, who is one Of the members of
the board, favors the sale, and Treas
urer Vandiver. another member. OPP
poses it. The third member State
Comptroller Atkinson. who has the dc.