Evening star., 1926-03-03

the denial is based" He added. how
ever, that it would be better, in his
opinion for the commission to retain
control of the matter and to lead the
way to the realization of those things
which we find meet the definitions OF
public interest set up by Congress In
it's declaration OF a national railroad
policy"
A. A. Colston, vice president and
general counsel of the Nickel Plate,
expressed Disappointment at the de-
cision, while Henry M. Anderson.
chief counsel for the contesttng NIL
nority stockholders, was jubtlant.
"Of course we win hands down." he
said, land If they ever start this over
again we will be there to meet them.
Denial that a "leak" at the COM
mission offices permitted premature
news of the decision to reach Wall
street was made by George Il. NC
Ginty, secretary of the commission.
Although some observers regarded the
avalanche of selling during the last
hour of trading on the stock exchange
as traceable to the decision, the ruling
itself was not officially announced
here until $3.50 o'clock, after the eX-
change had closed.
Mr.. McGinty explained that the
work of copying the decision for dis
tribution had been done behind locked
doors, with clerks copying detached
portions of the document so that none
could know its exact contents. In
uuirers were told as late as 1920
o'clock, he added, that it was not
known when the decision would be
given out.
Says Leak Is Impossible.
Intimations of possible leak
also brought from Chairman Eastman
Of the commission today the state
ment that such an occurrence was out
Of the question.
He said the mimeographing of the
opinion was done by different persons
behind locked doors In way which
made it impossible for advance infor
nation to reach the outside.
1t was indicated at the commission
offices that no further official cogniz-
ance would be taken Of rumors that
Wall Street may have gained infor
nation as to the ruling in an i'm
proper way.
Investment Over Billion.
o. p. and NJ. J. Van Sweringen were
real estate operators until 1916. Then
they acquired control of the old Nickel
Plate, principally because they needed
a Cleveland terminal for q rapid
transit line to their real estate hold
ingS.
This purchase excited a ripple in
the financial marts. but It was only a
small circumstance to the surging
wave of interest with which the in
dustrial world greeted the news in
1928 that the two Clevelanders had
secured control of four other rail
roads-the Chesapeake and Ohio, the
oil I>A
MarQuette-and were proposing to
merge them with the Nickel Plate.
The consolidation contemplated the
operation as unit of more than 5000
miles of roadway, with a property
value of about 81 087 900, 900, with
arteries in the COuntry'S main sweep
OF traffic, Western gateways and East
ern outlets to New York and the tide
water cities Of Virginia.
Minority Owners Start Fight.
1t was almost all over before Wall
Street, agitated by the market churn-
ing of Erie and Pere Marquette stock
prices, learned that the cause lay in
selection of those lines as the final
factors of something vaguely de-
scribed in the Street as the Van
SWeringen plan" There was plenty
of eye-rubbing, for not since the days
of Hartman and Hill had financial
men observed the overnight SCOOP
ing up of whole railroads. So expe-
and quietly had the two un-
assuming Van Sweringens proceeded
that Wall Street was almost COM
pletely deprived of the thrills and ex-
citement that usually attend the
birth Of a gigantic financial enter
prise.
But the storm averted in the
financial forum of the metropolis
broke with considerable fury when
the consolidation plan was presented
to the Interstate Commerce Commits
sion for approval. Groups of minority
in three of the acquired
roads assaulted the Van SWeringen
plan, root and branch. A committee
representing minority holdings in the
Chesapeake and Ohio led the on
with a determination epito-
mlzed by it's leading attorney when he
characterized the plan in his final
argument as the rawest proposition
ever laid before railroad stockholders
the raWeSt proposition ever laid be-
fore the stockholders of anv corDora-
ton So insistent did the attack
become that o. p. Van Sweringen
submitted himself to a long. ham
merlng cross examination on the
The minority complaint was that
the owners of Chesapeake and Ohio
and Hooking Valley stock would not
receive fair percentage of stock in
the new corporation when their hold
ings were transferred. But the op-
ponents of the consolidation did not
stop there. They sought to prove
that the Van Sweringen brothers and
a small group of associates would
profit approximately $102,O00,000 by
the enterprise, and much testimony
was produced bearing on a project
for big terminal in the Van
Sweringen's home city of Cleveland.
connecting up with certain real
estate and other interests.
Predicted Big Saving.
The reply of the Van Sweringens
was that no such profits as were
involved in the deal could be ex-
pected unless the project as a whole
served the public interest. It was
that the unified operation