Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-14
MEN AND MONEY
By NJ. S. Rukeyser.
Copyright. 1927

The recent Wheeling and Lake Erie
episode on the New York Stack Ex
change again illustrates the willing
ness of mortal man to risk great for
tunes on lunches. guesswork and half
information
The rise In the price of the stock OF
the long neglected short line spran+;
from the fact that the larger railroads
were accommodating its stock for CON
troll. Without knowing what was GO
ing on. outsiders began to sell the
stock short merely because 1t was
rising. The withdrawal of much of
the floating supply of the stock from
the marketplace by the railroads made
1t difficult for short sellers TO borrow
stock with which to make deliveries.
In the early days of the Erie Rali-
road, when the late Daniel Drew had
difficulty IN getting stock to make de-
liverles, he wriggled out of corner
by enlisting the aid of the printing
press, discovering that some OF the
, bonds. which he he,.i We're convert
bic into stock. The directors OF the
, Wheeling and Lake Ei1a, iii their de
sire to end the embarraS sing shortage
OF floating supply of their stock, have
asked the Interstate CoDDmerce Com
mission to authorize the issuance of
new common stock. into which out
standing preferred shares may be CON
verified.
l. c. e. Can Intervene.
Under existing conditions. the In
tertate Commerce Commission can in
terVene or behalf Of the public to pre-
vent manipulations and adjustments
which seem undesirable A few dec
AIDES ago, however, financial operators
were restrained only bYatheir own con-
Although, week ago the New York
Central. the Baltimore and Ohio and
the Nickel Plate simulta neously an
nounced that they had jointly bought
enough Wheeling and Lake Erie
stock to give them control. the full
story of the coup has not vet been
told In the rise thus far in 1927 of
Wheeling and Lake Erie from 2712
to 1870. these three trunk lines did not
pay anything like top prices for their
holdings. which, according to trust
worthy information which I received,
averaged about Sal a share. After
these three railroads were through
buying. other interests. not informed
as to what they had done, began to
seek control. / am informed that
Frank r.. Taplin. president and chair
man OF the Pittsburgh and West Vr-
ginia, was a heavy buyer.
The incident is not yet closed. be
cause the controlling railroads will
have TO get the sanction of the |. G. G.
If the popularity ascribed reason for
the purchase--to keep l.. r. Loree.
president of the Delaware and Hudson
Railroad. from getting the road for
his proposed fifth trunk line system
Is presented to the commission, IL is
not likely to be favorably impressed.
Spokesman for the three railroads,
however, do not mention the alleged
desire to throttle Loree competition,
but assert that the purchase was in
accordance with the four system plan
for consolidation in the East. which
was formulated and announced in
August, 1924. before Mr. Loree dis
closed his plan for an additional trunk
line.
Should Explain Waiting.
If the threatened I.oree connection
was not factor. it is difficult to de
termine why the railroads waited lntiI
the current period to buy the road
whose stock could have been p,lr-
chased for one-quarter of what thew
paid for 1t In 1924 when the four-sys-
tenn plan was first drawn up.
W. Is. Storey, president of the ad-
mirably administered Atchison, To
peka and Santa t'e Railroad. in com
1nentlng on reports as to the roads
intention 10 absorb smaller roads
when were assigned to 1t i'm the