Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-23
MEN AND MONEY
By NJ. S. Rukeyser.
Copyright. 1927

| nave become leadlng fdlTodu Li@I@h
makers, are seeking to transform the
Erie from a Wall Street joke into an
efficient trunk line.
That the financial district no longer
| believes that the day when Erie VIII
| pay dividends will be doomsday, as IL
| used to- has been suggested py the
rise of the common stock recently 70
the highest peak in more than Il
years.
The stock Of the company, Wflch the
Chesapeake & Ohio has asked the inter
state Commerce Commission for per-
mission to buy control Of, is, of course,
speculative, and the recent upturn IN
| part springs from the fact that the
| imagination of traders has Deeh
stirred by new visions of mergers.
There is also a technical reason LOT
| the rise. The personal holdings Oh the
| Van Sweringens and the Chesapeake
& Ohio Railroad account for more
| than half of the common STOCK out
| standing. Moreover, it was dlScIoseu
in the application of the Chesapeake
& Ohio Railroad to the Interstate Com
merce Commission that the G. q o.
/ board Of directors have authorized the
/ purchase of additional shares in the
open market incidentally, the petl-
| ton filed before the l. &. G. also re-
veals that the directors of the Chesa-
| peake and Ohio have authorized add1-
| tionaI purchases in the open market
of Pere Marquette. the second of the
| two roads which it plans to control,
as part of the recently revealed inter
| mediate unification plan of the van
| SWeringens.)
Bernet Is Factor.
| bet
| tons, Erie is being closely watched
| because J. J. Bernet, who built up
| the Nickel Plate for the Van SWer-
| ingens, has been switched to the Erie.
| Mr.. Bernet is considered one of the
| ablest operating men and business
| getters among the railroad presidents
| Of the country, and is plainly the star
| Of the Van Sweringen organization.
| He was trained in the school Of the
| late A. II. Smith Of the New York Cen
| trail lines. When the original Nickel
| Plate unification plan, which was re-
| jected by the Interstate Commerce
| Commission last March, was drawn
up 1t was assumed that Mr.. Bernet
would head the fiVe-road consolidation.
| The fact that Mr.. Bernet has been
| transferred to the Erie indicates that
the Van Sweringens believe that the
reconstruction of the Erie is the most
| urgent job to be done on any of the
| five railroads which they dominate,
including the Nickel Plate. the Chesa-
| peake & Ohio, the Hooking Valley. the
Pere Marquette and the Erie. Thus
far the Van Sweringens have not ac-
| lively asserted their influence in the
| management of the Pere Marquette,
and until Mr.. Bernet replaced F. d.
| Underwood as president of the Erie
last month, they had not begun to
exert leadership in the Erie.
| Mr. Bernet has already initiated
substantial organization reforms in the
| Erie, changing the division points, for
| example. He is likely also to make
| significant changes in equipment, sub
shutting heavier equipment for that
| now In use, particularly with the idea
| or speeding up freight service. His
outstanding achievement on the Nickel
| Plate, from the operating side. was in
lnauguratlng new speed standards for
| freight movement. Those in his con-
Hdence declare that he has in, mind
| similar development for the Erie.
winch has a main line between the
| port OF New York and Chicago. Mr..
Bernet is, in variety of small WAYS.
| introducing new methods, such as the
NICKEL Plate system for forecasting
earnings and future equipment re-
quirements.
Physically Rehabilitated.
The system which Mr.. Bernet took
over Is a far different Erie than Mr..
ITIiuerWood became heir to in 1901.
Under the Underwood management.
the physical side of the Erie was
rehabilitated, as result of a policy
OF consistently investing earnings in
the property. AS a result, the com
pany has a fairly satisfactory grade
between Jersey City and Chicago. al
though IN parts of Pennsylvania the
grade is not as good as elsewhere.
In emphasizing the alleged value
OF the Erie to the Chesapeake e. Ohio,
the latter road, in it's petition TO the
Interstate Commerce Commission
says:
the existing line of the Erie from
Marion, Ohio to Chicago, ILL.,, in con-
nection with the lines of the Hooking
and the Chesapeake Il Ohio and the
applicants lines, will provide a highly
efficient through route between the
coal fields and Chicago, equal to any
that could be constructed and far
superior TO that which the applicant
could obtain by improving it's Cincin-
nati-Chicago line. In addition the
Erie will provide the applicant an
entrance to the industrial territory of
eastern Ohio and western Pennsyl-
vania."
After describing the value of the
Pere Marquette as an entrance to
Detroit and surrounding country, the
railroad said further:
Qualification of the lines of the
Erie and the Pere Marquette with
those of the applicant in the interest
of more efficient distribution of the
applicants coal traffic will at the
same time enable the unified system
to provide better and more depend
able service for a large volume of
agricultural and industrial traffic
originating in the territories served
by the Erie and the Pere Marquette
and moving to the, territory south of