Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-07
WOULD STAND LOSS
FOR c. 80. MERGER
O. P. Van SWeringen Before
Commerce Commission Of
fers to Forego Profit.

o. +. Van Sweringen, prime mover
in the plans by which the Chesapeake
and Ohio Railroad seeks to take con-
troll of the Erie and Pere Marquette
systems, took the witness stand before
the Interstate Commerce Commits
sion today to declare his own willing
ness to forego 100000 in personal
profit in order to insure the merger S
success.
The difficulty in the way of the con-
solidation, Mr.. Van Sweringen eX'
planned. lay in a market situation, by
which the Chesapeake and Ohio took
options several months ago to pur'
chase the control of the Erie and Pere
Marquette, after which the market val
| ues advanced sharply. At the same
time, the options which the Chesa-
peake and Ohio holds on Erie and
Pere Marquet shares expire in part on
July and cannot be renewed.
A part of these Erie and Pere Mar
quette shares, Mr.. Van Sweringen
said, he owned personally and was will
ing to sell the Chesapeake & Ohio at
any time at the cost to him, although
this cost is below their present market
value by S10,000,OO0.
individuals Own Stock.
The Nickel Plate Railroad and a
number of individuals own additional
shares, particularly of Pere Marquette
however, he said. on which the Chesa
peake & Ohio option expires July /,
and it might not be possible for these
options to be renewed.
apparently one element of this
case which is being discussed is the
price which the Chesapeake & Ohio
should pay for the shares of Erie and
Pere Marquette covered by the so.
called Van Sweringen option" Mr.
Van Sweringen said. That price was
fixed by a special committee without
consultation with me. | believe it to
be fair 1t is nearly $10,000,000 below
its present market value. If. how
ever, the committee had fixed the
price at cost I would have accepted
it, If the commission now thinks
that I should sell the shares covered
by the option at cost. 1 will be equally
content.
~ hope this commission, if it finds
the proposed acquisition to be in the
public interest, will find way to pass
on the question in time to allow the
company to avail itself of the Nickel
Plate option on the Pere Marquette
shares, reserving if necessary for
fuller consideration the price upon the
so-called Van Sweringen shares"
Witness Is Questioned.
G. D. Mahaffie, finance director of
the commission. asked Mr.. Van Swer-
ingen about the Chesapeake & Ohio
ability to purchase at a reasonable
price $4,000 shares additional of Erie
"a 70 CT 6NII INry% I,
private individuals other than the Van
Sweringens
I'm greatly disturbed about that"
Mr.. Van Sweringen responded. "These
stocks are all owned by other individ-
uals, and l haven't talked with them
about what they are willing to do. /
hesitate to say whether they will still
stand ready to sell to the Chesapeake
4 Ohio on the basis of the Van Swer-
ingen options"
Henry w. Anderson. attorney for
Chesapeake & Ohio minority stock
holders who oppose the merger. took
Mr.. Van Sweringen over for cross
examination. He cited testimony
given by the witness during the Nickel
Plate merger hearing of two years
ago. in which it was declared that an
official of a railroad should not take
a profit from the sale of property to
his road. Mr.. Van Sweringen, under
the option, would take profit from
the Chesapeake & Ohio in the sale of
Erie stock should the merger go
through.
Profit Is Admitted.
1.-THE option figure does show a
profit" Mr.. Van Swcringen said. but
again l repeat this is an option, and
the price named was fixed by q COM
mittee of Chesapeake & Ohio direc-
tors entirely independent of me. How
ever, I have filed here the audit show
ing the actual cost of the Erie stock
which L hold. and if the commission
desires, the price can be fixed at cost.