Evening star., 1938-08-11
TRUCE REPORTED
IN c. & 0. FIGHT
Young and His Former Foes
Said to Be in Accord
on Holding Firm.
b the Associated Press.

NEW YORK, Aug. l1.-Robeyt r.
Young and the powerful Wall Street
banking group who fought bitterly in
and out Of court for control of the
Chesapeake q Ohio Railway system
have in effect agreed to a truce, we'll
informed Wall Street circles said.
Mr.. Young and his erstwhile chief
foes. w. G. Potter, chairman Of Guar
anty Trust Co., and Earle Baillie,
partner Of ]. q w. Seligman d Co..
were said to be in substantial agree
ment on the main points involved in
dissolution Of Chesapeake Corp, for
mer middle holding company Of the
Van Sweringen system and corporate
owner Of large block of c. q. O.
stock.
Mr.. Young is now vacationing in
Newport. r. l., leaving attorneys and
associates Of Mr.. Baillie to work out
details.
Chief factors still unsolved, 1t was
learned, are matters affecting the tax
liability of directors of Chesapeake
Corp. and its parent. Allegheny Corp,
and possibly also affecting stockhold-
ers Of the two corporations.
Report Due Next Week.
The legal report is due next week.
after which it will be decided whether
a Special meeting Of stockholders Of
Chesapeake Corp. is necessary for final
approval Of the plan. No agreement
on calling such meeting has yet been
reached between Young and the
bankers.
Control and management policy Of
the c. & o. is not Immediately af-
fected by the Chesapeake Corp. disso-
luton plan, 1t was said.
While Chesapeake Corp. owns a
large block of c. g. o. preference stock
which must be disposed of in the dis
solution, and while that class Of stock
has the right to elect two directors of
c. & O., the immediate problem is
primarily one of satisfactory disposal
price rather than potential control
power, informed sources explained.
G. Il o. will not have stockholders
meeting until next spring and both
groups apparently. at least for the
present. are unwilling to disturb pres
ent management and policy.
However, it was reliably reported
that there is no indication in the near
future OF any major operating or
trackage expansion of the c. g. O..
contradicting earlier reports that the
c. u o. management had plans to
enlarge the road along the general
lines Of the old Van Sweringen plans.
Nickel Plate Operation.
The c. e. o, it was said, will actively
operate the Nickel Plate as an integral
part Of its system, only if Substantially
all of the holders Of the Nickel Plates
per cent unsecured notes. which
mature October 1. agree before that
date to a three-year extension.
The c. & o. management was de-
scribed as determined that the railroad
would not scome to the assistance of
the Nickel Plate by buying up any con-
| siderable amount Of non-deposited
notes. A fortnight ago, George D.
Brooke. who Is president of both the
Nickel Plate and the c. e. O., warned
the note holders that unless the pro-
posal was accepted a reorganization
under section 77-B of the Federal
Bankruptcy Act was inevitable"
In the event the Nickel Plate should
go into reorganization, it was said the
c. d o. management will have to
postpone indefinitely its tentative plans
for active operation of the Nickel Plate.