Evening star., 1954-05-09

sound railroader of proved ability
who has turned Central around
financially in less than two years.
He promises So dividends very
quickly" and 81 dividends in the
reasonably near future" if the ma
tional business picture brightens.
But he SCOTS at such predictions as
Mr.. Young's. of 81 to $40 dividends.
as impossible of achievement with
tax rates as they are and the pas
senger service deficit problem that
exists" Even so, he is pointing def
initely toward an improvement over
the present 81 dividend and stimuli
taneously is producing results that
seem to bear out his forecasts.
Thirdly, he has improved Gen.
trails business structure. shaped up
its sagging maintenance of equip
ment and way, and made its trains
run on time. This is paying of in
increased freight business.
Youne's Advantage
But there is no evidence that
stockholders are different from
other Americans, or that Americans
invariably rely on logic at the polls.
Mr. Young is at the pinnacle OF
success in a 15-year public relations
effort
People remember his low-slung
experimental Train *. But they
forget that Train x has never made
q scheduled run-or for that matter
that it does not even exist as a
whole train.
They remember his criticism OF
New York Central for dragging its
feet on dieselization. But they for
get that under his auspices G. & Q.
was one of the last major roads to
dieseliZe.
They remember his blast at the
old-timerS for not buying roller
bearing freight cars. But they forget
that the last 10000 cars purchased
by C.. g. o. under his leadership had
old-fashioned bearings.
They remember his criticism Of
Central for its large passenger def
cit. But they forget that less than
10 years ago. Mr.. Young said he
was proud Of c. & O.'s passenger
deficit because 1t was evidence OF
public service. And they forget.
too, that Centrals passenger traf1ic
"a built-in money loser on any
railroad) is the second heaviest in
the country, while c. & O.'s is vir-
tually non-existent by comparison.
Youne's Record
Anti-Young railroaders in WASH
ington say his touch witherS. They
point to such statistics as these:
Under Mr.. Young, c. & 0. net in
come slumped 2 per cent while the
average Glass I road improved IS
per cent. AS to operating ratio (the
relationship of expenses to income).
the national average rose IL per
cent, while c. & O.'s scared 26 per
cent. C. & O.'s share of the Nations
Glass l net operating income de-
clined from So per cent to 5.4 per
cent.
The Young teams answer to these
figures is not to deny their &C
curacy, but to say, as Mr.. Deegan
did in a letter to this writer: ANY
comparison [of c. g. o. with
other railroads than PocahontaS
Region carriersl would be miSlead-
ing"
Two paragraphs later in the same
letter. Mr.. Deegan compared favor
ably C.. S1 O.'s 1853 transportation
ratio with that of Central, Since
Central is not a Pocahontas carrier,
MI. Deegan's own definition ap-
peared to label the comparison mis-
leading.
He explained further that in the
period of Mr.. Youngs chairman
ship, Allegheny liquidated a large
block of c. & o. stock.
Not to be overlooked as factor in
the battle is that the Central board
has a long continuity Gts senior di-
rector. Harold Vanderbilt, Is COM
pleting his 40th year as a member)
and the lure of need for change"
may be strong.
The Forgotten New Hoven
This lure, incidentally, was dam
gled before the little fish in a proxy
fight last month over the adjoining
New York, New Haven and Hartford
Railroad Co., and a slate of insur-
gents won. The New Haven fight,
while big and colorful, was COM
pletely submerged by the public
row over the Central that Is now
rushing to climax.
Another consideration is the
makeup Of the stockholders list as
it stands as of 3 pm, April 10.
the closing date OF record. In the
month prior to the deadline. more
than half q million shares Of Central
were traded on the New York Stock
Exchange. This activity shot Cen
tral up to 26. Who bought 1t and
how the new owners propose to
vote are matters that would bs
difficult for an insider and impos-
sible for an outsider to predict.
So there can be no certainty a.
to the outcome until the votes are
counted at Albany. If there are
disputes on individual proxies. these
might delay q conclusive result be-
yond June /.
II, when the votes are tabulated,
Robert r. Young emerges as the
new boss, what will be tho effect
on Centralf No one can say beyond
this: It may or may not be good.
but II certainly will bo exciting.