Nickel Plate System

All last week the indefatigable Van Sweringen brothers (of Cleveland) labored, and not in vain. In their bulging bag of railroads reposed the Nickel Plate, Erie, C. & O. and Hocking Valley, but they continued to gun for the Pere Marquette. Chairman E. N.

Brown of that road tactfully refused to sacrifice pleasure for business and remained absent on vacation. In his stead the Seligmans, bankers for the Pere Marquette, have expertly held out for the most favorable terms obtainable. There have been conferences, rumors, more conferences and more rumors. Stockbrokers have been no losers through the continued uncertainty.

Finally a "semiofficial statement" of the consolidation plan was given to an anxious world by parties unnamed. It provided for the creation of a brand new company (the New York, Chicago & St. Louis Railway Co.) to acquire and hold the stocks of the old "Nickel Plate" (the New York, Chicago & St. Louis Railroad Co.), the Erie, the C. & O., the Hocking Valley, and the Pere Marquette. The new company will have two classes of stock, common and 6% preferred, which will be exchanged in varying ratios for the stocks of the several roads going into the merger, on terms apparently favorable to all concerned. On the basis of 1923 earnings of the several roads involved, the new Nickel Plate would earn its fixed charges nearly twice, its preferred 'dividends almost four times, and its common dividends at 6% over twice. The Nickel Plate Railway system will have total assets of about $1,500,000,000, total trackage of 14,357 miles, and be the fourth largest trunk line railroad system between the Atlantic and the Mississippi, ranking after its chief competitors--the New York Central, the Pennsylvania and the B. & O.

The new system, according to experts, will be sound from a traffic as well as from a financial standpoint. Pere Marquette will serve to collect local traffic, and to distribute coal from the C. & O. The original Nickel Plate and Erie systems between them provide an excellent fast freight line into New York from the West. The Hocking Valley serves to connect the mileage of the C. & O., Erie and Nickel Plate. The consolidated system will touch New York, Chicago, St. Louis, Cleveland, Peoria, Newport News, Toledo, Detroit, Buffalo. The old Erie gives it one seaboard outlet on the Atlantic at New York, the C. & O. another at Newport News.

One weakness much commented on in stock market circles lies in the fact that the new Nickel Plate system will not touch Pittsburgh. This means a heavy loss of valuable freight, and for some times rumors have been afloat that the Van Sweringens would also acquire the Pittsburgh & West Virginia road to strengthen their system. Some Cleveland parties, unknown, have purchased 40,000 shares of this road from the Metropolitan Life Insurance Co., with an option on 34,000 shares more; this is about a quarter of the total 300,000 shares of the road. When the Van Sweringens are asked about this, they smile and change the subject.