Brighter Rails

When traffic is light, rails become dull with rust. In the past four months bigger trains and more of them have polished up the rails of all U. S. carriers. Weekly car-loadings have run as high as 29% above last year and many an operating deficit has changed to a profit. In the last reported week New York Central loaded 109,000 freight cars against 75,000 twelve months ago. Its June operating income was more than 2,000% above the year before--$4, 384,000 against $192,000. Average June operating income for the first 75 roads to report was 350% ahead of last year.

And thanks to brighter rails Chicago, Milwaukee, St. Paul & Pacific was able to withdraw its application for an R. F. C. loan. Pennsylvania paid back to the R. F. C. the last of the $28,900,000 it borrowed to further its electrification program and work-making car repairs. All this confirmed in large measure what old railroaders maintained throughout the Depression: that all the railroads needed was a little more traffic. Other rail news of the week:

P:In a copyrighted story the Baltimore Sun stated that "financial interests which back and in a sense control" Pennsylvania and Baltimore & Ohio were discussing a merger of the two competing roads. Penn sylvania's President Atterbury had "nothing to say," but B. & O.'s President Daniel Willard, vacationing in Vermont, promptly grabbed a telephone to shout: "I am opposed to any plan contemplating the con solidation of the Baltimore & Ohio with the Pennsylvania Railroad."

Railmen pointed out that such a move would leave Philadelphia and Baltimore as one-road cities, something which their citizens would never brook. If there was any discussion among "financial interests," it must have been among the partners of Kuhn, Loeb & Co., bankers for both roads.

P:Two years ago Patrick H. Joyce, burly, forthright president of Chicago Great Western, bought for his road a 20% inter est in Kansas City Southern. He bought it cheap from the hard-pressed Brothers Van Sweringen. The block of 104,500 shares, said President Joyce at the time, would give Great Western "part of the trackage we need for a direct route from the Northwest to the Gulf of Mexico." As to Kansas City Southern itself he added: "We will make a railroad out of it if we can get co-operation." Last week cash looked better than a railroad to President Joyce.* Great Western sold its minority control to the New York Stock Exchange firm of Paine, Webber & Co. Gloated President Joyce to newsmen: "I won't say how much we made on the deal but we made money."

P:While his son Edsel was making banking news last week (see p. 42), Henry

Ford made railroad news. He promised the roads a bigger slice of his business. Reason was not that Henry Ford has any particular sympathy for U. S. railroads but that his automobiles are not satisfactorily delivered under his present "drive-out" system. Dealers, fetching Fords from the 32 U. S. assembly plants, grow weary of holding their new cars down to the breaking-in speed (30 m.p.h.), step on the gas and damage the motor. "Drive-out" deliveries will be sharply restricted in future. Deliveries of 200 mi. or more will go to the railroads.

*And if reports were correct, cash looked better than a railroad too to Leonor Fresnel Loree who last year bought for his rich little Delaware & Hudson 500,000 shares of New York Central at an average of $20 a share. Before the July Crash this investment showed a $19,000,000 profit. Wall Street heard last week that canny old Leonor Loree took some of his profits before Central slumped from its high of $58.50 a share to last week's price of $40.

This file is automatically generated by a robot program, so reader's discretion is required.