N & W

A collection of information and personal research

(This is from the August 31, 1905, edition of the Manufacturers' Record, Vol XLVII, No. 7, pp. 162-163.)

Gould-Vanderbilt Maneuvers in West Virginia.

[Special Correspondence Manufacturers' Record.]

Charleston, W. Va., August 28.

Outside of the Deepwater-Tidewater Railroad enterprise, the first authoritative account of which I was enabled to give the readers of the MANUFACTURERS' RECORD last week, there is vastly greater interest and importance attached to the fate of the properties controlled by the so-called Little Kanawha Syndicate than to any other railroad properties, projects or possibilities in West Virginia.

Will Gould regain the undoubted control he once held over these properties, Or will the Vanderbilts be able to exercise the option which they obtained from Joseph Ramsey, Jr., just before he sailed for Europe last June? If Gould loses in the legal fight that he is expected to make against the delivery of the syndicate properties to the Vanderbilts, what then will be his next move in the effort to connect up the West Virginia Central & Pittsburg so as to get into Pittsburg from the East, and, by connecting up the links; realize his inherited and never-relinquished passion for a railroad system extending from ocean to ocean?

The recent presence in West Virginia of J. M. Schoonmaker, vice-president and general manager of the Plttsburg &. Lake Erie, the activities he displayed and the declarations he made, together with the imminent return of both Gould and Ramsey from their trips abroad, make it certain that some definite move will be undertaken in the immediate future, and this certainty has served to arouse the greatest interest in the outcome and to make the subject one of almost universal discussion.

There has been so much contradictory information vouchsafed by newspapers and individuals concerning this whole matter that the reading public can hardly have escaped a somewhat befogged condition. While in the present status of affairs it is impossible for anyone, insider or outsider, to know exactly what will be the outcome of the contest now on, yet a little examination into some of the facts that may be ascertained by diligent investigation will clear the atmosphere to a large extent, and will at least eliminate from consideration some of the falsities and absurdities which have been serving to beguile the public for many weeks past.

In the first place, it may be set down as a basic fact that Mr. Gould has not relinquished his hold on the properties of the Little Kanawha Syndicate. He submitted a bid for them to Mr. Ramsey only a day or two before they both sailed by different boats for different parts of Europe.

"Too late," was the reply sent back by Mr. Ramsey; "the properties have already been contracted for" -- and they sailed away.

It has since developed that Ramsey gave to the Vanderbilts an option on the properties running to, say, September 30. Since he has been in Europe Mr. Ramsey has not seen Mr. Gould, although Ramsey and a Vanderbilt representative are understood to have been in conference, and it is evident that the Vanderbilts are ready and even anxious to close the option. It is pointed out, however, that if Gould still wants the Little Kanawha properties -- and it is assured that he does -- it will be a very simple matter for him to go into court with a bid of a million dollars more or so, ask for an injunction against the sale, which no court would feel like refusing, and thus reduce the affair to the basis, practically, of an auction sale in court, with the result, perhaps, of a compromise, if not a complete victory for Gould.

This would be conceivable if Gould were merely an outsider. But it must be remembered that he occupies the vantage-ground of being one of the three men in whom the title of the Little Kanawha properties is vested as syndicate managers. Ramsey is another, and W. E. Guy, a St. Louis trust-company manager, is the third. While Mr. Guy is evidently in entire accord with Mr. Ramsey now, it may be easily foreseen that as a minority manager any court would be doubly ready to listen to a plea by Mr. Gould that the interests of the syndicate members was not being served by the sale of the properties for a sum less than had been offered for them.

It has been stated that the Vanderbilts have also purchased the Coal & Coke Railroad, which, when finished, as it probably will be by the end of the year, will run from a connection with the Kanawha & Michigan at Charleston to a connection with the West Virginia Central & Pittsburg road at Elkins. This reported sale has been promptly denied by officials of the Coal & Coke, and while it is not regarded as unlikely that the owners of the Coal & Coke road could be induced to make a sale, it is very reasonably assumed that it will not be parted with to interests inimical to Mr. Gould so long as he has any plans that such a sale would affect. The principal owners of the Coal & Coke road are ex-Senator Henry G. Davis, Senator Stephen B. Elkins and R. C. Kerens, the Missouri politician and capitalist. Mr. F. L. Landstreet, the president of Mr. Gould's Western Maryland and West Virginia Central & Pittsburg properties, married a niece of ex-Senator Davis. Both Mr. Davis and Mr. Elkins look on Mr. Landstreet as a remarkably bright man, a most promising railroad magnate, and an abler financier than either of themselves. They have faith in his judgment, and would be guided by his advice. Mr. Landstreet is Mr. Gould's representative in the affairs of the Wabash in Maryland and West Virginia. So it can be put down as a certainty that however advantageous it might be for the Vanderbilts or any others to get control of the Coal & Coke road, it will be sold to no one but Gould so long as Mr. Gould's interests lie in that direction. The Coal & Coke road will have a total length of 192 miles. Besides its important terminal at Charleston, and its possible connections with several of the lines contemplated in the plans of the Little Kanawha Syndicate, it opens up some 200,000 acres of fine coal lands belonging to the Davis-Elkins crowd, all of which lands might go into the deal if sold to Gould. In case the Little Kanawha properties should be lost to Gould, the Coal & Coke road would become of prime importance to him, From Deepwater a road could be built to Charleston, 35 miles away, connecting up the great Deepwater-Tidewater system, very probably a Gould ally, with the Coal & Coke road. From some point on the Coal & Coke road a line might be extended to a connection with the Wheeling & Lake Erie road, thus giving the Deepwater-Tidewater entrance into Toledo as well as Pittsburg, and providing a way, not so roundabout as it might seem without investigation, for the Western Maryland-Virginia Central into Pittsburg. It has already been pointed out that a feasible line into Pittsburg could be built by an extension of the West Virginia Central from Belington to a point on the Wheeling & Lake Erie near Wheeling, it being declared that such a line would be only some 10 miles longer than the route viu the Buckhannon & Northern, contemplated in the plans of the Little Kanawha Syndicate to achieve the same results.

Advertisements of an issue of bonds of the Western Maryland Railroad Co. contain the announcement that the 60-mile link between Cherry Run and Cumberland, Md., connecting the Western Maryland and West Virginia Central & Pittsburg, will be completed November 15. Officials of the Coal & Coke road announce that through passenger trains will be running from Baltimore to Charleston by the first of the year, an indication of at least very friendly present relations. It would appear to be a reasonable assumption that the Coal & Coke road is now or will be, practically, if not in fact, a part of the Gould system. It will require less than 125 miles of road to connect up the Coal & Coke or the West Virginia Central with the Wheeling & Lake Erie. Thirty-five miles of road -- or less -- would connect the Deepwater-Tidewater and the Coal & Coke, so that no more than 150 miles of unlocated road stand, it would seem (contracts for Gould's Western Pacific having been let), between a realization of Gould's ocean to ocean line, and that would give him a terminus not only at Baltimore, but one at Hampton Roads besides.

Should Gould get the properties of the Little Kanawha Syndicate, he would very probably still find it much more to his advantage to buy the Coal & Coke or effect a close and lasting relationship with it rather than let it fall into the hands of the Vanderbilts, who appear to be cementing ties with Gould's bitterest enemies, the Pennsylvania system. It was the Vanderbilts who made the strongest fight against Gould in his negotiations for the Western Maryland road. It is understood that the Vanderbilts have arranged to let the Pennsylvania and the Baltimore & Ohio each have one-fourth of the Little Kanawha properties, themselves retaining a half. So if Gould makes the kind of a fight that is expected of him, it is not unlikely that there will be lined up against him all the strength that not only the Pennsylvania can muster, but of the Vanderbilt interests as well, with the possibility of a conflict as bitter if not as spectacular and dramatic as that which accompanied the purchase of the Wheeling & Luke Erie and the entrance of the Gould roads into Pittsburg.

In a consideration of this interesting railroad problem some features of the case come up which are not understood at all by the public, and of which no authentic explanation ever has been made. These relate to the abandonment of work on the properties of the Little Kanawha Syndicate, and the rupture of the relations between Mr. Gould and his once greatly esteemed president of the Wabash system, Joseph Ramsey, Jr. Some there are who from the start and even to this day profess to believe that the rumpus between Gould and Ramsey is what is known in the realm of sport as a "phony" fight; that it is a fictitious disturbance engaged in for the purpose of so muddling the waters that some hidden designs may be carried out undiscovered. Some who indulge in speculation of this kind even suggest that Mr. Ramsey may be given the presidency of the Cincinnati, Hamilton & Dayton and its acquired lines when his resignation as president of the Wabash goes into effect October 1. They figure that the Deepwater-Tidewater system might easily be extended from the mouth of Gilbert's creek, on the Guyandotte, over into the Elkhorn coal fields of Kentucky, where the Hollins-Zimmerman crowd have large interests in the 250,000-acre tract of most valuable coal lands belonging to the Northern Coal & Coke Co. That the Cincinnati, Hamilton & Dayton interests, which, it is expected, will use the bridge now building at Ashland, are considering the question of constructing a line into the Elkhorn coal fields is a matter of current gossip, apparently verified by a statement I have heard made by those who ought to know, to the effect that the Chesapeake & Ohio has given notice to headquarters that if the Cincinnati, Hamilton & Dayton goes into the Elkhorn coal fields the Chesapeake & Ohio will build a line to Chicago. There are elements of plausibility in a suggestion that the Deepwater-Tidewater and the Cincinnati, Hamilton & Dayton could in the manner indicated form a combination that would be to the immense advantage of both systems, and if the combine were to become a Gould ally the Gould roads, with the Little Kanawha and other West Virginia properties, would have a hold on the richest remaining coal fields of the Appalachian system that all the other roads might well envy. The West Virginia-Kentucky coal fields are a prize so great as to justify speculation which might otherwise seem a vagary, and hardly any suggestion in connection with the efforts of the great railroad systems to get in here need be discarded as idle dreaming.

At the same time, and without pretending to pass on the probability of the Deepwater-Tidewater system forming any kind of an alliance with the Cincinnati, Hamilton & Dayton, I can hardly discover any substantial reason for a belief that the misunderstanding between Gould and Ramsey is not fully as serious as it appears on the surface. In one early explanation of the disagreement a careful and conservative commentator noted that the building of the Wabash into Pittsburg has been an enormously expensive undertaking, and that returns were so inadequate to the cost that Mr. Gould had taken Mr. Ramsey to task, the Pittsburg project having been largely engineered and directed by Mr. Ramsey. In an attempt to discredit the report of a serious rupture -- this was in May, before the actual tender of his resignation had been made by Mr. Ramsey -- this commentator pointed out that while the expenditure had been an enormous one, the Wabash would soon have such connections and trackage arrangements within the Pittsburg district as would give it direct connections and interchanging relations in the city with every trunk line except the Baltimore & Ohio, and that it had at Bruce, on its Wheeling division, where the Belt Line of the Wabash crosses the Baltimore & Ohio. It was considered that the outlook was an exceedingly satisfactory one, and that the situation in Pittsburg, if examined into and rightly understood, furnished no occasion for a capital complaint against Mr. Ramsey's judgment in conducting that campaign.

From such information as I have been able to gather out here, it would seem that very serious differences first arose between Mr. Gould and Mr. Ramsey over the Little Kanawha properties. After Gould had begun his West Virginia campaign a syndicate largely composed of St. Louis friends of himself and Mr. Ramsey bought the Little Kanawha Railroad, in operation from Parkersburg to Palestine, a distance of about 25 miles, which it was proposed to extend to Burnsville, in Braxton county; the Burnsville & Eastern, which was projected to run from Burnsville to Belington, and the Belington & Northern, which had about 20 miles of track when purchased. Work was begun on construction a few months after the purchase. Thousands of men were employed, and something like a million dollars was spent on the Little Kanawha extension from Palestine to Burnsville. Work was also extensively undertaken on the proposed line between Parkersburg and Zanesville to a connection with the Wheeling & Lake Erie. The surveys and rights of way of the Buckhannon & Northern, planned as an extension of the Belington & Northern, were also purchased, and something like a million dollars was spent on this line, which was located to the Pennsylvania line at a point near Morgantown, from which place it was proposed to build over a Greene county survey to a connection with the Pittsburg line of the Wheeling & Lake Erie. The Kanawha Syndicate had taken over about 100,000 acres of coal lands. Afterwards Col. J. M. Guffey sold to the syndicate 47,000 acres of coal lands in Monongalia county for $3,500,000. The Buckhannon & Northern road was so located as to open up these lands. It is reported that a serious disagreement occurred between Gould and Ramsey over the purchase of these lands. Mr. Gould regarded them as particularly valuable lands, but Mr. Ramsey declared that their purchase would be a violation of the purpose of the syndicate, and that it would be diverting money that should be applied to the construction of the Little Kanawha road. Mr. Gould at that time unquestionably dominated the syndicate, and the purchase was made.

Following this, it is said, there were differences between Mr. Gould and the syndicate as to the price at which the properties were to be taken over by the Gould system, and in face of urgent protests by letter, by wire and finally in person, Mr. Ramsey urging that the Little Kanawha properties were the most valuable of all the Wabash holdings, Mr. Gould refused to go any further, a halt was called and in March of 1904 all work of construction was stopped. The stringency of money, the enormous cost of the Pittsburg terminals and line into that city and the necessity of financing the Western Pacific are given as possible reasons for the failure of Mr. Gould to carry out at that time the plans contemplated on the formation of the Little Kanawha Syndicate. That he has never given up the idea of taking them over, however, the circumstances do not indicate, and there is every reason to believe that an era of great activity will be seen, with the Little Kanawha properties as a storm-center, very shortly after Mr. Gould gets back.

Albert Phenis.