N & W

A collection of information and personal research

(This is from the September 11, 1905, edition of the Manufacturers' Record, Vol XLVII, No. 10, pp. 239.)

West Virginia's Interests in Railroad Maneuvers.

[Special Correspondence Manufacturers' Record.]

Charleston, W. Va., September 18.

Gould and Ramsey have returned from Europe since my letter on West Virginia railroads appeared, two or three weeks ago. Their activities since returning have put a new phase on the situation. Indeed, so rapidly are moves being made on the railroad chessboard out this way that the well-founded conclusions of today are apt to be wholly upset by the developments of the morrow, and even the wisest student and forecaster may well approach a consideration of the railroad weather map with something akin to fear and trembling. The doctors have disagreed, and who shall attempt to decide?

The public appeal of Joseph Ramsey, Jr., who has not yet relinquished the presidency of the road, for sufficient proxies to enable him to wrest control of the Wabash from the Gould interests at the annual meeting of the stockholders at Toledo on October 12 has injected a new and highly sensational element into the controversy between Gould and his former chief lieutenant in the Wabash, and has served to eliminate the last vestige of doubt in the mind of anybody as to the reality of the rupture that has occurred between them. In the light of previous actions on Mr. Ramsey's part, so common has been the conclusion that Ramsey in his latest move was actuated by a desire to play into the hands of the Pennsylvania-Vanderbilt interests that Mr Ramsey has seen proper to make a public repudiation of any intention to turn the Wabash over to these arch enemies of Gould in the generally unlooked-for event of his gathering to himself sufficient proxies to give him control of the road when the annual meeting takes place. Whatever his actual plans and purposes may be, his attitude is one of quite sufficient hostility to Gould as to justify an expectation of the liveliest and bitterest warfare, and it seems not unlikely that until this battle has been disposed of earlier and less vital matters in controversy will be given scant consideration by the Goulds.

Indeed, it is coming to be the opinion out here that Gould has decided to place no obstacles in the way of the sale of the Little Kanawha syndicate properties to the Vanderbilts. It had been considered certain that if Gould were disposed to make the contest -- and it was assumed that he would probably care to do so -- he could prevent the Vanderbilts from exercising the option given by Ramsey to J. M. Schoonmaker, vice-president and general manager of the Pittsburg & Lake Erie road, acting for the Vanderbilts. Now, however, it is surmised that Mr. Gould will interpose no objection, and it is even reported that the sale has been as good as closed. And in the light of these developments there is a disposition to generally review and discuss the whole matter of the formation and evolution of the Little Kanawha syndicate, the real value of its holdings and the ultimate fate of the properties of which it is possessed. In this connection some very interesting gossip is going the rounds.

The story now goes that Gould never was in full accord with Ramsey as to the value of the properties taken over by the Little Kanawha syndicate, and that instead of the large returns the syndicate members had expected to receive on their investments he offered a sum which represented a profit of only about 5 or 6 per cent. Just how anxious he was to take over the properties at any price is a mooted question. Vast sums of money had been expended in grading portions of the several lines included in holdings, but nowhere had anything been completed, Then the proposed line between Pittsburg and a connection with the West Virginia Central at Belington was to be 165 miles long, and it is 138 miles from Belington to Cumberland, whereas the distance between Pittsburg and Cumberland is only 150 miles. It is pointed out that the West Virginia Central is a quite complete property in itself, with more coal and timber along its line than cars can be provided to haul it out in an indefinite number of years. With the imminent completion of the link between the West Virginia Central at Cumberland and the Western Maryland at Cherry Run, a through Gould road from the coal fields of West Virginia to the terminals at Baltimore would be provided, and when it was desired to connect up with the Wabash at Pittsburg an infinitely better line than the one via Belington could be built direct from Cumberland to Pittsburg. However much value may have been put on the opportunities and possessions of the Little Kanawha syndicate -- and it is reported that Gould really was desirous that at least the Little Kanawha extension should be built, to give a line from Parkersburg to a connection with the Davis & Elkins Coal & Coke road at Burnsville -- the price he offered the syndicate was considered so wholly inadequate that Ramsey in a huff offered the properties to the Vanderbilts through Schoonmaker. That official, seeing a possible extension of the Vanderbilt lines into the coal fields of West Virginia, and considering it likely that he might acquire the Coal &. Coke road and get into Charleston, snapped up the proffered Ramsey option. Then a wholly unexpected and quite disconcerting development followed. Feeling constrained, under a community of interest agreement, to make a tender to the Baltimore & Ohio and the Pennsylvania companies of an interest in the properties, this offer was made, merely as a matter of form and without expectation that it would be taken up. Much to the maker's surprise, the offer was accepted on the basis of a fourth ownership each by the two roads named. Then, so it is reported, Mr. Schoonmaker tried in vain to induce Messrs. Davis and Elkins to part with the Coal & Coke road, and on top of that comes the story that the Baltimore & Ohio has indicated a desire that the Vanderbilt lines forego the intended entry into Baltimore & Ohio territory, with the consequence that present gossip is to the effect that whenever the Little Kanawha Railroad is extended from Palestine to Burnsville it will be constructed by the Baltimore & Ohio, and that the other lines projected by the Little Kanawha syndicate will not soon be built.

Whether this will be the net result of all the activity shown by Mr. Schoonmaker in West Virginia during the past few weeks time alone will tell. That he has been figuring on many plans, projects and railroads all the surface indications would suggest. If nothing comes of all these investigations and negotiations, it would appear to be due to decisions reached in the councils of the mighty.

That anyone inimical to Gould has any chance to get control of the Coal & Coke road no one here believes for an instant. This view of the case was voiced in this correspondence some weeks ago. It was strengthened by the attitude of Messrs. Davis and Elkins on the occasion of a recent visit to Charleston. They came with a party of officers of the road on a tour of inspection, and incidentally while here looked over the ground with reference to securing freight terminals. The road is now in operation between Charleston and Gassaway, 96 miles, and between Elkins and Burnsville, some 50 miles and within 30 days tracklaying will be finished on the connecting link, so that some time between now and spring, when the roadbed has become settled and everything is in order, through vestibule trains will be run between Charleston and Baltimore. From the extent of the terminals proposed for Charleston, it is evident that they contemplate a freight business of the first importance. All connected with the road are enthusiastic over its future, and are predicting a very large business for it from the start. It is being laid with 85-pound rails, the tunnels are 22 feet in height, and every feature of the construction is first-class. It is evidently intended for traffic of the trunk-line kind, and while it is declared that in its management it will be an independent line, having friendly relations with all the roads it touches -- the Gould road, the Baltimore & Ohio, the Kanawha & Michigan and the Chesapeake & Ohio -- it is obvious how important it will be to the Gould system to have so friendly a link between the West Virginia Central and slack-water navigation at Charleston. That prevents the bottling up of the West Virginia Central -- as well as of the Coal & Coke -- at this end of the line, and affords opportunities for such further extensions and developments as may he undertaken by Gould interests later on, of which a connection with the Deepwater-Tidewater system is among the possibilities presented. Messrs. Davis and Elkins deny any intention of selling their road. They speak with enthusiasm of the almost illimitable future of Charleston and of West Virginia; of the great service to Charleston and the interior which the construction of the Coal & Coke road has rendered, and evidence a strong and even sentimental desire to retain control of this, "the only independent railroad in operation in the State of commercial importance and forming through connections." My own opinion, expressed in effect in a former letter, is that Gould will have to lose out entirely, in a way that may quite properly be considered as among the impossibilities, before the Coal &, Coke road can be classed as other than a friend and ally, if not an admitted link in his railroad system.

That the railroads of the Middle West are rapidly drifting towards a Gould and an anti-Gould ownership and affiliation would seem to be indicated by all recent developments, not only as seen in West Virginia, but conspicuously as revealed in the acquisition of the Cincinnati, Hamilton & Dayton, Pere Marquette and allied lines of the Great Central system. At this writing it appears that the ownership of the properties is at the disposition of the Pennsylvania and Vanderbilt interests. It is not clear that the old Detroit Southern -- now, with the Ann Arbor & Michigan, called the Detroit, Toledo & Ironton -- is included in the sale, nor is any authoritative confirmation given of reports concerning a prospective parcelling out of the various lines comprising the Great Central system. One report has it that the Detroit, Toledo & Ironton is still owned by Hollins and Zimmerman, and that these interests will carry out the recently announced plan of building a line from the proposed Hollins-Zimmerman bridge over the Ohio at Ashland through the holdings of the Northern Coal & Coke Co. in the Elkhorn coal fields of Kentucky, and on to the seaboard at Charleston, S. C. Wall Street is reported as not giving great credence to this rumor. At best it can scarcely be regarded as having yet reached the stage of a serious intent. At the same time a most lively interest attaches to every statement concerning the transaction, and to the bearing it may have on future development in the West Virginia-Kentucky coal fields. Not only are there many West Virginians who have interests in the territory affected, but a direct effect on development work in this immediate section is spoken of with much concern as among the elements entering into the situation. Whether the Hollins-Zimmerman interests will build a new line or not, or whether there may be a western extension of the Deepwater-Tidewater down the Guyandotte and over into Kentucky, and from there to the North, remains to be seen.

In the midst of all the apprehension lest the interests of the section may suffer from a prospective general consolidation of railroad systems comes a note of optimism in the way of a declaration that there will perforce be a greater attention given to development work than ever before, since the railroad systems being united will have to come somewhere near providing facilities for development or suffer together from an uprising that will result in the construction of new and independent lines. Having a common front, attacks may be delivered with greater effectiveness. Hence there will be a greater care not to expose that front to such attacks.

Albert Phenis.