First Aid

On Oct. 23, 1929, the New York Curb listed 1,227,392 preferred shares and 7,477,392 common shares of Blue Ridge Corp., investment trust sponsored by Harrison Williams and by Goldman, Sachs & Co. As the same date is more memorable as opening day for greatest market crash in history, unfortunate has been Blue Ridge's Curb career. In retrospect, indeed, the history both of Blue Ridge and of Shenandoah Corp., companion investment trust formed by the same interests, appears somewhat ironic. In August, Blue Ridge had announced a policy of exchanging its shares for shares of other corporations, had thus indirectly endorsed such quotations as 238 for U. S. Steel, 395 for General Electric, 349 for Detroit Edison. In September Shenandoah had announced an intensive selling campaign by which Shenandoah and Goldman Sachs Trading Corp. shares would be sold to small investors. Yet potent and prosperous appeared, last summer, both Blue Ridge and Shenandoah. Their securities and the securities in their portfolios* were rising harmoniously together. Back of them were the magic names of Harrison Williams, Sidney Weinberg. Waddill Catchings. Nobody realized that these were almost the last two investment trust rabbits to be pulled out of the prosperity hat.

Then the Market broke and with it broke Blue Ridge and Shenandoah. Blue Ridge common went from a high of 29 5/8 to a low of 3 1/2. Shenandoah went from 39 3/8 to 6 7/8. Furthermore, the first of the year was rapidly approaching--a significant period at which the Market break would be clearly reflected in investment trusts' reports of operations. Many a market student anticipated a severe January slump in investment trust securities.

Last week, however, Blue Ridge and Shenandoah sponsors gave first aid to their injured. To Blue Ridge was sold a large block of Central States Electric at a price considerably below the market. Seller, number of shares and price were not announced. But Blue Ridge assets showed a November appreciation of $12,000,000 and Central States on the day of the sale closed at 28. One method of giving Blue Ridge a $12,000,000 profit would have been to sell it 1,000,000 shares of Central States at 16 (12 points below the market). As to the seller, Harrison Williams' control of Central States and part sponsorship of Blue Ridge indicated him as Angel.

Shenandoah was permitted to purchase. for retirement, 765,200 shares of its own $50 preferred shares at a price considerably below its current $35 quotation. As a result of their favorable refinancing, both corporations closed last week with assets per share not far removed from their original assets-per-share figure.

*Besides large holdings in Goldman Sachs Trading Corp., Central States Electric and Blue Ridge, Chief Shenandoah investments last fall included: American Tel. & Tel., Commercial Investment Trust, Consolidated Gas of Baltimore, Electric Investors (now merged with Electric Bond & Share), Hydro-Electric Securities Co., Southern California Edison, Pacific Gas & Electric , Pacific Lighting, North American Co.

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