Technical Compromise

Robert Young controls Alleghany Corp., top holding company in the former Van Sweringen railroad empire. William Potter is board chairman of Guaranty Trust Co., which holds, as collateral on bonds now in technical default, Alleghany's 71% interest in Chesapeake Corp., middle link in the chain between Alleghany and rich Chesapeake & Ohio Ry. Financiers Young and Potter have been on the mat for months to see which shall dominate C. & O. (TIME, April 25).

Fortnight ago, after a prolonged proxy battle in which neither side got a clear-cut quorum, the two generals made a deal: C. & O.'s board was increased from nine to eleven members to include three Guaranty lieutenants, John Hollister, John Dickinson and Earle Bailie, the latter to rill a vacancy. Technically, this was a compromise; but Robert Young considered it a victory, for he still had about half the stockholders and most of the directors in his camp.*Last week in Cleveland the new board re-elected Mr. Young's C. & O. management, including President George Doswell Brooke. Directors also voted to pay a 25-c-dividend on July 1, said they planned to pay another 25-c- next October. If they do, C. & O.'s common stockholders, who received $3.80 last year, will get $2 in 1938, least since 1921. Meanwhile, final outcome of the big battle for C. & O. waited on the pleasure of the U. S. Circuit Court of Appeals. As the Court reconvened this week, the deadlock was expected to be broken once & for all. But the Court reserved decision--and the generals are still in the trenches.

*Last week, resourceful Robert Young made inroads into two other operating companies. He himself was chosen chairman of New York. Chicago & St. Louis (Nickel Plate); and one of his close associates, Cleveland Shipping Tycoon George A. Tomlinson, was elected chairman of 1'ere Marquette Ry.

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