Dividends Deferred

Less than a month after Robert Ralph Young finally battled his way to full control of the rich Chesapeake & Ohio Railway System (TIME, Dec. 28), the top executives of two of his four roads bowed to his consuming passion for debt reduction.

First Bob Young's man John W. Davin, new president of the Nickel Plate (New York, Chicago & St. Louis Railroad), told his preferred and common stockholders to expect no dividends for at least five years (they have already waited for eleven years), since all of Nickel Plate's earnings were earmarked for paying off more than $21,000,000 of debt due in 1947. Then Robert J. Bowman, the successful Young candidate for president of Pere Marquette Railway, told his equity holders that they could go begging until $40,000,000 of bonds due between now and 1956 (57% of the road's bonds) had been fully paid.

With both roads turning in better-than-average earnings, stockholders disgustedly dumped their shares on the market, by week's end had sliced some 10% off all Pere Marquette and Nickel Plate issues. But for stockholders patient enough to hang on, Bob Young's belt-tightening should mean much fatter checks later on.

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