Central's Courtin' Time

Robert R. Young and the New York Central's President William White both went courting last week. Objects of their affections: more than 40,000 small stockholders in the Central, whose votes on May 26 will decide control of the second largest (in total revenues) U.S. railroad system.

In a letter accompanying his proxy request Young said: "Central's stock during the last 25 years has declined marketwise 33 percentage points more than the [Moody] averages . . . This sorry state of New York Central affairs ... is basically due to the fact that its present board together owned, according to last year's proxy statement, only 13,750 shares of stock, or less than 1/2 of 1%." Said White, in his letter: "What is involved ... is the attempt of a promoter and pseudo railroad man, Robert R. Young, to seize control of the company . . . As a railroad executive. Mr. Young has been found to be lavish in his ideas and the expenditure of money . . . The choice which you have to make is between the promoter type of management and the experienced professional type."

To Have & to Vote. The proxy statements showed that the Central management has been loading up on the railroad's stock. The Central's directors now hold not 13,750 but 106,622 shares (out of 6,447,410 outstanding), chiefly because Director Harold S. Vanderbilt has increased his holdings from 10,000 shares to 60,000. The Young slate claimed ownership of 1,089,880 shares, or about 17%. But the big end of the Young group's holdings is the 800,000 shares listed for Texas Oilmen Clint W. Murchison and Sid W. Richardson, which the Central still refuses to transfer to the Texans in its record books (TIME, April 12).

Since the Central set April 19 as the last day for such a transfer, the Texans have little time left, though they still hope to vote it through "legal strategy."

So far, both sides have had little success with legal strategy. The Central had asked the Interstate Commerce Commission to investigate some of Young's stock deals (his sale to Cyrus Eaton of control of the Chesapeake & Ohio Railway, and the C. & O.'s sale of its New York Central holdings to Murchison-Richardson). But the ICC last week turned down the request. The Central filed another petition asking whether Young's slate could be lawfully seated if elected, but chances for a favorable ruling on that seemed slim, too. From another quarter, the Central gained an ally. An Alleghany Corp. stockholder, Mrs. Sadie Zenn, owner of 500 shares, filed a suit against the corporation, objecting to the fact that Alleghany had lent $7,500,000 to Murchison and Richardson to help them buy their stock. She wanted the deal canceled.

The Central also scored when it released its annual report. Earnings in 1953 were $34 million, highest in nine years. White said he hoped that higher dividends can be paid "when earnings will . . . permit."

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