Als Miracle

How has the New York Central done since Robert R. Young took over six months ago? Last week Chairman Young and President Alfred Perlman called reporters into the railroad's luxurious board room in Manhattan to give the answer. With his usual hyperbole, Young summed up: "Al Perlman has performed a miracle. It will go down as one of the great executive accomplishments in history."

When Young took over after the bitter proxy war, the road was running some $6,000,000 in the red. Last week he announced that the November profit was $5,400,000. For the year the Central would net up to $5,000,000. The Central, said Young, was now in good enough shape to pay a regular quarterly dividend for the first time since 1931 and he planned to recommend the first payment to the directors at their January meeting. He hoped it would be 50-c- a share.

The announcement did not come as a complete surprise. For six weeks Central has been one of the heaviest-traded stocks on the New York Stock Exchange, rising from 19 1/4 to 28. Young's announcement put it up another 1 1/2 points.* For next year Young estimated earnings of about $36 million, more than enough to cover the proposed dividend. President Perlman was not as "confident" as his boss, but estimated earnings at $30 million.

The road was put into the black, said Young, not by an increase in business but by drastic economies. Perlman lopped some 15,000 employees off the payroll to save $100 million a year, leaving a work force of 75,000, lowest since 1930. He canceled orders for 62 new diesels ($8,300,000) placed by his predecessors, instead found 97 diesels already in service that could do "50%" more work than the new ones. He also sent diesels into repair shops once a month instead of twice, thus enabling him to close some of the shops entirely.

Perlman poked into every corner of the road trying to trim the "belly fat." For example, he walked into a shop in Cleveland unannounced one evening at 9:30 p.m., found "not a man working. They were all in the locker room, although they don't go off work until 11." He shut down the shop. With better use of diesels, he found that he could retire 381 less efficient steam locomotives, leaving only 150.

Turning to the future, Railroaders Perlman and Young gave a preview of other plans for continued improvement of the Central. Among them:

P: A low-slung, lightweight passenger train will be ordered soon, if the committee of Eastern railroad presidents formed to investigate its possibilities (TIME, July 12) does not come up with a mass order for such a train. Young added that General Motors will have a new train "on the rails by July, Pullman shortly thereafter, and A.C.F. soon after that."

P:The Central, which had great plans for new terminals and cars for "piggybacking" truck trailers on flatcars under the old management (TIME, April 19), has changed its mind. Instead, the road will try to win business from truckers with new fast freight runs, such as the new New York-Chicago schedules that cut perishable-goods shipments by ten hours. P: Next month the Interstate Commerce Commission will be asked for permission to discontinue the road's West Shore line, which carries some 4,000 commuters down the west side of the Hudson, then takes them across to Manhattan on the Weehawken ferry. The Central, said Young, has already lost enough on the West Shore to buy Chevrolets for all its passengers to drive to New York.

*Thus giving Texas Wheeler-Dealers Sid Richardson and Clint Murchison paper profits of $1,350,000 on the 300,000 shares that they still hold of the 800,000 shares purchased at $25 a share last March.

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