History: Robert Young Takes Over The New York Central

Going back to follow my practice of commenting on Mark Tomlonson’s “DAY In NY Central History”

One item stood out in my mind:
“June 14, 1954 Robert R. Young officially gains control of the New York Central. Harold S. Vanderbilt is forced out, the last Vanderbilt to serve the New York Central.”

My boss (who was around in 1954) commented that June 14 was too late for the ANNUAL MEETING. “ALPHABET IT”

Well! I found a great source of information:

A GENERAL CHRONOLOGY OF THE PENNSYLVANIA RAILROAD COMPANY ITS PREDECESSORS AND SUCCESSORS ANDITS HISTORICAL CONTEXT
By Christopher T. Baer
1954
April 2015 Edition
All data subject to correction and change
http://www.prrths.com/newprr_files/Hagley/PRR1954.pdf

Thank you Mr. Baer!!! As well as Pennsylvania RR, he covers much other railroad-related material.

1954 was BUSY with the “takeover”. Sale of NY Central Stock, etc, etc.
Al Perlman “not knowing” Mr. Young, etc.

Then I found it!

May 26, 1954
NYC holds annual meeting at Washington Avenue Armory in Albany after
Court of Appeals refuses to block Alleghany Corporation from voting its
800,000 Murchison shares at the last minute; 2,200 attend, most traveling on two special trains from Grand Central Terminal; both Robert R. Young and Pres. William White work the crowds on the trains hoping to influence votes at the last minute.

My boss thanked me but added, there was a third train to Albany from the West (Cleveland?)

Now I could not resist to find more cool stories from 1954:

Jan. 3, 1954 Last run of a Richmond, Fredericksburg & Potomac Railroad steam locomotive, 4-8-4 No. 622 Carter Braxton, out of Washington Union Station on a holiday mail or passenger extra.

Jan. 4, 1954 New Haven asks ICC for 33% increase in interstate and New York commuter fares.

Jan. 15, 1954 Robert R. Young calls on Harold S. Vanderbilt at Palm Beach and tells him that he and Allan P. Kirby are “getting out of C&O” and buying heavily into NYC.

Jan. 16, 1954 Robert R. Young informs Harold S. Vanderbilt (1884-1970) that he has bought into NYC and implies he will run for Chairman.

Jan. 19, 1954 Alleghany Corporation sells its entire holding of 104,854 shares of Chesapeake & Ohio Railway stock to Cleveland financier Cyrus Stephen Eaton (1883-1979), who becomes Chairman in place of Robert R. Young; Young and other Alleghany Corporation directors announce they have
resigned as directors of C&O.

Jan. 20, 1954 Robert R. Young and Allan P. Kirby of Alleghany Corporation announce they have become “substantial” stockholders of NYC.

Jan. 20, 1954 Lehigh Valley Railroad resumes dividend payments for the first time since 1932.

Jan. 21, 1954 NYC Pres. William White announces his plan for developing piggyback service with Rail-Trailer Company of Chicago.

Feb. 2, 1954 Robert R. Young meets with NYC Pres. William White and VP-Finance Willard F. Place at the Cloud Club in the Chrysler Building; offers to retain both if he wins control, providing that he is made Chairman and CEO; White is non-committal.

Feb. 4, 1954 Federal Judge Harold R. Medina (1888- ) files his ruling in U.S. v. Henry S. Morgan, et al., dismissing the Justice Department’s antitrust case against 17 investment banking firms for lack of evidence; the evidence shows no case of combination or conspiracy, and in fact shows active competition among all investment bankers; Medina dismisses the case “with prejudice,” preventing the government from retrying the case short of bringing a whole new set of charges; Robert R. Young continues to charge that Medina is biased in favor of the banks.

Feb. 9, 1954 Robert R. Young and Allan P. Kirby publicly ask for seats on the NYC Board and for Young to be elected to the vacant post of Chairman.

Feb. 10, 1954 NYC Board turns down Young’s request for seats; Young announces a proxy fight for the next annual meeting; denounces Morgan control of NYC.

Feb. 15, 1954 Robert R. Young arrives at Penn Station from Palm Beach and before a group of reporters launches his campaign to capture the NYC.

Feb. 16, 1954 Robert R. Young places ads in the New York Times and Wall Street Journal asking for nominations to serve on his projected NYC “Ownership Board of Directors”; the NYC counters by hiring the best advertising agencies and proxy solicitors, as well as deploying its own legal staff; Young relies on Thomas J. Deegan, who resigns as the Chesapeake & Ohio’s VP of Public Relations & Advertising to manage the campaign, and the law firm of Lord, Day & Lord

Feb. 18, 1954 SEC holds hearings on its proposed relaxation of Rule U-50 covering competitive bidding for securities issues; the move is supported by the major Wall Street investment banks and opposed by Robert R. Young, Otis & Co. (Cyrus S. Eaton’s firm), Halsey, Stuart & Co. and the CIO; the SEC eventually backs down and declines to adopt the proposed amendment on
July 2, 1956.

Feb. 19, 1954 Young announces he will appoint a woman to NYC Board.

Feb. 23, 1954 Chesapeake & Ohio Railway sells its 800,000 shares of NYC which are held in a voting trust by Chase National Bank, and thus could be voted by them against Robert R. Young, to Clint W. Murchison (1895-1969) of Dallas and Sid W. Richardson (1891-1959) of Fort Worth, two very wealthy Texas oilman friends of Young’s, for $20 million; Alleghany Corporation loans the Texans $7.5 million of purchase price, money which it has to borrow; Kirby loans $5 million; Cleveland banks loan another $7.5 million under a contractthat protects the Texans against loss; Alleghany Corporation receives a “put” option to purchase at least 400,000 shares at $25 between July 15 and Sep.15, the same price paid by the Texans.

Feb. 24, 1954 NYC Pres. William White issues the first public notice of the Chesapeake & Ohio’s sale of its NYC stock and tries to show that Robert R. Young still controls the policy of the C&O.

Feb. 25, 1954 Chesapeake & Ohio Railway Board approves the sale of its NYC stock to Clint W. Murchison and Sid W. Richardson.

Mar. 2, 1954 Robert R. Young announces his slate of directors for the NYC election.

Mar. 3, 1954 NYC asks ICC to investigate Young’s tactics, particularly the Murchison sale and whether Young still controls the C&O through Cyrus S. Eaton.

Mar. 3, 1954 Alleghany Corporation and Robert R. Young place full page ads in the New York Times and other papers reminding how they had forced competitive bidding for railroad securities and broke the monopoly of J.P. Morgan and Kuhn, Loeb & Co.

Mar. 4, 1954 Young sues to block NYC directors from spending company money to oppose his election.

Mar. 18, 1954 Sen. William Langer (1886-1959), Republican of North Dakota and,Chairman of the Judiciary Committee, writes to ICC in support of Robert R. Young’s bid to capture NYC and asks for investigation of interlocking relationships between PRR, NYC and B&O and (shades of 1913) J.P. Morgan & Co., the First National Bank of New York, the Chase National Bank and the Mellon National Bank.

Mar. 21, 1954 Robert R. Young announces he will appoint Mrs. Lila Bell Acheson Wallace, co-owner with her husband of Reader’s Digest and the NYC’s first woman,director; other nominees are William H. Landers, a retired NYC engineer; Young chooses persons who will appeal to all ethnic and occupational groups among the many small NYC stockholders.

Mar. 29, 1954 At a luncheon conference, Robert R. Young speaks favorably of Alfred E. Perlman (1902-1983), who has rehabilitated the Denver & Rio Grande Western, as the type of progressive railroad he would like as the NYC Pres.; he is misquoted as saying he intends to make Perlman Pres.

Mar. 30, 1954 Alfred E. Perlman denies having an offer from Young or even knowing him.

Mar. 31, 1954 Last run of passenger service on NYC’s Catskill Mountain Branch between Oneonta and Kingston, N.Y., once served by through cars from Philadelphia over the PRR and West Shore Railroad.

Apr. 6, 1954 ICC refuses the NYC’s petition to investigate the C&O’s sale of NYC shares, to Murchison and Richardson.

Apr. 7, 1954 Sadie Zenn, who owns 500 shares of Alleghany Corporation, sues the management and Murchison and Richardson on the grounds that the sale was detrimental to Alleghany’s interest and calling for Murchison and Richardson to repay the loans in cash.

Apr. 1954 May issue of Fortune carries an anti-Young editorial, “The Sound and Fury of Robert R. Young”; NYC directors distribute copies in violation of copyright law, feeling that publicity is worth the fine.

May 4, 1954 Time Inc. sues NYC, charging it reprinted the Fortune editorial against Robert R. Young without its consent

May 18, 1954 N.Y. Appellate Court orders Chase National Bank issue a proxy to Murchison and Richardson for the NYC shares purchased from the C&O.

May 19, 1954 ICC refuses the plea of NYC and Harold S. Vanderbilt to order Robert R. Young to file a takeover application with it.

May 25, 1954 Robert R. Young first meets with Alfred E. Perlman, his candidate for chief operating officer; Perlman is currently vice president of Denver & Rio Grande Western Railroad, which he had rehabilitated.

ENOUGH FOR NOW
See https://penneyandkc.wordpress.com/robert-r-young/

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