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It was a dull week on the New York Stock Exchange—except for one stock. New York Central Railroad, usually as quiet as a tombstone, was the liveliest stock on the Big Board. The shares were steadily rising. How come? It was no secret that the great New York Central, second biggest U.S. railroad, was losing money hand over fist. And earning prospects this year looked anything but bright.
Every Wall Streeter thought he knew the answer. The answer was personal; a shrewd, scrappy little man named Robert Ralph Young, board chairman of the Alleghany Corp. In the short space of a few years, Bob Young had become the most-talked-about railroadman in the U.S. Consequently, people took stock—quite literally—in what he intended to do. He had already put together a railroad kingdom out of the roads which Alleghany Corp. controlled: the Chesapeake & Ohio, the Nickel Plate, the Pere Marquette and its stock interests (in ten other roads). Now he was after an empire. The New York Central would be its keystone.
Few people knew about Young's campaign to get control of the Central until it was well under way. A few months ago he had started buying up Central stock through a broker. A fortnight ago the news came out that Bob Young had spent $2,500,000 for 162,500 shares. Against the number of shares outstanding, some 6,447,412, this seemed a piddling amount.
But, like a general who knows that a small hill can become the key to a whole battlefield, Bob Young went right on buying. By last week, he had taken his hill, and said so. He announced that he had bought another 147,000 shares for about $2,690,000. Now, said Bob Young: "I hold enough stock to control the New York Central."
But did he? No one knew for sure. All he had was some 5% of the stock. (Alleghany controls C. & O. with only 6%.) Was that really enough to control Central's 10,743 miles of tracks, its 119,208 employes, its 139,278 locomotives and cars? Well, if the Central wanted to prove that it wasn't, everyone was sure that there would be the roughest, toughest, brass-knuckledest fight since the throat-cutting days of Robber Barons Fisk, Gould and old Commodore Vanderbilt.
Help from Aunt Janes. Among the Central's widely held stock, Young's Alleghany block was bigger than anyone else's (even Central's Board Chairman Harold S. Vanderbilt, great-grandson of the Commodore, held only about 60,000 shares). And Bob Young was a specialist in rallying small stockholders behind him ("Aunt Janes," he calls them). To the Aunt Janes—and the Uncle Jims—tired of being bumped around in rattletrap coaches, Bob Young appeared to be a streamlined Galahad on wheels. To fellow railroad men, whom he has unceasingly denounced in magazine articles, full-page ads and speeches for the stagecoach way they run their business, he seemed more like a devil in the firebox.