Virginian in 1909--Interference

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Bluefield Daily Telegraph
April 9, 1909

TO BOTTLE UP ROGERS ROAD IN THE MOUNTAINS
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Pennsylvania Railway [sic] Will Buy Norfolk and Western and Prevent Virginian Extension

    Semi-official announcement was made in Philadelphia Tuesday night, according to dispatches from that city, that the Pennsylvania Railroad Company would make an offer to purchase all of the outstanding common stock of the Norfolk & Western Railway Company at $100 per share, and would issue in exchange a 4 per cent collateral trust bond of the Pennsylvania company, the principal and interest of the said bond to be guaranteed by the Pennsylvania Railroad.
    This announcement will in all probability be advertised within a week or ten days, in lieu of an agreement made a few days ago with the purchase at a private sale of a big block of this stock held by New York and western interests.  This block of stock was bought at $100 per share, and the sale was only ratified after the assurance had been given that the same offer would be made to the minority outstanding stockholders.
    The purchase of this block was negotiated by E. J. Berwind, and consisted mainly of the holdings of large and influential bituminous coal interests, who were willing to assist the Pennsylvania railroad by reason of their mining interests to obtain the full control of the property.
    In 1900 the Pennsylvania purchased $6,246,00 of the $66,000,000 of common stock and $3,246,000 of the $33,000,000 preferred stock of the Norfolk & Western, thereby obtaining a minority representation on the board.  This purchase was made when large interests were acquired in the Chesapeake & Ohio and Baltimore & Ohio.  The holdings of these two companies have been sold and it is understood that the profits made from these sales are to be invested in the purchase of the full control of the Norfolk & Western.
    The action of the Pennsylvania to purchase the absolute control of the Norfolk & Western and make it a part of the system west of Pittsburg, was largely influenced by the desire to counteract the influence on the bituminous industry, which is anticipated from the Virginian Railway, the new soft coal road built by H. H. Rogers.
    As a matter of fact, the move of the Pennsylvania is in a truth an effort to checkmate Rogers, or in other words to bottle his road up in West Virginia.  While the new Virginian railway has an excellent tidewater terminal at Sewells [sic] Point, at Norfolk, Virginian, the road is practically shut off from communication at Deepwater, W. Va.
    It is stated that the Pennsylvania Railroad has already practically acquired a safe majority, but in view of the plans under consideration, which contemplate making the Norfolk & Western a part of the Pennsylvania system, it is desired to get in all the common stock.  As there is nearly $10 between the current market price and the purchase price offered there is every probability that the majority of the stockholders will accept the offer, in view of the fact that the principal and interest of the bonds to be exchanged for the stock will be guaranteed by the Pennsylvania Railroad Company.
    With the acquisition of the Norfolk & Western, the Pennsylvania will not only be in a strongly fortified position to meet the competition of Mr. Roger's new road, but will also be able to shut off possible western connection, and practically bottle up the new Virginian railway in the mountains of West Virginia.
    The position of the Pennsylvania is still further strengthened by reason of the belief that the Hawley interests, the new owners of the Chesapeake & Ohio, are on very friendly terms with the Baltimore & Ohio interests, more especially E. H. Harriman, who has influential voice in the policy of that road.
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[Some numerals were blurred on the microfilm; the best interpretation is shown.  It is obvious that there was a lot of speculation in article such as this, for instance in the prediction that the PRR would buy 100% of the N&W.  Also, it is difficult to understand what is meant by the PRR and N&W bottling up the VGN when it had the C&O for a western connection.]

Gordon Hamilton
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