N&W in 1911--PRR control

[NW Mailing List]

There's a difference between majority interest and controlling interest.

Controlling interest is usually much less than 50%; if 40% is held (for example), usually enough minority stockholders will vote with the controller on any issue to make the necessary 50% plus one.

EdKing 


From: NW Mailing List 
Sent: Wednesday, September 15, 2010 10:42 PM
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Subject: N&W in 1911--PRR control


Bluefield Daily Telegraph
March 10, 1911

PENNSYLVANIA CONTROL OF NORFOLK AND WESTERN
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    Testifying before the interstate commerce commission [sic] Tuesday, President Johnson, of the Norfolk and Western, stated that out of a total of 934,230 outstanding shares of stock in that railway the Pennsylvania lines owned 438,833--or only 3,283 short of a controlling interest.  To all practical intents and purposes this means nothing else than the Pennsylvania's control of the Norfolk and Western.  And it furthermore indicated that the West Virginia coal mines served by the latter road are in ultimate sense subject to the policy of the Pennsylvania system.  It reminds that whenever the Pennsylvania desire to prejudice the interests of the West Virginia coal field in its competition with other coal producing territory tributary to the Pennsylvania or and of its subsidiary branches, it can turn the trick without any degree of real difficulty--that it can regulate the volume of shipment from the Virginia and West Virginia mines both to the lakes, and the seaboard, at its will--that it can define the territory into which this coal may have market--and exclude it as a competing factor from other territory.  To the very destiny, therefore, of that vast wealth of coal land lying along the Norfolk and Western line, the Pennsylvania under present conditions holds the key.  It may be asserted that through possessing the power the Pennsylvania has not abused it.  This contention needs no other answer than reference to the facts developed in the investigation had before the interstate commerce commission five or six years, when under the merciless probing of William A. Glasgow, special counsel for the government, conditions were revealed that startled and shocked the entire country.  And should it be urged that as a result of the disclosures then made, and the subsequent action of congress, the Pennsylvania does and will hereafter proceed more guardedly and justly in its policy towards the West Virginia coal fields.  We have only to point to the complaints of the West Virginia coal operators now being heard by the interstate commerce commission, and involving the charge of discrimination in freight rates against them in favor of another field.  In any event no railroad combination should have the power to stifle competition in a necessary article of universal consumption, or regulate it or direct it such as is now enjoyed by the Pennsylvania with reference to the coal fields of the east.  The fact that this potentiality for favoritism to special coal fields inheres in a single railway corporation reflects the existence of a vice in the industrialism of the country that must be eliminated if the government is to survive as an effective agency of protection against the evils of railway combination.--Lynchburg News

[Although one or two numerals in the above number of shares were indistinct on the microfilm the numbers given above are essentially as printed.  Controlling interest is usually 50% plus one of the outstanding shares, but the above numbers do not agree with that definition.]
------
Gordon Hamilton


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