Business: The Railroad Game

Early Indian summer burned pleasantly upon Baltimore one morning last week. On the fifth floor of the Standard Oil Building windows were open, street noises drifted into the busy executive offices of Western Maryland Railroad Co. In his private office, President Maxwell CunninghamByers, 52, leaned back and talked with one of his special representatives, W. Taylor Springer. The railroad was running smoothly. He was satisfied. Western Maryland trains were on schedule over their 875 mi. of track. Engineers, brakemen, switchmen, signalmen were on the job. The road’s car-loadings were keeping up at a remarkable rate. During the past dull nine months, gross had dropped only 2%.

Outside the president’s office was a large room, filled with clerks, typists. The drone of typewriters was steady. A stenographer stopped and looked at her wristwatch. Noon was less than an hour off.

From the lift stepped Dudley Guy Gray, vice president in charge of traffic. He walked toward the president’s office, stopped to say hello to a few clerks. They noticed he was in a good mood, an increasingly rare thing in this slim, purposeful man of 61, who had been in the railroad game since his boyhood, with Western Maryland for 17 years.

Hearing that the vice president had come to see him, President Byers arose. He greeted Mr. Gray at the door, chatted with him for a moment. A few of the clerks looked up and watched. It was well known that there was tension between the vice president and his superior. And everyone knew that neither was a man to give in. President Byers was obviously a fighter. If his appearance did not tell you that at once, his record did. Labor unions had fought him in vain; aggressiveness had marked his long rise from the position of assistant engineer on the Pennsylvania.

As Mr. Gray entered the president’s office, Mr. Springer left. The door was closed. The stenographers and clerks did not hear the lock snap shut. But before Mr. Springer reached the lift the sound of angry voices came from the room. Then, in startling succession, came a fusillade of five shots. The outer office froze into silent, motionless attention. Before it was broken there was a round of five more shots, the sound of glass falling.

Charles E. Belt, clerk, was the first man to respond. He leaped to the door. When he couldn’t open it, he smashed his fist through the glass. He gasped at what he saw through the tinkling gash. Almost against the door lay the president, bloody, limp, dead. In a corner the vice president was clutching his side, moaning as in an agonizing contortion as he attempted to rise to his feet. The heavy rug was crumpled, a chair was overturned, bullets had ripped the mahogany desk.

Clerk Belt entered the room and bent over the vice president. “Who did the shooting?” he said. Vice President Gray stared at him with pale, fixed eyes. “That is obvious,” he said before entering a coma from which he never emerged.

The Case. A prompt verdict that Vice President Gray had shot his superior, then himself, was returned. The road and the two families (both were married, Byers leaves five children, Gray none) stifled further details. And thus was culminated a long, bitter rivalry.

Both men were oldtime railroaders. They met in 1904 when both worked for the Baltimore & Ohio. Mr. Byers left B. & O. to go to St. Louis & Santa Fe. During the War he was assistant to Carl Raymond Gray (no relation of Dudley G, Gray), who was then president of Western Maryland. When Carl Gray went to Union Pacific in 1920, Mr. Byers became president of Western Maryland. Dudley Gray was then completing his seventh year with Western Maryland. He apparently resented the much younger Mr. Byers becoming president. An arrangement had to be made whereby all of Dudley Gray’s reports would be made to the Board of Directors, not to the president. But in 1926 Mr. Byers became also chairman of the board and in this capacity received the vice president’s reports.

From that time the tension between the two men became tenser. They seldom spoke except when business demanded it. They disagreed on many a policy. This summer, when depression has caused friction between the friendliest of executives, the Gray-Byers rivalry reached its height.

The railroad industry is self-contained. A railroad is a self-contained unit. Rivalries that would not be tolerated in other modern industrial bodies are accepted by railroad men. Both the president and the vice president knew that their grievances were their own, not the company’s.

Thus, while in contrast to murders for love, for revenge, for money, happened one of the few murders ever done for business jealousy. Ranking officer after President Byers was his murderer. Next in line was Vice President George Poindexter Bagsby, general solicitor. Promptly he assumed his duties, for although passenger trains were halted for ten minutes on the day of each funeral, service must continue.— That too is a rule of the railroad game.

Celotex Cycle

In Chicago last week stockholders of Celotex Co. approved a plan which will constrict the activities of Bror Gustave Dahlberg, the company’s enthusiastic founder-president. And in Chicago last week the second receivership suit of the year was filed against Celotex.

Bror Gustave Dahlberg, 48, was born in Norway, soon was taken to St. Paul. About ten years ago he conceived of celotex, made from the fibre of sugarcane, as a substitute for lumber. He organized the company whose phenomenal growth in sales has added unto it many a subsidiary. Behind the expansion was Mr. Dahlberg, shrewd in matters of manufacturing and sales. Also, he is generally credited with being the architect of its financial structure. In the past decade he is said to have made $10,000,000.

Great is his faith in the company. When Celotex was around $50 last January he wired all stockholders, telling them the stock had only partially recovered, not to “unwittingly sacrifice” their holdings. But by June it had slipped to around $40, then broke sharply to $20 when one David Adler sued for receivership. It recovered somewhat when the suit was thrown out of court and charges made that Plaintiff Adler had stock manipulations in mind. But when last week’s events transpired Celotex stock was at $10¼.

The reorganization plan last week included doing away with the executive committee of which Mr. Dahlberg has been head, the establishment of a finance committee and of a five-year voting trust. Mr. Dahlberg is not one of the voting trustees, although Brother Carl Frederick Dahlberg is there to represent the Dahlberg holdings.

Approval of this plan followed by one day the second receivership suit. It was brought by William H. McFetridge of Chicago who says he owns 50 shares, is also suing for other stockholders. He charges that at the time the company was formed Mr. Dahlberg & associates made $10,000,000 in selling the new company land and equipment. In addition to similar charges, he says the company is hopelessly insolvent, cannot meet its obligations.

Whether this will turn out to be the same sort of suit as many another brought and dismissed this year remains to be seen. To the men reorganizing Celotex’s affairs it was especially annoying, for however groundless a suit may be, it has a psychological effect on creditors, investors. Celotex officials can point, however, to the fact that they are raising more than $500,000 through the sale of stock, that the new finance committee has set up a $1,000,000 revolving credit fund.

*During the funeral of William Cornelius Van Home, second president of Canadian Pacific Railway, most outstanding of its builders, every wheel in the vast CPR system was stopped.