Business: Another for McGinnis

In Boston’s North Station last week, at the annual meeting of the Boston & Maine Railroad, the most important man was not there. Absent was Wall Street Financier Patrick B. McGinnis, who won control of the New York, New Haven & Hartford Railroad a year ago and now was out after control of the B. & M. But he dominated the meeting nevertheless. Even before B. & M. officials counted the proxies, they were ready to admit defeat. Both Board Chairman Edward S. French and President Timothy G. Sughrue resigned in expectation of a McGinnis victory; they were afraid that if they stayed on and were fired, they would lose their pension rights. They acted wisely. In the counting, McGinnis and his group won easily, 273,237 v. 197,142. The victory gave McGinnis and friends control of a road with 3,200 miles of track in New England and a 1954 operating profit of $3,987,721. With the B. & M., McGinnis now controls 80% of all the railroad business in New England. In his corner in this fight, McGinnis had such prominent New Englanders as Burton M. Cross, former governor of Maine, and Francis P. Murphy, onetime governor of New Hampshire, plus Pierre (“Spike”) Dumaine, brother of Frederic (“Buck”) Dumaine, from whom McGinnis had wrested the New Haven. Spike Dumaine, who felt that he had been forced to take a back seat in running the industrial empire left by his father, was boss of the New England Transportation Co., a bus subsidiary of the New Haven, when McGinnis took over. Spike stayed on and threw McGinnis his support in the fight for the B. & M. As a reward, he was named a B. & M. director. At an early meeting of the new board, McGinnis expects to be named president of the B. & M. If he is, he can count on trouble from the Interstate Commerce Commission. No one at the ICC could remember that the agency had ever let one man serve as chief executive of two major roads. Furthermore, the ICC last week started an investigation to determine if it should permit the McGinnis group even to control the B.& M. In a preliminary opinion, an ICC official held that McGinnis and friends are al ready violating the ICC act, which forbids one railroad to take over control of another without ICC permission. At the annual meeting of the New Haven last week, Pat McGinnis strengthened his hold on that road. To the eleven directors he elected when he first won control, he added another seven, giving him overwhelming control of the 21-man board. Buck Dumaine has apparently given up any hopes of winning back control of the road; he declined to stand for reelection, and for the first time since his father took over the New Haven railroad in 1948, there is no Dumaine on the board. For stockholders McGinnis had good news. He expects that, with the general improvement in business, “net income will be around $12 million, or $3,000,000 greater than in 1954.” He promised that here will be a cash or stock dividend this year for stockholders, who have received no dividends since 1931. One of the innovations that McGinnis hopes will boost revenues was unveiled last week as 2,500 New England children (and Mcinnis himself) rode a special train to The Bronx zoo (see cut). But while profits were up, there was plenty of evidence that service, notably for commuters, was down. More and more commuters from Westchester County and Connecticut were finding their trains both overcrowded and late. In some instances in the past months, trains have crawled into Manhattan’s Grand Central Terminal as much as one hour behind schedule on a run that was supposed to take only 50 minutes in the first place.