Railroads: The C. & O. Wins

To stockholders of the Baltimore & Ohio Railroad, President Howard E. Simpson last week sent an unusual letter. It urged shareholders to agree to a merger with the Chesapeake & Ohio Railroad, even though Simpson has stoutly supported a merger with C. & O.’s rival, the New York Central. The merger would be the biggest in railroad history, make the new road the nation’s second largest, after the Pennsylvania.

Simpson could do little else. The rich and well-run C. & O., controlled by Chairman Cyrus Eaton, Khrushchev’s favorite capitalist, made the offer to exchange stock so attractive that a majority (55%) of B. & O. stockholders have already agreed to swap their stock for C. & O. shares. If the merger is approved by the Interstate Commerce Commission, C. & O. President Walter Tuohy will consider another merger with the Central.