RAILROADS: Wheeler v. the B. & O.

One day last week Roy Barton White, president of the Baltimore & Ohio Railroad Co., was surprised to read in the newspapers that he, his railroad and four officials of the B. & 0. were in trouble with the Government. Montana's Senator Burton K. Wheeler, chairman of the powerful Interstate Commerce Committee, had sent a sizzling letter about the B. & O.'s finances to OWMR Boss John W. Snyder, who is still filling the job of Federal Loan Administrator.

Senator Wheeler promptly made the letter public, without the courtesy of sending a copy to Roy White. In it he suggested that it was high time the B. & O. paid back the $82 million still owed the Reconstruction Finance Corp. Reasoned Senator Wheeler: since 1939 the B. & O. has made a net profit after taxes and interest payments of $100 million, plus a bookkeeping profit of $35 million from the repurchase at bargain prices of its bonds in the open market. Finally Wheeler charged that "Wall Street speculators have made a huge killing in the B. & O. stocks . . . there has been a frenzied speculation in the company's bonds."

At week's end, Roy White rose to his own defense. In a letter to Senator Wheeler, he pointed out that the B. & 0. had used its war profits to reduce its longterm, high-interest funded debt by $100 million, cut its annual fixed charges by $5.5 million.