RAILROADS: The Search for Aunt Jane

The battle for control of the New York Central turned into a standup, knockdown fight last week. Squared away on one side was suave, ambitious Robert R. Young, 57, whose mastery of high finance and knowledge of corporate infighting won him control of the $65 million Alleghany Corp. in 1941. Young boldly demanded to be named chairman of the Central's board because he owned 100,200 of its shares (which he claimed was the largest individual holding) and because he had the support of the 100.000 shares owned by his associate. Allan P. Kirby, and could also vote the holdings (more than 100.000) of Alleghany Corp. Lined up against him were the Central's 15-man board of directors, headed by President William White, 57, crack railroader who knows his job from the ties up.

A shrewd tactician, Young opened his campaign by trying to win White over to his side. He invited him to lunch in the lofty Cloud Club dining room atop Manhattan's Chrysler Building. There he painted a glowing picture of the Central's future, with business booming enough so that the price of Central stock would quadruple to 100. Young's plans for the Central call for borrowing $250 million and replacing all passenger cars with his "Train X" (a low, two-wheeled car that "flows around curves").

Special Inducement. Young had plans for White, too. Young thought that White was doing a good job and wanted to keep him on as the railroad's chief operating man. This raised the first obstacle. Under his present contract, White is boss of the Central until 1962 (at an annual salary of about $120,000 and retirement pay of $75,000 for five years and $40,000 thereafter). To make room for Young, White would have to move down to the job of chief operations officer, while Young would dictate the Central's overall policies. As inducement, Young offered White an option to buy the company's stock at a fixed price. White turned it down because, as he said afterwards, "Anyone who can't work loyally without a stock option, I don't want around. I consider myself an employee like all employees, and I don't want a plan that favors a few in top management."

A few days later White met for 5½ hours at Manhattan's University Club with other members of the Central's board. Although newspapers made a mystery out of the long meeting, most of the time was taken up by lunch. Young's demands and White's account of his meeting with Young. When he was through talking, the directors needed only 15 minutes to make up their minds. They unanimously turned Young down. "The board," said their public statement, "is not willing that Mr. White relinquish his position as chief executive officer . . . The board is generally favorable to the policy ... of recognizing large holdings of ... stock by inviting . . . owners ... to become directors. But the terms and circumstances of the present request . . . make any such recognition undesirable."

"Imperious Demand." Young heard the news at his winter home in Palm Beach, Fla., and said: "I am really basically gratified. I'd rather have my own board of directors than work with the present one." He blamed the turndown on "Morgan interests" on the board.