Railroads: A Hotbox for Pat

Patrick B. McGinnis made a million as a Wall Street railroad securities specialist, but his life became a hotbox when he switched to running rails instead of rating them. McGinnis was tossed out as Norfolk Southern chairman after a federal judge fined the line for selling securities without competitive bidding. He next was eased out of the Central of Georgia for highhanding its directors. Then McGinnis got control of the New Haven Railroad and, in an experience that still haunts its 26,000 daily commuters, brought on frequent delays and breakdowns by cutting maintenance. After leaving the New Haven, McGinnis went on to the Boston & Maine, where he resigned as chairman last year, giving health as his reason.

Last week Pat McGinnis' railroading career came in for more criticism—this time from the law. A Boston federal grand jury indicted McGinnis, B. & M. President Daniel A. Benson, Vice President George F. Glacy and a railroad equipment broker named Henry Mersey, charging that they had engineered kickbacks in the sale of B. & M. surplus cars. In 1958, the indictment charged, another railroad broker offered $500,000 for ten passenger and baggage cars that B. & M. wanted to sell. Pat McGinnis blocked the sale. Instead, the B. & M. sold its cars to Mersey, whose office is in the same building as the B. & M.'s, for $250,000. Mersey then resold them for $425,000 and, says the jury indictment, gave McGinnis $35,000, Benson $11,500, and Glacy $25,000. Pat McGinnis denied the charges from the Manhattan office where he now works as vice president of Highway Trailer Industries Inc., a firm that makes trucks.