Publication: Electrical Review
New York, NY, United States
The Sale of the Baltimore & Ohio
There seems to be no doubt from the facts as they are known at present, that the purchase of the Baltimore & Ohio Telegraph Company, its lines and properties, which was announced last week, is a personal purchase by Jay Gould.
Dr. Green, the President of the company, said two or three days ago, when negotiations were then believed to be approaching a conclusion, that no settlement could be accomplished, so far as the Western Union Company was concerned, without the approval of the Board of Directors and three-fifths of the stockholders. On the top of this statement he said, Thursday afternoon, that the Baltimore & Ohio property had been absolutely purchased by the Western Union and that the entire plant belonged to them. In the interval there had certainly been no opportunity to secure any consent from the stockholders, and it was only announced this morning that the Board of Directors had ratified the purchase. Taking Dr. Green's first statement as true, this ratification by the directors would not complete the sale. Moreover, this point was made on Wall street by men who are well acquainted with telegraph matters. The Western Union Telegraph Company has not now in its treasury the five millions of stock which is named as the purchase price, and therefore the corporation, as such, could not conclude "the transaction, simply because they could not pay for what they had bought. By many it is believed that the 50,000 shares of Western Union stock which have been transferred to the syndicate in payment of the Baltimore & Ohio property came out of Mr. Gould's personal strong box, and the stock of the Baltimore & Ohio Telegraph Company, amounting to over three millions of dollars, will or has been handed over to Mr. Gould.
The opinion gained ground yesterday on Wall street that the matter was arranged in this way in order to bring it to a prompt conclusion, and the reasons for the obvious haste were subjects of some speculation. It was not generally believed that Mr. Garrett's attitude in the matter is as compliant as representatives of the syndicate were disposed to announce. It was thought, in fact, that if the matter of the purchase had been delayed until after the arrival of the principal owner of the Baltimore & Ohio properties, it would not have gone through so smoothly and so satisfactorily to Mr. Gould. and the Western Union. "If everything was all right," said a Wall street man, "where was the necessity for such a rush? Why should not the proposition for purchase have been submitted to the directors and stockholders, and their consent obtained after the usual formula? There seems to be but one answer to these questions, and that is, that Mr. Gould and Mr. Morgan thought it wise and expedient to conclude the matter before Mr. Garrett's arrival."
Of course there is no idea down-town but that Mr. Gould had the right to buy the Baltimore and Ohio wires, or anything else that he can pay for; but the rather autocratic way to which the thing had been done, and the assumption that the Western Union stockholders would indorse his action in the matter without question, was widely commented upon. The annual meeting of the stockholders occurs the 12th inst., and the new issue of five millions of stock to reimburse Mr. Gould's outlay will undoubtedly be authorized at that time. In this connection it is pointed out that when proxies were asked for to use at its annual meeting, the stockholders did not understand that the matter of issuing new stock to such an amount as $5,000,000, or any other business of equal importance, would come up. It is not known that these proxies can now be re-called; but the door is certainly open to some very interesting speculations. In the same line with the dispatch from Philadelphia yesterday, announcing that the Baltimore and Ohio privileges in that city were secured under the express stipulation that the company would always maintain a competing line, and that its failure to obs