Robert R. Young - Stock Market, Railroads, C&O

Stock Market, Railroads, C&O

In 1931, Young formed a brokerage partnership with Frank Kolbe and bought a seat on the New York Stock Exchange in order to speculate in stocks. In 1942, in alliance with Allan P. Kirby, a retail merchant, Young owned a controlling interest in the Alleghany Corporation, a railroad holding company previously owned by the Cleveland-based Van Sweringen family, which controlled the Chesapeake and Ohio Railway (C&O), Pere Marquette Railroad (PM), and other railroad properties.

By the end of World War II, C&O was poised to help America during its great growth during the following decades, and at mid-century was truly a line of national importance. It became more so, at least in the public eye through Young, who became "the gadfly of the rails" as he challenged old methods of financing and operating railroads, and inaugurated many forward-looking advances in technology that have ramifications to the present.

As chairman of the board of the C&O, Young launched a well-publicized campaign for the modernization of railroad passenger service. He was one of the first railroad executives to introduce lightweight, high-speed diesel passenger trains.

In 1945, Young and Cyrus S. Eaton assembled $43,000,000 in a bid to purchase the Pullman Company operating pool, in the wake of a court decision that forced Pullman to divest that portion of its business. Their bid ultimately failed, with a Philadelphia court awarding the railcar operations to a consortium of the large railroads.

Young changed the C&O's herald (logo) to "C&O for Progress" to embody his ideas that C&O would lead the industry to a new day. He installed a well-staffed research and development department, which came up with ideas for passenger service that are thought to be futuristic even now, and for freight service that would challenge the growth of trucking. Fortune magazine wrote, "Young has an almost endless inventory of ideas, some pneumatic and some substantial, about passenger service. He believes that the railroads could double any previous passenger revenues if they put out a good product and merchandised it well..."

During the Young era and subsequently, C&O was headed by Cyrus S. Eaton and Walter J. Tuohy, under whose control the "For Progress" theme continued, though in a more muted way after the departure of Young. During that time, C&O installed the first large computer system in railroading, developed larger and better freight cars of all types, switched (reluctantly) from steam to diesel motive power, and diversified its traffic, which had already occurred in 1947 when it merged into the system the PM of Michigan and Ontario, Canada, which had been controlled by the C&O since Van Sweringen days. The PM's huge automotive industry traffic, taking raw materials in and finished vehicles out, gave C&O some protection from the swings in the coal trade, making merchandise traffic 50% of the company's haulage. Young also owned Pathe Laboratories, a motion picture processing laboratory; and acquired Producers' Releasing Corporation, a B-movie production company, also known as PRC Pictures.