Corporate History of B&M and MEC

I know that the Boston & Maine and Maine Central entered into a "joint management" agreement in 1933. My question is what exactly that meant. Did the B&M own a controlling stake in the MEC (as the Pennsy did with the Lehigh Valley and at one point the New Haven)? Was it the other way around? Were both roads subsidiaries of another holding company a la the 1920's Van Sweringen roads?

No, neither railroad owned the other and there was no common parent corporation. It was an unusual operating agreement designed to save both roads money during the Depression by consolidating some management and staff positions and coordinating some operations, sort of a semi-merger in which some functions were shared but each company remained corporately independent. The agreement came to an end in 1952 when the MEC pulled out, although of course they were again united under Guilford ownership thirty years later.

It may be a persisting hallucination, but I have a memory of reading that the "Independence" class of MEC U-18B's got that name in part for the then-approaching Bicentennial and also as a statement of intent to remain unaffiliated. If so, so much for statements of intent.

jaymac wrote:It may be a persisting hallucination, but I have a memory of reading that the "Independence" class of MEC U-18B's got that name in part for the then-approaching Bicentennial and also as a statement of intent to remain unaffiliated. If so, so much for statements of intent.

Weren't both the MEC and BAR owned by Amoskeag in 1976?

Dave

davidp wrote:Weren't both the MEC and BAR owned by Amoskeag in 1976?

No, Amoskeag never owned the Maine Central. US Filter, which was then taken over by Ashland Oil, was the pre-Guilford majority owner.

According to a Google-accessible MEC timeline, a 1965 New York Times article shows Amoskeag Corporation -- then owner of BAR -- buying a greater than 20% stake in MEC, which is substantial, but not controlling. Countering the purchase and Amoskeag's plans are E. Spencer Miller's frequently repeated statements of that period to remain unaffiliated with other lines that might do Maine or MEC harm.

Everyone wanted a piece of the Maine Central!

Amoskeag Buys 20% Interest In Stock of the Maine Central
By ROBERT E. BEDINGFIELD - New York Times
December 27, 1965, Monday
A better than 20 per cent interest in the voting stock of the Maine Central Railroad has been acquired by the Amoskeag Company and the family of Frederick C. Dumaine. Mr. Dumaine is president of Amoskeag, a holding company controlled by the Dumaine family.

Going back to the 1920s, it looks like the Pennsy tried to get a piece, too:

SAY PENNROAD BOUGHT MAINE CENTRAL STOCK; New England Sources Quoted in Assertion That Holding Company Got 19.5% of Voting Power.
December 14, 1929, Saturday
New York Times
PROVIDENCE, R.I., Dec. 13 (AP). --The Providence Journal tomorrow will say: "The Pennroad Corporation, subsidiary holding company of the Pennsylvania Railroad, was the actual...

And when the axe fell:

MAINE CENTRAL ACQUIRED
New York Times
Published: June 18, 1981
Timothy Mellon, a member of the Mellon banking family of Pittsburgh, has completed his acquisition of the Maine Central Railroad at an undisclosed price. Mr. Mellon, 38 years old, met today with railroad officials in Portland to confirm the purchase and his intention to retain current management, Bradley L. Peters, the railroad's vice president, said. Maine Central will be a subsidiary of Guilford Transportation Industries.

Too bad the Boston Globe archive previous to 1979 is not available online...

The B & M and Maine Central entered into a co-operative management agreement about 1932 with the approval of the Interstate Commerce Commission. Besides the through running of motive power on passenger trains between Bangor and Boston, most top level managers were the same persons for both roads and most were headquartered in Boston. It is my understanding that the Maine Central's financial condition was a lot worse than the B & M's at the time. The top slots in the Executive, Operating, Engineering, Finance, Purchasing and Traffic Departments were the same for both roads.
It is no coincidence that both roads had similar color schemes for diesels and style of searchlight automatic block signals.

Interestingly the Auditor of Passenger Receipts for both roads was in Portland and Freight Receipts in Boston. The Maine Central struck out on its independent course in 1952 when E(dward) Spencer Miller was elected President. It took several years for the break to be complete. People on the BRAC (now TCU --Clerks) roster had to make an election, move to Boston from Portland or move from Boston to Portland. Low seniority people probably didn't get to chose. When I started at the B & M in 1968 and for a number of years thereafter, there were still people on the B & M and MEC Clerks' rosters who had a certain notation next to their names. Caught in the B & M/MEC split they still had one bump back to their original roster.

One of the reasons for the break up might have been that by 1952, the prospects for the MEC were probably better than those for the B & M. MEC entered the 1950s with a substantial arrearage (non payment) of 5% preferred stock dividends since 1932. These were cumulative; if not paid this year, it is added onto next's years and keeps accumulating until paid. While this won't trigger a bankruptcy, it leaves the preferred holders in a very strong position in the company's management. B & M also had even more substantial arrearages on several preferred issues with almost no chance of paying them. B & M resorted to a refinancing under the Mahaffie Act which wiped out the arrearages but diluted holders of lesser stock --common. B & M became embroiled in a nasty stockholders' suit over this. It was resolved in B & M's favor but dragged out for a time. MEC's newly independent management worked throughout the 1950s and paid off a significant amount of the arrearages. In 1957 alone, MEC paid $20 in dividends on the 5% preferred--wiped out 4 yrs. of back dividends.

MEC diesels also sometimes worked to Worcester and I believe some had B & M cab signals as they sometimes went to Troy, NY to work of mileage owed to B & M.

By the way, when the B & M got hold of the Eastern about 1884, it also got control of the MEC because one of the only bright Eastern financial decisions its management made was to buy a big chunk of MEC stock. However, that was disposed of in a Mellen move orchestrated by J P Morgan.

On a slightly different note from the partnership arrangement I've been wondering the following:

There appear to be some indications that at some point Maine Central changed from corporate status from Co. to Inc.

I don't know if this happen as a result of the buyout by US Filter or Guilford or if this happenned earlier than that.

The "Scope and Content Note" for the Maine Central Railroad Company Records in the Special Collections of the Fogler Library at the University of Maine indicates the records only go to 1927.

I found that date and time an interesting point for such a corporate transition as Bath Iron Works Limited make the change to Bath Iron Works, Incorporated (after bankruptcy) around that time as well.

I also found it very interesting that none of the records from the E. Spencer Miller era were in their collections. Perhaps Guilford felt there was some kind of proprietary information of value from their business model that could be gleaned from the records (at least in 1984) or my other thought was that Guilford was choosing to keep their hands on the records of Maine Central Railroad, Inc. for the time being as long as the corporation continued to exist, which seemed wise for legal purposes and other reasons.

From what I've seen, Pan Am still identifies Maine Central Railroad as "Company" (or "Co.") in various corporate documents (e.g., letterhead, business cards, filings that are public record, etc.). I don't think I've ever seen it as "Inc." in the Pan Am era or the Guilford era.

I've seen persistent references to Maine Central Railroad Company as well, for example on the fuel surcharge tariff we discussed in the Mountain Division reactivation thread (New England forum).

However, Maine Central Railroad, Inc., also appears to exist and is a persistent results for corporate listing on a number of websites, for example Google Finance.

I'm curious as to whether or not there may actually be two separate corporations here. That would potentially provide some very telling answers as to the reasons for the current arrangements.

Interestingly a search of Hoover's appears to reveal 3 companies.

Maine Central Railroad, Inc., North Billerica, MA

MAINE CENTRAL RAILROAD COMPANY, Boston, MA

and

Maine Central Railroad Company, Waterville, ME

I was looking at deeds today and Found Boston & Maine Corporation, a Delaware Corporation with a Mailing Address of N. Billerica. There was also the Vermont & Massachusetts RR Company, registered in Massachusetts and a mailing address of N. Billerica

Please excuse me from drifting the topic of the joint management under Mr. French. Since we got onto the topic of E.S Miller, and Buck Dumaine, I have a few more questions.

Why did MEC sell out to US Filter? Couldn't Dumaine have jumped in then? I know he and Miller didn't get along. What about his B&M bonds, and sending Alan Dustin to run it? Why didn't Buck push harder? Was he starting to wind down his idea of a New England rail system?

Engineer Spike wrote:Please excuse me from drifting the topic of the joint management under Mr. French. Since we got onto the topic of E.S Miller, and Buck Dumaine, I have a few more questions.

Why did MEC sell out to US Filter? Couldn't Dumaine have jumped in then? I know he and Miller didn't get along. What about his B&M bonds, and sending Alan Dustin to run it? Why didn't Buck push harder? Was he starting to wind down his idea of a New England rail system?

Very interesting question. Never even thought about it. I would like to know as well.