oad, which
he had, in conjunction with the banking house of Kuhn, Loeb and Company,
reorganized and taken out of bankruptcy. Harriman was one of the
originators of the "community of interest" idea, a device for the
partial control of one railroad system by another. For instance,
although the law forbade any railroad system from acquiring a complete
control of a competing line by purchasing a majority of its capital
stock or by leasing it, nothing was said about one railroad having a
minority investment interest in another. A minority investment, even
though it be as low as ten or twenty per cent, usually constitutes a
dominating influence if held by a single interest, for in most cases
the majority of the shares will be owned in small blocks by thousands of
investors who never combine for a definite, practical purpose. Thus the
interest which has the one large block of stock usually controls
the voting power, and runs little risk of losing it unless a contest
develops with other powerful interests--and this is a contingency which
it almost never has to meet.

Carrying out this policy of promoting harmony among competing lines,
the New York Central and Pennsylvania Railroad early in 1900 acquired a
working control of the Reading Company, which in turn controlled the
New Jersey Central and dominated the anthracite coal traffic. Later the
Baltimore and Ohio shared this Reading interest with the Lake Shore of
the New York Central system. The New York Central and the Pennsylvania
acquired a working control of the same kind in the Chesapeake and Ohio
Railway, which was an important element in the soft coal fields and was
reaching out to grasp soft coal properties in Ohio and Indiana.

These and other purchases, and the consequent voice acquired in the
management, established comparative harmony among Eastern railroads for
a long time; they stabilized rates and enabled formerly competing roads
to parcel out territory equitably among the different interests. Later,
Harriman, and to some extent Morgan, carried the community of interest
idea some steps further. Morgan caused the New York Central to acquire
stock interests in certain "feeder" lines such as the New York, New
Haven and Hartford and the Chicago, Milwaukee and St. Paul, as well as
in competing lines; and Harriman caused the Union Pacific not only to
dominate the Southern Pacific Company by minority control but also to
acquire interests in the Illinois Central, the Ba