Is "Parent Company" a Misnomer?

NW Mailing List nw-mailing-list at
Sun Oct 7 22:16:59 EDT 2007

Corporate parenting can be an obscure, inexact relationship. Percent of
stock ownership and an artsy schematic defining who-controls-what likely defines
most such parental business connections. At the same time, there are other
factors such as a board member's individual personal power, a leasehold
position between the entities, off-the-books IOUs, political connections, and actual
home grown family interrelationships that could create a parental business
situation. The stock ownership choice likely is Webster's correct answer, but
those other factors can make a difference.

Regarding the parenting powers Pennsy may or may not have held over the N&W,
Jimmy Lisle asked, " If this parenting stuff had actually been true, then
why is it also mentioned that the PRR kept their hands off what the N&W was

To me, the crux of the matter is in his question: "... kept their hands off

The implied meaning of that line is that Pennsy choose to keep its hands off
N&W matters. If, in fact, Pennsy actually had the power to make that choice
on its own, then at the same time, Pennsy had the power to do the opposite:
to put its Godly hands all over N&W's operation.

Clearly, I don't know the answer because I don't know if the choice was
Pennsy's. However, my sense of Pennsy history is that there were times that it
was so big and powerful that it literally could exert a semblance of "parental
powers" over most of the hundreds of other railroads without owning a single
share of that other railroad's stock.

My guess is that in today's world, each of the half dozen or so major U.S.
railroads maintains a modicum of control over the short lines that lease
tracks belonging to the majors, all without the majors owning any stock in the
short line. Is that parenting? If you base parenting on stock ownership, how
much stock of a short line would a major have to own to be a parent?

Good question, Jimmy ... I wonder if we'll ever find an answer?

I vote for steam renewed ... Bob Loehne ... Thomasville, GA

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