The Montgomery advertiser., 1905-03-16
In the current number of Public

In the current number of Public Opinion MT. W. c. Nicholson. we'll known writer on economic subjects, for % consoiidation has been @ in some re. spects blessing to the country, 1t con- tains "a serious menace to the future welfare of the country" Never before, he states. in the history of the world enormous resources and the tremen- dous power centered in the hands of the ten men who control the railroad industry of the United States" The total railroad mileage in Germany is only one-ha1f of that of the Hartman Rockefeller-V Vanderbilt system in the United States. The mileage in this of the railroad mileage of Great Brit ain. There is no indication that con- solidation will cease by reason of the decision of the Supreme Court in the existing railroad combinations were formed before the Supreme Court or dered the dissolution of a company or ganized to effect the merger of the ic Railroads. The Northern Securities Company was merely a device-and a very transparent one to get around the Federal statute known as the Sherman act. But the five great combinations which have been organized in the last decade have demonstrated that rail-
 
 nal merger and without a holding company"
 The movement for railroad consoIi- dation on a great scale began after the decision of the United States Supreme Court in 1890 that all pooling among railroads was 'in restraint of trade" and illegal, Mir. Nicholson states that this decision threw the railroad indus try into a state of demoralization. Com petition of the most reckless character followed, and for two years rates were cut to point where 1t was Impossible to moye eHs traffic at a profit" From 1891 mileage of 5s,562 and capitalization of $3,26S,6s0,O00, were forced into the hands of receivers. It was while such ment for na had the hire If the railroads could not maintain rates by forming pooling agreements" MT. Nicholson explains. there was on- ly one thing to do-the stronger and bine and purchase the control of the weaker, and thus remove those irritat- ing factors in the situation. This ap- cidal competition could be checked and the railroad industry be placed upon a profitable basis" Capitalists with large resources found a golden oppor- railroads They reorganized them and by various devices. chiefly by voting trusts" controlled the reorganization.
 IL was Tn this way, says MT. Nicholr son, that J. P. Morgan and Company secured control of the Reading, Erie, Northern Pacific and the Southern Rail- ways. More than twenty independent roads were absorbed by the reorganiz- ed Southern Railway and the consoli- dated property passed under the control Of J. P. Morgan and Company"
 Such transactions are considered le- gitimate. Theoretically. the combina- tions thus formed are possibly as much
 fin restraint of trade" as if they had been organized through the device of a holding company They were created for the purpose of "steadying railroad rates" and putting an end to suicidal competition" So long as they do no injury to the public they will continue unmolested. The recom- mendation of the President that the In- terstate Commerce Commission be au- thorized to revise rates, the revised rate to go into immediate effect and continue in effect unless reversed by a court of review, does not apply to con- solicitations alone. It has been said that through combination the railroads have been enabled to effect economies and reduce rates; that by combination they have been enabled to give the public improved service. If this Is real ly the case the proof properly present. ed will undoubtedly have some effect on the legislation to be enacted by the Fifty-ninth Congress.