New-York tribune., 1921-09-30
Rail Officials
Differ on Bio
Merger Plan
Proposal of I. c. C. to Link
Nations Roads Into l0
Great Lines Meets Both
Approval and Criticism
Bankers Fear Confusion
Project Seen as Benefit To-
Weaker Companies, but
Drag on Some Big Ones

The judgment of railroad executives
concerning the Interstate Commerce
Commissions tentative plan for merg-
ing the major American railroads into
nineteen systems seems to be largely
based on whether the plan would be
of benefit to the roads in which they
are interested. For example, officials
of the Lehigh Valley, New York Cen
trail and the Pennsylvania expressed
themselves yesterday as being fairly
we'll satisfied with the proposed unfit
cations, whereas other roads upon
which the plan would saddle weaker
lines are strongly opposed to the idea
The point was emphasized, however
that the consolidation scheme, which is
based mainly on the Investigations of
Professor William 2. Ripley, of Har-
ward, into the possibilities of railroad
mergers under the transportation act,
is not compulsory. The opinion was
also expressed that unifications under
the law, as it now stands, in any event,
will not become a reality for a long
time to come
In banking quarters one criticism
directed at the plan was that it appar-
entity intends to separate certain ex-
isting lines, which would create con-
fusion in the unscrambling of their
present financial structures.
"The plan," said F. D. Underwood,
president of the Erie Railroad. "is a
step in the right direction, and I think
entirely feasible. cannot see the need
for as many as nineteen systems. Six
would be just as good. The larger
number is put forth with the idea of
preserving competition, but competi-
ton was practically eliminated with
ulation Of rates and also many admir-
istrative matters.
Consultations should be to the ad-
vantage of the public and Of large
number of investors who put the
money into non-paying properties and
who, through mergers, will at least re-
ceive some return"
Robert S. Lovett, chairman of the
Union Pacific, declared that the own
ers of successful lines will strongly
object to taking OH the burden of the
weak roads except at their actual value
He added:
Instead of having the Interstate
Commerce Commission evolve a plan
for forcing all the railroads of the
United States into arbitrarily formed
groups, it would be far better for the
law to provide for voluntary consoli-
dations from time to time. subject in
each case to approval by the commits
sion after full public hearing. Then
the carriers could enter into negotia-
tions with better prospects of agree
ing upon terms, unembarrassed by a
prior finding of the commission that
they must consolidate.
Il have never faltered in the belief
that competition of service and facili-
ties is the best railroad policy for the
public, and therefore I am not in
favor of the consolidation of large
competitive systems. Ny own judg-
ment is that if all the railroads shall
be consolidated into small number of
large systems, as contemplated by the
act, to compete with each other, it will
be but few years thereafter until
we have strong systems and weak
systems again, just as now, differing
only perhaps in the size of the sys.
TENS, which in case of failure will
only add to the magnitude of the disas-
terv