The New York herald., 1921-09-30
HE'S FOR COMPETITION
L0ree Calls Plan a Puzzle
That Would Be Hard to
Put Into Action.
RIGHT IDEA-UNDERWOOD
Head of Erie, Though. Does
Not Believe SO Many Sys-
TENS Are Needed.

Announcement of the Interstate
Commerce Commissions tentative
clan for the consolidation of the rail
roads of the United States into nine
Teen large systems evoked rather
widely varying comment from local
railroad executives.
There was general agreement, how
ever. that many practical difficulties
must be overcome to carry out the
consolidation of the more strongly in
.renched carriers with those Of lesser
earning power, and that the tentative
proposals will undergo many revisions
before final grouping is decided upon
md the merger negotiations get under
way.
With reference to the merging of
stronger with weaker lines, Judge
Robert s. Lovett, chairman Of the
Union Pacific system, said:
THE owners of the successful lines
certainly will object to taking on the
Burden Of the failures except at their
actual value, and the owners of the
unsuccessful lines. finding support in
the policy Of the Government to sell
their lines, will be stimulated in the
price they ask. And the owners Of the
successful lines will resist to the last
resort the basis of valuation which the
Interstate Commerce Commissions bu-
reau of valuation has adopted. namely.
the supposed cost OF reproduction of the
properties. less depreciation.
Sees Virtue in Compe tition.
II have never faltered in the belief
that competition in service and farili
ties is the best railroad policy for the
public, and therefore I am not i'm favor
OF the consolidation of the large COM
reting systems. Indeed, my own judg-
Inent Is that If all the railroads shall
lie consolidated into a small number Of
large systems. as contemplated by the
act, to compete with each other, 1t will
be but few years thereafter until we
have Strong systems and weak sys-
TENS again. just as now, differing only
perhaps in the size of the systems,
which In case of failure will only add to
the magnitude Of the disaster. Weak
lines and strong lines are an incident to
and an inevitable result of private own
crship and competition. and we may as
well choose first as last between pri-
vate ownership with strong and weak
lines and other incidents of competition
or Government ownership with all that
attends it,"
The foregoing views of Judge Lovett
were outlined more fully in an article
on consultations written by him for the
August number OF the Worlds Work.
II have not yet had an opportunity to
go over the plan carefully" said l.. F.
Loree, president OF the Delaware and
Hudson and chairman of the Kansas
City Railroads. but 1t takes me back to
my early childhood when / used 20
smuse myself with the 13-14-15 puzzle.
lily recollection is that the combinations
possible in that puzzle ran into the high
millions. OF course. with this new It.
1919 puzzle the combinations will be
somewhat greater
Feasible. Says Underwood.
The plan is a step in the right d.
rection and is, / think entirely feasible"
said +. d. Underwood, president of the
Erie Railroad, which under the plan
would be linked up with the Delaware.
Iaclawanna and Western and the Wa
bash railroads.
''I cannot see the need for as many
as nineteen systems Six would be just
rs good" continued Mr.. Underwood.
''The larger number is put forward with
the idea of preserving competition. but
competition was practically eliminated
with the inauguration Of Governmental
regulation of rates. and also many ad-
ministrative matters. You pay the same
rate to Chicago whether you travel by
the Pennsylvania or the Central. The
only competition remaining is that OF
service, and l cannot see that that would
be endangered by the creation of larger
units.
II do not know that there is much
to say specifically regarding the plan
proposed by the commission. II Is in
too embryonic a stage to deserve much
comment now, but ultimately feel that
much good will come of it.
''The task of arranging the groupings
is after all, like carving D. turkey. You
may be poor carver and make fail
ure Of II or you may do 1t well. The
essential requirement in the present
case is that each should get a little
white meat IT Is too early to say
whether the commissions plan provides
for that.
II do not agree with those who hold
that additional legislation Is called for
to make consultations feasible. AS
long as the rights of property exist,
do not sec that the mergers could be
made compulsory. Afte the groupings
are determined. 1t will be up to the
lines to get together. This will not
always be easy. but the weaker roads
Will have to make some concessions, and
the stronger roads Will have to give
value In accordance with the service
which the acquired lines will render as
feeders and connecting lines.
"Consolidations should be TO the adj
vantage of the public. and or large
number of investors. who put money into
non-paying properties and who. through
mergers, will at last receive some re-
turn"
WOMEN CALL ON VETERANS.