The Washington times., 1921-01-16

press companies which was recent
merce Commission on the ground tn
consolidation Of the companies woul
In uniting the separate railroads
into the big Systems the law makes a
few conditions which the commission
must respect before adopting a plan
for consolidation. The law declares
that competition must be preserved AS
fully as possible and competition is
regarded as the natural enemy Of
monopoly.
Present channels OF trade must also
be maintained wherever possible. Sub
ject to these requirements the new
systems must be so arranged that the
cost OF transportation between them
as competitors and as related to the
value OF their properties will be SO
nearly alike as to permit the estab-
lishment Of uniform rates on com
petitive traffic, from which the rail-
roads would receive substantially the
same rate OF return on the value Of
their properties.
BONDS Of CORPORATION.
The bonds at par of the corporation
which becomes the owner of the con-
solidated railroad properties, together
with the outstanding capital stock at
par OF tnt COTpOTdbiOHs may uoi VNSCCu
the value placed upon the consolidated
properties by the Interstate Commerce
Commission. The value of the rail-
road properties sought to be CONSOLE
dated must be ascertained by the com-
mission under section lea of the trans
portation act as soon as an applica-
ton for consoli dation Is filed.
The Interstate Commerce act, as
amended. authorized any number Of
railroads to combine into one COM
pany provided that the proposed con-
solidation is approved by the COM
mission as in harmony with any COM
plete plan for consolidation which
includes the entire United States.
The railroads efYecting such a con-
solidation, approved by the commits
sion after public hearing, are relieved
from the operations of the antitrust
laws to the extent necessary to per-
init them to take advantage OF these
provisions of the Interstate Com
merce act as amended and the APP
propriate order of the commission.
PROF. RIPLEY AT WORK.
The commission has placed the re-
sponsibfity for making study Of
the properties and condition Of the
railroads prior to consolidation lpon
Prof. william z. Ripley, OF Harvard
University, an expert in railroad mat
tiers. Prof. Ripley announced on
Thursday that he will make a report
to the commission on February l..
recommending . general plan for con
solidating the railroads of the coun-
try. 1T was previously announced
that the report would Re submitted
January 1. but ii was postponed.
The number Of systems proposed
by Prof. Ripley probably will not be
more than thirty, and the railroads
will be combined into such groups as
will answer the greatest transpor-
tation needs of the country after TAX
ing into account natural barriers. such
as mountains and rivers, which inter-
fere with transportation, and climatic
conditions which slow down traffic on
some roads during the winter months.
Following the submittai Of the re-
port by Prof. Ripley. the commission
will study its recomme ndations and
adopt a plan tentative to public hear
ings here. at which objections may be
fled. Subsequently a general plan
for consolidation finally will be ap-
proved and recommended by the COM
mission to the railroads. Although 1t
Is not compulsory upon any of them
to enter into any such merger.
WAKEFIELD WANTS TINE.
Sufficient time Is a prime necessity
In the work OF grouping the railroads
into large competitive systems, ac-
cording, to S. Davies Warfeld, presi-
dent OF the National Association of
Owners of Railroad Securities
The commission, l am informed"
said Mr.. Warfield recently. will pre-
sent suggestions shortly in respect to
consultations. The railroads have
ttIa ~
structive legislation which requires
time for the readjustment of their
affairs and put them in proper con-
dition. To disturb too quickly or
prematurely what has thus far been
accomplished towards stabilizing. to
the extent that they have been
stabilized. the credit and securities
OF the railroads, would be unfortun-
ate.
The Transformation act is definite
In result. IL will require some time
for Establishments by the commission
and before the railroads will be able
to ascertain definitely their earning
power and their performances In the
interest of commerce and their
owners.
Every owner of a security Of n
railroad will know what the rail-
road that issued IT can do. Rates
are made on railroad property in
the aggregate and each railroad will
make only what efficiency in man
agement and operation will entitle
IT. IL may earn per cent or up
to or O per cent on it's individual
property value as one OF group
out of rates adjusted to yield the
required percentage return on the
value OF the group. When this Is
ascertaiped by those who own the
securities of the roads the perform
ance OF each road will be known.
While preparation may be made In
respect to consultations so much
is involved that hope the time
will first be given to study results
to be obtained under existing con-
ditions."
MIR. CLARK's STATEMENT.
The policy OF consolidation framed
In the transportation Act Will not
permit consolidation in n haphazard
way. bun must progress under a pre-
determined, comprehensive plan, &C
cording to a statement of Edgar II.
CIark che Of tho vntAYQt At q