Evening star., 1923-07-01
BRITISH RAIL MERCER
MAY SHOW WAY TO u. S.
Consolidation, Which Becomes Effective
Today, Has Many Points Bearing on
This Country's Problems.

of the roads into four groups This
| left 80 properties, many of them
light roads and electrically operated,
| some of them in and about London.
| The country, including England,
! Scotland and Wales, was divided up
| into four areas. with railroad
| group in each area. These groups
have been named: The Southern
| Railway; the Great Western; the
London, Midland and Scottish Rail-
| way, and the London and Northeast
| ern Railway.
Tramc still Competitive.
The four new groups. it is said, are
very far. from having an actual
| monopoly of the territories they
serve. The bulk of the traffic, 1t is
said. 1t still competitive. The plan In
this country. a now advanced, is to
have from twenty to thirty-fve great
competitive systems.
In the United States the great
problem of merging the railroads
will be that1of finance. The sugges-
tion has been made that IL the
mergers are to be compulsory the
government will have to condemn
the railroad properties. issuing
short-time securities for them, and
then turn them over to newly organ
lied private corporations, and that
the securities Of the new corpora
tions will be used to pay for the
properties. Such a plan presents
many difficulties, but 1t is predicted
would be far easier of consummation
than bringing about an agreement
among the owners of many railroads
as to the value they should receive
for the properties in the proposed
mergers.
In Great Britain the problem of
amalgamation has been largely one
of finance also. The plan adopted
was to figure on the railroad values
of 1913, the last normal year, and in
the exchange of securities-giving
! the owners of the old. the new Sc
curities-an effort was made to see
| that the owners would get the same
return on their investment as before.
More Dimcult in United States.
! The problem of consolidation in
this country is admittedly much
larger and more difficult than in
Great Britain. Under the Cummins-
Esch transportation act. returning
the roads to private operation after
the war. provision was made for a
study of consolidation plans by the
Interstate Commerce Commission,
and the publications of the commits
sion's suggestions for such CONSOLE
dations. The commission, acting un-
der this authority. had Prof. William
2. Ripley of Harvard University pre-
pare a plan. The Ripley plan pro-
vided for twenty-one systems. The
commission modified this plan, SO
that nineteen systems were provided,
but in the main stuck to Prof. Rip
ley's suggestions. This tentative
plan was made public in August, 1921.
Since then the commission has been
holding hearings in Washington and
in all parts of the country on the
proposed mergers. 1t still Is to have
Hearings in New England this sum-
mer. But it is a fair supposition that
the commission will have ts final
pan r.sdy for publication by the
time Congress meets in December.
Left to the Railroads.
Under the transportation act that
lis as far as the commission can GO.
If the roads care to avail themselves
of the consolidation plans advanced
by the commission they may do so,
but there is nothing in law compell-
ing them TO do so. AS a matter of
fact, at the hearings the railroads
have advanced many arguments
against the consultations proposed
by the commission and have indicat-
ed clearly they will not merge unless
they are forced to do so.
In the Cummins bill as II originally
was introduced and passed by the
Senate provision was made for COM
pulsory consolidation of the roads
into from twenty to thirty-fve sys-
TENS But in conference with the
House the compulsory feature was
dropped The Cummins bill also pro-
vided for the creation of a transpor-
itation board to prepare plans for the
consultations and went into great
detail regarding the mergers. But
those provisions went out also In
conference.
Senator Cummins, 1t is known. be-
lieves that the provisions of his orig
inal bill will meet very largely the
ideas of the administration. and the
new measure designed to force merg-
ers probably, will resemble 1t to q
marked extent.