Evening star., 1923-12-08
MEANS TO COMBINE
RAILROADS URGED.
Hoover. in Report, Advises
Early Consolidation as
CONTEMPLATED in Law.

Measures to expedite consolida tlon
of railroads. as contemplated In the
transportation act, Will be advocated
by Secretary OF Commerce Hoover In
his forthcoming annual report,
The Commerce Secretary feels that
obstacles encountered In consolida-
ton efforts conducted thus far would
be solved in e. great measure "!f tho
consolidated systems were allowed
federal Incorporation. and II. after a
,apse Of somo appropriate period for
voluntary action the Interstate Com
merce Commission were given author
ity to create definite organization
committees for each system. inCIud-
Ing representation from the public
and from the component roads
Extracts from the report made pub
lie today declare commercial and in
dustrial developments in the last two
years emphasize the "desiTability OF
early progress" toward consolidation
IF We are to have a transportation
system adequate to the necessities ot
the country and containing in itself
the strength for annual Increase
Calls Move Important.
The urgent Importance Of the
early consummatfon of consolidat ton
warrants consideration OF methods
to expedite it. Under the present
provisions for wholly voluntary ac-
ton subject to the Interstate Com
| merce Commission, many consolida-
tions are likely to be long delayed.
The difficulties of negotiation be-
tween the members of the groups
that will be established by the Inter
state Commerce Commission; the
complications arising from varying
priorities of securities affecting the
determination of terms of purchase
by one railway line OF the property
of another; the unwillingness OF
some lines to acquire or to sell
others: the questions of individual
ity; the difficulties OF establishing by
negotiation the relative value Of one
property to another; the necessity
Of holding capitalization within the
limits of the actual property "alues :
the complexities and conflicts of
state regulations and laws-all these
problems would find Il great measure
of solution if the consolidated $yS-
TENS were allowed federal incorpori-
ton and if. after a lapse of some
appropriate period for voluntary &C
tlon, the Interstate Commerce Con-
mission Were given authority 20
create definite organization commit
tees for each system including rep
resentation from the public and from
the component roads.
Only to Perfect Plan.
1T should be the duty of such COM
mitteoS to develop and perfect n plan
Of consolidation either through the
exchange of securities of the CONSOLE
dated systems directly with the Sc
curlty holders of the component roads
or by some other method | believe
that under such auspices the security
holders would be willing voluntarily
to make such an exchange. Ii a mi
nority should refuse, it would be en-
tirely feasible To invoke condemna-
tiOn ard purchase of their securities
for the consolidated systems at an
established fair value. Such a meth
Cd would permit the determination of
the relative value cf the different
railways considering both the ply
steal properties and the often lower
total of their securities. and due ac-
count could he taken Of future as
well as present conditions.