The Omaha morning bee. [volume] (Omaha [Neb.]) 1922-1927, 1923-06-25
U.S.. Government
Planning toForce
Railway Mergers
Before Next Con
gress to Garry Threat of
Federal Ownership as
Alternative.
BY international News Service.

Washington, June 24.-Backed by
every agency at the command Of the
Harding administration, the United
States government will seek to force
the consolidation of all American rail
roads into a few great transconti-
mental system by enactment of COM
pulsory legislation in the next con-
gress, International News Service
learned.
A tentative draft Of the govern
ment's plan calls for creation of from
Is to % gigantic nationwide systems,
riss-crossing the United States from
the Atlantic to the Pacific and from
Canada to the Mexican border. They
will replace the 500 carriers now in
operation.
L. s. Ownership Alternative.
The government will write a threat
of federal ownership into the proposed
legislation as an alternative to volun-
tary consolidation in accord with the
administration unification plan. If
the roads refuse, the government
plans to effect the consultations
through the medium Of temporary
federal ownership, but with a provi-
sion for return of the unified sys-
TENS to private control later by sale
OF railroad bonds to the general pub
lie. If the whole merger plan fails.
permanent government ownership Is
held out as the only remedy.
These details of the governments
plan were revealed by Senator Albert
B. Cummins, republican of Iowa.
chairman of the senate interstate
commerce committee and coauthor of
the existing transportation act.
Three Successive Steps.
The method OF compulsory consolida.
ton has three successive steps, Cum.
minis revealed. and he declared 1t
a legality that would never be ques-
toned by any court of law"
These are:
/. Creation of great government
railroad corporations similar in char
acter to the emergency fleet corpora
ton.
2. Federal condemnation of exist.
ing railroad corporations and acquisi-
ton OF the physical properties by
forced sale.
3. Transfer of the physical proper
ties to the government corporations,
which would give the government full
power TO merge whatever roads 1t
MIA ha a fat1 l.
turned to private control by sale of
bonds from the government corpora.
tions.
The administration will make every
effort in the next congress to enact
compulsory consolidation legislation,
Senator Cummins said. Without it.
we are helpless TO carry out the ad-
ministration plan Of consolidating the
roads.
Must Have Transportation.
III we should fall in our consolida-
ton plan entirely, we will have per-
manent government ownership Of at
least 100000 miles of railroads. These
will be the weaker roads and while
this Is unthinkable. the nation must
have adequate transportation. even II
the government must enter the rail
road game, buy and operate a mum.
Der OF carriers
This money would be needed only
temporarily. as the roads would later
be returned to private control in their
consolidated form by selling the Sc
curities on the market.
THE question of values in acqulr-
ing the roads would be settled solely
by the courts. There would be just
enough great systems to guarantee
that each will earn the same rate OF
fair return under normal conditions.
1t will be easy 10 divide all the roads
into from IS to % great systems. so
this will result"
Copyright, 1929