The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1923-06-06
CONSIDERING RAIL-
CONSOLIDATION

WASHINGTON, June 5.-nne of
the most important tasks ever under
taken by the interstate commerce
commission is now receiving the at
tention of that body. This has in
view the formulation of a plan for
consolidation of the railroads into a
relatively few large competitive sys-
TENS. Economy of operation and
greater efficiency in handling freight
and passengers is the end in view.
This project has been taken up in
pursuance of the transportation act
passed by a Republican congress in
1920. That act provides for either a
compulsory or a voluntary consoiid-
alton of railroad properties. Para
graph 4 of section 407 of the act re-
quires the commission to prepare a
plan for consolidation of railway
properties into a limited number of
systems, preserving competition as
fully as possible and also preserving
existing routes and channels of trade
and commerce. Subject to those re-
quirements, systems are to be so ar
ranged that cost of transportation
over competitive systems can employ
uniform rates in movement of COM
p~etitive traffic and, presumably, un-
der efficient management, substan-
TALLY the same rate of return earned.
| Whnr1 tho Or1oYoIc ION hos onronH
upon a tentative plan, it is required
to conduct hearings for the purpose
Il of receiving the opinions Of railway
officials and representatives of states
After the hearings are at an end, the
commission is given power to adopt a
plan for consolidation. Hearings are
now in progress.
The voluntary plan for consolida-
ton provides that any two or more
, carriers by railroad may consolidate
F subject to the general condition:
|, above mentioned for a compulsory
+ system, and with the further provisC
! that the bonds and capital stock, a
par, of the consolidated systems shall
not exceed the value of the consolid
ated properties as determined by tn,
+ interstate commerce commission
This is to prevent issuance of watereC
n stock. Consultations by voluntar!
, act of railroad corporations are sub
ject 90 approval after hearing.
It seem likely that most consolida
tons that take place will be undo
the voluntary provisions of the law
The tendency in past years has bee
to consolidate railroads, the stronI
roads buying up the property of tn
weaker. For a great many year
there was a strong popular prelude
, against those consultations, proba
!, bly, for the reason that in some in
stances the consultations woul
: eliminate rather than stimulate com
petition. Under the plan which tn
interstate commerce commission ha
" tentatively formulated a few larg
E systems will be created ~connectin
the chief transportation centers an
absorbing the smaller lines into tn
larger systems. The plan is of sue
> a nature that a shipper will in mo:
instances have a choice between tw
competitive systems in determinin
the line over which his goods shall b
n transported.
s The chief advantage of the COZ
8 solidation plan would be that the shiI
5 per IN most instances would deal wit
8 only one railroad company, and ths
3 company, having a complete throue
s system, would so arrange it's servit
& as to carry the goods at the lea
3 possible cost ind the greatest poss
4 bic expedition. There would be 1
8 opportunity for one road to shirk r
& sponsibility for inefficiency, as Il
& whole length of the service in a mi
E jority of instances would be undI
s one management. There would
8 some saving in overhead costs, b
this would probably be of relative
g minor Importance.
With the general principle Of co
& solidation Of railroad systems, the
q is very general accord; there Is muI
& difficulty, however, in working o
70 the details