Evening star., 1924-12-06
BABSON DISCUSSES
BIG RAIL MERGERS
Warns Investors Not 10 ExSt9
pect Too Much of Weak
Roads for Long Time.
BY ROGER w. BABsON.
Special Dispatch to The Star.

| By ROGER w. BABsON.
| Special Dispatch to The Star
| WELLESLEY HILLS, Mass. Deccm-
| Der 6.--The air is full of prospective
railroad mergers. The old, inefficient
and disastrous method Of operating
! piece-meal short lines is over. The
| Interstate Commerce Commission is
| on record that the railroads of the
| country shall be grouped in certain p
com mbinations TO the. end that our
| commerce be handled in sane and
| efficient manner.
| One of the first mergers that has
come to the public eye and which is
still in process is that of the Nickel
| Plate. Another one which is in proc
ess-and. by the way. promises to be
| one of the largest -i is the Missouri
/ Pacific. combination. This latter plan
| is one of the most ambitious schemes
| trate the method followed and the
| advantages gained by this whoi"
| merger program.
Nucleus OF Big system.
The present Missouri Pacific is to
be the nucleus in system No. IL pro
| posed by the Interstate CONNER"
| Commission. When complete, this
| consolidated system, as planned, Will
probably extend from Chicago TO ST.
! Louis and Kansas City. From these
| points the system will continue to the
| Pacific Coast, although the western
| extension from Salt Lake City VIII
be over the lines of the Western Pa
cific, which, though not controlled
| by Missouri Pacific, has a community
Of interest with the latter. each own
| ing one-hslf of the common stock OF
the Denver & Rio Grande, a recently
| reorganized road. From st. Louis and
I IL 90 49,,
will also extend southwark to the
| Gulf Of Mexico.
| The total mileage Of the combina-
| tion is expected to be around 1900
miles, greater than any existing syS-
| tenn Whether or not all the contem-
| plated acquisitions of the merger Will
finally go through remains to be
seen. Already application has been
made for control of New Orleans,
Texas and Mexico and its subsidiary.
International Great Northern. As it
already controls Texas and Pacific, il
is a foregone conclusion that the
Missouri Pacific will have a strong
ho:d on the great empire State of
| Texas.
Great Expansion Seen.
Those who have not investigated
little realize how this great State,
and, for that matter. the whole South
west. is developing. The next ten
years will undoubtedly show a Won.
derful expansion, and this the Mis-
souri, Pacific. in the person Of its
farsighted officers. realizes full well.
Among the States covered by the
consolidated roads as outlined By
system 19 are Illinois, Missouri, Kan
sas, Colorado, Arkansas, Oklahoma,
Louisiana and Texas.
Other roads included in system "a
are Louisiana and Arkansas, Chicago
and Eastern Illinois and Kansas City
Southern. The first, namely, Louisi-
ana and Arkansas, is a relatively
short line extending from Hope. Ark,
| to Alexandria and Jonesville, La.
with short branch line touching
| Shreveport.
| The Chicago and Eastern Illinois
| would afford an entrance to Chicago.
| this line running across the State OF
| Illinois and meeting the Missouri
Pacific at ST. Louis and Thebes.
| c. & a. Available.
While the Chicago and Eastern hi
| nos is included in consolidation pla:
| No. 19 by the Interstate Commerce
| Commission as a road which would
| give the Missouri Pacific sn-entrance
to Chicago, this is not necessarily
| the only system which might be con
sidered for this purpose. The Chi
CaEo and Alton, at present in re
| ceivership, might serve the same pur-
| pose. This road affords practically
a strafght-line route from St. Louis
I to Chicago and also connects with
| Kansas City. meeting the Kansas City
| Southern there.
! Students of the transportation situ-
| alton are now awaking to the posi-
| bilities to be obtained from logical
| consultations and mergers, of which
/ the Missouri Pacific and Nickel Plate
| plans are fore-unners of others to be
| forthcoming in the next few years.
Long Waits Possible.
Investors buying sound rail issues
| will benefit in the long run, but the
| speculator who tries. TO make a good
| profit by buying some weak road that
| is to be helped by proposed merger
may find himself waiting for a long
! time.
! Once the mergers are in effect the
| railroads will gain in, lower operat-
| ing costs and by other economies
| The investor will be in a stronger
| position and general busipess-now
| reflected on the Babsonchart as .
per cent above normal-will enjoy
| the invigorating effect of lower
| transportation costs.