Evening star., 1926-03-03

| NCollIIIieu lIOHi r lFSC 1dSO.t
age railroad consolidation through
legislation.
First opinion was that the Van
SWeringen interests, which sponsored
the Nickel Plate project, would take
advantage of the loophole in the de-
clslon permitting them to reopen the
case, and that meanwhile other con-
solldation plans would await the
Commissions verdict OH that appeal
What effect the decision will have on
pending consolidation legislation in
congress, other than to focus atten-
ton upon it, remains to be seen.
The commissions ruling, which
found seven members opposed to the
merger, one for it and three not vot-
ing, approved generally of the trans
portation phase of the proposal, but
objected to the financial phases of it.
The merger would have linked up the
New York, Chicago and st. Louis
| Railroad Co, or new Nickel Plate,
with the Chesapeake and Ohio, Hook
ing Valley, Erie and Pere Marquette
railroads. 1t would have joined more
than 5000 miles of track in ten States
and Canada, with a property value
exceeding $1,000, 900
Question of Coercion.
The decision held that phases Of the
| proposed leases Of the various roads
dealing with the rights of non-assent-
ing stockholders of the lines other
! than the old Nickel Plate appeared
! TO be designed to "Coerce all the
stockholders into exchanging their
stock for that of the new company
upon the terms proposed" 1t CON
tended that the options given these
| stockholders "are largely illusory."
The commission declined to take re-
sponsibility for establishing "a just
and reasonable ratio of stock ex-
change" to enable completion of the
consolidation, declaring that burden
rested upon the applicants. I'VE
should not be expected" the decision
continued, ito arbitrate to the fraC-
tion OF a share just what each stock
holder should receive" and it pointed
I out that the law would probably be-
come unworllable if the commission
sought to render such decisions in
this and subsequent cases.
/ The commission declared It could
! not escape the conclusion that the
plan was arranged with the intention
of keeping control in the hands of it's
proponents even though their interest
is a minority one in fact. Such an ar
rangement is not in accord with sound
railroad practice"
Regarding the Intervention of the
American Short Line Railroad AS
sOciation and certain individual car
| rierS for proper recognition of short
| lines connecting with those of the
proposed merger units, in event the
, project was approved. the commission
! said: THE Importance of the problem
of the short lines in their relation to
. IL ,-.r1Y-
emphasized.
Weak Lines Left Out.
"One of the chief criticisms of the
unifications which have been proposed
or suggested" it continued has been
/ that certain of them do not embrace
related weak lines, although the union
of the weak with the strong lines is
| one of the ends which Congress ap-
| parently had most definitely in mind.
when these unifcations are being
considered the problem of the short
| lines whose property in the public in
terest should he included in the sys-
TENS proposed cannot be overlooked
if it is possible to include them upon
reasonable terms"
Little or no consideration was
given to the short line connections of
the lessor companies, i found in the
preparation of the Nickel Plate plan
Some of the weaker units of the Erie
it cited, would be left out of the unfit
cations.
Chairman Eastman and Commits
sioner Aitchison issued separate
opinions, in which they concurred
with the majority but differed with
the conclusions on certain phases of
the project Commissioners Camp
bell and McManamy joined Chair
man Eastman in his views Com
missioners Hall. Woodlock and Tay-
lor did not participate in the case,
while the others in the majority re-
Trained from handing down separate
opinions.
Right to Fix Terms Upheld.
Commissioner Lewis, in a dis
senting opinion, denied the Van
Sweringen petition, and declared the
commission was competent TO "aD-
praise and to indicate what it would
consider to be just and reasonable
terms and conditions even as be-
tween various groups of security
holders"
1T would certainly be within the
scope of it's proper activity" he as
serted. "to indicate what would bring
the proposal, found to be in the pub
lie interest Gas far as transportation
was concerned) into line for it's ap-
proval.
"The presumption is created that
if the terms and conditions and
financial structure are revised to a
satisfactory state, not indicated, the
proposed consolidation will be ap
proved. There are, however, left a
number of issues which were raised
and are not passed on. Would they
rise to such proportions as to block
approval?
among these is the allegation Of a
community OF interests between the
Van Sweringens and the New York
Central and various banking houses
and trust companies, Il line of attack
vigorously prosecuted for months
through the Cleveland Union Ter
minal and many other companies
touched not only by the Van Swer
ingens personally, but also by the
VaneSs Co.
The record on this one issue is
very ample and it seems to me we
should make a clearCut finding on this
vital matter Inasmuch as it is found
that the proposed new system would
be q worthy competitor of the New
York Central as well as of the Penn
sylvania and Baltimore and Ohio sys-
TENS, there is an implied failure to
connect it up with the New York Cen
tral interest, but this is not clearly
or affirmatively found"
Proponents of the unitiCatiOn, Com
missioner Lewis declared, vii be free
to renew their application for q merg-
er after "such revision as they may
think meets the objections on which