The midland journal. (Rising Sun, Md.) 1885-1947, 1926-03-12
NEWS REVIEW OF
CURRENT | h EVENTS
Rejection. of Nickel Plate
Merger Is Factor in Col
lapse Of Stock Market.
BY EDWARD w. PIckARD

BY EDWARD w. PlckARD
RKBRGER of the Nickel Plate,
X4Chesapeake & Ohio, Hooking
Valley, Pere Marquette and Erie rail-
roads, as proposed by the Van Swer-
ingen brothers Of Cleveland, was dis
approved last week by the interstate
commerce commission, and those So
called wizards Of the railway world
will have to devise new plan If they
wish to try again to bring about the
giant combination. Their work on
the rejected scheme Is said to, have
cost them between two and three mil
lion dollars. II it had gone through
according to those who opposed it,
the brothers would have pocketed a
profit Of about $1O0,000,O00.
The commission based its disallow-
ance of the merger on a disapproyal
Of the financial, structure of the pro-
posed new Nickel Plate company, hold
ing that the terms and conditions of
the proposed acquisition Of control by
the new company of the other COM
panies were unjust and unreasonable.
The commission held that the merger
would be in the public interest from
the standpoint Of providing efficient
transportation, leaving the inference
that it would have been approved had
the financial provisions been above
criticism
1--WE cannot 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 minority one in
fact,' the commission said. "Such an
arrangement is not in accord with
sound railroad practice. The Nickel
Plate is THE only railroad of impor-
lance in the country in which pre-
ferred stockholders do not have the
right to vote, and now it is proposed
to extend this feature to over $685.
100000 of new stock of a company
comparable. with the New York Cen
trail, Pennsylvania and Baltimore &
Ohio" [
TN, FINANCIAL circles the immedi-
i ate result of the Nickel Plate rul-
ing was the biggest days trading in
the history Of Wall street, with per-
pendicular decline in prices that in
yolved practically all stocks and in
one extreme case reached so points.
The stock market had been in state
of comparative collapse for several
days, anyhow, and this was stagger-
ing blow to the. bulls. Trading
eclipsed every former record, which
had stood for. years1 The total for the
day was 3,S6460O shares. The size of
the market may be judged in COM
parison with the Northern Pacific
panic market on May 8, 1901. On that
day 3,072 .305.- shares were traded in.
Stocks had been technically weak
ened in seven previous days of drastic
decline; the confidence of shareholders
In the speculative shares had been
shaken by loss of from FIVE to fifty
points or more In their holdings. Many
margin traders had reached the end
of their tether.
The excuses of the wild upward
speculation in many shares which had
continued over long series of months
since the election Of President Cool
idge were being corrected and brought
down to wholesome level by the mar
ket itself. Stocks were engaged in seek
ing their true market value, based on
earnings rather than on merger pros
poets, or stock dividends, which this
year and last have famed. the specu-
lative flames.
The collapse of the stock market,
which was accompanied by severe re-
actions In the grain and other specu-
lative commodity markets, was de-
scribed by experts as mainly specu-
iative orgy of powerful groups and
professional operators. The general
public was not caught to any great ex-
tent. -
DY CLOSE votes the house military
. affairs committee junked all the
pending army air service legislation,
this including the bills for separate
air corps, for a unified air service, for
the creation of a department of ma
tional defense and for the adoption of