Evening star., 1926-03-04
RAIL MERGER PLAN
MAY Be REVIVED
Van Sweringens to Decide
Future Action Today-Rul-
ing Considered Helpful.
By the Associated Press.

BY the Associated Press.
NEW YORK, March 4. - Despite
The staggering blow dealt to the am
bilious railroad merger plans of the
Van Sweringens by the Interstate
Commerce Commission rejection OF
The proposed Nickel Plate combina
tion, It's financial sponsors have re
affirmed their belief that a new finan.
cia1 structure for the consolidation
would replace the one wrecked by the
unexpected ruling of the commission.
Assurances were given at the same
time that the adverse decision against
the Nickel Plate would not retard
other merger projects now pending.
among which are l.. +. Loree's pro-
posed fifth Eastern trunk line to be
built around the Delaware and Hud-
son and his new Southwestern sys-
tenn embracing the Kansas City
Southern, st. ouis-Southwestern and
katy" railroads: the contemplated
combination of the Frisco and Rock
Island lines and other less advanced
groupings. such as the Atlantic Coast
Line and Louisville and Nashville
systems in the South. Tentative
plans for enlarging most of the great
Eastern railroads, however, will be
thrown into the discard until a def.
mite course of action on the Nickel
FIate is determined.
Merger Efforts Costly.
A second effort to rearrange the
Nickel Plate financial plan. it was
estimated, would cost the Van Swer-
tngens at least S750,000, but bankers
Indicated that with the commission s
views now clarified, such an expendi-
fure might be justified to save the
investment OF between So, 900 900 and
100000 on the case, and to realize
their dream OF a vast unified railroad
system.
Bankers here are eagerly awaiting
decision from the Van Sweringen' q.
who are due to discuss the matter at
a conference with their legal advisers
today, but indicated that their course
Of action might not be revealed for
another week
z. n. Brown, chairman OF the Pere
Marquette Railway, one of the par
ticipating roads in the merger. said he
expected the Nickel Plate interests 10
work out a new plan to meet the re-
quirements laid down by the Inter
state Commerce Commission. The
pere Marquette directors, however, in
1icated that they no longer considered
the road bound by the Nickel Plate
lea sing agreement when they voted to
increase in dividends. Under the orig
inal plan all constituent roads agreed
70 make no dividend changes until the
merger had finally been passed upon.
Held Encouraging Sign.
Speyer & Co, financial hackers of
the proposed Frisco Rock Island mer
ger, asserted that the disappointment
caused by the Nickel Plate decision
and the resultant declines in some
stocks should not he allowed TO Oh
ecure the longer view in so far as
this decision might be an influence on
the permanent and future value OF
railroad investments.
"It is quite clear" said the bankers
statement, that the members of the
Interstate Commerce Commission have
maed very thorough and conscien-
tious study of all questions involved
and have arrived at their decision un-
Influenced by political or outside con-
siderations. This in itself is very en-
oouraging. Furthermore. the commits
sion decides in favor of combining
these railroad properties from trans
Dortation point Of view. which is
great step in advance. If one cOnsid
ers what the opinion OF similar bodies
would have been 10 or 20 years ago.
Main Reason for Denial.
THE main reason that the Inter
state Commerce Commission gives for
disappearing this exchange OF securi-
lies on the terms proposed is the fact
that a large body of owners would
practically have been deprived Of their
right to vote the shares they own, and
that the control Of such a large sys-
tenn ought not to be vested in q COM
narrative few without an adequate
cash investment on their part.
THE decision, therefore, not only
Will tend to protect minority interests
in this and other contemplated mer-
gers. but il also shows that the com
mission does not favor concentration
Il control of large systems, or mo-
nopoly of transportation, in the hands
of few. However able or honest
hese may be, experience has shown
hat too much power or absolute con-
'rol by a few may lead to abuse in
he long run. Such abuse, history has
shown. In turn may lead to violent re-
ections and even revolutions, not only
IN the political but also in the finan-
riml field"