Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-04-06
MEN AND MONEY
By III. s. Rukeyser.
Copyright. 1879

| With the advance Of Spring, roman
tic railroad matchmakers naturally
turn their thoughts to further we'd
dings in the transportation field.
Society has long felt an interest in
developing the institution of marriage
among individuals, but IL only recently
videned the field to include railroads.
| As d matter Of fact, until the trans
nortation act Of 1920 was passed, the
legality OF railroad mergers was sefi-
ously questioned. But in 1S20 Con
gress. with q feminine bent OF NINA,
reversed itself and removed the ban
on wedding bells for the carriers
which had previously been inherent
in the antitrust laws.
And now, when the Interstate Com
MERGE Commission passes on the re-
quest Of Arthur Curtiss James and
his associates to unity the Great
Northern. the Northern Pacific, the
Burlington, and the Spokane, as It
will before long. it is possible that II
will give it's blessings TO a match
which earlier in the century was held
by the Supreme Court to be contrary
to public policy. In essence, the
James plan. which, under new condl-
tons. is likely to be approved, Is the
same as the program of the late James
J. HILL which. earlier in the century,
was rejected in the famous Northern
Securities case.
Ahead of Their Time.
Those pioneer railroad natchmakers
Hill and the late T.. I'll. Hartman
were ahead Of their time, but their
spiritual successors, like Mr.. James
and the Van Sweringen brothers OF
Cleveland seem destined to accom-
plish what they failed to arrange.
In spite of the failure of the Sixty
ninth Congress to act on the proposed
amendments to clarity the clause au-
thorizing railroad mergers, the whole
movement has been quickened by re-
cent developments. In the recent Los
Angeles and Salt Lake Railroad case
the Supreme Court upheld the right
of the Interstate Commerce Commits
sion to make valuations on railroad
properties for purposes of rate making
and recapture of earnings In excess
Of per cent on property value. Ana
in the decision on the st. Louis q
O'F'allon Railway Co. case late last
week, the /. c. c. set up the principle
that it would base it's valuation on
1914 prices, ignoring the subsequent
general rise in the price level. If the
courts uphold this decision, to which
minority on the commission strongly
objected, Ii will have an important
bearing on the railroad merger move
ment, just as the Supreme Court de-
cision will.
one of the basic ideas behind the
merger legislation is to encourage the
linking up of strong and weak roads.
The strong. of course, are inclined to
think twice before burdening them
selves with the weak, but these recent
decisions give the strong roads an ad-
ditional incentive for absorbing the
weak.
High Property Value.
Many Of the weak roads have high
property value and low earning power.
BY absorbing q weak road. the strong
can pool the property value of the
two, and thus delay or permanently
remove the hazard of recapture of ex-
cess earnings by the Government.
One of the incentives for the proposed
absorption of the Erie by the Chesa-
peake & Ohio would be for the latter
TO get the advantage of the high prop:
erty value of the Erie. As the law
is read by matchmakers, the Chesa-
peake & Ohio would get the benefits
of Erie valuation by merely acquiring
. AiiesSoA ~ u SUM VI lle Iodu, DIS Is
proposed in the new plan, on which
the Interstate Commerce Commission
has been asked to pass. Until there
is new congressional legislation, rail-
road weddings are likely to take the
form OF either leasing arrangements.
such as is proposed in the Great
Northern Northern Pacific plan, or of
control by ownership Of stock, such
as is proposed in the linking up of the
Chesapeake & Ohio with the Erie and
the Pere Marquette, rather than actual
into single new oper-