The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-01-17
RAILROAD STOCKS
MAIN ATTRACTION
ON WALL STREET
Development of Mergers
Watched Carefully by
Exchange.
BY f. Walter MOckler.

By f. Walter MOclsler.
NEW YORK, Jan. 17.-Despite
the continued sluggishness of the
general market the past week de-
veloped two OF the most important
factors in the railway world since
the era of mergers began. The first
of these concerned the sudden gall
vomiting into life of the long-planned
Great Northern-Northern Pacific
merger, while t';a second was the
outgrowth of sharp appreciation in
Lehigh Valley common, which
seems almost certain to indicate an
important development in merger
plans of the eastern railroads.
For nearly seven years the Of
hcials of the Northern Pacific and
the Great Northern have been work
ing out merger plans. Inasmuch as
these roads control the Colorado
Southern and the Chicago, Burling-
ton & Quincy, it is an obvious con-
clusion that any merger plans of
the parent companies must of neces-
slty include the controlled lines. 1t
is apparent that the immediate plan
of the Hill roads in the Northwest
will head toward a leasing plan,
rather than an outright merger, al
though retaining all merger rights
for future action.
New York Central
The deal will parallel the recent
activity of the New York Central
in the East. The latter desired to
merge outright with the Big Four
and the Michigan Central, possess
ing practically all Of the stock in
these roads.
Lehigh Valley crossed 100 before
the end of the week with buying
very apparently coming from bank
ing interests which have long been
desireous ot obtaining additional
Lehigh. For years this situation, as
understood in the Street, has been
rather anomalous. Bankers rep
resenting the Delaware e Hudson
have been credited with control or
ownership of some 25 per cent of
Lehigh's stock with approximately
the same amount being held by the
New--York Central's bankers. The
banking groups concerned as we'll as
the railroads mentioned are natural
competitors in the financial and rail-
way world.
Battle Ground
It was obvious that in time Lehigh
would be the battle-ground for a
bitter fight for control with the OPP
ponents matching buying orders. 1t
is not expected that the Street will
see another Northern Pacific market,
but some very very wise traders who
have been staying with Lehigh for
two years are spending considerable
time right now saying az told you
so" from an advantageous position
down around so.
1t is extremely likely that the rail
list will meet some very important
news before January has expired.
this news coming from three differ
ent sources, all of vital interest to
the country as a whole.
Concerns Congress
Such mergers require new legisla-
ton by Congress, however, and it
is becoming increasingly evident to
business in general that any nego-
tiations leaning on Congress for help
are counting a long delay. Under
the lease terms in the northeastern
situation, the Burlington and the
Colorado Southern will remain in the
same comparative position as they
now hold to the major carriers, no
matter what the technical standing
of the four roads happepn to be,
1t is generally believed that the
new Nickel Plate plan will be ready
for submission to the Interstate
Commerce Commission before the
end Of the CURRENT month, but 1t
would be a relief to the rail list in
the market if the Hill lroad merger
plans could take the play away
from the Nickel Plate" The latter
has been absorbing entirely too
much public attention and the lack
of success which has attended the
plans already submitted has reacted
to the disadvantage of the whole
rail market.
Relapse Possible
It has been asserted in responsible
quarters that any further sharp set
back to the Nickel Plate plan would
throw the entire merger situation
back very many years;eertainly I'M
til the present generation Of rail
leaders and politicians had passed
from the picture. If the Hill roads
can come through with workable
plan which can hope for success on
it's first application, this can then
be accepted as a model or pattern
for the mergers to follow, thus sD'>s
ordinating the possible influence OF
another rejection of a Nickel Plate
plan while at the same time leaving
the road clear to market improve,
ment in the event of success for
the plan being prepared by the Van
CWorin cons