The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-06-23
Editorial Comment
The Northern Railway Consolidation Plan
New York Timesl

(NeW Ork llmeS)
Announcement of the plan for the formal merg
ing of the Northern Pacific and Great Northern
railways brings up many interesting considerations
The proposal is linked with the past, because it is
the direct outcome-n a sense the unavoidable re-
sult-of the celebrated fight for possession of the
Northern Pacific in 1901 That contest arose from
the purchase of Burlington & Quincy by Northern
Pacific and Great Northern jointly, and from Union
Pacifics attempt to get share in the ownership
by snatching control OF Northern Pacific itself from
its existing proprietors.
As result Of the disastrous Corner which en-
sued in Northern Pacific stock, an absolute major
ity interest in Northern Pacific and Great North
ern stock lodged with the newly former $780,
100000 Northern Securities holding company.
Three years later, that holding company was dis
solved under the antitrust law by the United States
supreme court. The Burlington remained in pos
session of the two Northern railways, but the rela-
tion proved to be in many ways awkward Only
six years ago the joint collateral trust mortgage,
under which Burlington's stock was held by the
two larger companies, expired by limitation. It
had to be renewed disadvantageous terms and
the new mortage has only nine years. more to run.
The plan now proposedi4f Am company, to
take up the stock Of NofthAsn racif1S gand Great
Northern and operate them as a single system,
actually goes further than did the Northern Secur-
"
decreed that, subject to the Commerce Commissions
approval of proposed combination. the railways
"shal be relieved from the operation of the anti
trust laws" and therefore the supreme courts de-
cision Of 1904 no longer runs against such merger
On the other hand the commissions own tentative
grouping of the railways in 1921 into nineteen
larger systems placed Northern Pacific and Bur-
lington in system along with several minor
roads, and Great Northern in another along with
Chicago, Milwaukee & St. Paul and six other small
er railways.
This divergence of plan would not Of itself neces-
sarily prejudice the commissions approval Of the
proposed merger, for it has already made known
its willingness to consider other groupings than those
outlined in its official plan. It may approve
the application Of the Northern companies, whose
plan would indeed hardly change the present status
of control. But the grouping which the railway
companies propose, however desirable it may be in
itself, scarcely touches the actual problem which
the transportation act had in mind in it's section
regarding railway cancellations. The underlying
purpose Of that section was to provide union Of
strong and weak lines in given traffic area into
q system under common ownership and manage
ment whereby facilities should be pooled, econo-
mics promoted, and inequality Of profits under the
uniform rates established for that area be smoothed
out Only che Of the districts sma1er independ-
ent lines Is proposed BY the railways for ncorpora-
ton in the merger, = against the half dozen rec
smmendsd n the commissions plan.