Evening star., 1928-05-19
C. & 0. MARQUETTE
MERGER APPROVED
Nearly 5000 Miles of Rails
to Be Observation-Disclosures
Plan Is Rejected.
By the Associated Press.

Nearly 5000 miles of railroad in the
Eastern half Of the United States
operated by the Chesapeake &c Ohio and
Pere Marquette systems viii be con-
solioated under authority granted the
former road by the Interstate Commerce
Commission.
The commissions decision, announced
late yesterday, permits the first inpor-
tant merger Of railroads in Eastern
territory since the consultations we're
authorized by Law.
The victory for the Van Sveriuoa7
interests. coming after failure of their
plan two years ago to link the Nickel
Plate with the Pere Marquette, Chesa-
peake e. Ohio, and Erie, was only a
partial one, however, for the decision
rejected the Chesapeake g. Ohios an
pilcation TO assume stock control of
the Erie along with the Pere Marquette.
While the authority to purchase stock
amounting to control in the Pere Mar
quette was given on certain conditions.
these are not expected to place anv
serious obstacles in the way Of the
chesapeake & Ohio's plan to go forward
with the merger.
NedEiy 9sUVU Miles OF Line.
The latter system operates from
Newport News, Va, to Chicago and has
network Of branch lines in Southern
coal mining territory, the total mileage
aggregating 1850 The Pere Marquette
operates 2,2s6 miles Of line in Michigan
Illinois, Indiana, Ohio and Canada.
simultaneously with announcement
OF its important decision. the conn,s-
SION cited the New York Central N-ict-eI
rate and Baltimore & Ohio PsilroaS.
20 SNOW cause at hearing here lime
%. why they should not dfvest then1-
serves OF all interest in the capital stoc.r
OF me wheeling & Lake Erie. which the
ON GSo1nniiSSlon charges is "unlawfuIIv
The specific complaint against III.
,.lLee trunk lines is that By combining
,Iss RS, year 70 purchase control Of the
"hseHng they violated the Clavto-I
antitrust act. The citation was az AZ
nounced only a day after the cornn1Is-
SION had refused executive officers ~
me three roads permission To becorre
directors of the Wheeling
In the Chesapeake 6z Ohio-Pere Mar
Cuette merger decision the conrissi0,
neid the two systems would constitl,te
good operating unit in the public in
ierest, probably bring about savings in
operation and not likely interfere vifS
existing competition in the territo-v
they traverse.
Reason for Erie Opposition.
Describing the applicants relation n
the Erie as neither complementary nor
supplementary" the commission thought
such unifcation would likely result
70 disruption OF existing railroad
channels.
A merger of the Erie and Chesapeake
q ONO, II said, would constitute prac-
tlcaIy an ALLEGATION Of an important
new York-Chicago trunk line in ad-
vance of the adoption of grv genera
plan for the formation of com1etitive
systems In Eastern territory"
The financing program approved al
.ows the Chesapeake 6 Ohio 70 issue
Szu'OOO,OO0 IN par value Of new COM
mon stock TO present stockholders al
$50 share. the proceeds 70 be used IN
acquiring Pere Marquette control.
IL may take over 16,600 shares OF Pere
Marquette common. prior preference
and preferred class stock from the vfr-
ginia Transportation Corporation. Sc
500 shares of Marquette from the
VaneSS Co, Van Sweringen subsidiary.
at a price OF $2,522.sS1, and purchase
any additional Marquette common that
can be obtained for maximum Of SI1p
a share and such preferred as may be
available at 500.
Permission to apply fo- authority to
buy additional Marquette stock any
time during the next year also was
given.
Minority stockholders had opposed
the unification ON the ground that il
was "a great speculative enterprise
rather than a transportation develop
ment."
Campbell DisSents.
Dissenting from the majority opinion.
Commissioner Campbell said the CheSa-
peake-Pere Marquette consolidation
should not have been allowed. Com
missioner Porter. ON the other hand.
held that acquisition OF the Erie also
should have been permitted. while Com
missioner WOodlock said the Chesapeake
should have been allowed to issue rev
stock at par instead Of at $l5o q share.
Commissioner Eastman. In another
dissenting opinion. sharply criticised the
preliminary financial steps leading to
the merger application. declaring such
projects have been characterised cy
the creation and use of mare oT
dummy corporations" such corpora
tions. he said. were legal perve-SiorS
used for purposes Of conceal
ment or evasion"
RICHMOND. Va. May ls.-GsOrge s
Kemp. head OF the Chesapeake & Ohio
protective committee. said
here last night that he does not believe
the Chesapeake & Ohio can acquire
the Pere Marquette despite the decision
Of the Interstate Commerce Commission
the merger.