New Britain herald., 1929-12-05
Defeat of Rule Against
 Purchase of Competing Roads Seen in New Cor porations Holding Stock.

Washington Dee. ! tE' Considrr-
 auon by congress ot new legislation to prevent po@sibl, defeat by holding
 corporations of tho goyornmont's
 plan for "orIorly" consolidation Of railroads was recommended today @ by the Interstate Commerce Commission in it's annual ro-
 port
 Congress also was informed that - inc commission is proceeding with . its general plan for consolidation Of all carriers into major trunk line systems and hopes 10 have this ready D shortly.
 ''lt seems clear" the commission . said, that the acquisition of con- s trol or of an amount of stock sufr- - clent 10 influence the policies Of competing railroads. either hy indi- s Niduals or by noncarrier corpora- . uons. may result iu the suppression of competition in manner no less harmful than if such control be eN- 9 ercised directly by one carrier over anothcr.'
 Competing Purchase Prohibited . Purchase by one road of d com- , pcting line is prohibited by the Clayton act, and under this statute - the commission several times has > ordered roads 10 divcst themselves ! Of stock acquired in others. The rc-
 port points out however. that a fur
 thor means Of unifying carriers g through common control or affilia- ? ton has been developed and cites . the AllcghanN Corporation and the IcnnrOad Cooperation as examples. The Allcghany group was held to F bc controlled, through q combination , Of direct and indirect means, by the Van SWcrinGcn interests which con , troI through similar means the New 2 ork, Chicago &, St. Louis. the Erie , the Pcrc Marquette. and the Chcs. apcakc and Ohio. The Pcnnroad z Corporation, tl" commission cited Q also holds various stocks of sailroad v corporations, and is not controlled D by any railroad company as such 5 but it's stock Is held by a voting
 
 May 1, l929. and the Votin" trustees . are the president and two other di- . rectors of the Pennsylvania Rail- road
 If these facts are correct" tho . commission said. the Allcghany . Corporation can, by acquiring q con- trolling interest in the stock of q railroad company, bring it under 2 common control with the railroad 2 companies above mentioned which arc controlled by tho same interests 4 as control the Allcgnany corporation. . but without itself holding control of or being controlled by any one of
 these railroad companies as such. 'ln il similar manner the Penn g road Company, by acquiring stock
 control of q railroad company can . bring it under common control with - tho Pennsylvania Railroad without , itself controlling or being controlled hy the latter carrier as such. In < other words. common control can s he effected in both instances b> a chain, on, vital link in which is
 made up of the control exercised, di- . rectIy or indirectly, over two or
 more corporations by individuals.
 The process may, Of course. hc facili-
 tatod by reducing the control of the
 holding company of our or all of the
 carriers involved iN relatively
 small if not Insignificant financial
 interest through various devices,
 such as limitation of th" voting
 power Of certain classes Of stocks,
 the supcrjmpo&in" or pyrauidin@ Of