Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-26
RAIL PLANS AWAIT
CONGRESS ACTION
Decisions Must Be Made on
Various Mergers Proposed
by Carriers.

Speed limits are not likely to be ex-
ceeded by the coming session of Con-
gresS, at least along transportation
lines. Plans now being discussed by
legislators indicate that the plan which
will be submitted by the Interstate
Commerce Commission will be carefully
considered before any additional powers
are granted the commission. Since &C
ceptance Of any plan must hinge on the
approval also of the railroads, unani-
nous agreement seems well in the dis
lance.
Nearly every major proposal for rail-
road consolidation which has been SUBJ
mitted to the commission thus far has
met with immediate objection either
from other carriers or parties at inter-
est. For example. some roads in the
Eastern trunk line territory are press
ing vigorously for action on proposals
already submitted, according to Presi-
dent Willard of the Baltimore g. Ohio.
Other roads are equally as urgent for
their rejection.
Northern Pacific Merger.
It is regarded as doubtful If even the
proposed merger of the Northern Pa
cific and Great Northern will be given
approval by the commission in it's pres
ent form, according to those in close
touch with the situation. The fly in
that ointment is the fact that the roads
in conjunction own control of the Chi
cago, Burlington & Quincy, a longer
and perhaps more powerful factor in
Western transportation than either
Other carriers object that the merger
would form combination so powerful
as to stif1e competition in certain North
western territory.
These objections may be behind the
proposal recently mentioned as more
than possibility by Arthur Curtiss
James, ranked as the greatest holder of
railroad securities in the world, for a
combination of the Burlington, the
Western Pacific and the Denver e. Rio
Crane, Western roads. Application for
permission to build connecting link in
oregon between the Great Northern and
Western Pacific now is under consider
alton by the commission and is vigor-
ously opposed by the Southern Pacific.
Further Complications.
Further complications are presented
by the competition of bus lines and mo-
tor transport with the steam and cleo
trio roads and by the move toward the
extension of inland waterway transport
tation. Freight lines on the Great
Lakes are likely to see some consolida-
tions during the coming Winter, but
these lines have always taken the stand
that they are not common carriers.
They have had splendid season, owing
to the demand for iron ore and the
movement of coal and grain, but the
new 600-foot vessels put in service have
proved so economical that some combi-
nation which will make the lake fleets
more efficient and reduce expenses is
demanded.
The completion of deep channel in
the Ohio and the betterments along the
Mississippi have led merchants. manu-
facturers and big shippers to turn at
tention toward forming their own barge
lines to handle their own freight and
other freight and the adjustment of rail
and water rates is of deep moment to
the railroads from a competitive stand
point This movement to inland water
way transportation is only in its IN
fancy. Connection by deep channel cat
least 9 feet between the Great Lakes
and the Gulf is matter Of a compare
lively brief time.
The roads have been making excel
lent profits. Car loadings are high ana
the regional shippers advisory boards
have given no indication OF any marked
drop in car demand for the next few
months. The railroad executives nave
agreed to push programs OF expansion,
but to do this they must have addltlonal
money ana QeldyS ana uIlCtl LdAliIlSo "a
not calculated to make the task OF
marketing or underwriting the necessary
security issues any easier. For some time
now, the general average price OF rail-
road common stocks has been between
IL and Is times earnings. Prices since
the sensational market decline have been
we'll under that ratio, and this may
have bearing on the absorption OF new
issues, if the Interstate Commerce Com
mission fixes limit beneath which they
may not be offered as it has done be-
fore.
Speedy Action to Be Asked.
On the other hand, many roads are
now in position or shortly will be in a
position to declare increases in dividend
rates or to inaugurate such distributions
by present non dividend payers.
There is no doubt whatever that
speedy action by Congress will be press
ed for. The number of holders of rail-
road securities has grown amazingly in
recent years, and as one investor put it
these shareholders and bondholders are
tired of riding the cushions one mile
and riding the rods the next"
Copyright. 1929