New Britain herald., 1929-12-06
RAILROAD HOLDING
 COMPANIES

On the day when New England railroad officials were meeting in New Britain as guests of the local traffic bureau the annual report of the Interstate Commerce Commis- kind words to say about railroad holding companies. On this day, too, it became known that the most active of these holding companies, the Pennroad Corporation, was ad- Hitted to have purchased sub stantial stock interest in the Bos- ton tS Maine railroad; and as this subsidiary of the Pennsylvania sys- tenn is already heavily interested in the New Haven railroad, and the lat ter in turn is heavily interested in the Boston &, Maine, it becomes evi- dent that the Pennsylvania interests in New England become more dom- mating than that of any other trunk line. The early purchase of substan- tial stock in the Maine Central and the Bangor and Aroostook is also anticipated. If all this comes about the only opposition line in New England will be the Boston &, AL bany, which operates under the aegis of, the New York Central.
 In it's annual report the Interstate Commerce Commission devotes sev- eral pages to consideration of the holding companies formed by several railroads, concerns which are indi- rectly under their management and the stocks largely owned by stock holders of the railroads, although in the course of Sme they no doubt will gain wider distribution Nh public hands. The Commission definitely gives it as it's opinion that concerns like the Aleghany Corporation and the Pennroad Company are purely holding companies.
 These concerns were formed to en- able the railroads sponsoring them to gain in power and influence with out running the risk of going con- trary to the law or the Interstate Commerce Commission. The law in fact does not reach them; it pre- yents railroads from doing certain things but does not apply to quasi independent holding company which in fact may be controlled by rail- road.
 Where parallel or competing car riers are involved the Commission is not prepared to say that virtual unifaction brought about is not amenable to the Clayton Antitrust Act. but the Commission admits il , eventually will be for the courts to decide how inclusive and cffectual 1hc act is upon the holding com .panies to the railroads Where no competing ines are involved, how ever, the unification is brought about through the functions Of a holding company. an earlier decision O! the I. C. C. itself has allowed that such consolidation may be brought about without authority from or regulation of the Commis- sion. It is only where the holding companies meddle with competing properties that the Commission is doubtful of its own powers or the rights of the companies. Meanwhile the eggs are being scrambled.
 And then, realizing the new dcvel- opments are beyond it's ken, the Commission concludes;
 we call this matter 10 the
 6ltcDllOn Ol Illt congress De-
 cause we believe that it deserves
 thorough investigation and seri-
 ous consideration. What the ap-
 propriate remedy may be we do
 not undertake for the present 10
 say"
 The other day the press carried reports that the Pennroad con- pany, the voting trustees of which are the president and two other di- rectors of the Pennsylvania railroad is buying into the New England rail. roads as a protection" against the consolidation plans of the Commis- sion. The Pennroad company appar- ently has no difficulty in raising money and if the purchase Of rail road properties is continued long enough the Pennsylvania through this holding company ultimately vii exercise astounding influence, if not control, in other companies. If, foI Instance, consolidation of New