The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1929-12-06
SSOUGHT
ON RAILWAY
MERGERS
BY M. L. RAMSAY

u1nscIS Oh rAlUOaQ mergers e.
'fected through unregulated hold.
Nne companies, the Interstate Com
merce Commission yesterday
Surged Congress to consider new
REGULATORY legislation.
Such mergers may result in a
suppression Of competition mo
less harmful than would at
tend the direct acquisition Of con-
troll Of one carrier by another,
the commission. said in its an
nual report.
The intent Of Congress was
consultations carried out under
. carefully planned scheme of
public regulation" according to
Ehe commission, and this is
menaced by the holding company
Thorough investigation Of this
problem was asked, but the COM
mission said it was not prepared
to suggest a specific remedy at
this time.
The commission hopes to have
Its own plan for consolid tions
adopted and published early in
the present session Of Congress,
che report said.
1t also pleaded anew for an
amendment to- the transpOrtar
ton act STIMULATING means Of
bringing carrier valuation down
to date, especially in view Of the
upset of the commissions Valua-
ton methods by the Supreme
Court decision in the OFallon
case.
Congress has left the duty of
planning console ations with the
commission. it was pointed out.
How this scheme can be upset
was Illustrated by the Allegheny
Corporation and the Pennroad
Corporation, controlled reSpec-
lively by Van Swerfngen and
Pennsylvania railroad interests.
Both own stocks of various rail.
roads, the report said, and the
commission has mo direct jllrtS-
dictfon over either of these com
panies." Fl.
The report continued:
Common control can be ef-
fected in both instances by q
chain, one vital Link in which
is made mp of the control exeF-
Cised directly or indirectly,
over two or more corporations
by individuals.
"The process may, Of course,
be facilitated by reducing the
control of the holding com
pany or. of one or all Of the
carriers involved to a relatively
small if not insignificant finan,
CiaI interest through various
devices, such as limitation of
the voting power of certain
classes of stocks, the Superim.
posing or pyramiding of one
hOlding company on top Of an.
other, and the like.
where parallel or competing
carriers are involved we are not
prepared to say that process Of
virtual ratification SO brought
about is not amenabIe to the
PROVISIONS of section U of the
Clayton antitrust act. These
provisions are couched in very
broad language, and it will
eventually be for the courts to
determine how inclusive and
effectuaI they are.
where no competition is In !
vOlved, however, it is obvious
that if our, decision in stock
of Denver & Rio Grande West
ern r. R., was right, such
notifications may be brought
about without authority from
or regulation Of this commits
sion.
"PIainIy, il this be the situa-
tion, the subsection Of the uni
ficatiOn of carriers by railroad
to the orderly processes OF y
carefully planned scheme Of
public regulation, which section
s was designed to accomplish,
is very likely to be partially
or even wholly defeated, sub
iect TO the possibility that the
Clayton antitrust act may In
some measure, after protracted
litigation, enable control over
the situation to be maintained.
awe call this matter to the
attention of the Congress be-
cause we believe that it de.
serves thorough investigation
and serious consideration. What
the appropriate remedy may be
we do not undertake for the
present to say"
Under the head of "recommen-.
dationS'' the commission added
that consideration should now
be given, by the Congress to aI0-i
propriate legislation"
Every year since 1925 the COM
mission has asked to be relieved
sof the duty of formulating con-
solidation plan, the report pointed
out, continuing:
tfVhiIe hearings have been
held by appropriate committees
Of both houses of Congress and
bills have been reported to the
respective houses, the Congress
has not amended section 5 as
Suggested. We believe, under
these circumstances, ii was our
duty to proceed to comply, as
far as possible, with the mandate
Of the law.
Accordingly, the commission
now has the question actively
before il. II is receiving cur
earnest consideration. Although
A can not be stated definitely