Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-21
CONGRESS FACES
RAIL MERGER FIGHT
Unification Plans Developing
Major Problem for Next
Session. ~

Railroad consultations, recently
brought into sharp focus by the favor
able action Of the Interstate Commerce
Commission on unifcation plans OF the
New York Central, gave evidence yes
terday of becoming one OF the major
problems which will confront the next
session of Congress.
Developments in the situation, which
has been a source OF controversy al-
most continuously since the passage OF
the interstate commerce act, are ex-
pected during the coming months. both
from Capitol Hill and from the Inter.
state Commerce Commission itself.
per Of Congress anticipate q bitter
tight. especially In the Senate.
Claude r. Porter, one OF the men,
bsrs of the Interstate Commerce Com
mission whose docket embraces con-
solicitations. has already submitted q
preliminary grouping of the railroads
of the country for study by the COM
mission as whole. His program was
placed before the commissioners about
two months ago. and, although 1t has
been the source Of some discussion
among them, it Is not considered prob
able that any final action will be taken
until late In the Fall. His tentative
alignment of roads, according to pres
ent indications, will undergo several
changes. In the Senate and the House
1t is expected the battle will be fought
during the regular session along much
the same lines.
Origin Of Interest.
The current interest In railroad con-
solicitations, 1t was pointed out in WASH
tngton, Is not entirely q development
of recent months. The problem which
now is attracting the attention Of rail-
af
and the Interstate Commerce Commits
sion was originally stated in the inter-
state commerce act. It's provisions in
clude one which made 1t compulsory
that the commission promulgate q
plan for the final grouping of roads
as measuring stick" for contemplate
ed mergers. The act. however. does
not make It compulsory that the pro-
gram Of the commission be put into
effect.
In accordance with the mandate of
the act, the Interstate Commerce Com
mission in 1921 issued q tentative
grouping which divided the railroads
of the country into seven trunk lines.
Since that plan was presented no
formal action has been taken by the
commission, and its annual reports
have always asked that 1t be relieved
of the responsibility of making o per-
The commissions appeals were taken
into consideration in bills which were
introduced in tho last session by Sena-
tor Simeon D. FeSs, Republican, OF
Ohio. and Rev. James s. Parker, Re
publican, of New York. Both died on
inaction March 4, but not before the
Fess bill had been amended by Sena-
tor Frederic M. Sackett, Republican, of
Kentucky, so that the Interstate Com
merce Commission still was imposed
with the necessity of making the con-
solidation plan: The FeSs bill has been
reintroduced, with the amendment, in
the extraordinary session now In
recess.
Although there have been attacks on
railroad consultations in Congress from
several sources, the most vigorous have
come from those members who feel that
the Fess bill does not give adequate
protection against the dangers" which
might be involved In recapitalization on
q huge scale. It Is pointed out by these
leaders that the theory Of consultations
Is based on economy Of operation and
cheaper rates. Recapitalizations of
whole systems, they fear, with the con.
eliminate the benefits which unifica-
tons were expected to bring about.
Thorough Study to Be Given.
In view OF the number OF applications
for consultations and indications
which are now before the commission,
it Is expected that its permanent plan
will report as rapidly as 1t is consistent
with thorough study Of the problem.
The scope Of the systems which have
been recommended by Mr.. Porter re-
main q matter Of mystery, but it Is
assumed that the plans will bring about
no disruption Of established systems.
This assumption, It was explained, is
borne out by the action of the com.
mission in the application Of the New
York Central to bring about q CONSOLE
dation with the Big Four and the Pere
Marquette. Although the program, as
approved by the commission WAS not
generally considered a consolidation in
the usual sense because the New York
Central largely controlled :he systems
1t proposed to unity, tho commission
by implication indicated that rs mem
bers had no disposition to interfere with
established systems.
The New York Central, as a result
Of the approval Of its plans, is regarded
as occupying q somewhat strategic po-
sition in whatever consolidation pro.
gram Is promulgated by the commission.
This view is maintained on the theory
that the commission, having granted
the approval to the unification, would
be diSinclined to nullify its action by
proposing plan which would interfere