Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-24
RAIL MERGER PLAN
ST|RS OPPOSITION
Wall Street Believes !. c. c.
Proposal Lacks Elements
Favorable to Carriers.
BY CHARLES F. SPEARE.
.inl IAinnaAch "a Tia cAnn

Special Dispatch to The Star.
NEW YORK, December 24.-After a
week end study Of the Interstate Com
merce Commissions plan of railroad
consolidation, Wall Street reached the
conclusion that this would not contain
the elements favorable to a general or
immediate improvement in railroad
securities. So 1t sold the rails" along
with industrial and public utility issues.
This attitude was to have been ex-
| pected, inasmuch as there was an entire
lack of unanimity among the members
of the commission themselves as to the
best way of unifying the carriers and
| by the prospect Of prolonged contest
among Eastern railroad executives to
| hold what they will be asked to give up
and in opposing ALLEGATIONS that they
! feel too much strengthen their COM
| petitors.
Porter's Stand.
Commissioner Porter, who had most to
do with drawing up the plan, strongly
objects to five Eastern systems. He is
an out-and-out four-plan man. He very
frankly states in his opinion that the
| fifth, or Wabash system would be lin
| truth and fact a second Pennsylvania
system" Commissioner Eastman goes
ever further than the majority of the
commission in favoring nine instead Of
five Eastern lines, which would involve
|
Lackawanna, Erie, Chesapeake g. Ohio
and Norfolk & Western in addition to
the lines built up around the Pennsyl-
vania, New York Central, Baltimore e.
Ohio and Wabash.
Commissioner Taylor takes exception
to the merger of the Northern Pacific
| and Great Northern, which he regards
as unlawful in view of the United States
/ Supreme Court decision nearly 80 years
ago which determined that these were
competing lines. Commissioner Nc
Manany has different view Of the
plan than his associates. He argues
that the conditions of 1920. which COM
PEELED the transportation act and which
authorized the commission to prepare
the consolidation plan are not present
in the same form today and he does not
feel that railroad consultations will
accomplish a great deal In effecting
economy or more efficient operations
One OF the strongest opponents of
the plan as set up is Prof. william q
Ripley OF Harvard University, who pre-
pared the tentative merger scheme
promulgated by the Interstate Com
merce Commission in 1921. Like Com
missioner Porter, he does not favor the
Wabash System, which brings together
a number of relatively weak and unre-
lated lines into group that he believes
Will never be able to compete with the
other four Eastern systems. Mr.. Rip
ley voices the opinion generally ex-'
pressed in railroad and banking circles
today that the most illogical Of all o.
the recommendations of the present
plan is that which brings the Seaboard
Air Line under the jurisdiction Of
Northern road. Other opportunities fol-
controversy are the separation of thf
Chicago g. Northwestern and the Omai1f
from their longtime ally, the Unioi
| pQPi6P IN thu off 81 d.
number IL, of which the Northwestern
Is the center, and the failure to Civ,
the Chicago, Burlington & Quincy
Western outlet after cutting 1t OF from
the Great Northern and the Northern
Pacific.
battle-ground in East.
Among those who have been active
In promoting the plan for a merger OF
the Northern Pacific and Great North.
ern, to which between 10 and rs pei
cent Of the stockholders of both road;
agreed and had deposited their shares,
the proposal Of the Interstate Com.
merce Commission found favorable re-
Spouse.
In weighing the advantages Of a mer-
ger OF these lines which, it is said
would produce economies of 100000
year. against continued possession o,
the Burlington, 1t seems to be felt thu
the former would be preferable, as IL
would end the bitter opposition in tn
Northwest to joint control by tn
Northern roads of the Burlington. Thesc
roads would receive ample compensation
and suffer no less in income in ar
!; equitable transfer of this property tx
other interests.
The main battle ground over tn
plan will be in the East and between
those roads that have been trying t.
get together for several years, but cam
to the point in 1928 when they coulC
no longer trade with one another and
abandoned their conferences. The plan
as recommended shows a greater de.
gree of consent to what the Baltimoro
& Ohio and Nickel Plate systems have
already accomplished than to the Penn
sylvania Railroad. This may be du
to the activities of the latter throug,
purchases by subsidiaries of competing
lines, and unofficially held by the In
terstate Commerce Commission to BE-
against the spirit of the Clayton act.