Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-23
RAIL CONSOLIDATION
MEASURE FAVORED
Bill Reported to Senate by
Fess, With Recommended
tion for Passage.
Ry the Associated press

BY the Associated Press
The railroad consolidation bill was re-
ported to the Senate today with a
recommendation for its passage In order
to permit the establishment of a limited
number of systems strong enough to
give efficient service at a reasonable
cost to the public.
The measure, approved few days
ago by the Senate interstate commerce
committee, was reported to the SEN
ate by Senator Fess, Republican, Ohio,
with a detailed explanation of its pur-
pose. 1t is the hope Of the supporters
of the bill, the report declared, to create
eficient systems neither so large as to
be unwieldy or unmanageable, nor too
small to secure economies derived from
large scale operation.
Would Assure Continuity Of Revenue.
"A well balanced system" said the
Fess report. "is one. that has a reason
able opportunity to originate we'll di-
versified and dependable traffic which
assures continuity of revenue, so that
the depression in single industry will
not too greatly affect its total traffic;
one which has facilities, equipment,
tracks, yard and terminals adequate to
the public needs"
The unihcation could be brought
about by merger financial control
corporate consolidation or absorption
Two or more railroads could arrange
uniflcation of their lines under specific
instructions set forth in the bill, the
whole proposition to be under the iuris-
diction of the Interstate Commerce
Commission.
The measure would require carriers
to give due public notice of an inten-
ton to unity, and to make a report to
the governor of each State through
which their lines pass Public hearings
would be required before the commits
sion so that organizations of shippers
chambers of commerce and other COM
munity organizations and the stock
holders, bondholders and other creditors
of the carriers involved may be heard
| The commission would have powers tC
deal with the financial and economic
contingencies which the unifications
might present.
Stockholders Would be Protected.
| One of the main purposes of the bill
+, would be to afford minority stockhold-
/ ers the opportunity to refrain from go
! ing along against their will with new
plan, to withdraw from an enterprise
and to liquidate their holdings.
| obviously, however" the report de-
| clared, this opportunity need not bt
| afforded to all stockholders. Those who
! favored the adoption of the plan may
| be dismissed from further consideration
| They cast their lot with the new plan
They stand by their own decision, anc
If they desire to get out they do SO only
! by sale of their stock in the oper
market or otherwise. Nor is the COM
mittee satisfied that the opportunity
| should be given to every stockholdel
who opposed the adoption of the plan.
In considering the disposal of minority
stockholders, the effect upon their stock.
| holdings and the time they became
stockholders would be considered. The
measure would give specific authorize.
tion as to how the minority stockholder.
might be determined, who should come
within that category and how the,
should be treated.