Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-06
VAST RAIL SYSTEM
SCHEME IS Barred
Eastman Charges Van SWer-
ingens and Atterbury Plan
ned Huge Network.
BY the Associated Press.

By the Associated Press.
Unification Of railroads into vast
interlocking systems without Govern
ment supervision, through the acquisi-
ton Of stock by holding companies
dominated by powerful transportation
magnates. was described Yesterday by
Joseph B. Eastman, member OF the
Interstate Commerce Commission.
Testifytng as the flrst witness Ia the
Investigation of railroad holding and
investment trust companies by the
House interstate commerce committee,
Eastman said the Van Sweringen in
tercsts Of Cleveland and w. w. After
bury Of the Pennsylvania Railroad were
two Of the dominating factors IN the
consolidation move.
The Allegheny Corporation, controlled
by the Van Sweringen interests and the
Pennroad Corporation, o holding COM
pany directed by officers Of the Penn
Sylvania Railroad, were cited as having
acquired substantial holdings In numer-
GUS railroad lines for purposes Of con-
| troll.
Situation Held Dangerous.
The situation was regarded as dan
gerous by the commission, the witness
said, adding that the result might be
the loss Of Jurisdiction by the commits
sion over consultations OF carriers
under a Government plan.
While the commission has jurisdic-
ton over outright mergers Of rail lines;
he explained, the transportation act Of
1920, under which The commission
operates, does not apply to acquisition
| Of stock by holding companies.
Asked by committee members II the
| stock purchases by the Pennroad and
other holding companies were contrary
| to the public interest, Eastman said
some Of the negotiations may involve
violations of the Clayton act" The
situation is being looked into by the
commission.
In discussing the operation Of o. P.
Van Sweringen, president Of the Ale
leghany Corporation, and his brother.
M. ]. Van Sweringen, vice president,
| he said 1t was common knowledge that
they had succeeded in unifytng certain
lines through holding companies despite
| adverse decisions handed down by the
| commission.
| Urges Extension Of Probe.
The Allegheny Corporation and the
Pennroad Corporation, Eastman said
we're not the only holding companies
which should be investigated. He sug-
gested that the committee inquire into
the Atlantic Coast Line Co., which, he
said, controlled 80 per cent Of the At
lantic Coast Line Railroad and had an
interest In the Louisville g. Nashville
and the Nashville. Chattanooga & st.
| Louis.
The Western Pacific Railroad Corpo-
/ ration, he asserted, had substantial
holdings in the Sacramento, Denver and
Rio Grande and Western. The Della
ware 81 Hudson Co., the Investment
Trust Corporation, the Adams Express
Co., the International Corporation, Ltd,
| the New York Investment Corporation,
the United States and International Sc
curity Corporation, the Union Pacific,
the AtchiSon, Topeka q Santa Fe,
also have holdings in other railroads
and companies, he said. The Union
Pacific. he said, had holdings in the Il
linois Central, the New York Central,
the Baltimore g. Ohio, the Chicago
g. Northwestern. the Wabash, Chicago
Milwaukee g. Pacific, the Pere Mar
| Quette Co., and the Glover Leaf Co.
| At the outset Eastman explained he
| was presenting his individual views
and was not speaking for the commits
sion.
Holding Company Quiz Ordered.
An investigation of activities of the
holding companies, particularly the AL
leghany and Pennroad corporations
however was recommended in the COM
| missions last annual report.
The House recently authorized the
inquiry, which Chairman Parker Of the
interstate commerce committee felt was
necessary before the group could I'M
dertake to formulate legislation to carry
out the Governments plan for CONSOLE
dalton of some $500 rail lines into 81
great systems to assure adequate CON-
petition and rail service for the Nation