Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-21
LIBERAL RAILWAY
LEGISLATION URGED
Couzens Fayors Law Based
on Conditions Since 1920
Act Was Passed.

Senator James Couzens of Michigan,
chairman of the Senate committee on
interstate commerce, believes that Con-
gress should enact more liberal legs
latlon" or at lsast be more speclnc 50
as properly to indicate its intent With
respect to railroad consolidation. For
this reason he urges that a thorough
inquiry should be made taking into ac-
count some of the changed conditions
since the transportation act OF 1920
was passed
Since Mr.. Couzens is the head of the
committee which will deal with rail-
road legislation his observations are
significant.
THE subject of rail transportation, +"
said Mr.. CouZens, lis very much in the
public mind at this tiIne-for several
reasons. One of the reasons is that
railroads, on their own statement are
very efficiently and economically man.
aged, which reacts greatly in the pub
lie interest. This increased efficiency
in railroad management has brought
about much better use of equipment
and greatly speeded up transportation
of commodities, thereby making 1t un-
necessary for manufacturers and n1er-
chants to carry so large a stock on
hand. I mention this because when the
1920 transportation act was passed this
exist, and some railroads, both large
and small, were called weak" rail-
roads.
Sought to Aid Short Lines.
Congress thought, so as to provide
adequate income for the so-called weak
and Short-line railroads, leveling-out
plan should be adopted. mean by tn:
leveling plan where one railroad
through good operating conditions,
plenty of business, and efficient man
agement, receives very high return
upon its investment, while other rail-
roads not so well located and with less
tonnage are unable to get even an
adequate return upon their investment
Then it was thought that the consoE-
dation Of the railroads into a number
OF large systems would bring about econ
ony in administration by the elirnina-
ton OF duplication of management: it
was thought that better use of terminal
facilities might be had, with resulting
economy. This, together with other rea-
sons, brought about the provisions fol-
consolidation in the transportation act
Of 1920.
Congress further provided that the
Interstate Commerce Commission should
prepare plan for making large num-
Der of strong railroad systems through
ABSORPTION by the most profitable of
the so-called weaker lines. This was to
act as a guide to the railroads and to
the public. After nearly ten years the
Interstate Commerce Commission has
handed down such plan. The plan is
now open to criticism, favorable or UNI
favorable, and to suggestions for modi-
f1cation or changes.
ut is entirely conceded that to bring
about consultations in the public in
terest, Congress should enact more lib
eral legislation, or at least more specific
legislation. so as to properly indicate
its intent
New Ways TO Defeat Plans.
However. since the enactment of the
1920 law. much water hes gone over the
dam, and we do not hear so much
about weak lines and the unfavoraLle
position that they and certain Short
Zine railroads were placed in. T'ha;
urgency has disappeared but there still
remains the desirability of allowing
such economies as may be brought
about by consolidation, and also the
leveling out Of income so as to prevent
excessive earnings by one road and t.
enable otEsr roads to secure an adequate
return.
There he's developed also means
which may be used to defeat the intent
of Congress in its regulatory powers
over interstate commerce These devices
are known as holding companies and
investment trusts. It is pointed out by
the Interstate Commerce Commission ir
the annual report that in their judg-
ment these holding companies and in
vesnent trusts do not come under this
jurisdiction of the Interstate Commerce
Commission, and therefore they desire
Congress to provide for an investiga-
ton as to the extent Of these holding
companies and investment trusts, and
their control or influence in the man.
agement of the railroads Developments
clearly indicate that in a number of