New Britain herald., 1930-07-08
Advance Toward Wide National
 Tendency to Consolidate Roads
 Stopped By Many Rail Interests
Unfavorable Attitude of Congress Has Its Effect On Holding Organiza- tions and Pyramiding.

toward national COnSOlGafOn ot railroads was well nigh brought 10 q complete though perhaps tenn porary halt by events and develop ments associated with the con gressional session just closed.
 A single proposal came 70 q final vote in one house and other pro- jects all Of a nature tending to cast doubt or the future Of the national merger program were left hanging.
 Ten years ago congress by great flajoritias ordered tha interstate commerce commission TO prepare means for throwing all of the couu- try's rail systems into ] < or 20 giant punts, and empowered It to set aside antitrust statutes for the purpose.
 One house Of he congress just ad- journed voted hy an unexpected ma jorItv 10 withdraw the power the commission holds 10 override the antitrust laws; the other house Of the same congress. hesrating 10 go that far, vas torn by a demand for action nullttying the only extensive rail merger the commission had ap- proved
 Adjournment buried doubts and differences for the time being, though 1t left a congressional con- mietee busjly delvins into the mod ern methods Of railroad finance which came under hot fire during the controversy.
 Railroads Waiting
 Meanwhile. aside from congress, the four chief railroad interests which had asked the commerce commission 10 sanction specific plans for merger actions withdrew their appIIcadonsc 10 await developments.
 The new agitation over railroad consolidation was incred primarily by an extraordinarv report 10 con- gress from the commerce commits sion last fall. asking investigation Of railroad financing.
 Joseph B. Eastman. chairman of the commissions legislative commit tee. following up the report, ex- pIained to a house committee that there was danger Of complete loss Of public control Of the process of LII O1I ALlt--EShLCL II OIiL tllt lt- narkable use being made of the holding company device. He said also the 'pyramiding" of ownerships going on ought 10 be at least thor oughly understood by the law mak- ing bodies,
 Principally, here was cited the re markable accomp plshments of the
 
 land. who have linked together a string Of railroads - north. south east and west-of greater propor- tions and extent than any of the Hill Hartman, or Gould empires Of transportation,
 As the congressional inquiry dis closed, the holding company device has been astoundingIy developed in the process, one corporation after another being superimposed upon predecessors, and vast quantities of securities being emitted and mar keted with the investing public at each stage
 Thus, to give a single example, 52 per cent Of the Chesapeake (. C444C A4Ii O6EL NOt HIS S'DtN bE'dli the chief asset Of a new company, the Chesapeake Corporation, was made subject to 2 collateral bond issue Of S4S.oo0.oo0 while 70 per cent Of the voting stock of the Chesapeake Corporation became property Of the AlIeghany Corpora tion.
 In turn, the Alieghany Corpora ton, after selling 66 o-3 per cent of its own stock to the public, and bonding it's assets under another collateral mortgage issue. appears to have passed '6G0,0n0 shares Of its own common stock 10 the Van Swcr- ingen corporation. the third link in the holding chain
 Urges Supervision
 Commissioner Eastman indicated that the chief purpose Of the pro- cedure was to enable voting control Of immense holdings Of rail prop erty 10 be retained by investment al the top Of a relatively small sum Of capital, and the various legislative resolutions emitted from the study Of the performance had 8 common character in suggesting that holding corporation dealings with rail se- curities be brought under commis- sion supervision.
 The Pennsylvania company, through the Pennroad Corporation. also appeared from the inquiry 10 have gone strongly into holding cor poration play However, the two remaining Of the great eastern trunk lines, the Baltimore 6o Ohio and the New York Central. remained clear and incidentally got during the winter specific grants of official favor.
 The Baltimore &, Ohio has been permitted to make outright pur- chase Of the Buffalo Rochester (, Pittsburgh. and the Buffalo (, Sus- quehanna, facilitating the ambition of it's veteran president. Daniel Willard to create new Chicago New York short line in northern territory. The New York Central got authority 10 consolidate it's own subsidiaries, the Big Four and Michigan Central. and 10 buy up a whole group of short lines along its routes.
 In the west. the congressional re volt over rail consolidation was famed into flame principally by the commissions conditional sanction of the union of the Northern Pacific and Great Northern systems. That project. 2 years ago was banned by a federal court order, because anti trust law opposed the union of parallel and competing lines of rail road"
 The protest from the northwest against it's renewal was unabated when congress closed and it was re- ported in financial circles that the