Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-05

Two Developments in connection with
railroad consolidation In the United
States promise to give rise to further
discussion of the plans authorized by
Congress and undertaken by the inter-
state Commerce Commission. The posi-
ton of the Burlington road raises ques-
tionS in connection with union of the
Northern Pacific and Great Northern,
while the action of the Baltimore &
Ohio in Withdrawing its application for
consolidation of various carriers also be-
comes q subject of discussion.
On the merger of the Northern roads
the st. Louis Globe-Democrat COM
ments: THAT Federal authority now
cordially approves what It endeayored
formerly at great cost in effort to pre-
vent is one of the indications of the re-
markable reversal is not one but many
views which q quarter century has
brought. The ancient question, how
ever, still presented difficulty. the trans
portation act of 1920 specifying that
consolidation should be sanctioned with
due regard to maintaining reasonable
competition, and two of the ten COM
misSionerS dissent because of that point.
This exact plan Of merger between the
two roads was recommended in the sew
eral tentative projects in national rail
unification outlined by the Interstate
Commerce Commission q few weeks ago.
However, the decision, which, it is
thought, will be speedily followed by
approval Of other major unifying prof.
ects long pending, will not be received
with full rejoicing by all the stock
holders of the Northern Pacific and
Great Northern. These roads own
Jointly all the stock of the Burlington
system, whose earnings are among the
most stabilized and generous in the
entire railroad world. In fact, In some
years the earnings on the Burlington
stock they own have gone far toward
making it possible to pay dividends on
Northern Pacific and Great Northern
stock. Under both the tentative out
line of projects and the approving deci-
sion both roads must divest themselves
Of this desirable stock and another dis
position of the Burlington is to be made.
Many stockholders will prefer to have
the Burlington without the merger than
to have the merger without the Bur-
lington."
RECOGNIZING that important forward
steps in railroad consultations are on
the verge of being taken" the Louisville
Courier Journal quotes j. Vandyke Nor
man. traffic and transportation author
ity, who spoke before the TranSporta-
ton Club. and states: Mr.. Norman
sees no benefit accruing to any one from
railroad consolidation, except the f1nan-
cial interests, who will make money out
Of issuing securities. He expressed him.
self as being amazed that an ancient
political and economic policy could be
Norman fears that the result of con-
solidation will be that advantageous
Iong-haul rates now in effect will be
raised so as to permit commodities to
move in from the short-haul point, to
the disadvantage Of producers. The
whole thing resolves itself into a matter
of trust in the Interstate Commerce
COMMISSIONS few men sitting around
a table in Washington as Mr.. Norman
phrases it. 1t would appear that the
case of railroad and shipper alike lies
as IL must continue to do under con-
solidation. Above and controlling them,
1t might be remembered, are the courts"
"The commission, while sanctioning
unification." according to the New York
Herald Tribune, has also sought to
forge a weapon with which to defend
its recent scheme of consultations. 1t
REQUIRES the Great Northern and North
ern Pacific to divest themselves of their
ownership of the Chicago, Burlington g.
Quincy as a condition precedent to uni
hcation. These roads wish to merge
with the Burlington eventually In a big
Northwestern system. But the commits
sion prefers to make the Burlington the
nucleus of an independent grouping.
There is force in the contention that the
Northern Pacific and the Great North
ern must hold the Burlington, or part
of it, as a connecting link with Chicago,
and the commission ik1elf disclaims any
intention of destroying that connection.
in particular. and seems to be q more
natural component In a merger OF the
two Northerns. The commission is,
therefore. undertaking a strategical Of
fensive In trying to cut the Burlington
loose now. Pending the outcome of this
experiment, 1fe unification just APP