Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-18
Railroad Holding Companies
As Possible Danger Debated

Future policies In dealing with the
railroads are earnestly debated, as a re-
suit OF the recent statement by Joseph
d. Eastman of the Interstate Commerce
Commission that there Is danger of loss
OF public control over these properties,
through the development of holding
companies. Coupled with this is the
introduction into Congress by Senator
Couzens and Representative Knutson OF
legislation to postpone projected con-
solicitations until such time as Congress
has been able to act on this situation.
Mr.. Eastman undoubtedly does not
exaggerate in the slightest" says the
Louisville Courier Journal, when he de-
scribeS as dangerous the threatened
loss OF control over railroad consolida-
lions through the purchase Of stocks by
holding companies Obviously it is pos
s1ble for such corporation, over which
the commission may exert no authority
under the law, to buy up, control and
manipulate carriers which are COM
petitors, and thus effectually defy the
Governments efforts to regulate their
affairs"
Considering that enactment of SEN
ator Couzens' resolution might end the
commissions work on consolidation. the
Harrisburg Telegraph expresses the view
that Congress, and not body of such
limited membership and only indirectly
responsible to the public for its actions,
should decide such a vital subject as
consolidation, affecting the prosperity Of
whole communities and the employment
OF thousands of men," The Little Rock
Arkansas Democrat points out that the
transportation act of 1920 gives the
commission jurisdiction only over the
actual physical merger of the railroads, {"
and that, in stopping at that point in
empowering the commission to protect
the publics interest, Congress forgot, or
ignored, the tremendous possibilities in
stock control" That paper concludes
That monopoly Is not necessarily dan
gerous, but there never is a time when
1t doesn't need close Watching"
The scheme of railroad consolida-
ton" according to the Baltimore Sun.
was evolved to assure better service and
grea1er economy In transportation by
creation OF rail systems as nearly equal
as practicable in mileage, financial re-
sources and revenues. AS the Situation
now stands in Eastern territory. the
pennsylvania and the Van Sweringens
II they can retain their grip upon car
r1erS In which they have bought control
or substantial holdings through hold
ing companies, will have defeated the
purpose of Congress-
Public skepticism over the necessity
Tor any general merging of the railroads
at TINS time" is seen by the st. Paul
Ploneer Press. which declares further:
Wnat MT Eastman foresees is the uni
ncatlon of railroad ownership in hold
ing companies that cut across the
mergers as arranged by the Interstate
Commerce Commission. It will do the
commission very little good to preserve
the appearance of competition among
railroads which, through Companies
holding stock in the various lines. are
owned by the same men. Mr.. Eastman
Is asking legislation which will give the
commission a better control over the
ownership as well as the operation of
the railroads"
ct Is true that steps which would
ne Illegal II taken by railroads them
seIVes-steps which in such cireunn-
stances the commission could enioin--
weA an air Of legality when taken by
holding companies not now responsible
TO Federal authority" argues the Chi
cago Daily News, while the Providence
Journal holds that the fact that a
consolidation movement Is being fos-
tered by Congress affords a reason for
giving the Interstate Commerce Com
mission authority over the holding COM
panies."
while stock assembled in the possess
sion OF the holding companies is poten-
TALLY a menace to the commissions |
control of consultations, states the |
Springfield Republican, 1.-The railroads |
which have used these expedients had |
better be given the benefit of the doubt |
unless an actual stem is taken to con-
erto independent line. There Is no |
evidence that this has been done. II |
1t were done, the commission would |
probably find that it had power to |