Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-18

ing off of shipments in particular COM
modities produced on their lines can
not risk even the expense OF ordering
new locomotives that would haul more
freight at lower cost ton and a mile
and thus pay for themselves eventually.
The smaller roads haven't the reserves
and the credit OF the larger ones; they
must pursue conservative policy.
The result is, Of course, that such
roads order less steel rails fewer ties.
less freight cars, employ fewer men In
maintenance work and generally reduce
expenditures and the need for labor.
1t is true, perhaps. that a railroad con-
solidation might affect direct railroad
employment to some extent, but the
economies in operation undoubtedly
would result in expenditures for equip
ment, extensions and improvements that
would more than counterbalance Fur
thermore, President Hoover in ANNOUNCE
Ing the negotiation Of the Eastern con-
solidation plan has stated his under
standing to be that 1t provides for the
protection of the interests Of the en-
ployes as we'll as the interests Of the
various communities.
More Available Funds.
The strengthening and rehabilitation
OF railroad credit through consolidation
OF the weaker with the stronger lines
would make funds available for material
and equipment purchases in large vol
ume. And such purchases mean more
employment in locomotive building, to
cite Just one probable effect. For the
careful estimate of experts is that one
third OK the motive power on American
railroads is more than 20 years old, and
much Of 1t should be and would be re-
placed II railroad finances were avail
able. During the five years 1925-l929
there were IS Glass 1 railroads, exclud-
ing those having less than SO locomo-
tives, which did not buy a new engine
On the other hand, some Of the
larger and better financed railroads
spent large sums for new equipment,
even in the improbable passenger serv-
ice, IN order to meet bus and automo-
bile competition. Such expenditures
mean employment for men in car
shops, for labor in steel mills, in uphol-
stery establishments and in a dozen
other lines. And the public BENEFITS as
well. The passenger who few years
ago rode in an uncomfortable, crowded,
often dirty, poorly ventilated day coach
now is afforded an individual seat that
pivots, is cushioned, has arm rests and
has individual window ventilators.
Modern equipment is improved in many
other ways on the large, well financed
roads. But OF the main line trunk
roads transportation facilities have not
improved greatly, and cannot do so
until consolidation brings greater finan-
cial ability and stability.
Protection Of Public.
The public is not only entitled to
benefits from consolidation but expects
protection from transportation monop-
oily. No monopoly could be more dan
hat ~ 1aaf1N
But the purpose of Congress in its en-
actment Of consolidation legislation has
been to preserve healthy competition
in the public interest. That competi-
ton need not take the form Of a fierce
struggle for traff1c among hundreds of
railroads in a given territory. 1t can
and should take the form Of healthy
competition among four or five great
railroad systems, engaged In legitimate
rivalry, rendering a competitive service
on safe and sane basis. II the plan
Of the Eastern railroads, now under
consideration by the Interstate Com
merce Commission, should be approved,
there would continue to be competition
among the Pennsylvania, New York
Central and Baltimore & Ohio systems,
for example, between st. Louis and
Chicago and the East.
Whether sufficient competition will
will be properly protected, whether the
interests Of minority stockholders and
Of others will be properly protected un-
der the plans that have been formu-
lated are not questions necessary to
discuss here. They are not questions
decided by President Hoover. With ad
mirable fairness and good Judgment, he
stated in his announcement Of the re-
suit Of the negotiations:
IL t. - - ~.
Interstate Commerce Commission, which
has the independent duty to determine
If it meets with every requirement Of
public interest"
Some Financiers Against Merger.
I know that those who are opposed
to the present plan Of Eastern railroad
consolidation, as well as practically ell
other plans in all other territories, are
likely to charge that railroad consolida-
ton is in the interest Of and by and
for f1nanciers. They very conveniently
forget that less than year ago the
largest of the so-called wall street"
investment and banking firms, with
Nationwide security business, spent a
very large sum Of money distributing a
h-rchure against railroad consolida-
ton.
Those who are opposed to any and
ali consolidation plans also seldom, If
ever, mention the record of public pro-
lection the Interstate Commerce Com
mission already has made. Proposal
after proposal for consolidation or uni
fication has been presented to the COM
mission and has been rejected because
it was deemed contrary to public In
terest or the legitimate interests Of
minority holders of securities. Prob
ably no ether tribunal in America even
including the Supreme Court of the
United states, has firmer hold on
Interstate Commerce Commission. Its
IL members are experts who are far1il-
lar with every phase of the transporta-
ton business. They are men appointed
by the President of the United States,
by and with the approval of the United
States Senate-and no appointments
have been more vigorously and vigilant-
ly scrutinized by the Senate than those
to the Interstate Commerce Commits
sion. The Senate has not hesitated to
question or reject appointments.
And so the problem of railroad con-
solidation is one that is left-and safely
mer'bers Of an impartial, dis
interested tribunal of experts, acting
in Judicial capacity. They have the
Information and facilities to examine
every detail of an intricate, involved
problem, which holds important posi-
bilitieG of benefit to the public.
Commission AS Safeguard.
For years the commission has been
the constant safeguard of the public.
1t las exercised authority over rates.
over service, over equipment over
safety appliances, hours of labor, capt.
valuation. rates of return
on investments, the expenditures OF the
carriers, their purchases, their methods
of accounting. It is this tribunal, Sc
cure in the public confidence, which in
the words of President Hoover has "the
duty to determine" if the
Eastern railroad consolidation