Evening star., 1932-10-07
RAIL MERGER IDEA
WINNING SUPPORT.
Plans to Effect Economies
Receive Stimulus From
|. c. c. Action.
BY CHARLES F. SPEARE.

special DlspdtCn 70 lHc 5tuT.
NEW YORK, october 7.-Censolida-
ton of railroads as means of effect
ing practical economies in operations,
and at the same time maintaining an
adequate service to shippers and to the
travelling public, has been academically
discussed for many years and is now
q live topic again
Definite proposals have been MADE
several times by the Interstate Com
merce Commission since 1920. From
1925 on the roads in the trunk line
territory have been engaged on plan
that would favorably affect their par
ticular zone. Finally, there has Just
been consummated an agreement
among the Pennsylvania Railroad, New
York Central, the Baltimore ONO
and the Chesapeake & Ohlo-Nlckel
Plate lines which will be pattern Tor
other systems throughout the country
and whose success or failure VII! de-
ternline the degree to Whlch rallroad
mergers become an important factor IN
solving the major railroad problems.
&c. c. Promotes Mergers.
The fact that the I. C. c. has ap-
proved of railroad consolidation and
has proposed various plans by which
it might be put into effect gives con-
siderable momentum to the idea. 1t
has been advocated by President Hoo
yer in various messages to Congress.
In his Salt Lake address on the rail-
roads recently, Gov. Roosevelt stated
that proposed consultations OF rail-
roads, which are lawful and in the
public interest, should be pressed to
conclusion" The difficulties of merg-
ing independent lines into one main
system have not been, nor need they
be In the future, those Of legislative
restraint. The delays and the objec-
tions will again, as in the past. orig
mate with the railroads themselves.
This includes bodies of their security
holders and organized groups OF ship
pers
Frequent attempts have been made
to bring different railroads In different
parts of the country into co-ordlnated
system If some of these have failed 1t
has been the result primarily OF tne
speculative promotions that have been
centered in such movements and to
which regulating bodies, as we'll as Sc
curity holders, have entered a protest.
This was particularly true OF the sew
eral movements toward unltcatlon OF
the roads in the Southwest. At tine
same time progress has been MADE IN
co-ordinating into one system logical
parts of previous combinations, notably
in the case of the Missouri Pacific. The
failure of the Great Northern-Nortn-
ern Pacific merger, which was free from
all speculative taint and was as simple
a case for merging parallel llnes as
could be presented, was due 10 tIe on,
iections of a competitor that would
have been left in an isolated POSITION II
Al had hopn effected.
From a dollar and cents basis 1t mas
alvays been impossible to approximate
the value of railroad consultations:
That between the Great Northern ana
Northern Pacific was claimed TO De
Worth s1O,000,0O0 a year to the two
lines. In the proposed merger OF Soutn-
western roads it was estimated around
5000 900 per annum. No hgures NE
ever been presented to show the saving
to the individual roads or to the group
cf four roads which viii now proceed
to consolidate the members OF thelr
own family and work in closer CO.
operation with each other. Obviously,
economies of operation must come prl-
marily from the smaller working forces
required. This will involve much strlle
between railroad management5 and rall-
road labor organizations. 1t Is an estap-
lished fact that the savings OF the
British railways under the merger plan
effected after the war have not 1uStl-
fed the original estimates.
Operations Simplified.
Probably the greatest net return from
the railroad consolidation now projected
bv the Eastern trunk line territory
would be of an indirect character and
of a sort that cannot be clearly trans
lated into mcnetary units. There mas
been a. tremendous waste OF effort ana
money through lack of cooperation
between railroad administrations. Con-
seouently, with four men in the East
able to deal with the problems CT their
territory, direct action will be simpll-
fed by the elimination of scores OF
human factors and sensibilities which
now have to be considered when
problem in rates or in duplicate services,
or even in action ccncernlng legislative
proposals, comes before them. On the
operating side there are many snort
cuts to economies in routing trafnc. IN
the administration Of common terminals
and wherever new facilities are required
or compelled by the public.
In ali cases consolidation will have
measure of success that justifles its
trial where those involved fully concur
in the idea. 1t will fail in those in
stances where participants feel they
have been forced into and are part of a
popular movement for which they have
little or no sympathy. The test also
will involve the relative values OF con-
solidation to the weak lines and to the
stronger ones. This Is an issue that has
not yet been settled and which many
railroad managers feel must be looked
at practically and not from an aitruEtlc