Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-06-12
|. c. c. Expected to Announce
Eastern Trunk Line Deci-
sion in Near Future.
F0UR-SYSTEM LINEUP
WOULD BENEFIT ROADS
Executives Are Understood to Be
Planning Economies Contingent
Upon Government Sanction.
Special Dispatch TO The Star

NEW YORK, June 1l-Some time
between July l and its usual August
recess period the Interstate Commerce
Commission is expected to render its
decision in the merger application of
the four Eastern railroads, which pro-
vides for that number OF new systems
in their territory
While the opinions OF the commits
sion cannot be anticipated or their
trend indicated. there have been certain
intimations lately that are favorably
interpreted by railroad executives and
others who are most familiar with the
sentiments and psychology Of a ma jor-
ity OF this Government agency. These
men. 1t was learned today. are now
quite confident the commission will
render a verdict satisfactory to the
parties in interest, although they NAV
follow their usual procedure in making
a number OF recommendations to modi-
~ some OF the main features of the
consolidation scheme.
Decision Would Be Helpful.
decision by the commission that
would permit the establishment of four
major systems, controlled by the Penn
sylvania, New York Central, Baltimore
q Ohio and Chesapeake g. Ohio rail-
roads, would be extremely helpful in as
slstlng these carriers to offset the ef-
fects OF loss Of traffic which, at the
present time. requires them to employ
only about so per cent Of their facili-
ties 1t is understood that a large
number Of economies would quickly be
effected and that these might be repre-
sented In earnings statements in the
later months Of this calendar year.
Obviously. however, it would require
much longer time to bring about those
changes which are expected finally to
ceheVe the carriers OF much unneces-
sary expense.
The latest application of the Eastern
roads to the commission for permission
70 establish four major systems in the
East was submitted last October. 1t
substituted a program, arrived at only
after long and bitter disputes between
the carriers, for the one of the commits
sion which would have established five
Eastern systems under its consolidation
scheme Of December, 1929. It included
various compromises: between the
Pennsylvania and the New York Central
lines especially. and on ALLEGATIONS long
IN dispute, such as the ceding of the
Delaware, Lackawanna & Western to
the New York Central and certain
rights to the Pennsylvania Railroad in
the Buffalo-Lake Erie region. The Joint
ownership and operation of the Vir-
ginian Railroad by the Pennsylvania
and the obtaining Of joint rates and
through routes over this soft coal road
by the Chesapeake e. Ohio and the
New York Central lines was another
victory for the arbitrators, following
long deliberations.
Mileage Affected.
In the testimony presented in this
case to the Interstate Commerce Com
mission it was shown that the total
mileage to be affected by the four-party
plan would be over $4,000 and that the
primary valuation Of the properties in
volved was 1926 100000. In the
mileage chart the Pennsylvania lines
were represented as having 17.107 miles
IN the proposed system. the Chesapeake
d. Ohio, 1881 miles; the New York
Central, l3434 miles, and the Baltimore
& Ohio about 10000 miles
Since the application for a merger
was made last october, the market
value of all railroad securities has de-
clined to the lowest level in nearly 40
years. On June l the average price of
listed railroad stocks was $3.50, or only
two-thirds of the average of nine
months previous. In order to effect the
consultations after the Interstate Com
merce Commission approves it, there are
certain minority interests which will
have to be dealt with. These, no doubt,
would now be willing to turn over their
holdings at lower prices than those
prevalent when the merger plan was
being prepared
The consolidation plan now before
the commission does not include anv
OF the New England lines, although the
Pennsylvania Railroad has a large in
vestment in both the New York. New
Haven & Hartford and in the Boston &
Maine. Should the commission act
favorably on the trunk line merger. the
next step in the program for a general
consolidation of all railroads in the
United States, it is expected, would be
taken In the New England territory.
Within the past year studies have been
made by engineers of both the New
Haven and the Boston & Maine and
are understood to have been undertaken
on the Bangor & ArooStock. Eventually.
railroad men believe. there will be but
one major system in New England, other
than the Canadian lines which now
have tidewater outlets in that part of
the country.
Copyright, 1927