Evening star., 1933-03-24
ATTEMPTS At RAIL
MERGER REVIEWED
Efforts to Consolidate Va
rious Lines Began IL
Years Ago.
special Dispatch to The Star.

OF the attempts made In this country
IN the past IL years to bring about
railroad consolidation Is just now
worth reviewing as a new lineup Of
the carriers is being proposed which
will have the effect Of scraping all Of
the unification formulas previously pre-
pared.
In the middle of 1921 the Interstate
Commerce Commission, under the au-
thority Of the transportation act, pre-
sented scheme for national consolda-
ton known as the Ripley plan. This
divided the United States into score
of zones in which each railroad was
given a certain ALLEGATION. Nothing
ever came Of this proposal, which was
quite generally resisted by the carriers.
In December, 1929, the Interstate Com
merce Commission a second time out
lined q rearrangement OF the railroads
into l9 American groups and ADDED Two
systems covering those parts OF the Ca
madam National and the Canadian Pa
cific lines that were located within the
United States.
Merger Proceeds Slowly.
Previously attempts had been mace
on small scale to bring together parai-
lei and competing lines In the North-
west and In the Southwest ana tne
executives Of the four trunk lines IN
the East had been working toward a
consolidation that would have covered
the trunk line territory. A Northern
Pacific Great Northern merger was oe-
MED by the I. c. C. Several efforts 10
unity roads running out OF st. LOUIS
to the Gulf made little headway.
At the end of 1880 It was announced
that the heads of the Pennsylvania,
New york Central, Baltimore q ONO
and Chesapeake & Ohio systems hao
finally reached an agreement on =
plan of consolidation Of the principal
carriers in the Eastern group, put eA
Guiding the roads in New Engaaui;
This merger has been going ioL"aLu ~. = =
slowly during the past year, VIII .iS
prospect that its practical eHecS WIZ. WIS
not be witnessed for another ~ noa,oa,o anan
and might possibly be delayed even
longer. .h. ,ost wear
President Roosevelt was empnauc ~
his recommendation for consolloasio'.,
If railroads. His argument IN penalt
# Il was supported in the recent report
of the committee representing noloels
NJ railroad securities Since this was
nresented certain interests have Deen
iaboring on the consolidation questioil
until now it Is being discussed IN w. ~
skeleton form. 1t also throws an d "
the earlier schem3 into the otSGaad az
and upsets the arrangement thdt uao ia
been nearly perfected by the truhk Lnie
roads. It provides for seven niani tSs, SSst
TENS instead of the 20 or more tna'
were proposed by the Interstate Com,
nerce Commission in 1921 and In 1879
brings together systems whose merger
had previously been opposed py the
commission and disrupts the setup ina! M
had been established after about eien'
wears of negotiations between the East
ern lines.
Two Systems Proposed.
In its tentative form it would merge
| into a system dominated by the NeM
York Central all Of the lines IN Ne"
England, the members OF the van Swel'
ingen group and the Delaware, Lacka'
! wanna g. Western, which IS now con. !.
| trolled by the New York Central. a
| Pennsylvania system would mcluoe tne
Baltimore & Ohio and its various con
trolled lines. as well as the Lenlgn vai-
lev and Norfolk g. western, IN whch
the PENNSYLVANIA now has domlnat-
| ing position. In sum, therefore, the
present four-party plan of the Eas'
would be reduced to two systems.
In the West the Great Northern ano
Northern Pacific would be merged with
| the Chicago. Milwaukee, st. Paul d. Pa
cific. which had opposed this consolida-
ton a few years before. To this group
would be Joined the Chicago & North
western. The Union Pacific and South
ern Pacific, which were once under q
common authority, would again be
brought together, although the United
States Supreme Court has stated nat
they must be separated. The Atchlson
and the Rock Island would constitute
the third major system west OF the
Mississippi River.
To each one of these three con-
solidated groups would be added the
present Independent lines in their i'm
mediate territory. This would involve
units of large mileage, such as Mis-
souri-Pacific The sixth and seventh
systems would cover the South and
Southeast and be dominated by the
Southern Railway and the Atlantic
Coast Line, with the Illinois Central
probably becoming part of the latter
Would Aid Weak Lines.
The effect of such consolidation
| would be to attach many weak lines
to systems Of great strength. In TINS
| respect it carries out something Of the
economic philosophy of the Roosevelt
administration that has been indicated
in the measures for stabilizing the
banking situation, where too many
weak units have affected the credit OF
the entire financial structure. Just as
bankers affiliated with powerful insti-
tutions are today disinclined to take
on and relieve weak banks, so IS 1t
likely that there will be resistance to
merger proposals on the part Of rail-
road executives who have for years
fought the idea of attaching to them
selves properties of small earning
power and which are generally recog-