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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (April 7, 1960)
Railroad Officials Unimpressed By New Talk of Consolidations By LEROY POPE New York-ffiPD - Veteran railroaders are unimpressed by reports that the 60s are going to be the greatest era of railway consolidation in this century. The managements of at least 30 lines are talking mer ger and the" Interstate Com merce Commission has flash ed a green light for consolida tions. But neither Wall Street ers nor rail executives expect It to happen. They point out that twice before in 1920 and 1933 the ICC tried to nudge the railway companies into major consolidations, and both times the companies balked. This time, experts said to day, there doubtless will be some mergers. The Norfolk & Western and the Virginia, two prosperious lines, have merged and the combined company now is flirting with the Nickel Plate, to annoy ance of the Chesapeake & Ohio, which has been having an off and on romance with the Nickel Plato for years. Merger Progress The long-projected absorp tion of the paralleling Lacka wanna by the Erie, the line whose stock Jay Gould and Jim Fisk manipulated so joy ously to trim the suckers near ly a century ago, seems likely to occur at last. Some pro gress even seems visible to ward merging all the rail roads in New England into one system built around the staggering New Haven. This was a dream of the elder Pierpont Morgan. There are more ambitious schemes out West to make one big system out of the Mil waukee and the Rock Island and an even bigger one by combining the Great North ern and Burlington. There Is no doubt mergers would cut the costs of many railroads considerably and might even save rail service for some communities that are going to lose it because small, weak lines can't keep It up. The old argument against mergers pretty much has lost force. Experts say such com petition as still exists between railroads is cut-throat and harmful not beneficial. And the ICC's new philosophy plainly seems to be "The railroads need to be strong to compete with the trucks, the barges and the airlines not with each other." Then, why aren't more mer gers expected to come about? The main reason was put bluntly by the late President Daniel Willard of the Balti more it Ohio, during an ear lier wave of merger talk. He said "Nobody wants to merge himself out of a job." Salaries But No Dividenls Bluntly, from the point of view of the executives, run ning railroads that lose money has come to be a way of life a pleasant vested interest. A railroad doesn't have to make money for its executives to collect salaries, good salaries. The salaries get paid even if stockholders and the tax col lector and other creditors don't One expert said " "The chaps who run these roads that lose money all the time would be indigant If you ac cused them of much the same kind of feather-bedding they charge the unions with. But their jobs can look like feath erbedding to a cold blooded security analyst, who reaches the conclusion their lines ought to be merged and most of the executives shoved off the payroll." When the ICC first tried to get ( wave of railway mer gers started in 1920 It en gaged Professor William Rip ley of Harvard to draw a Section B Medford Pages 1 to 12 Tribune Section B MEDFORD, OREGON, THURSDAY, APRIL 7, 1960 12 Pages master plan for consolidating the nation's railways. Professor Ripley's plan drew a lot of praise but nothing came of It directly. Invested Heavily Indirectly, fear that the gov ernment would press mergers caused railways to invest heavily in each other's stocks and bonds. The idea was to protect the interests of the top management teams. A lot of railroad money was invest ed this way that might more profitably have gone into bet ter rolling stock and other fa cilities. 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(UPI Telephoto) Nikifa Boasts Of New Weapon Geneva-ll'PD-The West said Wednesday that Premier Ni kita Khrushchev's' boasts of a "fantastic new weapon" in the Soviet arsenal made his announcement of troop reduc tions meaningless and under, lined a necessity for iron clad disarmament controls. British delegate David Ormsby-Gore told the 10-na-tion East-West Disarmament conference that Khrushchev's announcement that Russia is cutting her troop strength by another 1,200,000 men in the next two years Is not a real disarmament measure. He said the Soviets really are only changing the form of their striking powers. They are not, as they have claimed here, engaged In any real re duction of military might, he said. ACCURATE TIME Washington - Standard clocks at the United States na tional bureau of standards do not vary by as much as one fiftieth of one second In every 24 hours. 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