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. And when the 1929
crash came, many railroads
found their capital depleted
almost to the vanishing point
because they had tied up so
much money in each other's
shares.
The second ICC effort In
the 1930 was successfully re
sisted by what looked like
sheer Inertia until the out
break of war in Europe put
the railways temporarily on
their feet again.
NAME CHANGE
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SIGNS AUTOGRAPH Former President Harry Truman
signs an autograph for Mary Pickford, America s sweetheart
of the silent films, as they met at Chicago. At left is Charles
"Buddy" Rogers, Miss Pickford's husband. (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.
Russia's Sputnik III
Burns in Atmosphere
Bedford, Mass.-tUPD-Sputnik
III burned up In the earth's
atmosphere Wednesday after
making more than 10,000 rev
olutions around the earth In
the past 23 months, the Na
tional Space Surveillance Con
trol Center said.
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