Herald and news., November 03, 1957, Image 9

SUNDAY, NOVEMBER 3, 1957
HERALD AND NEWS. KLAMATH FALLS. OREGON
PAGE NINE
iMnsy!vaDuia, Men York Central Consider fiftorgo?
I NEW YORK W Two rail gi-
ants, their profits off, are consid
ering a merger that would create
the world's largest railroad in
jevenue and assets.
J Citing common problems and
thanged economic conditions, the
Pennsylvania and New York Cen
tral railroads Friday an
nounced they have begun studies
' looking toward a possible merger
into one consolidated system.
4 The two roads are the largest
In the country, bajed -on annual
revenue. Their combined assets
are in excess of "54 billion dollars.
The announcement by James M.
Symes, president of the Pennsyl
iv'ania. -and Alfred E. Perlman,
tnrpsident of the Central, was
imadc after the New York and
, -A
other stock exchanges had closed
for the day.
Stocks of the railroads on the
New York exchange were both off
12.5 cents. , Previous announce
ments of planned mergers have
been reflected on the exchange by
flurries of activity.
Wall Street observers took a
rather skeptical view of the pro
posed merger, pointing out the
many roadblocks that would have
to be cleared approval by the
Interstate Commerce Commission
and the possibility that the Jus
tice Department could intervene
on antitrust grounds.
Railroad and investment men
indicated it could be years before
the Central and Pennsylvania op
erated as a single company on
the same tracks.
The ICC has long held that
competing lines should not be per
mitted to merge. The commission
has refused to approve the effort
by Robert R. Young, chairman of
the Central, to merge the Central
and the Chesapeake and Ohio
Railway because, the ICC said,
the result would be loss of "ex
tensive competition" between the
two railroads.
The Pennsylvania and Central
compete in some areas, chiefly
between New York and Chicago.
In Washington, both the ICC
and the Justice Department de
clined comment Friday on the
merger possibility. In proposed
railroad mergers, the ICC inves
tigates to determine if, among oth
er things, the proposal would be
in the public interest. The Justice
Department usually intervenes -to
follow the testimony presented.
Other possible roadblocks In
clude possible objection by states
and cities served by the railroads
and the fact that stockholders of
both companies would have to ap
prove the consolidation.
Consolidation would create' a
transport giant covering most of
the northeastern United States.
The railroads cross heavily pop
ulated and industrialized sections
of the East and Midwest.
A merger would apply both to
the physical properties and the fi
nancial structure. It would enable
the roads to consolidate terminal
facilities and eliminate duplicate
rail and yard facilities in some
areas.
A merger of the roads would
create the 11th largest corporation
in the country.
The presidents' joint statement
said economic and competitive
conditions confronting railroads,
particularly in the East, "have so
changed that a thorough inquiry
should be made into the wisdom
of consolidating, as against con
tinuing "competitive operations."
The Presidents stressed the im
pact of other forms of transporta
tion that are "subsidized to vary
ing degrees" an evident allusion
to trucks, airlines, buses, barges
and private automobiles.
Earnings of both railroads plum
metted this year. In the first nine
months of the year the Pennsyl
vania had net earnings of
$19,581,366 after taxes a sharp
drop from $31,291,852 in the same
period last year. -
The Central's net earnings fell
to $8,759,018 after taxes in the first
nine months of this year from
$28,172,388 last year.
Last month the earnings of the
Pennsylvania were 25 per cent be
low the 1956 level. The Centrals'
profits dipped more than one mil
lion dollars.
A slump in freight carloadings
has been partly responsible.
Heavy deficits from passenger
traffic also have hit most major
carriers.
The Pennsylvania laid off 4.000
workers recently when an expect-
Knight Tight-Lipped OnKnovland Race; May Lose GOP Support For Office
By MORRIE LANDSBERG j
SACRAMENTO, Calif. (fl-Gov.
Goodwin Knight was all but writ
ton off the Republican ticket for
governor Saturday by his continued
. htc rl,,l U7th.
Silence uu mo
drawal from the race against Sen.
William F. Knowland.
But Knight, vacationing out of
the state, had no assurance that
he could have the GOP nomina
tion for the U. S. Senate without
a fight assuming that's the job
he decided to seek instead of re
election. .
Mayor George Christopher of
San Francisco, reached on a tour
of Greece, said firmly he would
not give up his quest for the Sen
ate and predicted he would win
the nomination. Knowland has an
nounced he's giving up his Senate
post when his term ends next year
and has begun his campaign for
governor.
Two other Republican Senate
candidates indicated they would
await Knight's decision. They are
State Controller Robert C. Kirk-
wood' and Warren K. Atherton,
Stockton attorney and former na
tional commander of the Ameri
can Legion.
Rep. Clair Engle (D-Calif), lead
ing contender on the Democratic
ticket, reaffirmed his intention to
run whether Knight goes after the
Senate seat held by Knowland
since 1944.
Knight's reported pullout meant
cheery news for Vice President
Nixon, the third member of Cali-
Plane's Engine
Catches On Fire "
NEW YORK Iff) A London
bound plane's 21 passengers and
eight crew members escaped in
jury Friday night when one engine
of a Trans World Airliner caught
fire on an Idlewild Airport run-wav.
The plane had taxied several
thousand feet on the 8,000-foot run
way when the blaze broke out.
The pilot immediately brought the
craft to a halt, and all aboard
scrambled to safety through the
Constellation s emergency chute.
The cause of the fire was not
immediately determined. .
fornia's GOP big three, who might
have been caught in the middle
of a Knight-Knowland battle for
governor.
Nixon . also got another break.
An authoritative source in Wash
ington said Knowland will step out
of Nixon's way and not enter any
presidential primaries outside
California in 1960.
In the absence of Knight, his of
fice answered all questions with
a steady "no comment." An aide
said privately he expected the
governor to say something by
Tuesday or Wednesday.
Some political observers said
Knight would confer with Nixon
in Washington Tuesday.
Assemblyman William A. Mun-
nell (D-Montebello), assembly mi
nority leader, raised the question
of the 60-year-old Knight's health.
In a statement he said the gov
ernor "has been not only physi
cally but emotionally ill, and that
is why he has been kept from
public view."
Knight, before leaving Monday,
was confined to the Executive
Mansion for 12 days. His office
said he had the flu. Knight, in
statement issued after his depar
ture, described himself as weak
and said his doctor had ordered
him to take a two to three week
rest. -
Knight variously was reported
in Arizona and Mexico but efforts
to locate him failed.
Queen Critic Does Quick Change, Sings Praise
LONDON W Lord Altrincham,
who recently said the speaking
style of Queen Elizabeth II was a
"pain in the neck," now says shej
shows every sign of being a tele
vision star in the making." .
The 33-year-old peer wrote in a
STUCK DUCK
TULSA, Okla. Wl It was a
strange request for the Tulsa Fire
Department aid for a drowning
duck. But the call was answered
to a drain near Swan Lake, and
firemen found a duckling stuck
in the mud. The duck was unstuck.
monthly magazine that the Queen
did well in her television speech
last month in Canada, but not so
well in speeches in the United
States.
"When she arrived at Washing
ton Airport and was greeted by
the President," Altrincham said,
"one sentence spoken spontane
ously would have been much pref
erable to the few sentences which
were read off a piece of paper."
Commenting on the Queen's
Club, Altrincham added:
"The opening remarks, being
unpretentious ar.d human, seemed
to come naturally from the speak
er, whereas the rather trite little
sermon which followed did not
have an authentic ring." .
The young critic said if Eliza
beth is "completely and unaffect
edly herself, she will lose no dig
nity, while gaining those qualities
which, in a queen, are even more
precious than dignity."
In the Canadian speech Eliza
beth used simple and direct word
ing and the content was better
than usual, Altrincham said. "In
deed," he said, "she shows every
sign of being a television star in
the making."
Altrincham expressed his views
in the National and English Re
view, which he edits. Two months
ago he set off a continuing na
tional debate with an article- in
the Review saying the Queen's
speeches made her sound like "a
priggish schoolgirl."
EASTLAND BEDDED
RULEVILLE, Miss. (UP), Sen.
James O. Eastland (D-Miss.) was
confined to the hospital Saturday to
prevent complications from a re
cent flu attack. Eastland left a
sick bed earlier in the week to
conduct a Senate hearing on Com
munism in Memphis.
ed autumn rise in traffic failed to
materialize.
The Central has 10,600 miles of
road and the Pennsylvania 9,663.
Hie Atchison, Topcka & Santa Fe
owns 13,000 miles of road. The Ca
nadian National Railway Co. has
39.915 miles and assets of
$3,418,169,123.
Comment on the proposed mer
ger varied.
W. N. Deramus Jr., president
of the Missouri Kansas Texas
Railroad, said in Parsons, Kan.,
he couldn't comment on the mer
ger until the study is completed
"because some strange and won
drous things can come out of
such studies. Sometimes the out
come isn't what you expect at
all."
William T. Faricy, chairman of
the board of the Assn. of Ameri
can Railroads, said the announce
ment came as a great surprise.
He said the merger would not
come within the jurisdiction of the
association."
George C. Frank, director of
public relations for the Erie Rail
road, said, "it's an amazing an
nouncement, but I can't see where
it . would make any difference in
Erie's competition."
H. E. Gilbert, International
president of the Brotherhood of
Locomotive Firemen & Engine
men, said, "I can't think of any
combining (of railroads) where
the employes have benefited."
He declined further comment un
til he studies the proposal.
Financier Bernard Baruch said
that unquestionably the railroads
are in a profit squeeze and that
something must be done about it.
Pierre R. Bretey, an analyst of
iiayaen, Mono & Co., offered a
Dependable Coverage
MAYFLOWER
AUTO INSURANCE
Reasonable Ratei
VERN W. EMLEY
Olflc. rhon. t-!il tOOl So. lh
"curbstone opinion" in Wall Street
that the merger would have to
overcome major obstacles by rail
road labor organizations.
In Baltimore, Howard E. Simp
son, president of the Baltimore &
Ohio Railroad, said the announce
ment "comes as a complete sur
prise to me." He declined further
comment until he has more infor
mation on the proposal.
The main line of both roads runs
from New York in the East to
Chicago and St. Louis in the Mid
west. The lines are not precisely
parallel but both systems have
branch lines serving the same
cities.
In addition to New York the
Central operates In Ohio, Indiana,
Massachusetts, Pennsylvania, Il
linois and Michigan and extendi
into Ontario and Quebec, Canada.
There is also some mileage in
West Virginia. The road reaches
Missouri at St. Louis.
The Pennsylvania operates in
New Jersey, Delaware, Maryland,
Pennsylvania, New York, Ohio,
Indiana, Illinois and Michigan. It
also reaches Missouri at St. Louis.
Important cities served by both
railroads in addition to New York,
Chicago and St. Louis include In
dianapolis, Gary, Detroit, Toledo,
Columbus, Cincinnati, Pittsburgh
and Buffalo.
Total assets of the Pennsylvania
as of Dec. 31, 1956, were $2,468,
953,000 and of the Central, $2,021,
038,000. In revenues, the Pennsylvania
was first among railroads last
year with 991 million dollars and
the Central second, with 780, mil
lion dollars. The Santa Fe's rev
enues totaled 590 million dollars.
IxJf
SIPEAK1MG OF
COVERAGE.....
Speaking of coverage . . guaranteed, audited, net paid circulation of
the Herald and News on Thursday, Oct. 24, was 14,047. For Herald and
News advertisers, this means more profits than ever from your advertising
investment.
For more than 50 years leading business firms have profited from in
vesting in Herald and News advertising. You can, too! As the Klamath mar
ket grows, so has the readership of the Herald and News. Truly, it covers
the market "like a carpet.''
On Dec. 1, when Herald and News advertising rates are adjusted to the
new 14,000 circulation base, advertisers will continue to find the Herald and
News their most economical investment ... the basic advertising medium of
the Klamath Basin.
C fi ft & .2'.
FAMILIES
NOW PAY
TO READ
I THE II
89 Herald and News Employees Spend $396,179.49 with Herald and News
Advertisers Each Year t '