Scrambling the Roads

The modern railroad masters of the East spent a busy week in Washington, discussing mergers and consolidations with the Interstate Commerce Commission. Their deliberations have naturally been in secret, and few echoes have passed the closed doors to the eager financial reporters outside. Accordingly, fantastic rumors of all sorts have gained space and credence. Every financial editor has had his own pet notion of how the merging of the Eastern roads ought to be done.

The problem essentially involves merging the older Eastern lines, par- ticularly between Chicago and the North Atlantic seaboard, into a few systems. Last spring, the Van Sweringens took time by the forelock, and by adding to their original Nickel Plate holdings the Hocking Valley, Erie, C. & O. and Pere Marquette, created the new Nickel Plate system (TIME, July 7, et seq.).

This coup was sprung while the N. Y. Central, the B. & O. and the Penn- sylvania were deadlocked over the future ownership of the Central New Jersey and the Reading. But the energetic Van Sweringen brothers kept right on acquiring roads; their system lacked entry into Pittsburgh, and rumors became active in Wall Street that the Pittsburgh & W. Virginia, the Lackawanna and other roads might soon be added to the new Nickel Plate.

Finally, to bring order out of chaos, there has been a gathering of chieftains in Washington; the leading figures are Daniel Willard, President of the B. & O.; Samuel Rea, President of the Pennsylvania; Patrick E. Crowley, new President (TIME, Apr. 14) of the New York Central; and last but not least, C. P. and M. T. Van Sweringen. The principal reason for this gathering was to agree as to who should get what.

Several attractive smaller roads, and several not so attractive, are the lure: these include the Norfolk & Western, Central New Jersey, Reading, Lackawanna, Lehigh, Wabash and others. The railroad leaders wish to merge until only four main systems finally remain in this northeastern territory. Naturally, each big road wants to acquire the attractive small roads, and leave the poor small roads for some one else. No one apparently wants the New Haven, so that New England will be mostly left out of the effects of the merger movement. On the other hand, some of the little roads do not apparently want to be swallowed up-- they are quite contented with things as they are. Other little roads feel that they must be absorbed by their stronger competitors, and are mainly concerned with picking a winning swallower and getting guarantees against being bitten in the process. The I. C. C. originally planned for mergers which would develop nine separate systems. The leading railroad men want only four systems. Apparently, agreement is slowly being reached as to the proper way of working out such a merger. Yet the situation is still as complex and interdependent as a chess problem; and for its final solution, years rather than weeks will be required.