Experiment in Trucks

The trucking industry grew too fast for its britches, is now a gangling, sprawling adolescent given to waste motions and tripping over its own feet. The U. S. has some 600,000 trucks operating for hire. Two-thirds of the owners are one-man, one-truck outfits started on a shoestring and lucky to have it left. About 60% of the firms take in less than $2,000 a year; an alarming number of them go broke.

Many a trucker has wondered how much time & money he could save if his firm were big enough to buy tires and gasoline in bulk, carry a 100% pay load on all trips, act as its own insurance company. In 1939 a corporation called The Transport Co. was organized to find out. Transport's plan: to buy up 48 trucking and truck renting firms (operating over 10,000 vehicles in 18 Eastern and Southern States), consolidate them into the nation's first really big motorized freight system.

Father of the plan was Charles Cotterill, a Manhattan promoter-attorney specializing in Interstate Commerce Commission cases. Cotterill plugged his idea for years, finally interested Wilmington's Du Pont family. For president. Transport chose Burge M. Seymour, head of Manhattan's big Metropolitan Truck Leasing Co., a top-flight operations man. For financing. Transport went to Kuhn, Loeb & Co., which underwrote railroad giants in an earlier era.

Then Transport went to ICC for approval of the merger, tried to show that its plan was in the public interest. In 1939 the firms made a profit of $2,000.186.

Transport estimated that it could have upped that figure to $5,160,168 (by saving $4,060,000 in operating expenses at a cost of less than $1,000,000 in administration and higher taxes). Transport also believed it could have cut schedules by six to 36 hours, improved service all around. Two months ago ICC gave its unanimous verdict: no.

Last week ICC published its reasons. Most of the commissioners questioned Transport's ability to effect as many economies as it claimed, worried also about the effect on competition. But sharpest and perhaps decisive criticism was on the proposed financing. Transport planned to pay $22.543,657 for its 48 units; ICC found that the companies had only $10,617,958 in tangible assets. Moreover, out of capital of $24,751,824 which Transport wanted to raise by selling stock, a whopping $3,424,-964 would have gone as profit to the organizers, promoters and bankers (presuming the success of the underwriting).

To an ICC which had watched the railroads writhing under overcapitalization, this sort of financing looked all too familiar. Wrote Chairman Joseph B. Eastman: "It seems to be a case where ... the vendors, the promoters and the bankers will all be liberally compensated . . . and the investing public will be left holding most of the bag."

The rest of Chairman Eastman's report (a dissent from the majority view that the merger was undesirable per se) was as neat an argument for the plan as any Transport lawyer could have concocted. Some day the opinion may be looked back to as having set the pattern for unified truck systems in the U. S. ". . . The opportunities for greater economy and efficiency of operation ... are extensive and important," Eastman wrote. "I should like to see the experiment tried. . . . Under present transportation conditions, monopoly is the thing which needs least of all to be feared. ..."

At week's end it looked as if Chairman Eastman might be granted his desire to see the experiment tried, at least in part. Kuhn, Loeb, its fingers slapped, was out of the Transport picture. But about ten of the companies (with a net worth of around $7,500,000) were considering merger through a simple interchange of stock. After reading Eastman's opinion, they (and President Seymour) had good reason to hope for ICC approval.

A pair of mink were trapped twelve years ago by high-school graduate Wallace D. Turner, who started a mink farm with them near Pawling, N. Y. Last week Turner sold a half interest in his farm (now largest in North America) to wealthy Sportsman Edward T. Clark, to whose estate near Goshen the 5,000 animals will be moved. Price: $50,000-$60,000.

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