CONSOLIDATION OF RAILWAY PROPERTIES HEARINGS BEFORE THE COMMITTEE ON INTERSTATE COMMERCE UNITED STATES SENATE SIXTY-NINTH CONGRESS FIRST SESSION ON S. 1870 A BILL TO PROVIDE FOR THE CONSOLIDATION OF CATION OF RAILWAY PROPERTIES Printed for the use of the Committee on Interstate Commerce COMMITTEE ON INTERSTATE COMMERCE JAMES E. WATSON, Indiana, Chairman ALBERT B. CUMMINS, Iowa. ROBERT B. HOWELL, Nebraska. FREDERIC M. SACKETT, Kentucky. ELLISON D. SMITH, South Carolina. OSCAR W. UNDERWOOD, Alabama. KEY PITTMAN, Nevada. WILLIAM CABELL BRUCE, Maryland. BURTON K. WHEELER, Montana. JOHN F. HAYES, Clerk CONSOLIDATION OF RAILWAY PROPERTIES THURSDAY, JANUARY 21, 1926 UNITED STATES SENATE, COMMITTEE ON INTERSTATE COMMERCE, The committee met, pursuant to call of the chairman, at 10.30 o'clock a. m., in room 224, Senate Office Building, Senator James E. Watson presiding. Present: Senators Watson (chairman), Cummins, Gooding, Couzens, Pine, Sackett, Smith, Pittman, and Wheeler. The CHAIRMAN. The committee is in session for the purpose of holding hearings on Senate bill 1870, known as the consolidation bill, introduced by Senator Cummins. (The bill is here printed in full as follows:) [S. 1870, Sixty-ninth Congress, first session] A BILL To provide for the consolidation of carriers by railroad and the unification of railway properties within the United States Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraphs (4), (5), and (6) of section 5 of the interstate commerce act, as amended, are amended to read as follows: "(4) Inasmuch as the public interest requires that the transportation of passengers and property by railroad shall be at the lowest rates consistent with a fair return upon the value of the railway properties held for and used in the service of such transportation, and inasmuch as the varied conditions under which such transportation occurs render it impossible to accomplish that end without the further consolidation of carriers and unification of railway properties, it is hereby declared to be the policy of Congress that a limited number of systems should be established, by the consolidation of carriers or the unification of railway properties within the continental United States, that will, as fully as possible, preserve competition and, wherever practicable, maintain the existing routes of trade and channels of commerce. Such systems shall also be so arranged, so far as practicable, that the cost of transportation as between competitive systems and as related to the values of the railway properties through which the service is rendered shall be the same, to the end that such systems can employ uniform rates in the movement of competitive traffic and under efficient management earn substantially the same rate of return upon the value of their respective railway properties. "(5) In order to bring about such consolidation or unification it shall be lawful for one or more carriers to propose and make application to the commission for the approval of— "(a) A corporate consolidation or merger into one corporation of any of the carriers making the application; "(b) The unification of railway properties by the acquisition (through purchase, exchange, lease, or otherwise) by any such carrier of any of the railway properties or franchise rights, or the right to operate any of the railway properties, of any other such carrier; and/or "(c) The unification of control by the acquisition (through purchase, exchange, or otherwise) by any such carrier of securities issued by any other |