Railroad Consolidation and Prospective Legislation

March 30, 1927

Report Outline
Legal History of Consolidation
Progress in Consolidation Since
Prospective Legislation on Railway Consolidation

Consolidation of railroads a process which got under way soon after the first steam lines were established in the United States has played an important part in the development of the great American transportation systems. As early as 1853 sixteen railroad companies were consolidated to form the New York Central and provide a continuous line between Albany and Buffalo. Over 600 corporations have figured in the history of the Pennsylvania system, and 300 in the history of the Southern. The oldest company in the Southern system, the South Carolina Canal and Railroad Company, was organized in 1827 and disappeared by consolidation 16 years later.

Consolidation of railroad properties continued on a steadily increasing scale down to 1890, by which time over 2300 railroad companies established in earlier years had gone out of existence. Some of these companies had abandoned their lines, some had been replaced by other companies controlling the same extent of property, but most of them had turned over their properties to or been consolidated with larger railroad companies. After 1830 the process of consolidation was retarded by the new anti-monopoly statutes of the states and the federal government and the interpretations placed upon these statutes by the courts. In the two ensuing decades large scale consolidation was brought practically to a halt.

Policy of the Transportation Act

When the United States entered the war, the anti-monopoly laws stood as a serious obstacle to unified railroad operation under private management, and the transportation systems were taken over by the federal government, January 1, 1918, as a war emergency measure. The period of government operation demonstrated the advantages to be gained through joint use of terminals, trackage and equipment, the elimination of round about hauls, and the economies of unified management, with the result that when-the railroads were returned to private control, it was sought to continue these advantages for the future by permitting a resumption of the consolidation process.

ISSUE TRACKER for Related Reports
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Nov. 17, 1961  Railroad Subsidies
Aug. 24, 1960  Railroad Mergers
Jan. 01, 1958  Condition of the Railroads
Jan. 31, 1951  Railway Safety
Oct. 04, 1944  Railroad Freight Rates
Jun. 12, 1939  The Government and the Railroads
Apr. 21, 1938  Government Ownership of the Railroads
Dec. 07, 1937  Railroad Rates and Revenues
Jul. 17, 1937  Advances in Railway Passenger Service
Sep. 27, 1934  Railroad Rates And Federal Regulation of Transportation
Jan. 11, 1933  Railroad Receiverships and Reorganizations
Aug. 26, 1932  The Railroads and the Depression
Oct. 13, 1931  Wages of Railroad Labor
Jul. 09, 1931  Railroad Freight Rates
Feb. 14, 1931  The Railroad Consolidation Controversy
Sep. 19, 1927  The Problem of Railroad Valuation
Mar. 30, 1927  Railroad Consolidation and Prospective Legislation
Mar. 26, 1927  Principles of Railroad Consolidation
Mar. 08, 1926  Railway Labor Disputes Legislation
May 04, 1925  The Baltimore and Ohio Cooperation Plan
Sep. 12, 1924  National Railroad Consolidation and the Van Sweringen Merger
Aug. 14, 1924  Automatic Train Control in Relation to Railroad Casualties
May 28, 1924  The Condition of American Railroads
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