Principles of Railroad Consolidation

March 26, 1927

Report Outline
Forms of Railroad Consolidation
Economies of Railroad Consolidation
Consolidation Amd the Weak and Short Lines
Motives of Railroad Executives in Consolidations

In the seven years that have elapsed since the passage of the Transportation Act and the return of the railroads to private control, March 1, 1920, only one important change has been made in the provisions of the act. This change was made by the last Congress when it adopted the new Railway Labor Disputes Act, first advanced by the railroad brotherhoods in 1923 and later supported by the railroad managers, as a substitute for the labor provisions of the Transportation Act. In all other important respects the act stands as it was written in 1920, although many of its provisions have failed to give full satisfaction.

Repeal or amendment of the rate-making section of the act has been repeatedly sought by agricultural interests since 1920, and revision of its consolidation sections has been urged by President Coolidge in each of his annual messages. In his first message to Congress in 1923 the President recommended legislation which would aid and stimulate “voluntary consolidations” and in his second annual message he recommended that a definite period for voluntary consolidation should be fixed by law and that means be provided for the application of “government pressure to secure action after the expiration of such a period.”

“Such consolidation,” he said, “will assure not only a greater element of competition as to service, but it will afford economy in operation, greater stability in railway earnings, and more economical financing. It opens large possibilities of better equalization of rates between different classes of traffic so as to relieve undue burdens upon agricultural products and raw materials generally, which are now not possible without ruin to small units owing to the lack of diversity of traffic, It would also tend to equalize earnings in such fashion as to reduce the importance of section 15A, at which criticism, often misapplied, has been directed.”

ISSUE TRACKER for Related Reports
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Mar. 07, 1975  Railroad Reorganization
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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
Government Labor-Management Relations
Unions and Labor-Management Relations