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structures, either of which would cost several times the amount required to run the lateral parallel to the State highway.

It may be stated in this connection that the granting of authority to construct the irrigation lateral along the State highway through the national monument will in no way mar the scenic effects, inasmuch as the highway is already in existence and the proposed lateral will follow the same course. The Director of the National Park Service advises that such arrangement will not interefere with the national monument and has given his approval to the proposed legislation. A copy of his letter is inclosed for reference.

It is respectfully requested that the inclosed draft receive the favorable consideration of your committee and the Congress. Very truly yours,


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Mr. COUZENS, from the Committee on Interstate Commerce, sub

mitted the following


(To accompany 8. J. Res. 161)

The Committee on Interstate Commerce, to whom was referred the joint resolution (S. J. Res. 161) to suspend the authority of the Interstate Commerce Commission to approve consolidations or unifications of railway properties, having considered the same, and adopted certain amendments, recommend that the joint resolution do not pass.

The amendments adopted by your committee are as follows:

Strike out all of said resolution between line 3, page 4, and line 4, page 5, both inclusive, and insert in lieu thereof the following:

That the authority of the Interstate Commerce Commission under existing law to approve and authorize any consolidation of railroad properties or any acquisition of control by one carrier by railroad of any other such carrier or carriers is hereby suspended until March 4, 1931, except in so far as such authority can and shall be exercised in conformity with the following requirements:

(a) The commission is specifically authorized and directed to prescribe in its order approving and authorizing any consolidation or acquisition of control such terms and conditions as may be found necessary to prevent the dismissal, lay-off, or demotion of employees, and/or uncompensated losses of rights, privileges, and conditions of employment, resulting from the anticipation or consummation of such consolidation or acquisition of control; and/or to compensate employees for all losses and expenses sustained by them (including losses and expenses sustained through change of residence, or disposition of home), as a result of the anticipation or consummation of such consolidation or acquisition of control, to the extent that the commission determines that such losses result from the consolidation or acquisition of control and not from other economic factors. The term "employee" as used herein means a person defined as an employee in the railway labor act.

(b) The commission is further specifically authorized to make it a condition of any consolidation or acquisition of control that existing through routes and channels of trade and commerce shall be maintained, and also to require as a condition precedent to its approval and authorization of such consolidation or acquisition of control that the applicant or applicants shall make a binding offer, upon such terms as the commission shall prescribe, to acquire control of, or to consolidate or merge with, or to purchase the properties of any other carrier or carriers by railroad, not included within the application, which are assigned to the same system with applicant or applicants in the commission's plan of consolidation. In the event of such a condition precedent, the commission is also authorized in its discretion to approve and authorize the acquisition of control or consolidation or merger or purchase specified in such condition precedent with or without other proceedings under this section.

(c). The commission shall not approve or authorize any such consolidation or Acquisition of control where, except for such approval and authorization, said consolidation or acquisition of control would be in violation of any of the antitrust laws designated in section 1 of the act entitled “An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes,' approved October 15, 1914: Provided, That nothing herein contained shall prevent the approval and authorization by the commission of any acquisition or control of railroad properties required as a condition to any acquisition of control or consolidation heretofore or hereafter approved and authorized by the commission.

Be it further resolved, That any consolidation or unification, or common control, or any exercise of common control, of carriers by railroad engaged in interstate commerce, or the properties thereof, however accomplished, whether directly or indirectly, through a holding company or holding companies, by a voting trust, or in any other manner whatsoever, and which the commission is not empowered to approve and authorize, or which the commission, if empowered, has not approved and authorized, is hereby declared unlawful and may be enjoined by any court of competent jurisdiction at the suit of the United States, the commission, any commission or regulating body of any State or States affected, or any party in interest: Provided, That the provisions of this paragraph shall apply only to consolidations, unifications, and common control effected or exercised subsequent to February 28, 1920.

Be it further resolved, That the commission is hereby directed and authorized to execute and to enforce the provisions of this resolution in the same manner and to the same extent as though they were written into the interstate commerce act.

The joint resolution as introduced undertook:

(a) To suspend the authority of the commission under existing law to approve any consolidation or unification of railroad properties or railroad operating systems;

(b) To make unlawful any consolidation or unification of railroad properties, whether directly by consolidation, merger, lease, purchase, or acquisition of control, or indirectly through the device of a holding company, or in any other manner, without the approval of the commission; and to provide that any such unlawful consolida

(c) To direct the commission to withhold its approval of any consolidation or unification until such time as Congress should enact adequate legislation properly designed to protect and promote the public interest in such consolidations or unifications and until Congress should authorize the commission to exercise the powers over consolidations heretofore or hereafter conferred upon it.

Hearings were held by your committee between April 15 and April 24, 1930, at which 32 witnesses, including representatives of the American Short Line Railroad Association, the Railway Labor Executive's Association representing 21 railway labor organizations, and other representatives of railroad employees, attorneys and representatives of various railroad systems, members of the Interstate Commerce Commission, members of State utilities commissions, and other interested citizens appeared or filed statements with the committee.


Objection was made by representatives of the short-line railroads and others to the portion of the resolution suspending all consolidations or unifications upon the ground that such suspension would prevent the acquisition of short lines by stronger carriers and cause many of them great hardships. Some representatives of the short lines suggested the exemption from the resolution of such short lines, while others contended that short lines would not be purchased unless a general plan of consolidation was permitted to be carried out. Representatives of railroad labor organizations stated that they were not opposed to the taking over of short lines by longer railroads. In the report made to the House committee upon the House resolution which was presented by Commissioner Eastman, the Interstate Commerce Commission states:

The suspension for a time of all power to unify would, to some extent, make it Decessary to continue on economic expenditures which could be eliminated by unification. It is possible that in some particular case the results might be serious. It would deprive the short lines of a market for their property.

Chairman McManamy, of the commission, who in the statement to the House indicated that he favored the resolution in its entirety, stated in the hearings before this committee that he would modify his position and that he could see no harm in relieving the short lines from the provisions of the resolution.


Congressman Knutson, of Minnesota, representing the entire Minnesota delegation in the House; representatives of the Minnesota Railroad and Warehouse Commission; representatives of the Railway Labor Executive's Association and of employees of the Northern Pacific Railway Co. and Great Northern Railway Co. appeared before the committee, favoring the passage of the resolution and object ng particularly to the proposed Northern Pacific-Great Northern consolidation as being opposed to the public interest because it involved the elimination of competition between two strong parallel competing carriers and because of the damage which would result to the employees of the roads involved. A statement objecting to this consolidation was also filed by the chairman of the Iowa Railway Commission.

The consolidation was defended by Mr. Walker D. Hines, counsel for stockholders of the Northern Pacific and Great Northern Railway Cos., who have been seeking to secure the unification of the systems in question, and by Mr. Clarence A. Miller, attorney for certain short lines, intervenors in the Northern Pacific-Great Northern case.

The report of the Interstate Commerce Commission including the majority report, the special concurrences of Commissioners Lewis, Brainerd, and Woodlock, and the dissents of Chairman McManany and Commissioner Eastman, appears in the record in full.


Mr. William N. Doak, national legislative representative of the Brotherhood of Railroad Trainmen, and Mr. Donald R. Richberg, counsel for the Railway Labor Executives' Association, presented the views of the railway labor organizations as to the effects of consolidation upon railway employees. The following excerpts from the statement of the Railway Labor Executives' Association as to results of the study of that organization as to the effects of consolidation, present briefly their views:

They have become convinced that neither existing law nor any measures now under consideration by Congress provide adequate protection for the interests of either the users of transportation service or the employees who furnish that service.

* *

As representatives of railway labor we have also watched at close hand the destructive effects upon the employees of changes in the transportation industry, partly the result of programs of efficiency and economy and partly the result of corporate policies not productive of efficiency and economy.

When divisions have been lengthened, when terminals, and other facilities have been moved and consolidated, losses amounting to millions of dollars, losses of employment which have affected over 200,000 employees, and losses through part-time employment which have affected almost all railroad employees, have been brought about and in many cases the public gain has been questionable.

These huge losses of railroad employees are only the beginning of widespread public injury. Hundreds of communities along the lines of consolidating railroad suffer irreparable damage. When railroad workers lose their earnings, their jobs and their homes, not only are the merchants of their home towns deprived of their customers, but many a community loses its primary basis of prosperity as a shipping and distributing center of railroad traffic. There should be some real assurance of public benefit before the wholesale disintegration of prosperous cities and towns should be encouraged by government.

Mr. Daniel Willard, president of the Baltimore & Ohio Railroad Co., stated:

The economies to be realized eventually by consolidation—and I believe there will be very substantial economies—will come through making it unnecessary to provide as much new capital as might otherwise be necessary. That is one economy.

The other economies, which can be lumped in one item, are labor and material, less of both being needed, probably-particularly labor. In fact, the only way economies can be made to any extent in railroad service is by the use of fewer employees, and with that would always go the use of some less labor. Our figures show that the wages paid for labor constitute about 60 per cent of our total operating expenses, and material about 40 per cent. It is safe to say that of that materials probably 50 per cent represents wages paid to labor, so that when & railroad reduces its operating expenses by a dollar, it is a safe thought that 80 per cent of that represents less wages being paid to somebody.



In the report of the Interstate Commerce Commission to the House committee which was presented to your committee by Commissioner Eastman, appears the following statement:

There are, however, means of bringing carriers by railroad under common control without supervision by the commission under existing law, or authɔrity from it. Such methods were explained to your committee by a representative of this commission at recent hearings in the holding company investigation which you are conducting. The commission favors legislation which will prohibit such unsupervised forms of virtual unification. We suggest that it might be well in lines 7 to 8 on page 1 (lines 7 to 8, p. 4, S. J. Res. 161) of the resolution to change the words "consolidation or unification of railroad properties" to read consolidation or unification or common control through stock ownership of carriers by railroad engaged in interstate commerce or the properties thereof."

All the members of the Interstate Commerce Commission who appeared before your committee favored the inclusion in the resolution of the language prohibiting uncontrolled unifications by means of holding companies.

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