TRANSPORTATION: Presidents' Plan

At 9 a. m. one day last week the East's five most potent railmen and their aides sat down around a big conference table in Manhattan's Pennsylvania Station. They were William Wallace Atterbury, strident and aggressive president of Pennsylvania R. R.; Patrick Edward ("Pull Eighty Cars") Crowley, diffident and watchful president of New York Central R. R.; Daniel Willard, precise and conciliatory president of Baltimore & Ohio; and the Brothers Van Sweringen, urbane and alert owners of Chesapeake & Ohio-Nickel Plate. Luncheon was served them in their chairs. Nine hours later they arose together after concluding an agreement so momentous they did not trust themselves to announce it to the public. Because President Hoover had pressed them into this conference, because he was moral sponsor for their negotiations, and because his word might commit the Interstate Commerce Commission they let him reveal the results of their efforts.

Spokesman Hoover. Next day President Hoover declared: "As a result of meetings ... a plan for consolidation of the different railways in [the Eastern] territory (exclusive of New England) into four independent systems was agreed upon. . . . These negotiations . . . were undertaken at my suggestion.

"It is my understanding that the plan provides for the protection of the interests of the employes and full consideration of the interests of the various communities and carries out the requirements of the law in protection of public interest generally."

Thus had White House pressure and the cry of Hard Times broken the decade-long deadlock on eastern mergers. For the last ten years these same rail executives had been fighting a stockmarket battle for possession of subsidiary roads as part of their trunk systems, had been snatching at all independent trackage in the country's rail territory to keep it out of their rival's hands. So bitter and reckless had become their operations that the Interstate Commerce Commission had cried out in loud protest while the Senate had passed a resolution to suspend temporarily all mergers. It was last autumn that President Hoover secretly set them to negotiating again with the result that last week they peacefully divided up 56,000 miles of railroad worth nearly ten billion dollars.

Who Gets What. The main divisions were as follows:

Baltimore & Ohio (12,000 mi.) would get Reading and Central of New Jersey which would carry B. & O. over tracks of its own into New York. From Pennsylvania-controlled Wabash, the B. & O. would secure the Ann Arbor as an outlet into Michigan. It would retain Western Maryland, Buffalo, Rochester & Pittsburgh, Buffalo & Susquehanna, Lehigh & Hudson. Its possession of Chicago & Alton would take it to Kansas City.

Chesapeake & Ohio (13,000 mi.) would add to its Nickel Plate, Erie and Pere Marquette, control of Lehigh Valley (to be purchased for $35,000,000 from Pennsylvania which would retain trackage rights). This system's other lines would include Bessemer & Lake Erie (from U. S. Steel Corp.), Wheeling & Lake Erie, Chicago & Eastern Illinois.

Pennsylvania (17,000 mi.) would retain its control of Wabash, Norfolk & Western and Detroit, Toledo & Ironton.