iated be merged with the Erie and the Nickel Plate. It so happens that these unaffiliated lines contain the weak properties of trunk line territory. The Erie and the Nickel Plate are relatively weak and less able to carry the burden of the necessitous roads. Yet to give them access to strategic points requires that they be consolidated with a number of weak properties. Consequently we have the strong properties of Trunk line territory left practically undisturbed, and not burdened with any particular load of weak properties, while alongside them the weak are consolidated with the weak. Instead of solving the problem of the necessitous roads, this promises to perpetuate that problem in official territory. For rates that will sustain the Erie and Nickel Plate with those affiliated weak properties, will likely give undue prosperity to the stronger New York Central, Pennsylvania, and Baltimore and Ohio systems, and rates merely sufficient to yield a fair return upon the properties of the three great systems, might in all probability force the Erie and Nickel Plate into bankruptcy.

It is recognized that the three strong roads have preempted the best lines and facilities. The great problem of Trunk line territory is presented by the Erie and the Nickel Plate-Lackawanna. It is concluded that they should constitute the trunks of independent self-sufficient systems. The suggestion that these two stems be consolidated into one system is dismissed on the ground (1) that they parallel each other almost completely from end to end without at the same time being near enough together to produce the possible advantage of joint operation and too, such a system would have a mileage even greater than the present Pennsylvania and "considering the detached character of many of these properties, a heterogenous aggregation altogether surpassing the possibility of efficient management would certainly be produced." (2) A second objection to putting the Erie and the Nickel Plate-Lackawanna into one system is that it would enforce corporate relationships which are unnatural or strained. It would be to compel roads which have been bitter competitors for many years to become partners. It might have been added, too, that

such a combination would be a flagrant disregard of the statutory mandate to preserve competition as fully as possible.

In turning to a detailed consideration of how the five proposed groups should be constituted three tests are laid down: (1) size, (2) financial strength, (3) comprehensive possession of the trunk line territory. Applying these tests it is concluded that the Pennsylvania and the New York Central have substantially fulfilled their destiny. That is, that they are big enough, financially strong, and that they reach all of the important centers and gateways and have sufficient laterals and feeders. In fact these systems are so well fortified that it is thought that the problem they present is one of withdrawal of subsidiary lines, rather than additions thereto. Here again a confession in the report that it is for practical considerations inexpedient to merge any weak properties with these two giant systems of the East. They are to go practically free from any burden contemplated by the statute. The problem of the weak road emphasized so strongly in the introductory chapter of the report is left to weak systems and not to the strong.

It is suggested that the Lake Erie, or the larger portion of it, be taken from the New York Central. Amputation of the Konawha and Michigan and parts of the Toledo and Ohio Central Railroads is also recommended, largely because such severances would not appear to be prejudicial. It is then proposed that the New York Central be given more complete control of a route to the Canadian maritime provinces through acquisition of the Rutland Railroad.

As for the Pennsylvania System, it is said that it should not be carried into New England through an absorption of the New York, New Haven and Hartford because the Pennsylvania has already attained a predominance among the trunk lines which renders further accessions undesirable. For the same reason the Pennsylvania is denied the Norfolk and Western, which is controlled through stock ownership.

It is proposed to add to the Baltimore and Ohio certain properties so as to strengthen it financially and as a com

petitive factor throughout trunk line territory by upbuilding at each of its extremities. It is to be given access to the Michigan Peninsula and ferries and across Indiana and Illinois to connections with western trunk lines elsewhere than Chicago. This is to be done by reassignment to the Baltimore and Ohio of the Cincinnati, Indianapolis and Western Railroad. Also it is to be strengthened in the West by an inclusion of the Monon. In the East it is proposed to give it access to New York through control of the Philadelphia and Reading, and the Central Railroad of New Jersey. That is to say, the Baltimore and Ohio, reasonably well able to care for its own, instead of burdened with a quota of weak roads, is recommended as a proper and fortunate recipient of the much coveted and prosperous Philadelphia and Reading and the Central of New Jersey.

The Erie's weakness is analyzed. Its location seems almost to avoid the great cities or interior ports. Its great capitalization is a chronic source of weakness. Its problem is represented to require (1) a readjustment of its capitalization to the value of its physical properties, (2) the acquisition of feeders and entrance into new territory. No suggestion is offered for recasting the financial plan so as to reduce fixed charges, and to bring the total par value of outstanding securities in line with actual investment. However, the rounding out of the Erie, so as to put it into other traffic bearing territory, is proposed by the addition of the Delaware and Hudson; the Ontario and Western; the Lehigh Valley which is a coal road; and the eastern half of the Wabash as a line to St. Louis; the Pittsburg, Bessemer and Lake Erie, a prosperous property which would add financial strength as well as an excellent entrance to Pittsburg. It is said the Erie should have access to Indianapolis and Columbus, but no definite recommendation of means is made other than a reference to the possibility of asquiring trackage rights. In order to put this system into the soft-coal region, it is proposed that it be given two small properties with their heavy grades and switchbacks: the Pittsburg, Shawmut and Northern, and the Pittsburg and Shawmut.

The Nickel Plate, a line about 500 miles long, paralleling the Lake Shore from Buffalo to Chicago, built to force the Lake Shore to buy it, and recently sold by the New York Central System, is taken as a nucleus for a fifth system. It is proposed that the strong Lackawanna shall be joined to the Nickel Plate. It is recognized that enormous expenditures will be necessary to bring the Nickel Plate up to the standard of the Lackawanna. But it is also refreshingly stated that even Trunk line territory has not yet reached its full development, and that in the future a first class railroad, such as the Nickel Plate would be rendered, will be needed. It is proposed to put this system into St. Louis by way of the Clover Leaf. This last mentioned road also reaches Detroit. By way of feeders in the West, the Lake Erie and Western is suggested. The system would get over the tracks of the Toledo and Ohio Central, into soft coal area, and iron and steel directly by inclusion of the Wheeling and Lake Erie, the Pittsburg and West Virginia, and the Western Maryland. Strength too it is thought would be added by absorbing the Buffalo, Rochester and Pittsburg. This would round out a system of approximately 4,000 miles.

A different problem is presented by the railroads in the lower Michigan Peninsula. The New York Central and the Pennsylvania have their own needs amply cared for in this area. The Pere Marquette has traffic alliances with the Baltimore and Ohio. This is an important traffic area. It is important that each system have free access to the Michigan ferries. There do not seem to be enough good railroads in the area to go around. That suggests the alternative of putting together all that are free, and making a small local system which would deal with all the systems. This is the plan suggested, and a regional group is proposed which would be built around the Pere Marquette. It is advocated that this regional system be given its own outlet to the soft coal region through acquisition of the Detroit, Toledo and Ironton. It is believed that such a regional grouping would render the manufacturers of Michigan independent of the Trunk lines and enable them to route

by way of South Atlantic and Gulf ports, if they should desire.

A striking parallel is drawn between the Michigan Peninsula and the New England situation. In each there is a long water frontage, a rich industrial district in the South with many junction points, a more sparse population and thinner traffic toward the north, and a dependence upon outside connections for coal and many other supplies. There are ferry routes across Lake Michigan to the northwest, and differential Canadian routes from New England.

The second chapter of the report deals with the New England region. New England's transportation problem is recognized as threefold: (1) to provide the lowest possible rates on inbound raw materials such as coal, cotton, iron and steel; (2) to obtain cheap transportation for foodstuffs and other necessities of common life from the distant centers of their production; (3) to secure outbound freight rates on finished products, so that they may stay in the markets of the interior in spite of competition from the developing industries in the interior.

New England has no trunk line system dependent upon any of her seaports or markets. Her railroads are largely local. They have thus far striven for the objectives just stated by playing off one trunk line against another in the matter of interchange traffic. New England has too been the beneficiary of ocean and coastwise steamship transportation. The water transportation is not affected by consolidation. Professor Ripley addresses himself to the problem of securing the threefold benefits he mentioned as indispensable to New England. He concludes that it can best be accomplished by strengthening the bargaining power of the New England railroads. That he thinks can best be done by a regional consolidation of all New England roads.

The requirements of the statute would seem to call for an allocation of the New England railroads to the various competing Trunk lines. That would preserve existing competition, such as remains, within New England. Then too the New England railroads are not prosperous on the whole. They are in need of some support if we are to have consoli