A Colossal Railway Consolidation

Republican Editor Edward Rosewater welcomes the consolidation of the Southern Railway out of its receivership and hopes that bigness will streamline railroad operations and open up opportunities for government oversight and control.

We have not yet seen or heard any response from ex-Governor Boyd in reply to the fervent appeal of Editor Bryan for him to make way for a free silver democrat.

A COLOSSAL RAILWAY CONSOLIDATION

September 1 marked the inauguration of the reorganization scheme of the Richmond Terminal system, by which a huge network of railroads covering a large portion of the southern states has been again united under one management, to be known this time as the Southern Railway company. The reorganization means another gigantic and powerful railroad corporation and one that is to operate in states that have heretofore been served chiefly by small connecting lines. The Southern Railway company is to control 4,500 miles of railroad and about 150 miles of water line, and with the exception of 491 miles that are leased the whole is owned directly by the company in contra-distinction to the leasehold methods of acquisition that were always pursued by its predecessors.

The preliminaries required for this reorganization are particularly interesting at this time, because they indicate the steps which will have to be taken by a great many other American railroads now in the hands of receivers in order that they may be again placed on a paying basis. The original plan was perfected May 1, 1893, and issued to the public on May 23, 1893. Prompt responses by security holders enabled the committee to be sure by July of the same year that the former were willing to co-operate with them. The process was interrupted by the financial depression and consequent decrease of railway earnings during the fall and winter. New conditions and new complications are said to have been presented, and the problem became one of dealing not only with bankrupt corporations but also with bankrupt receivers as well. A few changes in the plan were therefore necessary, but they were approved without delay by all whose consent was required. The new company is built upon over thirty corporations whose affairs and securities were interlocked in every conceivable way and in almost hopeless confusion. One board of directors supplants thirty board of directors, and one system of accounting takes the place of thirty separate accounts. To accomplish this object there were had two trustees sales, one receivers' sale and ten foreclosure sales under mortgages, while several minor sales and conveyances of various kinds are still in progress to complete the details of the scheme. All the lines thus acquired are consolidated into one system, which is to be still further enlarged by the addition of several tributary roads which up tot his time have refused to entertain negotiations for their acquisition. When the reorganization plan is entirely consummated, the Southern Railway company will operate lines of about 5,000 miles in length and connecting all the most important points in the southern seaboard states.

Besides the importance of this consolidation as an example of what other bankrupt roads will have to go through, it signalizes the introduction of a strong railroad corporation into a number of states in which the railroad strength has hitherto been divided. These states will soon learn the necessity of stronger governmental regulation to hold the railroads within their legitimate sphere. Unless the managers of the new company have contrary to all precedent learned something from the experience of other lines in other states, these southern commonwealths will soon appreciate the burden of railroad domination which the western states are now trying to lift.