New Threat

The Interstate Commerce Commission, in its annual report last week, shook a warning finger at non-carrier holding corporations which gain control of two or more competing railroad systems. Congress was asked to make a "thorough investigation" of this latest corporate custom by which the I. C. C. feared its plan for rail consolidations "is very likely to be partially or even wholly defeated." The Commission admitted that for such a new threat it could not find an appropriate remedy.

Cited by the Commission were two such holding companies: Alleghany Corp. controlled by the Van Sweringen interests (Nickel Plate, Erie, Pere Marquette. C. & O.) and Pennroad Corp., controlled under a voting trust by the president and two directors of the Pennsylvania Railroad.

Warned the Commission: "The Pennroad Co., by acquiring stock control of a railroad, can bring it under common control with the Pennsylvania without itself controlling or being controlled by the latter carrier as such. . . . Common control can be effected by a chain, one vital link in which is made up of the control exercised, directly or indirectly, over two or more corporations by individuals. . . . [This] may result in the suppression of competition. . . ."

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