Word: icc
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...railroad merger applications before the Interstate Commerce Commission have been so closely watched as the Norfolk & Western's petition to take over the Nickel Plate, the Wabash and three connecting roads. After more than two years of study, the ICC last week voted 10 to 1 to give its go-ahead to the merger. With that decision, the way was opened for the creation of a 7,450-mile freight superline whose routes would reach west to Missouri and north into Canada, save the two lines $27 million in costs each year. Railroaders saw in the ICC decision...
...manner of the ICC's approval contained the clue. Before the merger is allowed, ruled the commission, the $352 million of Norfolk & Western and Wabash stocks bought up by the Pennsylvania Railroad since the late 19th century must be sold-to make sure that the Pennsy holds no control over the merged roads. Often the difference between profit and loss for the Pennsy, the Norfolk & Western stock paid it $14.5 million last year in dividends, is often used as collateral on new investments. But the Pennsy's possession of the stock has been one of the roadblocks...
...toward mergers, which railroaders hope may eventually save them up to $1 billion a year. In the past two years the Government has approved two major mergers-the Chesapeake & Ohio and Baltimore & Ohio linkup, as well as the tie between Atlantic Coast Line and Seaboard Air Line Railroad. The ICC is considering 20 other proposed mergers, of which six are big. The Justice Department has raised serious objection to only one, the link-up between the nation's two largest railroads, the Pennsylvania and the New York Central. But the railroads are exempt from antitrust laws, and the ICC...
...barrier was removed last month, when the chiefs of 17 rail unions signed a job-protection deal with Pennsy Chairman Stuart Saunders and New York Central President Alfred Perlman. Terms: if the merger is consummated, the labor force cannot be reduced by more than 5% each year. An ICC hearing examiner will make a recommendation on the merger by year's end, and railroaders are hopeful that the ICC's eleven commissioners will give the two roads a go-ahead...
...this friendliness could change sharply when Johnson begins making decisions closely affecting business. In the next month, he must make appointments to federal agencies that will decide whether the ICC takes a hard or soft line toward rail mergers and whether the Federal Reserve Board might swing toward a monetary policy of easier credit. He is expected to offer a bill soon that will return high price supports to wheat farmers, and as the touchy railroad labor negotiations begin in February, he will have to indicate whether in an election year he will continue the Kennedy Administration's attempt...