Railroad Consolidation.
—It has been shown that at the beginning railroad building consisted of short stretches from town to town, or from the end of one water communication to the beginning of another. It was but reasonable that these would join for the purpose of through traffic. The result was also better efficiency as the equipment could be used to better advantage; the terminal costs were reduced as there were not so many of them; and, what may have been a leading cause, the control, and perhaps prevention, of competition. Unrestricted competition caused rate wars; rates once down it was difficult to get them back and frequently bankruptcy occurred. Government regulations were made prohibiting rate agreements and pooling. Such apparently hastened consolidation. One objection to consolidation was the concentration of vast financial powers in the hands of a few, and since money had much influence in Washington and in the state capitals, political power as well. This and combinations of other industrial concerns were causes which brought about the enactment of the Sherman Anti-Trust law of July 2, 1890.[109] This law did not come in time to stop consolidation and it may be doubtful if it would for the Supreme Court has decided that combinations are not unlawful unless they exercise an unreasonable restraint upon trade.[110]
The methods of consolidation are: merger or outright purchase, in which case the individual lines lose their separate identity; stock purchase, wherein a controlling share of the stock of another road is held by the purchasing line or by a holding company; lease usually for long periods, a rental being paid periodically for the use of the line; and, community of interest, that is the establishment of friendly relations. The consolidations are more often financial than physical. When two roads physically combine under one management it is customary to reorganize and assume the same name. In the consolidations given in the table below many of the roads are operated separately and almost independently but are dominated by common financial interests with common policies or very friendly relations. Some of the principal consolidations prior to 1912 are:[111]
| Vanderbilt Interests | |
| Mileage | |
| Boston & Albany | 392 |
| New York Central | 3,591 |
| Lake Shore & Michigan Southern | 1,663 |
| Michigan Central | 1,805 |
| New York, Chicago & St. L. | 561 |
| Lake Erie & Western | 886 |
| Big Four | 1,979 |
| Pittsburgh & Lake Erie | 215 |
| Chicago, Indiana & Southern | 329 |
| Other affiliated eastern lines | 1,759 |
| Western Maryland[112] | 575 |
| Chicago & North Western Systems | 9,827 |
| Total | 23,582 |
| Morgan Interests | |
| Erie Railroad | 2,565 |
| Pere Marquette | 2,334 |
| Southern Railroad System | 8,667 |
| Cincinnati, New Orleans & Texas Pacific | 335 |
| Mobile & Ohio | 1,114 |
| Atlantic Coast Line | 6,818 |
| Louisville & Nashville | 4,590 |
| Chicago & Great Western | 1,495 |
| Total | 27,918 |
| Harriman Interests | |
| Oregon Short Line | 1,646 |
| Oregon Railway & Navigation Company | 1,737 |
| Union Pacific System (remainder) | 3,791 |
| Southern Pacific | 10,257 |
| Illinois Central System | 6,340 |
| Central of Georgia | 1,915 |
| Baltimore & Ohio | 4,555 |
| Delaware & Hudson | 875 |
| San Pedro, Los Angeles & Salt Lake | 1,105 |
| Cincinnati, Hamilton & Dayton | 1,015 |
| Total | 33,236 |
| Atchison, Topeka and Santa Fé | 10,472 |
| Chicago, Milwaukee and St. Paul System | 9,657 |
| Seaboard Air Line | 3,084 |
| Pennsylvania Railroad Interests | |
| Pennsylvania Lines | 11,197 |
| Norfolk & Western | 1,990 |
| Total | 13,187 |
| Gould Interests | |
| Wabash System | 2,663 |
| Wheeling & Lake Erie | 457 |
| Missouri Pacific System[113] | 3,920 |
| St. Louis, Iron Mountain & Southern[113] | 313 |
| St. Louis, Southwestern[113] | 1,675 |
| Texas & Pacific[113] | 1,991 |
| International & Great Northern[113] | 1,159 |
| Denver & Rio Grande[114] | 2,778 |
| Western Pacific[113] | 979 |
| Total | 15,935 |
| Moore Interests | |
| Rock Island System | 8,144 |
| Delaware, Lackawanna & Western[114] | 1,052 |
| Lehigh Valley[115] | 1,431 |
| Total | 10,627 |
| Hill Interests | |
| Great Northern | 7,397 |
| Northern Pacific | 6,281 |
| Chicago, Burlington & Quincy | 10,443 |
| Colorado & Southern | 1,249 |
| Total | 25,370 |
| New Haven Interests | |
| New York, New Haven & Hartford | 2,887 |
| Boston & Maine | 3,594 |
| Total | 6,481 |
| Hawley Interests | |
| Minneapolis & St. Louis | 1,027 |
| Iowa Central | 559 |
| Toledo, St. Louis & Western | 451 |
| ’Frisco System | 7,147 |
| Chicago & Alton | 1,025 |
| Chesapeake & Ohio System | 2,232 |
| Missouri, Kansas & Texas | 3,393 |
| Hocking Valley | 350 |
| Total | 16,508 |
| Philadelphia and Reading | 2,137 |
| Grand Total of above Groups and Systems | 198,638 |
| Total milage of railways in the United States, Dec. 31, 1916 | 397,014 |
For a more extended discussion see “National Consolidation of Railroads,” by George H. Lewis.