Business: Equal Rights for New Lines

The Interstate Commerce Commission last week put a newly merged railroad on the tracks and gave it a shove. It approved merger of the Delaware, Lackawanna & Western and the Erie into the Erie-Lackawanna Railroad, which will be based in Cleveland, will operate 3,000 miles of line in New York, New Jersey, Pennsylvania, Ohio, Indiana and Illinois. Then it rebuffed the efforts of both the unions and competing railroads to hamstring the new road.

So worried are the railroad unions about the increasing trend toward merger that they challenged the commission’s interpretation of the Transportation Act of 1940. What the act really says, contended the unions, is that no employee can be fired until four years after a merger. Not so, said the ICC. Any attempt “calculated to preserve unneeded jobs would unduly restrict” the merging roads, declared ICC. It held to its old interpretation that the merging roads are only required to offer either severance pay or other jobs to unneeded employees.

Competing railroads asked ICC to limit severely the new line’s right to carry freight on its own new through routes. The ICC flatly turned down the requests, which it said would “freeze” the present traffic pattern. It gave the new road a free hand to go out and find business.