Monday, Feb. 11, 1929

Railway Express

Among new financings of last week was an offering of $32,000,000 in bonds of Railway Express Agency, Inc. Such famed houses as J. P. Morgan & Co., Kuhn, Loeb & Co., First National Bank and National City Co. underwrote the issue. On March 1, subject to the approval of the Interstate Commerce Commission, the new organization will take over virtually the entire expressing business of the U. S. The bond issue culminates two years of effort on the part of U. S. railroad executives, particularly of William Benson Storey, president of the Santa Fe.

When the ordinary U. S. citizen thinks of expressing a package or trunk, he may well be excused for thinking of Adams Express or American Express. Yet the arrival of a trunk at either the Adams offices (61 Broadway) or the American offices (65 Broadway) would probably be greeted with surprise rather than with interest. For both Adams and American are now holding companies. The actual operating express company is American Railway Express. It is American Railway Express whose functions the new Railway Express will take over on March 1.

Progress of the express business, from a competition between express companies to a railroad-controlled monopoly sanctioned by the Government, began during the War. For just as the railroads were administered by the Government, so the physical properties of the express companies were sold to the then newly-formed American Railway Express Co., which was managed by a Federal administrator. In September, 1920, Government administration ended, and American Railway Express continued as an operating company whose stock was jointly held by Adams Express and American Express. American Railway Express then arranged contracts with almost every U. S. railroad (notable exception--the Southern Railroad, municipally owned) and acquired a virtual monopoly (95%,) of U. S. expressing. The contracts with the railroads included an option by which the railroads could purchase American Railway Express. These options expire Feb. 28, 1929. Last December the railroads, through a committee headed by President Storey of the Santa Fe, acquired control of American Railway Express by acquiring control of its holding companies, Adams and American. After March 1, Adams, American and American Railway will be holding companies.