Solution in Search of a Problem

Written by William C. Vantuono, Editor-in-Chief
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“It’s elementary, my Dear Watson. I simply must assist the STB in considering this merger! I feel beholden to making the obvious less obscure!” Illustration by Sidney Paget for Strand Magazine (December 1892, p.646).

FROM THE EDITOR, RAILWAY AGE FEBRUARY 2023 ISSUE: There are a few observations my predecessor, Luther Miller, used to make when he came across language or statements that he deemed served little purpose: “Making the obvious less obscure.” “The Pope is a Catholic.” “A solution in search of a problem.” “Add that to your treasure trove of useless information.” I think he’d probably say the same thing about most of the statements the United States Department of Justice made in two filings about the pending merger of the Canadian Pacific and Kansas City Southern.

DOJ had a lot of things to say about the merger, most of it basically (and repetitively) reminding the Surface Transportation Board to perform the job that is its primary function—namely, ensuring that competition is maintained in the rail industry. An example:

For an STB Sept. 28, 2022 hearing it did not attend in person, DOJ’s Antitrust Division wrote, “The applicants [CP and KCS] argued that the Board should infer that the Antitrust Division does not believe the transaction has the potential to cause harm. No such inference should be drawn. In its initial comment [on the merger submitted to the STB in April 2021], the Antitrust Division encouraged the Board to ‘thoroughly examine the competition concerns raised by commenters.’ That filing made clear, among other things, that the Antitrust Division shares the Board’s serious concerns about increasing consolidation in the industry. The consolidation of Class I railroads presents substantial concerns, including: (i) lessened competition among Class I railroads to attract new industry locations; (ii) reduced incentive to invest in research and implementation of important new technologies such as Positive Train Control; and (iii) the danger of industry-wide understandings and agreements that become more likely as the industry becomes more concentrated. The Antitrust Division emphasizes that the Board should not interpret the Antitrust Division’s absence from the Board’s September 2022 proceedings to imply otherwise.”

Well, duh, fellas! Or, as we used to say in high school in the 1970s, “No s__t, Sherlock!”

Wait, it gets better:

The transaction “may divert ‘significant volumes of traffic’ to ‘longer, less efficient routes, and without reducing rates.’” There is “the potential that the merged entity may divert traffic ‘to its own network by using its control over the Mexican portion of the movement.’” The transaction could “give the merged firm additional leverage over competitors by allowing the merged firm to foreclose competition from other railroads, exert more extensive power over bottlenecks, and threaten the commercial viability of interchange rates.”

Marty Oberman and his STB colleagues are quite capable of figuring this stuff out, don’t you think? The DOJ has better things to do with its time, like prosecuting white-collar criminals and rooting out terrorists, than trying to tell the STB how to do its job, right?

To quote Sir Humphrey Appleby, “I do see that there is a real dilemma here, in that, while it has been policy to regard policy as a responsibility of officials, the questions of administrative policy can cause confusion between the policy of administration and the administration of policy, especially when responsibility for the administration of the policy of administration conflicts, or overlaps with, responsibility for the policy of the administration of policy.”

Say, if you folks at the DOJ are looking for something fun to do, there might be a few non-classified papers stuffed into the unlocked glove compartment of my car, sitting outside my house (I don’t have a garage). Go for it!

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