Open for Bids

The Pennsylvania Railroad Co.'s tart-tongued president, Martin Withington Clement, was once asked by the Interstate Commerce Commission why he let Manhattan's Kuhn, Loeb & Co. underwrite a Pennsy bond issue. Snapped he: "I deal with whom I please."

Last week, the ICC drastically curbed the right of Pennsylvania's Clement —and all other U.S. railroaders — to deal where they pleased. In a historic, 26,000-word report that wound up a 20-year-old fight, the ICC ordered: after June 30, railroad bond issues above $1,000,000 must be sold through competitive bidding.

This resulted from Pennsy's attempt last July to sell a $28,483,000 bond...