Southwest Rails

As the crow flies between New Orleans and Kansas City the distance is 650 mi. From Kansas City to Port Arthur, Tex. it is 625 mi., from Port Arthur to New Orleans 250 mi. Near the centre of this big southwestern triangle is a man-made lake near Hot Springs, Ark. called Catherine. On an island in the lake is Couchwood, the spacious summer home of Utilities Tycoon Harvey Crowley Couch, onetime (1932-34) RFC director, chair-man of Louisiana & Arkansas Ry. and Arkansas' richest citizen. The four C's in Harvey Couch's book read: "Courage, Confidence, Concentration and Co-operation will enable us to make Arkansas and this section of the Southwest the most self-sustaining, the most prosperous part of the U. S."

Because he saw a bright future for rail traffic in the "golden triangle" of his part of the Southwest, Railman Couch last week purchased working control of Kansas City Southern Ry. from Paine, Webber & Co. The Manhattan brokers would reveal no details of the deal, but a good guess was that Senator Joe Robinson's good friend Harvey Couch and his associates paid up to $2,250,000 for the stock once held by the Brothers Van Sweringen.

Harvey Couch's Louisiana & Arkansas Ry. has only one dining car, the K.C.S. but three. Assets of the two roads foot up in about the same ratio -- $36,500,000: $136,000,000 -- and dining car and passenger revenues mean little to either. Running from New Orleans to Shreveport, La. and Hope, Ark. with an affiliate branching to Dallas, Tex. the L. & A. carries mostly quarry products, refined oils and sugar.

With the shortest route between Kansas City and Port Arthur on the Gulf of Mexico, the K.C.S. does a good business each year carrying coal, oil and farm products. It joins the L. & A. at Shreveport. The man who built the Kansas City Southern into a first-class railroad was bush-bearded old Leonor Fresnel Loree of the Delaware & Hudson R.R., ousted from his post of stewardship on the K.C.S. last year by Paine, Webber after a long-drawn-out fight at the corporate polls.

Preliminary 1936 earnings figures showed a net profit of $580,000 for the K.C.S., comparing with a deficit of $955,000 in 1935. The L. & A. showed a $334,000 profit last year, comparing with $428,000 the year before. What the deal last week meant was that Harvey Couch's ideas on co-operation would be applied to freight operations, especially since the two roads together would have the most direct route between New Orleans and Kansas City by way of Baton Rouge, Shreveport, Texarkana and Joplin, Mo.

Another step in what may be Harvey Couch's plan for a Southwestern rail empire was a new application to the Interstate Commerce Commission early this month in which the L. & A. sought permission to buy the Rock Island, Arkansas & Louisiana R. R. First proposed last summer, this acquisition would connect the L. & A. with Little Rock, Arkansas' first city.

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