Apple Pie

The Norfolk & Western Railway, which reaches from Norfolkthrough the West Virginia coal fields up to southern Ohio is one of the nations best-run railroads. A ride over its main line, says the Handbook of American Railroads, instills "a sense that everything is in 'apple-pie order' and as it should be. "The road is also growth-minded; last year the Interstate Commerce Commission approved a merger between the N. & W. and the Virginian, the first merger of two independently owned railroads in this century. Last week the road's go-ahead President Stuart T. Saunders announced a new merger plan to put together a railroad giant that could be the nation's most profitable transportation complex.

To extend his road across northern Ohio east of buffalo, and west to Chicago and St. Louis, he wants to merge with the New York, Chicago & St. Louis (Nickel Plate) Railroad through an exhange of .45 of a share of N. & W. stock for one of Nickel Plate's. To close the 111-mile gap between the end of his tracks at Columbus and the Nickel Plate's at Sandusky, he wants to buy the Sandusky Line from the Pennsylvania Railroad for $27 million. Finally, to push his network into Michigan and west to Omaga, he plans to lease the Wabash Railroad for $7,125,000 annually for six years, eventually merge with it by exchanging 675,000 shares of N. & W. stock for all of the Wabash's 598,186 shares.

The combined earnings of the roads last year totaled $77 million, well ahead of the earnings of any other transportation corporation. President Saunders estimates that by eliminating duplicate tracks and terminals between the Wabash and Nickel Plate, he will save at least $25 million a year and make the profit picture prettier.

The Pennsylvania, which owns 28% (the largest single block) of the N. & W. and 99% Of the Wabash, has already blessed the merger. So have the Nickel Plate and N. & W. directors. The plan may be the first step in a Pennsylvania scheme to set up a huge eastern rail system that it will later try to join.

Saunders still needs approval by ICC and Nickel Plate and N. & W. stockholders. But no serious ovjections are expected. ICC Chairman Kenneth H. Tuggle reiterated last week what the agency has said before--that it is in favor of mergers that are in the public interest.

The ICC put its okay on a new 4,700 mile rail network made up by merging the Minneapolis, St. Paul & Sault Ste. Marie (Soo Line) Railroad. Wisconsin Central, and Duluth, South Shore & Atlantic. All are subsidiaries of the Canadian Pacific Railway. The merger calls for formation of a new company to be called the Soo Line Railroad Co.

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