Rumble in the West

The Western Pacific is a short (1,188 miles) railroad whose main line runs from Salt Lake City to the Coast, but its tracks cover some coveted ground. Last week, in a conference before the Interstate Commerce Commission in Washington, two of the nation's biggest and richest railroads staked out their claims to take over the Western. The Southern Pacific started to do so four months ago, after acquiring 10% of Western's stock; it wants to merge the Western system into its own to get the benefit of new business while eliminating duplicating facilities.

The Atchison, Topeka & Santa Fe, which countered Southern Pacific's challenge by quickly picking up a 20% holding in Western, wants to run Western as a separate, semi-autonomous railroad, continue to use it to compete with the Southern Pacific. Other railroads joined the fight. The Santa Fe's transcontinental archrival, the Union Pacific, whose lines tie in with the Southern Pacific's, said that it had bought up 10% of Western's stock and that it supported the S.P. The Chicago, Rock Island & Pacific, which competes with the Santa Fe in the Midwest, also came out in favor of Southern Pacific's proposal. The Rock Island, which is linked to the Western system at Salt Lake by the Denver, Rio Grande & Western, fears that a Santa Fe-controlled Western would route traffic over the Santa Fe rather than the Rock Island.

But the Santa Fe also had friends. Western Pacific directors endorsed the Santa Fe plan, and the Great Northern Railway, which has a line that ties in with the Western system at Bieber, Calif., backed the Santa Fe and bought 8% of Western's stock to give its support more weight.

After the conference, the case was recessed until the formal hearings begin in San Francisco, possibly this summer. On grounds of preserving competition, it looked as if the Santa Fe had the better chance of winning ICC's O.K., since it would cooperate with the Western to compete against the Southern Pacific. If ICC allowed the Southern Pacific to take over the Western, the northern California area would be left with a one-company rail system--just as it was 52 years ago, before the Western Pacific was built to break the Southern Pacific's monopoly.

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