Antitrust

Although the Federal Government has smiled on most recent merger activity, every now and then a corporate union gets flagged down. Last week the Interstate Commerce Commission affirmed its year-old rejection of the proposed merger between the Santa Fe and Southern Pacific railways, citing "serious anticompetitive effects" as its reason. The combined railway would control more than 90% of rail traffic on the West Coast.

The ICC move came on the heels of a Justice Department plea to the same body, urging a rebuff of Greyhound Lines's request that it be allowed to begin operating ailing Trailways immediately rather than wait for formal approval of a merger between the firms. Justice argued that allowing Greyhound to run Trailways before the ICC has studied the proposed merger would blur the companies' respective identities and make it difficult to restore competition should the merger be turned down. At week's end the ICC gave Greyhound temporary permission to operate Trailways after Justice changed its mind. The reasoning: the firm was nearly bankrupt and could not continue without help.