Growing System

In 1911 diminutive Isaac Burton Tigrett of Jackson, Tenn. took on the presidency of diminutive (48 miles) Birmingham & Northwestern Railroad as a sideline to his banking business. Eight years later he was a dyed-in-the-wool railroad man, head of Gulf, Mobile & Northern, and going strong. Four times in the next 20 years Railroader Tigrett enlarged his line, each time taking over another road, until he had 824 miles of right of way from Jackson to Mobile and New Orleans. Last week he stepped out of the diminutive class, stood to get a major trunk line from St. Louis to the Gulf.

For an upset price of some $11,000,000, the Mobile Federal Court ordered the properties of bankrupt Mobile & Ohio (St. Louis to Mobile) sold at foreclosure to G. M. & N., which already had ICC approval to absorb the larger road into a single, 2,007-mile system. First large railroad consolidation since 1934, it puts "Ike" Tigrett at the head of a new railroad named Gulf, Mobile & Ohio, which will start with a $31,870,000 funded debt and annual interest charges of $1,399,920 (about half the two roads' present fixed charges). An additional $6,025,800 of 5% bonds will pay interest only if earned, and dividends on the 305,750 shares of $5 preferred are on a similar basis. If G. M. & O. can jump those three hurdles, holders of its 609,847 common shares may see a dividend.

Most of the water to be squeezed out of M. & O. (in receivership since 1932) will shower on Southern Railway, owner of 94% of the ailing road's common, which will be wiped out. For $7,839,500 worth of M. & O. bonds Southern gets 93-c- on the dollar. To pay Southern off, G. M. & N. borrowed $7,500,000 from RFC last month, will get another $2,000,000 to pay additional merger expenses.

This setup will give modest, canny, homespun Ike Tigrett a chance to step up the $427,388 net profit his road made last year (M. & O, lost $440,924) to a respect able figure by getting a longer haul on a larger portion of the two lines' traffic. Al ready benefiting from the movement of industries to the South, he hopes to add more manufactured goods to the lumber, petroleum, bananas, etc. which are , the standbys of his new road. Now 60, not old as railroad presidents go, he has been a railroad president longer than any other U. S. railroader except Baltimore & Ohio's venerable ''Uncle Dan" Willard. He is also a pioneer of new railroading wrinkles.

First to introduce streamliners to the South with the Rebels (New Orleans to Jackson, Tenn.), he went competitors one better by stocking his streamliners with smart, good-looking college girls -- the U. S.'s first train hostesses. Scheduled to pay for themselves in seven and a half years, the sleek, Diesel-powered stream liners paid out in less than half that time. In 1936 President Tigrett formed Gulf Transport Co. to handle freight over a coordinated rail-highway system. To it he added a passenger service with tickets interchangeable between busses and trains. Says he: "We believe in hauling as far as we can by rail and then the rest of the way by highway." A recent traveler on the line observed: "All over the system you see young faces. They believe in the railroad."

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