New Saga

Of all U.S. railroads, few have branched out into more off-track business than the Southern Pacific. It runs a 22-acre produce market in Los Angeles, sold 47.5 million bd. ft. of timber from its 430,000 acres of tree farms last year, has a corps of drivers who pick up every General Motors car produced in California and deliver it to dealers. It was one of the first railroads to start a bus line; it has more truck-line routes than track mileage, and it has even tried to sell airline tickets at its whistle-stop stations. Last week the Southern Pacific chuffed off into yet another sideline. Through its new $30 million, 800-mile Los Angeles-El Paso pipeline surged the first barrel of gasoline. When rfie flow hits a peak, Southern Pacific will deliver up to 20,000 bbls. daily to towns in New Mexico, Arizona and California's lush Imperial Valley.

To justify building a pipeline to compete with his own tank cars, S.P. President Donald Joseph Russell, 56, has a businessman's answer: "In two or three years, the refineries would have built a pipeline. If Southern Pacific is going to lose business, I want to be sure we are losing it to ourselves."

Progress Heritage. Russell is writing for Southern Pacific a greater saga than the one begun by famed Railroader E. H. Harriman, whose Union Pacific bought working control of the Southern Pacific in 1901 for $42 million, spent some $240 million to improve it.-It was Harriman who pioneered automatic block signals, spanned Utah's Great Salt Lake with 16 miles of embankment and twelve miles of trestle. The S.P. is the nation's second-longest railroad (after the Santa Fe); adding wholly owned affiliates and the Cotton Belt, which it controls (88%), it is the longest, with 14,854 miles of road.

President Russell, the son of a Colorado furniture salesman, quit his engineering course at Stanford University to go to work as an S.P. timekeeper. Promoted to a $200-a-month engineering job, he asked for a 45-c--an-hour laborer's job to get more track experience. Later, he took over as deputy engineer to double-track the Sierra crest, moved up steadily and, in 1952, became president.

Under Russell, the Southern Pacific has concentrated on research and electronics to improve its service, developed a hydraulic, shock-absorbing coupling gear that permits freight cars to be slammed together without damage. The Southern Pacific has saved itself $1,000,000 yearly by putting inventories under the control of an electronic brain. In a new $7,000,000 switchyard at Houston, it installed a radar-electronic computer control system that shunts a freight car to its proper track, computes weight, windage, distance, then brakes the car to a gentle coupling.

Progress' Casualties. Russell has virtually written off passenger operations as a perpetual profit-loser, but his freight business grows as new companies move in. Every day at least one new company chooses a site on S.P.'s right of way; 15,000 new freight cars are on order. Southern Pacific's 1954 net of $48.7 million made it the third most profitable U.S. railroad (after Union Pacific and Santa Fe), and 1955 profits reached $56 million. To continue to earn such good profits, Russell believes that railroads must change with the times. Instead of carping about airlines, he wants to operate them. Says he: "If the train is going to be outrun, why shouldn't we go along? There simply have to be casualties in any form of progress."

* After Harriman's death in 1909, the Union Pacific lost an antitrust suit and was forced to sell its Southern Pacific stock in 1913. W. Averell Harriman, now Governor of New York, took over as U.P. board chairman in 1932, held the title until 1946 when he handed it over to his younger brother, E. Roland Harriman.

This file is automatically generated by a robot program, so reader's discretion is required.