In the Public Interest

While Government and industry spokesmen worried on about how to solve the crucial problems of the nation's railroads, the Interstate Commerce Commission last week took some levelheaded action. By unanimous vote, ICC approved the merger of two major Eastern seaboard soft-coal carriers, Norfolk & Western and the Virginian, allowed them to form a single system with assets of $970 million and 2,746 miles of track serving six states (see map). It was the biggest consolidation of two independent lines since ICC was formed in 1887, and one that President Stuart T. Saunders, who remains as boss of the surviving N. & W. could hail as a milestone. Said Saunders: "A great day in the history of the railroad industry. It reflects a farsighted viewpoint on the part of the commission."

Though both lines, with records of solid profits all through the railroad-busting Depression, earned money in 1958 from the coal regions of Virginia and West Virginia ($11.6 million for the Virginian; $43.5 million for the N. & W.), they duplicated one another to the point where the two lines were not, in ICC's words, "in the public interest." Merged, they will economize by consolidating managements and by using the Virginian's better tracks eastward over the Allegheny and Blue Ridge Mountains. The Virginian's coal piers and marshaling yard adjacent to the Norfolk Navy Base will probably be put up for sale. Estimated saving from the elimination of duplicate facilities and services: $1,000,000 per month.

The ever-cautious ICC warned railroaders that the N. & W.-Virginian decision, which did not involve any opposition from competitors or stockholders, is not a green light for mergers as a way out of financial problems. But it is at least a yellow caution light. Next on ICC's docket is the proposed merger between the Erie and the Delaware, Lackawanna & Western, whose combined loss in 1959's first half is more than $2,000,000. A clear track for this second major combination would revive industrywide merger talks (e.g., between the Pennsylvania and the New York Central, and the proposed five-line New England tie-up of the Bangor & Aroostook, Boston & Maine, Maine Central, New York, New Haven & Hartford, and Rutland Railway).

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