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Show Railroads Claim Merger Will Help Consumers Omaha, Neb. The nation's railroads are increasingly increas-ingly turning toward merger so they can compete more effectively with pipelines and such government subsidized rivals as trucks, barge lines and airlines. A relatively new entry into the merger field is Union Pacific, one of the strongest strong-est railroads in the country. Union Pacific has asked the Interstate In-terstate Commerce Commission to approve a merger with the financially-depressed Rock Island Is-land line to create a strong road connecting with the major rail lines to the east. ; The Union Pacific' claims that merger of the two railroads will enable the combined lines to compete more successfully against their tax-supported rivals ri-vals as well as single-line railroads rail-roads that already link up the west coast with the eastern roads or have merger bids that will give them such a link. The UP proposes to sell the southern portion of the Rock Island to the Southern Pacific If the ICC approves both the merger and the sale. This will bring the resources of the SP, a major railroad, into action to revitalize and improve rail service serv-ice in the southern midwest. MERGER BENEFITS Stockholders of the Rock Island Is-land and the Union Pacific already al-ready have approved the UP-Kock UP-Kock Island merger and railroad rail-road presidents, Edd H. Bailey of Union Pacific, and Jervis Langdon, Jr. of the Rock Island contend that if the ICC approves ap-proves the merger, this will: . . . greatly improve service to Union Pacific and Rock Island Is-land customers with more frequent fre-quent freight schedules, later departures, earlier deliveries and greater reliability in getting get-ting freight to its destination on time. . . . permit Union Pacific to supply new capital for major ma-jor improvements in Rock Island Is-land facilities. . . . provide healthy competition competi-tion among all forms of trans- portafio?i in the west and middle mid-dle west. Shippers would benefit ben-efit by the added strong rail link between the west coast and the major gateways to the east, providing them with greater flexibility in marketing. The Union Pacific and Rock Island executives said the merger merg-er is imperative if both roads are to remain competitive with rival railroads and other forms of transportation. COMPETITIVE PICTURE They pointed out that today three railroad systems have exclusive ex-clusive single-line routes connecting con-necting west coast points and the major eastern gateways the Santa Fe and Southern Pacific-Cotton Belt routes in the south, and the Milwaukee in the north. The proposed Great Northern-Northern Northern-Northern Pacific-Burlington merger, linking the Pacific Northwest with the eastern gateways, would create two more strong single-line transcontinental trans-continental routes, one through the northern tier of states and the other through the central U. S. It also would create a single-line route between the Pacific Northwest and the Gulf of Mexico. In contrast, the Union Pacific stops short at the Missouri River Riv-er and' its traffic must travel over other roads to reach the major lines to the east. The Rock Island links up with the eastern roads at Chicago, Peoria, Peo-ria, Joliet and St. Louis, but has no access of its own to the important im-portant markets on the West Coast. A major contribution that the Union Pacific will make toward improved service of the combined com-bined lines if ICC gives it the green light will be in the field of capital expenditures. The financially-pressed Rock Island over the next five years should make substantial capital outlays for necessary equipment, equip-ment, roadbed improvements and other facilities. Based on studies made in 1964, Union Pacific Pa-cific estimates this need to be at least $200 million. The full program needed may well be beyond Rock Island's financial reach. President . Bailey said the Union Pacific has pledged after merger to supply capital to provide the kind of facilities needed. |
