Railroads: Toward the 21st Century Ltd.

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¶ In the Midwest, where the railroad map is incredibly tangled, several efforts are under way to unsnarl it. The aggressive Chicago & North Western, run by Ben Heineman, has merger agreements worked out with the Chicago Great Western, and would like to include the Milwaukee Road. The Illinois Central and Gulf, Mobile & Ohio, with 9,200 miles of frequently parallel track, hope to merge too. The Missouri Pacific is anxious to take over the Atchison, Topeka & Santa Fe. The three "Northerns"—the Great Northern, the Northern Pacific and the Burlington—have been given tentative ICC permission to combine lines that cover most of the territory between Chicago and the Pacific. The Rock Island Line, an enticing property despite financial difficulties, has a plethora of suitors. Hoping to take all or part of the Rock Island over are the Union Pacific, Southern Pacific, Santa Fe, and Heineman's Chicago & North Western. — In the Southeast, the Atlantic Coast Line and Seaboard Air Line Railroad have already merged into the Seaboard Coast Line and expect to realize annual savings of $38.7 million. Meanwhile the Southern Railway, bothered by this increase in competition, has been shopping around for a partner. ¶In the West, where mergers are less urgent because rail routes are longer, highways fewer and profits greater, one small railroad is being assiduously courted. Both the Southern Pacific and the Santa Fe have attempted to acquire the Western Pacific, if only because its profits are steady and its route includes the easiest pass through the Sierra Nevada. So far, Western President M. M. Christy has turned down all offers.

Sustained Sentiment. The man who is slated to preside over the Penn Central, fittingly enough, is the man who started the merger trend. It was Saunders, as president of the Norfolk & Western, who arranged for the takeover of the Virginian Railway in 1959 and laid the groundwork for the N. & W. to acquire the Nickel Plate and the Wabash. Born in McDowell, W. Va., Saunders grew up in Bedford, Va., within sight and sound of the N. & W.'s main line through the coal fields. He attended college in the town where the N. & W. has its headquarters. Even after he was graduated from Harvard Law School and set up a practice in Washington, Saunders retained his sentimental attachment to the region. In 1939, he and his wife Dorothy jumped at the chance to return to Roanoke when Saunders was offered a job in the legal department of the N. & W. There he made himself so valuable that he moved up steadily until he was finally named president in 1958. In that job, he left operating problems mostly to subordinates, concentrated on mergers and finance.

Saunders' performance at the N. & W. impressed the Pennsylvania Railroad directors, who, at that time, held 33% of the N. & W.'s stock. A delegation from the Pennsy, headed by