Railroads: Now There's a New Way to Say Atchison, Topeka & Santa Fe

To anyone unfamiliar with the U.S. Southwest, "Santa Fe Industries" may sound like an overextended name for a New Mexico manufacturer of Navajo Indian blankets. When the name begins to appear on stock tapes sometime later this summer or early fall, even Easterners will soon learn that it refers to the big and already well-known Atchison, Topeka and Santa Fe Railway Co. Like other U.S. railroads, the fourth largest, Santa Fe, has become increasingly active in nonrail businesses, now receives about $17 million annually, or close to 30% of its total earnings, from these other activities.

Presuming that 80% of the line's 138,000 stockholders approve, the name change to Santa Fe Industries is a way to indicate the new and more venturesome look of the hundred-year-old Santa Fe.

Practical Reason. Aside from image, there is an eminently practical reason for restructuring the corporation. Under Interstate Commerce Commission regulations, a railroad can issue securities only for new ventures connected with railroading. Moreover, it needs ICC permission for just about every kind of venture it undertakes. A holding company that happens to have a railroad as a subsidiary is freer from ICC control. Thus, when the name change takes place, accompanied by an exchange of A.T. & S.F. stock for equal shares in Santa Fe Industries, the railroad will be merely a portion of the bigger company. Chairman and Chief Executive Ernest S. Marsh, 65, and President John S. Reed, 51, will hold similar titles in the new organization, and all other jobs and activities will remain pretty much the same.

Railroading will continue to represent the biggest portion of revenues that last year amounted to nearly $700 million. In line with industry trends, the Santa Fe is gradually closing out what was once one of the best passenger services in the country. Since last October, the Santa Fe has discontinued 15 trains, some runs dating back to the days when bison and Indians roamed the tracks and Harvey girls ran the depot restaurants.

At the same time, freight service, which now accounts for 86% of the Santa Fe's rail revenues, is being improved. The Santa Fe last January inaugurated what it calls "Super C" Flexivan service. The "Super C" freights make the 2,200-mile run from Chicago to the West Coast in 40 hours, faster than the Super Chief.

In its newest freight venture, the Santa Fe is proposing that cargo moving between Europe and Asia be unloaded from ships and carried across a U.S. "land bridge" consisting of Santa Fe and Penn Central tracks. Moving between New York City and the West Coast in five days, the trains would chop five to eleven days off the same trip made by ship via the Panama Canal, with obvious savings.