Railroads: Tracks Coming Together

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Railroads no longer grow by stretching new lines of track—they simply merge. Last week the U.S. got two new, big rail systems by merger. The Supreme Court gave final affirmation to a union of the Chesapeake & Ohio and the Baltimore & Ohio, which together will form an 11,000-mile system stretching through the East and Midwest. A few days later, the Interstate Commerce Commission approved plans for the Atlantic Coast Line and the Seaboard Railroad, long fierce rivals, to join. The 12,300-mile linkup, stretching through the Southeast from Florida to Virginia, will make the new road the second longest in the U.S. (after the Santa Fe's 12,900 miles).

Principally responsible for the B. & O.C. & O. merger is C. & O. President Walter Tuohy, who this week also becomes chairman of the B. & O. Tuohy, 62, an elfin onetime coal salesman who outmaneuvered New York Central President Alfred Perlman in persuading B. & O. stockholders to join with him instead of Central, plans to save $50 million annually by integrating operations. Seaboard President John W. Smith will run the new Seaboard Coastline Railroad, which hopes ultimately to save $38 million yearly, partly by eliminating 4,200 jobs along its frequently overlapping routes.