Railroad Mergers

August 24, 1960

Report Outline
New Wave of Rail Consolidation Plans
Railroad Consolidation and the I.C.C.
Benefits in Merging of Rail Carriers

New Wave of Rail Consolidation Plans

Acceleration of Railroad Merger Movement

American railroads, harder pressed than ever by the competition of highway, air and water carriers, are showing unprecedented interest in the possibility of bettering their condition by reducing competition among themselves. Some two dozen Class I carriers, operating more than half the railroad mileage in the country, have projected or are studying plans to combine into larger, stronger, and more viable systems.

Merger or consolidation of railroads has been common in American transportation history. In fact, most of today's rail systems were built up by joining together numerous short-line roads. The Association of American Railroads pointed out, July 29, that at one time there were as many as 6,000 railroads in the United States. by the turn of the century the number had been reduced to 1,224, and today it is down to around 410 so-called line-haul carriers operating 218,000 miles of road. But despite the drop in total number of rail carriers, there has been little change for decades in the number of major railroads. There was considerable discussion in the 1920s of the need for rail mergers, but few actual mergers followed. Only two years ago, on June 3, 1958, a report on railroad problems by the Senate Committee on Interstate and Foreign Commerce observed that “The railroad industry has not … been sufficiently interested in self-help in such matters as consolidations and mergers.”

Total operating revenues of $9.8 billion last year gave the Class I railroads net railway operating income of only $749 million, which was lower than in any year since 1949. The steady decline in net railway operating income since 1955 has been an important factor in spurring interest in economies to be gained through consolidations. The growing merger movement was given definite encouragement last October, when the Interstate Commerce Commission approved union of the Norfolk & Western and the Virginian Railway. The climate for such proposals was further improved, March 30, when a plan for consolidation of the Erie and the Delaware, Lackawanna & Western received the preliminary approval of an I.C.C. examiner.

ISSUE TRACKER for Related Reports
Oct. 14, 2022  Passenger Rail
May 01, 2009  High-Speed Trains Updated
Oct. 18, 2002  Future of Amtrak
Apr. 16, 1993  High-Speed Rail
Mar. 10, 1978  Future of American Railroads
Mar. 07, 1975  Railroad Reorganization
Jun. 20, 1973  Railroad Nationalization
Nov. 17, 1961  Railroad Subsidies
Aug. 24, 1960  Railroad Mergers
Jan. 01, 1958  Condition of the Railroads
Jan. 31, 1951  Railway Safety
Oct. 04, 1944  Railroad Freight Rates
Jun. 12, 1939  The Government and the Railroads
Apr. 21, 1938  Government Ownership of the Railroads
Dec. 07, 1937  Railroad Rates and Revenues
Jul. 17, 1937  Advances in Railway Passenger Service
Sep. 27, 1934  Railroad Rates And Federal Regulation of Transportation
Jan. 11, 1933  Railroad Receiverships and Reorganizations
Aug. 26, 1932  The Railroads and the Depression
Oct. 13, 1931  Wages of Railroad Labor
Jul. 09, 1931  Railroad Freight Rates
Feb. 14, 1931  The Railroad Consolidation Controversy
Sep. 19, 1927  The Problem of Railroad Valuation
Mar. 30, 1927  Railroad Consolidation and Prospective Legislation
Mar. 26, 1927  Principles of Railroad Consolidation
Mar. 08, 1926  Railway Labor Disputes Legislation
May 04, 1925  The Baltimore and Ohio Cooperation Plan
Sep. 12, 1924  National Railroad Consolidation and the Van Sweringen Merger
Aug. 14, 1924  Automatic Train Control in Relation to Railroad Casualties
May 28, 1924  The Condition of American Railroads