Why the Southern and not the Frisco???

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I posted a question on another message board and wanted to get insights from folks here. It is exactly as I posted it elsewhere so there are some things that are common knowledge to everyone here but not on the other board. Any help and insights would be appreciated. Thanks everyone.

Bryan Smith Columbia Alabama

Here's the question:

I've been doing a bit of reading about the history of the Central of Georgia Railroad (CofG) and came across some interesting points that weren't fully explained. During the 50's the St. Louis-San Francisco railroad, known as the Frisco, began buying shares in the CofG and by 1956 had acquired 71% of the common stock. In 1963 the Interstate Commerce Committee (ICC), the forerunner of todays Surface Transportation board ordered the Frisco to divest it's holdings in the CofG saying it was bad for competition. (Don't you love it when the federal government claims to eliminate one federal bureaucracy (ICC) but fail to mention they create another one to take its place (STB).) The Frisco sold their holdings, with the blessings of the ICC, to Southern Railway for 22 million dollars which then acquired the other 29% for an additional 10 million making the total price paid 32 million. For a railroad valued by some at 126 million. Not a bad days work.

My question is this: The Frisco operated mainly in the lower Midwest and had few, if any, lines that overlapped with the CofG. Their mainlines ran from Mobile/Birmingham thru Memphis to St. Louis and Kansas City. They also served Dallas/Ft. Worth and had other branch lines. On the other hand, Southern's lines and the CofG's line overlapped each other in numerous places, especially the line from Chattanooga to Macon and with both having separate lines into Columbus GA. It would seem as though the Southern buyout would be far worse for competition than the "end to end" merger of Frisco and CofG. The Frisco is now a part of BNSF.

Why would the ICC approve the Southern buyout but not the Frisco??? I know the Southern buyout meant many CofG people lost their jobs, especially in Macon, where a Frisco buyout would have still preserved jobs and competition in the Macon area.

I know its all hypothetical and matters nothing to NS and its performance at this point but I knew there were some here that have much insight into that era and could possibly provide some of the answers.

-- Bryan Smith (bsmith3608@aol.com), April 09, 2000


Was browsing and came upon your discussion regarding the Frisco's sale of the CofG to Southern, and can add a little color commentary. I recall as a young operator at Birmingham Terminal in early '63 when Brosnan and Frisco's president (whatever his name) held their negotiations at Birmingham Terminal sometime in early 1963. They coupled their office cars platform-to-platform and went at it for several days. Everyone around the station speculated Brosnan was driving a hard bargain to buy the FRISCO, not the CofG. Boy, were we surprised!

-- Marv Clemons (clemonsm@att.net), May 27, 2000.

The short answer to this on is, "Because the Interstate Commerce Commission said so!"

The Frisco bought controlling interest in the CofG around 1956 without ICC permission. Even though the stock was placed in trust pending ICC approval, the Frisco apparently exercised some degree of control (SLSF diesels appeared on CofG trains at times during that period.) The Commission did not like this unauthorized exercise in contol and essentially said, "The idea of SLSF and the Central merging is a good one, but you didn't say 'May I?' so we will not approve this acquisition and furthermore, you have to sell the stock."

The Southern bought the stock from the Frisco, and the rest is history. Interestingly enough, the GM&O was playing with the idea of buying the Central and merging it. The idea was rendered moot in 1960 when Southern and Frisco struck a deal.

Hope this helps.

Bob Hanson

-- Robert H. Hanson (RHanson669@aol.com), April 13, 2000.

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