Mergers that never were

Discussion in 'General' started by Gabriel G., Sep 18, 2020.

  1. Gabriel G.

    Gabriel G. Member

    In his book, Main Lines: Rebirth of the North American Railroads, 1970-2002, Richard Saunders, Jr. describes the Frisco as being "a system not quite finished." While this may seem an uncharitable description of the Frisco, there is truth to Saunders' statement. The Frisco was always conceived as being a component of a larger system. While the Frisco served as a pawn in the empire-building strategies of its larger neighbors, it also engaged in some empire-building of its own. I have compiled a list of potential mergers and merger partners for the Frisco, as well as explanations as to why these mergers never took place.

    Out of MoPac, Frisco: While Missouri Pacific is traditionally seen as a rival of the Frisco, MoPac and the Frisco were originally conceived of as a single railroad. The St. Louis & San Francisco Railroad was founded as a subsidiary of the Atlantic & Pacific Railroad in 1876, comprised of trackage that previously belonged to Atlantic & Pacific's Missouri and Central Divisions. Atlantic & Pacific was itself founded as a subsidiary of the Pacific Railroad, which later became Missouri Pacific. The Pacific Railroad lost control of the incomplete Atlantic & Pacific after the latter defaulted on its bonds and its property was seized by the state of Missouri. Had this not taken place, it's possible Frisco would've been a component of the Missouri Pacific system instead of a rival.

    St. Louis, San Francisco & Santa Fe?: As most Frisco fans are undoubtedly aware, the St. Louis & San Francisco was under the control of Atchison, Topeka & Santa Fe until the Panic of 1893, when both the Frisco and Santa Fe fell into bankruptcy. It was through Santa Fe's control of the Frisco that Santa Fe gained its fabled Transcon route to California and the Frisco was forever denied direct access to its namesake city. Even after Santa Fe lost control of the Frisco, the two railroads interchanged significant amounts of transcontinental traffic with each other. Santa Fe explored the possibility of a merger with the Frisco in the early 1960s, though these talks were derailed after Missouri Pacific attempted a hostile takeover of the Santa Fe and Union Pacific and Southern Pacific began pursuing the Rock Island. Santa Fe initially opposed Burlington Northern's acquisition of the Frisco but settled for haulage rights over the Frisco from Avard to Birmingham. The Frisco and Santa Fe became a single system once again when Burlington Northern and Santa Fe merged with each other in 1995. Today, the Frisco serves as the eastern extension of BNSF's Transcon, an outcome which may have taken place a century earlier had Santa Fe remained in control of the Frisco.

    Dead-ends with B.F. Yoakum and the Reid-Moore Syndicate: After Santa Fe lost control of the Frisco during the Panic of 1893, the St. Louis & San Francisco Railway came under the control of Benjamin F. Yoakum. Yoakum eventually joined forces with Daniel G. Reed and William H. Moore of the Rock Island. Together, they assembled a system comprised of the Frisco, Rock Island, Gulf Coast Lines and Chicago & Eastern Illinois. The Frisco and Rock Island fit together like puzzle pieces, with each system filling the gaps of the other. Unfortunately, this empire was short-lived, as the Frisco, Rock Island and C&EI all fell into bankruptcy shortly before the First World War. The Frisco later attempted to regain control of the Rock Island, purchasing fifteen percent of its stock in 1929, but sold it shortly after declaring bankruptcy in 1933. Later, John W. Ingram sought the inclusion of the bankrupt Rock Island in the Burlington Northern system alongside the Frisco, but Lou Menk refused Ingram's proposal in light of the fact doing so would make Henry Crown Burlington Northern's largest shareholder. Chicago & Eastern Illinois and the Gulf Coast Lines both ended up in the hands of rival Missouri Pacific, while the Rock Island was carved up amongst its neighbors after its liquidation in 1980.

    No help from Miss Katy: B.F. Yoakum was close personal friends with Edwin Hawley, owner of the Minneapolis & St. Louis and Missouri, Kansas & Texas railroads. Yoakum viewed the Katy as a natural extension of Frisco: a Frisco-Katy merger would've granted the Frisco a more direct route from Kansas City to Dallas and Fort Worth and direct access to the Gulf Coast. Katy and Frisco already shared trackage in a number of locations and the two railroads would later operate the fabled Texas Special together. The relationship between the Frisco and Katy never went beyond this, though the Katy was one of a handful of railroads that opposed Burlington Northern's acquisition of the Frisco. Jerry Grinstein later stated Burlington Northern made a mistake in allowing Union Pacific to sweep up the Katy instead of buying it alongside the Frisco, as doing so would've granted Burlington Northern access to a number of power plants in Texas and Oklahoma that relied on coal from the Powder River Basin and allowed for greater access to the Gulf Coast petrochemical industry.

    The Central of Georgia Folly: The Frisco is arguably one of the railroads responsible for kicking off the modern "merger movement" as we know it. Shortly after Louisville & Nashville absorbed the Nashville, Chattanooga & St. Louis, the Frisco applied with the Interstate Commerce Commission for permission to control the Central of Georgia. While the Interstate Commerce Commission was initially favorable to the Frisco's request, they soon discovered the Frisco had begun acquiring Central of Georgia stock before they had applied for permission. Thus, the ICC denied the Frisco's request and forced the Frisco to divest its holdings in the Central. The Frisco sold its stock to the Southern, who promptly went and absorbed the Central. In hindsight, this was probably for the best, as the Central of Georgia served areas of the South that were largely untouched by the Sunbelt boom of the 1960s and the Frisco would've alienated the Southern and Seaboard Coast Line had it invaded their territory. After ending its merger talks with Missouri Pacific in the mid-1970s, the Southern considered a merger with the Frisco but soon abandoned that idea in favor of pursuing Illinois Central Gulf. The Southern would eventually merge with Norfolk & Western in 1982, forming today's Norfolk Southern.
     
    Last edited by a moderator: Sep 19, 2020
  2. jarnett

    jarnett Member

    While working in the Frisco Sales Office in Greenville, SC (Offline 1978-1980), I remember reading some of the old files. One of them concerned the Frisco study of the GM&O traffic patterns and how a possible merger would look.
     
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  3. Gabriel G.

    Gabriel G. Member

    I have a soft spot for the "Geemo," so it's cool to know the Frisco viewed them as a potential merger partner. If I recall, the Chicago & North Western and Kansas City Southern also considered merging with the Gulf, Mobile & Ohio before Illinois Central made an offer. KCS couldn't afford to make a counteroffer as they were in rough shape during the late 60s-early 70s when the IC-GM&O merger hearings took place, so they printed up freight schedules for a potential KCS-GM&O system and distributed them to commissioners in hopes the ICC would reject the IC-GM&O merger and support a KCS-GM&O merger, instead. :ROFLMAO:
     
    Last edited by a moderator: Jan 4, 2021
  4. Gabriel G.

    Gabriel G. Member

    Update time! According to the 1948 February issue of Trains, Isaac B. Tigrett of the Gulf, Mobile & Ohio attempted to gain control of the Frisco in 1947-48, with the intent to merge the two railroads into an 8,000-mile system stretching from the Great Lakes to the Gulf of Mexico.
     
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  5. Iantha_Branch

    Iantha_Branch Member

    Now that is an interesting what if
     
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  6. Gabriel G.

    Gabriel G. Member

    Update time! Apologies for the lack of activity on here as of late, but graduate school has kept me busy. I recently stumbled onto an issue of Railway Age from 1922 which states that the Frisco had acquired the entire capital stock of the International-Great Northern. I lived in Austin, Texas for around three years as a child and spent a lot of time watching trains with my father at the former International-Great Northern (now Amtrak) depot, so it's interesting to know there was a period where the Frisco seriously considered absorbing the International-Great Northern. Fortunately for MoPac, this merger did not go through, as the International-Great Northern was a valuable component of the latter-day MoPac system, along with fellow Frisco cast-offs the Gulf Coast Lines and Chicago & Eastern Illinois.
     
  7. Karl

    Karl 2008 Engineer of the Year Frisco.org Supporter

    After looking through the 1922-24 Frisco Annual Reports, I could not find any reference to this purchase. A later newspaper article uses the term “contract to purchase” (pending ICC approval, the inference is mine) might explain the omission. After the loss of its Gulf Coast Lines, the Frisco was thwarted in its attempt to return to the “Guff Coast of Texas”. The Frisco Pensacola line was a poor substitute to what be came the massive petro-chemical industry between Brownsville and New Orleans. The MP and its successor, the UP, benefited greatly from the Frisco’s loss.

    Kansas_City_Star_Sun_Jun_28_25_.jpg
     
  8. Gabriel G.

    Gabriel G. Member

    Karl,

    From what I can gather, MoPac lost control of the International-Great Northern after the latter emerged from bankruptcy in 1922. Shortly thereafter, MoPac acquired control of the Gulf Coast Lines, which in turn acquired the International-Great Northern to prevent it from being acquired by the Frisco. Jerry Grinstein lamented Burlington Northern merged with Frisco instead of MoPac because MoPac tapped into cross-border traffic and the lucrative petrochemical industry in Texas and Louisiana, whereas Frisco did not. On top of this, MoPac served many of the power plants in Texas that burned low-sulfur coal from Wyoming. Once the Chicago & North Western entered the basin and Union Pacific acquired MoPac, Burlington Northern lost a large chunk of its customer base in Texas.

    Gabriel G.
     
  9. fredman23

    fredman23 Member

    I've always thought it was interesting that the component parts of the Atlantic and Pacific Railway are now back together in the Been Nothin Since Frisco.
     
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  10. Gabriel G.

    Gabriel G. Member

    Fred,

    I mean, it's only natural, isn't it? The only reason those two were ever separated in the first place was because of the Panic of 1893 throwing both railroads into bankruptcy.

    Gabriel G.
     
  11. klrwhizkid

    klrwhizkid Administrator Staff Member Administrator Frisco.org Supporter

    The "component parts" of the Atlantic and Pacific Railway, the St Louis - San Francisco Ry and Missouri Pacific are in two different railway systems; BNSF and Union Pacific respectively.
     
  12. Gabriel G.

    Gabriel G. Member

    Keith,

    You're right. Fred and I completely neglected the period in which MoPac and Frisco were under common ownership. The early corporate history of the Frisco is somewhat convoluted, so I'll do my best to summarize:
    • MoPac initially controlled the Frisco, but lost control of the Frisco after the latter defaulted in March 1866.
    • John C. Frémont created a new company in July 1866, the Atlantic & Pacific, to take control of MoPac and the Frisco.
    • The Atlantic & Pacific lost control of MoPac in November 1875, but maintained control of the Frisco.
    • In January 1880, the Atlantic & Pacific came under the control of Santa Fe. The Atlantic & Pacific then completed its transcontinental mainline from Isleta, New Mexico to Needles, California.
    • In 1890, the Atlantic & Pacific transferred control of the Frisco to Santa Fe.
    • Santa Fe and Frisco fell into bankruptcy in December 1893, while the Atlantic & Pacific followed in January 1894.
    • The now reorganized Santa Fe acquired the assets of the Atlantic & Pacific in June 1897, but neglected to re-acquire the Frisco.
    Between 1866 (when the Atlantic & Pacific was formed), its various divisions - the Pacific (MoPac), Central (Frisco) and Western (Isleta, New Mexico-Needles, California) - were split amongst three railroads (MoPac, Frisco and Santa Fe) as a result of multiple reorganizations and changes in ownership. MoPac became part of Union Pacific, while Frisco and Santa Fe became parts of BNSF.

    Gabriel G.
     
    Last edited: Nov 30, 2021 at 1:54 PM

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