Archives West Finding Aid

Mr. Edwin Burgess, a lawyer with wide railroad experience, was chosen in 1960 to represent the interests of the Mercantile Safe Deposit and Trust Company of Baltimore in the proposed merger of the Atlantic and the Seaboard. Mercantile held fiduciary control over nearly 35 per cent of the Atlantic Coast Line and thus would gain a controlling interest in the newly merged company.

This new railroad would bring together the 5,573 miles of track of the Atlantic with the 4,146 miles of the Seaboard. Both roads were in strong financial condition when they appeared before the Interstate Commerce Commission (ICC) for permission to merge. This merger, they claimed, would save the new line nearly 38 million dollars over a five year period. In addition, the merger would hasten the lowering of rates, eliminate duplication of service in many areas, and generally improve rail service along the whole southeastern coast of the United States.

The historical importance of this merger was recognized at the time since mergers between financially strong competitors were generally conceived as favoring monopolistic trends. Michael Conant in his 1964 study Railroad Mergers and Abandonmentcommented:

"A significant aspect of this case was the petition of intervening railroads that as a condition of approval the Commission require the Seaboard and the Atlantic Coast Line to transfer specific sections of their lines to intervenors. . . . All these requests for conditions to the merger were based on the argument that the merged line would divert so much traffic from the intervenors that their solvency would be endangered. (p. 80)"

The ICC rejected all arguments opposed to the merger since to permit them to stand would have frustrated the overall objectives of the merger. Thus, in approving the merger the ICC held that it was of greater import to eliminate wasteful transport and increase efficiency than to allow a near monopolistic situation to arise in the area's rail service. However, two of the ICC examiners did reject the proposed merger on the grounds that it would not help preserve rail competition in the southeastern United States.

The decision of the ICC favoring merger was rendered on December 2, 1963. The merger, however, was not completed until several years of intervenor's court appeals were finally ended when the United States Supreme Court, in a per curiam decision, sustained the merger on May 10, 1967.