Southern Railway president L. Stanley Crane today forecast that within two decades, major portions of the nation's heavily used railroads will be electrified because of expected price increases for diesel fuel.
Crane told stockholders at the Washington-based company's annual meeting here that about 2,000 miles of Southern's 10,500-mile road have a density of freight traffic that would make conversion to electric energy economical in the long run."It's coming...diesel fuel will grow more scarce and more expensive," Crane said in response to a stockholder's question.
In other developments today:
Stockholders approved an extensive Employee Stock Ownership Plan (ESOP), to take advantage of tax legislation passed by Congress last year to permit an additional investment tax credit for companies which agree to contribute stock to their workers.
Professional stockholder Evelyn Y. Davis won two victories without a fight from Southern's management, which agreed to begin listing all corporate directorships and major charity directorships of its directors on proxy statements. Management already has established age limits for future directors, in response to a Davis complaint last year. But shareholders defeated by lopsided vote a Davis proposal that Southern publish lists in newspapers of all political contributions or spending for lobbying.
Crane said management is optimistic that the economy will "remain strong" for the balance of the year and that Southern will track those gains, following a record first quarter. He said "piggyback" freight shipments (trucks carried on flatcars) are up sharply to record levels.
Some rail industry leaders, including Crane, have been predicting a growth of electrification for several years. But the Souterh chief executive noted today that a 1973 study by his firm, which point to economic benefits from electrifying a 785-mile main line between Cincinnati, Chattanooga and Atlanta, was based on erroneous data about electric rates.
At that time, he noted, fuel prices had been soaring but electric rate increases that subsequently took effect had not been established. Because the 785-mile link would cost $140 million for new locomotives and electric facilities, later studies showed that electric price boosts had brought the costs of diesel and electric power roughly even.
In the future, however, "certainly in the next 20 years," electrification will be added to main freight lines, Crane said.
In the years prior to 1940, there was a trend toward installation of electrified lines to increase track capacity, to improve operations on high grades and to eliminate smoke pollution. From a peak of 2,500 miles of electrified routes at the start of World War II, the totalsince has declined to less than half that amount.