The Justice Department said yesterday that it would participate in Interstate Commerce Commission proceedings reviewing the proposed merger of the St. Louis-San Francisco Railway Co. into the Burlington Northern Inc.
In comments filed with the ICC, Justice took no position on the merger, but indicated it would investigate the proposal.
"This is the first large-scale rail merger proposed since the passage of the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4R Act)," said Justice Department Anti-trust Division head John Shenefield in announcing his department's plans.
"We are vitally interested in the progress of the application," he added. "Given the information available, we have not determined whether we should actively oppose the merger."
The Justice Department filing with the ICC states that it is becoming involved in the process "to ensure that competitive issues are fully developed before the commission."
Burlington Northern is one of the nation's largest railroads, operating on some 25,000 miles of track from Portland and Seattle to Minneapolis, Chicago, Kansas City and St. Louis. A major hauler of grain, food products and coal, it is a financially sound operation.
The Frisco is a smaller "but equally secure and well-run railroad," according to the filing, and connects with BN at Kansas City, St. Louis and Dallas/Fort Worth.
The Frisco would give the BN a vital link to the Gulf Coast. The consolidation would be what as known as an "end-to-end" merger, with little or no overlapping of present lines. It would produce a huge single-line operation from the West Coast to the Gulf of Mexico.
The Justice Department said it could not determine yet when the effects of the merger would be on other railroads that compete with the two carriers.
"There may be widespread diversions of traffic from other carriers without any concomitant benefits to shippers and the public," the department brief said.
It also stated, however, that "the presence of a strong, new competitor providing efficient single-line service may spur further rationalizations of track and equipment resulting in substantial benefits to shippers and the public."