HISTORY OF SOUTHERN PACIFIC RR
Did you know that in 1869 the Central Pacific Railroad and the Southern Pacific Railroad joined at Promontory, Utah and have been rivals since. first bought SP and kept the SP name because it was larger? Not exactly "larger"--Central Pacific used Southern Pacific as an overall holding company. Central Pacific was obliged to pay 5% of their profits to the federal government to pay down their loans for all traffic sent via the "Overland Route" (the Sacramento to Omaha line) but once CP acquired SP, they could avoid this surcharge by sending freight east via their new "Sunset Route" (via Southern California.) Admittedly, the southern route worked better as it was not likely to be blocked by heavy snows (as the Overland route through the Sierras sometimes was) but avoiding paying back the government was an important priority of the CP's principals.
It had always been intended, since the joining of the golden spike to merge the SP and UP into one system, only EH Harriman's death and the ensuing court battles over control of his empire prevented the great merger of 1908.
In the early May 1980s, the SP and the Santa Fe decided to merge, but was thwarted by various internal problems. More serious talks and ideas started again in Sept.1983 and the merger idea was beginning to solidify. This idea was considered done, so much so, that the railroads decided it a done deal.. The SPSF started painting units in the famed Kodachrome scheme (red, yellow with black accent) and a large SP or SF on the side with room left for the other two letters of SPSF in the appropriate places. But this merger was denied by ICC in 1986. With the denial of the merger, detractors said SPSF stood for "Shouldn't Paint So Fast". The SP at this point was basically a bankrupt railroad, so DRGW bought it in 1987, and from 1987 - 1995 started the long haul back to restoration to solvency for the railroad. They decided the SP name had much wider name recognition than DRGW, so they named the new railroad after the SP. In 1992, the speed lettering SP scheme was introduced as a melding of the Rio Grande speed lettering and the SP classic gray and scarlet. Actually SP was purchased by the D&RGW prior to the UP takeover . . To put it in simple terms, SP sought various merger partners over the years AT&SF and Rock Island to name a few . Traditionally, the transportation of produce, citrus and lumber was the lifeblood of the SP. Changing market conditions, outdated infrastructure and poor business decisions, recession and deregulation caused the loss of produce and lumber traffic to trucks and other rail competitors, even earlier SP had begun to abandon or sell off most branch lines which had long been vital to SP balance sheets for car loadings which, along with other events, contributed to the irreversible downhill spiral of ridding themselves of excess trackage with no regard to customers or of being retained as a future traffic source if market conditions improved. Enter the Union Pacific.
In 1996, the UP bought out the SP, and like always, simply assimilated the SP assets into the UP umbrella, with the UP name and look wiping out all traces of anything left of the SP.
UP had foreseen the windfall it could reap by dominating the chemical transportation trade along the Gulf Coast. Merging with the MP/MKT accomplished this to some degree, but SP had always dominated this traffic. UP was intent on preventing any other potential rival from gaining a foothold in this valuable market which was the most coveted of SP possessions. UP also was also paying close attention to the West Coast intermodal explosion and saw an opportunity to stick one to the Santa Fe. The WP merger gave them access to The Port of Oakland directly and hence a threat to the Santa Fe dominated Port Of Richmond , UP didn't get its monies worth by purchasing the WP.
It appears also that in the end DRGW did in fact buy SP, but kept the SP name and so in reality, SP bought UP, but they kept the UP Exec board, thus the UP name. therefore the UP is actually the CP (ironic the 2 railroads that first joined the US coast to coast are now one) and the 4 Railroads in question used to be owned by the same man E. H. Harriman are now one as well It can be said that the Denver & Rio Grande Corporation bought the SP, and was in turn bought by the Union Pacific; so now there are basically only two major railroads in the western United States -- Union Pacific and Burlington Northern Santa Fe.
The following narrative was given to the club by the Historical Society and hangs on the wall in our depot.