Evening star., 1940-06-27
Seaboard Makes Bid
For Luxury Travel
Held by Air|ines
But Some BondhoIders
Believe Line Should
First Strengthen Credit
By CHARLES F. SPEARE.


NEW YORK, June PA bold bid
for luxury travel to the South, now
dominated by the airlines, is found
in the application by Seaboard Air
ways, Inc, subsidiary of the Sea-
board Air Line Railway, for certifi-
cate from the Civil Aeronautics Au-
thority permitting it u operate in
the territory of the rail carrier and
also in the Southeast.
The Seaboard has a record for
the longest receivership of any
American steam transportation line,
except the Minneapolis g. st. Louis.
For several years bondholders have
been attempting to formulate a plan
by which the property could regain
a solvent status. AS an evidence
of its low credit the 31a per cent
receivers certificate of the system
is today quoted at 81.
1t is understood that between
S4,000,000 and S5,000000 would be
required to equip the Seaboard Air
ways, Inc, with planes and other
facilities. There are numerous
bondholders of the railroad who
have been without interest for 10
years and others whose interest has
been sharply scaled, who believe
that the first purpose of the rail-
way should be to reconstruct its
credit basis, not to venture into new
and highly competitive fields.
Wants Citizenship Proof.
Another carrier which seeks to
supplement its rail traffic with serv-
ice by plane is the Kansas City
Southern. Together with the LOU
isiana g. Arkansas, which it con-
trolls, it has a steel highway be-
tween Kansas City and New Orleans
and enters Texas Gulf ports. It's
present head Is Harvey C. Cough,
one Of the most aggressive railroad
executives in the Southeast. His
request for license to operate an
airline has not been granted so far
by the c. A. A., which has required
as condition to such application
that proof be given of American
citizenship of rs per cent of the
stockholders of the road For years
this system was dominated by
Dutch banking institutions. Today
its common stock is held by thou
sands of residents of Holland, now
a part Of the German Empire. The
implications of the demand are OBJ
viouS.
The Boston g. Maine and its con-
nection, the Maine Central, have
operated jointly the Boston Maine
Always, Inc, since 1888 This serv-
ice covers the territory from Boston
to Bangor, as we'll as from Boston
to Montpelier and Burlington, VT.
Some years ago the Pennsylvania
Railroad, in conjunction with the
airlines, operated a rail-and-air
service to the West. This was be-
fore sleeper planes" were added
to the equipment of the coast-to-
coast schedules and the time con-
sumed by the flight was hours
longer than today.
Railroads Wake Up.
After long-distance motorbuses
had absorbed a substantial amount
OF railway passenger traffic steam
carriers woke up to the seriousness
Of this competition and began to
invest in bus lines. The New Eng
land territory is served by motor
companies dominated by the New
York, New Haven & Hartford
Railroad. The Pennsylvania Rail
road has considerable investment
in bus lines operating in its i'm
mediate territory.
West of the Mississippi great
strides have been made by the rail-
roads in the last five years in check
ing the control of passenger travel
by the buses. The Southern Pa
ciflc, Union Pacific, Great Northern
and Atchison, among the active
rail operators of transcontinental
service, have large investments in
motor carriers. The Southern Pa
cific has a 40 per cent interest in
the Pacific Greyhound and the
Southwestern Greyhound lines,
which operate south of Portland.
Greg, and west of Ell Paso, Texs
Other Bus Lines.
The Union Pacific owns the en-
tire capital stock of the Union Pa
cific Stages, Inc, as we'll as other
investments in bus lines in the
Middle West and Southwest and
those serving the Yellowstone Ma
tional Park. The Atchison, which
is at a disadvantage to the Southern
Pacific in north and south rail
business in California, has estab-
lished bus line which this year
has given the Southern Pacific's
fast daylight" train between
Los Angeles and San Francisco
severe test both from the stand
point of running time and the cost
of coach fares. /
All the transcontinenta lines have
for some months felt the effect on
their Pullman service of competi-
ton from the airlines. Apparently
the same rivalry is now getting
under the skin of the managements
of the north and south roads in
the East, who have met the demand
for low-cost service In their stream
lined fast coach trains but have
still to overcome the loss of lllxlIrv