Since its incorporation, it had the right to build a railroad from San Diego to Lakeside, which would be in competition with the San Diego, Cuyamaca & Eastern Railway. But E. S. Babcock had been in control of the latter since 1904.

This simplified the acquisition of that railroad by the Spreckels interests and it was taken over in 1909. The corporate name was changed to San Diego & Cuyamaca Railway Company, with William Clayton as President.

Up to 1908 the Cuyamaca had operated steam trains only from San Diego to La Mesa, El Cajon, Lakeside and Foster. In that year a McKeen Gasoline Motor Car was received and it was given the name "Cuyamaca". An Automobile Rail Car with chain drives and a passenger body was also in use, bearing number 24.

Time Schedule No. 27, effective January 21, 1912, of the San Diego & Cuyamaca listed four passenger round trips daily between San Diego and Foster, one daily except Sunday, two Saturday only and one Mixed and one Freight trains daily except Sunday. There were notations that "Trains will be run with Locomotive or Gasoline Motor Car, as occasion may require." and "Company Reserves the Right to Vary from this Schedule at Pleasure." E. A. Hornbeck was the General Manager.

In order to effect the economies that would result through the merger of the Cuyamaca with the San Diego Southern, a new corporation was formed in 1912, immediately following Time Schedule.

Operations were then divided into three divisions. The Cuyamaca became the Eastern Division, the Coronado and National City & Otay steam lines became the Southern Division and the interurban line the Electric Division.

Time Table No. I of the San Diego & South Eastern, effective March 31, 1912, indicates, by omission, that the use of the motor cars had been discontinued. The McKeen Car "Cuyamaca" was sold to the United States Reclamation District for the Yuma Valley Railroad, Arizona.

On the Southern Division, steam trains were operated from Sixth Ave. and L St., San Diego to Tijuana and to Sweetwater Dam. After the Cuyamaca station was moved from Tenth Ave. to 13th St. on Commercial St., only one steam train a day was operated out of San Diego, from 13th St., to National City, the others starting from 24th St. and Cleveland Ave., National City. Effective September 1, 1914, no steam train service was provided out of San Diego over the Southern Division.

The number of trains on the Eastern Division was reduced but the Electric Division was flourishing, using the rebuilt coaches No. 101 to 104 inclusive and the three Niles cars No. 105 to 107, the trailers, also the Express Car No. 111. These were relettered.

After car No. 101 had been damaged in a collision, it was reconstructed into a combination express and passenger car.

San Diego & Southeastern Dissolved

In a determined but futile effort to regain the loss of patronage to the private automobiles and the buses on the Eastern Division, William Clayton announced in August 1916 that radical reductions in fares would be made, that a new service would be on trial between San Diego, La Mesa, El Cajon and Santee. He expected to put on some gasoline Motor Cars and Trailers, making nine round trips a day.

Two General Electric - Schenectady Gasoline-Electric Motor Cars were purchased, second hand, from the "Dan Patch Lines", the Minneapolis, Northfield & Southern Railway. They had a rated seating capacity of 90 and were lettered and numbered San Diego & South Eastern Ry. No. 41 and No. 4'2. Both had express compartments and open rear platform entrances. At the same time, a Gasoline Automobile Car was purchased from Hewitt-Ludlow Alice Company and was fitted up locally, as number 31. A third General Electric Schenectady Gasoline-Electric Motor Car, GE No. 3707, which had operated on the Buffalo, Rochester & Pacific Railway, was acquired as number 43.

This service would be handicapped by having the terminus at the 13th and Commercial Sts. Station. Clayton stated that the Gas Cars will terminate at "Union Station".

To accomplish this, a franchise was asked to permit the building of a line parallel with the San Diego & Arizona Railway's track from Eighth Ave. to First Ave., to Marker St., connecting there with the San Diego Electric Railway's track on First Ave. Before the franchise could be granted, a logical change took place.

The San Diego & Southeastern had lost much of its trackage in the flood, it was operating Motor Cars, thereby releasing steam power, it proposed to duplicate San Diego & Arizona trackage and the San Diego & Arizona needed locomotives.

The San Diego & Arizona Railway Company absorbed the San Diego & Southeastern Railway Company in 1917, taking over the operation of the steam divisions and the motor cars, while the San Diego Electric Railway continued to operate under lease the interurban line to Chula Vista. The motors retained their numbers but were relettered San Diego & Arizona.

Now the motor cars could be operated over the San Diego & Arizona's tracks to First Ave. and a connecting track was laid in First Ave., to Market St., including a crossing. For the time the motors terminated at First Ave. and Broadway.

But this was not satisfactory since the cars could not be turned around. So, arrangements were made with the San Diego Electric Railway to make further use of its tracks from Broadway on First Ave., to B St., to Kettner Blvd. A curve was installed in the Southwest quadrant at First Ave. and B St. Then to avoid interference with the First Ave. electric cars, Route No. 6, another curve was put in, in the Northeast quadrant. The First Ave. cars were then routed via B St., First Ave. to Laurel St., and the crossing was taken out. A Wye was built at the foot of B St. and a siding was installed on the San Diego & Arizona right-of-way property, opposite the Santa Fe Station. Effective February 10, 1918, the motors continued up First Ave., to B St., to Kettner Blvd., where they were turned.

The San Diego Electric Railway had found that its Class 2 cars were more satisfactory and economical to operate than the interurbans. In 1915, the three Niles Cars, numbers 401, 402 and 400, which had been assigned to Point Loma Railroad operation, were vacated. All ten of the interurbans were sold to Pacific Electric Railway in 1918.

Air whistles were installed on the Class 2 Cars regularly assigned to interurban operation. Route Indicating Boxes displayed: NC for National City, CV for Chula Vista and OB for Ocean Beach.