Transcript of Record — United States v. Idaho
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TRANSCRIPT OF RECORD —
SUPREME, COURT OF THE UNITED STATES
OcTroBER TERM, 1935_
No. 420
THE UNIFED STATES OF AMERICA, THE INTERSTATE
COMMERCE COMMISSION, AND THE OREGON SHORT
LINE RAILRO AD COMP: ANY, APPELLANTS
Vs. ‘
THE STATE OF IDAHO, AND J. D. RIGNEY, ET AL., CON-
STITUTING AND AS THE PUBLIC UTILITIES COMMIS.
SION OF THE STATE OF IDAHO
APPEAL FROM ‘THE DISTRICT COURT OF THE UNITED STATES FOR
THE DISTRICT OF UTAH
4
FILED SEPTEMBER 14, 1935
. ‘SUPREME COURT OF THE UNITED STATES .
OcToBER TERM, 1935
No. 420
THE UNITED STATES OF AMERICA, THE INTERSTATE
COMMERCE COMMISSION, AND THE OREGON- SHORT
‘LINE RAILROAD COMPANY, APPELLANTS -
vs.
THE STATE OF IDAHO, AND J. D. RIGNEY, ET AL., CON-
STITUTING AND AS THE PUBLIC UTILITIES COMMIS-
SION OF THE STATE OF IDAHO | ;
\
—
APPEAL FROM THE DISTRICT COURT OF THE UNITED ——— FOR
; THE DISTRICT OF UTAH
INDEX
Original Print
Recoad from D. C. U. 8., District of Utah.................-.-.-.- 1 1
Caption fomitted in printing].~{ .......................... 1 1
er eee pasebesnboaqeestose 3. 2}
Exhibit A—Report of I. C. C., Finance Docket No. 9096 - 8 5
BE Gt Gs Sine dcccccancencoccenesssesbosaghes 22 13
I GE os Ge Ginwecidnncnccccccccesensccascendssethaese 24 14
Answer of Oregon Short Line R. R. Co pnteeeucsananniamanen 29 17
Be GE GF Gin occcncccecteecncebecnceceghaanesecs 31 18
a eaeniaah 330 ss«a19
Defendants’ exceptions to proposed findings and decree -----.-. 43 25
Findings of fact and conclusions of law... .-..........-.--.-- 44 26
Pe ncqoccbccccqnncaccssenqenensodacescassasstesneuce 51 31
Stipulation re transcript of record and collar thereon.......-.- 54 32
Narrative statement of evidence before I. ©. C., Docket No. P
SNic nai oc uhh arden Related Am eathiaacmeaeae esneionl 58 34
Appearances-_.........- GL. akédshesuseueesepadonawnel 58 34
Testimony of— ° :
GOSS Tl. BE cnccocaqcedegnscccccosscensceas -. 50 - 39
Ge Ge Bein cccncnscucsscuccsnctqnenenescncesdes 82 49
ne ee Te 84 50
Te ee Ei catensictntseisesiosneenene 88 53
87542—35-—1 t
u* , INDEX
Record from D. C. U. 8., District of Utah—-Continued.: + ;
Narrative statement of evidence, etc.—Continued.
Testimony of—Continued. / Original Print
P Mérris H. Brown, Fe, Ce ‘diigo 89 53 '
RR. Whippreeht....:.0 22-2222 nnn enon enn e ne ee 92 55
George W. Edgington---.--- -- quasedudugesassshaon 102 61
i, Sais hae boddkenbenenabapens paemanianieeali 104 63
Bis Gh Bs caccsoucccenccsnstecccgecccsecnss= 104 = 63
BE BA) Beiidcancncckedcbundaseacesndnensaenes 105 63
/. 2 Sa ee ee bequctecene 110 66
Bi EE iinsctcdddccasgnubnnapeanscoamnite lll = 67
. Goanns GS, Bit a. nn cnetesccnses sishaiiapiiaaaldoigeasal 112 68
GC, Bh. Pn cc ccceacenseccnceescsccers Rasascistintbas 113 - 68
Bs Sh Ci rccicawckscnhadhncsbesacaeacaniee 115 70
GN Ge Gn encccccnsesiscncsescccsscssisas 11972
The We MEIER cnesccccvaroncacccetqeceasccoades 123 75 ©
iti ckicvencsadcccsonsnencakdentawa - 138 84
PED DE cnncndtencasecccestecencsascnaes 141 86 .
Gases Be PEPER cqccctcecccoccscccencsccesccace 169 103
. Eugene McAuliffe_----- enciiaaiannnide seissaataiibaaimts 173 106
M. Reese Hattapaugh..-...:.....-.-.-...---..-- 174 106
B, Tis We ecntencacsndm aaa a on. Re ' 174 106
ET ET ata eh A AED 181 110
EW ckaaddbenienotiotschagaaunmeeuseand’ 182 1ll
ic natcondnectnatntnnncamnnhonneen 184 112
H. O. Whitney_--.--- agpdteaSnnoscasacapesceseses 196 119
Si eect cannpaennsdiianicmmediediconde 198 . 120
A. Mi. Wilde @ctalled).:.......5....,.....-......- 199 121
AGING PERM nccccecsencsencccasgscscescsces 200 122
i SE titchidcccptbctuanpinsnainananeniie 217 +=133
itn ciedpcenandcdineadetinensobans 226 6138
I nis sack eesinces tactimatsiedsiaetienintignaioninininaita 230 =8=6140
Sl Rc ninnintcengienbcinnaiaiiacepdemnnaaahangen 244 149
i eae 250 . 153
Recital as to—
ici didenbhanndhdneiaameie Linnea tdehhmiinann 251 153
NN 252 154
Exhibit 22—Order No. 957 of Public Utilities Commision .
OE , GD Be. Pc ccicinadcincancsenscosdmaba é 255 157
Exhibit 23—Receiver’s deed, Oct. 23, 1931_......---2-. . 277 177
Recital as to—
Exhibit kk re ears ee he 284 182
SIT scisnccisatint nee. etaieeadatherasaaenkitcaninientoienanghciindn otal 285 182 ,
SINT Tis id osc det. cidisisasinnsiepnbstliinipdettgin dhebaaakepemmigaaiasints 286 «86183
iis iccinmne citi Mibintumasthtibamnegmiine menage 294 188
Exhibit 31—Statement peer coal prodyced from Gem hs °
State Co. Mine, etc., April to November, 1932____--_-- 295 189
Exhibit 32—Profit and loss account of Gem Co. for period
Sept. to Nov., inc., 1932__......_-- Diiiantiabnians 296 . 189
Exhibit 33~—Statement of Oregon Short Line R. R. Co.— ;
Cars and tons of coal shipped from Talbot and/Wygert,
Idatio, ete., for eleven months ended Nov. 30, ¥032 agihed 297 190
° *
INDEX c es
Record ftom D. C."U. 8., District of Utah—Continued.
Narrative statement of evidence, etc. — Continued. : Original Print
Exhibit 42—Statement showing. annual constructive reve-
nue and expenses of Talbot Branch, etc. —Oregon Short
FARO. nc acccesccccccepescadacccccscccesqececdessce 298
Exhibit 43—Financial dalnmant of Gem State Co. Dec.
1, 1088... ......22222.2-28.24---25---- pleaquesas 299
Nairative statement of evidence i in D. C. U. 8 Reisaasd aisigaiiaie 301
Appearances---.--------->-------------------------- 301
Testimony of—. :
Ailen Bathh.. .cccansceccoccatsascsccbccsccesccses 301
Chastes H. Davie. .....-<---2---7--=-- entbitiinnas 304
H. F. Samuels----. ----------------------------- 307
Description of exhibits introduced POGRRcccccpersncen 312
Proceedings before I. C. C., Finance Docket No. 9096-- - - - .. 319
Application for certificate of public convenience, etc - - ---- 319
Petition in intervention of Walter M. Stookey et al-_------ 322
Petition in intervention of North Coast Bank & Trust Co.. 326
Petition in intervention of Centennial Mill Co- --~-~------- 328
Order permitting intervention ---------------------- ... 330
Return to questionnaire - - - - ..- - --------------+-------- _ 331
Exhibits A to C, incl —Financial statements-. -- ----- 339
Exhibit D—Explanation of statement filed in Tesponse
to question No. 8. ---...---------+------------- 344
Exhibit E—Statement of tonnage handled by —
’ Branch, ete ------ eaccihethbihhpimaacauca giaians ~— 347
Exhibit F— Opinion of counsel ----- - - - - Leqeseseane 348 -
Petition for further hearing -------------------------- - 849
Order reopening proceeding --------------------------- 355
Order extending ameatwe Ds tancaconneogae iain adeno 356
Petition for appeal- -*. .-~---------- AS a Ne 357
Notice of appeal... ...---------------------- ipasannewins 358
Bond on appeal [omitted in printing]- -- - ------------------ 359
Assignments of aoe gpa a ree liscuheneiaacedieatiins ARS
Order allowing appeal - -----4 ------.----+---------------- 362
. - Notice of appeab. ---------------- eae paninipainennsingateante 363
Citation and service [omitted in printing] - - - ---------------. _ 864
Amended praecipe for transcript of record -- - - ----- Sidi tchhanete 366
Clerk’s certificate [omitted in printing] -.---.----+----------- 374
Statement of points to be relied upon and designation as to printing
192
1
ae
* UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL 1
1 _ In United States District Court for the District of Utah,
Central Division
[Caption omitted.] = ie
No. 12873, Equity
Srate or Ipano AND J. D. Riowey, M. Reese Harrasaven, aNnp
_Harry Holden; Constituting and as the Public Utilities Commis- —
sion of the State of. Idaho, plaintiffs
va.
Unrrep Srares of America, wrerstate Commerce ComMISsiON, AND
- Qregon Short Line Railroad Company, a Corporation, de-
fendants | ° | |
2 Complaint
(Filed Oct. 2, 1934)
| i <
To the Honorable District Court of the United States for the Djs-
trict of Utah, Central Division: : *
The State of Idaho and J. D. Rigney, M. Reese Hattabaugh, and
Holden, constituting its Public Utilities Commission, file
their bill of complaint against the above-named defendants and in
that relation complain, allege, and say: ;
I
qt
The plaintiff State of Idaho is one of the sovereign States of the
United States of America.
II
The plaintiff, Public Utilities Commission of Idaho, is an ap-
* pointive commission organizéd and existing under the laws of the
State of Idaho, and consisting of J.-D. Rigney, M. Reese Hatta-
baugh, and Harry Holden ; that each of the members of said commis-
. Sion is a citizen and resident of the State of Idaho.
Ill
The defendant, United States of America, is made defendant in
this action by authority of Judicial Code, Section 208 (Section 46,
Title 28, U.S.C. A.). | |
ry °
The defendant, Interstate Commerce Commission, is a body cor-
porate, organized and existing under the laws of the United States of
America. e
%
2) yt ee a
2 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL.
V
The defendant, aii Short Line Railroad Company, is a cor-
poration organized and existing under the laws of the State of Utah
and resides and has its principal place of business at. Salt Lake aay
Salt Lake County, State of Utah.
VI
This is a civil suit in equity brought in this Court
3 in pursuanee of Section 43, Title 28, U.S. C. A., fixing venue
in suits to set aside orders of the Interstate Commerce Com-
mission.
Vil
On January 4th, 1932, the defendant Oregon Short Line Railroad
Company made application to the defendant Interstate Commerce .
Commission for permission to abandon 9.053 miles of railroad, all
physically within the County of Teton and State of Idaho; there-
after and in such proceeding the plaintiffs State of Idaho and Public
Utilities Commission cf Idaho intervened in opposition to the grant-
ing of such permission, thereafter and upon final submission of
such matter the said defendant Interstate Comnierce Commission
made and entered its Certifieate of Public Convenience and: Neces-
sity granting the said application, and in words and figures as fol-
lows, to wit:
<
Certificate of Public Convenience and Necessity
At a session of the Interstate Commerce Commission, Division 4,
held at its office in Washington, D. C., on the 29th day of November,
Aw D. 1933.
\ Finance Docket No. 9096 -
“Orecon SHort Line Rarmroap Company ABANDONMENT
A hearing and investigation of the matters and things involved
in this proceeding having been had, and said division having, on
the date hereof, made and filed a report containing its findings of
fact and conclusions thereon, which report is hereby referred to
and made a part hereof: |
It is hereby certified, That, subject to the requirement contained
in our report aforesaid, the present and. future public conven-
- jence and necessity permit the abandonment by the Oregon
4 Short Line Railroad Company of its so-called Talbot branch,
in Teton County, Idaho, described in the application and
report aforesaid.
It is orderd, That this cortificate shall take olla and be in force ~
as to abandonment of regular operation from and after 30 days
from its date, and as to abandonment 15 months from its date. Tar- |
4
CNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 3
iffs applicable to the brarich line in question may be canceled upon
noticeto this Commission and to the General public, by not less than
10 days’ posting and filing in the manner prescribed in section 6.
of the Interstate Commerce Act. . .
It is further ordered, that when filing schedule canceling tariffs
applieable on said branch line of railroad, the Oregon Short Line
Railroad Comp jy shall in such schedules refer to this certificate
by title, date, and docket number.
And it is further ordered, that the Oregon Short Line Railroad
Company shall report to this‘ Commission as required by valuation
order No. 24, effective May 15, 1928. © <
By the Commission, division 4.’ |
[SEAL] . _Grorce B. McGinty, .
) Secretary.
, Vill
- That prior to the allowance of such certificate of convenience and
necessity, and on the 29th day of November 1933 the said defendant
Interstate Commerce Commission made and entered its report con-
taining its Findings of fact and conclusions of fact and law, .a true
copy of which said report is annexed hereto, marked “ Exhibit A”.
and incorporated:herein as fully as though here recited verbatim.
IX -
5 The plaintiffs allege that in all of said proceedings had
upon the application of defendant railroad company, the —
defendant Interstate Commerce Commission has been and now is
without jurisdiction of the said 9.053 miles of railroad commonly
known as Talbot Spur, for. the following reasons: :
1. Spur and industrial tracks located wholly within one state are
excluded from the jurisdiction of the Interstate Commerce Com-
mission by the provisions of Section 1, Par. 22, Title 49,U.S.C, A.
2. The said Talbot Spur lies wholly within the State of Idaho.
3. The said Talbot Spur was constructed, is now and at all times
since its construction has been existent for one purpose, to wit: To
furnish: transportation facilities to Idaho Coal industries in moving.
coal from Teton Basin in Idaho, to points within the State of Idaho.
' 4. The said Talbot Spur is an industrial track. |
5. Jurisdiction over intrastate railways and their operations is
vested in the plaintiff Public Utilities Commission of Idaho by
, Title 59, Idaho Code Annotated, 1932.
Xx
This suit is between citizens of different states and the amount in
controversy exceeds Three Thousand ($3,000.00) Dollars.
* XI
The plaintiffs have no plain, speedy or adequate remedy at law.
- — a Se é
<7 EE EE
4
4 UNITED STATES ET AL. VS. STATE OF IDAHO, -J. D. RIGNEY, ET AL, |
+: es,
Unless the said onder of the defendant Interstate Commerce Com-
mission is set aside by this Honorable Court, the defendant Oregon
Short Line Railway, will, at the expiration of the period of fifteen
_months from tlie date, of said order, proceed to abandon the
6 roadbed and destroy the tracks constituting the said Talbot
Spur.‘
°
XIII
The ahandonment of said Talbot Spur by defendant railroad com-
pany will deprive the State of Idaho and its citizens of railway ac-
cess to coal deposits in excess of 44,000,000 tons; that defendant
railway company is the sole railway company operating in the
County of Teton, State of Idaho; that the said coal deposits He at
an altitude and in such geographic position that the same are inac-
cessible during winter months by reason of snow and ice; that aban-
- donment of such spur or industrial track will damage the State of
Idaho to an amount not subject. to exact calculation but estimated’
by these plaintiffs to be in excess of one million dollars and arising
from increased freight charges upon coal imported in leu of coal
from mines served by the Talbot Spur; that the State of Idaho is
and has been one of the largest consumers of coal originating at the
mines served by said Talbot Spur; that such.damage will, by reason
of its peculiar nature be irreparable and will consist.of the following
among other items:
1. Loss by- increased cost of coal (including original cost and
freight) to State institutions and citizenry.
2. Loss of taxes by abandonment of now assessable property.
3. Loss of employment to Idaho citizens.
XIV
The said order contravenes and ignores the sovereign power of
the State of Idaho over its domestic concerns and delegated to its
Public Utilities Commission.
Wherefore, Plaintiffs pray that this Honorable Court make and
enter its judgment and decree vacating and setting aside the said
order of the defendant Interstate Commerce Commission, and for
-such other relief as may be equitable. Plaintiffs pray
7 for general relief.
, Bert H. Mixer,
Attorney General of Idaho,
ArreL L. Crow ey,
| Assistant Attorney General,
Attorneys and Solicitors for Plaintiff's,
Residence and P. O. Address: Boise, Idaho.
H. Van Dam, Jr,
Residence: Salt Lake City, Utah, Of Counsel.
os ie
UNITED STATES ET AL. VS, STATE OF IDAHO, J. D. RIGNEY, ET AL. 5
[Duly sworn to by Harry Holden, jurat omitted in printing.]
8 Ewhibit A to complaint
| Interstate Commerce rer
Finance Docket No. 9096
Orecon Snort Line Raitroap Company ABANDONMENT
~ Submitted October 24, 1933. Decided November 29, 1933 .
Certificate issued permitting abandonment of regular operation effec-
tive after 30 days, and abandonment effective after. 15 months, by _
the Oregon Short Line Railroad Company of its Talbot branch in
Teton County, Idaho : . :
George H. Smith, J. M. Souby, H. B. Thompson, C. A. Root,
P. H. Anderson, and Robert B. Porter for applicant.
Fred Babcock, Roy L. Black, A. H. Wilkie, H. F. Samuels, J. D.
Skeen, J. Reese Hattapaugh, and Harry Holden for protestants.
Report of the Commission
Division 4, Commissioners Meyer, Brainerd, and Mahaffie
By Division 4: :
Exceptions were filed to the report proposed by.the examiner
and the case was argued orally. :
The Oregon Short Line Railroad Company on January 4, 1932,
applied for permission to abandon a branch line of railroad, known
as the Talbot branch, extending from Talbot Junction south westerly
to Talbot, 9.053 miles, all in Teton County, Idaho. The State of
Idaho, by its attoriiey general, the Public Utilities Commission of
- Idaho, and certain minjng and other interests intervened in oppo-
sition to the granting of the application. A hearing was held on
May 16 and 17, 1932, and a. proposed report based thereon was
issued. On petition of the protestants a further hearing was held
on December 15, 1932. -
The Teton Valley, in which this branch line lies, is bordered
9 on the east by the mountains of the Teton Range and on the
_ south and west by lower hills. The main settlements of the
valley are on the east side. ,
In the range of hills west of the valley there are deposits of coal
of undetermined extent; which it is estimated probably contain up-
ward of 44,000,000 tons. The seams are pitched at an angle of from
. 45° to 90° from the horizontal.
The Talbot branch was built by the United States Railroad Ad-
ministration in 1918-1920, while the applicant’s line was under Fed-
eral control, to serve the coal mines at Talbot, near its western
t
6 ‘UNITED STATES ET AL. VS. STATE, OF IDAHO, J. D. RIGNEY, ET AL,
terminus. At its eastern end, at Talbot Junction, it connects with
the applicant’s St. Anthony branch, in eastern Idaho, extending from
Idaho Falls to Victor. About 3 miles west of Talbot Junction the
branch crosses Teton Creek; and about 2 miles west of the creek is ~
Dygert, a station where some fatm produce and supplies are handled.
A little west of Dygert the branch enters the canyon of Horseshoe
Creek, which it -follows:to its terminus at Talbot. This canyon is
quite crooked and the line here has a maximum grade of 2.2 percent.
4 There are no stations on the branch except Talbot and Dygert.
a -There are some good highways in this territory, although there
are usually several months in the year when motor vehicles cannot
_be used on them on account ef snow. A gravel road extends from the
-Idaho-Wyoming line near ‘ Victor northward through Driggs,
Tetonia, and Felt, stations on the St. Anthony branch above men-
tioned, to the Yellowstone highway near Sugar City. Another gravel
road extends up the south fork of the Snake River to a point “about
opposite Victor, from which point a graded earth road goes over the —
4 mountains and connects with the gravel road at Victor. There are
et numerous surfaced roads, graded in places, extending. across the
valley. One of them, close to the line of the Talbot branch extends
from Talbot to Dygert, from which point similar roads ex-
ta 10 © cae to Driggs and Tetonia.
oal was discovered near Talbot in 1901. Several seams.
particularly the Brown Bear and the Horseshoe, so-called, were
mined in a small way up to the-time of the World War. The“coal
was hauled in wagons or sleighs to nearby farms or towns. At
several times efforts were made to induce the applicant to build
a line.to these mines, but acting on the adverse reports of its—
engineers, it refused to do so. During the war the necessity of
mining the coal in this field was urged on the Fuel Administrator
-and the Railroad Administration, with the result that on September
4. 1918, the Director General of Railroads entered into an agree- -
ment with the Idaho Coal Mines Company to construct the Talbot
branch. The coal company undertook to provide the necessary right-
of-way and to pay the cost of building certain mine tracks, estimated
at $58,000, and the director general undertook to build the line from
Talbot Junction to Talbot. The coal company had taken over the
Brown Bear and Horseshoe mines, and apparently had a tract of
1,080 acres extending 2 or 3 miles along the hills west of Teton
Creek. The railroad was completed..in April 1920, after some. de-
lay caused by the failure of the coal company to-advance money
for its share of the cost. The cost of construction to the United
States, about $300,000, was charged .to the applicant’s capital ac-. |
. count, and was included in its claims against the United States for
reimbursement of its losses during the Federal control period. These:
claims, totaling $1,549,575, were grouped with those of the Union
Pacific Railroad Company, which owns the applicant’s capital stock.
The total claim of the Union Pacific, about -$23.500,000, was settled -
by the payment of $8,000,000. Counsel for the applicant testified
é
3
=
ie
*
2
£
;
wigs DR CN gt EO TPR Ce a
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 7
that there was no apportionment of the latter sum to particular
items. The Public Utilities Commission of Idaho, in its order .
11 of June 26, 1924, in the proceeding hereinafter referred to,
states that the applicant credited the United States with
$46,529 for this branch, and that the net cost of the branch to the
applicant was $33,486. * a
No coal was shipped over the Talbot branch for four years after
its completion. During this period the coal property was in litiga-
tion, the coal company. was in receivership for some time, ‘and the ,
mine was closed. In 1924 the properties were taken over by: the
Teton Coal Company, of which H. F. Samuels was president.”
On the purchase of the coal properties by the Teton Coal Com-
pany they-were leased for 20 years to Robert. H. Harlin, with whom
was later associated Samuels, president of the company, and .Carl
Reichert. As the railroad had not been well kept up during the
_ four years from April 1920 to April 1924, the coal company and the
persons above named brought a proceeding before the Public Util-
ities Commission ofIdaho to compel the applicant to- make the nec-
essary repairs to fit the branch for service. By order of June 26,
1924, that'Commission ordered’ the applicant to make such repairs
and commence operation within 30 days. It further ordered that
applicant. to construct a wye af the mine for the turning of ‘éngines
and .snowplow and required the coal company -to furnish to the _
applicant a bond for $27,160, the‘estimated cost of the wye, that. it
would ship 29,920 tons a year for five years. The road was repaired
‘and .the wye constructed as ordered, but only 21,393 tons of coal
were shipped in the fiye years. The balance due the applicant under
the obligation of the bond is $19,657.40. no part of which has been
paid. . ‘
-- The Teton Coal Company continued development of the mine
and in 1927 it was forced into receivership which lasted until ‘Octo-
ber 1931, when it was sold to the Idaho. Cokoal Company, which,
in turn, assigned its contract of purchase to the Jensen Coal
12 Products Company. The Jensen Company transferred the
property to the Gem State Coal Mining Company, which
now owns it subject to the obligations hereinafter shown. Mean-
while the applicant secured a judgment against the Teton Goal Com- .
pany for $21,000 in connection with the construction of the wye.
H. F. Samuels, who is obligated as guarantor on this indebtedness
to the extent of $200,000, operated the mine under lease, chiefly in
repair work, until April 1, 1932, when he returned it-to the company.
: The work done was largely: performed by men who worked for their
beard, without substantial pay. On October 20, 1932, the property
-was sold to W. R. -Burr to satisfy a judgment of about $3,400 on
laborers’ liens, but the coal’ company has one year from the date of
- sale to redeem it. On argument, counsel for the protestants stated
that a sheriff’s deed shortly would be issued.to the holder of the
Judgment on’ the laborers’ ‘lien, which lien is subject to the lien of
bonds and interest thereon in the sum of approximately $250,000. -
Bites rece nny SORE REE SEO ORE OT sate
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‘8 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
The Gem States has not been able to operate during the pendency
of suit. It is anticipated that the holder: of the judgment will join
with the bondholders'i in undertaking the production of .coal.
The coal company’s balance sheet as of December 1, 1932, shows
assets of $718,216.41, including $716,000 as the purchase price of the
physical property, $1, 716.41 cash and accounts receivable, and $500
for coal lodded ready for market. Bonded indebtedness, mostly
past due, with interest thereon was $330,791.58; judgments, taxes,
and other obligations, $62,091. 42; “net worth ”, $325,333.41: The
bonded debt was. assumed.
During the five months April ‘to August, 1932, the Gem “Phate
Coal Company shipped 820 tons of coal by rail and sold 142 tons at
‘the mine for movement by trucks or wagons. Most of it was pro-
duced in cleaning up and retimbering the mine. During the
13 next three months 2,306 tons of coal were shipped by rail and
1,078 tons by truck. For that period revenues were $8,986,
operating expenses $9,253, net loss $267. Nothing was charged for
aries of officers, as they receive none. — received $1 a ton,
ying for their own board and explosives. y wages were $2.50
for laborers and $3 for'timbermen. It is a 2, that in October
and November the total cost of mjning, including all “ dead work”,
was $2.20 a ton, and the average price received at the mine was $2. 83
in the former sncnth and $3.45 in the latter. In the first half of
December, 609 tons of coal were moved from the mine.
In addition to the Gem State Coal Mining Company, three other
companies have mined some coal near Talbot in recent years. These
are the Superior Coal‘Mining Company, the Idaho Coal Mines Com-
pany, and the Pinter Coal Company. The same seams of coal ex-
tend through the Gem State property for 2 or 3 miles and through
the Superior: Company’s property for some 2 miles. Some of them
are also found on the other properties. Coal from these lesser mines
is either trucked from the mine, or loaded on wagons or _—
hauled to Talbot, and shoveled into cars.
On behalf of the applicant it is urged that during the 12 years
since the Talbot branch was built no tonnage has ever ‘been produced,
that could justify its existence, and that there is ‘no hope of pro-
ducing such tonnage in the future. Several experts testified to the
general effect that it is impracticable to mine the coal successfully,
‘except in a small way for local use. In their opinion the nearly
vertical position of the seams, the brittleness of the coal, and the
presence of so much gouge in partings and along the rock walls make
it impracticable to mine the coal extensively. The coal mined is
largely slack and the difficulty of keeping it cleen led to the adoption
of the present method of mining, which allow. the gouge to be cut
out before the coal. The applicant’s witnesses deny that this
14 method provides a practicable means of disposing of the waste
materials within the mine, and.they confidently predict its
failure on the ground that the cost of safely timbering the series of
countergangways would be prohibitive, and that the wall pressure |
RASENGAN SUPA IRE ”
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL.
would prevent mining such coal from the pillars. Collapse of the
-+ mine would be only a question of time. Its present operation is de-
scribed as carried on under extremely hazardous conditions; which
would not be tolerated in any State that had laws governing coal
mining. The timbering, the ventilation, and the means of escape are
said to be insufficient. The long haulage tunnel is criticized as nar-
row, lightly timbered, and badly drained, and the use of a gasoline
locomotive underground is said to carry the danger of poisoning by
carbon monoxide. The mine foreman testified that the mine is in
»safe workable condition, well ventilated, and sufficiently timbered.
_ He admitted that the air shaft, which is fitted with a series of ladders.
and landings, is not very safe as the only emergency escape shaft. -
He is experienced and competent, but none of his superiors has had
any other experience in coal mining. - They have allowed him to-
direct the work. It is not explicitly denied that. the usual require-~
ments of coal-mining statutes are not complied with. The coal is of
good quality and easily dug, The applicant’s witnesses estimate that
~ the percentage of slack will bemot less than 70 percent. They have
been informed that the prices now received at the mine are $2 for
slack, $4.50 for nut, and $5 for lump, and they say it will be impossi-
ble to get such prices except in a small local market. For example,
the slack would cost $4.20 a ton on the track at Pocatello, and it is as-
serted that without washing or cleaning by other expensive methods,
the use of which is not justified, it must be inferior to slack from
- Rock Springs, Wyo.,; which costs $3.90 a ton at Pocatello. Lump
coal would cost $7.20 a ton at Pocatello, while the best Utah coals,
very popular in Idaho, would cost only $6.55. The opinion is ex-
~ pressed that the cost and hazard of underground mining at:
15 Talbot are not justified, and that the local market could. best
be served by mining from the surface and trucking.
The protestants contend that the railroad is necessary to the de-
velopment of the mining properties, which contain large quantities
pf coal, and that there is a good market in eastern Idaho for all the
coal that can be produced in the Talbot mines, as the Snake River
Valley contains a comparatively large population and several im-
portant towns and cities and very little timber. In 1931 there were
shipped over the applicant’s railroad 119,489 tons of coal from Utah
and Wyoming fields to points between Pocatello and Talbot, not
including Pocatello, a city of about 18,000 inhabitants. This coal,
protestants urge, should be supplied by the Talbot mines, which ©
are the only coal mines in Idaho. The Talbot coal, however, cannot
be sold in large quantities if it eannot be shipped by rail, as the
expense of trucking to Idaho Falls and other tagyns is in most cases
at least twice as great as the railroad freight charges and the roads
are usually impassable for motor vehicles for several months each
winter. The protestants assert that with railroad service, coal can
be secured from the Talbot mines at lower prices than are paid for
the Utah and Wyoming coal, so largely used in eastern Idaho, on
account of the much lower freight rates. For example. the rate
¥
10 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL,
on coal to Idaho Falls from the [Jtah mines is $3.65 a ton and from
Wyoming $3.25 a ton, while from the Talbot mines to Idaho Falls -
it is only $1.65 a ton. To Pocatello the rates are $3.36 from Utah,
$2.96 from Wyoming, and only $2.2@sfrom Talbot. Statistics fur-
nished by the applicant show that 38 cars of coal, of 1,547 tons, were
forwarded from tae Talbot branch during the first. nine months -
of 4932 and 46 cars of 2,050 tons, during the next two months. Of
the total tonnage, 86.4 percent is.shown as slack. Most of the
16 _—rail shipments, at least up to October 31, were to points within
120 miles of Talbot... They supplied about 2 percent of the.
coal shipped to that general territory. Several users of the coal
testified that it is about as good as coal from Utah and Wyoming.
There had been ‘some cgmplaints of its tendency to coke.
The protestants assert- that the principal reason for the appli-.
cant’s objection to operating the Talbot branch ‘is that the applicant,
or the Union Pacific System, can earn more by ‘hauling coal to
Idaho from the Utah and Wyoming fields, and that the Union
Pacific Coal Company, an affiliated corporation, has extensive mines
in Wyoming which supply coal to Idaho consumers. But the appli-
cant shows that most of the coal produced by the latter company
is for the use of the Union Pacific lines, and none of it is sold in
Idaho. —
It is also urged by the anne nts that this application and the
_consequent. uncertainty regarding the maintenance of ‘the railroad
make -it impossible to obtain money for further mining develop-
ment aud that the proposed abandonment ‘vould destroy the value °
of the mining properties on which so much money has been ex-
pended. Evidénce was introduced to show that the applicant is
- more prosperous than most other railway companies.
State apd Federal officers of Idaho and citizens and business in-
‘terests of the Snake River Valley express much interest in the de-
velopment of the Talbot coal properties and the prospects of»
obtaining fuel for eastern Idaho at lower rates than the current
prices for Utah’and Wyoming coal.
* ~ It is also alleged that there are prospects of oil near the Talbot
branch which may eventually furnish tonnage for the railroad. The
Grand Teton Oil Company has 3,000 acres of land in that vicinity. ,
’ At the time of the first hearing it had spent, $175,000 on the
17 _—s~property and was drilling for oil in two places, one ‘about
1.25 miles from the branch and the other within 50 or 75 yards
therefrom, and had reached a depth of 3,400 feet. It had shipped
some machinery over the railroad and planned to have four or five
oil rigs operating in that.locality in the summer of 1932. It was
testified that they had some gas and indications of oil. The pros-’
' pects, however, were uncertain and the president. of the oil company
could not say whether the oil would be shipped by rail or by pipe
line if it were produced. '
The agricultural development in the Teton Valley is not large.
Some wheat and oats are raised and in recent years there has been
7
aati oh oa Neen ER ty
CNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL, 1}
" some cultivation of potatoes. Stock is also raised on the ranches. oes
. Little of the produce of the farms or ranches, however, is handled
on the Talbot branch. Most farm: products that move by rail are
apparently produced in the easterly part of the texritory served
by the branch and are shipped from Tetonia -and Driggs, on the
applicant’s St. Anthony branch, although a few carloads are’ shipped
' from Dygert.
The shipments, in carloads, originating onthe Talbot branch
were 86 in 1924, 70 in 1925, 37 in 1926, 282 in‘ 1927, 267 i 1928,
99 in 1929, 6 in 1930, 3 in 1931, and 85 in the first 11 mofths of
1932. All these shipments were of coal except 60 carloads, of
which 26° were wheat, 12 of hay, and 8 of potatoes. No wheat has
been shipped since 1928. The incoming traffic consisted of 2 car-
loads in 1925, 12 in 1926, 3 in 1927, 2 in 1928, 1 in 1929, 4 in 1930,
and 1 in the first 11 months of 1932. The more important of thesé
shipments were gravel, lumber, machinery, and merchandise. The
shipments of coal were chiefly from Talbot, while other outbound
shipments were all from Dygert. -*.
The total operating revenues of the Talbot branch are stated as
$1,232 for 1925, $806 for 1926, $2,809 for 1927, $2,298 for
18. 1928, $971 for 1929, $186 for 1930, $46 for 1931, and $448 for
_ the first 10 months of 1932; total $8,796 for nearly eight
years. In computing these revenues the branch was allowed the
total of local revenues, while on shipments moving to or from the
. branch it was allowed a “ pro rata mileage proportion of the earn-
ings -based on individual shipments.” The tetal operating expenses
were $5,483 in 1925, $3,065 in 1926, $9,245 in 1927, and $2,629 in the
first 10 months of%1932. The deficit in net railway operating indome
is stated as $5,989 in 1925, $3,819 in 1926, $8,697 in 1997, $5,168 -
in 1928, $15,231 in 1929, $5,600 in 1930, $4,430 in 1931, and $3,650
in the first 10 months of 1932; total, $52,584. The expenses were
allocated on an actual basis where practicable, as in the ease of
repairs to way and structures. Other items were prorated on rela-
tive road mileage, locomotive mileage, or cat or train milés. The
accumulated deficit in net railway operating income from July 15,
1924, to October 31, 1932, is stated as $61,765. Assuming that the
branch might handle 50 tons of freight a day, 18,250 tons a year,
the applicant estimates that its operation would result in a net
loss of $5,093 a year. For this estimate-the revenue assignable on
a mileage prorate basis is increased 25 percent. Expenses, taxes,
and equipment rents are taken at the average for the five years
1927-1931. It is further estimated that even with 60,000 tons annual
traffic, there would be a net loss of $2,224 a year. It is admitted -
that the last estimate necessarily involves much uncertainty.
The total revenues of the applicant from all traffic originating or
terminating on the Talbot branch -were $6,539 in’ 1925, $5,193 in
1926, $27,895 in 1927, $25,092 in 1928, $7,467 in 1929, and $1,637
In 1930; total, $73,823,-of which about 85 percent was from the
transportation of coal. Only 11.1 percent of the total revenue was
12 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
«
--assigned to the branch. For the same period operating ex-
penses and taxes assigned tq the branch were $48,503. The
19 ~—applicant’s total revenue from traffic handled on the branch
‘ after 1930 is not shown completely. Statistics of record indi- —
cate that it was about $500 in 1931 and $5,200 in the first 11 months
of 1932. . 7
* The cost of constructing the wye tracks at Talbot in 1924 and 1925
is stated &s $22,033, and of rehabilitation work done on the branch
in the fall of 1924 as. $7,275. The estimated ‘cost of maintaining the
branch is $3,569 in 1932, $4,848 in 1933, and $6,256 in 1934.
' The protestants objected to the introduction of testimony herein
on the ground that the track involved in this controversy is a spur —
or industrial track lying wholly within the State of Idaho, over
which we have no jurisdiction, and the point was argued at length
‘on brief and orally. We are of the opinion that the line involved
is ‘a branch line and that we have jurisdiction. -
, In 12.6 years the line has hauled 41;547 tons of -coal, which con-
stituited about 85 percent of its traffic. The mining conditions appear
- to be unfavorable, and it is reasonable to conclude that past failures
_ in mining were largely attributable to that cause. This conclusion
_is supperted by the opinion of several experts to the effect’ that the
coal cannot be successfully mined except on a very small scale. In
view of the interest manifested in the ease, it is remarkable that.there
is little competent evidence to the contrary. The financial weakness
of the mining companies justifies serious doubt whether they can
carry out their enterprises in any case. The most important com-
pany, the Gem State, is heavily in debt and without apparent re-
sources. Its mine appears to be operating under conditions that
would be held unsafe in States where there are statutes regulating
the operation of coal’ mines.
| 20 »* In its petition for further hearing, filed September 14,
s 1932, the ‘Gem State Coal Mining Company stated that
4 “Within the next week petitioner expects to be producing at least -
= __ 50 tons a day, and increase that amount to 100 tons by October Ist.
After that the output can be steadily increased.” The record shows
- that during October 1,515 tons were‘mined, of which 901 tons
moved by rail and 614 tons by truck. In November the production
dropped to 1,125 tons, of which 911 tons moved by rail and 214
tons by truck, and the applicant argues that the movement by truck .
was reduced to make as good a showing as possible for rail move-
ment. While the showing for the two months is better than for
" any previous period since 1928, it nevertheless fell short of the
petitioner’s prediction. ~
* On pene counsel for the protestants stated that the State
Board of Equalization has reduced the taxes on the branch for the
year 1933 to $1 a mile, and that the taxes on the applicant’s prop-
erty had been reduced generally 10 percent. Counsel for the a
plicant objected to the introduction of data relating to the reduc’
tion of taxes on the branch for the reason that such reduction was
RS ie ae eT asi > » ae i on PO ee re ee, oer - aver fiers ne et Si cae a ste Si Sica se ke
SRA ahaa eRe. Mihi Goi 3 Side ates Nee emi xg . %
. . : ° 7
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- s
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oO? “pr,
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UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 13
made only for a period of one year and can be again increased at
any time after that period. :
The Talbot branch serves the only coal mines in Idaho. The in-
sistence of the protestants that they-now are in a position to pro-—
duce a substantial volume of tonnage for the line leads us to betieve
that a further trial period should be granted. Accordingly, our
certificate herein will permit abandonment: of regular operation of
the Talbot branch effective 30 days from its date and the complete
abandonment thereof 15 months from sajd date. Under this per-
mission the applicant will be required to send a locomotive to the
mines at any time that notice is given by the shippers that not
21 less than five carloads of coal are ready for movement.
Subject to the above requirement, we find that the present
and future public convenience and’ necessity permit the abandon+
ment by the Oregon Short Line Railroad Company of regular oper-
ation of the branch line known as the Talbot branch, in Teton
County, Idaho, described in the application, effective from and after
30 days from the date of our certificate herein, and abandonment of
said branch line from and after 15 months from said date. Suitable
. provision will be made for the cancelation of tariffs.
[File endorsement omitted.]
22 Ex Unrrep-Srates District Courr 2"
Answer of United States of America
Filed Nov. 6, 1934
_ United States, one of the above-named defendants, for answer to’
the complaint filed herein against it says: ~
I
United States admits for the purposes of-this suit that the facts
set forth in the opening paragraph’ and in paragraphs I to VIII,
inclusive, of the complaint are true. » «4
a % if
United States denies the matters, things and conclusions alleged in
paragraph IX of the complaint, and denies that said certificate of
‘public convenience and necessity isued by the Interstate Commerce
Commission* ofy November 29, 1933; is umlawful, void or illegal for
the reasons alleged in said paragraph IX, or for any other reason.
, Ill
Answering paragraph X of the complaint, United States admits
that this Court, when specially constituted of three judges as re-
quired by Urgent Deficiencies Act, 38 Stat. 219, has jurisdiction of
this suit. ‘
37842—35——2
“pho A RAC Nate SNE
aE Rl Nm Sol ,
TaN Soe ER Sy
14. UNITED STATES ET AL. VS. STATE,OF IDAHO, J. D. RIGNEY, ET AL,
‘iV |
United States admits the truth of the allegation in n paragraph XI
of the complaint.
V is
Answering paragraph XII, United States admits that said cer-
tificate of the Interstate Commerce Commission authorizes and per-
mits the Oregon Short Line Railroad Company to abandon after
fifteen months from November 9, 1933, its branch, which is de-
scribed in the Commission’s report, annexed as Exhibit “A” to the
complaint, but United States has no knowledge as to whether the
Railroad Company will avail itself of such authority and permission.
3 VI
United States denies the allegations of paragraphs XIII and XIV,
and particularly denies that plaintiffs will suffer irreparable or any
legal injury whatever for the reasons alleged:in said paragraph XIII,
or for any other reason arising or resulting from the Commis- .
sion’s said certificate of November 9, 1933..
Vit
Except as herein expressly admitted United States denies each
and every allegation of the complaint, and of the several paragraphs
thereof.
Wherefore, having fully answered the complaint, United States
prays that the. relief therein prayed be denied and the complaint
dismissed with costs to the plaintiffs, and that it have the benefit of
~ such other and further orders, decrees or relief as may be just and
proper. .
. ad Ever B. Cottins,
Special Assistant to the Attorney General.
Harotp M. STerHeENs,
Assistant Attorney General.
Danie B. SHIELps,
United States Attorney.
[File endorsement omitted. ]
24 | In United States District Court
Answer of the Interstate Commerce Commission
Filed Oct. 23, 1934
The Interstate Commerce Commission, defendant in the above-
entitled suit, now and at all times hereafter. saving and reserving to
itself all and all manner of benefit and advantage of exception to the
tm
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET al, 15
‘many errors and insufficiencies in the plaintiff’s bill of complaint
contained, for answer thereunto of unto so much or such parts thereof
as it is advised that it is material for it to answer, answers and says:
a |
Answering the opening paragraph and paragraphs I to VI, inclu-
‘sive, of the bill of complaint, the Commission admits, for the pur-
poses of this suit, that the allegations therein contained are true.
II
Answering paragraphs VII to XIV, inclusive, of the bill of com-
plaint, the Commission admits and alleges that it made and entered
the report, dated November 29, 1933, referred to in the bill of com-
plaint and made a part thereof as Exhibit A, in a proceeding then
pending before it entitled Finance Docket 9096, Oregon Short Line
Railroad Company Abandonment; that said proceeding was insti-
tuted by the Commission following the filing of an application with
it on January 4, 1932, by the Oregon Short Line Railroad Company,
under Section 1 (18) of the Interstate Commerce Act, wherein that~
carrier sought permission to abandon a branch line of railroad known
as the Talbot branch, extending from Talbot Junction southwesterly
to Talbot, 9.053 miles, in Teton County, Idaho; that full hearings
were had thereafter; that a proposed report was then prepared by a
Commission examiner, recommending that the Commission find that
public convenience and necessity. permit the abandonment of
25 the branch in question by the Oregon Short Line Railroad
Company, that exceptions to this proposed report were filed
with the Commission by, the State’ of Idaho and by the Gem State
Coal Mining Company; that thereafter, upon petition fora
further hearing by the Gem State Coal Mining Company, one
of the protestants in the case, the Commission reopened the case
and conducted a further hearing on December 15, 1932; that there-
after a Commission examiner, following the rehearing, issued a pro-~
posed report again recommending to the Commission that they find
that a certificate of public convenience and necessity be issued permit-
ting the Railroad Company to abandon the branch in question ; that
thereafter exceptions to this proposed report were filed by the Public
Utilities Commission of the State of Idaho and by the Gem State
Coal Mining Company and Superior Coal Company; that thereafter,
on October 24, 1933, the proceeding came on before Division 4 of
the Interstate Commerce Commission for oral argument; that there-
after the COmmission made .and entered and served upon all the
parties in said proceeding, the report and certificate of November 29,
1933, hereinbefore referred to, attached to and made a. part of the
complaint as Exhibit A, to which the Commission respectfully refers
the Court for information concerning its findings and requirements
in the premises; that in said proceeding the parties thereto, including
P
ae EEA LTE PL A PIM EE ITE EN NEED UC LOE to RE aren
16 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
the plaintiffs herein, were and each of them was, accorded the full
hearing provided for by the Interstate Commerce Act; that in said
hearings a large volume of testimony and other evidence bearing
upon the matters covered in said report and certificate was submitted
to tle Commission for consideration; including testimony and other
= evidence submitted on behalf of plaintiffs herein by their counsel;
that at sdid hearings and subsequently both orally and in briefs filed
in said proceedings, questions relating to said matters were
26 fully argued and submitted to the Commission for determina-
tion on behalf of satd parties by their respective counsel, includ-
ing many of the particular questions raised by plaintiffs in this suit,
whereupon the Commission determined said matters and entered and
served: upon all the parties to said proceeding, including ‘the plain-
tiffs herein, its said report and certificate; that said report and certifi- .
cate included the Commission’s findings of fact, decision, conclusions,
order and requirements in the premises, and that, upon ‘the evidence.
-~ aforesaid, and as shown in-ard by said report, the Commission made »
the findings and stated the conclusions upon which said report and \
certificate are based.
The, Commission further alleges thit the findings and conclusions
in said report were and are, ar -ach of them was and is, fully
supported and justified by the e dence submitted in said proceeding
as aforesaid.
The Commission further alleges that in making said’ report it con-
sidered and weighed -carefully, in the light of its own knowledge and
experience, each. fact, circumstance, and condition called to its atten-
tion on behalf of the’ parties to said proceedings by their respective
counsel, including matters covered by the allegations of the bill of
complaint herein.
The Commission further alleges that said report and certificate of
November 29, 1933, were not made or entered either arbitrarily or
unjustly, or contrary to the relevant evidence, or without evidence to
support them; that in making said certificate the Commission did not
exceed the authority which had been duly conferred upon it, and the
Commission denies each of and all the allegations to the contrary
contained in the bill of complaint herein.
Further answering paragraphs VII and VIII of the bill of com-
plaint, the Commission admits that the allegations therein
27 contained are true.
Further answering paragraph IX of the Bill of complaint,
the Commission denies that its said certificate of November 29, 1933,
is invalid either for any of the reasons set forth in said paragraph, or
for any other reason or reasons. |
Further answering paragraph X of the bill of complaint, the Com-
mission admits, for the purposes of this suit, that the gts
contained therein are true.
Further answering paragraph XI of the bill of complaint, the
Commission alleges that the statement contained therein is a con-
clusion of law to which .it is not required to make answer. In this
iat ee ier ty RR
ae
oS
2.
re 4
a)
MS
ah.
*
2
€
ia
P:
pee Piet, SHAaES cl oh oe eh KF 3. Rat dates ata vases. ,
7 = ; rar Sot fs
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 17 °
connection the Commission admits, however, that the venue of the
suit has been properly laid. :
Further answering patagraph XII of the bill of complaint, the
Commission denies that the track referred to therein is a spur track
within the meaning of paragraph (22) of Section 1 of the Interstate
Commerce Act. | 7
Further answering paragraph XIII of the bill of complaint, the
Commission denies that its certificate of November 29, 1933, causes
plaintiffs irreparable damage or any damage, and denies that plaintiffs
will suffer irreparable damage or any damage if said certificate is not .
stayed and enjoined.
Further answering the allegations of the bill of complaint; the
Commission denies any authority on the’ part of a single judge to
grant any of the relief prayed for in the bill of complaint. The Com-
_Inission alleges that the following corrections should be made in
Exhibit A, attached to and made a part of the bill of complaint: On
sheet 4, line 8, insert the word “ was ” between the words “ wye ” and
“constructed ”; on sheet 5, line 5, change “ude” to “due”;
28 on sheet 10, line 12, change “$186 for 1930” to read “ $1,866
for 1930”; and ou sheet 10, line 18, after “1927”; insert
“ $4,553 in 1928, $13,980 in 1929, $4,449 in 1930, $1,919 in 1931.”
Except as herein expressly admitted, the Cammission denies the’
truth of each of and all the allegations contained in the bill of com-
plaint insofar as they conflict either with the allegations herein, or
‘with either the statements or conclusions of fact included in said
report and certificate of November 29, 1933, which. report and certifi-
cate is hereby referred to and asked to. be made a part hereof.
_ All gf which matters and things the Commission is ready to aver,
Maintain, and prove as this Honorable Court shall direct, and hereby
prays that said bill of complaint be dismissed. |
Interstate ComMMERCE Commission.
By Epwarp M. Rempy.
Dantet W. Know tron, .
Chief Counsel, of Counsel.
[Duly sworn to by Balthasar H. M eyer; jurat omitted in printing. ]
[File endorsement omitted.]
29 , In United States District Court
Answer of Oregon Short Line Railroad Company
Filed Nov. 27, 1934 |
Comes now the Oregon Short Line Railroad Company, one of the
above-named defendants, and answering plaintiffs’ complaint on file
herein admits, denies, and alleges as follows, to wit:
1. This defendant admits for the purposes of this suit that: the
facts set forth in the opening paragraph and in paragraphs I to
VXI, inclusive, of the complaint are true. .
18 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL.
2. This defendant denies the matters, things, and conclusions al-
leged in paragraph IX of the complaint, and denies that said cer-
tificate of. public convenience and necessity issued by the Interstate
Commerce Commission on November 29, 1933, is unlawful, void, or
illegal for the reasons alleged in said ‘paragraph IX, or for any
other reason or at all.
_ 8. Answering paragraph X of the complaint, this defendant ad-
mits the allegations thereof. .
- 4. This defendant admits the allegations of paragraph XI of the
complaint. .
5. Answering paragraph XII of said complaint, this defendant
admits the allegations thereof.
6. This defendant ‘denies the allegations of paragraphs XIII and
XIV, and particularly denies that plaintiffs will suffer irreparable
or any legal injury whatever for the reasons alleged in said para-
graph XIII or for any other reason arising or resulting from the
Interstate Commerce Commission’s said certificate of November 29,
1933.
7. This defendant denies each and every: allegation contained in-
said complaint not hereinbefore expressly admitted.
Wherefore, having fully answered the complaint, this defendant
prays that said complaint be dismissed and that it recover its costs
herein expended.
30 Gerorce H. Smirn,
| Rost..T. Porter,
W. Hau Fark,
H. B. THompson,
Solicitors for Defendant
Oregon Short Line Railroad Compaiy.
Copy of the foregoing received this 27th day of November 1934.
H. Van Dam, JR,
Attorneys and Solicitors for Plaintiffs.
Copy of the foregoing received this 27th day of November 1934.
Dan B. SHIELDS,
Attorneys for the United States of America. °
[Duly sworn to by Robt. B. Porter jurat omitted in printing.] -
[File endorsement omitted. | ;
31 ' In United States District Court
Minute entries of trial
MINUTE ENTRY OF OCTOBER 27, 1934
. At this 27th day of October 1934 defendants appearing by R. B. .
, Porter, its solicitor, and motion to dismiss heretofore filed was sub-
mitted without argument giving defen‘ant three days in which to
prepare and present brief and plaintiff five days thereafter in which
to prepare and present reply brief.
“e
«
_ UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET.AL. 19
/.
* MINUTE ENTRY OF NOVEMBER 10, 1934
At this 10th day of November 1934 pursuant to stipulations filed
November 7, 1934, it is ordered that plaintiff be given to and includ-
ing November 16, 1934, in which to file brief.
MINUTE ENTRY OF DECEMBER 15, 1934
To hear and determine the application filed herein of the above
named plaintiff, thé Honorable Sam G. Bratton, Judge of United -
States Circuit Court of Appeals, Tenth Circuit, and the Honorable
John Foster Symes, United States District Judge for the District of.
Colorado, are hereby called to assist the Judge of this Court and
said cause is hereby set down for hearing in Salt Lake City, Utah,
on the 7th day of January 1935, at ten A. M.
MINUTE ENTRY OF JANUARY 7, 1935
At this 7th day of January 1935 plaintiffs appearing by
Ariel L. Crowley and Maurice H. Green, their solicitors, de-
32 fendants, United States of America and Interstate Commerce
Commission by Edward M. Reidy, their solicitor, and the Ore-
gon Shortline Railroad Company by R. B. Porter, its solicitor, and
this cause came on.for trial before the Honorable Sam Gilbert Brat-
ton, Honorable Tillman D. Johnson, and Honorable John Foster
* Symes, Judge Bratton presiding. Attorney M. H. Green was entered
as Attorney for the State of Idaho and the motion to dismiss of de-
fendant, Oregon Shortline Railroad Company was waived and de-
nied. Certain documentary evidence was introduced and stipulations
made in open Court. On the part of plaintiffs C. H. Davis and H. F.
“Samuels were sworn and éxamined and Allen Proh was ‘sworn, and
plaintiffs rest. Defendants rest. The Court heard the arguments |
- of counsel and took the case under advisement, briefs to be furnished
by all parties within two or three days.
33 rat In United States District Court
Before Bratton, Circuit Judge, and Jounson and Symes, District
Judges. : ;
Opinion
- Filed March 8, 1935
Symes, District Judge, delivered the opinion of the Court.
This is an action by the State of Idaho Sind its Public Utility
Commission, against the defendants, the United States, the Inter-
state Gommerce Commission, and the Oregon Short Line Railroad,
to set aside and vacate an order of the Interstate Commerce Com-
mission granting, on the application of the railroad company, its
certificate to abandon. 9.053 miles of railroad, all located within
- 2
sins Sb iM ehetie ae Pires a eae gene TIRE ag RI MATE EL me A De RR PRUETT TC Oe
ee tite ae Bing oh ar oe natal Ste ee ee oot SE Oma oars ity SOOT. . it Bis OS
a ~
> d :
,
oS AS Ee alee ES. e
20 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
he State of Idaho. The order becomes effective fifteen months
“Tse its date. 193 I. C. C. 697.
Sec. 41 (Subd. 28), Tit: 28 U. S.C. A. (Jud. Code, Sec.+24, as
amended), vests in the District Court of the United States, juris-
diction of cases brought to enjoin, set aside, annul, or suspend in -
whole or in part any order of the Interstate Commerce Commission.
Sec. 46, Tit. 28 U. S. C. A. (Jud. Code, Sec. 208), authorizes the
making of the United States a party, and Sec. 47, Tit. 28 U. S.C. A.
(act of October 22, 1913, Chapt. 32; 38 Stat. 220), requires such suits
to be heard by a three-judge court. The venue of the suit is gov-
erned by Sec. 43, Tit. 28 U.S. C. A. (Act of October 22, 1913, Chapt.
32, 388 Stat. 219). See also Colorado v. United States, 271 U. S.
153.
34 ‘The case is submitted on the record made before the Com-
mission. The facts are undisputed. Some testimony was
given Before this Court, which merely amplified evidence already
in the record.
The railroad company on January 4, 1932, applied to the Com-
mission for permission to abandon the nine miles of track in ques-
tion, known as the Talbot Branch, extending from Talbot Junction,
a station on applicant’s St. Anthony branch southwesterly to Talbot,
all in Teton County, Idaho. The application was opposed by the
State of Idaho, its Public Utility Commission, and certain other in-
terests who intervened. Hearings were held May 16th and 17th,
1932, and a further hearing on December 15, 1932. The matter was
orally argued on October 24, 1933, before the Commission, and on
_ November 29, 1933, the Commission issued its certificate permitting
the abandonment of regular operatior. effective after 30 days, and
abandonment after 15 months. It is this certificate that the plain-
_ tiffs here complain of.
This line -was built by the United States Railroad Administra-
tion in 1918-20 to‘serve the goal mines at Talbot, while the rail:
road was under Federal control, pursuant to a contract with the
owners. of the mines. It runs through a mountainous, sparsely set-
led district in eastern Idaho. The grade of the last two miles jis
over two percent, and the topography forbids any further exten-
sion. The total-cost was $300,000, of which the coal company agreed
to pay a part, and also to furnish the right-of-way on the under-
standing that the railroad company could tear up the tracks in the
event the coal company failed to supply a minimum specified ton-
nage. The terms of the contract resulting in the construction indi-
_ cate that the line was built exclusively to serve only the mines
35 in question. Due to a receivership and litigation, no coal
was shipped over this line for the first four years. after its
completion.
On June 26, 1924, the Public Utility Commission of Idaho, on
application of the coal company, and over the objection of the rail-
- road company that this track was a branch, held it to be a spur, and
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 2].
tain repairs, including a wygsat the mine for the turning of en-
gines, on condition that the ai company put up a bond for $27,160,
the estimated cost of the wye, and that it would ship 29,920 tons
of coal a year for five years. This york was done as ordered, but
only.a little over 21,000 tons of coalAvas shipped during the follow-
ing five years. ;
In 1927 the mine was again forced into receivership, which con-
tinued until 1931, when it was sold to a new owner, and in turn
became the property of the Gem State Goal Mining Company, the
present owner, subject to a judgment for’$21,000 arising out of the
construction of the wye. In October 1932 the property was sold
to satisfy a judgment on labor liens. so
The record shows that shipments in carloads originating on this
line were 935 carloads over the nine-year period, 1924-32, inclusive,
all of which was coal, except 60 carloads; of which 26 were wheat,
.12 hay, and 8 potatoes. No wheat has been shipped since 1928.
- During 1932 only 4,346 tons of coal were produced, of which 1,220
went out by truck. This district has good roads. - ,
It further appears that at no time has there been a train sched-
ule or regular service of any kind over this line. The railroad com-
pany maintains no buildings, loadiAg platforms, or agents at any
point on this line, and has no telegraph line, express, passenger, or
mail service. Whenever the mine company desired cars it
36 would telephone the order over its own private telephone line
to the Junction and the next triweekly train which operates
over the main branch line would be stopped at the junction point,
the train broken up and empty coal cars pushed by the engine up
to the mine and there spotted; the engine would then hook on to
the rear of the loaded cars and back down this line to the station,
the loaded cars switched into the main train, which would then
resume its trip. The bills of lading for cars of coal’from the mine
are made out by the mine company. There are ‘practically no ship-'
ments of any kind in the other direction, the few supplies for the
mine being sent up in the empty cars as the same were ordered.
The tax returns made by the railroad to the State for the years
1919 to 1925 show that the latter did not report the line here in
question as a branch line, but on the contrary reported it in 1928
as a spur. After the State commission had asserted its jurisdic-
tion by the order of June 26, 1924, supra, this particular piece of
track was returned by the railroad and assessed as a branch line. .
Three other companies have mined very small amounts of coal
near Talbot in recent years. Coal from these mines was either
trucked out from the mines.or loaded on wagons and hauled tg Tal-
bot and shoveled into cars. It also appears that the few farmers
tributary to this line haul their produce to the main line, the only
. exception being that on rare occasions some merchandise broker
would buy enough wheat, etc., to make a carload, and load it at a
ordered the railroad company 9: commence operations and make cer-
Ba NE St 3 Bis ara abltoiae aaa
he Maa Ree ince
22 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
point called Dygert, half- -way up the line where there was — a
switch track.
The Commission, in its report, finds the shove facts and reviews at
som¢ length the mining operations in this territory, points out the
physical difficulties of mining this particular coal successfully,
87 except on a very small scale, and in regard to safety that the
. mine “ appears ‘to be operating under conditions that would
be held unsafe in States where there are statutes regulating the:
operation of coal mines.” And in respect to the protéstants’ claim
that there is a good market in eastern Idaho for all the coal that
can be produced in these mines, the Commission said such. prospects
were “uncertain.” Both the mines and this line have always shown —
operating deficits.
The bill of complaint raises the only. question before this Court, to
wit: Was ‘the Interstate Commerce Commission without jurisdiction .
to hear and determine the matter, for the reason, as alleged, that the
line in question was a spur, or industrial track, lying wholly within
the State.of Idaho, as distinguishedfrom’a branch, or extension of
the line of the defendant railroad. The answer.to this question de-
pends upon the character of this piece of track. The Transportation
Act of 1920, Sec. 1, Tit. 49 U. S. C. A. (Chapt. 91, Sec. 402, 41 Stat.
456, 477-8, provides, Par. 18-22, incl.):“* * * no carrier by raik |
road subject to this Act shall undertake the extension of its line of
railroad * * * unless and until there shall first have. been ob-
tained from the Commission a certificate that the present or future
public convenience and necessity require or will require the construc-
tion * * * of such extended line * * *” Paragraph (22)::
“The authority of the Commission (so) conferred * * *- shall
_ hot extend to the construction * * * or spur, industrial, team,
switching or side tracks,» * * * to be located wholly within one
State * * *” Paragraph (20): “Any construction * * *
contrary to the provisions * * * of paragraph (18) * * *
may be enjoined by any court of — jurisdiction at the suit of
* * * any part in interest.”
The Supreme Court in Texas & Pac. Ry. v. Gulf, ety., :Ry.. 270
‘U.S. 266, holds that the district courts have jurisdiction to decide the
issue whether the track is an extension rather than an industrial track
excepted in par. 22, supra. In Interstate Commerce, Commission v.
Union Pacific, 222 U. S. 541, the Court said that in determin-
38 ing these mixed questions of law and fact the Court confines
‘itself to the ultimate question as te whether the Commission
acted within its power. “It will not consider the expediency or
wisdom of the order, or whether, on like testimony, it would have
made a similar ruling.” See also U. S. v. New River Co., 265 ©
U. S. 543.
This question has been before the Federal Courts many times and ~
the decisions are too numerous to cite. Each case} of course, turns
ane its own particular facts. The leading ease cited in support
_ UNITED STATES ET AL, VS, STATE OF IDAHO, J. D. RIGNEY, ET AL. 23°
of the action of the Commission is Texas and Pac. Ry. v. Gulf, Etc.,
Ry., supra, the facts of which were wholly unlike those here pre-_
sented. There the Santa Fe, without obtaining a certificate from »
the Commission, proposed to. build into territory adjoining the City
of Dallas, known as the Industrial District, containing cement works,
oil refineries and metal works. . This district produced a great vol--
ume of carload traffic, and all its industries were already served by,
and located on, the‘line of the Texas Company, or connected there-
with by spurs. It was not disputed that the latter railway com-
, pany. was affording ample railroad facilities. The Santa Fe had no
line running near to, or in any part of this Industrial District, but
proposed to bufld a line 714 miles in length, including spurs, sites,
and other subsidiary tracks. As the Court states, manifestly, it was
‘an attempt to compete with the Texas Company for this very lucra-
tive business, and deprive the Texas Company ‘of their monopoly
thereof. | ip . s
The Court held the proposed line not a spur in the sense in which
that word is commonly used; that the building of unnecessary lines,
such as the one in question, involves a waste of resources, and that
the proposed. competition between carriers would result in harm to
the public; that when one railroad inflicts injury upon its rival
39 “it may be the public which ultimately bears the loss.” That.
spur, industrial or switching tracks, etc.; as defined in par. 22,
were those commonly constructed either to improve the facilities re-
quired by shippers already served by the carriers, or to supply facili-
ties to others, who being within the same territor'y, are entitled to like
service from the carrier. “The question’ whether the construction
‘should be allowed or compelled depends largely upon local condi-
tions which the state regulating body is peculiarly - fitted to appre-
ciate.” The opinion then points out that where the roposed track-
age extends into territory.not theretofore served by the carrier, and
_ particularly where it extends into territory already served by another
carrier, it becomes a matter of national concern.
It would seem that the undisputed facts before us require a hold-
ing that the piece of track to Talbot was merely a spur. That it was
built to serve a single industry only is demonstrated by the contri-
bution required from that industry to its original construction, and
the bond exacted a few years later as a condition to the.order for
resumption of, service ant the making of certain improvements.
Practically no other industry is served, nor does it extend into new
territory. The fact is, the,country is so sparsely settled, and the
topography such, that any further extensions are not justified. So,
‘clearly, it is a case of purely local, as distinguished from national.
concern, which, as the Court’ said, supra, the state body can more
properly regulate. iu Pee |
Ip abandonment of Line by Missouri Pacific R. Co., 76 I. ©. C.
635, the Commission held a track two and two-tenths miles long to
Seep RES.
RA Sa
NeSAR oT
.
Pe
24. UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
‘ .
be a spur, because its sole purpose was to haul carload shipments of
‘stone from certain quarries to the railroad’s main line. And like-
wise in Public Convenience Application of the Western Pacific R.
Co., 67 I: C. C. 135, a proposed line was held to be a spur, the sole
purpose of which was to reach certain tracts of timber “not at
present accessible to any line of railroad.”
40 \ Most all the cases cited in support of the jurisdiction here
assumed by the Commission present a state of facts similar
in principle to Texas & Pac. Ry. v. Gulf, Eté., Ry., supra. In Ac-
quisition by Iberia & Vermilion R. Co., 111 I. C. C. 660, the Com-
mission held.a line 12 miles long to be a branch and not a spur,
because it was to serve a large community, as distinguished from
a.single industry. In Detroit & M. Ry. Co. v. Boyne City, G. & A,
R. Co., 286 Fed. 540, a track 334 miles long was held to be an
extension rather than a spur. It was fo be used for continuous trans-
portation service by full trains, and was to have loading stations
for use by the publig for other commodities, and made competition
with another railroad serving the same industry. Another instance
of am extension is E] Dorado’& W. Ry. Co. v. Chicago, R. I. & P.
Ry. Co., 5 F. (2d) 777, in which the proposed extension was to
afford a connection with the tracks of another railroad for the ex-
change business and operation of through trains carrying inter-
state freight. Another example on a sfmilar state of facts is Mis-
souri Pacific R. Co. vy. Chicago, R. I. & P. Ry. Co., 41 Fed. (2d)
188, where the new line was to be projected across the tracks of
another line, thus interfering with the latter’? efficient operation, *
and invade territory already served by another railroad, thus lessen-
ing the latter’s business. o
In. a late case in the Supreme Court, Texas R. ‘R. Co. v. The North
Side Belt R. R. Co., 276 U.S. 475, the Supreme Court said the
purpose of pars. 18 to 22 of “Transportation Act was to prevent *
interstate carriers from weakening themselves by operating super-
fluous lines, and to protect them from competition by other carriers.
In Alabama R. R.. v. The Jackson R. R., 271 U. S. 244, the
__ 41 question was whether a connection between the lines of two
railroad companies was an extension. The Court held it was,
because the proposed junction was between the main lines of two:
railroads and amounted to the establishment of through routes and
the interchange of car services, and was but a step toward the joint
--use of tracks, over all of which matters the Commission had ex-.-
clusive jurisdiction. _
The decisions of the Federal Courts seem to turn on several fac-
‘tors, no one of which is controlling. Extensions that invade com-
petitive territory and divide business with another carrier, that serve
more than oné industry, a small community, or which are used by the
public generally; short pieces of track connecting two different rail-
roads, so as to afford through lines, or joint use of tracks; or any
piece of track serving a large industry or small community, the ex-
— ————————
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 25
pense of operating which is so large as to be an undue burden on. or
affect the ability of the carrier ‘to perform its duty as an interstate
carrier; or lines into new territory are factors, one or more of which
are present in the cases held to require a certificate from the Inter-
state Commerce Commission.
None of these’are present in the case at bar. During the 14 years
that have elapsed since the bailding of this line, it has been demon-
strated that the volume of traffic is inconsequential and ‘uncertain,
with no reasonable expettation that it will ever increase, or that the
line will be of services to other industries or the public generally, nor
is it capable of extension. We also give weight to the facts that the
track was originally financed in part by a single industry,*and that
the order of the State Commission in 1924, ordering the resumption
of service, was conditioned upon the furnishing of a minimum
42 amount of business, and a bond required to cover the cost of
-the new improvements. The record also shows that the
financial burden on the railroad company has been negligible, inso-
far as it affects its ability to perform its duties as an interstate
carrier. ns
We conclude on this record that the question before the Commis-
sion, and involved here, concerns the abandonment of a spur, of in-
dustrial track within the meaning of Sec. 22 of the Transportation
Act of 1920, and that the Interstate Commerce Commission lacked
jurisdiction in the premises.
The order appealed from should be enjoined, set dside and an- |
nulled, and
It is so ordered.
March 8, 1935.
[File endorsement omitted.] Pd
8 In United States District Court
Defendants’ exceptions to proposed findings and decree
nN Filed April 8, 1935
Come now the defendants and objeet to the Findings and Decree
heretofore proposed by the plaintiffs in the above entitled matter
and offer the following amendments and exceptions: . iy
}. On p 1 of the proposed findings of fact, line 5, after the
words “for“@nd on behalf of the plaintiff” insert the foHowing
langiage: “over the objection of defendants.”
2. On page 3 of the proposed findings of fact eliminate the last
eight lines of paragraph 2.
3. Eliminate paragraph 3 of the conclusions of law for the reason
that there is no statement in the opinion of the court covering such
matters and they are statements of fact rather than conclusions of
law, and further that the matters contajned in said paragraph 3 are
covered in paragraph 4 of said proposed conclusions of law.
s*
26 UNITED STATES ET AL. VS. STATE OF IDAHO, J: D. RIGNEY, ET AL,
4. Strike from said decree all of page 2 thereof except the last
two lines, for the reason that it is unnecessary to set out said order
in full but simply to identify same as is —* done on page 1 of
' said proposed decree.
Groror H. SMITH,
Rosr. B. Porter,
> W. Hat Farr,
" Be. BB. THOMPSON,
_ Attorneys for Defendant Ovtipiis Short Line Railroad Company.
opere E ai) a SH ah Bein 26 Od Sin cated Ul
Lip aN Sib tar Ney ACS atin! Bari Nae
°
‘Copy mailed to Maurice H. Greene, Attorney for Plaintiffs, this
8th day of April 1935.
EK. M,. Rerpy,
Attorney for Defendant, Interstate Commerce Commission.
Dan B. SuHrexps,
Attorney for Defendant, United States of America.
(File endorsement omitted. |
44 | _ In United States District eee
.
. — Finaings of fact and conclusions of law
Filed April 27, 1935
This cause came on regularly for final hearing before underscribed
. Sam G. Bratton, Circuit Judge, and J. Foster Symes and Tillman D.
Johnson, District Judges, sitting as a statutory three- -judge court, on
the 7th day. of January 1935, ‘at Salt Lake City, Utah. Evidence
was introduced for and on behalf of the plaintiffs, the defendants
offering no evidence; the cause was submitted to the Court and briefs
having been filed by the parties, and the opinion of the court having |
been delivered by Judge Symes, Judges Bratton and Johnson concur-
ring, the Court, pursuant to Equity Rule 7014 of the Stipreme Court
of the United States, now makes the following:
‘ en : 4
FINDINGS OF FACT
I
i
d
The first s1x + cain of the Bill of Complaint are admitted to
: ‘be true by the answers of the defendants, and are found by the court °
3 to be true.
. epi Ses >< 4\ > Mac
Dies hae Seasick’ This Yi
II
On January 4, 1932, the defendant, Oregon Short Line Railroad
Company made application ‘to the defendant Tnterstate Commerce
Commission for a certificate of convenience and necessity authorizing,
said railroad company to abandon 9.053 miles of railroad, known as -
the Talbot Branch, extending from Talbot Junction in a southeast;
7 oY GERD he seems .
‘aareiiiais Sakae BEE, snes PORRSRA Og 2% AS Pr PERE Haas TID Ses POR Ae eR ees ae eye
. " . ‘ ‘ = a Set le ae ey
i ‘ . r
@,
UNITED STATES ET AL. VS, STATE OF IDAHO, J. D. RIGNEY, ET AL. 27
erly direction to Talbot, Idaho, the whole of said line lying and be-
ing within the County of Teton, State of Idahd. Plaintiffs inter-
vened in said proceeding before the Interstate Commerée Commission
in opposition to said application. Hearings were held before said
Commission at which hearings the parties thereto, including the
, Plaintiffs and the defendant railroad Cgnpany, appeared and ©
45 — submitted evidence. . On the 29th day of November, 1933, the
defendant, Interstate Commerce Commission, made and filed
its final report on said app!‘cation and issued its Certificate of Con-
venience and Necessity as follows:
“ Certificate of Public Convenience and Necessity.
“At a Session ‘of the Interstate Commerce Commission, Division,
4held at its office in Washington, D. C., on the 29th day of N ovember,
A. D. : ie
“Finance Docket’ No. 9096
” Oregon Short Line Railroad Company Abandonment
“A hearing and: investig, tion of the matters and things involved
in this proceeding bali foes had, and said division having, on the
date hereof, made and filed a report containing its findings of fact
and conclusions thereon, which report is hereby referred to and made —
a part hereof: ae .
__ “It is hereby certified, That, subject to the requirement contained
in our report aforesaid, the present and future public convenience
and necessity permit the abandonment by the Oregon Short Line
Railroad Company of its so-called Talbot branch, in Teton County,
Idaho, described in the application and report aforesaid.
“It is ordered, That this certificate shall take effect and be in
force as to abandonment of regular operation from and after 30 days
from its date, and as to abandonment 15 months from its date.
Tariffs applicable to the branch line in question may be canceled
upon notice to this Commission and to the general public by not
less than 10 days’ posting and filing in the manner prescribed in
section 6 of the Interstate Commerce Act.
“Tt is further iad. That when filing schedule canceling tariffs —
applicable on said branch line of railroad, the Oregon Short Line
Railroad Company shall in such schedules refer to this certificate by
title, date, and docket number. ;
“And it is further ordered, That the Oregon Short Line Railroad
Company shall report. to this Commission as required by valuation
order No. 24, effective May 15, 1928.
“ By the Commission, division 4.
“TsEau] ; Grorce B. McGinty,
“ Secretary.”
.
5 . oes ite rays Rae gee Reeaa ae eee
SiieieseeGe : 2
28 © UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
~ Upon the date fixed in said Certificate of Convenience and Neces-
sity or such future date as may be fixed by order of said Interstate
Commerce Commission authorizing abandonment. of said line of
railroad the defendant, Oregon Short Line Railroad Company, un-
less restrained and enjoined by order of this court, will discontinue
service over said line and will tear up the tracks and remove the”
rails constitutifg the same and will wholly abandon said line of
railroad.
III
Said line of railroad was constructed by the United States Rail-
road Administration, during the period: of Federal control, in the
years 1918-20, for. the single purpose of serving the coal mines
situated at Talbot, Idaho. The said line of railroad was constructed
pursuant to a contract between the Director General of Railroads
. and the owners of ‘the coat mines. Cost of construction approxi- |
mated $300,000.00, of which sum the coal company agreed to, pay a
part and further agreed to furnish certain parts of the necessary
right-of-way. Said contract further provided that the railroad
company could tear up the tracks on failure of the coal company
to supply a minimum specified tonnage for transportation. For a
period of four years after construction, by reason of the coal mines
being involved in litigation, no rail transportation service was main-
tained over the line by the defendant Oregon — Line Railroad
Company.
IV
On June 26, 1924, the plaintiff, Public Utilities Commission of the
State of Idaho, on application of the coal company and over the
objection of thg defendant Oregon Short Line Railroad ‘Company
that said Commission had no jurisdiction over the line in quéstion,
held the same ‘to be a spur track, and ordered the defend-
ant Oregon Short Line. Railroad Company, to commence
47 operations over the line, upon st coal company furnishing
to said defendant a bond in the suin of $27,160.00 to cover the
cost of repairs to the track and the construction of a wye for the
turning of engines at the mine, said bond to be conditioned upon
the coal company delivering to the Oregon Short Line Railroad
‘Company for shipment 29,920 tors of coal a year for a period of five
years. Said bond was furnished, and the defendant Oregon Short
Line Railroad company complied with said order ofthe Public —
Utilities Commission of ‘the State of Idaho. Subsequently the rail-
road company procured a judgment for $21,000.00 for construction
of the wye and the ownership of the Gem State Coal Mining Com-
pany was acquired subject to such judgment.
V
‘The. defendant Oregon Short Line Railroad Company has never
maintained a train schedule or regular service over the line; has
eh, PARE A og ev ot dpcceare om! an ey < o . aus 2 Paty
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 29
never furnished express, passenger or mail service, and has main-
‘tained no buildings, loading platforms or agent at any point along
said trackage and has no telegraph or telephone line in connection
therewith. Cars are ordered by the mine company over its private
telephone line to the junction with the main line of the railroad as
needed.. When cars are ordered, the tri-weekly train operating over
the main branch is stopped at the junction point, the train broken
up, and empty coal cars are pushed by the engine up to the mine and
spotted, the engine then hooking on to the rear of the loaded cars
_ and backing down the line to the junction, where the loaded .cars are
switched into the main train. Bills of lading-for cars of coal are
made out by the mine Company. There are practically no shipments
in the opposite direction; the few supplies for the mine being sent
up in the empty coal cars when ordered.
48 | a. a
Carload shipments originating on the line total 935 carloads for
the nine-year period 1924-1932, inclusive, said shipments being en-
tirely shipments of coal, with the exception of 60 carloads of farm
commodities. _ Farmers tributary to the line haul their produce to
the main line. On rare occasions some merchandise broker -buys
sufficient farm commodities to make a carload and loads the car at
Dygert, a point about half way up the line where a switch track is
located. .
VII ,
The line of railroad was not reported to or taxed by the State of
Idaho as a branch line until 1925; in 1923 the line was reported by
the defendant Oregon Short Line Railroad Company to the State
‘of Idaho for taxation purposes as a spur; after the entry of the order
of the Public Utilities Commission of the State of Idaho on June
. 26, 1924, the line of railroad has been reported by the railroad and
taxed by the State of Idaho as a branch line.
VIII .
Since‘its construction the volume of traffic over the line of rail-
road has been inconsequential and uncertain, with no reasonable
- expectation of increase or that the line will be of service to other
industries than the coal mines or to the public generally. The line
extends through a mountainous, sparsely ‘settled district in eastern
Idaho and by reason of the topography of the country it is not
possible of further extension. | .
a
Ix
The financial burden of the line of railroad on the Oregon Short
Line Railroad Company ‘has been negligible insofar as it affects the
37542—35——3
,
Ora he baw Fa. teh Mh erate et SS ee ae . ea ee ee IR ER OSL, +
,
vies
30 UNITED STATES ET AL. VS. STATE OF IDAHO, J.-D. RIGNEY, ET AL,
‘ability of the railroad company to perform its duties as an inter-
state carrier.
49 From the foregoing Facts, the Court makes the following
Ih iN cate i eee Pn
ametpaeate? NS
CONCLUSIONS OF LAW ?
ae
The plaintiffs, State of Idaho and Public Utilities Commission
-of the State of Idaho, are entitled to maintain this action.
II
This court has jurisdiction of the action and of the parties thereto.
WT
The line of railroad involved in this action was constructed and has
been maintained for the purpose of serving a single industry ; prac-
tically no other industry 3 is served; the line of railroad does not in-
vade new territory; and its continued oper ation or abandonment
is of local and not ‘of national concern.
IV
_ Fhe line of railroad herein involved is a spur or industrial track.
within the meaning of Section 22 of the Transportation — of aed
(Ch. 91, Sec. 402, 41 Stat. 478).
Be Oi WO oh
aera an
Vv
The order of the Interstate Commerce Commission niade and
entered on November 29, 1933, in the proceeding then pending before
it entitled “Oregon Short Line Railroad Abandonment, Finance
Docket 9096 ”, authorizing abandonment of said line of railroad by
the defendant Oregon Short Line Railroad Company was in ex-
cess of the jurisdiction of the Interstate Commerce Commission and
is null, void, and of no force and effect whatsoever.
VI
Plaintiffs are entitled to a decree vacating, setting aside,.and
50 annulling said order of thé Interstate Commerce Commission
and the whole thereof, and enjoining enforcement thereof.
Let the Decree be entered accordingly.
Dated this 22nd day of April 1935.
' Sam G. Brarron,
. _ Cireuit Judge.
Titman D. JoHNson,
District Judge.
J. Foster. Symes, ©
District Judge.
_" nin rosy a om & ns onl
Lia R IG CASEI yo eS
[File endorsément omitted.]
;
UNITED STATES ET AL. vs. STATE OF IDAHO, J. D. RIGNEY, ET AL, ce |
| 51 In United States District Court | .
Decree
Filed April 27, 1935
This cause came on for final hearing en the 7th day of January
1935 at Salt Lake City, Utah, and was submitted by counsel and the
court having made and filed herein its findings of fact and conclu- -
sions of law and being of the opinion that judgment should be
entered herein in favor of the plaintiffs and against the defendants,
It is ordered, adjudged, and decreed that that certain Certificate
of Convenience and Necessity made and entered by the Interstate
Commerce Commissien on the 29th day of November, 1933, in the
proceeding then pending before it entitled, “Oregon Short Line
Railroad Abandonment, Finance Docket No. 9096”, which said Cer-
tificate of Convenience and Necessity is in words and figures as
follows: : , 7
“Certificate of Public Convenience and Necessity
“ At a Session of the Interstate Commercé. Commission, Division
4 held at its office in Washington, D. C., on the 29th day of Novem-
ber, A. D: 1933.
: “Finance Docket No. 9096
“
“Oregon Short Line Railroad Company Abandonment.
“A hearing and investigation of the matters and things involved
in this proceeding having been held, and sais! division having, on the .
date hereof, made and filed a report containing its findings of fact
and: conclusions thereon, which report is hereby referred .to and
made a part hereof: ee
“It is hereby certified, That, subject to the requirement contained
in our report aforesaid, the present and future public convenience .
and nevessity permit the abandonment by the Oregen Short Line
_ Railroad Company of its so-called Talbot branch, in Teton County,
Idaho, described in the application and’ report aforesaid. a
- §2- “It is ordered, That this certificate shall take effect’ and be
in force as to abandonment of regular operation from and
—_ 30 days from its date, and as to abandonment 15 months from
its date.. Tariffs applicable to the branch line in question may be
canceled upon notice to this Commission and to the general public
by not less than 10 days’ posting and filing in the manner prescribed
. in Section 6 of the Interstate Commerce Act. |
“It is further ordered, That when filing schedule canceling tariffs
applicable on said branch line of railroad the Oregon Short Line
Railroad Compay shall in such schedules refer to this certificate by
‘title, date, and docket number. ;
OTT ane ee Pat In Re, RE ge
ip dea tN Sas ai RO Phe eRe eee ra) Siti . .
“
eA TS
AEA:
,
: . a
e i eee se i tal i ca a ict es lic as
bax je eeliis (st a as aiaieas SERS ODES ES Die IR
oats
32 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL.
“And it is further ordered, That the Oregon Short Line Railroad
Company shall report to this Commission as ‘required by valuation
order No. 24, effective May 15, 1928.
“ By the Commission, division 4. ,
[ SEAL] | “ Grorce B. McGinty,
. “ Secretary.”
be and the same is hereby vacated, set aside, annulled, enjoined and.
declared to be of no force or effect whatsoever.
It is further ordered, adjudged, and decreed that the defendants
United States. of America, Interstate Commerce Commission. and
Oregon Short Line Railroad Company, and their agents, servants,
and attorneys and All persons having notice of this decree, be and
they are hereby permanently restrained and enjoined from taking
any steps, proceedings or acts under and by virtue of or in conform-
ity with said Certificate of Convenience and Necessity or any part
thereof.
It is further ordered, adjudged, and decreed, that the written
objections and: exceptions of the defendants to the findings and to
this decree, be and they’ hereby are overruled. To-all of which de-
fendants duly excepted. ©
Dated this 22nd day of April, 1935.
Sam G. Bratton,
Cirewit J udge.
. Tuitman D. JoHNson,
District Judge.
J. Foster Symes,
District Judge.
53
[File endorsement omitted.] .
54 ' In ‘United States District Cn
Stipulation re transcript of record ;
Filed July 27, 1935
On the hearing of the application for a. permanent injunction the
petitioners offered in evidence a certified full copy of the transcript
of the record of the evidence and proceedings before the Interstate
- Commerce Commission in the proceedings entitled “ Finance Docket
No. 9096, Oregon Short Line Railroad Company Abandonment ”, con-
sisting of a total of 684 pages of the oral testimony of the witnesses
and 43 exhibits and the same having been received in evidence by
the Court, and the defendants having seasonably filed and served a
; condensed narrative of the transcript of the evidence and proceed-
ings for the determination of the appeal; and now, for the purpose
of reducing and settling the record on appeal pursuant to Equity
‘Rule 75, the parties by their respective _—- (and with the ap-
proval of the Court) stipulaté: .
UNITED. STATES ET AL. VS. STATR OF IDAHO, J. D, RIGNEY, ET AL, 33
(1) The within and attached narrative is a true and correct trans-
script in narrative form of all of the oral testimony introduced at
the hearings before the Commission as the same is contained in the
official typewritten transcript of the proceedings referred to.
(2) The narrative shall be substituted for the original transcript
of the oral testimony so certified by the Commission, and shall be
incorporated in the record on appeal and shall have the same force
and effect upon the appeal as the original testimony.
And at said hearing on the application for a permanent injunc-
tion petitioners introduced certain testimony and exhibits*which had
not been presented to the Interstate Commerce Commission, con-
_ sisting of approximately 19 pages of the oral testimony and 14
55. exhibits, and the same having been received in evidence by the .
Court over defendants’ objectioris, and the defendants having
seasonably filed and served a condensed narrative of the transcript
of such evidence and. proceedings for the determination of the ap-
peal; and now, for the purpose of reducing and settling the record
on appeal pursuant to Equity Rule 75, the parties by their respec-
tive counsel (and with the approval of the Court) stipulate: ,
(3) The within and attached narrative is a true and correct tran-
script in narrative form of all of the oral testimony introduced at
the hearing before the District Court as the same is contained in the
official typewritten transcript of the proceedings referred to.
(4) The narrative shall be substituted for the original transcript
of she oral testimony so introduced in the District Court, and shall
be incorporated in the record on. appeal and shall have the same
force and effect upon the appeal as the original testimony, subject .
to defendants’. objections thereto as aforesaid. ‘
(5) The exhibits in the certified copy of the transcript, which
were introduced at the hearings before the Commission, Nos. 1 to 43,
inclusive, shall, with the exceptions mentioned in paragraph (7)
of this stipulation, be ince»porated and printed in the record on
appeal in their entirety, and shall have the same force and effect
upon the appeal as the original exhibits. .
(6) The original exhibits introduced by the witnesses in the Dis-
trict Court, over defendants” objections, 14 in number, need not be
incorporated and printed in the record upon appeal in their entirety
but merely described, and the parties agree that the attached docu-
ment entitled “ Description of Exhibits introduced de novo in
56 District Court” is a true and correct description of said
exhibits, and shall have the same force and effect upon the
appeal as if said original exhibits had been incorporated. _
(7) In addition to the exhibits referred to in paragraph (6)
‘hereof, the following exhibits received in evidence before the Com-
mission and in the District Court, need not be printed, but merely
described.
pitted Ket eorbamate anes oe Aaa
<a
34 UNITED STATES ET .AL. VS. STATE OF IDAHO, J. D. Se, ET AL,
(a) Exhibits Nos. 2, 18, 24, 26, 27, 28, 35, and 36 (maps, graphs,
reports, etc.). ;
-- Daw B. Surexps,
United States Attorney.
Harotp M. STEPHENS, ’
Asistant Attorney General.
Eimer B. CoL1ins,
Special Assistant to the Attorney
General for the United States of America.
Dante, W. Knowtron, |
E. M. Revy,
For the "Interstate Commerce Commission, Defendants.
’ Gero. H. SirH,
Roser. B. Porter,
W. Hat Farr,
For the Oregon Short Line Railroad Company.
ArteL L. Crow ey,
Maovrice H. Greene,
. For Plaintiffs—A ppellees.
Done this 23rd day of July 1935. : .
* ORDER
BT It is ordered, That the within.and attached stipulation and
‘narrative be, and the same are hereby, approved; and in pre-
paring, certifying, and-transmitting the transcript of the record to
the Supreme Court of the United States the Clerk is directed to
proceed in accordance: therewith.
Trax D. JouNson,
United States District Judge.
Salt Lake City, this 27th day of J uly 1935.
[File endorsement qmitted. ]
58 In United States District Court
Narrative statement of evidence before Interstate Commerce
Commassion
Pocarstio, Ipano, May 16, 1932.
APPEARANCES: F
J. M. Souby, Sia Nebraska, and H. B. Thompson, C. A. Root
‘and P. H. Anderson, of Pocatello, Idaho, appearing for applicant,
Oregon Short Liné Railroad Company.
Roy L. Black, Pocatello, Idaho, appearing for Superior Coal Min-
ing Company and Gem State Coal,Company.
Fred Babcock, Attorney General of Idaho, Boise, Idaho, appear- ’
ing for State of Idaho, and associate general for Gem State Coal
Conny and = ‘Coal Mining Company.
UNITED STATES ET AL. VS. STATE PF IDAHO, J. D. RIGNEY, ETAL. 35 ©
A, H. Wilkie, Idaho Falls, Idaho, and H. F. Samuel, Sam, Idaho,
for Gem State Coal Mining Company. -_
. PROCEEDINGS
Examiner Suizivan. The Interstate Commerce Commission has
assigned for hearing at this time and place the application of the
Oregon Stort Line Railroad Company, under ‘paragraph 18 of
Section I of the Interstate Commerce Act, for a certificate of public
convenience and necessity, permitting the abandonment of the so-
called “ Talbot Branch ”, extending from Talbot Junction to Talbot,
approximately 9.453 miles, in Teton County, Idaho, Finance Docket
9096. ; = ;
~ It will be understood, gentlemen, that the application and return to
questionnaire, together with the exhibits accompanying those docu-
ments, will be considered as part of the record.in this proceeding,
without being specially introduced ; subject, of course, to the right of
full cross examination on any point contained therein. :
Mr. Brack. We object to the introduction of any testimony in
this hearing, on the ground.and for the reason that the ©
‘59 «track involved in this controversy lies wholly within the State
of Idaho, and is.a spur or industrial track, over which the
Interstate Commerce Commission does not-have any jurisdiction.
Examiner Suizivan. The objection will be overruled. Of course.
the record will show, the obj :ction and the ruling; and it being a
question of law, it may prope*ly be covered in your brief.
Applicants’ ‘evidence, direct examination
Groce H. Surrx, General Solicitor, Oregon Short Line Railroad
Company, residing at Salt Lake City, testified: I have been employed
regularly and steadily since the first day of July 1899 in the Law
~
* Department. _I was appointed head of the department, the position
I now hold, in 1915. The witness has taken_part in most of the
conferences with respect to efforts to obtain a branch line of railroad
to certain coal deposits at Talbot, Idaho, which’is the subject of this
inquiry. ie, .
The branch line of railroad sought to be abandoned in this pro-
ceeding was ordered génstructed by the United States Railroad Ad-
ministration over thé protest. of the Oregon Short Line Railroad
Company. Its construction was induced by representations made
to, and pressure exerted upon the United States Fuel Administrator,
- Dr. Garfield. Representations were made to him by the promoters of
the coal properties, including the Fuel Administrator of Idaho, the
late Frank R. Gooding; that the coal mines were in the process of
development, and if a railroad were extended to the properties, a
daily production of from 500 to 1,000 tons per day would be mined
and offered for shipment. It was represented that these coal prop- ,
erties be developed and supplied with railroad transportation, so as
36 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL
to furnish coal to the Northwest, to relieve the car situation,
60 obviating the necessity of sending cars out west for this coal.
The Oregon Short Line at the time of the-construction of
this branch was under the control of the United States Railroad
Administration, being in the Central Western Region. The officers
of the Oregon Short Line protested against the construction of the
line. The capital expenditure was approved after being so ordered
by the Railroad Administration.
The contention of the Railroad Company is that this line was not .
justified in the beginning, by the then-existing conditions with
refergace to the coal properties or other traffic, and that the future
existence find expense of this branch js not justified within. any
- ‘reasonable period by any known condition.
That there never was any justification for the construction of this
line is amply proved and demonstrated by the results that have
. followed since construction of the line was undertaken and com-
pleted. To judge the future we must study the past. The best
basis for prediction- of any future event is to know what has taken
_ place inthe past. ‘To understand the position of the Railroad in
applying to the Interstate Commerce Commission for authority to
abandon this line, the history of. the Teton coal properties before
and since the construction of the railroad branch is important and
must, necessarily be considered by the Commission.
The first personal knowledge that I eyer had about these Teton
coall properties was in the summer of 1899 and in 1900. At that time’
the Oregon Short Line Railroad Company was constructing whiat
- was then known as the St. Anthony Branch. This was a line of
_railroad extending from its then main line to Silver Bow and Butte,
from the station of Idaho Falls, Idaho, to St. Anthony, Idaho, a
distance of about 3714 miles. The line was later extended to Victor,
Idaho, from which extended line, at a point called Tetonia; a
61 . branch, line of nine and a fraction miles to the Teton coal
; properties was built, as already stated, by order of the United
Staites Railroad Administration, over the — and against the |
objection of the Railroad Company.
Sometime during 1901 representations were made by local people
andi delivered to the Railroad Company. Analyses were made of
Antthony branch so as to-reach these coal properties, and that that
would be a valvable situation to the Railroad Company, as well as
to tthe community. At that time and for a number of years. there
hadi been farmers and settlers in’the valley on the west side of the
Tetton Mountains, and coal from these properties had been hauled _
‘away in bobsleds and wagons, mostly in the wintertime, and sold
to farmers and residerits. .
. As a result of the general knowledge of the existence of these coal
properties, and the representations from time to time made about
them by various persons, the Oregon Short Line Railroad Company
secured the first report I have any knowledge cf, regarding these
a ———
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 37
coal properties, iri the year 1901. Specimens of the coal were secured
and delivered to the Railroad Company. Analyses were made of
these various samples. :
The inquiry and suggestions about extending railroad transporta-
tion or* facilities to the coal properties, resulted in detailed. investi-
gations and reports initiated at the instance of the railroad, and
coal experts representing the railroad and its interests made ¢xam-
inations as early as the summer of 1903.
At that’time a report respecting the properties was made by W. B.
Rae, at the request of the Uniton Pacific Coal Company, which is a”
subsidiary of the Union Pacific, looking after the coal interests for
the whole system. The report of Mr. Rae showed that there were
three or four seams that had been uncovered and tunnels driven, one
as far as 500 feet, and that some coal, amounting to as much ©
62 as 1,000 tons from one mine, had been extracted and sold to
farmers since the property was originally opened some two
or three years before. Reports and inquiries respecting the coal
properties in this neighberhood continued from time to timé. The
Railroad was anxious for coal properties to be discovered and de-
veloped on its line, and the Union Pacific Coal Company sent out
several parties of prospectors to look for coal in this territory during
the years 1905 and 1906. ~~~ ~~~ . ;
In the latter year further-examination of the Teton Coal Region
and coal properties was made by W. D. Brennan, a mining engineer
of the Union Pacific Coal Company, and Gomer Thomas, State
Mining Inspector of the State of Utah. -Mr. Thomas’s report shows
that very little more work and development had been done on. the
property since it was examined three years before. His report was
in 1906.’ Coal had been mined each year for several years and sold
to the farmers in the neighborhood, some of it going as far as Jack-.
son’s Hole, and some 710,000.00 worth of assessment work had been
done on the claims. The land was not subject to patent, having there-
tofore been withdrawn from entry. Consequently no one had any
good title or was in a position to acquire title at that time, the_loca-
tors only being entitled to priority of application when the land was
subject to be acquired. .
_ This report shows that fhe veins were on a steep ditch or dip, and
in order to develop coal in commercial quantities it would be neces-
sary to operate the mine by means of steep inclines on the veins,
which were from 45 to 75 degrees, or to sink vertical shafts in appro-
priate places and cross-cut the veins, or carry on mining operations
by the long-wall system. The usual method of mining coal-in Utah
and Wyoming is to mine on the vein which is on’a dip, so you can
follow the veing into the country. Then you can drive drifts out to
one side. In this mine, accerding to all the reports, the veins
63 stood on edge. ¢ They were very steep, almost vertical. It was
on these reports and these facts that the Railroad persistently
and consistently refused to build any railroad, or. to extend any
*
spat
BS UR ae Hla aie
i
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o
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i
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BR
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oh
38 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, PT AL,
facilities $6 this mine, upon the belief, based upon the knowledge
that it could get, that there was nothing to justify the railroad, that
there was not any traffic in sight, and that nothing indicated that it
would justify! a railroad (T. 1-15).
In 1912.the Engineering Department of the Oregon Short Line
Railroad Company had an investigation made by one of its engineers,
Mr. A. M. Nelson. He examined the coal deposits and went over the
territory, and submitted a detailed report, under date of February
16, 1912... *
In 1912 the coal mining claims of the neighborhood were held by
various persons in the locality, according to the representations that °
_ were made to us. While the railroad officials kept in touch with the
situation for the purpose of ascertaining accurate information and
following the course of developments, there was no activity in develop-
ment and no general attention directed to the properties until 1914,
when with the World War local interests were again: stimfulated to
activity. At this time the property seems to have passed into the _
control of Mr. G, E. Bowerman, a banker of St. Anthony, Idaho.
. . This.banker requested that a branch line of railroad be constructed
to the coal deposits. .In August 1914 Mr. George B. Pryde made a
comprehensive and exhaustive report on the locality, state of develop-
ment, and analysis of the coal in all of the openings of the veins in
the valley. The characteristic features of all these reports were
regarding, 1st, the small amount of development that had been made
up to that time, notwithstanding that dikeuny of the veins was prior
‘to, or about 1899; and 2nd, that coal had been extracted and sold to
the lgcal: communities ever since their discovery. Mr. Pryde’s
*64 ~~ repért of 1914 showed that from the beginning up to that date
the total quantity extracted from the four mines was 20,000
tons, during a period of twelve or thirteen years. All agreed that for
bituminous coal the samples and the deposits, so far as they were uh-
covered, disclosed a fair quality of coal of that character. All agreed
that extensive and expensive work and development would be neces-
sary to bring the properties to the point of commercial production
justifying railroad facilities; and all agreed that the quantity of coal
was entirely problematical, no work or development having progressed
to the point where the extent of the deposits could be estimated.
In July .1917.a Mr. Grant and a Mr. Taft called upon the Chief
Engineer and the General Freight Agent of the railroad at Salt
Lake City to discuss the probability of securing a branch line of
railroad‘from some point on the Victor Branch to the: coal fields
on Horseshoe Creek, on the west side of Teton Basin. —
‘In the meeting I attended with these gentlemen, the railroad pro-
posed to them that if they would deposit the estimated cost of mak-
ing a.survey, the railroad would have a reconnaissance made, and
Messrs. Reeves, the General Freight Agent, and Mr. Stradley, the
Chief Engineer, stated they would be willing to recommend to the
- Railroad Company, their principal, the construction of the branch
line, to be — by the railroad but built by and at the cost of |
‘ UNITED STATES ET AL. VS. STATE OF IDAHO, J. D: RIGNEY, ET AL. 39
the parties owning the coal properties, and that the railroad would
‘thereafter refund to the coal company the costs of construction on
the basis of fifty cents per ton on coal shipped out over the line,
until the cost of the-rails and fittings had been returned.
_ After this conference nothing further wds heard of the matter of
constructing the railroad line to the coal properties until December —
| '1917, when Mr. G. E. Bowerman, of St. Anthony, again took
65 up the matter, representing that he had the necessary financial
support to open up the mines and censtruct a line of railroad,
provided he could get some encouragement from the railroad in
the matter of preliminary work to cover the cost of locating the
line, together with estimates as to the probable cost of construction.
On December i4, 1917, Mr. R. S. Talbot represented to the offi-
cials of the railroad company that. he intended to take over the’
oe Valley coal property; that the property was producing about
30 ok 40 tons per day, and that he and his associates intended to
- develop an output of 300 to 500 tons per day. The question of
rates was briefly discussed. He was told by the General Freight
Agent that the railroad would look with favor upon coal develop-
ment in this territory or anywhere else on its line, if it could become |
a shipping »roposition. Subsequently Mr. Talbot was notified that,
due to the depressed business conditions, the railroad was in no
position- to undertake any new construction or development at ‘its
owh expense; that if any new construction were made it avould
have'to be at the expense of the property to be served, and particu-
larly in view of the fact that the property was undeveloped and’ ~
its production was ‘unknown and uncertain. Because of the engi- —
neer’s reports concerning this coal property the opinion was reached
that there was nothing to justify the construction of a railroad.
That is why we all persistently insisted that if any branch line
' was to be built to the mines, it should either be built by the mines
as a mine appliance, or at the expense of the owners of the property. -
upon contract, and under.a provision by which the railroad would |
return the cost and acquire the complete title upon the refund basis
paying a percentage.- We always mentioned fifty-cents a ton in
this instance, upon the basis ‘of fifty cents. a ton shipped out over
the line. oe ; - ;
66 in February 1918 Mr. Talbot was again in conference with
officials of the railroad and was informed that the-railroad
could not assume any portion of the costs of the proposed branch |
to the coal properties, but that if Mr. Talbot concluded to proceed,
all the work must be at his expense and without assurance of ‘help
from the railroad. Mr. Platt did state, however, that he would be
willing to recommend that the railroad gradually acquire title to the ©
property, after its construction, on the refund basis.. '
_ Mr. Talbot repeatedly stated that on the completion of a,.railroad
line to these coal properties the output of the mines would be 500
~ tons per day, and as soon thereafter as market conditions would per-
al
‘
.
40 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
mit the production would be increased to 1,000 tons per day, which
would: probably be the steady output for a few years.
Estimates of the cost and expenses of the construction of a line to
the properties were made from-such-data as was on hand, and sub-
mitted to Mr. Platt and discussed with him-and Mr. Reeves and my-
self in April 1918.
At a conference with Fuel Administrator of seven States, held in
Salt Lake City, May 1918, wherein the States of Washington, Idaho,
Wyoming, Arizona, California, Oregon, Nevada, and Utah were
represented, and which conference was addressed by Mr. Talbot,
resolutions were adopted and forwarded to Mr. H. A. Garfield, Fed.
eral Fuel Administrator for the United States, as follows: This is the
resolution passed by the conference of Fuel Administrators of the
seven states named: '
“ Resolved, That this conference earnestly recommends the con-
struction of a branch railroad from the Oregon Short Line in eastern
Idaho to the Brown Bear and Horseshoe mining district in the Teton
Valley, to permit the production and shipment of a first class
67 bituminous coal from these mines to a-population of about
75,000 along the main line of the St. Anthony branch of the
‘Oregon Short Line Railroad. This extension, about twelve miles in
length, will permit the shipment of “approximately 500 tons of coal
per day oyer a haul of not to exceed sixty miles to, destination, and
will greatly relieve the demand for railroad equipment, now required
to move this coal a distance of three to four hundred miles from the
Wyoming and Utah mines.”
Mr. Talbot, having failed to get what he dehined from the local
railroad representatives, regarding the construction of a track to
these mines, next proceeded to Washington, D. C., where he secured,
-on May 15, 1918, the approval of Dr. Garfield, United States Fuel
Administrator, of the application for the construction of:a branch
line to the Teton Valley Coal Mines, as follows: This is a copy of
the document that Mr. Garfield gave him: |
Unrrep Srares Fuet ADMINISTRATION,
ees BG. a 15, 1918.
In your reply refer to 2-A-3. R
Mr. R. S. Taxzor, ’
| Spokane, Washington.
Dear Sir: Your application for the construction of a track to the
Teton Valley coal mines in Idaho:
After taking into consideration all the facts contained therein, I
hereby grant my approval of vour proposition.
All matters pertaining to transportation must be taken up with the.
_ Office of the Director General of Railroads.
Very truly yours,
(Signed) a A. GARFIELD,
United States Fuel sc aimseetinet sh
Sat: J.
CC to Mr. C. RB. Gray, Mr. G.1 N. Snider.
UNITED STATES ET AL. VS, STATE OF IDAHO, J. D. RIGNEY, ETAL, 4]
68 Following receipt of the United States Fuel Administrator’s.
approval of the application ‘to construct the line, the Oregon
Short Line Railroad Company prepared estimates of the cost of the
construction of the proposed line. These showed that the estimated
cost of the proposed line to the Brown Bear coal mine, based on
location survey, including branch line and sidings of 10.26 miles,
approximated $277,970.00; tipple trackage for the coal mine, 0.79
miles, approximated $50,800.00. Estimated value of right-of-way to
be furnished by the coal company to the Oregon Short Line,
$12,000.00. Making a total estimated cost to the Mirfes Company,
of approximately $62,800.00. Total of all trackage, including sid-
ings, 11.05 miles, and right-of-way, $340,770.00.
On July 1, 1918, the following telegram was sent by Regional
Director, R. H. Aishton, of Chicago, to Messrs. C. R, Gray and R. S.
Lovett, Washington, D. C.-: he ta
“Your message today. Have’ just received report from E. E.
Calvin conference construction branch line to serve Teton Valley Coal
Company, Driggs, Idaho, on Oregon Short Line and mailing complete
report with recomméndation to Director Lovett with copy fo you
today. J ; | ,
“I recommend that main branch line ten miles long be constructed
at expense of railroad company estimated cost $277,970, and that
right-of-way for branch. line, estimated cost $12,000 be furnished by
coal company, also that coal company assume cost construction of
tipple trackage and other tracks at mine in accordance with General
Order No. 15, estimated cost $50,800. This proposifion has approval
of coal company and is recommended by President Calvin of Oregon
Short Line.” : ;
Mr. Gray at that time was Direcwor of Operations for the
_ Railroad -Administration, and Mr. R. S. Lovett, who has
69 previously been President of the Union ‘Pacific, Oregon Short .
Line and other units of the Union. Pacific System, was Director
of Captial Expenditures for the Railroad Administration.
On July 2, 1918, Judge Lovett replied to Mr. Aishton as follows:
“Construction of branch line of Oregon Short Line Railroad
Company to serve Teton Valley Coal Company near Driggs, Idaho,
is approved, upon the terms stated in your telegram of July first
addressed jointly to Mr. Gray and myself, and’ work may proceed .
immediately without awaiting approval on DCE Form Four.” DCE
means Division Capital Expenditures. ‘
The Oregon Short Line was advised on J uly 3, 1918, that construc- °
tion of the branch line to serve the Teton Valley coal mines had been -
approved on the basis of Mr. Talbot’s paying for right-of-way and
tipple trackage and he was to stand-the expense of maintenance of
the latter, but the railroad to bear the balance of expense of the »
construction of the main line—I mean the Railroad corporation.
DCE Form Four, recommended by Regional Director’ Aishton, ©
July 29, 1918, was approved by the Director of Capital Expenditures, -
United States Railroad Administration, August 31, 1918, and there.
—_
42 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
after on September 4, 1918, a contract between the Director General
of .Railroads, operating the Oregon Short Line Railroad, and the
Idaho Coal Mines Company, a corporation, was entered into, covering
the construction of this branch line to serve the coal property. This
contract was made applicable to the successor of the Director General,
which was the Railroad Corporation.
The Mines Company agrees, in this contract, to furnish right-of-way
for the entire track, free of cost to the Railroad, and have the *
70 same conveyed to it. The entire line to belong to the Oregon
Short Line, and all material used therein, except that portion
of the miné tracks paid for by the mine. Provision is also made in
the contract for the Director General to use the mine tracks for all
the business of the Oregon Short.Line, provided such use will not .
interfere with the business of the mine. The track is to be maintained
by the Director General, but the Mines Company is to pay the Director -
General for maintenance and repairs of that portion of the track
belonging to it.
_ The contract provides that the Director General, after giving
sixty -days’ written notice to the. Coal Company, may terminate
the agreement and discontinue the operation of the mine tracks,
take up and remove the rails, ties and other materials, and use
‘the same on any part of the Oregon Short Line for any perpen,
without let or hindrance, in the event:
(a) The Coal. Company ceases for a continuous period of one year
in doing of business in an active and. substantial way .over the said
mine track ;
(b) The Coal Company shall fail to keep and perform each and
every obligation,.condition, and stipulation stated in (or resulting
under this agreement ;
(c) The Director General is ‘required Ly law, ordinance, ‘or police:
regulations, or changed conditions, to elevate or depress or other-
wise change the tracks of the Railroad at or near the location of
the mine tracks so as to make it. impracticable i in the judgment of
the Director General to continue the cyerations.
If the trackage is removed as authorized -by the contract, the.
- Director General shall pay the Mines Company the salvage value of
that portion of the trackage removed belonging to the Mine
71 and paid for by it. It is then provided that in the event of
termination of the contract, as provided, the Coal Company
shall have no recourse or redress of any character against either the
Director General or the Oregon Short Line; and finally, it. is pro-
' vided in the contract that the terms thereof shall be binding upon,
and inure to the benefit of the successors of the Director General
or the Coal Company, and also that upon termination of Federal
_ control and resumption of operations by the Oregon Short Line
- Railroad, the covenants and conditions in the agreement contained
shall inure to its benefit and that of its successors or eicont (T.
16-30). «
«
UNITED STATES ET AL, V8. STATE OF IDAHO, J. p, RIGNEY, ET AL, 43
Work under the contract was. commenced by the railroad in Sep-
tember 1918 and was prosecuted diligently in: an effort to complete _
the trackage by fall, ‘The Mining Company deposited with the
Oregon Short Line ‘$4,000 as an advance on that portion of the
work to be paid for by it.
$47,600.00, was yet to be put up by it in order to complete its part
of the work. “Mr. Talbot was repeatedly requested, orally ‘and
in writing, to make arrangements to deposit the amounts called
for by the contract, so that the work could be resumed...
"44 WNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
“Tn view of. emergency now dino in matter of coal supply
you are hereby : authorized and directed to complete extension
73 of mine track to a point opposite tipple location where rail-
- road could|be joined by tramway from mines, the purpose
being to put line in condition as soon as possible for handling coal
up to capacity of mine to deliver coal. * Cost of this work is estimated
to be $19,530.00 for ‘labor, in addition to $38,570.00. for material
on the ground but not yet charged out. Please give notice to Mr.
' Talbot accordingly, as well as giving instructions to General Man-
ager of Oregon Short Line.”
On the 15th day of January 1920, in wales to settle the differences
- between the parties, a supplemental agreement was entered into
between the Director General of Railroads and the Idaho Coal Mines
Company. It provided that the Coal Company woul pay in ad-
vance of the work performed the actual cost of the portion of labor
and materials to be paid for by it. The Director General agreed to
keep the Coal Company advised of the approximate amount of the
balance remaining and. to notify the Coal Company when there re-
mained only $7, 000 to apply upon the cost of labor and materials.
The supplemental’ agreement provided that the Director General
might discontinue the prosecution of the work and terminate the
. agreement whenever the amount of money on deposit-with the Direc-
tor General was exhausted.. ;
Work was then started upon the tipple track of the Mines Com-
pany, and late in February, when it became apparent that. the work
could not be completed before the termination of Federal control,
the railroad decided to complete the trackage that was to belong
to the railroad company. When the amount of money on deposit
was reduced by progress of the work to the sum of $7,000.00, Mr.
Talbot was called upon to make additional deposit on April 10,
1920, in accordance with the terms of the supplemental contract.
This demand has never been met, no further deposits or pay-
74 ments have ever been made by Mr. Talbot personally, on the
Idaho .Coal Mines account, nor by the Company otherwise.
After the completion of the work in April 1920, accurate check
-of the work done and the accounts involved therein. was made by -
the Railroad, and -it then developed that not only had all of the
funds deposited by the Idaho Coal Mines Company been utilized
in the construction work it was.to pay for, but the account had
n exceeded to the extent of approximately $8,446.62, which amount
is. due and owing the Oregon Short Line over and above all moneys
deposited by: the Idaho Coal Mines Company and credits properly
due it. Demand for payment of the same has been oy made,
but has never been complied with.
When this branch line reached the coal mine, there was no coal "
mine in operation or any coal being produced; and there was not a
pound of coal shipped until 1924.
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 45
The cost of constructing the branch line up to the termination of
Federal control was $290,443.80,.a capital charge of the Oregon Short
Line Railroad Company.
The cost of completing the line by the Railroad Company after
that, and in addition to that expense, was $6,809.47. ’
Amount expended by the Railroad in performing work to be paid
for by the Mines Company, over and above money deposited ‘by it,
was $8,446.62, which latter amount has never been paid.
A few. carloads of coal. were shipped during the construction of
this branch, but from the time of the completion of the track, in’
April 1920, to the Spring of: 1924, the mine had preduced no -coal
for shipment, and not a pound of coal was offered for shipment
from April 1920 until April 4, 1924, when Mr. H. F. Samuels, of
Idaho, as President of the Teton Coal Company, requested the Gen-
eral Manager of the Oregon Short Line Railroad Company
75 to put the line in céndition for operation and set coal cars at
the Company’s mine for loading, advising at the same time
that his Company was starting. construction of a 4,000-foot tunnel,
which he estimated would be completed within a year. Following
this request, the Railroad Company -caused the property to be in-
spected by competent mine ‘operators, and refused to spend. more
money on this branch because, up to that time, notwithstanding the
very large expense on the part of the Railroad to build this track,
. no coal mine had been developed as a successful shipping property,
and no coal had been shipped to justify the expenditures that had
theretofore been made, and the mining experts reported, at the con-
clusion of an investigation, that it was very improbable that the
mine could ever be developed as. a paying producer of coal to ship
hy rail, and that there was little probability that the Coal Company
would be able to develop the mine to a paying proposition.
On April 8, 1924, a suit was instituted by the Teton Coal Com-
pany against the Oregon Short Line Railroad Company, before the
Public Utilities Commission of Idaho, to require the railroad Com-
pany to repair, rehabilitate, and operate the track from Tetonia
Junction to the Brown Bear Mine, in Teton County, and to furnish
sufficient cars to: remove the coal from the mines and to publish
and file tariffs to cover intrastate shipments of coal from the mines.
required the Coal Company to furnish a bond in the sum of $27,-
160.00 to. the effect that it would ship an everage of 29,920 tons of |
coal a year for a period of five years, upon which it would be
allowed a credit of twenty cents per ton. ;
76 The estimated cost of constructing a wye at the end of the |
*branch, which the Commission found necessary and /ordered
' Constructed, was $27,160.00 and as this was equivalent to twenty
37542354 oa :
46 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, BT AL.
cents per ton on 29,920 tons fora period of five years (the Coal
Company’s representatives had testified upon the hearing that they
could ship in excess of that amount, if they -had transportation
facilities), the order was made as above described, arrived atin the
‘ manner just detailed. This order of the Commission will be found
on pages 264 to 290 of the.11th Annual Report of the Idaho Public
Utilities Commission.
The Railroad Company promptly obeyed the order and rehabili-
_ tated the track and constructed the wye, with the result that at
the end of the five-year period only 21,393 tons of coal had been
. shipped altogether, -as against a guarantee of 29,920 tons per year,
or a total guarantee of 119,680 tons, thus leaving a balance due to
the Railroad Company, under the obligation of the bond, of $19,-
657.40, no part of which ‘has ever been paid, although demand for
the payment of this sum was made and refused (T. 31-40).
On July 14, 1928, the. Railroad Company instituted a suit for the
recovery of the amount due on the bond and the order of the
Commission.
One appeal to the Circuit Court of Appaals was taken wil finally
judgment was rendered in favor of the plaintiff, the Railroad Com-
pany, and against the defendants, the Teton Coal Company, H. F.
Sdmuels, John W. Egleson, Receiver of the Coal Company, and
certain sureties on the bond, for $21,000.00, no part of which has
ever been paid, and which ie a lien upon the property: of the Teton
Coal Company, subject tqbond issues, judgments, and laborers’ liens
aggregating close $500,000.00.
77 In this connectf$n the Railroad Company, as a result of
some negotiations that did not produce any money, dismissed
the action as against the sureties, and never got anything from the
sureties on this bond. They were all individual sureties. - &
Substantially no coal mining operations have been carried on by .
. the Teton Coal’ Company since the summer of 1928. Most of the
time-;since then the Teton Coal Company has been in the hands of
the receiver.
In addition to the expenses and lawsuits mentioned an action
was commenced by the Teton Coal Company against the Oregon
Short-Line Railroad Company to reduce freight rates on coal ship-’
ments from Talbot, Idaho, as:a result of which an order was entered -
finding the existing rates unreasonably excessive and establishing a
new schedule of rates.
. In May 1925, in a.suit by the Oregon Short Line Railroad Com-
pany versus the Teton Coal Company and others, the Railroad Com-
pany was required to institute a proceedings for an injunction,
and to secure a temporary ‘restraining order to prevent the defend-
- ants from tunneling under the land and tracks owned by the Rail-
road at a point ppposite the tipple. At the is tunneling was
done the mines where shut dewn and no extraction of coal or ship-
-ments had taken place for some time. This case was comp
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 47
This branch line was ordered in by the United States Railroad
Administration, upon the recommendation of the Unitel@ States Fuel
Administrator, over the protest of the Railroad Company, and
under representations that never came true, and that the develop-
ment and shipment of coal over the line constructed has never
justified its constriction nor does it justify its present existence and
| the expenditure of money. | .
78 - Notwithstanding the large promises that have been made
from time to time by various people connected: with this prop-
erty, the mine did not ship a pound of coal from the time of the
completion of the track in April 1920 until April 1924. Since that —
time the total shipments, instead of being anything like predicted,
promised, ‘guaranteed, or ordered by the State Commission, under
. bond, to average at least 29,920 tons per year, it has been only a
total of 38,329 tons, all told, up to April 1, 1932, or an average of
4,791 tons per year. The total revenue derived from the time the
' line was built,.April 1920, to date has been but $9,508.29.. The ac-
cumulated deficit over revenue is $59,359.99. We are suffering a loss
évery year of something over $4,000.00. 'We knew a great deal more
about the conditions and the lack of justification for this -construc-
tion than did the Railroad Administration that ordered it put in. |
The president of the Union Pacific Coal Company predicted
79 ~~ that the coal mines would not be a success; that coal could not
: be mined therefrom and produced profitably; and stated that
this branch line was not justified. The position previously asserted
‘and now maintained by the railroad was and now is an established
fact; that there never was any justification for this branch track; ._
established and demonstrated facts: , . |
Under the practice of the State Board of Equalization spur tracks
‘are not separately identified or named and assessed. The State Board
_ of Equalization in the. State of Idaho ‘is ‘made up ex officio of the:
Governor, the attorney general, the treasurer, the secretary of state,
and the State auditor, and it is a board that assesses for taxation
purposes all public utilities in the State. The track leading from the .
junction to the mine at Talbot is classified and assessed by the State
Board of Equalization as a branch line, the same as the Twin Falls,
. Mackey, and other branch lines. ¢ 3
After Federal ‘control ceased, the Oregon .-Short Line made a
-Claim against the Railroad Administration, protesting against being
charged with the expense of construction of this branch line. That
claim was in writing dated May 12, 1919, addressed to the Director
General of Railroads. It specified five items in all totaling $1,549,- .
575.00... * we
The first item in-that claim is the one based upon this track, .
ordering this track in. It says: “The Oregon Short Line Railroad -
Company hereby gives notice, under and pursuant to the provisions
of section 8 of the contract dated February 14, 1919, between the
and there is no justification for the continuation of it in the face of
48 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
Director General of Railroads and the Union Pacific Railroad Com-
pany, Oregon Short Line Railroad Compdny, and others, covering
the Federal control of the transportation properties of the Union
- Pacific System, that said company claims that losses have accrued
5
or will accrue to it by reason: of additions, betterments,
80 ~° track extensions, and motive power made and provided by
order of the Director General.of Railroads prior to the execu-
tion of the contraci aforesaid on‘or in connection with the property
of said company taken under Federal control, in respect of the items
hereinafter set forth, and to the full amounts charged or to be
=. to said company as the capital cost of said items, viz:
“The cost amounts hereinafter stated are, estimated costs
shown by the D. C. E. forms or work orders.) ‘*
—e “a.
_“Form and serial no. 4: 15; approved by D. (.-E., September 3,
1918; amount, $289,970.” ,
_ Construction of 9.05.miles of branch line railroad and 2 miles of
sidetrack from Mile Post 31:54 on the Teton Valley Branch of-
- Oregon Short Line Railroad for handling coal output of the Teton
Coa! Céinpitny.° This construction was ordered by the Railroad Ad-
ministration over the protest of the company. \The coal mine in-
tended to be served by this spur was undeveloped and its estimated
capacity and production, taking into consideration local mining
and market conditions, were not sufficient to warrant the large ex-
_ penditure necessary for the construction of this spur. It is the be-
lief of the company that the construction was ordered upon the
recommendation of the Federal Fuel Administrator, based solely
upon then existing emergency conditions as to the coal supply
of the @untry, and without. regard to the want of justification for
~ such, ction from the railroad’s standpoint. These claims of
the Oregon Short Line were lumped with all the claims of the Union ”
Pacific System, and presented to the Railroad Administration, total-
ling $28,525,896.12. Those were all the claims for the Short Line,
-the Union Pacific, the Los Angeles, and Salt Lake. I don’t know
whether or not the ©. W. R. & N. was included.
After long negotiation the Government said: “ We will give you
eight million dollars,” - There was no identification of what the
eight million dollars was for; no itemized account, no anything; but
_ after some consideration the railroad accepted it.
. 7
81 ' Cross-examination
They gave us~$8,000,000.00 for a claim of $23,525,896.12 and we
accepted it. : ;
I have no way of kilowing that the $8,000,000.00 allowed by the |
Railroad Administration was in fu!l of.our claim of $289,970.00 for
the construction of the Talbot branch. We received no itemized
‘ e ‘ |
' UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL. 49
‘statement from the Railroad Administration as to how much was
allowed for this Talbot branch.
If any evidence was given at the hearing before the Public Utili-
ties Commission of Idaho that the Railroad Administration allowed °
and paid all cf the amount of the claim for this road, except $32,-
333.00, it was a mistake. I have no way of knowing what part of
the $8,000,000.00 allowed by the Railroad- Administration was al-
lowed on our claim of $289,970.00 for the construction of the Talbot
branch. There is a bare possibility of an allowance of the entire
$289,970.00, but it is so remote that it is not susceptible of any
credence.
A copy of the contract between the Director General of Railroads
and the Idaho Coal Mines Company was thereupon offered in
evidence. .
Mr. Biacx. We want to make the objection that it is incompe-
tent, irrelevant, and immaterial for any purpose in this case.
”~ Examiner Suuiivan. That objection will-be overruled. It will be
accepted for what it is worth. That contract will be accepted as
exhibit no. 1. ;
(The contract was received in evidence and marked “Applicant’s
Exhibit No. 1, Witness Smith ”, for identific: tion. It is forwarded .
herewith). (T. 41-60).
Direct examination
J. H. Bean, General Clerk, Freight Department, Oregon Short
Line Railroad Co.
The witness referred to Oregon Short Line Tariff Supplement
No. 5 to I. C. C. No. 2075, issued on January 9, 1919, to becom 4
tive January 16, 1919. Supplement 7 to O. S. L. Tariff I. C. "C. 207
‘ issued on January 9, 1919, to become effective January 16, 1919, a
lishing through rates on coal from Talbot to destinations i in Idaho,
*Montana, Oregon, and Washington. Talbot is the only station on ‘
this branch shown by the tariff. We never filed any general :
83° class and commodity tariff until 1924, effective November 25, “
O. S. L. Tariff 4307, I. C. C. 2512. That carried a general line
of class and commodity rates to and from the main line junction.
This also includes Dygert: Tariffs are not filed covering spur prop-
82
Cross examination _
_ These rates on coal were published from Talbot. There would be
‘ no difference in the tariffs in the rates on coal from Tetonia Junction
and from Talbot, as the Talbot rate would apply under the inter-
. mediate application from Tetonia Junction. This tariff I. C. C. 2512.
had the effect of establishing through rates by the use of a propor- -
tional rate to and from Talbot, from and to Talbot Junction... After
November 25, 1924, there was a difference in the rates from Tetonia
Junction and from Talbot, dependent on what the commodity was.
5Q ‘UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL,
We had graded class.rates and an abritrary proportional. The tariff
was built in. two sections: One section for the local rate on. the.
branch, from Talbot Junction to Talbot, the proportional section to
be added to the rates to and from Talbot Junction. :’ oe
A proportional rate is an arbitrary figure to be added to a base
rate to and from a givén base and‘point, and cannot be used locally. —
_ The rate to be added to Talbot Junction is of lower volume. than the
_ local rate would be for handling the same commodity from Talbot
Junction to. Falbot. These rates are now in effect and have been
since 1924. ef ne ae Rare
Coal is rated class D and on cogk from other producing districts
to Talbot 314-cents ‘a hundred clone is added to the rate in
effect: to Talbot Junction in the tariff for the local movement. That
_ tariff is only on file’as an Idaho intrastate tariff. The new crates
covering commodities other than coal were published- November 25,
‘ 4924. The junction is about a mile or a mile and a half from |
Tetonia. We have a rate on coal from Talbot to Tetonia.
“84 There is not a specific rate to‘the junction The Tetonia.rate
would apply at Tetonia Junction under the intermediate ap- .
plication. Hig at
2 . Redirect examination
I have been testifying as to the rates from Talbot to the branch
line junction point; also rates from Talbot to other destinations
beyond the junction. There is ‘no ‘rate. published from Talbot, a
point at the mine, to the junction where the branch attaches on to
the ‘Victor.branch. The rate to the junction if a shipment moved
through, would be the rate to the point beyond, under the inter-
mediate application, which is Tetonia, the first point beyond.
_ Direct examination
E. Sracey, Locating Engineer, Union Pacific System Lines.
The witness’stated that as Locating Engineer for the Union Pa-
cific System he located the line of railroad running from Tetonia
to Talbot in 1918...
A map previously marked “Applicant’s Exhibit No, 2, Witness.
Stacey ”, for identification, was thereupon received in evidence.
The Teton Valley is enclosed on the east side by the high mountains
- of the Teton range, and by lower hills on the south and west sides.
Due to this topography all the streams carrying any material amount
of water for irrigation are on the east side of the valley, where are
- located the towns of Felt, Tetonia, Driggs, and Victor. These con-
stitute the main settlements of the valley, and are all served by the
Teton Valley branch of the Oregon Short Line Railroad.
The streams over on the west side of the valley are all small, and
are generally used to irrigate individual’ ranches located at the .
mouths of the canyons. | ee
TARY ERM Nate ity Seaaire m pele nce WAIL 10-501 cw eoprecumnaerattecermmanen
UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. 51
85 Horseshoe Creek, ‘up whose canyon the Talbot branch goes,
‘ is the main stream on the west side, and irrigate’ a ranch #f
approximately three hundred acres. -This ranch is about seven miles
from Tetonia. -These west side irrigated ranches are largely devoted
to hay and stock-raising, and were settled prior to any railroad
construction in the valley. There are around one’ thousand acres
of this irrigated land which is nearer to the Talbot branch than to
the Teton Valley branch, but not over ten miles from the trackage, |
if the Talbot branch was abandoned.
Probably ninety percent of these west side bench lands are w ithout
water, and where cultivated are devoted to dry-lang grain; the best
‘farms being along the foothills, where the soil is freer from gravel,
- and the snowfall deeper. ‘The ‘lower portion of the bench, next to.
the river, contains the most gravel, and where uncultivated is good
‘stock range. There is estimated to be five thousand acres of the dry
farm land nearef to the Talbot branch than to the Teton Valley
branch, but not over a ten mile haul to the latter. Some of these
five thousand acres are of gravelly sqil,.and evidently spoiled a
_ good stock range to make a poor dry farm.
The agricultural industry in this territory has remained. practi-
cally stationary. The entire west side of the valiy, including, that
portion traversed by this Talbot branch, is withigt ten miles or less
of the present Teton Valley, and has a railroad clgse enough to serve
it for any agricultural purpose.
About midway along this branch railroad ffom the junction to
Talbot is located a side track about 1 480 feet long, which has been
named Dygert. That track is adapted to loading; that is what it
was put there for.
Referting to Exhibit No. 2,:the legend in the ‘lower right-hand
corner of the map- designates the different types of roads
86 shown. It is noted a gravel road extends from the Idaho-
Wyoming line, near Victor, northward through the main set-
Alements of the valley. This turns westward toward Sugar City,
at the upper left-hand corner, where it joins with the Yellowstone
highway, which is the main traveled route up and down the =r
Snake River valley, tapping all the principal cities in it.
Another gravel road extends up the south fork of the Snake
River, in the lower left-hand corner, to a point about opposite Vic-
tor. Here a graded earth road goes over the mountain and connects
with the graveled road at Victor. ‘
There are numerous earth roads, graded in places, extending be-
‘tween the east and west sides of the valley, the principal ones being
~shown by a short dotted line on this map. These roads are in prac-
tically the same condition as in 1918, and are the ones over which
coal has been hauled in the past. - They offer'a fair means of trans-
portation during the greater part of the year, but are quite bad
during the melting period, until the ground dries out in-the spring.
This covers a period of about two months.
Sv SAPRSEIROIS PAUL RARE ER A EIS REMMI om Ye
52 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL
_ It is eleven miles,by wagon road from the coal tipple to Driggs;
eleyen miles from the coal tipple northward to junction with the
gravel road leading to Sugar City, and ten miles from the tipple to
Tetonia. The shortest distance\from the tipple to the Teton Valley
branch tracks is about nine miles.
_ While these roads would not stand up under heavy or continuous
traffic, they have remained in their present condition for a consider-
able period of years.
The branch line of railroad: leaves the Teton Valley branch about
a mile and a half south of Tetonia Station and takes a southwesterly
course for about nine miles. At the end is located a coal
8% tipple. Fhe grade is descending outbound till the Teton
River is. crossed at Mile post 2.5.: The maximum grade down-—
hill is 1.2 percent from the junction to the Teton River. The Teton
River is crossed, by a 13-span pile bridge 195 feet long. The grade
then becomes ascending, outbound. Open couritry is traversed to
mile post 6, where the canyon of Horseshoe Creek is entered and
followed to the énd of the track. . This canyon portion is quite steep
and crooked, having a maximum curve of 12.26’ and a 2.2 percent
grade. The line is constructed according to standard branch line
construction. At Talbot. sufficient secondary trackage was con-
structed to handle the anticipated output from the mines (T. 60-75),
Cross-examination
The rails on the Talbot line are 75 pounds to the yard, which is
standard branch construction. Our heavy main-line engines would
not operate over this line nor over the Victor branch. The Talbot
branch has practically the same type of construction as the line from
_ St. Anthony to Victor. ; :
- The cross-section of the valley is a good deal like a saucer, with
the Teton River flowing through the middle. The-grade from the
mine down to the river and the grade from the river out to Talbot
Junction are‘ both maximum and ruling grades. A short ‘pitch of
‘a very steep grade would be a maximum but not a ruling grade.
The locomotive might be able to make a run and pull the grade; then
it doesn’t become a ruling grade. A ruling grade depends.upon the
engine capacity. ; .
There are more than four tracks constructed at Talbot and in 1924"
a wyé’ was constructed’ so a locomotive could be turned around.
The construction there was done with the purpose of handling the,
aniount that wM®anticipated ; arfywhere from 500 to 1,000 tons a day.
The siding-at’ Dygert was placed there for the purpose of loading.
farm products. If the branch line were abandoned farm
88 products could not be loaded closer than Tetonia, which 1s
about ten miles away. That would be the maximum; most of
the farmers live within three or four miles of Tetonia.
If this branch were removed’ the nearest railroad track to ship
produce or coal would either be Tetonia or Driggs. I have been over
. «
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UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ETAL, §3.
the road from Talbot down to. Drigg@in the winter time; once & bob
- sled was necessary—another time it wasn’t. The wagon road from
Talbot to Driggs is not a graveled road. For the first four or‘five
miles leading west from Driggs down to the Teton River it is rather
marshy and some gravel and large logs have been hauled in. From
the Teton River up to the coal mine at Talbot it is just a dirt road.
The wagon road leading from the coal mines to Tetenia is a dirt road.
During the latter part of the spring or.summer until the snow comes
. in the fall these rof@ls are dry and a fair means of trarisportation.
The grades on these roads from the mine are down grade to the
Teton River, so the grade is not an impediment against -hauling,
freight gut. Trains moving up to Talbot would usually haul empty
cars, SO that the grade would be no impediment.
Redirect examination
This branch line is sufficiently well constructed to permit of the
use of whatever equipment may be necessary to handle the traffic that
originstes or is offered on the branch.
Direct examination
J. T. Lyon, Station Agent, Oregon Short Line Railroad Company,
Tetonia, Idaho.
_ The witness has beenStation Agent at Tetonia since April 26,
1920. He stated that farm crops have been mostly delivered to Te-
tonia. Some shipments of wheat and potatoes have been made
89 from Dygert where an itinerant trucker goes out into the terri-
- tory and buys up grain and pools it to, make a carload. or
possibly two or three carloads at a time. ‘The individual’ farmer
does not raise enough to make a carload, so he naturally delivers it to
Tetonia- because there is no established market place at Dygert. -
There is a saving for the shipper by hauling it to. Tetonia as there is
an arbitrary on grain of 314 cents at Dygert over Talbot Junction,
Grain crops have been materially reduced in the last four or five
_ years. Potato raising on that side of the valley has rather recently’
come into being. There has been some abandonment of dry farms
on the west side. .
*
Cross examination
Up until the last two or three years the Teton Valley has been a
prosperous valley. Wheat is raised on the west side of the Teton
River, but it is not a good wheat country. ;When the price of wheat
is low very little is raised (T. 75-89).
Direct examination
Morris H. Brown, Jr., Division Engineer, Oregon Short Line Rail-
road Company. -e
SG 2
54 UNITED STATES ET AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL.
’ The withess offered in evidence Exhibit No. 6, showing estimated cost
The witness stated that he was: Division Engineer of the Oregon °
Short Line, having jurisdiction of the Utah Division which includes
the Talbot Branch. .
The witness thereupon offered in evidence Exhibit No, 3 entitled
-“ Cost of Work Performed During September, October, and Novem-
ber, 1924, at Various Locations, Mile Post 0 to Mile Post 9, in con-
nection with,,Rehabilitation of Talbot Branch ”, which was received
in evidence over objection. The witness offered in. evidence Exhibit
' No.4 which purports to show the cost .of work performed in connec-
tion with Construction of Wye Track at-end of Talbot’s Branch
90 during 1924, 1925. The exhibit was received in evidence
over objection. The witness offered in evidence Exhibit No. 5,
a statement showing Estimated Cost of Maintaining’ the Talbot
Branch during the year 1932. The exhibit was received in evidence.
-~
of maintaining the Talbot Branch during the year 1983, and Exhibit
No. 7, showing the estimated cost of maintaining the Talbot Branch
during the year 1934. -Both exhibits were received in evidence.
The Roadmaster having jurisdiction of this line and myself made
an inspection of the track, paying attention to the condition of ties,
the line surfave and gauge, and prepared by estimates as.a result of |
that investigation and inspection. The estimates are submitted on
anticipated requirements.’ An estimate:has been made of the cost of:
repairing this nine-mile branch line and of the net salvage value. |
The salvage value of material which can be salvaged is $42,593.00.
The estimted cost of recovering this material is $18,754.00, leaving a
net credit due to salvage of $23,839.00. or
= . * °
Cross-examination
In operating trains from the junction to the mine a full regular |
train crew is used. It has been the customary practice for the local
crew on the Victor branch to handle the work up to the Talbot mine.
This requires an: ——~, fireman, conductor, and two brakemen..*
They are paid 100 miles.extra time for going this nine and a fraction *
miles. That is because of their agreement; the Talbot Branch was
‘not in their assignment. The whole crew makes the trip and each’
one of them is allowed 100 miles extra, but only when they make the
trip. That is the result of a labor agreement between the railroads
and the organization because the Talbot Branch was not a part of
their regular assignment. — :
91 If the Superintendent assigned these men to this run and
inéluded the Talbot Branch there would be no extra charge,
but if it was included in their assignment.it may irtcrease their daily
wage, regardless of whether they operate or not. ae ;
I do not know from my own knowledge anything about the cost
of what was done on the Talbot Branch in 1924 and 1925, except
what the record reveals.
™,
| ,
salsa: sone nese mcenegeren een eerenccenmmealll
‘
UNITED STATES BT AL. VS. STATE OF IDAHO, J. D. RIGNEY, ET AL. . 55
*The record does not indicate that any work was done on this
branch from 1920 until 19247 ~The 16-span bridge over Horseshoe
Creek was occasioned by the building of the wye at Talbot in 1924.
From the time the line was rehabilitated in 1925 until 1932 there has
been nothing unusual in expenditures to keep up the line.
-In 1932 the line required 800 cross ties at a cost of $1.31 each,
making a total of $1,048.00. Personal inspection was made of the .
branch with a view of being as economical as possible, utjlizing
’ second-hand crossties and what. additional ties would be necessa
to renew broken and completely rotten ties. To a mile of trac
2,560 crossties are necessary. -This was very much under an ordi-
nary replacement. An ordinary replacement of ties on a line as old
as this branch would. require an average of abotit 200 ties per mile,
The cost of $1.31 per tie is purely a material charge of the store de-
partment and does not include the cost of laying the ties. The cost
of renewing the ties is shown on the exhibit as $403.00. Labor costs
‘have been reduced 10 percent in the last year. Some crossties may
have been along the railroad and these are termed “in storage,” as -
they were not installed. °
In 1933, 3,000 tieplates were -required:. This prevents mechanical
wear to the expense of creosoted, oil-treated ties. It stops deprecia-
tion of the material, and is also labor saving after they are
applied. a oe .
92 ° There is“an item of $300 for work trains’ plowing snow. A
Jordan spreader was used for a snow plow. It took a portion
of one day. The Jordan spreader is operated by air but-a Jocomo-
tive is required to Shove it. Th
This text is long and has been trimmed here. Open the source document for the complete record.
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