Appendix — Western Pacific Railroad v. United States

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SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1964 /J65

No. 598 /2

THE WESTERN PACIFIC RAILROAD COMPANY,

ET AL., APPELLANTS,

vs.

UNITED STATES, ET AL.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

INDEX

VOLUME 1

Proceedings before the Interstate Commerce Com-

mission

Secretary’s certificate (omitted in printing)

Complaint in Docket No. 33679

Separate answer of The Atchison, Topeka and

Santa Fe Railway Company

Separate answer of Northern Pacific Railway

Company, Camas Prairie Railroad Company

and Walla Walla Valley Railway Company __

Answer of Union Pacific Railroad Company and

Spokane International Railroad Company __.

Answer of Great Northern Railway Company and

Pacific Coast R.R. Co.

Answer of Washington, Idaho, and Montana

Railway Company

Petition of Southern Pacific Company for leave

to intervene in opposition to complaint —___-

Record Press, Printers, New York, N. Y., May 27, 1965

ii INDEX

Original Print

Proceedings before the Interstate Commerce Com-

mission—Continued :

Transcript of hearing, May 8, 9, and 10, 1961 _— 37 16

Appearances 38 16

Testimony of T. P. Wadsworth—

direct (by Mr. Treanor) 41 19

Statement of T. P. Wadsworth entered into

record 44 21

Statement of D. L. Loftus entered into rec-

ord—

direct (by Mr. Treanor) 75 43

Offers in evidence 84 48

Testimony of D. L. Loftus—

cross (by Mr. Hobbs) —. 84 49

redirect (by Mr. Burkett) - 90 53

Offers in evidence 92 54

Testimony of Grant S. Allen—

direct (by Mr. Treanor) 93 55

cross (by Mr. Hobbs) — 111 67

cross (by. Mr. Farrell) —.. 116 72

cross (by Mr. Burkett) 120 74

eross (by Mr. Farrell) —— 123 77

redirect (by Mr. Treanor) 125 - 8

recross (by Mr. Farrell) - 126 78

Offers in evidence 126 78

Testimony of F. B. Stratton—

direct (by Mr. Treanor) _ 127 79

cross (by Mr. Hobbs) ——. 136 85

eross (by Mr. Farrell) —. 136 86

Testimony of Charles K. Faye—

direct (by Mr. Treenor) —. 137 87

cross (by Mr. Hobbs) —— 144 91

cross (by Mr. Farrell) —_. 147 94

Statement of A. K. Hinckle entered into rec-

ord—

direct 158 101

eross (by Mr. Burkett) — 161 103

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, ana 10, 1961—

Continued

Statement of F. W. Fuller entered into rec-

ord—.

direct (by Mr. Treanor) _

cross (by Mr. Farrell) ___

redirect (by Mr. Treanor)

recross (by Mr. Farrell) _

Statement of M. A. Kasen entered into rec-

ord—

direct (by Mr. Treanor) _

record—

direct (by Mr. Treanor) _

cross (by Mr. Farrell)

redirect (by Mr. Treanor)

Statement of N. C. Kunzmann entered into

record—

direct (by Mr. Treanor) _

eross (by Mr. Burkett) __

eross (by Mr Farrell) __

redirect; (by Mr. Treanor)

recross (by Mr. Farrell) _

Statement of John M. Cox entered into rec-

ord—

direct (by Mr. Treanor) _

cross (by Mr. Burkett) __

Statement of Robert Stoll entered into rec-

ord—

direct (by Mr. Treanor) _

cross (by Mr. Burkett) __

redirect (by Mr. Treanor)

recross (by Mr. Burkett) _

Statement of C. V. Donaldson entered into

record—

direct (by Mr. Treanor) _

eross (by Mr. Farrell) ___

cross (by Mr. Burkett) __

iii

Original Print

165 106

168 108

171 110

172 111

177 114

181 117

184 119

185 120

186 121

188 122

189 123

190 124

193 126

194 127

196 128

197 129

199 130

203 132

iv INDEX:

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Testimony of Clifford Worth—

direct (by Mr. Treanor) ~

eross (by Mr. Burkett) —~

cross (by Mr. Farrell)

Offer in evidence

Testimony of P. Steele Labagh—

direct (by Mr. Treanor)

cross (by Mr. Burkett)

Statement of Myron Lindgren entered into rec-

ord—

direct (by Mr. Treanor) —.

cross (by Mr. Burkett) —

Statement of Avery M. Cloninger entered into

record—

direct (by Mr. Treanor) -

cross (by Mr. Burkett) —.

Statement of Paul J. Roche entered into rec-

ord—

direct (by Mr. Treanor) -

cross (by Mr. Farrell) —.

redirect (by Mr. Treanor)

Statement of Frank L. Sigloh entered into

record—

direct (by Mr. Treanor) -

cross (by Mr. Burkett) —.

redirect (by Mr. Treanor)

recross (by Mr. Farrell)

Testimony of A. R. Allen—

direct (by Mr. Treanor) ~

eross (by Mr. Hobbs) ——

Testimony of T. P. Wadsworth—

(resumed )—

cross (by Mr. Farrell)

cross (by Mr. Burkett) ——.

redirect (by Mr. Treanor)

recross (by Mr. Farrell)

INDEX

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Offers in evidence

Testimony of T. P. Wadsworth—

cross (by Mr. Burkett) __

Complainants rest direct case

Testimony uf A. J. Stilling—

direct (by Mr. Hobbs) ___

cross (by Mr. Treanor) _.

cross (by Mr. Tjosseni) __

redirect (by Mr. Hobbs) _.

Offer in evidence

Statement of R. B. Hardin entered into rec-

ord—

direct (by Mr. Higgins) _

cross (by Mr. Treanor) __

cross (by Mr. Pfrommer) _

Offer in evidence

Statement of G. E. Roeder entered into ree-

ord—

direct (by Mr. Treanor) _

cross (by Mr. Burkett) __

cross (by Mr. Farrell) ___

redirect (by Mr. Treanor)

recross (by Mr. Farrell) _

Testimony of C. W. Evers—

direct (by Mr. Hobbs) __

eross (by Mr. Treanor) _

Offers in evidence

Statement of L. S. Davis entered into record—

direct (by Mr. Farrell) __

eross (by Mr. Treanor) ___

redirect (by Mr. Farrell) _

recross (by Mr. Treanor) _

redirect (by Mr. Farrell) __

Offers in evidence Sai

Original Print

316 212

318 213

328 219

333 223

334 224

351 236

368 249

370 250

372 250

374 252

376 254

378 255

386 261

391 265

392 265

431 294

446 304

447 305

448 306

vi INDEX

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and iv, 1961—

Continued

Testimony of Ferdinand Wascoe—

direct (by Mr. Burkeiti) —-

eross (by Mr. Treasor) —

cross (by Mr. Pfrommer) —

redirect (by Mr. Burkett)

Offers in evidence

EXHIBITS :

No. 1—Map which shows the Pacific Coast

areas involved in this case, as well as the

locations of the lines and routes of the

complainants and defendants —

No. 2—Map which shows the points in Cali-

fornia served by complainants, as well as

the relationship between such points and

those situated on the Southern Pacific,

with whom the defendants maintain joint

rates via Portland, Oregon —— ~~...

No. 3—Tables 1-18 of Statistical and other

data referred to by Witness Wadsworth’s

prepared statement

No. 4—Pages of Pacific Southcoast Freight

Bureau Tariff 1-S, ICC 1352, containing

present routing arrangements in effect via

the Southern Pacific Company via Port-

land, Oregon, thence via the Northern Pa-

cific Railway or Union Pacific Railroad

Company

No. 5—Pages of Pacific Southcoast Freight

Bureau Tariff 1-S, ICC 1352, containing

present routing arrangements in effect via

The Western Pacific Railroad Company

via Bieber, Cal. between points in Cali-

fornia and points in Oregon, Washington

and Northern Idaho

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Exursrrs—Continued

No. 6—Map showing “Stations designated

in red are junction points between Union

Pacific and Great Northern Railway in

Oregon, Washington and Idaho, affording

interchange of carload freight without

transfer of lading”

No. 7—Map showing “Stations designated

in red are junction points between North-

ern Pacific Railway and Great Northern

Railway in Oregon, Washington and Idaho,

affording interchange of carload freight

without transfer of lading” ___

No. 8—Page 38 of Southern Pacific Com-

pany Freight Tariff 230-K, ICC 4960,

containing absorption of Western Pa-

cific’s switching charge at Sacramento on

Canned Goods moving from Sacramento

via SP to points on NP or UP in Oregon,

Washington or Idaho

No. 9—Statement showing “Representative

Commodities on which present combination

rates applicable via Bieber and Portland

thence Northern Pacific Railway or Union

Pacific Railroad Company are compared

with joint through rates in effect via de-

fendant’s routes with the Southern Pa-

cific Company via Portland” __

VOLUME 2

No. 10—Statement showing “Originations

and terminations of Carload freight traffic

via Bieber moving west of transcontinental —

for the years 1955-1959”

Original Print

508 355

509 356

510 357

512 359

viii

Proceedings before the Interstate Commerce Com-

mission-—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Exuisits—Continued

No. 11—Statement showing “Cars via Santa

Fe Via Bieber or Portland (West of

Transcontinental Territory) for the years

1955-1959”

No. 12—Statement showing “Traffic via

Bieber compared with total revenue

freight traffic handled by The Western

Pacific Railroad Company for the years

1955-1959”

No. 13—Statement showing “West of Trans-

continental Traffic via Bieber compared

with other West of Transcontinental

Traffic moving via The Western Pacific .

Railroad Company and with the total rev-.

enue traffic handled by that Railroad” _...

No. 14—Pages of Pacific Southcoast Freight

Bureau Tariff 1-S, ICC 1352, containing

present rates on Cast Iron Pipe from

Decoto, California on the Western Pacific

Railroad to. points in Oregon, Washington

and Northern Idaho, via Western Pacific

to Bieber, Cal.; Great Northern Railway

to Portland, Oregon, thence via Northern

Pacific Railway Company or Union Pacific

Railroad Company

No. 15—Pages of Pacific Southcoast Freight

Bureau Tariff 1-S, ICC 1352, containing

present rates on Automobiles from Oak-

land and Decoto, Cal. to points in Oregon,

Washington and Northern Idaho, via

Western Pacific to Bieber, Cal., Great

Northern Railway to Portland, Oregon,

thence Northern Pacific Railway Compeny

or Union Pacific Railroad Company —.....

558a

559

406

407

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Exusrts—Continued

No. 16—Pacifie Southcoast Freight Bureau

Tariff No. 297-D (and Supplements 3 and

4), ICC. No. 1678, containing present

rates on Automobiles from points in Cali-

fornia on the Western Pacific Railroad

Company to points on the Northern Pa-

cific Railway and Union Pacific Railroad

Company via Western Pacific Railroad

Company to Bieber, California, Great

Northern Railway to Portland, Oregon,

thence Northern Pacific Railway or Union

Pacific Railroad Company

No. 17—Statement on “Economie Growth”

No. 18—Statemeut on “Production”

No. 19—Statement on “The Western Pacific

Transportation Plant”

No. 20—Map of The Western Pacific Rail-

road showing the interchange points

between the Western Pacific and the

Sacramento Northern, the Tidewater

Southern, and other railroads

No. 21—Map of U.P.R.R.Co. showing main

railroad routes and connections—Port-

land, Oregon, Aug. 4, 1960

No. 22—Statement showing “Gross ‘ Ton

Miles Trailing East, West & Total” ____

No. 23—Statement showing “Northbound—

Southern Pacific Schedules” __ ia

No. 24—Statement showing “Soutabound—

Southern Pacific Schedules” °

No. 25—Statement showing “Comparison

between Lowest “Through” rate on Fibre-

board boxes, KD Flat from Stockton and

Antioch, Calif. to Selected Stations in

Washington and Lowest “Combination”

Rate Applicable via the Bieber Route” _

578

595

597

598

601

603

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Exurits—Continued

No. 26—Map showing the Union Pacific line

in California, Nevada, Utah, Idaho, Ore-

gon and Washington indicated in red, the

principal lines of the Southern Pacific in

Oregon and California indicated in blue

and the joint line of the Santa Fe, West-

ern Pacific, Great Northern, between Cali-

fornia and Portland indicated in green -_

No. 27—Map of Portland, Ore. and Van-

couver, Wash. and Vicinity showing prin-

cipal railroad trackage therein os

No. 28—Statement showing “Northboun

Freight Train Schedules Southern Pa-

cific—Union Pacific and Bieber Route and

Elapsed Times”

No. 29—Statement showing “Southbound

Freight Train Schedules—Southern Pa-

cific—Union Pacific and Bieber Route and

Elapsed Times”

No. 30—Map showing Lines of Southern Pa-

cific indicated in blue, Inside Gateway to

Portland, Ore. indicated in green, Lines of

Northern Pacific Railway Co. and connec-

tions indicated in red, and Lines of Ore-

gon Trunk and Spokane, Portland &

Seattle Railways indicated in yellow

No. 31—Enlarged Map showing Lines of

Southern Pacific indicated in blue, Inside

Gateway to Portland, Ore. indicated in

green, Lines of Northern Pacific Railway

Co. and connections indicated in red and

Lines of Oregon Trunk and Spokane,

Portland & Seattle Railways in yellow —.

605

606

607

610

466

467

468

470

471

Proceedings before the Interstate Commerce Com-

mission—Continued

Transcript of hearing, May 8, 9, and 10, 1961—

Continued

Exuiits—Continued

No. 32—Exhibit showing comparison of

Railroad Distance via Existing joint rate

routes with route sought in this proceeding

and also routes via Oregon Trunk-

Spokane, Portland and Seattle Railway

Companies between Representative Points

on the Northern Pacific Railway Company

and San Francisco and Los Angeles, Cali-

fornia

No. 38—Statement showing Transportation

Conditions of Southern Pacific Routes

Compared with Western Pacific Route via

Bieber, California between Portland, Ore-

gon and Stockton, California, San Fran-

cisco, California, and Los Angeles,

California

No. 34—Statement showing “Freight Train

Schedules—Southern Pacific Routes Com-

pared with Western Pacific Bieber Route”

No. 35—Statement showing “Gross Ton

Miles Trailing East, West and Total—

Gerber—Dunsmuir”

Brief of complainants to the Hearing Examiner,

dated and served July 6, 1961 (excerpts) _.

Complainants’ reply to exceptions of Northern

Pacific Railway Company, Union Pacific Rail-

road Company and Southern Pacific Company

(excerpts)

Transcript of hearing December 14, 1961 (ex-

cerpts)

Statement by Commissioner Freas and colloquy

with Mr. Treanor

Complainants’ petition for reconsideration of the

report and order of Division 2, dated and

served August 27, 1962 (excerpts)

612

622

641

659

473

501

s &

510

xii INDEX

Proceedings before the Interstate Commerce Com-

mission—Continued

Complainants’ petition for further hearing for

purpose of introducing newly developed evi-

dence, dated December 28, 1962 __._.

Order of Commission denying petition for recon-

sideration of report and order of Division 2,

entered January 18, 1963

Complainants’ petition for waiver of the provi-

sions of Rule 1.101(e) of the Commission’s

general rules of practice, January 19, 1963 __

Petition of The Western Pacific Railroad Com-

pany pursuant to Rule 1.101(a) (4) general

rules of practice seeking a finding that an issue

of general transportation importance is in-

volved, filed January 30, 1963

Reply of defendants Northern Pacific Railway

Company, Camas Prairie Railroad Company

and Walla Walla Valley Railway Company to

complainants’ petition for waiver of Rule

1.101(e) and petition for further hearing __

Reply of defendant Union Pacific Railroad Com-

pany to complainant’s petition for waiver of

Rule 1.101(e) and petition for further hearing

Reply of intervener Southern Pacific Company

to complainants’ petition for waiver of Rule

1.101(e) and petition for further hearing

Order of the Commission designating this pro-

ceeding as one involving an issue of general

transportation importance, entered February

14, 1963

Complainants’ petition to the full Commission

for reconsideration of the report and order of

Division 2 and complainants’ request for oral

argument before the full Commission (ex-

cerpts)

Petition of United States for leave to intervene

for the purpose of petitioning the full Com-

mission for reconsideration of the report and

order of Division 2 and to be heard on oral

argument

Original Print

666 512

674 516

676 517

682 519

687 522

697 527

710 536

717 541

719 542

Proceedings before the Interstate Commerce Com-

mission—Continued

Petition of United States to full Commission for

reconsideration of report and order of Division

2 and request of United States for oral argu-

ment before full Commission

Reply of intervener Southern Pacific Company

to petition of Department of Justice for leave

to intervene for the purpose of petitioning the

full Commission for reconsideration of the re-

port and order of Division 2 and to be heard

on oral argument dated and served August 1,

1963

Petition of United States to Full Commission (1)

to vacate its order served July 30, 1963; (2)

to reopen the proceedings for the purpose of

considering petitions of the United States filed

July 26, 1963 and such responses thereto as

may be filed by the parties; (3) to hear oral

argument if then warranted; and (4) to issue

a decision stating findings and conclusions and

the reasons or basis therefor upon all material

issues as well as an order granting or denying

the relief sought

Reply of defendants Northern Pacific Railway

Company, Camas Prairie Railroad Company

and Walla Walla Valley Railway Company to

petition of the United States for leave to in-

tervene

Order of Commission denying petitions of United

States entered August 9, 1963

Motion of Union Pacific Railroad Company, de-

fendant, for The Interstate Commerce Commis-

sion to deny or reject the petition of The

United States for leave to intervene served

August 9, 1963

Reply of defendants Northern Pacific Railway

Company, Camas Prairie Railroad Company

and Walla Walla Valley Railway Company to

petition of the United States to reopen pro-

ceedings

740 8=— 5553

768 573

774 8577

783 = 5583

794 589

796 590

Proceedings before the Interstate Commerce Com-

mission—Continued

Reply of Union Pacific Railroad Company, De-

fendant, to petition of The United States to

reopen proceedings served August 16, 1963 __

Reply of intervener Southern Pacific Company

to petition of United States to reopen proceed-

ing served August 21, 1963

Letter from Secretary, Interstate Commerce

Commission to Mr. John N. Dougherty, De-

partment of Justice, dated September 10, 1963

Record from the United States District Court for

the Northern District of California, Southern

Division —

Complaint :

Exhibit “A”—Report and Order of the Com-

mission, Division 2, Commissioner Freas, de-

cided July 26, 1962 and served August 2,

1962

Exhibit “B”—Notice of denial of hearing by

the full Commission, dated July 12, 1963

and service date of July 30, 1963 _...__

Exhibit “C”—Report and Order recommended

by Hearing Examiner, John F. Wright,

dated July 31, 1961 and served August 10,

1961

Order granting motion of Northern Pacific Rail-

way Company, Camas Prairie Railroad Com-

pany and Walla Walla Valley Railway Com-

pany to intervene as defendants, November 4,

1963

Answer of intervening defendants Northern Pa-

cific Railway Company, Camas Prairie Rail-

road Company, and Walla Walla Valley Rail-

way Company filed November 4, 1963 ______.

Order granting motion of Union Pacific Railroad

Company to intervene as defendant, November

26, 1963

Original Print

Record from the United States District Court for

the Northern District of. California, Southern

Division—Continued

Answer of intervening defendant Union Pacific

Railroad Company filed November 26, 1963 __ 886 661

Order granting motion of Interstate Commerce

Commission to intervene as defendant, Decem-

ber 16, 1963 890 664

Answer of intervening defendant, the Interstate

Commerce Commission filed December 16, 1963 891 665

Answer of the United States of America filed

December 16, 1963 896 669

Order granting motion of the Southern Pacific

Company to intervene as a defendant, dated

December 16, 1963 898 669

Answer of intervening defendant Southern Pa-

cific Company filed December 16, 1968 __.__ 900 670

Order allowing intervention of The Atchison,

Topeka, and Santa Fe Railway, dated Janu-

ary 13, 1964 905 674

Answer of intervening defendant, The Atchison,

Topeka and Santa Fe Railway Company filed

January 13, 1964 907 675

Transcript of hearing on motion to enjoin, set

aside, suspend and annul order of Interstate

Commerce Commission 909 676

Appearances 909 677

Argument by Mr. Treanor on behalf of plain-

tiff

910 ~=677

Argument by Mr. Ginnane on behalf of Inter-

state Commerce Commission 938 693

Argument by Mr. Higgins on behalf of Union

Pacific, intervening defendant __ -

Argument by Mr. Farrell on behalf of North-

ern Pacific, the Camas Prairie and Walla

Walla Railroads 975 715

Rebuttal argument by Mr. Treanor ; 983 720

Opinion and judgment, Zirpoli, J.—Order deny-

ing petition, June 19, 1964

960 707

Record from the United States District Court for

the Northern District of California, Southern

Division—Continued

Notice of appeal to the Supreme Court of the

United States

Designation of additional portions of the record,

ete.

Clerk’s certificate (omitted in printing) —

Order noting probable jurisdiction

Original Print

1003 735

1011 740

1015 741

1016 742

[fol.1] Secretary’s Certificate to following transcript

(omitted in printing).

[fol. 5]

BEFORE THE

INTERSTATE COMMERCE COMMISSION

Docket No. 33679

Tue Western Paciric Ramroap Company, SACRAMENTO

NorTHERN Raiuway, and Tiwewater SourHern Rarway

Company, Complainants,

vs.

Camas Prarie RR. Co., Great Nortoern Raruway Com-

PANY, NortHern Paciric Ramuway Company, Paciric

Coast RR. Co., Spokane InrernationaL Rarroap Com-

PANY, Union Paciric Ramroap Company, WALLA WALLA

VALLEY RarLway Company, Wasuineton, Ipano & Mon-

TANA Rattway Company, and THe Artcuison, Topeka

AnD Santa Fe Ramway Company, Defendants.

CompLaint—Filed February 10, 1961

To the Interstate Commerce Commission:

The complainants, The Western Pacific Railroad Com-

pany, Sacramento Northern Railway and Tidewater South-

ern Railway Company, hereby charge that they are unlaw-

fully prevented from publishing competitive through joint

rates and competitive through routes with the defendants,

Camas Prairie RR. Co., Great Northern Railway Company,

Northern Pacific Railway Company, Pacific Coast RR. Co.,

Spokane International Railroad Company, Union Pacific

Railroad Company, Walla Walla Valley Railway Company,

Washington, Idaho & Montana Railway Company, and The

Atchison, Topeka and Santa Fe Railway Company, on

[fol. 6] freight traffic moving between California points on

the one hand, and points on defendants’ lines in Oregon,

Washington and Idaho on the other.

Complainants serve the territory herein involved through,

and together with its connections, The Atchison, Topeka

and Santa Fe Railway Company and the Great Northern

Railway Company, and as the complainants seek the pre-

scription of through routes and joint rates to which these

carriers will be necessary parties, they are herein named

as defendants. However, the defendants, The Atchison,

Topeka and Santa Fe Railway Company and the Great

Northern Railway Company, have clearly stated their will-

ingness to voluntarily join with complainants in the estab-

lishment of the sought through routes and joint rates be-

tween points in California and points on the lines of the

other defendants in Oregon, Washington and Idaho.

By this complaint, therefore, complainants respectfully

show:

That the complainants, The Western Pacific Railroad

Company, Sacramento Northern Railway and Tidewater

Southern Railway Company, hereinafter referred to as

“Western Pacific’, “Sacramento Northern”, “Tidewater

Southern”, or “complainants”, are all corporations orga”-

ized and existing under the laws of the State of California;

that they are all common carriers by railroad engaged in

[fol.7] the transportation of property in interstate and

foreign commerce and as such are all subject to the pro-

visions of the Interstate Commerce Act.

That all of the defendants, hereinafter referred to as

“Northern Pacific”, “Union Pacific”, “Great Nor‘hern”,

“Santa Fe”, or in the case of Camas Prairie, Pacific Coast,

Spokane International, Walla Walla Valley, Washington,

Idaho & Montana, as the “short line connections of defen-

dants Northern Pacific and Union Pacific”, are common

carriers by railroad engaged in the transportation of prop-

erty in interstate and foreign commerce and as such com-

mon carriers are subject to the provisions of the Interstate

Commerce Act.

III

That the complainant, Western Pacific, is an integral

part of a north-south route via Bieber, California, which

route is known as the “Inside Gateway”; that the “Inside

Gateway” route is composed principally of Western Pacific

and the defendants, Great Northern and Santa Fe, and

serves among others, points in California on the one hand,

and points in Oregon, Washington and Idaho on the other ;

that the principal California terminals of this route are at

San Diego and Los Angeles, California, on the Santa Fe;

on Western Pacific in the San Francisco-Oakland, Cali-

fornia, Metropolitan Area; and that the principal northern

(fol. 8] terminals are on the Great Northern at Portland,

Oregon, and Seattle and Spokane, Washington.

That the complainant, Western Pacific, connects with

the defendant, Santa Fe, at Stockton, California, and with

the defendant, Great Northern, at Bieber, California; that

the defendant, Great Northern connects with the defen-

dants, Union Pacific and Northern Pacific, at Portland,

Oregon; that the complainants, Sacramento Northern and

Tidewater Southern serve points in northern California

and connect with the complainant, Western Pacific, at vari-

ous points in northern California.

That defendants, Northern Pacific and Union Pacific,

with their short line connections, also named herein as de-

fendants, make up a north-south route between California

and other points, on the one hand, and on the other, points

and places in the States of Oregon, Washington and Idaho,

via connections with the Southern Pacific Company at Port-

land, Oregon; that through routes and joint through rates

now exist and have for many years existed for the routing

of traffic between points on the Northern Pacific and Union

Pacific, including their short line connections and points in

various western states, including southern and northern

California, served by the Southern Pacific Company and

the defendant, Santa Fe: That the following named tariffs

{fol.9] are representative of those which publish such

through routes and joint through rates:

1.C.C. Number of

Pacific Southcoast Freight

Tariff Number Bureau, Agent

1-8 1352

60-M 1420

80-I 1536

241-E 1577

295-D 1677

297-D 1678

1016 1590

That complete interchange facilities have existed for

many years and now continue to exist between the com-

plainant, Western Pacific, and the defendant, Great North-

ern, at Bieber, California, and between the complainant,

Western Pacific, and defendant, Santa Fe, at Stockton,

California; and between the complainant, Western Pacific,

and the complainants, Sacramento Northern and Tidewater

Southern, at various northern California points; that com-

plete interchange facilities now exist and for many years

have existed between the defendants, Northern Pacific and

Union Pacific and defendant, Great Northern, at Portland,

Oregon.

That complainants have requested defendants, Northern

Pacific, Union Pacific and their short line connections, to

[fol. 10] join complainants and the Santa Fe and Great

Northern, in the publication of through rates and divisions

between California points and points in Oregon, Washing-

ton and Idaho; that such through rates and divisions have

been sought on the same basis as that granted by said de-

fendants to complainants’ competitor, the Southern Pacific

Company; that defendants, Northern Pacific and Union

Pacific, together with their short line connections, unlaw-

fully refuse to join with complainants and the Santa Fe

and Great Northern in such joint through routes and rates

as they have accorded the Southern Pacific on traffic be-

tween the territory herein described; that this refusal has

been complete except to the very limited extent that the

defendants have joined with the defendant, Great Northern

and the complainant, Western Pacific, in joint through

rates and routes via Bieber on motor vehicles originating

at Decoto and Melrose (Oakland), California, and on cast

iron pipe from Decoto, California, and to those instances

where the Interstate Commerce Commission has heretofore

prescribed through routes and joint rates such as on live-

stock and the Class Rates.

VII

That by reason of this unlawful and unreasonable re-

fusal, the combination of rates and charges are the appli-

cable rates and charges on traffic moving via the “Inside

Gateway” between points in Oregon, Washington and Idaho

on lines of the defendants, Northern Pacific and Union

__ [fol. 11] Pacifie and their short line connections, and points

in northern and southern California, Such combination

rates exceed the joint through rates over Portland, Oregon,

which apply when the routing south of Portland is via

Southern Pacific Company only, or via Southern Pacific

Company and Santa Fe.

VIII

That by reason of the relationship of rates outlined in

paragraph VII herein, complainants are unable to compete

with the Southern Pacific Company for traffic moving be-

tween points in California and points in Oregon, Washing-

ton and Idaho on the lines of the defendants, Northern

Pacific and Union Pacific and their short line connections

named as defendants herein.

That this refusal and failure by defendants, constitutes

a violation of Sections 1(4) and 3(4) of Part I of the Inter-

state Commerce Act and is contrary to the provisions of

the National Transportation Policy.

That the Commission is requested to prescribe just, rea-

sonable and nondiscriminatory competitive joint through

rates, charges, practices and through routes applicable to

the transportation of freight traffic moving between points

in California and points in the States of Oregon, Wash-

ington and Idaho via the “Inside Gateway” through Port-

[fol.12] land, Oregon, so that complainants and defen-

dants, Great Northern and Santa Fe, may participate on

a basis equal to that being maintained by the defendants,

Northern Pacific and Union Pacific and their short line

connections, with complainants’ competitor, Southern

Pacific Company, also through Portland, Oregon.

That complainants are willing, and they are informed

that their connections, Santa Fe and Great Northern, are

also w'lling to voluntarily establish such just, reasonable,

equitable, nonpreferential and nonprejudicial divisions as

will assure the Northern Pacific, Union Pacific and their

short line connections the same earnings under the sought

routes and rates as the latter carriers are now earning on

the involved traffic which they now interchange with the

Southern Pacific Company at Portland, Oregon, when and

if the sought rates are made effective; that this proceeding

should be held open to allow the parties an opportunity to

voluntarily establish such just, reasonable, equitable, non-

preferential and nonprejudicial divisions; that in the event

of failure to voluntarily establish such divisions the pro-

ceeding should be assigned for further hearing so that the

Commission may determine and prescribe just, reasonable,

equitable, nonpreferential and nonprejudicial divisions as

between the parties.

XII

That the traffic covered by this complaint, and the re-

[fo]. 13] lief sought thereon, includes freight traffic gen-

erally of whatever description or class of service, together

with all terminal services, allowances, transit and other

privileges, including, but not limited to diversion and re-

consignment in connection therewith; that the relief is

sought wherever such arrangements do not already exist -

via the “Inside Gateway” in conjunction with complain-

ants; that complainants seek equal treatment with their

competitor, Southern Pacific Company, on traffic moving

between points in California on the one hand, and points

on the lines of the Northern Pacific and Union Pacific and

their short line connections in Oregon, Washington and

Idaho on the other; that complainants seek this relief of

such equal treatment to the same extent and/or on the

same basis as such joint rates, routing and privileges are

now, or in the future may be, accorded their competitor,

Southearn Pacific Company and its connections.

XIII

That by reason of the facts stated in the foregoing para-

graphs, the failure and refusal of the defendants to estab-

lish competitive joint through rates and charges and

through routes applicable to the freight traffic from and

to the points hereinabove described, constitute violations

by defendants of Sections 1(4) and 3(4), Part I of the In-

terstate Commerce Act; are contrary to the National Trans-

portation Policy; and deprive the public and complainants

of the use of reasonable through routes at reasonable and

[fol. 14] nondiscriminatory through joint rates which are

necessary and desirable in the public interest.

Wherefore, complainants pray that defendants may be

severally required to answer the charges herein; that after

due hearing and investigation, an order of the Commission

be made commanding said defendants, and each of them, to

cease and desist from the aforesaid violations of the Inter-

state Commerce Act and the National Transportation Policy

and requiring said defendants to establish, put in force,

maintain and apply in the future to the transportation of

the freight traffic hereinabove described in lieu of the exist-

ing unjust, unreasonable and discriminatory combination

rates and charges and practices, just, reasonable, nondis-

criminatory and competitive joint through rates, charges

and practices and through routes; in the event defendants

fail and refuse voluntarily to establish just, reasonable,

equitable, nonpreferential and nonprejudicial divisions of

said joint rates and charges, the Commission by its order

determine and prescribe such divisions; and that the Com-

mission enter such other and further order or orders as

it may deem meet and proper in the circumstances.

Dated at San Francisco, California, this 6th eeian of

{fol. 15] February, 1961.

Respectfully submitted,

Walter G. Treanor, 526 Mission Street, San Fran-

cisco 5, California, Attorney for Complainants.

{fol. 17]

BEFoRE THE INTERSTATE COMMERCE COMMISSION

ICC 33679

(Title omitted]

SeparRaTeE ANSWER OF THE ATCHISON, TOPEKA AND Santa FE

Rartway Company—Filed March 2, 1961

For answer to the complaint herein, defendant, The

Atchison, Topeka and Sante Fe Railway Company states

that it is willing to join with complainants and other rail

carriers in establishing the joint rates and through routes

which complainants ask the Commission to prescribe, and

therefore consents to the entry against it of appropriate

orders granting the relief prayed for by complainants.

The Atchison, Topeka and Santa Fe Railway Com-

pany, By Roland J. Lehman, S. R. Brittingham,

Jr., Its Attorneys.

1211 Railway Exchange, Chicago, Illinois.

Dated: February 28, 1961.

[fol.18] Certificate of Service (omitted in printing).

[fol. 19]

BerorE THE Interstate ComMERCE CoMMISSION

Docket No. 33679

[Title omitted]

SeparaTE ANSWER OF NorTHERN Paciric Ramuway CoMPaNy,

Camas Prarrte Ramroap Company and WatLa WaLLa

VauLey Ramway Company—Filed March 10, 1961

Come now the above-named defendants and in answer

to the complaint in this proceeding respectfully state:

1. These defendants admit that they are common car-

riers by railroad engaged in the transportation of property

in interstate and foreign commerce and are subject to

the provisions of the Interstate Commerce Act as alleged

in Paragraph II of said complaint.

2. Except as above admitted, these defendants deny each

and every other allegation in said complaint.

Wherefore, defendants pray that the complaint in this

proceeding be dismissed.

Northern Pacific Railway Company, Camas Prairie

Railroad Company, Walla Walla Valley Railway

Company, By M. L. Countryman, Jr., Earl F.

Requa, Its Attorneys.

Dated: March 7, 1961.

1018 Northern Pacific Bldg., St. Paul 1, Minnesota.

[fol. 20] Certificate of Service (omitted in printing).

{fol. 21]

BerorE THE INTERSTATE COMMERCE COMMISSION

Docket No. 33679

[Title omitted]

Answer oF Union Pacrtric Ratmtroap Company and SPoKANE

INTERNATIONAL Rartroap Company—Filed March 13, 1961

The above-named defendants, for answer to the com-

plaint in this proceeding, respectfully state:

1. These defendants admit that they are common car-

riers of property by railroad in interstate commerce sub-

ject to the provisions of the Interstate Commerce Act, as

alleged in Paragraph II of said complaint.

2. These defendants deny each and every other allega-

tion in Paragraphs I, III, IV, V, VI, VII, VIII, IX, X, XI,

XII and XIII of said complaint.

Wherefore, defendants pray that the complaint in this

proceeding be dismissed.

Union Pacific Railroad Company, Spokane Interna-

tional Railroad Company, By L. W. Hobbs, John

J. Burchell, Their Attorneys.

Dated: March 10, 1961.

1416 Dodge Street, Omaha 2, Nebraska.

[fol. 22] Certificate of Service (omitted in printing).

[fol. 24]

BerorE THE InTERsTATE CoMMERCE CoMMISSION

Docket No. 33679

[Title omitted]

ANSWER oF Great NorTHERN RatLway Company and

Paciric Coast R. R. Co.—Filed March 15, 1961

Defendants Great Northern Railway Company and Pa-

cific Coast R. R. Co. for answer to the complaint herein:

Admit and allege that they now are and have been will-

ing to establish voluntarily on traffic moving between Cali-

fornia and Idaho, Oregon and Washington via the “Inside

Gateway” a general line of competitive joint through freight

rates to and from stations reached via defendants Union

[fol. 25] Pacific and Northern Pacific and their short-line

connections. Such joint through freight rates would be

equal to and competitive with those applicable via the route

of Southern Pacific in connection with such other defen-

dants. These answering defendants further admit and al-

lege that they are willing to establish just, reasonable,

equitable, nonpreferential and nonprejudicial divisions on

traffic moving under such rates. These defendants allege,

in addition, that to and from stations in Oregon, Washing-

ton and Idaho on their own lines and the lines of short-line

connections of Great Northern there is now applicable a

general line of joint through freight rates via the Inside

Gateway competitive with rates via Southern Pacific. It

is now and has been the policy of these answering defen-

dants to preserve and foster the Inside Gateway as a route

for all traffic between points in the states described moving

under rates within the control of these answering defen-

dants.

II.

To the extent that the complaint herein alleges a failure

of the defendants Union Pacific, Northern Pacific and their

short-line connections to join with complainants, Santa Fe,

and Great Northern in joint through freight rates via the

Inside Gateway fully competitive with those in which Union

Pacific and Northern Pacific now participate in connection

[fol. 26] with Southern Pacific, these answering defendants,

Great Northern and Pacific Coast, allege that they have no

control over and are not responsible for such failure. If the

situation resulting therefrom is violative of any provisions

of the Interstate Commerce Act or of the National Trans-

portation Policy, these answering defendants, because of

the facts stated in this answer, are not chargeable there-

with.

Wherefore, these answering defendants pray that this

Commission take such action with respect to the complaint

herein as may be warranted by the facts to be shown by

the parties and as shall be consistent with the allegations

of this answer.

Dated March 13, 1961.

Anthony Kane, L. E. Torinus, R. P. Tjossem, Wood-

row L. Taylor, Attorneys for Defendants Great

Northern Railway Company and Pacific Coast

R. R. Co., 175 East Fourth Street, St. Paul 1,

Minnesota. ,

[fol. 27] Certificate of Service (omitted in printing).

[fol. 28]

Brrore THE InTERsTaTE COMMERCE COMMISSION ;

Docket No. 33679

[Title omitted]

Answer or WasHIncTon, IpaHo, AND MonTANA

Rat.way Company—Filed March 16, 1961

The above-named defendant, for answer to the complaint

in this proceeding, respectfully states:

1, The defendant is a common carrier of property by

railroad in interstate commerce subject to the provisions

of the Interstate Commerce, Act, as alleged in Paragraph

II of said complaint. .

2. The Washington, Idaho, and Montana Railway has

a physical connection and interchange traffic ONLY with the

Northern Pacific Railway Company and the Great N orth-

ern Railway Company at Palouse, Washington, and the

Chicago, Milwaukee, St. Paul and Pacific Railway Com-

pany at Bovill, Idaho.

3.. The Washington, Idaho and Montana Railway Com-

pany is a party to certain tariffs named in the complaint

and does participate in through routes and joint rates with

the Great Northern Railway Company and the Western

Pacific Railway Company to the extent it has been requested

and is able to handle traffic with the GN-WP.

4. The Washington, Idaho and Montana Railway Com-

pany does not have through routes and joint rates with

the Northern Pacific Railway Company or other defendants

(except the Great Northern Railway) since it is not the

dominating factor in determining participation in sought

routes and rates.

5. The Washington, Idaho and Montana Railway Com-

pany denies other allegations named in complaint.

Washington, Idaho and Montana Railway Company,

By A. K. Hinckle, Vice President. .

Dated: March 10, 1961.

P. O. Box 600, Lewiston, Idaho.

[fol. 29] Certificate of Service (omitted in printing).

[fol. 31] [File endorsement omitted]

[fol. 32]

BerorE THE INTERSTATE COMMERCE COMMISSION

Docket No. 33679

[Title omitted]

Petition or SouTHerRN Paciric Company For LEAVE TO

INTERVENE IN Opposition To CompLaiInt—Filed at Hear-

ing, May 8, 1961

Comes now your petitioner, Southern Pacific Com-

pany, and respectfully represents that it has an inter-

est in the matters in controversy in the above-entitled pro-

ceeding and desires to intervene in and become a party

to said proceeding, and for grounds of the proposed in-

tervention says:

Petitioner is a Delaware corporation which owns or

operates property situated in the states of Oregon, Cali-

fornia, Nevada, Arizona, Utah, New Mexico and Texas,

and is a carrier by railroad subject to Part I of the In-

terstate Commerce Act.

[fol. 33] II

Petitioner’s lines of railroad connect with the lines of

railroad of defendants Northern Pacific Railway Company

and Union Pacific Railroad Company at Portland, Ore.

Through routes and joint rates exist and have existed for

many years for the interchange of traffic between said de-

fendants and petitioner, said through routes and joint

rates covering freight traffic moving generally between

points on the lines of said defendants in Oregon, Wash-

ington and Idaho, on the one hand, and points in Cali-

fornia, on the other hand. Said routes constitute reason-

able through routes between said points, and said joint

rates are just and reasonable.

The violation of section 3(4) of the Interstate Com-

merce Act alleged in the complaint in this proceeding

raises the issue of the favorableness of the transportation

conditions of the lines of railroad comprising the Bieber

Route between Portland, Ore., and California points (re-

ferred to in paragraph III of said complaint), on the one

hand, and the transportation conditions of the lines of

petitioner between said points (referred to in paragraph

IV of said complaint), on the other hand.

The position of petitioner is in opposition to the relief

sought in this proceeding.

Wherefore said Southern Pacific Company prays leave

to intervene and be treated as a party hereto, with the

(fol. 34] right to have notice of and appear at the taking

of testimony, produce and cross-examine witnesses, and

be heard by counsel upon brief or at the oral argument, if

oral argument is granted.

Dated at San Francisco, Calif., this 5th day of May, 1961.

Charles W. Burkett, Jr., Attorney for Petitioner.

Duly sworn to by T. F. Ryan, jurat omitted in printing.

[fol. 37]

BerorE THE INTERSTATE COMMERCE COMMISSION

Docket No. 33679

In the Matter of:

Tue Western Paciric Ramroap Company, et al.,

Complainants,

Camas Prareire Rattroap Company, et al., Defendants.

Transcript of Hearing—Monday, May 8, 1961

Room 226-A, Old Mint Building

Fifth and Mission Streets

San Francisco, California

[fol. 38]

PROCEEDINGS

Exam. Wright: Come to order, please, gentlemen.

@ & eo @ e oe &

APPEARANCES

Who appears for the complainant?

Mr. Treanor: Walter G. Treanor, 526 Mission Street,

San Francisco, California. I am an attorney admitted

to practice.

Exam. Wright: Any further appearances for the com-

plainant?

Mr. Treanor: No, sir.

Exam. Wright: Who appears for the defendants?

Mr. Hobbs: L. W. Hobbs and William P. Higgins, 1416

Dodge Street, Omaha, Nebraska, appearing for the Union

Pacific Railroad Company and the Spokane International

Railroad Company. We have both been admitted to prac-

tice before the Commission.

Mr. Farrell: Frank S. Farrell, Room 1008, Northern

Pacific Building, St. Paul, Minnesota.

I appear on behalf of the Northern Pacific Railway

Company, Camas Prairie Railroad Company, and the

(fol. 39] Walla Walla Valley Railway Company.

I am an attorney admitted to practice before this Com-

mission.

Exam. Wright: Any further appearances on behalf of

the defendants?

Mr. Tjosseni: R. Paul Tjosseni, 404 Union Street, Se-

attle 1, Washington, appearing for the Great Northern

Railway Company. I am an attorney admitted to practice.

Mr. Pfrommer: Frederick G. Pfrommer, 114 Sansome

Street, San Francisco. I am an attorney admitted to prac-

tice. I am appearing on behalf of the Atchison, Topeka

and Santa Fe Railway Company, named as a defendant

in this proceeding.

However, our formal answer already filed with the Com-

mission states that we consent to the entry against us

of appropriate orders granting the relief prayed for by

complainant.

Exam. Wright: Any further appearances for the de-

fendant?

Mr. Hinckle: My name is A. K. Hinckle, vice-president

of the Washington, Idaho and Montana Railroad Com-

pany, named as a defendant.

My appearance today is in support of the complainant.

I am not admitted to practice before the Commission.

Exam. Wright: As a full-time employee, your appear-

ance is noted.

Any further appearances?

Mr. Burkett: Mr. Examiner, my name is Charles W.

Burkett, Jr. I am an attorney-at-law, admitted to prac-

(fol. 40] tice before the Commission.

At this time I would like to tender a petition for leave

to intervene in opposition to the complaint, original and

one copy for you, one copy for the reporter, I believe.

Exam. Wright: Are there any further petitions for in-

tervention?

(No response.)

Exam. Wright: Any further appearances?

Mr. Allen: Mr. Examiner, my name is A. R. Allen. I

am manager of the Portland Freight Traffic Association.

I am admitted to practice before the Commission.

Our appearance at this moment is as an interested

arty.

Should I have given my address on that, sir?

Exam. Wright: For the benefit of the reporter, yes.

Mr. Allen: 907 Oregon Bank Building, Portland 4,

Oregon.

Exam. Wright: Are there any further appearances?

(No response.)

Exam. Wright: If there are no further appearances,

do the parties wish to examine this petition for inter-

vention?

Mr. Treanor: So far as the complainant is concerned,

Your Honor, we do not. We are delighted to have them

in.

Mr. Burkett: We are delighted to be here.

Exam. Wright: Are there any objections to the peti-

tion?

(No response.)

Exam. Wright: Hearing none, the petition is granted.

{fol.41] As I mentioned previously, this is a complaint

proceeding, and I believe there is no need of any state-

ment regarding the issues. They are pretty well framed

by the complaint and answers.

Mr. Treanor: I would like to call Mr. Wadsworth.

T. P. Wapsworth was duly sworn and testified as fol-

lows:

Exam. Wright: Off the record.

(Discussion off the record.)

Exam. Wright: On the record.

Mr. Treanor: Your Honor, this witness has prepared

his testimony in statement form. I would like to request

the permission of the Examiner for Mr. Wadsworth to

read this statement as his direct testimony.

Exam. Wright: Does the statement make reference to

the Exhibits 1 through 16, which were just marked off

the record?

Mr. Treanor: Yes, Mr. Examiner, and they are referred

to in order, as we come to them.

[fol.42] Exam. Wright: And this statement, copies of

it, have been provided all the parties?

Mr. Treanor: Yes, sir, it was provided for them this

morning in the hearing room.

(Complainants’ Exhibits Nos. 1 through 16, inclusive,

Witness Wadsworth, were marked for identification.)

Exam. Wright: I wonder—it is quite voluminous. I was

thinking possibly of saving time by having it entered into

the record the same as if read.

[fol. 43] Direct examination.

By Mr. Treanor:

Q. Mr. Wadsworth, I would like to direct your atten-

tion to your exhibit which has been marked for identifi-

cation as No. 9.

. You have called my attention to a correction which

you desire to make in that exhibit. Would you please

state for the record the nature of that correction in Ex-

hibit for identification No. 9?

A. I would like to eliminate the Columns 11, 12, 13, 14

and 15, lines 1, 2 and 3.

Mr. Hobbs: One page?

Mr. Treanor: One page.

The Witness: The first page.

Exam. Wright: Will you state that again? Columns—

The Witness: Columns 11, 12, 13, 14 and 15, lines 1,

2 and 3.

By Mr. Treanor:

Q. For clarification, Mr. Wadsworth, you are talking

about the elimination of those columns only to the extent

that they refer or apply in connection with the specific

lines that you have mentioned?

A. That is right.

Q. You do not desire to take out those columns in their

entirety?

Exam. Wright: I think that is clear.

[fol.44] The Witness: Also, the same columns for line

14, I believe it is 14.

Mr. Farrell: On the same page?

Exam. Wright: The same page?

The Witness: The same page.

Exam. Wright: Exhibit 9 is so modified.

Thank you very much, Mr. Wadsworth. If there are no

further questions, you are excused until tomorrow morn-

ing, and I direct that the reporter enter into the record,

the same as if read, the 3l-page statement headed, “State-

ment of T. P. Wadsworth.”

(Witness excused.)

(The document referred to is copied into the record in

words and .ig’ res, as follows:)

SraTeMent or T. P. WapswortH

My name is T. P. Wadsworth. My business address is

526 Mission Street, San Francisco 5, California. I am

employed by the Western Pacific Railroad Company as

Assistant Director of Pricing, a position sometimes iden-

tified by other railroads as Assistant Freight Traffic

Manager.

I have been continuously employed in the field of trans-

portation, primarily dealing with rates and rate practices,

since 1926. I have been with the Western Pacific since

1929. I have a Bachelor of Science degree granted by the

[fol.45] University of California at Berkeley. I am a

registered practitioner before the Interstate Commerce

Commission. My present duties include, among other

things, the supervision of the preparation of data for sub-

mission to the Interstate Commerce Commission and va-

rious State regulatory bodies.

I submit this statement on behalf of the complainants.

The Northern Pacific, whose rails reach no point in

California, maintains joint rates with the Southern Pa-

cific via Portland, Oregon, in order to participate in traffic

between points in California and points in Oregon, Wash-

ington, and Northern Idaho.

The Northern Pacific, having an interchange at Port-

land also with the Great Northern, has refused to publish

rates through this interchange, thence via Bieber, in con-

nection with the Western Pacific, Sacramento Northern

and Tidewater Southern, the complainants in these pro-

ceedings.

The Union Pacific, whose own rails reach California

only in the Los Angeles area, participates in joint rates

between points in California on the complainants, and

points on its lines, Huntington, Oregon, and east, includ-

ing all stations, in Oregon, Idaho, Utah, Nevada, Montana

and Wyoming. Such joint rates are competitive with

those maintained by the Union Pacific with the Southern

Pacific via Wells, Nevada, or Ogden, Utah. This segment

of the Union Pacific was formerly known as the “Oregon

[fol.46] Short Line Railroad”. The Union Pacific par-

ticipates via Portland, Oregon, with the Southern Pacific

in joint rates between points in California and points on

its line west of Huntington, Oregon, located in the States

of Oregon, Washington, and Northern Idaho, but has de- ~

clined to participate with complainants, from or to the

same points, via Portland, Oregon, thence via Bieber, Cali-

fornia, over the routes presently in effect between com-

plainants and the Great Northern, a connection of the

Union Pacific at Portland, Oregon. ~~

This segment of the Union Pacific was formerly known

as the “Oregon, Washington, Railroad & Navigation Com-

pany.”

The Great Northern participates with complainants in

joint rates via Bieber, California, between points in Cali-

fornia and Portland, Oregon, and other points on its lines

in Oregon, Washington, and Northern Idaho. Such joint

rate policy of the Great Northern and the complainants

has been in effect since 1931 when the Bieber route was

constructed under authority of the Interstate Commerce

Commission’s Finance Dockets Nos. 7439, 7440 and 7781

(166 ICC 3 and 170 ICC 399).

Such joint rates were then, and are now, generally the

same as those published by the Great Northern with the

Southern Pacific via Portland, Oregon, which were then,

and still are, the same generally as the joint rates pub-

lished by the Northern Pacific and Union Pacific via Port-

land, Oregon, thence Southern Pacific.

{fol.47] Joint rates are now provided in connection with

the Santa Fe as follows:

1. It participates in joint through rates via Bieber

to or from points on the Great Northern.

2. It participates in joint through rates in connec-

tion with Southern Pacific via Portland to or from

points on the Great Northern, Northern Pacific and

Union Pacific.

My Exhibit numbered 1 for identification, is a map which

shows the Pacific Coast areas involved in this case, as well

as the locations of the lines and routes of the complain-

ants and defendants. This map is a situation map designed

to show this information in a general way. It was not

drawn to scale or intended to be completely accurate in

all respects.

Exhibit 2 is another map which shows the points in Cali-

fornia served by complainants, as well as the relationship

between such points and those situated on the Southern

Pacific, with whom the defendants maintain joint rates via

Portland, Oregon.

Complainants operate 987 miles of railway lines in the

State of California, as shown by Table 1 of Exhibit 3.

The larger cities in the territory served by complainants

are listed in Table 2 of Exhibit 3.

Through joint class and commodity rates are in effect

with routing via Bieber between points on complainants’

(fol. 48] lines shown in Exhibit 2 and points in Oregon,

Washington and Northern Idaho on the Great Northern

and its short line connections other than Northern Pacific

or Union Pacific. These rates are published in tariffs is-

sued by the Pacific Southcoast Freight Bureau named in

Table 3, Exhibit 3.

Tariffs in Table 3, Exhibit 3, also contain rates between

points on the Northern Pacific or Union Pacific in the

Northwest and points in California on Southern Pacific

with routing via Portland, as shown by my Exhibit No. 4.

The details of the routes now published via Bieber in the

above tariffs are shown by my Exhibit No. 5, containing

copies of pages of routing in PSFB Tariff 1-S, used as

representative. These routes are summarized in Table 4

in Exhibit 3.

Some of the points on the Great Northern, to or from

which present rates with complainants apply, are equipped

with facilities for the interchange of freight with the North-

ern Pacific or Union Pacific. These stations are named in

Table 5 in Exhibit 3, and are shown as well, in red, on Ex-

hibits 6 and 7.

Some stations served in common by the Great Northern-

Northern Pacific or Great Northern-Union Pacific, have no

facilities for the interchange of freight; those in Table 6 in

Exhibit 3 are representative.

Table 7 in Exhibit 3 outlines the basis of charges gen-

erally applicable now, on traffic moving via Bieber between

points in Oregon, Washington and Northern Idaho on the

Northern Pacific or Union Pacific and points in California

on the complainants.

[fol.49] Table 7 in Exhibit 3 shows that shipments may

move from or to points in California via complainants’

existing routes with the Great. Northern via Bieber to or

from industries on the tracks of the Northern Pacific or

Union Pacific at stations named in Table 5, Exhibit 3.

They will be assessed the existing through joint rates of

complainants and the Great Northern without extra charges

for switching by Northern Pacific or Union Pacific in some

cases, and with such charges being in addition, in others.

The reason for the difference is that the Great Northern

does not absorb the Northern Pacific or Union Pacific

switching charge in all instances on traffic moving via Bie-

ber. Its tariff No. 2500-E, ICC A-8996 permits absorption

of connecting lines’ switching charges only on “competi-

tive” traffic. Item 110 of that tariff defines “competitive”

traffic as that “which at time of shipment may be handled

at equal rates (exclusive of switching charges) from same

point of origin to same destination via other carriers, one

of which performs the switching service or absorbs the

switching charge of the line serving the industry.”

Thus, under this tariff, the Great Northern absorbs the

switching charges of the Northern Pacific or Union Pacific

at stations named in Table 5, Exhibit 3, only when the

traffic has moved via Bieber from or to points on complain-

ants’ lines shown in Table 8 in Exhibit 3. This traffic is

“competitive” since the points in Table 8 in Exhibit 3 are

[fol. 50] common with the Southern Pacific, and the rates

from or to such points via Bieber are the same as apply

now between the same points via other routes, such as:

SP-Portland-GN,

SP-Portland-NP,

SP-Portland-UP.

The stations on complainants’ lines, originating or ter-

minating traffic on which the Great Northern absorbs

Northern Pacific or Union Pacific switching charges, as

above stated, are divisible into two main classes.

The first class covers the points having facilities for in-

terchange with Southern Pacific. They are designated on

Exhibit 2 by a *” reference mark, and are summarized

in Table 8 of Exuxbit 3.

The second class covers those which while served in com-

mon with the Southern Pacific, have no interchange facili-

ties with that line. Those stations are underlined in Ex-

hibit 2, and are summarized in Table 9 of Exhibit 3.

Shipments from or to points served only by complainants

such as those named in Table 10 of Exhibit 3, are subject

to extra charges for switching by the Northern Pacific or

Union Pacific at stations in Table 5, Exhibit 3, when routed

to or from the stations in Table 5 of said Exhibit 3 via

the Great Northern via Bieber. This is due to the fact that

the traffic is not “competitive” as present combinations be-

(fol. 51] tween points in Tables 5 and 10 via Bieber-GN-

Portland-NP or UP are higher than rates now published

via Bieber-GN.

The amount of the unabsorbed switching charge depends

upon the station where the switching is performed or upon

the switching zone where the industry is located. Repre-

sentative charges of this kind are furnished in Table 11 of

Exhibit 3.

Traffic moving to or from points on the Northern Pacific

or Union Pacific which are not also served by the Great

Northern, such as those listed in Table 12 of Exhibit 3,

is subject to charges described below:

Present charges are combinations of unabsorbed switch-

ing charges and through rates, as to shipments from or to

points which complainants serve in common with Southern

Pacific, where interchanges exist as described by Table 8

of Exhibit 3. The switching charges cover the movement

of the freight between the industry track on complainants

and the interchange with the Southern Pacific. The rate

covers the movement beyond. the station via Southern Pa-

cific through Portland to or from the exclusive point on the

Northern Pacific or Union Pacific. This switching charge

is $6.89 per car and is published in tariffs named in Table

13 of Exhibit 3.

This switching charge is assessed, in addition to appli-

cable freight rate, because it is not absorbed by the South-

ern Pacific. This charge is not absorbed because Southern

Pacific absorbs connecting lines’ switching charges only on

[fol. 52] “competitive” traffic, and this traffic is not “com-

petitive” as defined by Item 10 of SP Tariff No. 230-K,

ICC No. 4960.

Denial by the Northern Pacific and Union Pacific of

through joint rates via Bieber deprives complainants of

an opportunity to participate in line haul service on this

traffic.

A good example is the movement of canned goods from

Sacramento, California, to points on the Northern Pacific

or Union Pacific in Oregon, Washington, and Northern

Idaho. In 1959 the Campbell Soup Company, whose plant

at Sacramento is located on the Western Pacific, shipped

over 150 carloads to exclusive points on the Northern Pa-

cific and Union Pacific. This traffic moved from Sacramento

via Southern Pacific since the combination rates applicable

via Bieber exceeded the through rates via Southern Pacific-

Northern Pacific or Southern Pacific-Union Pacific through

Portland.

In November, 1960, the Campbell Soup Companv applied

to the interested lines for through competitive rates from

Sacramento via Bieber to destinations on the Northern

Pacific and Union Pacific as well as to points on their short

line connecting carriers. The applicant stated at that time

that the use of existing routes via Southern Pacific through

Portland imposed additional transportation charges over

and above those that would apply if rates were established

via Bieber. Such “additional transportation charges” re-

ferred to the charges of the Western Pacific for switching

(fol. 53] from the plant to the interchange with the South-

ern Pacific. At that time, those switching charges were

not absorbed by Southern Pacific.

However, on March 6, 1961, Southern Pacific published

an extraordinary exception to its general practice of ab-

sorbing switching charges only on competitive traffic. Effec-

tive on that date, it published a provision in Item 995 of

its Tariff 230-K, ICC 4960, authorizing absorption of the

charge made by the Western Pacific for switching freight

from industry tracks at Sacramento to its interchange

track with Southern Pacific. This absorption was published

on “Canned or Preserved Foodstuffs (not cold pack nor

frozen) and other articles moving to stations on the North-

ern or Union Pacific in Oregon, Washington or Idaho,

under rates published in Items 4837, 4837.8 or 4838 of

PSFB Tariff 1-S, ICC 1352.” A copy of this absorption is

reproduced as Exhibit 8.

Combinations of line haul rates now apply on shipments

between exclusive points on complainants in Table 10 of

Exhibit 3, and exclusive points on N orthern Pacific or

Union Pacific in Table 6 of Exhibit 3.

Exhibit 9 shows examples of the present combinations

over Portland, Oregon, using the following rates as factors:

Between Portland and points on complainants, the rates

used are the present through joint rates published via

Bieber by complainants and the Great N orthern.

(fol. 54] Between Portland, Oregon, and points on the

Northern Pacific or Union Pacific, the rates used are the

present rates published by the Northern Pacific or Union

Pacific.

Exhibit 9 shows that the combinations over Portland

applicable via complainants to Bieber-GN. -Portland thence

Northern Pacific or Union Pacific exceed the present

through joint rates published by the Northern Pacific or

Union Pacific to Portland thence via Southern Pacific, to

or from points in California on the Southern Pacific or the

Santa Fe Railway.

The lowest combination rates now applicable via any

all-rail route, between points on complainants and points

on the Northern Pacific or Union Pacific, are the lower of

the combinations described below:

1. Combination over the lowest rated interchange

point with the Southern Pacific in California, or

2. Combination over the lowest rated interchange

point between the Great Northern and Northern Pa-

cific or Union Pacific in Oregon, Washington or North-

ern Idaho.

Combination rate, now the lowest rate applicable on

canned goods from McHenry, California, to Yakima,

Washington, via any all-rail route, is an example of the

situation where the lowest rate from a point on a com-

plainant’s line to a point on the Northern Pacific or Union

Pacific is a combination over a point in California which

is an interchange with the Southern Pacific. This rate is

[fol. 55] a combination over Stockton, using the rate from

McHenry to Stockton as one factor, and the rate from

Stockton to Yakima, as the other. This combination rate

applies only via the route of the Tidewater Southern to

Stockton, thence via Southern Pacific to Portland, thence

Northern Pacific or Union Pacific. This combination rate

prevents Western Pacific from participating in the move-

ment of canned goods to Yakima which originates at a

local point on the Tidewater Southern, a subsidiary rail-

wayline owned by the Western Pacific. The reason is that

both the Northern Pacific and Union Pacific have refused

to publish the same rates on canned goods from Stockton

to Yakima via WP-GN-Portland, as apply now via SP-

Portland. Moreover, they have also declined to publish

through joint rates on this commodity from McHenry to

Yakima via TS-WP-GN-Portland thence Northern Pacific

or Union Pacific. The station, McHenry, is located on the

Tidewater Southern between Stockton and Modesto, and

would have rates competitive with other shippers in the

same general area, if the Northern Pacific or Union Pa-

cific would establish the same rates to Yakima from

Modesto via TS-WP-GN through Portland as they now

maintain from Modesto via Southern Pacific through

Portland.

Another illustration is the present lowest all-rail rate

on canned goods from Yuba City to Walla Walla, Wash-

ington. Canners located at Yuba City on the rails of the

Sacramento Northern, cannot have their cars switched by

[fol. 56] the Sacramento Northern to the Southern Pacific

at Yuba City for movement to Walla Walla via SP-

Portland-NP or UP under present through joint rates,

since Sacramento Northern and Southern Pacific main-

tain no interchange at Yuba City. The lowest rates now

applicable are combinations over Marysville, using as fac-

tors, the local rate of the Sacramento Northern from Yuba

City to Marysville, plus the joint rate of the Southern

Pacific-Northern Pacific or Southern Pacific-Union Pacific

from Marysville to Walla Walla. Here, too, the lowest

applicable rate deprives the Western Pacific of an oppor-

tunity to participate in traffic originated by the Sacra-

mento Northern, its wholly owned subsidiary. This is due

to the refusals of the Northern Pacific and Union Pacific

to publish rates to Walla Walla, either from Yuba City

via SN-WP-GN-Portland or from Marysville via WP-GN-

Portland, the same as apply now between the same points

via SP-Portland thence Northern Pacific or Union Pacific.

Present rates on other traffic, between points on the

Northern Pacific or Union Pacific and points on complain-

ants, are combinations over junction points in the North-

west between the Northern Pacific and Great Northern,

_or the Union Pacific and Great Northern. Forest products

are an example, where the lowest rates from Olympia,

Shelton and other points in Washington on the Northern

Pacific to San Francisco Bay points are combinations over

[fol.57] Portland, Oregon, using the following rates as

factors:

RE ance aren

From point of origin to Portland, the rates of the North-

ern Pacific in North Pacific Coast Freight Bureau Tariff

No. 41-J, ICC No. 994.

From Portland to California, the present rates via

Bieber in Pacific Southcoast Freight Bureau Tariff No.

80-I, ICC 1536.

At the present time, the combinations over Portland are

lower than the through joint rates on Forest Products

published to San Francisco Bay points in PSFB Tariff

80-I, ICC 1536, and the restricted routing to confine the

application of the through rates to routes via Portland in

connection with Southern Pacific are of no avail. This

situation is undoubtedly temporary, as if and when the

through rates are adjusted to a level lower than the pres-

ent combinations, they will again be subject to the general

routing provisions of this tariff, confining their applica-

tion to routes between Southern Pacific and Northern

Pacific via Portland.

In other instances, the lowest combination rate on traffic

between points on the complainants and points on the

Northern Pacific or Union Pacific, is a combination over a

northern junction point other than Portland. Present rate

on canned goods from Oakland, California, to Bellevue,

Washington, is an example. Here, the lowest rate is a

combination of line haul and switching rates, the latter

being absorbed by the Great Northern under authority of

[fol. 58] its tariff No. 2500-E, ICC No. A-8996, Item No.

520. The line haul rate is published from Oakland to

Seattle, Washington, via WP-Bieber-GN in PSFB Tariff

1-S, ICC No. 1352, and the switching rate is published from

Seattle to Bellevue in Northern Pacific Tariff No. 333-B,

ICC No. 9801, Item No. 210 of Supplement 12.

There are no through joint rates via Bieber between

points on the Northern Pacific or Union Pacific and points

on the Santa Fe. On the other hand, through joint rates

are in effect now between those points with routing via

Northern Pacific or Union Pacific to Portland, Southern

Pacific to a junction point in California, thence via the

Santa Fe, as shown by Exhibit No. 4. Those joint rates

are published both to points located exclusively on the

Santa Fe as well as to points served in common by the

Santa Fe and Southern Pacific. They are the same, to

or from common points, as the rates published via NP

or UP-Portland-SP. They do not, however, include points

on the Santa Fe in the San Francisco Bay Area.

No other rates than combinations are available between

the same points via NP or UP-Portland-GN-Bieber-WP-

Stockton-AT&SF. Exhibit 9 shows that those combina-

tions exceed the joint through rates now in effect via NP

or UP-Portland-SP to a junction in California, thence

AT&SF. This denies the public of the advantages of al-

ternate routes and deprives the Western Pacific of an op-

portunity to participate in the movement of traffic between

points in California on the Santa Fe and points on the

[fol. 59] Northern Pacific and Union Pacific.

Exhibit 10 shows the extent of the movement of freight

via Bieber from or to points on the Santa Fe from 1955

through 1959.

This exhibit shows the following:

1. More than 50 per cent of all the cars handled

via Bieber moved from or to points on the Santa Fe.

This percentage ranged from a high of 58.5 per cent

in 1959 to a low of 54.2 per cent in 1957.

2. The number of cars handled via Bieber froin

or to points on the Santa Fe ranged from a high of

34,077 in 1955 to a low of 28,655 in 1958.

3. Southbound traffic predominates.

I have determined the following since preparation of

Exhibit 9:

(a) 1959 traffic via Bieber between points on the Santa

Fe and points in the Northwest on the Great Northern

produced revenues for the Western Pacific averaging

$126.00 per car, northbound, and $116.00 per car, south-

bound.

(b) Western Pacifie’s revenues would average about

$101.00 per car, northbound, and $93.00 per car, south-

bound, if the same rates were published between points on

the Santa Fe and points on Northern Pacific and Union

Pacific via Bieber as apply via Northern Pacific or Union

Pacific to Portland, thence via Southern Pacific and the

Santa Fe.

Exhibit 11 compares the movement of cars from or to

{fol. 60] points on the Santa Fe via Bieber with those

handled by the Santa Fe in connection with the Southern

Paeific through Portland.

Prior to analyzing this exhibit, its following aspects

should be observed:

1. Santa Fe furnished only its total number of

ears, northbound and southbound, separately. Its

totals included its movements both in connection with

Southern Pacific through Portland and via Bieber.

2. As shown in the exhibit the total cars via Santa

Fe moved only between the States of California and

Oregon-Washington.

3. Information on the exhibit as to the extent of

Santa Fe’s movements via Bieber came from Western

Pacifie’s Accounting Department records. Their scope

geographically was broader than the information fur-

‘nished by the Santa Fe as they included all shipments

via Bieber between points west of transcontinental.

4. Information on the exhibit as to the extent of

Santa Fe’s traffic in connection with Southern Pacific

was determined by subtracting its traffic via Bieber

from the total.

It should therefore be evident that the resulting traffic

via Santa Fe-Southern Pacific was understated.

Exhibit 11 shows that the Santa Fe handled consider-

ably more cars of freight via Bieber than in connection

[fol.61] with Southern Pacific. The totals of the cars

handled, northbound and southbound via each route, are

summarized in Table 14 of Exhibit 3.

It is reasonable to assume that the Bieber route han-

dled a predominating proportion of the traffic which moved

to or from points on the Great Northern from or to points

on the Santa Fe. This assumption is based upon the fol-

lowing facts: :

1. Santa Fe-GN-WP work as partners in the solicita-

tion of traffic via Bieber, and as I previously testified, the

present rates via Bieber apply only to or from points on

the Great Northern. The sales activities of these three

lines are coordinated and the lines have close working

arrangements. No similat arrangements exist between the

Santa Fe and Southern ific.

2. Santa Fe and Western Pacific freight trains sched-

ules between California and the Northwest are keyed

together to produce the best possible services via Bieber.

On the other hand, the Santa Fe has no working schedules

with the Southern Pacific on California-North Coast traf-

fic. Southern Pacific does not make connections with the

Santa Fe’s schedules at Stockton. Its “Star Pacer” train

to Portland does not pick up cars at Stockton, and its NCP

goes through Stockton too early to connect with Santa

Fe’s SWG.

3. Santa Fe has rates from or to more points on its

line via Bieber than in connection with Southern Pacific.

[fol.62] For example, San Francisco Bay points on the

Santa Fe are accorded rates via Bieber, whereas they are

not permitted to participate in rates via Southern Pacific

through Portland.

If the foregoing assumption is true, the preponderance

of the traffic handled via Santa Fe in connection with

Southern Pacific originated at or was destined to points

on the Northern Pacific or Union Pacific. Consequently,

if an alternate route had been available to or from points

on Northern Pacific or Union Pacific via Bieber, it may be

reasonably assumed thai it would have handled a large

portion of additional traffic (see Table 15, Exhibit 3).

Extent or Present Movements Via Breser TO on F'Rom

Points on NortrHern Paciric on Union Pactric

Complainants’ Accounting Department records show

that the Bieber route handled 143 carloads in 1959 and

165 in 1960, which were shipped to or from points on the

Northern Pacific and Union Pacific in Oregon, Washing-

ton, and Northern Idaho. Included therein were 124 ecar-

loads of cast iron pipe in 1959 and 154 in 1960. The cast

iron pipe moved from Carpenter, California, under joint

through rates published via WP-Bieber-GN-Portland,

thence Northern Pacific or Union Pacific. The remainder

consisted of 19 cars of government and commercial freight

in 1959 and 11 cars in 1960, as shown by Table 16 in Ex-

hibit 3.

[fcl. 63] Commercial traffic, other than cast iron pipe, con-

sisted of 16 carloads in 1959 and six in 1960. It is described

by Table 18 of Exhibit 3.

All of the Government traffic moved from military instal-

lations in California to Fort Lewis, Washington. It con-

sisted of three carloads in 1959 and five in 1960 as described

by Table 17, Exhibit 3.

The extremely limited amount of traffic handled during

the past two years, between points on Northern Pacific or

Union Pacific and points on complainants, shows that appli-

cable combination rates were too high to permit the traffic

to move via Bieber in competition with other routes through

Portland, thence Southern Pacific.

Extent or ALL Trarric MoveMEeNts Via Bieser

Exhibit 12 shows the extent of the movement of all freight

traffic handled by complainants via Bieber for the five years

from 1955 through 1959. It shows the number of cars and

tons handled, together with Western Pacific’s revenues, for

the movements via Bieber for both transcontinental and

west of transcontinental traffic. The following information

is evident from the exhibit:

1. The Bieber route produced about 20 per cent of

Western Pacific’s freight revenues. The range was

from 19.9 per cent in 1955, 1958 and 1959, to 18.7 per

[fol. 64] cent in 1957.

2. Most of the traffic handled via Bieber moved be-

tween points west of transcontinental territory. This

segment of the traffic via Bieber contributed 83 per

cent of the cars and more than 78 per cent of the West-

ern Pacific’s revenues. The percentage of west of

transcontinental cars handled via Bieber ranged from

86.3 per cent in 1955 to 80.3 per cent in 1958 and 1959.

Exhibit 13 compares the cars, tons and Western Pacific’s

freight revenues from traffic moving via Bieber to and from

points west of transcontinental territory, with those from:

minated by complainants, as well as those on which they

1. Other traffic moving via the Western Pacific to

and from points west of transcontinental territory.

2. Total revenue freight traffic handled by the West-

ern Pacific.

This exhibit shows the following:

1. Traffic moving between all points west of trans-

continental territory (including Bieber) produced more

than 50 per cent of the cars of freight handled by the

Western Pacific during the five years from 1955 through

1959, and more than 37 per cent of Western Pacific’s

freight revenues.

2. Traffic moving via Bieber between points west of

transcontinental territory, produced 46 per cent of the

cars and more than 40 per cent of Western Pacific’s

freight revenues from all traffic handled between points

(fol. 65] west of transcontinental territory.

3. While Western Pacific’s traffic from and to points

west of transcontinental territory declined in this pe-

riod 15 per cent, the decline via Bieber was only 12.6

per cent.

Exhibit 10 shows the number of cars originated and ter-

performed intermediate service to or from the Santa Fe

and other connections.

This exhibit shows the following:

1. The Bieber route produces an important amount

of traffic for complainants.

2. Northbound traffic in Column 3 exceeded south-

bound in Column 5 in 1955, 1956 and 1957, but in 1958

and 1959 southbound traffic exceeded northbound.

I have determined the following information concerning

Western Pacific’s revenues from these movements in 1959,

excluding its revenues from traffic which moved in connec-

tion with the Santa Fe, on which I have already commented:

(a) Its revenues from northbound traffic averaged

$169.63 per car.

(b) Its revenues from southbound traffic averaged

$171.86 per car.

I have estimated that Western Pacific’s revenues would

average about $144.00 per car, northbound, and $146.00 per

car southbound, if rates were published via Bieber between

[fol. 66] points on Northern Pacific and Union Pacific and

points on the complainants and their connections other

than the Santa Fe, competitive with those via Northern

Pacific-Southern Pacific or Union Pacific-Southern Pacific.

Northern Pacific and Union Pacific have made the fol-

lowing tariff publications which show that Portland, Ore-

gon, is an interchange point on carload traffic with the

Great Northern.

They have complied with Rule 10(h) of LC.C. Tariff

Circular No. 20 which requires distance tables to clearly in-

dicate which stations are junction points where it is possi-

ble to interchange carload traffic with another railroad

without transfer of lading and must name the connecting

carriers at each such junction with which such transfer is

possible.

Northern Pacific’s Table of Distances 1500-I, LC.C. No.

9759 names Portland, Oregon, as a junction point with the

Great Northern at which it is possible to interchange car-

load traffic without transfer of lading. It also shows that

this interchange is through the intermediate switching serv-

ice of the Northern Pacific Terminal Company. This provi-

sion is a comparatively recent publication having been

established effective January 31, 1955 on page 3 of Supple-

ment 20 and was designated as resulting in a reduction.

While the Northern Pacific’s Table of Distances indicates

that its interchange with the Southern Pacific at Portland,

Oregon, is by direct track connections, this provision is in-

(fol. 67] accurate because other publications show that the

interchanges between these two railroads at Portland, also

involve intermediate switching services of the Northern

Pacific Terminal Company. The following publications are

representative :

(a) Northern Pacific published on page 408 of The Offi-

cial Railway Equipment Register for April 1960, ICC-RER

No. 335 of The Railway Equipment and Publication Com-

pany, Agent, that its interchange with Southern Pacific at

Portland, Oregon is via the Northern Pacific Terminal

Company.

(b) Southern Pacific Local and Joint Distance Table N 0.

420-D, ICC 4687, shows on page 24, that Portland (Park

St.), Oregon, is a point where carload traffic may be inter-

changed with the Northern Pacific through the Northern

Pacific Terminal Company of Oregon.

Shippers are not concerned with the function of the

Northern Pacific Terminal Company in these routes, in

view of provisions such as Item 735 of PSFB Tariff 1-S,

that the joint rates include ail charges for switching at

intermediate interchange points on shipments handled

through.

The Distance Tables show the following with respect to

the Great Northern’s interchange at Portland with the Un-

ion Pacific.

Page 12 of Union Pacific’s Distance Tariff No. 4000-B,

ICC 5537 publishes Portland, Oregon, as a station where it

is possible to interchange carload traffic between the Union

[fol. 68] Pacific and Great Northern without transfer of

lading.

Page 12 of Great Northern’s Official Table of Distances

No. 400-C, ICC A-6710 (effective December 14, 1929), shows

Portland, Oregon as a point to interchange carload traffic

without transfer of lading, between the Great Northern and

other defendants as follows:

(a) Northern Pacific (through Northern Pacific Termi-

nal Company of Oregon.)

(b) Oregon, Washington Railroad and Navigation Com-

pany (now the Union Pacific Railroad), through Northern

Pacific Terminal Company of Oregon.

Page 3 of Supplement 77 of this publication shows that

North Portland, Oregon, is another interchange point be-

tween the Great Northern and the Union Pacific. This sta-

tion is within the switching limits of Portland, Oregon, on

the Union Pacific according to Official List of Open and

Prepay Stations No. 75, ICC A-40 of Station List Publish-

ing Company, Agent.

The following tariffs, other than distance tables, provide

that the Northern Pacific and Union Pacific interchange

freight with the Great Northern at Portland, Oregon:

North Pacific Coast Freight Bureau Routing Tariff No.

77-D, ICC 980, publishes the i‘ollowing:

Route Numbers Route

5H5 GN-Portland, Oregon, UP

9D5 NP-Portland, Oregon, GN

[fol. 69]

13D5 UP-Portland, Oregon, GN

13D17 UP-North Portland, Oregon, GN

This tariff also provides that “routes should be read from

left to right or from right to left, according to direction in

which the shipment moves.” Thus, these routes apply in

either direction, both inbound and outbound through Port-

land.

NPCFB Routing Tariff No. 77-D contains the routes via

which the joint rates apply which are published in rate

tariffs of the North Pacific Coast Freight Bureau.

Item 18710 of NPCFB and PSFB Freight Tariff No.

1016, ICC 1590 provides routing via GN-Portland-UP for

class rates published in that tariff:

From: GN Ry. stations Nos. 9400 to 10040 (points west

of Wenatchee, Washington, to but not including

Seattle, including Vancouver, B.C., Bellingham,

Everett, and Anacortes.

To: UP Stations Nos. 10505 to 10520 ( Kenton, Fir, Ward

and Hemlock, Oregon.)

10540 to 10680 (Montavilla, Oregon, to Miller, Ore-

gon, including Hood River and The Dalles).

10855 to 11270 (Biggs, Oregon, to Pilot Rock, Ore-

gon, including Arlington, Condon, Heppner and

Umatilla).

11715—Juniper, Oregon.

[fol. 70] 117-8—Wallula J unction, Washington.

Item 12420 of PSFB Tariff 220-D, ICC 1514 of PSFB,

Agent, provides routing via NP-Portland-GN , Bieber, Cali-

fornia, WP or WP and connections via California Junc-

tions:

Between: Points on Northern Pacific in Washington,

Yakima, Washington, and West, including

branches.

And: Points in California on the Western Pacific and

connections (except AT&SF, NWP, SP and VE).

Such routes govern the joint rates published on livestock

between the points above mentioned.

Other tariffs mentioned on the following pages, provide

joint rates with routing via WP-GN-Portland-NP or UP;

to the extent shown.

Cast Iron Pipe

Joint rates are published from Carpenter, California, on

the Western Pacific to points in Oregon, Washington, and

Northern Idaho via WP-Bieber-GN-Portland, thence

Northern Pacific or Union Pacific. These rates are the

same as apply between the same points and Decoto, Cali-

fornia, on Southern Pacific with routing via Portland,

thence Northern Pacific or Union Pacific. Included in the

rates published via Bieber also are rates to various con-

nections of the Northern Pacific or Union Pacific, such as

the Camas Prairie RR., Washington, Idaho & Montana Ry.

[fol. 71] and the Spokane International Ry.

Exhibit 14 contains copies of the pages of PSFB Tariff

1-8, ICC 1352, in which these rates are published.

Initial publication of rates on cast iron pipe in Exhibit 14

became effective June 21, 1952. It was an adjustment to

satisfy a complaint filed by the United States Pipe & Foun-

dry Company in Docket 30964.

The pipe company had constructed a plant at Carpenter,

California, a substation of Decoto, which was located upon

the Western Pacific. It alleged violations of Section 1 and

3 of the Act, arising from the fact that the combination

rates then applicable to points on the Northern Pacific and

Union Pacific, exceeded the through rates published to the

same points from Ironton, Utah, on the Union Pacific.

About four months after this complaint was filed, the

Northern Pacific and Union Pacific concurred to the publi-

cation of rates which satisfied the pipe company. Their

concurrences were subject to the same divisions north of

Portland, on traffic via Bieber and the Great Northern to

Portland, as they received from rates published with the

Southern Pacific routing via Portland.

There has been a regular movement of cast iron pipe un-

der these rates; amounting to 124 carloads in 1959 and 154

in 1960.

[fol. 73] Automobiles

Joint rates are published via WP-GN -Portland, thence

Northern Pacific or Union Pacific on automobiles from Mel-

rose (Oakland) and Decoto, California, on the Western

Pacific which are the same as rates between the same points

via SP-Portland-NP or UP.

Copies of pages of PSFB Tariff 1-S, ICC 1352, contain-

ing rates for boxcar service are contained in Exhibit No. 15

and Exhibit No. 16 contains a copy of PSFB Tariff 297-D,

ICC 1678 in which are published TOFC rates on automo-

biles.

These rates were initially published effective October 4.

1959, as a result of ICC Docket 33118, Western Pacific RR.

v. Camas Prairie RR. Co. et al. This complaint was filed in

July 1959, alleging violations of Section 1(4) and 3(4) of

Part I of the Act by refusal and failure of defendants (in-

cluding Northern Pacific and Union Pacific) to publish joint

through rates with the Western Pacific from Decoto and

Melrose (Oakland) via Bieber to the Same extent as was

granted to the Southern Pacific by defendants. Shortly

after the Commission scheduled a hearing for September Ze

1959, the Northern Pacific and Union Pacific advised. the

Commission and the Western Pacific that they would join

in the rates and divisions to the extent requested in the

complaint. Upon complainant’s request, the Commission

dismissed the complaint on November 10, 1959.

[fol.74] A limited number of commodity rates have been

published to or from points on Northern Pacific and Union

Pacific with routing via complainants to or from a junction

point in California with the Southern Pacific, thence South-

ern Pacific through Portland.

Rates on sugar from Clarksburg, California, to Walla

Walla and Yakima, Washington, via SN-SP-Portland-NP

or UP were published in 1936. Both Northern Pacific and

Union Pacific declined to participate via Bieber. Com-

plainants agreed to publish these rates in connection with

Southern Pacific since the sugar company needed the rates

in order to reach those markets in competition with other

California producers.

Other rates established via SN or WP-SP-Portland-NP

or UP prior to 1931 were published in that manner because

the industries located on the complainants had no other

access to markets located in areas served by the Northern

Pacific or Union Pacific. Since that time, the Northern

California Extensions of the Great Northern and Western

Pacific resulted in the construction of the Bieber route in

1931 under authority of Finance Dockets 7439, 7440 and

7881 (166 ICC 3 and 170 ICC 399). In the meantime, the

Bieber route has developed into important segments of

both the Great Northern and Western Pacific. The condi-

tions justifying issuance of certificates of public conveni-

ence and necessity in the Bieber Gateway Case dictate

against establishment of additional rates via complainants

[fol. 75] with Southern Pacific through Portland, thence

Northern Pacific or Union Pacific.

Another significant change in conditions was the emer-

gence of the Western Pacific from a hectic early period

fraught with financial problems. This railroad’s stature

has matured to the extent that it now actively and posi-

tively contributes to the public welfare and justifies the

faith of the Interstate Commerce Commission in awarding

it the certificates of public convenience and necessity in the

Bieber Gateway Case. The Western Pacific has vigorously

and successfully carried out a program of industrial de-

velopment in areas tributary to its rails, as well as areas

served by the Sacramento Northern and Tidewater South-

ern, its subsidiaries. For example, its acquisition of land

in California has resulted in the location on its rails of such

large industries as the Ford Motor Company’s automobile

plant at Milpitas, and the Campbell Soup Company’s plant

at Sacramento.

Exam. Wright: Will you call your next witness, Mr.

Treanor?

Mr. Treanor: I call Mr. D. L. Loftus, please.

D. L. Lorrus was duly sworn and testified as follows:

Exam. Wright: Be seated, please.

Mr. Treanor: Your Honor, this witness has three ex-

hibits. May we go off the record and mark them for identi-

cation?

(fol. 76] (Discussion off the record. )

Exam. Wright: On the record.

During the off-the-record discussion, Exhibits 17, 18 and

19 were marked for identification.

These are exhibits to be sponsored by Mr. Loftus.

(Complainants’ Exhibits Nos. 17, 18 and 19, Witness

Loftus, were marked for identification. )

* * oe ee 7 * 7

Direct examination.

By Mr. Treanor:

Q. Mr. Loftus, would you proceed to read your state-

ment.

A. My name is Donald L. Loftus, and I have been em-

ployed by the Western Pacific Railroad since 1952. My ad-

dress is 526 Mission Street, San Francisco, California. My

present position is Assistant to President in charge of the

Research and Planning Section, which position I have held

since 1956.

[fol.77] Prior to this, I was a transportation engineer in

the same Section. I am a graduate of N orthwestern Uni-

versity, receiving a B.B.A. degree in 1948, and majoring in

transportation.

Prior to joining Western Pacific, I spent three years with

Pullman-Standard Car Division of Pullman, Ine., as re-

search analyst and field service representative, During the

sam period, I was a lecturer in the Transportation Depart-

ment in the Evening Division of Northwestern University.

My responsibilities include the areas of Market Research,

Economic Research and Long Range Forecasting and

Planning. Presently, I have a staff of three analysts and

one secretary-clerk.

In connection with this proceeding, I have been asked to

develop and present certain data relating to the growth of

the geographical areas involved; and data illustrating the

progress made by Western Pacific in improving and mod-

ernizing its transportation plant and equipment during the

past ten years. The latter program has been carried out

with the prime objective of meeting the current and future

transportation needs of the regions we are capable of serv-

ing, either directly or through connections.

I have prepared, or caused to be prepared under my di-

rection and supervision, three exhibits for introduction in

this case. They are true and correct to the best of my

knowledge, information and belief. Briefly, they cover three

[fol. 78] principal subjects:

First, Economic Growth: the rapid increase in popula-

tion, consumption and production, which has characterized

the Pacific Coast regional economy in recent history, and

the prospects for this growth continuing into the future;

Second, Production: the economic base supporting this

growth; and

Third, Western Pacific’s Transportation Plant: the up-

grading of Western Pacific’s plant as a major link in the

transportation system of the regional economy.

The statistics largely tell the story and the following

commentary will therefore be brief, and designed to enable

a better understanding of the exhibits.

Exhibit No. 17—Economic Growth

Unfortunately, such accepted indicators of economic

growth as Gross National Product or Industrial Produc-

tion, which are available on a national basis, are not com-

puted for individual states or regions. As an alternate, this

exhibit provides other statistics which describe broad

trends in area development. Population is a general meas-

ure of state and regional growth. Statistics on value added

by manufacturing and farm income, while not including all

sectors of the economy, nevertheless provide a valid indica-

tion of production trends. State and regional consumption

patterns are accurately reflected by personal income and

(fol. 79] retail sales. Taken together, these figures present

a balanced picture of the growth trends within a region.

In the last 20 years, population growth on the Pacific

Coast has been impressive, taking place at a rate three

times that of the nation. California has led the way, its

population more than doubling. The Northwest states have

also been growing rapidly, at a rate almost twice that of

the nation.

The population growth reflects an economic expansion

which has been well diffused throughout the region. Both

industry and agriculture have shared in the gains. Value

added by manufacturing and farm marketing cash receipts

have been both increasing at rates significantly higher than

for the entire nation. To varying degrees, all three states

have contributed to this expansion.

The impact of these trends on the West as a market is

clearly shown by the tables on Personal Income and Retail

Sales. Much of the absolute gain in dollars shown in the

tables must be credited to inflation since 1940 (a 1940 dollar

equals 2.10 1959 dollars) and, for this reason, the rates of

increase are compared with those for the nation. In these

non-inflationary terms, the growth is still impressive.

While not shown in the tables as such, the Pacific Coast

states have enlarged their share of total U. S. population

from seven per cent in 1940 to 11 per cent in 1960; their

(fol. 80] contribution to national value added by manufac-

turing from six per cent in 1940 to 11 per cent in 1958; and

total retail sales from ten per cent in 1939 to 13 per cent in

1958. These gains were made in a time when the nation as

a whole was experiencing wide growth.

Generally accepted projections of the Pacific Coast econ-

omy foresee these growth trends continuing into the fu-

ture. Two of the tables in this exhibit, those for population

and personal income, include projections through 1970. In

both cases the growth record established in recent history

is expected to continue. Population additions are antici-

pated to continue at a rate well in excess of the national

average. Personal income, probably the best indicator of

consumption, is also predicted to maintain its upward trend

line. Note that personal income statistics 1940-1958 include

a sizeable element of inflationary growth while that for

1970 is in constant 1959 dollars. As optimistic as these

projections appear, in the past they have almost always

erred on the conservative side. Generally accepted projec-

tions of the other measures of economic growth used in this

exhibit are not available but, in my opinion, it is a reason-

able assumption the same general relationships which have

held in the past will continue into the future and the growth

rate suggested by these projections will be general through-

out the regional economy.

[fol. 81] Exhibit No. 18—Production

The production of California, because of its diversity,

does not lend itself to description by showing the physical

output figures of a limited number of industries. It is prob-

ably sufficient to cite the production statistics in the previ-

ous exhibit. In addition, those shown in this exhibit indicate

that production generally from California has been increas-

ing its share of national totals during a period when the

national total itself underwent rapid expansion.

For the Northwest, because of the less diversified nature

of the economy, it is possible to show general growth pat-

terns by measuring production of a relatively small number

of basic commodities. The Northwest is a major supplier to

national markets for forest products, paper products, non-

ferrous metals, and certain agricultural commodities. These

product groups account for almost all of the rail movements

originating in the two-state region.

Production statistics for major components of these

product groups are shown, including the 1959 relationship

between Northwest production and that for the entire na-

tion. While the Northwest share of the national market for

the specific products listed ranged between nine percent

and 30 per cent in 1959, the Northwest had only 2.6 per cent

of the total U. S. population in that year, emphasizing the

importance of out-of-state markets.

(fol. 82] The total forest products industry output in-

incluudes many products, but lumber is the basic com-

modity. Although production from Washington has been

declining in recent years, Oregon output has more than re-

placed this loss and the two states accounied for almost a

third of total U. S. production in 1959. Closely allied to

forest products, wood pulp is the basic raw material of the

paper industry. The increasing importance of the North-

west in the paper industry is clearly shown by the 152 per

cent increase in wood pulp production since 1940.

The statistics on wheat and apples are included as indi-

cative of the participation of this region in national agri-

cultural output. Production of wheat has shown a con-

sistent upward trend. Apple production has been trendless

for many years, but Washington still remains the largest

producing state for this crop. Agricultural commodities in

general have shown an upward production trend.

The Northwest has long been an important factor in the

national supply of non-ferrous metals. Aluminum produe-

tion in 1940 was negligible; in 1959, the region supplied

about one-fourth of all national needs. Copper, lead-and

other non-ferrous metal production in the Northwest is also

important.

Exhibit No. 19—Western Pacific Transportation Plant

With the general economic growth in its service area, the

Western Pacific transportation plant has been systemati-

[fol. 83] cally improved. The tables in this exhibit are

divided into two general areas, road and equipment, and

measure changes in specific items as indications of general

improvement.

The extent of improvements to road is indicated by the

consistent trend to higher grade materials and facilities. A

program of rail re-laying has increased the number of track

miles in heavy weight rail to almost three-fourths of the

entire system. Tie replacements have resulted in almost the

entire system now being in treated ties. The portion of

mileage with higher grades of ballast has been consistently

increased. Bridge structures have been systematically up-

graded. Not shown in the exhibit is the fact that 75 per cent

of tunnels formerly timber-lined are now concrete-lined.

The capacity of equipment, both motive power available

and freight cars, has been significantly expanded from both

a quality and quantity standpoint. The statistics on motive

power speak for themselves. Statistics shown extend back

to 1954 and represent diesel-electric power only. The num-

ber of freight cars in Western Pacific’s fleet has not only in-

creased by 22 per cent since 1954, but the portion of the fleet

made up of special equipped cars has increased from less

than 200 cars to more than 1,800 in 1960. Of the entire fleet,

almost one-third are special equipped and more than 60 per

cent of these are equipped with special interior devices.

While not a recent or continuing project, it is noteworthy

[fol. 84] that all mainline trackage has been under CTC or

automatic block signals for almost ten years.

To summarize—the statistics, in my opinion, portray a

picture of a regional economy which has been expanding,

both relative to its past size and as a share of the national

economy. This growth has taken place on a wide front in

all three states and generally in the various sources of both

production and consumption. Generally accepted projec-

tions see these trends continuing through 1970. At the same

time, the capacity of the Western Pacific transportation

plant has been systematically expanded apace with the

regional growth.

Mr. Treanor: That concludes the direct examination, Mr.

Examiner.

Exam. Wright: Are you going to offer the exhibits at

this time?

Orrers IN EvipENcE

Mr. Treanor: I was going to offer them after cross, but I

will offer them at this time.

Exam. Wright: I am going to defer ruling until after

cross-examination.

Cross examination.

By Mr. Hobbs:

Q. Mr. Loftus, referring to your Exhibit 19, did you

make any comparison of your Western Pacific transporta-

tion plant with any other railroads in the west?

A. No, I did not.

Q. Then so far as you know, the defendants, Union

[fol. 85] Pacific, Northern Pacific and Great Northern—no,

not the Great Northern—the Southern Pacific, Union Pa-

cific and Northern Pacific’s plant likewise then has been

systematically expanded apace with the growth of the reg-

ion that they serve in the Northwest?

A. I don’t know that they have.

Q. You don’t know that they don’t?

A. I don’t know that they don’t.

Q. Why did you pick out the year 1950 to compare with

the year 1955 and 1960?

A. I picked this because our program began, our im-

provement program began in 1950.

Q. And what was it before that?

A. (No response.)

Q. You mean it was just let slip?

A. No, we had a change in management in 1948 and ’49,

and the new management brought in this program in 1950.

I am not too conversant with the program prior to this pe-

riod. It was before my time with the railroad.

Q. Have you made any comparison of the physical char-

acteristics of the Western Pacific with any other railroad

in the region or in the Northwest?

A. Not physically.

Q. You don’t know how they compare then, physically?

A. (No response.)

(fol. 86] Q. The Union Pacific, for example in Oregon and

Washington, the Western Pacific in California, the North-

ern Pacific in Oregon and Washington, do you know how

the physical characteristics of those roads compare with the

Western Pacific plant?

A. First-hand, I do not.

Q. Well, do you know any other way?

A. (No response.)

Q. You say first-hand you do not?

A. [have heard comment that—

Q. You don’t know anything—

A. —that improvements were made, but I don’t know

exactly what improvements were made.

Q. Well, you don’t know how the physical characteristics

of the Western Pacific plant compare with any other rail-

road out West?

A. No.

Q. I am talking about the curves and grades, and all the

rest of that.

A. Well, I do know that our expenditures, percentage-

wise, have been very high, as a per cent of our gross, one of

the highest in the nation during this period.

Q. And that could be accounted for by the level of your

growth?

A. It could.

Q. Now, then, on your Exhibit No. 18, why did you go

back in making in your comparison or showing your figures

[{fol. 87] for 1959, why did you go back to 1940 and calculate

the per cent of increase? That is 20 years ago.

A. Well, this is a judgment sort of thing. You can pick

just about any year you choose.

Usually, to show growth trends, however, you should

cover a wide span of years. Usually 20 years is the period

selected to show trends. Anything shorter might be mis-

leading.

Q. Well, then, does that mean that the comparisons you

are making on Exhibit 19, then, are not valid?

Mr. Treanor: I object—

Mr. Hobbs: You only go back to 1950 there.

Mr. Treanor: I object to that, Your Honor, because the

witness has already testified as to the reasons for his start-

ing in 1950 in connection with his Exhibit No. 19, and no

proper comparison can be made.

These figures on Exhibit No. 18 are national published

figures, and the figures on 19 are directed to the physical

experience of the Western Pacific plant.

Mr. Hobbs: You are just answering for the witness, and

he could have said the same thing, and probably that could

have answered my question.

Exam. Wright: I will overrule the objection.

Do you remember the question?

The Witness: I believe so.

On Exhibit 19, as I said, the Western Pacific improvement

[fol. 88] program began in 1950. Actually, the planning

was begun prior to that time, but the actual physical work

began in 1950, and this is the reason for taking 1950 as a

starting point on this exhibit.

By Mr. Hobbs:

Q. Well, wouldn’t it seem to you more reasonable on your

Exhibit 18 if you had just compared 1950 with 1959 rather

than 1940?

A. (No response.)

Q. That indicates the real trend, doesn’t it, at the present

time?

A. I say this is a judgment sort of thing, and we could

probably debate this all day as to what the proper base

year would be.

Economists themselves can’t agree on this point, and I

would have to get into a long discussion on why ’40 is not a

good year.

I would say usually we use 20 years as a time span to il-

lustrate growth, and this is my reason for so doing.

Q. Well, taking the lumber production for 1940 in Ore-

gon, for example, at—what is it—5,202 million feet? Do you

know whether 1940 was a good year when there was a lot of

production or a poor one when there wasn’t too much pro-

duction ?

A. I think it was a normal year. I don’t recall anything—

Q. Well, do you know whether it was or not?

A. Not exactly, no.

[fol. 89] Q. Now, in the case of the Oregon Lumber, if you

had compared 1950 with 1959, it would show quite a de-

crease in the production, wouldn’t it?

A. It would show a slight decrease.

Q. And the same thing applies to the amount in both Ore-

gon and Washington, isn’t that true?

A. Yes.

Q. If you had taken the year 1950, you would have shown

quite a decrease—

A. Yes.

Q. —rather than an increase.

A. Yes.

Q. Does that have anything to do with you selecting the

year 1940—

A. No.

Q. —for the comparison?

A. I think I made myself clear as to why I selected 1940.

Q. On page 3 of your statement you say that “the popu-

lation growth reflects an economic expansion which has been

well diffused throughout the region.”

Did you make any attempt to segregate that into the vari-

ous states, for example?

A. The states involved in this proceeding?

Q. Yes.

A. Yes, it is done on the exhibit.

[fol. 90] Q. What exhibit is that?

A. I believe 17 at the very top.

Q. You couldn’t, or did you break it down to areas served

by the railroad?

A. No, population data are not available on this basis.

They are statewide.

Mr. Hobbs: That is all I have.

Exam. Wright: Cross-examination, further cross-exami-

nation?

Mr. Farrell: No questions.

Exam. Wright: Redirect?

Mr. Burkett: I have some.

By Mr. Burkett:

Q. Mr. Loftus, what is the mainline mileage on the West-

ern Pacific between Oakland, California, and Salt Lake

City, Utah?

A. Between 920 and 24 miles, I believe.

Q. How much of that mileage is east of Keddie, Califor-

nia, and how much is west of Keddie, California?

A. Do you want it exact or just approximately?

Q. No, just approximately.

A. I would say slightly over 600, 650.

Q. Would be east of Keddie, California?

A. Yes.

Mr. Faye: Keddie is Milepost 280.

Mr. Treanor: May we disregard that statement, sir?

Exam. Wright: Yes.

[fol. 91] The Witness: Milepost 280, it is around 625, I

believe.

By Mr. Burkett:

Q. And what is the mileage from Keddie to Bieber?

A. 112.

Q. Now, am I correct that traffic from California to Port-

land generally would move over the mainline of the West-

ern Pacific to Keddie, and thence north to Bieber?

A. That is my understanding.

Q. And could the mileage then from Oakland to Bieber

normally be the way I calculate it, about 400 miles?

A. Right, roughly so.

Q. And that is out of a total main mileage of, say, ap-

proximately 1,050?

A. I think it is—yes, that is close.

Q. Now, turning to your Exhibit No. 19, please, I notice

there that on line 1 you state, “Percentage track miles in

rail 112 pounds or heavier, 71 per cent.”

Would you please state what portion of that is on the line

between Keddie and Bieber?

A. I don’t know specifically what portion that would be

of the total, but the entire Bieber line is 112 pounds, if I am

not mistaken.

Q. And let’s pass down to the next 115 pounds, or heavier.

Is there any 115-pound rail on the Bieber line?

A. I don’t know th.t, the answer on that. There may be

[fol. 92] some on curves, but that I am not qualified to com-

ment on.

Q. Now, with respect to all of the items which you have

shown here on your Exhibit 19, can you provide a break-

down of the statistics as they apply to the line between

Oakland, Keddie and Bieber on the one hand, and the line

between Keddie and Salt Lake City on the other hand?

A. This could be provided.

Q. Can you tell us now what those figures are?

A. No, I cannot. I believe one of our engineers would be

more qualified.

Q. Now, referring specifically to the freight car fleet

where you list total cars, is Western Pacific today a creditor

or a debtor road with respect to the freight car ownership?

A. With respect to the freight cars themselves, we vary

from year to year. It is very close to a break-even, I would

say. We are a creditor some years, and some years a slight

debtor, but I would say the balance is a creditor.

Q. Can you tell us whether you were a creditor or a

debtor for the year 1960?

A. I wouldn’t want to answer that. I think I would be

guessing.

Mr. Burkett: That is all I have. Thank you.

Exam. Wright: Any redirect?

Mr. Treanor: No, sir.

OrFersS IN EVIDENCE

I would like to offer the Exhibits 17 through 19, inclusive.

[fol. 93] Exam. Wright: Any objections to Exhibits 17,

18 and 19 for identifieation?

Mr. Hobbs: No, we have none.

Exam. Wright: Hearing none, they are received.

(Complainants’ Exhibits No. 17, 18 and 19, Witness

Loftus, were received in evidence.)

Mr. Treanor: At this time, Your Honor, I would like to

eall Mr. Grant Allen.

Grant S. ALLEN was duly sworn and testified as follows:

While off the record, Exhibits Nos. 22 through 24 were

marked for identification.

(Complainants’ Exhibits Nos. 24 through 24, inclusive,

Witness Allen, were marked for identification. )

Exam. Wright: Proceed with your direct examination,

Mr. Treanor.

[fol. 94] Direct examination.

By Mr. Treanor:

Q. Will you state your full name, please, sir.

A. Grant S. Allen.

Q. And what is your address?

A. 526 Mission, San Francisco.

Q. Mr. Allen, by whom are you employed, and in what

capacity?

A. The Western Pacific Railroad as superintendent of

transportation.

Q. Briefly, what has been your railroad experience?

A. My experience covers the last 48 years as a telegra-

pher, and train dispatcher and brakeman, trainmaster, as-

sistant superintendent, superintendent, superintendent of

transportation, and I had charge of the railroad operations

for the six companies during the construction of the

Boulder or Hoover Dam.

During this period, I worked for the Santa Fe, the

D&RGW, the Oregon-Washington Railroad, and Naviga-

tion Company, the Oregon Short Line, the Union Pacific,

the LNSL, the Northern Pacific, and the Southern Pacific.

And I was employed for about two years on the Portland

Division of the Southern Pacific as an operator and a train

dispatcher, and during my experience on the Portland Divi-

sion I worked as a telegraph operator at their Brooklyn

Yard in Portland.

Q. How long have you held your present position, sir?

(fol. 95] Q. How long have you held your present posi-

tion, sir?

A. Since 1952.

Q. Have you—excuse me.

What is the general area of responsibility for the superin-

tendent of transportation of the Western Pacific Railroad?

A. I have charge of the, general charge of the operation

of the freight and passenger trains on the railroad. The

manifest department is under my jurisdiction, the compil-

ing and making of through schedules, and employees’ time

tables, the claim prevention work, and the general distribu-

tion of cars is all under my jurisdiction.

Q. Mr. Allen, at what points are there presently in effect

interchange arrangements between the Western Pacific,

Tidewater Southern, and Sacramento Northern, with other

railroad carriers?

A. I think that Exhibit No. 20 will show that more readily

than I can tell it. It is a map of the Western Pacific Rail-

road, and it shows the interchange points between the West-

ern Pacific and the Sacramento Northern, the Tidewater

Southern, and other railroads.

Q. Mr. Allen, have you personally familiarized yourself

with the interchange between various carriers, carriers—

railroad carriers at Portland, Oregon?

A. Yes, sir.

Q. How recently have you personally observed the inter-

[fol. 96] change arrangements in and around Portland,

Oregon?

A. I was up there in the early part of May, and I was in

Portland again last week.

Q. Is that May of 1960?

A. This year.

Q. May of this year? :

A. Early in April, I should have said, excuse me, early in

April 1961, and I was up there last week.

Q. Now, based upon your own personal observation,

would you please briefly describe the manner of interchange

or the actual physical operation of an interchange between

the Great Northern and Union Pacific at Portland, Oregon?

A. If you will refer to this map, this large map, to inter-

change a car from the Union Pacific at their Albina Yard

to the Great Northern, the Union Pacific yard engines move

these cars from Albina across the Willamette River on a

steel bridge and bring them to the interchange yard oppo-

site the Union Station.

At that point the Northern Pacific terminal handles the

ears for delivery to the Great Northern at Guilds Lake

Yard.

Q. Mr. Allen, will you also, based upon your own per-

sonal observation, briefly describe the manner of inter-

change or the actual physical operation of an interchange

between the Great Northern and Northern Pacific at Port-

land, Oregon?

A. These cars can be interchanged between both rail-

(fol. 97] roads at the Lake Yard.

Q. While you were in Portland, did you observe any ac-

tual interchange between Union Pacific and Southern Pacific

at Portland, Oregon?

A. No, sir.

Q. Are you familiar with the manner of that operation?

A. Yes, sir.

Q. Would you please briefly describe it?

A. The interchange is effected by the Southern Pacific

Yard engines. They move cars from the Southern Pacific

directly to the Union Pacific yard at Albina, and they will

move cars being interchanged by the Union Pacific to the

Southern Pacific from Albina back to Brookland.

Q. In your opinion, Mr. Allen, is there any material dif-

ference in the manner of interchange between Great North-

ern and the Union Pacific or the Northern Pacific at Port-

land, on the one hand, and the interchange between the

Southern Pacific with the Union Pacific or Northern Pacific

on the other hand?

Mr. Higgins: If the examiner please, I object to that.

There has been no sufficient foundation at this point. The

witness merely has given a very generalized description of

the switching and interchange between the respective roads

there.

To lay a foundation, there would certainly have to be

more detail as to distances, characteristics of movement,

and so on, and I submit at this point the witness has not

[fol. 98] been qualified in addition to the fact this founda-

tion has not been laid for that type of an opinion and,

therefore, I object to it.

Exam. Wright: I will sustain that objection.

By Mr. Treanor:

Q. Mr. Allen, I would now like to direct your atten-

tion back to your explanation of your own personal knowl-

edge of the manner of interchange at Portland, Oregon,

between the Great Northern on one hand, and the Union

Pacific on the other, keeping in mind, Mr. Allen, that your

previous answers have not been considered to be complete

enough, so please take your time and give it to us in as

much detail as you can.

A. In order for the Union Pacific to deliver or interchange

traffic to the Great Northern, the Union Pacific yard en-

gines leave Albina Yard.

Q. Now, is that shown on—

A. Which is shown on the map, on the east bank of the

Willamette River.

Exam. Wright: This is Exhibit No. 21 for identification.

Mr. Treanor: Yes, sir.

The Witness: Yes, sir, and they move upstream to the

[fol. 99] place on the map marked as steel bridge where the

cars are brought across the river and brought into a yard

which is directly opposite the Union Station.

From this point, the cars are moved on the Northern

Pacific terminal from the depot yard and interchanged on

the Northern Pacific at Guilds Lake Yard.

By Mr. Treanor:

Q. Is that shown on Exhibit No. 21?

A. Yes, sir, further down the river opposite that Swan

Island Shipyard shown on the map.

For traffic that is interchanged from the Great Northern

to the Union Pacific, the reverse is true.

The Northern Pacific terminal yard engines move the

traffic from Guilds Lake Yard to the depot yard, where the

Union Pacific yard engines will pick up the cars and take

them to Albina Yard.

Q. Now, does that complete your explanation?

A. Between the Union Pacific and the Great Northern.

Q. Now, would you please describe the interchange be-

tween the Great Northern and the Northern Pacific at Port-

land?

A. The Great Northern trains set on cars at Guilds Lake

Yard, where they are interchanged to the Northern Pacific,

and the Northern Pacific trains pick up these cars at

Guilds Lake Yard.

The Northern Pacific terminal engine switches these cars

and arranges them, takes them out of one train and puts

[fol. 100] them into the train of the other company, and

the interchange from the Northern Pacific to the Great

Northern is accomplished then in the same manner in the

same yard.

Q. Would you please briefly describe, or not briefly any

more, completely describe the interchange between the

Southern Pacific at Portland and the Union Pacific?

A. The actual physical interchange of cars is performed

by the Southern Pacific yard engines. They will move cars

from the Southern Pacific’s Brookland Yard, which is

marked on the map opposite Ross Island, across the river

on the southeast part of town.

These yard engines will move traffic from Brookland

Yard through to the Albina Yard of the Union Pacific, and

accomplish delivery.

For traffic moving between the Union Pacific and the

Southern Pacific, the same yard engines will move the

traffic from Albina Yard back to the Brookland Yard.

The Union Pacific yard engines are not used in this

transfer of service.

I have been given to understand that—

Mr. Burkett: Now, just a minute, Mr. Examiner. I am

going to object to this witness testifying to what he has

been given to understand on this record, because it is

hearsay or possibly anonymous hearsay.

Exam. Wright: I will sustain the objection.

[fol. 101] By Mr. Treanor:

Q. Don’t say what you have been given to understand,

Mr. Allen, what you know of your own knowledge.

A. The Union Pacific pays the Southern Pacific for this

service, for the time of all of the Southern Pacific engines

north of East Portland Junction, which is opposite the

steel bridge.

Q. Mr. Allen, as superintendent of transportation, are

you personally familiar with present operations over the

so-called inside gateway, including the general condition

of the route and the present schedules over that route?

A. Yes, sir. :

Q. Briefly, what is the general condition of that route,

by the inside gateway into Portland?

A. The portion of the route from Oakland to Keddie is a

first-class piece of railroad that is wholly equipped with cen-

tralized traffic control.

The portion of the railroad on the Western Pacific from

Keddie to Bieber is equipped with 112 or heavier, 112-

pound or heavier rail rock ballast, but is not equipped with

either automatic box signals or centralized traffic control.

The same is generally true of the Great Northern between

Bieber and Klamath Falls. They do not have block signals,

but they do have heavy rail and rock ballast.

Between Klamath Falls and Chemult, the Great Northern

trails operate over a joint track arrangement with the

[fol. 102] Southern Pacific which is centralized traffic con-

trol.

From Chemult to Bend, there are no automatic box sig-

nals, but the route is equipped with heavy rail and ballasts.

At Bend, the traffic moves over the Oregon trunk rail-

road to Wishram, and that is a first class piece of rail-

road and is equipped with automatic box signals.

From Wishram to Vancouver, the traffic moves over the

main line of the SP&S Railroad, which is also equipped with

an automatic box signal and heavy rail and ballasts.

From Vancouver to Seattle, the trains are operated over

the joint track of the Northern Pacific Railroad, which is

double track, and automatic box signals.

The traffic from the Bieber trains is handled from these

trains at Vancouver, Washington to Portland, Oregon by

switch cuts of the SP&S Railroad.

For traffic that is moving from Portland to trains mov-

ing south on the Bieber route, the same SP&S switch cuts

move the cars from Portland, to Vancouver, Washington,

where they are placed in southbound Bieber-route trains.

Q. Mr. Allen, did you, are you familiar with the fact of

whether or not there is an interchange at Portland between

the Southern Pacific on the one hand, and the Great North-

ern on the other?

A. Yes, sir.

Q. Would you please describe in as much detail as you

(fol. 103] can the manner of that interchange ?

A. For traffic from the Great Northern to the Southern

Pacific, the Northern Pacific terminal moves the cars from

Guilds Lake Yard to the depot yard, which is across from

the Union Station.

Mr. Burkett: Mr. Examiner, at this point I didn’t hear

the question, but I would like to register an objection.

I don’t see the relevancy in this proceeding to the inter-

change conditions between the Great Northern and the

Southern Pacific at Portland. There is no issue here raised,

the way I read the complaint, concerning that interchange.

Mr. Treanor: I had not intended to ask that question

until Mr. Burkett intervened.

I think now it is an important part of this case and

should be brought out for the benefit of the Commission.

Mr. Burkett: Well, I do not think the Examiner would

wish to take the position that our intervention broadens

the issues in any way.

We are comparing the operation of through routes be-

tween the Northern Pacific and the Union Pacific with

interchange at Portland, with the Southern Pacific on the

one hand, with routes from the Northern Pacific and Union

Pacific that interchange with Great Northern on the other

hand.

I don’t see any issue here between the interchange condi-

tions between the Great Northern and the Union Pacific at

Portland.

[fol. 104] Exam. Wright: I will overrule the objection.

By Mr. Treanor:

Q. You may proceed, Mr. Allen.

A. The Northern Pacific moves the cars from the Great

Northern to the depot yard where the interchange is effected

with the Southern Pacific.

The Southern Pacific yard engines from the Portland

yard to the depot yards take these cars back to Brookland

with them.

The reverse is true in the case of traffic moving from the

Southern Pacific to the Great Northern. The Southern

Pacific yard engines move the traffic from Brookland yard

to the depot yard, where interchange is effected with the

Great Northern, and the cars are then handled between the

depot yard and Guilds Lake Yard, to be made up into Great

Northern trains.

Q. Mr. Allen, my attention has been called to the fact

that the previous series of questions in which I overlooked

having you describe in greater detail the manner of inter-

change between the Southern Pacific and the Northern

Pacific at Portland, Oregon.

Would you please describe that operation?

Mr. Farrell: Mr. Examiner, I am going to object at this

point. I don’t think that is an issue in this proceeding.

Mr. Treanor: If Mr. Farrell is willing to admit that the

manner of interchange is not at issue, I certainly won’t

press it.

Mr. Farrell: I will withdraw the objection.

(fol. 105] Exam. Wright: You may answer.

By Mr. Treanor:

Q. Proceed, Mr. Allen.

A. The interchange is effected in much the same manner

as with the Great Northern. The Northern Pacific yard

engines handle the cars from Guilds Lake Yard to depot

yard where the Southern Pacific engines take the cars to

Brookland, and going north the Southern Pacific engines

bring the cars from the Brookland yard to the depot yard

where Northern Pacific terminal handles the cars to Guilds

Lake Yard to be switched into Northern Pacific trains.

Q. Does that complete your answer to that question?

A. Yes.

Q. Mr. Allen, would you please briefly describe, this time

briefly, the interchange at Bieber, California, with par-

ticular reference to the actual manner in which this is ac-

complished and the length of time involved in that inter-

change?

Mr. Higgins: Pardon me, the question isn’t quite clear.

The interchange between what lines?

By Mr. Treanor:

Q. Between the Great Northern and the Western Pacific

at Bieber.

Mr. Higgins: All right.

A. The Western Pacific and Great Northern have in

effect a pool arrangement of cabooses and locomotives that

work between Stockton and Klamath Falls so that the same

locomotive and the same caboose go through on these trains

[fol. 106] in either direction, so that many times the inter-

changes are made between the two railroads only long

enough, in about five minutes, which means that the train

stops long enough for the engine crews to change, and as

the train pulls by the incoming train crew gets off the

caboose, and the outgoing train crew gets on the caboose.

Unless there are cars to be actually picked up or set out

at Bieber, this interchange never takes more than 15 min-

utes.

Q. Mr. Allen, where is the point of interchange from the

Santa Fe for traffic moving over the inside gateway?

A. At Stockton, California.

Q. Now, please describe the manner in which this inter-

change takes place and the length of time involved.

A. Both railroads have their own yard at Stockton.

The Santa Fe’s yard is Mormon Yard, and our yard is

known as Stockton Yard.

Cars for the north arriving at Mormon Yard on the

Santa Fe are switched out and placed on a transfer about

intermediate to both yards.

From this point our yard engines pull the cars down into

our yard and make them up into trains.

The total time between the arrival of the Santa Fe train

in their yard at Mormon and the departure of our yard at

Stockton is approximately two hours.

Q. Mr. Allen, if there should be an increase in the volume

([fol. 107] of tonnage moving over the inside gateway, is the

Western Pacific in a position to provide the service neces-

sary to move additional traffic?

A. Yes, sir.

Q. Would you please state for the record the basis for

your conclusion as to the readiness of the Western Pacific

to meet a demand for increased tonnage?

A. If you will turn to Exhibit 22, I draw up figures of

the gross ton miles handled on the Western Pacific Rail-

road during the four busy war years, and for the last three

ears.

The statement shows the gross ton miles handled east and

west, and total on the Oakland-Stockton subdivision, the

Stockton-Oroville division, the Oroville-Portola subdivision,

and the Keddie to Bieber subdivision, which are the four

subdivisions that are applicable in this case.

You will note that during the heaviest war year, which

was 1945 on the western division, we are now handling ap-

proximately 75 per cent of the traffic which actually handled

during the war.

For the entire railroad, we are handling about 78 per

cent of the tonnage handled during the entire war.

During the war years we had no automatic biock signals,

except on our track, our side of the paired track. We were

constructing centralized traffic control in the Feather River

Canyon. The rest of the railroad did not have block signals.

(fol. 108] We had only about six diesel locomotives.

The rest of the traffic was handled by steam locomotives.

Now, we are all dieselized, and we have centralized traffic

control, and a much better railroad.

We have more cars available than we had at that time,

and unequivocally, I can say that we are in a position to

handle much more traffic than we are now.

Q. Mr. Allen, the Western Pacific, does the Western

Pacific have any diesel units or cabooses in a ready reserve

status?

A. As of April 1st, we had 27 diesel locomotive units, and

11 cabooses stored.

Q. Mr. Allen, is the present volume of traffic moving over

the inside gateway utilizing the full capacity of the West-

ern Pacific at its connection?

A. No, sir, it is not.

Q. In your opinion, is the Western Pacific in-a position

to provide additional transportation equipment and facili-

ties for traffic moving the inside gateway, should the need

arise?

A. Yes, sir, we are equipped to so handle.

Q. Have you caused any study to be made of the present

schedules which apply both via the inside gateway and the

Southern Pacific Company to Portland?

Mr. Burkett: I will object to the question unless the

inside gateway schedules are limited to operations into and

out of Portland.

I think that the complaint here brings into issue only

[fol. 109] interchange at Portland, so an inside gateway

schedule which may exist without operations into Portland

has no relevance to the issues in this proceeding and would

be misleading.

Mr. Treanor: In the first place, Mr. Examiner, many of

these points that are reached by the inside gateway today

through our connection with the Great Northern are com-

mon points served by the defendants.

We want to show the Commission what we are doing to

these points today, and I think it is pertinent to this case.

Exam. Wright: I will overrule the objection.

By Mr. Treanor:

Q. Mr. Allen, have you made such a study?

A. Yes, sir, I have set down the schedules now in effect

by the various railroads from Southern and Central Cali-

fornia, to the Pacific Northwest, which is Exhibit No. 23.

The northbound schedule on the Southern Pacific, that

runs daily and handles all traffic, leaves Los Angeles at

8:00 a.m., you will note, and arrives at Portland at 11:30

a.m. on the third day.

There are connections on the Northern Pacific, Great

Northern and Union Pacific that can handle this traffic to

Seattle.

The same thing is true of the daily train on the Southern

Pacific out of Oakland at 11:15 p.m. This train has con-

nections with all three railroads from Portland to Seattle.

Q. Mr. Allen, are you personally acquainted with gen-

[fol. 110] erally the type of traffic that is handled on South-

ern Pacific’s Star Pacer?

A. From their schedule instructions No. 375, the Star

Pacer operates from Los Angeles to Portland with mer-

chandise and the OFC, including traffic set out at Bakers-

field, Fresno, Roseville, Klamath Falls, Chemult and Enu-

gene, operates from Los Angeles, Tuesday, Wednesday,

Thursday and Friday.

Q. Mr. Alleff, are your present schedules in this territory

set up to make under today’s conditions a convenient con-

nection with the Union Pacific or Northern Pacific?

A. No, sir, it is not.

Q. In the event—excuse me.

Why is that, Mr. Allen?

A. Because there is no traffic moving that way.

Q. Mr. Allen, in the event that traffic should move over

that, or over those routes, are you in a position to make

the necessary changes in your schedule?

A. Yes, sir.

Q. Make a more efficient and timely interchange with

those carriers?

A. Yes, sir, we are.

Mr. Treanor: Your Honor, that concludes the direct ex-

amination of this witness.

Exam. Wright: Cross-examination.

(fol. 111] Cross examination.

By Mr. Hobbs:

Q. Mr. Allen, going back to your description of the inside

gateway, there is a connection between the Union Pacific

and the Great Northern at Bend, isn’t there?

A. Yes, sir.

Q. And is there any interchange facilities there, or have

you been to Bend?

A. Yes, I have been to Bend. It is a joint yard with the

Oregon trunk and the Union Pacific.

Q. So that freight could be interchanged there, as well as

anywhere else?

A. Yes, sir.

Q. Now, then, after you, after the Great Northern hauls

that train up to Wishram, it then goes into Vancouver, I

think you said, over the SP&S?

A. It goes over the Oregon Trunk, and Bend to Wish-

ram, and then the SP&S from Wishram to Portland.

Q. Yes, that is what I should have said.

A. Yes.

Q. Now, on arrival to Vancouver, the train is then taken

to the Great Northern yard, or some yard in Vancouver,

isn’t it?

A. That is the SP&S yard.

Q. The train is taken into that yard?

A. That is correct.

Q. And there the cars that are in the train for Portland

[fol. 112] are taken out of the train?

A. Yes, sir.

Q. And where is the next move with those cars?

A. Let me explain. The train—we are talking now about

a northbound train going to Seattle.

Q. Well, no, I am talking about a train going to Portland.

A. All right, okay.

The Portland cars are handled in trains going to Seattle,

and I would like to describe the manner in which the cars

are taken out of the train at Vancouver for Portland.

This northbound train is switched at Klamath Falls, so

that all of the Portland cars are on the train just ahead

of the caboose, and as this SP&S train is pulling into Van-

couver yard, which turns the train north towards Seattle,

the train is stopped and a cut is made ahead of these Port-

land cars, and uncoupled from the rear of the train, and

the head-in of the train pulls into the Vancouver yard.

The SP&S switch engine comes, couples the cars on the

rear of the train and goes around the other leg to Port-

land.

Q. That is in the Vancouver yard?

A. Yes, sir.

Q. All right, then, from there as I understood, you, then,

they are transferred by an SP&S switch engine to the

Guilds Lake Yard at Portland?

A. Wherever they happen to be going at Portland, yes,

sir.

[fol. 113] Q. Wouldn’t they go into the Guilds Lake Yard?

A. Could be, yes.

Q. How else would you get any interchange with the

Southern Pacific, Union Pacific, or anybody else, if they

didn’t?

A. For those cars, that is where they would go.

Q. Then they go through the yard at Guilds Lake?

A. That is right, Northern Pacific terminal switches

them there.

Q. Yes. And from there they are taken by the Northern

Pacific terminal switch engines to the depot yard?

A. Yes, sir.

Q. From there—

A. If there were any cars interchanged, that is the way.

It wasn’t handled right there. There is none, you under-

stand.

Q. This would be the method of operation?

A. Yes.

Q. Of any cars going with the Union Pacific?

A. Yes.

Q. That is what I am interested in.

A. Yes.

Q. Now, from the depot yard, then, the cars would be

taken by Union Pacific switch engines?

A. That is right.

Q. Across to the east side of the River, and up to—

A. Albina.

(fol.114] Q. Albina yard, for in-training?

A. That is right.

Q. In other words, then the cars—well, let me say this

first. You also described the operation involved in inter-

changing cars to and from the Southern Pacific. They come

into the Southern Pacific Brookland Yard, and they are

taken by the Southern Pacific over to Albina Yard directly?

A. Yes.

Q. So then, in other words, any cars that were to be inter-

changed to the Union Pacific at Portland off the inside

gateway would go through three yards, as compared with

no yards on the interchange from the Southern Pacifie to

the Union Pacific. That is true, isn’t it?

A. That is correct.

Q. Now, then, suppose yon got some cars over the Union

Pacific at Albina, and they were consigned, if anybody

would be foolish enough to do it, to Spokane on the Union

Pacific. Those cars then would be put in a Union Pacific

train and taken to Spokane, which would result in haul-

ing them up the south side of the Columbia River, for a

couple of hundred miles, the very distance that they traveled

from—

A. Wishram—

Q. —Wishram to Portland?

A. That is right.

Q. So on any cars that were consigned to a point on the

(fol. 115] Union Pacific east of Portland, there would al-

ways be a backhaul of some 200 miles. That is true, isn’t it?

A. If they went through that route, yes, sir.

Q. Well, how else would they go with the Union Pacific?

A. They couldn’t go any other way.

Q. So all I am talking about is the Union Pacific—

A. Yes.

Q. —and so far as the Union Pacific is concerned we

would always have, there would always be involved an addi-

tional haul of some 200 miles to get them back up to where

they crossed the river in the first place.

A. That is right.

Q. Did I understand you correctly to say that at the

present time you have no, insofar as train operation is

concerned, you have no real connection with any Union

Pacific eastbound train?

A. We do not have any agreed schedules with the Union

Pacific, that is correct.

Q. Now, then, taking the other side of the coin, if there

was any cars consigned to Seattle, turned over to the Union

Pacific at Portland, you would have to go through all these

yards which you and I just described to get them to Port-

land, to take them back out again to a point that they could

reach via the Great Northern at the present time without

any of that?

(fol. 116] A. Let me get your question straight, that

they— —

Q. Well, the Great Northern at the present time, I pre-

sume, are parties to joint rates with the Western Pacific

to Seattle?

A. Right.

Q. So if the cars were routed via the Union Pacific, Port-

land to Seattle, you would have to go through these three

or four yards to get them to us; then we take them back out

again to get to the same place that they could have gone

without going through any yards.

A. That is correct.

Q. Now, on your Exhibits 23 and 24, there are other

Southern Pacific-Union Pacific connecting trains, there are

others than you have listed on these two Exhibits 23 and 24,

aren’t there?

A. That is right. I took them from the Southern Pacific

concensed schedules, and that is the connections that they

show.

Q. Yes, but there are others?

A. Yes, sir.

Q. There are other trains that they could make connec-

tions with?

A. Yes, sir, that is right.

Mr. Hobbs: I think that is all I have, sir.

Exam. Wright: Any further cross?

By Mr. Farrell:

Q. Mr. Allen, when the SP&S train arrives in Vancouver,

you stated that the cutter cars going to Portland would

be taken on across into Portland?

{fol.117] A. Yes, sir.

Q. And if those cars were going to be interchanged with

the Northern Pacific, then into what yard would they be

moved into?

A. Into Guilds Yard.

Q. And the interchange would be effected at that point?

A. Yes, sir.

Q. And how would that be effected?

A. The Northern Pacific terminal switch engines make

them up into a Northern Pacific train.

Q. It would be through the use of the facilities of the

Northern Pacific Terminal Company at Portland?

A. That is right.

Q. Now, the other cars in that train going to Seattle on

the same SP&S train routed Great Northern, or the Bieber

to Seattle, how could that be handled when the train arrived

at Vancouver?

A. The Great Northern crews operate between Portland

and Seattle. Their trains are made up and terminated in

the Hoyt Street Yard, which is directly adjacent to the

Union Station. Their crew would originate at the Hoyt

Street Yard, and go to the Oceanic Lead at the Guild Lake

Yard, and pick up any cars there, and go to Vancouver

and pick up this train that came in from the south, and

continue on through to Seattle.

Q. Now, the distance from Vancouver to Portland is

{fol. 118] about ten miles, isn’t it?

A. That is correct.

Q. So the cars that were routed to the Northern Pacific,

for example, would be handled ten miles south, and then

they would have to be handled ten miles north?

A. That is correct.

Q. If they were routed Great Northern, they would not

have that circuity, is that correct?

A. That is correct.

Q. Now, if that car were routed to the Northern Pacific

out of Portland to Spokane, now, that car would be handled

similar to the Union Pacific car. It would be handled, in

other words, from Wishram into Vancouver, would it not,

first?

A. Yes, sir.

Q. And then it would be interchanged at Portland to the

Northern Pacific, and then would move out on the Northern

Pacific?

A. Yes, sir.

Q. And in fact it would have to move up through the

Auburn yard of the Northern Pacific on into Spokane,

would it not?

A. That is correct.

Q. Now, if that car were routed Great Northern, this

would move on into Wishram, and from Wishram would

move right through direct over the lines of the SP&S to

Spokane, would it not?

A. Right.

Q. And you have made no comparison with the amount of

[fol. 119] circuity of the mileage involved therein, have

you?

A. No, sir.

Q. Would you agree with me that it is very substantial?

A. It is.

Q. Now, in showing the schedules that are set forth on the

so-called inside gateway, on your Exhibits 23 and 24, that

reflects the present method of handling, does it not?

A. Yes, sir.

Q. Which you have described?

A. Yes, sir.

Q. On the present traffic?

A. Yes, sir.

Q. And does not reflect the schedule which would exist if

the traffic were handled back in Portland?

A. That is right.

Q. Now, have you actually observed an interchange in

Portland between the Northern Pacific and the Great North-

ern ad, physically observed it yourself, in the train

moves that are made?

A. I have been in that yard when they were switching

cars, but I couldn’t identify whether they were from one

railroad or the other.

Q. The answer to my question then is “no”?

A. That is correct.

Mr. Farrell: I have nothing further.

{fol.120] Exam. Wright: Any further cross?

Mr. Burkett: Yes, sir.

By Mr. Burkett:

Q. Mr. Allen, referring to your Exhibit No. 22, what

are the train miles for the year 1960 between Keddie and

Bieber?

A. Train miles, I don’t know that figure.

Q. Do you have those figures?

A. I could get them. I don’t have them with me.

Mr. Burkett: Mr. Examiner, at this time I would like

to ask that we be furnished with the train mile figures cor-

responding to the gross ton miles trailing figure shown on

Exhibit No. 22.

We are agreeable to those being furnished at the con-

venience of the complainant.

Mr. Treanor: Before I agree, I would like to know the

purpose of this. What is the significance of it, before we

go to a lot of work?

Mr. Burkett: I think that there are decisions which indi-

cate that in a proceeding of this type the Commission is

interested in the comparison of the operating characteris-

tics of the allegedly preferred route and the alleged sought

route, and car density per train would necessarily be the—

would necessarily be and constitute one of those transporta-

tion characteristics, and it is for that reason that we make

that request.

Mr. Treanor: I am not willing to provide it voluntarily,

[fol.121] Your Honor. I don’t want to provide that in-

formation for Mr. Burkett to turn over to his cost depart-

ment.

Mr. Burkett: It is not a question of turning it over to

the cost department. It is a question of comparing train

density of these two routes, and I have decisions of the

Commission which would indicate that of this, information

of this type is relevant evidence for the Commission to con-

sider.

Mr. Treanor: We have other matters going that are not

connected to this proceeding and, therefore, I am not will-

ing to give it. I think you might use it somewhere else in

another entirely unrelated proceeding.

Mr. Burkett: Well, I will submit for the record that I

ask for the material in good faith, and we feel that it is

relevant to this proceeding, and there is no showing that the

information could not be made easily available.

Exam. Wright: Your request appears in the record, but

Iam not going to require the complainant to produce the in-

formation.

By Mr. Burkett:

Q. Now, turning to your Exhibit No. 23, Mr. Allen, am I

correct that the inside gateway schedules there shown would

necessarily be longer if interchange were made, if the traf-

fie were actually carried into Portland, interchanged at

Portland, and then moved out to Seattle?

A. I don’t know as I am prepared to answer that ques-

tion when there is no traffic moving that way now.

(fol. 122] Q. All right. Well, let us look at this train

which arrives at Vancouver at 3:00 p.m.

A. Yes, sir.

Q. That train carries traffic moving into Portland where

it arrives at 5:30 p.m. At what time does that traffic move

out of Vancouver for Seattle today?

A. Today it moves out of there at 5:00 p.m.

Q. It leaves Vancouver at 5:00 p.m. to arrive at Seattle at

10:00 p.m.?

A. Yes, sir, that is on the Great Northern now.

Q. Yes. And what time does that train which leaves Van-

couver at 5:00 p.m.—I beg your pardon.

At that time does that train which leaves Vancouver at

5:00 p.m. leave Portland?

A. About 4:00 p.m.

Q. Are these inside gateway schedules the only schedules

which are regularly operated through the inside gateway?

A. We have extra trains that we operate up that route

maybe about three days a week. We run extra trains be-

sides the ones that are shown.

Q. That is, there are three extra trains a week north-

bound, and three extra trains a week southbound?

A. No, the schedules southbound are daily en both sched-

ules.

Q. Yes, sir.

A. The GWS and the California, but the northbound

{fol. 123] schedule, the Expeditor you will note operates

only three days a week and, in addition to that, we operate

another train about two more days per week.

Q. On the approximate schedule that you have there

shown for the Expeditor?

A. It is a slower train. It is a local one. We don’t con-

sider it a part of a through schedule.

Q. Now, when you were describing the operating char-

acteristics of the inland gateway, I don’t think I fully

understood your description of the line from Chemult to

Bend. Would you elaborate on that, please?

A. It is a piece of railroad that has no block signals, but

does have heavy ballasts and rail.

Q. The trains are operated on train orders?

A. Yes, sir.

Q. I suppose—

A. They are operated on train orders from Keddie to

Vancouver with the exception of the centralized traffic con-

trol between Klamath Falls and Chemult.

Mr. Burkett: That is all Ihave. Thank you.

Mr. Farrell: Mr. Examiner, I have a question I over-

looked, if you will indulge me.

. Exam. Wright: Very well.

By Mr. Farrell:

Q. Mr. Allen, did you state that all the traffic of your

road was—strike that.

[fol.124] Mr. Allen, I believe you testified that your line

north of Keddie, between Keddie and Bieber, did not have

automatic block signals or CTC.

Is that correct?

A. That is right.

Q. You were in the room and heard the testimony of the

witness Loftus?

A. Yes, sir.

Q. And he stated, and I quote from page 7 of his pre-

pared statement:

“While not a recent or continuing project it is note-

worthy that all traffic has been under CTC or automatic

block signals for almost three years.”

Can you explain that conflict in the testimony?

A. He had reference to the main line between Oakland

and Salt Lake City.

Q. Do you not consider your line between Oakland and

Keddie to be main line?

A. Secondary main line.

Q. His testimony says, “all main line.” Do you then con-

sider that line to be branch line?

A. In the reference to the railroad, as between ours—

Q. Within the company?

A. Within the company, we call it the main line between

Oakland and Salt Lake City, and we call it the Northern

(fol. 125] California extension of the NEC from Keddie to

Bieber.

Q. You consider branch line then—

A. Well, it isn’t necessarily a branch line, but it isn’t a

part of our main east and west line.

Mr. Farrell: I have nothing further.

Exam, Wright: Any redirect?

Mr. Treanor: Yes, sir, just one or two questions prompted

by several questions on cross.

Redirect examination.

By Mr. Treanor:

Q. This may be clear in the record, Mr. Allen, but on the

operation of these trains after the connection is made with

the Great Northern, and the movement into Portland, now,

does the Great Northern go into Portland? Are those trains

Great Northern trains, or are those trains interchanged

with the SP&S or the O.T.?

A. No, the cars are Great Northern cars, and they are

handled between Vancouver and Portland by the SP&S

for the Great Northern on a contract basis.

Q. The contract has been approved by the Interstate

Commerce Commission?

A. Yes, sir.

Mr. Treanor: Thank you. That is all, thank you.

Exam. Wright: Any recross?

Mr. Farrell: One more question for the record.

[fol. 126] Recross examination.

By Mr. Farrell:

Q. Could we have the weight of the rail between Keddie

and Bieber?

A. A minimum of 112 pounds. There have been some

115 changed out on curves.

Mr. Farrell: Nothing further.

OrFers IN EvIDENCE

Mr. Treanor: I would like to offer the Exhibits 20, 21, 22,

23 and 24, Mr. Examiner.

Exam. Wright: Any objections?

(No response.)

Exam. Wright: Hearing none, the Exhibits 20 through

24, inclusive, are received in evidence.

(Complainants’ Exhibits Nos. 20 through 24, inclusive,

Witness Allen, were received in evidence. )

[fol. 127] Mr. Treanor: I will call Mr. Stratton.

F. B. Stratton was duly sworn and testified as follows:

Exam. Wright: Please be seated.

Direct examination.

By Mr. Treanor:

Q. Will you please state your full name and your busi-

ness address?

A. F. B. Stratton, 526 Mission Street, San Francisco.

Q. Mr. Stratton, by whom are you employed, sir, and in

what capacity?

A. By the Western Pacific Railroad Company. I am di-

rector of industrial development and real estate, and have

the same title and responsibility for the subsidiary com-

panies, Sacramento Northern Railway, Tidewater Southern

Railway, and am president of the Standard Realty and

Development Company.

Q. For the record, what is the Standard Realty and De-

velopment Company?

A. It is a wholly-owned subsidiary of the Western Pa-

cific for the purpose of acquiring, developing and selling

land to accommodate industries. .

Q. Mr. Stratton, briefly what has been your business ex-

perience?

A. I have had 39 years of experience with the Western

[fol. 128] Pacific Railroad. I have been in the same posi-

tion since 1946.

Prior to that, most of my experience was gained in the

traffic department.

Q. Briefly, what are the areas of responsibility for the

industrial department?

A. The function of the department is primarily to obtain

new industries, to locate on the railroad from which revenue

gains are expected to flow.

In order to accomplish this effectively, new lands are

acquired, developed and sold to the prospective new in-

dustries. Also, non-operating real properties are managed

for profitable return.

I have the same responsibilities for our subsidiary com-

panies, the Sacramento Northern, Tidewater Southern, and

Standard Realty.

Mr. Hobbs: Mr. Examiner, Mr. Stratton seems to be

reading a prepared statement. I wonder if we may have

copies of it.

Mr. Treanor: He is not reading a prepared statement.

He is reading from notes, Mr. Hobbs.

Mr. Hobbs: It looks like questions and answers to me.

Mr. Treanor: Well, they are questions and answers.

Mr. Hobbs: Do you have a copy of it we can have?

Mr. Treanor: I have my own.

Exam. Wright: I will let him proceed.

Mr. Hobbs: It is in the record.

[fol. 129} By Mr. Treanor:

Q. Mr. Stratton, do you personally participate in the

negotiations for the location of industries on your lands?

A. Yes, I do. All negotiations of any major importance

are reviewed by me before they are submitted to higher

management for approval.

On the major subjects of considerable importance, I usu-

ally handle the negotiations completely by myself.

Q. Now, briefly what is the acreage or the number of

locations which you presently have available for locating

any shippers on your line in California?

A. We have approximately 4500 acres of potential in-

dustrial land, and it is located in about 30 different areas.

Q. Now, does that number or acreage vary in any ma-

terial sense from year to year?

A. Not materially. The trend has been upward since

the program was launched about ten or 11 years ago.

Q. Mr. Stratton, how many new industries have located

on the lines of the Western Pacific and its subsidiaries dur-

ing the last three full years 1958, 1959 and 19601

A. About 100. ;

Q. Now, what are the various factors that, to your per-

sonal knowledge, are Aither determinative or important in

the sale of an industfial site on your railroad?

A. Well, the proximity of markets or the proximity to

(fol. 130] markets, I should say, the supply of raw material,

the abundance of good labor, transportation advantages are

very important. There are a number of others of less im-

portance.

The order of importance in each one of these, however,

will vary according to the specific requirements of the in-

dustry.

Q. Now, Mr. Stratton, in the location of an industry on

your line, or in your efforts to locate industry on your line,

are you in competition with any other carrier or carriers in

the state of California?

A. Yes.

Q. Now, can you tell us more specifically the location of

such areas of competition?

A. We are competitive with the Santa Fe at Pittsburg,

Stockton, Modesto areas, and with the Southern Pacific at

the same places and practically all of our other points in

California.

Q. To your personal knowledge, has the availability or

nonavailability of competitive through rates and routes

played any material part in cither

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