# Appendix — United States v. Interstate Commerce Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0030%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1970 - **Citation:** 396 U.S. 491 ## Text IN THE Supreme Court of the United States OCTOBER TERM, 1969 NORTHERN LINES MERGER CASE No. 28 UNITED STATES OF AMERICA, APPELLANT Vv. INTERSTATE COMMERCE COMMISSION, ET AL. No. 38 CHARLES E. BRUNDAGE, ET AL., APPELLANTS v. INTERSTATE COMMERCE COMMISSION, ET AL. No. 43 CITY OF AUBURN, APPELLANT Vv. INTERSTATE COMMERCE COMMISSION, ET AL. No. 44 LIVINGSTON ANTI-MERGER COMMITTEE, APPELLANT Vv. INTERSTATE COMMERCE COMMISSION, ET AL. ON APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA 4 TOR Re ii INDEX VOLUME I Relevant Docket Matries Coenen OF Epes CONTE nn Jae Gs Tee CO 1966 Report of Commission, denying authorization for BIE sisrasdes ccaaslonberecilevantdea datliarSdanetscascesetiantal gcorcsedstanametbaiesd 1967 Report of Commission on reconsideration, authorizing I Ee Meee Second Report of Commission on Reconsideration, denying petitions for reconsideration and modifying certain con- I onc ae _ BOM ee AE Ee Ue Third Report of Commission on Reconsideration, construing I A a lacnretelieecaaebabds VOLUME II Order of Commission extending period for exercise of merger authorizations previously granted, April 23, 1969 ._____. Report of the Hearing Examiner, served August 24, 1964 __ VOLUME III Report of the Hearing Examiner (continued) _ Report of the Commission on Petitions for Rehearing, March 31, 1966 RECENT ET BSE ee ee ELS Complaint by the United States, filed May 9, 1968 > Answer of Intervening Defendants, filed May 10, 1968 Answer of Interstate Commerce Commission, filed May 14, BIE sclccsceicsisvoseaeoetn 245 463 498 505 507 1284 *Includes minor corrections noted in sua sponte orders dated December 11, 1968 and April 16, 1969. INDEX (Continued) iii Page Motion of Charles E. Brundage, et al., to Intervene as Plain- tiffs, together with complaint, filed May 15, 1968... .._ 1286 Order of District Court granting Motions to ectincina filed May 16, 1968 _ 1294 Motion of Livingston Anti-merger Committee to Intervene as Plaintiff, together with complaint, filed May 23, 1968 _. 1295 Court order granting aforesaid motion, filed June 3, 1968 ___. 1302 Answer of Intervening Defendants Great Northern Railway Company, et al. to Intervening Complaint of nil Anti-merger Committee . 1303 Answer of Intervening Defendants Great Northern Railway Company, et al., to Intervening Complaint of Charles E. Brundage, et al., filed June 5, 1968 1306 Answer of Intervening Defendants 230 Pacific Northwest Shippers to Complaint of Plaintiff United States of Amer- | Us RWI UARUUN yn es 1309 Answer of Intervening Defendant Public Utility Commis- sioner of Oregon, filed June 17, 1968...» 1325 Answer of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, filed June 24, 1968... Gianni nese eenidikehaec eens 1327 Notice of Appeal of Livingston Anti-Merger Committee _..__ 1336 Supreme Court’s Order of February 24, 1969 noting probable pi | a a a a ene ere os Oe 505 SERVICE DATE APRIL 24, 1969 ORDER INTERSTATE COMMERCE COMMISSION Finance Docket No. 21478 GREAT NORTHERN PACIFIC & BURLINGTON LINES, INC.— MERGER, ETC.—GREAT NORTHERN RAILWAY COMPANY, ET AL. Finance Docket No. 21479 CHICAGO, BURLINGTON & QUINCY RAILROAD COMPANY, ET AL.—STOCK ISSUANCE, ETC. Finance Docket No. 21480 GREAT NORTHERN PACIFIC & BURLINGTON LINES, INC. ET AL, CONSTRUCTION AND ABANDONMENT IN THE MATTER OF EXTENSION OF THE PERIOD WITHIN WHICH THE AUTHORIZATIONS PREVIOUSLY GRANTED HEREIN MAY BE EXERCISED PRESENT: VIRGINIA MAE BROWN, Chairman to whom the above matter has been assigned ‘or action thereon. Upon consideration of the record in the above-entitled proceedings, and of the stay order entered on December 16, 1968, by the Supreme Court of the United States in United States of America v. United States, et al., No. 899, October Term, 1968, and in City of Auburn v. United States, et al., No. 999, October Term, 1968; and good cause appearing therefor: It is ordered, That the period within which the au- thorizations previously granted herein may be exercised be, and is hereby, extended to May 4, 1970. = ss ee oe 4 4 3 4 a i 4 : ME SRS 506 Dated at Washington, D. C., this 23d day of April, 1969. By the Commission, Chairman Brown. H. NEIL GARSON Secretary [SEAL] — 507 REPORT OF HEARING EXAMINER INTERSTATE COMMERCE COMMISSION Finance Docket No. 21478 Finance Docket No. 21479 Finance Docket No, 21480 GREAT NORTHERN PACIFIC & BURLINGTON LINES, INC.— MERGER, ETC.—GREAT NORTHERN RAILWAY COMPANY, ET AL. TABLE OF CONTENTS Page No. 514 Appearances. 517 The applications. 521 Procedural. 523 Fair hearing. 536 The applicants: 536 Corporate status, operations and properties. 536 Great Northern Pacific & Burlington Lines, Inc. 537 Great Northern Railway Company. 544 Northern Pacific Railway Company. 553 Chicago, Burlington & Quincy Railroad Company. 561 Pacific Coast R. R. Co. 562 Spokane, Portiand and Seattle Railway Company. 564 Officers, directors, and intercorporate relationships. 565 Traffic participation. 576 Valuation, 577 Financial considerations. 586 The transactions: 586 General. 590 The major transactions: 590 The Northern Lines merger. 596 The Burlington merger. 599 The SP&S lease. 602 The related transactions: 602 Acquisition of interests in subsidiaries or affiliates. 603 Acquisition of motor carrier properties. 608 Acquisition of trackage rights. 609 Securities transactions: 609 Issuance of stock—preferred. 611 Issuance of stock—common. 508 Page No. 613 Issuance of bonds. 621 Modification of collateral trust bonds. 623 Assumption of obligations and liability. 628 Other related assumptions of liability. 632 Construction and extension of lines of railroad. 638 Abandonment of lines of railroad. 641 Applicant’s evidence: 641 Origin of application. 646 Economic reports and appraisals. 649 Consolidation study report (Wyer Report). 654 Estimated savings. 658 Studies I—XX. 709 Recapitulation. 711 Appraisals and other reports. 713 Prospective diversion of traffic. 714 Prospective benefits: a Rte na ear Pacis DR S WERENT aplaia eNSM ALS li ead Va balP A: ; 714 General. 4 718 Proposed faster freight service—schedules. 4 727 More advantageous transit—routing privileges. ; 732 Increased availability of cars. 737 Improved balance of traffic. 738 Benefits of unification market-wise to producing areas. 740 Other benefits. 743 National defense. 746 Public relations efforts. 747 Principal shipper support. 769 Competition. 769 General. 770 Railroad. 776 Other modes. 784 Stock exchange considerations. 785 Negotiation and arms-length bargaining. 796 Stockholders’ contribution to the unified system. 802 Interveners: 803 Northern Pacific Stockholders Protective Committee. 813 Intervening railroads. 815 Chicago, Rock Island & Pacific Railroad Company. 815 Union Pacific Railroad Company. WEE Ner te aT rage; 2 Ren piiccmc “ PO Oe GEE PIELER IS LNG LENE 8 CE PE HEELERS — 509 Page No. 818 Southern Pacific Company. 823 Western Pacific Railroad Company. 825 Atchison, Topeka and Santa Fe Railroad Company. 828 Soo Line Railroad Company. 833 Chicago, Milwaukee, St. Paul & Pacific Railroad Company. 909 Chicago & North Western Railway Company. 950 Other Interveners—In support. 956 Other Intervenors—In support with conditions. 973 Other Interveners—lIn support of condition, but neither in support of or opposed to unifica- tion as such. 978 Other Interveners—In opposition. 1077 General discussion and conclusions. 1077 Applicable standards. 1083 Benefits. 1092 Injuries. 1097 Summary. 1101 Recommendations. 1116 Ultimate findings, certificate and order. 2 SAD 5 3 4 510 INTERSTATE COMMERCE COMMISSION Served August 24, 1964 NOTICE TO THE PARTIES Exceptions, if any, must be filed with the Secretary, IN- TERSTATE COMMERCE COMMISSION, Washington, D. C., and served on all other parties in interest within 30 days from the date of service shown above, or within such further period as may be authorized for the filing of such exceptions, At the expiration of said period for the filing of exceptions, the recommended order will be- come the order of the Commission and will become effec- tive unless exceptions have been seasonably filed or the order has been stayed or postponed by the Commission. If exceptions are filed, replies to exceptions may be filed within 20 days after the final date for filing of excep- tions, It should not be assumed that the recommended order has become effective as the order of the Commis- sion until a notice or order to that effect has been served. Finance Docket No, 21478? GREAT NORTHERN PACIFIC & BURLINGTON LINES, INC.— MERGER, ETC.—GREAT NORTHERN RAILWAY COMPANY, ET AL. Decided 1. (a) Merger of the properties and franchises, includ- ing the motor carrier operating rights of Great Northern Railway Company, Northern Pacific Railway Company, and Pacific Coast R. R. Co., into Great Northern Pacific & Bur- lington Lines, Inc., for ownership, management and operation; 1 This report also embraces Finance Docket Nos. 21479, Chicago, Burlington & Quincy Railroad Company, et al.—Stock Issuance, ete., and 21480, Great Northern Pacific & Burlington Lines, Inc., et al.—Construction and Abandonment. “y (b) (c) (d) (e) 511 Acquisition by Great Northern Pacific & Bur- lington Lines, Inc., of sole or joint control of carriers subsidiary to or affiliated with Great Northern Railway Company, Northern Pacific Railway Company and Pacific Coast R. R. Co., through ownership of stock; Acquisition by Great Northern Pacific & Bur- lington Lines, Inc., as successor in interest, of all lease-hold rights, trackage rights and joint ownership in or joint use of any railroad line or lines and terminals incident thereto possessed by Great Northern Railway Company, Northern Pacific Railway Company, and Pacific Coast R. R. Co.; Subsequent merger of the properties and fran- chises, including the motor carrier operating rights, of Chicago, Burlington & Quincy Rail- road Company, into Great Northern Pacific & Burlington Lines, Inc., for ownership, manage- ment and operation; Acquisition by Great Northern Pacific & Bur- lington Lines, Inc., of sole or joint controj of carriers subsidiary to or affiliated with Chicago, Burlington & Quincy Railroad Company, through ownership of stock; (f) Acquisition by Great Northern Pacific & Bur- (g) (h) lington Lines, Inc., of all leasehold rights, track- age rights and joint ownership ‘in or joint use of any railroad line or lines and terminals inci- dent thereto possessed by Chicago, Burlington & Quincy Railroad Company; and Lease by Great Northern Pacific & Burlington Lines, Inc., of the lines of railroad and other properties owned, used, or operated by Spokane, Portland and Seattle Railway Company, for a term of ten years; and Acquisition by Great Northern Pacific & Bur- lington Lines, Inc., through the lease and during the term of said lease, (1) of sole or joint control of carriers subsidiary to or affiliated with Spokane, Portland and Seattle Railway wt *& ey i ¢ f * ¥ » % PBA Paes 512 a Company, and (2) of all leasehold rights and trackage rights and joint ownership in or joint use of any railroad line or lines and terminals incident thereto of railroad possessed by Spo- kane, Portland & Seattle Railway Company, ap- proved and authorized. Conditions prescribed. Authority granted to Chicago, Burlington & Quincy Railroad Company to issue not exceeding $70,- 000,000 principal amount of its first and re- funding 4 percent bonds, due August 1, 2010, to be sold to Great Northern Pacific & Burling- ton Lines, Inc., at par, plus accrued interest, if any, and proceeds to be used for the purposes set forth herein. Conditions prescribed. Authority granted to Great Northern Pacific & Bur- lington Lines, Inc.; (a) To issue (1) not exceeding 17,500,000 shares of common capital stock, without par value, (2) not exceeding 3,102,333 shares of preferred stock, par value $10 each, (3) not exceeding $71,500,000 principal amount series A consoli- dated mortgage 4 percent bonds, due October 1, 1984; (b) To assume (1) obligations and liabilities of Great Northern Railway Company, Northern Pacific Railway Company, Pacific Coast R. R. Co., Chicago, Burlington & Quincy Railroad | Company, and companies subsidiary to or affili- | ated therewith, including obligations contingent- ly guaranteed either solely by Great Northern Railway Company, Northern Pacific Railway Company, Pacific Coast R. R. Co., Chicago, Bur- lington & Quincy Railroad Company, or jointly with other guarantors, and (2) during the term of lease, the obligations and liabilities of Spo- kane, Portland and Seattle Railway Company, and companies subsidiary to or affiliated with, including obligations contingently guaranteed either solely by Spokane, Portland and Seattle Railway Company, or jointly with others; Paes hig INC OPTSaTAUD RORRRERTOE RON SERENE ALE te Nam Ramp. eed NAS | 513 (ce) To pledge $71,500,000 principal amount of Great Northern Pacific & Burlington Lines, Inc., series A, Consolidated mortgage 4 percent bonds, due October 1, 1984, as collateral security under Northern Pacific collateral trust indenture; (d) To modify and alter the status of the Northern Pacific collateral trust bonds through a supple- mental indenture thereto which provides for as- sumption of Northern Pacific Railway Com- pany’s obligations under the Northern Pacific collateral trust indenture, proposed substitution of collateral for the elimination of certain pro- visions of the collateral trust indenture relating to substitution of collateral, and for grant of a right to the holders of the collateral trust bonds | to direct the manner of voting the pledged series A consolidated mortgage bonds; all in connec- tion with proposed mergers and lease. Condi- tions prescribed. Application for authority un- der section 20a dismissed in all other respects. 4. Certificates issued; (a) Authorizing construction by Great Northern Pa- cific & Burlington Lines, Inc. as successor, of ) connecting lines of railroad and extensions of lines in Douglas County, Wis., Pine, Stearns, Wadena, Wilkins, Clay and Polk Counties, Minn., Cass and Grand Forks Counties, N. Dak., Lewis and Clark County, Mont., Bonner County, Idaho, Spokane, Whitman and King Counties, Wash., and Multnomah County, Oreg.; and (b) Permitting abandonment (1) by Great Northern Pacific & Burlington Lines, Inc., as successor, of portions of the lines of railroad of Great Northern Railway Company in Clay County, Minn., Lewis and Clark County, Mont., Spokane County, Wash., and of Northern Pacific Rail- way Company in Wilkin County, Minn., and Spokane County, Wash.; and (2) by Spokane, Portland and Seattle Railway Company, as les- sor, in Spokane County, Wash.; all in connection with proposed mergers and lease. Conditions prescribed. ~— ia ahs aN Rha SL RE NUA RE eee eu Aa os TE iti anita Eder tar ee 514 APPEARANCES Kenneth F. Burgess, Ray Garrett, John B. Schwemm, D. Robert Thomas, Harold K. Bradford, Jr., Roger T. Crosby, E. T. Conmy, Jr., R. T. Cubbage, Frank S. Far- rell, James A. Gillen, Anthony F. Kane, Martin Lucente, Frank J. Magill, Eldon Martin, Earl F. Requa, Woodrow L. Taylor, R. Paul Tjossem, L. E. Torinus, and James i R. Walker for applicants. ' Homer G. Hamilton for the State of Nebraska, Eldon i Martin for the State of Missouri, The Missouri Farmers bi Association, The Nebraska Lumber Merchants Associa- tion, The North Idaho Economic Development Associa- i tion, Inec., The Quincey (Ill.) Chamber of Commerce, The Alliance (Nebr.) Chamber of Commerce, and six various shippers, Henry A. Archambo for the Minneapolis (Minn.) Traffic Association, 7. N. Early for the Billings (Mont.) Traffic Bureau, H. FE. Franklin, Jr., for the Port of Tacoma, Wash., and the Tacoma (Wash.) Chamber of Commerce, Gerald E. Franzen for the Chicago Asso- ciation of Commerce and Industry, FE. J. Hansen for the Grand Forks (N. Dak.) Chamber of Commerce and Red River Valley Potato Growers, Association, J. D. Paul for the Seattle (Wash.) Chamber of Commerce and the Seattle Traffic Association, FE. C. Pewters for the Everett (Wash.) Chamber of Commerce, Robert B. Post for Car- gill, Incorporated, Harry C. Sundblad for the Omaha (Nebr.) Chamber of Commerce and the Omaha Grain Exchange, Erv. A. Timm for the St. Paul (Minn.) Area Chamber of Commerce, ard Lillian Widmyer for herself, interveners in support. John M. Agrey, John C. Stewart, and Martin Vaaler : for the Public Service Commission of State of North : Dakota, John G. Alley for the Province of British Colum- 5 bia (Canada), J. EF. Finsness for the Fargo (N. Dak.) Chamber of Commerce, and Fred H. Tolin for Whatcom County (Wash.) Traffic and Rates Bureau, Alaska Cop- per Companies, Inc., Washington-Oregon Shippers Co- operative Association, and Van Waters & Rogers, Incor- porated, and 227 various other shippers and shipper asso- ciations, interveners in conditional support. a 5 ; 3 i ¥ * bee aa GSEs Seca SAR NS PIRES OSE ETERS ERIN OI ENE IN AUNREEEL PE RSD SANT 515 Osborne Becklund, Charles H. Clay, F. W. Crouch and C. Harold Peterson for Soo Line Railroad Company, Gene F. Bennett, Edwin R. Eckersall, J. C. Garlington, Raymond K. Merrill, Robert F. Munsell, Warren Ploeger, Stuart K. Rider, Jr., and Edwin O. Schiewe for the Chi- cago, Milwaukee, St. Paul & Pacific Railroad Company, George L. Buland, Charles W. Burkett, Jr., Kenneth M. Judd, Thormand A. Miller, and Oglesby Young for the Southern Pacific Company, Martin Cassell and Thomas I. Megan for the Chicago, Rock Island & Pacific Railroad Company, Frank W. Davis, Charles H. Dickman, Richard M. Freeman, Harry B. Otis, and Edgar Vanneman, Jr., for the Chicago and North Western Railway, Leighton Hatch, Walter G. Treanor, and E. L. Van Dellen for the Western Pacific Railroad Company, L. W. Hobbs, Randall B. Kester, Francis J. Melia, and Howard E. Roos for the Union Pacific Railroad, and Starr Thomas for the Atchi- son, Topeka and Santa Fe Railway Company, intervening rail carriers. Joseph E. Quin for Orville F. Freeman, Secretary of Agriculture of the United States, and Thomas S. Howard for the United States Department of Justice, interveners in opposition. Richard Musenbrock for the State of Minnesota and the Minnesota Railroad and Warehouse Commission, Her- man L. Bode and C. A. Merkle for the State of South Dakota and the Public Utilities Commission for the State of South Dakota, Frank B. Hayes for the State of Wash- ington, Waldo F. Wheeler for the Iowa State Commerce Commission, and Ronald L. Anderson, Jack L. Chestnut, Walter F. Mondale, Oliver A. Ossanna, E er Petersen, Paul Rasmussen, and Otto A. Ratke for the Minnesota Railroad and Warehouse Commission, John H. McKeon, John Sheehy, and Paul Smith for the Board of Railroad Commissioners of the State of Montana, and Lloyd G. Hammel and John F. Weisser for the Public Utility Commissioner of Oregon, interveners in opposition. Arvid M. Falk for the City of Minneapolis (Minn.), Richard P. Gallager for the City of Mandan (N. Dak.), Anthony C. Gospodar for the City of Breckenridge (Minn.), Daniel A. Klas for the City of St. Paul (Minn.), PERI IE AE ES eM ERT ALG AE ALOR L ONS ER NR IGE pet Beas onan Re 516 Alva C. Long for the Cities of Auburn and Sumner (Wash.) and the Auburn (Wash.) Chamber of Com- merce, Toby E. Markewicz for the City of Superior (Wis.), R. G. Nerison for the City of Jamestown (N. Dak.) , Thomas E. Plante for the City of Duluth (Minn.), Bernard J. Gallagher for the Spokane (Wash.), Anti Merger Association, George Kargianis for the Seattle (Wash.) Improvement Council, Thomas Kennedy for the Missoula (Mont.) Civic Group, C. W. Leaphart, Jr., W. R. McGee, and Webb Sullivan for the Livingston (Mont.) Anti-Merger Committee, Harry C. Munger for the Duluth (Minn.) Volunteer Committee Opposing Merger, and Robert D. McMullan for the Clark County (Wash.) Anti-Merger Association, interveners in oppo- sition. William G. Mahoney for Railway Labor Executives As- sociation, and E. L. Dirks, Charles B. Falconer, Robert Lee Kelleher, Ernest Monroe, J. H. McLaughlin, Paul E. Peterson, and C. W. Wellnitz, for various other organi- zations of railway employees, interveners in opposition. Joseph R. Dudley for the Minnesota Motor Transport Association, Clifford Ferguson for Ed Benedict, and Samuel R. Freeman for Wheat Producers Transportation Committee, interveners in opposition. A. Wilford Larson and Richard V. Maves for the Pub- lic Service Commission of Wisconsin, A. C. Stoddard and John E. Tormey for the Michigan Public Service Com- mission, Louis B. Dailey for Northern Pacific Stockhold- ers’ Protective Committee, Philip A. Porter for the Wis- consin Manufacturers Association, and Oliver Lee Stew- art for Southwest Oregon Shippers Traffic Association, interveners seeking imposition of specified conditions. wise CPs: eee ee 517 REPORT, CERTIFICATE AND ORDER RECOMMENDED BY ROBERT H. MURPHY, HEARING EXAMINER THE APPLICATIONS By joint application filed February 17, 1961, authority is sought by Great Northern Railway Company (Great Northern) ,? of St. Paul, Minn., Northern Pacific Railway Company (Northern Pacific), also of St. Paul, Pacific Coast R. R. Co. (Pacific Coast), of Seattle, Wash., Chi- cago, Burlington & Quincy Railroad Company (Burling- ton), of Chicago, Ill., and Spokane, Portland and Seattle Railway Company (SP&S), of Portland, Oreg., common carriers by railroad subject to Part I of the Interstate Commerce Act, hereinafter called the Act, and Great Northern Pacific & Burlington Lines, Inc. (New Com- pany), not a carrier, of Wilmington, Del., to consummate certain transactions under section 5(2)* of the Act, to issue certain securities and assume obligation and lia- bility in respect of securities under section 20a‘ of the Act, and to effect certain extensions and abandonments of lines of railroad under sections 1(18) to 1(20),° in- clusive, of the Act. The application as filed is divided into four parts, fall into three separate categories of authority sought, and will be considered as three separate related docketed matters, as subsequently discussed. In part I of the application, docketed in Finance Docket No. 21478, authority is sought under section 5(2) of the Act (1) for merger into New Company of the operations, properties, and franchises of Great Northern, Northern Pacific, and Pacific Coast, upon terms and conditions of agreement of merger, hereinafter referred 2In this report reference to applicants and interveners and others mentioned will be by the distinctive names in their respective corpo- rate titles or by designation shown in parentheses. 549 U.S.C. 5. *49 U.S.C. 20a. 549 U.S.C. 1. a to as the Northern Lines merger agreement, subsequently discussed, for ownership, management and operation; (2) for acquisition by New Company, through ownership of capital stock, of sole or joint control, as the case may be, of all carriers subsidiary to or affiliated with Great Northern and Northern Pacific at the time of merger; (3) for acquisition by New Company of all leasehold rights in respect of, all trackage rights over, and all i joint ownership in and rights of joint use of, any rail- road line or lines and terminals incident thereto pos- sessed by Great Northern, Northern Pacific, and Pacific Coast at the time of merger; (4) subsequently thereto, for merger into New Company of the operations, prop- erties, and franchises of Burlington, upon the terms and conditions of agreement of merger, hereinafter referred to as the Burlington merger agreement, subsequently dis- cussed, for ownership, management and operation; (5) for acquisition by New Company, through ownership of capital stock, of sole or joint control, as the case may be, of all carriers subsidiary to or affiliated with Burlington at the time of merger; (6) for acquisition by New Com- pany of all leasehold rights in respect of, all trackage rights over, and all joint ownership in and rights of joint ; use of, any railroad line or lines and terminals incident ; thereto possessed by Burlington at the time of merger; (7) for lease by New Company of the properties and assets of SP&S for a term of 10 years, upon terms and conditions of indenture of lease hereinafter referred to as the SP&S lease, subsequently discussed; (8) for ac- quisition and exercise during the term of lease by New Company as such lessee of sole or joint control, as the case may be, of all carriers subsidiary to or affiliated with SP&S at the time of the lease; and (9) for acquisi- tion and exercise during the term of lease by New Com- pany as lessee of all leasehold rights in respect of, all trackage rights over, and al] joint ownership in and rights of joint use of, any railroad line or lines and terminals incident thereto possessed by SP&S at the time of lease. In part II of the application docketed in Finance Docket No. 21479, and, in connection with and pursuant 518 SOR eer ST ye ee RAL Deine IOA DAO Ady WED a . 5 a 4 3 4 “ ; 5 4 cad 7s 2 3 % iB c | F 519 to the transactions for which authority is sought in Fi- nance Docket No, 21478, authority is sought under sec- tion 20a of the Act by New Company (1) to issue of such principal amount, not in excess of $71,500,000, of its series A consolidated mortgage bonds as shall be equal to the principal amount of Northern Pacific refunding and improvement mortgage bonds then pledged under the Northern Pacific collateral trust indenture and to pledge such series A consolidated mortgage bonds under such Northern Pacific collateral trust indenture, to be effected under a supplemental indenture thereto, in sub- stitution for, and upon release from pledge of, an equal principal amount of Northern Pacific refunding and im- provement mortgage bonds pledged under the Northern Pacific collateral trust indenture; (2) to issue such shares of its $10 par value 514 percent cumulative pre- ferred capital stock, and such shares of its no par value common capital stock required by the terms of the North- ern Lines merger agreement to be issued to stockholders of Great Northern and Northern Pacific upon merger of Great Northern, Northen Pacific and Pacific Coast into the New Company; (3) to issue such additional shares of its preferred and common capital stock as may be required to be issued upon the exercise, subsequent to such merger, of restricted stock options, issued under the restricted stock option plans of Great Northern and Northern Pacific, respectively, outstanding at the time of merger; (4) to assume all obligation and liability of Great Northern and Northern Pacific in respect of secu- rities; (5; to assume during the term of and as provided in SP&S lease all obligation and liability of SP&S in respect of securities; (6) to issue such shares of its no par value common capital stock required by the terms of the Burlington merger agreement to be issued to stock- holders of Burlington upon merger of Burlington into New Company; and (7) to assume all obligation and liability of Burlington in respect of securities; and by Burlington, prior to merger into New Company, to issue and sell to New Company at principal amount and ac- crued interest, if any, $70,000,000 principal amount of its first and refunding series 2010, 4 percent bonds, se- = RA PILES LLG EA LOL LILLIE LOIN OGLE ETL TILT : wo bate Snih gille Dasie ah at oad Shae mone er acca ie aide RN pia el ART Pri Rs Na Se ¢ 2 9 > “~~ cured by its first and refunding mortgage, dated Febru- ary 1, 1921. By amendment filed June 22, 1961, in Finance Docket No. 21479, and, in connection with and contingent upon approval and consummation of the trans- actions described in Finance Docket No. 21478, and the transactions described wherein authority is sought under section 20a of the Act for New Company to assume all obligation and liability of Northern Pacific in respect of securities and to issue not exceeding $71,500,000 princi- pal amount of New Company’s series A consolidated mortgage bonds and pledge them under the Northern Pacific collateral trust indenture in substitution for, and upon release of pledge of, an equal principal amount of Northern Pacific refunding and improvement mortgage bonds now pledged under such indenture, authority is also sought by New Company under the same section of the Act specifically to concurrently alter the status of the Northern Pacific collateral trust bonds by modification of the Northern Pacific collateral trust indenture in the form of a supplemental indenture thereto, which, in addition to the provisions for assumption by New Com- pany of all of Northern Pacific’s obligations under the collateral trust indenture, provides for proposed substi- tution of collateral, for elimination of certain provisions of the collateral trust indenture relating to substitution of collateral, and for grant of rights to holders of col- lateral trust bonds to direct the manner of voting the pledged series A consolidated mortgage bonds, unless the Commission finds that no authority in respect of request covered by said amendment is required by law. In parts III and IV of the application docketed as Finance Docket No. 21480, and, in connection with the transactions for which authority is sought in Finance Docket No. 21478, authority is sought under sections 1(18) to 1(20) inclusive, of the Act by New Company and SP&S for certificates of public convenience and ne- cessity contingent upon approval and consummation of the merger and lease transactions for which authority is sought in Finance Docket No. 21478, permitting (a) New Company, and SP&S to the extent of its interest as owner and lessor under proposed lease of portions of 520 REALE MAE Fil PPE OT SREP NOE LE LEE AL AP IPO LS DEI BE DENA WILE Pip - 521 the extensions described in items (19), (21), and (24) of appendix A hereto covering matters set forth in part II, to construct and operate the extensions and lines of railroad described in items (1) through (24) inclusive, of appendix A, and (b) New Company, and SP&S with respect to the lines described in items (5) and (7) of appendix B covering matters set forth in part IV, to physically abandon the portions of existing lines of rail- road described items (1) through (7) inclusive, in ap- pendix B, contingent, as to each abandonment, upon completion of the respective new portion or portions of line referred to in the item relating to such abandon- ment. No railroad in the territory involved in the pro- posed transactions has requested inclusion in the trans- actions. The several docketed applications described are sub- | mitted together as interdependent parts of a proposal for | unified operation, control] and management of the prop- erties and franchises of the applicant companies, Subse- quent to the filing of the applications, numerous resolu- tions of cities, municipalities, communities, and other or- ganizations, letters of support and letters of protest and/ or objection in respect of the applications were received. By order of the Commission, Commissioner Tuggle, en- tered July 7, 1961, the matters were referred to the hearing examiner for hearing and for the recommenda- tion of an appropriate order accompanied by reasons therefor. By the terms of that order, hearing was set for September 19, 1961, at St. Paul. Petitions were filed by several intervening parties seeking, among other things, postponement of the hearing date, to which ap- plicants replied, and by order of the Commission, Divi- sion 3, the proceedings were reassigned for hearing be- fore the hearing examiner on October 10, 1961. Exten- sive public hearings commencing on the last mentioned date and terminating on July 10, 1962, were held in several sessions comprising 82 days of hearing at various points ° throughout the territory involved. *St. Paul, Minneapolis, and Duluth, Minn., Chicago, Ill, Des Moines, Iowa, Omaha, Nebr., Portland, Oreg., Seattle, and Spokane, Was., Fargo and Bismarck, N. Dak., Aberdeen, S. Dak., and Billings, Great Falls, Helena and Missoula, Mont. RIO ORE IEE SLES LAL SL IE LL LGA ICSE LGC ALLEN EE ID i Numerous petitions for permission to intervene in the proceedings were granted before and during the hear- ings. Pursuant to such petitions filed some 427 petition- ers were permitted to intervene in the proceedings. Such petitions were advanced for several reasons, either in support of the proposals, in opposition to the proposals, or as their interests might appear. However, some who were permitted to intervene failed to enter appearance at the hearings, but evidence of their concern was pre- sented either through interveners for applicants or other interveners. Others failed to enter appearance at the hearings or otherwise pursue their interest, and their failure to participate or otherwise pursue their interest should be considered only as expressions of interest with- out probative support. In addition to applicants, 310 in- terveners, set forth in appendix C hereto, whose interests comprise a variety of categories, participated through appearance of counsel or their representatives and some introduced evidence. Support for the proposals was evidenced by applicants, and by numerous interveners, shippers and receivers of freight, associations of shippers or shipper organizations, by chambers of commerce, and by others, including a number of agencies of government, city and state. Opposition to the proposals was evidenced by numer- ous agencies of government, city, state and federal, by certain rail carriers, by organizations of railway em- ployees, and by civic and community groups, and others. Some participation, principally by certain intervening rail carriers, some shippers and receivers of freight, and 4 some agencies of government, was predicated on a desire to obtain, in the event of approval of the proposals, im- position of conditions favorable to certain intervening rail carriers’ or to support stipulations and agreements entered into by and between certain intervening rail earriers* and applicants respecting establishment of or 522 OE ee Pea NT ee Se ee ae ee ae! ee FO ESR ea ord eis bow RRO Rey * aut ; 7Chicago, Milwaukee, St. Paul & Pacific Railroad Co. (Mil- ¢ waukee), and Chicago and North Western Railway Co. (C&NW). ® Soo Line Railroad Co. (Soo), Union Pacific Railroad Company (Union Pacific), Southern Pacific Company (Southern Pacific), PLLA L LE SEN ON IS LIA! AEP LOE ENO IIDS IESG ATES ELIE GLE A mente maintenance of gateways for the movement of traffic and/or traffic and operating relationships. Opposition by an organization representing certain mi- nority stockholders of Northern Pacific was directed to objections in respect of ratio of exchange of values ascribed to certain properties. Briefs were filed by applicants and separately by each of the following interveners: C&NW, Milwaukee, South- ern Pacific, Union Pacific, Western Pacific, Railway La- bor Executives’ Association (RLEA), Northern Pacific Stockholders’ Protective Committee (NP Stockholders’ Committee), Province of British Columbia, Canada (Province), Secretary of Agriculture of the United States (Agriculture), United States Department of Jus- tice (Justice), lowa State Commerce Commission (Iowa), State of Minnesota and its Railroad and Warehouse Commission (Minnesota), Public Utility Commissioner of Oregon (Oregon), Public Utilities Commission of the State of South Dakota (South Dakota), Board of Rail- road Commissioners of the State of Montana (Montana), State of Washington, Public Service Commission of Wis- consin (Wisconsin), Public Service Commission of State of North Dakota and Chamber of Commerce of Fargo, N. Dak., jointly, Wisconsin Manufacturers’ Association, Lillian Widmyer, Fred H. Tolin for 230 Pacific North- west Shippers (sometimes referred to as Tolin Group), Wheat Producers Transportation Committee, Grand Forks, N. Dak., Chamber of Commerce .and Red River Valley Potato Growers Association jointly, Livingston Anti-Merger Committee, Spokane Anti-Merger Associa- tion, City of Minneapolis, Minn., Cities of Auburn and Sumner, Wash., and Auburn, Wash., Chamber of Com- merce jointly, and Seattle Improvement Council. 523 Fair hearing. On brief, Minnesota, Oregon, Washington, and Justice separately contend denial of fair hearing. The key argu- ments will be discussed, At the October 13, 1951, ses- Chicago, Rock Island and Pacific Railroad Co. (Rock Island), The Western Pacific Railroad Company (Western Pacific) and The Atchison, Topeka and Santa Fe Railway Co. (Santa Fe). SEM TE LPN HEY AIRE At ALM VOM DIE sd —— 524 sion of the hearing, Minnesota and Washington, among others, requested continuance of hearing for cross-exam- ination of applicants’ technical witnesses to a date not earlier than May 1, 1962. Oregon concurred. The re- quest was denied, and the date fixed for resumption of hearing on December 5, 1961. Minnesota, Washington and Oregon contend that the seven weeks between Octo- ber 13 and December 5, 1961, were inadequate to analyze evidence and prepare for cross-examination, and that de- nial of additional time resulted in limiting the effective use of the right of cross-examination and denial of fair hearing. They argue that applicants had the proposal 4 under consideration since July 1956; that the proposals ; could not be evaluated without the supporting evidence ; which applicants introduced at the outset of the hearings October 10-13, 1961, and that the right to a full and E fair hearing essential to the legal validity of an admin- j istrative determination under authority entrusted by Congress, embraces not only the right to present evidence, but also a reasonable opportunity to know the claims of oppositing parties and meet them, citing Morgan v. U. S. ; 304 U. S. 1, (1937). Oregon further argues that no Interstate Commerce Commission staff personnel partici- pated in the proceedings; that any analysis which such Commission staff may undertake to insure coverage of all pertinent issues should be developed on the record so that intervening parties representing local public interest may have the benefit of such analysis in advocating their position, and that absence of such analysis in the record denotes absence of due process, Oregon also argues that it was handicapped by its staff limitations and other commitments of their time and that, to the extent that these limitations were not fully considered in setting hear- ing dates, it was denied a full and fair hearing. Oregon contends that it was required to present its case in chief prior to intervener Milwaukee, and that in view of its limited available staff and the subsequent presentation by Milwaukee of its six proposed conditions, hereinafter discussed, which “represented an effort on its part to be included in the merger under 49 USCA 5(a) (c),” as well as stipulations entered into of record between appli- oe ee St pA Be 4 ; MOLI IOGEAR BE ENGILIS ALG LIEL GELDER EI: BESTA OE _ eants and other intervener railroads, it (Oregon) re quired additional time, which was not given, to fully develop all the important public interest factors which the Commission must consider. The hearing examiner’s ruling on October 13, 1961, setting December 5, 1961, as the date for resumption of hearing for cross-examination of applicants’ technical witnesses, was challenged by petitions filed (1) by Minne- sota, Washington, Milwaukee and RLEA, which petitions were denied by order of the Commission, vice-Chairman Murphy, entered November 1, 1961, and (2) by Mon- tana, which petition was denied by order of the Com- mission, Vice-Chairman Murphy, entered November 9, 1961, and affirmed on reconsideration by order of the Commission, Division 3, acting as an appellate division, entered December 1, 1961. The merits of those petitions were considered and disposed of on the dates indicated. Not only was adequate time provided, but the parties contending the action denied them fair hearing were present throughout the 21 days of hearing which fol- lowed (December 5, 1961—January 31, 1962, in two sessions) participated fully in cross-examination of ap- plicants’ technical witnesses and material covered by ap- plicants’ exhibits, and had full access to all supporting data. Their objections renewed on brief are without merit and should be overruled. The contention that no Commission staff personnel ap- peared to participate in cross-examination of applicants’ witnesses and thereby aid opposition in developing a basis for position is indeed unique and novel. The Com- mission is under no statutory obligation to have a mem- ber of its staff participate in these proceedings. Com- mission staff personnel do not ordinarily participate in the hearing phase of proceedings such as these except in circumstances involving investigations of violations of the Act, or under some specific direction of the Com- mission, No investigation of violation is here involved, and the hearing examiner may not speculate as to why the Commission did not direct the Commission’s Bureau of Inquiry and Compliance (that arm of the Commission staff which would inquire in public hearings) to partici- a LOONIE OIE UE PIN: GOI LW AS SSE ONAL EE LLIN LENE DEALING 525 a: , pate in the hearings. These proceedings are not investi- gative in nature, but involve applications for permissive authority to consummate certain transactions, for which the proponents have the burden of proof. Cf 5 USC 1006. Oregon alone has the responsibility of determining what position to take and to produce evidence in support of its position. The Commission does not share this re sponsibility. Hence, it cannot be validly argued that be- cause Commission staff members did not participate in cross-examination of applicants’ witnesses the record is incomplete or that the hearing was not fair. Oregon was competent and able to present, and did present, evidence in opposition. Nonparticipation of Commission staff mem- bers did not adversely affect Oregon’s responsibility and capability to determine its position, and produce sup- porting evidence. Its contention is without merit and should be overruled. Compare Brotherhood of Mainte- nance of Way Employees, et al. v. U. S. et al. No. 23,467 decided August 13, 1963, U. S. Dist. Court for Eastern Dist. Michigan, Southern Division. Oregon’s contention it was not afforded additional time to present its evidence is contrary to the facts. The rec- ord shows that its initial presentation of evidence oc- curred on March 22, 1962 (the 33rd day of hearing) at Portland, and because at that time intervener Milwaukee had not presented its evidence in support of its proposed conditions, but expected to do so subsequently, Oregon requested additional time, was afforded the time, and pre- sented its additional evidence on May 9, 1962 (the 54th day of hearing) at Chicago. Its contention is without merit. Its reference to Milwaukee’s proposed conditions as representing an effort to be “included in the merger” evidences an erroneous interpretation of the statute. Paragraph (d) of section 5(2) of the Act provides: “(d). The Commission shall have authority in the case of a proposed transaction under this paragraph (2) involving a railroad or railroads, as a prerequi- site to its approval of the proposed transaction, to require, upon equitable terms, the inclusion of an- other railroad or railroads in the territory involved, upon petition by such railroad or railroads request- 527 ing such inclusion, and upon a finding that such in- clusion is consistent with the public interest.” (Em- phasis supplied). No petition has been filed by any railroad or railroads herein seeking inclusion. Minnesota, Washington, and Justice further contend they were denied a fair hearing by reason of errors in admission and exclusion of evidence, by deprivation of full right of cross-examination and imposition of undue restraints on such participation, and denial of adequate time to allow for analysis and preparation for cross- examination of applicants’ rebuttal witnesses. Minnesota further contends rulings of the hearing examiner in re- spect of cross-examination of witnesses of other inter- veners in opposition (Milwaukee and NP Stockholders Committee), curtailment of cross-examination on appli- cants’ proposed freight schedules and various subjects in the applicants’ consultant’s report dealing with abandon- ment of lines, status of subsidiaries, through traffic, em- ployment loss, and organization of the New Company, limitation on cross-examination of witness for intervener in support St. Paul Area Chamber of Commerce, in im- properly receiving evidence dealing with testimony of other supporting witness for the same intervener, failure to exclude repetitious and cumulative evidence of appli- cants’ public witnesses, specified rebuttal evidence of ap- plicants and evidence in respect of certain motor carrier subsidiaries of applicants, resulted in its functioning under unwarranted handicaps. While the record shows concern was evidenced as to the propriety of an intervener in opposition cross-exam- ining other interveners in opposition, it likewise shows that the hearing examiner permitted cross examination of such interveners’ witnesses by other interveners in opposition within the purview of their interest in respect of any stated support of the applications and/or condi- tions proposed. Thus, such witnesses of interveners Mil- waukee and NP Stockholders Committee were available for cross-examination and on the occasions in question Minnesota declined to cross-examine. 528 | Minnesota’s contention that curtailment of cross-exam- ination of applicants’ witnesses on various subjects de- scribed presented unwarranted handicaps, is likewise without foundation, Detailed examination of the record discloses active participation and extensive cross-exam- ination by counsel for Minnesota. The record also shows that the contention raised in respect of applicants’ pro- posed freight schedules deals with efforts by Minnesota to interrupt cross-examination of another intervener in opposition witness. Minnesota was not denied cross-ex- amination of the witness for that was not involved. What was involved was counsel’s unwarranted interruption of cross-examination by other counsel and the prompt cur- tailment of such interruption by the hearing examiner in pursuance of the maintenance of good order in the proceedings. The record shows that in respect of certain recom- mended abandonments described in applicants’ consult- ant’s report and not part of the applications involved, inquiry by Minnesota was, upon objection raised, ex- cluded by the hearing examiner as not properly part of the subject matter before the hearing examiner and be- yond the scope of these proceedings. The contentions are without merit, and the rulings of the hearing examiner should be affirmed. The contentions regarding “rulings” of the hearing ex- aminer on the question of status of subsidiaries and em- ployment loss as cited in brief are without foundation. The record shows in each instance discussion between counsel for Minnesota and the hearing examiner dealing with the proper phrasing of questions propounded, that the questions were rephrased by counsel to permit under- standing by the witness and clarity of the record, and were answered by the witness. The record evidences no undue handicaps upon counsel’s cross-examination. On similar contentions dealing with Minnesota’s inquiry on through traffic and organization of New Company, no citations of record are indicated. On its contention deal- ing with limitation of cross-examination (which also | deals with reception of evidence) of witness for inter- |— vener in support St. Paul Area Chamber of Commerce, 529 the record shows that extensive cross-examination of the witness ensued; that the line of inquiry in question was extensive and exhaustive; that Minnesota by motion sought to have the evidence of intervener St. Paul Area Chamber of Commerce excluded on the grounds that the communities represented were not part of the “jurisdic- tional area” as defined by its witness, and was overruled by the hearing examiner. The ruling dealing with its pertinence is proper and should be sustained. In respect of the contention the hearing examiner improperly re- ceived evidence in support by the same intervener, the record shows that St. Paul Area Chamber of Commerce was a properly recognized intervener in support, having timely filed its petition, which was granted; that its evi- dence, subsequently discussed, shows its area embraced an extensive trade area beyond the city limits of St. Paul; and that its witnesses from surrounding towns evidenced actions by their respective chambers of commerce which was properly admissible as part of that intervener’s case-in-chief, all subject to cross-examination. The ruling should be sustained. Contentions raised by Minnesota, Washington and Jus- tice that the hearing examiner erred in receiving evidence of applicants, supporting shippers and others which they consider cumulative, are not adequately supported by the record, The record shows that numerous shippers and others testified for applicants or for other interveners, and that they represent a wide and divergent variety of industry and commerce located, or concerned with transportation at, many points in the broad and extensive territory here involved. The record also indicates that all parties presenting public witnesses were aware of, and endeavored to comply with, the Commission’s cumula- tive evidence rule’ and that few rulings of the hearing ® Rule 1.76 of the Commission’s General Rules of Practice which provides: Evidence; cumulative restriction. It shall be the duty of the officer before whom any proceeding is being heard to limit the number of witnesses whose testimony may be merely cumula- tive. And in order to enforce this section, the officer may require a clear statement on the record of the nature of the testimony to be given by any witness proffered. 530 ; examiner on that subject were required. At a number of the points where hearings were held throughout the territory involved counsel for Minnesota, Washington and/or Justice indicated a desire to stipulate certain public interest evidence of applicants, but applicants de- clined. On other occasions when applicants indicated a desire to stipulate certain public interest evidence, the named interveners stipulated, but thereafter declined to further stipulate. Efforts to encourage stipulation by the parties of facts which appeared to the hearing ex- aminer as susceptible of stipulation were only partially successful, However, the question of what is cumulative in connection with shippers representing many varied industries having different transportation problems, throughout an extensive area such as here, and seeking to be heard, is a difficult and sometimes complex judg- ment question which in all instances must be carefully examined. In proceedings such as these where broad and diverse public interest has been manifested, the Com- mission, which specifically ordered hearings held at nu- merous points throughout the territory involved, should not be deprived of proper evidence proffered, even that bearing on what may be considered by some as cumula- tive. However, that is a judgment question and has been ruled on by the hearing examiner. In all instances, | however, the witnesses were available for cross-exami- nation and were cross-examined. Washington further contends the hearing examiner erred in allowing a witness (Governor Erbe of Iowa) for applicants, over objection (by Milwaukee) to include in his testimony reference to communications received from shippers in Iowa in support of the application (ar- gument also raised by Justice on brief), in rejecting two exhibits (179 and 180) offered by it in respect of a sur- vey conducted by its witness, and in receiving evidence of applicants on rebuttal which it considers improper, in which contentions Justice also concurs on brief. With respect to the ruling of the hearing examiner permitting the witness for applicant to testify concern- ing communications received from others, it is significant to note Milwaukee did not pursue its objection on brief, Oe ee eno an ee ee | that Washington did not join in the objection when made, but raises it on brief, and that Justice, which had not yet intervened likewise raises it on brief. Interveners’ objection has some merit. Upon further reflection and reconsideration, the hearing examiner believes that the evidence contained in communications from others, who were not available for cross-examination and data there- in could not be otherwise verified, should not have been received and will not be considered in arriving at the conclusions herein. The record shows that the two exhibits offered by Washington, to which reference is made, viz., a state ment of its witness dealing with a survey conducted by him and the results of the survey itself—purporting to tell the Commission what other persons told the witness through questionnaires about their views concerning the | proposed Milwaukee conditions were rejected by the hear- ing examiner upon objection. The record also shows that several of those other persons had already testified and had been cross-examined, and that certain supporting data was not made available as it was considered confi- dential. The Commission has long accepted as sound the general principle that over objection, petitions, letters, affidavits, questionaires, or cumulative data resulting from surveys such as here involved, are inadmissible be- cause of the hearsay character and the inability of op- posing parties to cross-examine persons who made state- ments in such questionnaires. Compare Somerset Bus Co., Inc, Extension-Somerville-New York, 43 M.C.C. 543, Ore- gon-Nev.-Calij. Fast Freight, Inc. Ext.-San Jose, 71 M.C.C. 165, Washington, D, C. Commercial Zone, 83 M.C.C. 471, and Regulations for Payment of Rates and Charges, 310 I.C.C. 391, and the cases therein cited. The ruling of the hearing examiner should be sustained. Washington and Justice further argue in respect of their contentions that evidence of applicants on rebuttal which they consider improper was admitted over their _ objection, that failure to sustain objections resulted in _ the incorporation into the record testimony entirely re- _ moved from proper rebuttal, and placed a burden on the opposition, and that having been received, fair hearing 531 532 : required no less than adequate opportunity to meet it and it was not provided. The record shows and the hearing examiner recognizes that some opinion and argu- mentative matter was contained in rebuttal, difficult of separation therefrom, but that adequate opportunity was provided to cross-examine rebuttal witness as subsequent- ly discussed. The record shows that counsel for Wash- ington and Justice did not avail itself of opportunity to cross-examine on the rebuttal evidence. Its contentions are without merit. Justice further contends the hearing examiner “inter- fered with cross-examination of witnesses by counsel for interveners in opposition and attempted to curtail it for no sound reasons”. In an example cited, counsel prefers to quote out of context to give substance to its conten- tion. Justice correctly quotes the question asked on cross- examination of one of applicants’ witnesses: “Q. Being a one-railroad town like that which I can appreciate, you would be pretty much inclined to go along with just about anything the Northern Pacific proposed to do in the area of merger, wouldn’t you?” Justice states that it was a proper question but that ... “Yet the examiner interjected, ‘Don’t be mislead by that question’” ending its reference to quotation from the record. The reference to the statement of the hear- ing examiner taken wholly out of context warrants ex- position. The record shows that objection was raised by counsel for applicants to the question on the grounds it was “argument,” to which hearing examiner stated, “I don’t think that is argument.” Whereupon the question was re-read to the witness at the request of counsel for Justice following which the transcript of testimony (tr. 10384-10385) reflects the following: A. Under the present conditions— Q. (By Mr. Howard) (interrupting) is that — right? j Exam. Murphy: Don’t be mislead by that ques- — tion. You are on cross-examination—I am address- — 533 ing this question solely to the witness’s demeanor, I want to be sure the witness understands the ques- tion—do you fully understand that question? The Witness: Well, the fact that it is the only railroad in town doesn’t influence me, no. Exam. Murphy: If I understand the question, you don’t mean that, Counsel, to indicate that people of Brainerd would be just docile about the thing, do you? Mr. Howard: Oh, no, I certainly didn’t ask that. The Witness: Could I assert here. I have ap- peared in opposition— Exam. Murphy (interrupting): When you used the phrase “one-railroad town”, that is the point. Mr. Howard: I confined it, Mr. Examiner, speci- fically to the area of merger because they could be doing many things the residents don’t like. I think the question says in the area of merger. Exam. Murphy: All right. A. We did go on record in favor of merger. Mr. Howard: I won’t pursue that point further. No further questions. Thank you. The context is thus clear, Other similar circumstances cited warrant the same conclusion. Its contention is without merit. Contentions by Minnesota, Washington and Justice, that adequate time after receipt of rebuttal evidence to allow for analysis and preparation for cross-examination of applicants’ rebuttal witnesses was not afforded and thus deprived them of a fair hearing warrants discus- sion. The record shows that on June 18-20, 1962, copies of applicants’ rebuttal evidence material was distributed to all active parties, including the named contending in- terveners; that on June 22, 1962, counsel for Washington having examined that material requested additional time (specifically 60 days, which request was joined in by _ counsel for Minnesota and Justice) within which to fur- _ ther study the data preparatory to cross-examination and _ that it be provided an opportunity at a later date to _ cross-examine applicants’ rebuttal witnesses; that the hearing examiner reserved ruling on the request until completion of the scheduled rebuttal (beginning on June 27, 1962, and continuing through June 30, 1962); that applicants’ rebuttal witnesses were cross-examined ex- tensively by other interveners, some questions propounded by counsel for Justice, but notations of record made by Minnesota, Washington and Justice to reserve their cross-examination for such subsequent hearing date as may be set by the hearing examiner, which reservations were granted; that upon conclusion by other interveners of cross-examination of rebuttal witnesses (June 30, 1962), the hearing examiner, having reviewed the evi- dence submitted and the cross-examination of the sev- eral witnesses by other interveners, concluded the re- quested recess of 60 days excessive, and adjourned the hearing tc July 10, 1962, for the purpose of providing counsel for Minnesota, Washington and Justice oppor- tunity to cross-examine on applicants’ rebuttal evidence; that counsel for Minnesota and Washington, by separate letters dated July 3, 1962, and counsel for Justice, by letter dated July 5, 1962, addressed to the Secretary, Interstate Commerce Commission, indicated that insuffi- cient time had been granted, that they were not and could not be prepared to go forward with cross-examina- tion and, citing Rule 1.4" of the Commissions General Rules of Practice, requested to be excused from attend- ance and participation at the subsequent hearing session scheduled for July 10, 1962. The request was granted by the Secretary. The hearing session scheduled for July 10, 1962, was held and counsel for Minnesota, Washing- ton and Justice did not appear. The record shows that those counsel, active in the proceedings, had ample oppor- tunity to examine applicants’ rebuttal evidence and pro- ceed with cross-examination, They chose not to seek re- view of the date set by the hearing examiner, but to 534 10 Dealing with communications and pleading generally, the perti- nent portion of which reads: “(a) How addressed. All communica- tions, including correspondence concerning matters referred to boards, should be addressed to the Commission unless otherwise specifically directed. All communications should clearly designate the docket number, if any, and short title. The person communicat- ing shall state his address, the party he represents, and how re- sponse should be sent to him if not by first class mail.” 535 absent themselves from the hearing set primarily to pro- vide them with opportunity to cross-examine applicants’ rebuttal witnesses, who were available for such purpose. Interveners’ arguments and contentions of denial of fair hearing are without merit and should be denied. Certain facts regarding the physical composition of the record warrant discussion. The transcript of record totals 15,004 pages, together with 243 exhibits, the efforts of fifty separate and distinct interests represented by 124 counsel or representatives of record during 82 days of hearing. The transcript of record reflects testimony of 623 witnesses of which 328 were applicants’ witnesses and 295 were interveners’ witnesses. With minor excep- tions, those witnesses were vigorously and extensively cross-examined as evidenced by the record, analysis of which reflects the following significant data: Of the total pages of transcript 10,051 pages, or 67 percent of the total pages of transcript were devoted to cross-examina- tion by all parties. Aggregate cross-examination by coun- sel for Minnesota, Washington and Justice utilized 4,341 pages or 43.2 percent devoted to cross-examination; counsel for Minnesota utilized 2,434 pages, or 27.2 per- cent of total cross-examination; counsel for Washington utilized 690 pages, or 6.1 percent of total cross-examina- tion; and counsel for Justice utilized 998 pages, or 9.9 percent of total cross-examination. Minnesota partici- pated on all but the 82nd day, and Washington partici- pated on all but the 72nd and 82nd day; and Justice’ participation which began on the 30th day, after comple- tion of cross-examination of applicants’ technical wit- nesses, and continued through the 76th day and from the 78th through the 81st day, was, except for presenta- tion of its two witnesses, whose evidence is subsequently discussed, together with filing of brief, directed almost exclusively to cross-examination of shipper and other pub- lic witnesses evidencing support of the proposals or con- ditions requested by other interveners. a 536 THE APPLICANTS Corporate status, operations and properties. New Company, a Delaware corporation, was organized January 18, 1961, for the purpose of owning, construct- ing, and operating a railroad, engaging in transporta- tion of persons and property by railroad and by other modes, and also to engage in all types of businesses and activities to the extent permitted by the laws of Dela- ware, including the business of acquiring, developing and operating various types of nontransportation properties. Its incorporation was effected to permit it to become the corporate successor of Great Northern, Northern Pacific, Pacific Coast, and Burlington, and lessee of SP&S. It has outstanding 200 shares of common capital stock, without par value, but with a stated value of $5 each, owned in equal proportions by Great Northern and Northern Pacific, issuance of which shares was author- ized pursuant to authority granted by order of the Com- mission, Finance Board No. 2, in Finance Docket No. 21477, Great Northern Pacific & Burlington Lines, Inc. Stock, 1.C.C. , (not printed in full), decided March 19, 1961. Those shares were authorized and issued solely to enable New Company to have stockholders capable of assenting to the proposed transactions for which author- ity is here sought. Upon consummation of the first of the merger transactions for which authority is sought (the Northern Lines merger) as subsequently discussed, and concurrently therewith, the certificate of incorpora- tion of New Company would be amended so that, among other things, the authorized capital stock of New Com- pany would be reclassified and increased to 3,102,283 shares of preferred stock, par value $10 each, and 17,- 500,000 shares of common capital stock, without par value, whereupon the original 200 shares above described would be retired and cancelled. Upon accomplishment of the transactions for which authority is here sought, New Company would not be controlled by any corpora- tion, individual or trustee. New Company has no assets other than its initial capital of $1,000. It is not a carrier, owns no property | 537 and is not presently engaged in any operations. Upon consummation of the first of the transactions for which authority is here sought, i. e., the Northern Lines merger, it would succeed to the properties and assets of Great Northern, Northern Pacific, and Pacific Coast, and be- come a carrier in its own right. Subsequent transactions herein involve merger into New Company of the proper- ties and assets of Burlington, and lease of the properties and assets of SP&S, and upon consummation of all of the transactions New Company would operate those proper- ties principally as a common carrier by railroad subject to Part I of the Act. Great Northern, a Minnesota corporation, was organ- ized originally under the territorial laws of Minnesota on March 1, 1856, as Minneapolis and Saint Cloud Rail- road Company. The name of the corporation was changed to its present name on September 18, 1889, The author- ized capital stock of Great Northern is 7,500,000 shares of common capital stock, without par value. As of August 81, 1961, it had outstanding 6,073,135 shares. However, as of December 31, 1961, it has issued 6,208,957 shares, of which 6,075,269 shares were outstanding and owned by approximately 41,000 shareholders, 133,647 shares of which were held in treasury (including 109,265 shares reserved for purpose of satisfying restricted stock options granted from time to time to officers and key employees at prices ranging from $24 to $58 per share), and 41 shares were reserved for conversion of outstanding fac- tional scrip. It is not controlled by any other corporation or company. Great Northern’s long-term debt as of August 31, 1961, consisted of bonds aggregating $178,662,900, equipment obligations aggregating $66,059,954, including $7,916,318 due within one year, and miscellaneous obligations $20,- 552, including $10,276 due within one year. As of De- cember 31, 1961, its long-term debt consisted of bonds aggregating $178,662,900, equipment obligations aggre- gating $63,736,230, including $8,619,594 due within one year, and miscellaneous obligations $20,552, including $10,276 due within one year. Details respecting the va- rious obligations comprising such debt is described else- where herein. 538 : Great Northern has conducted operations under its present name since 1889 as a common carrier by railroad and such operations were conducted by predecessors under different names continuously since 1862, Its rail- road operations as of December 31, 1960, comprised 8,277.69 miles of road, of which 4,355.36 were main line (4,261.69 owned and 104.67 trackage rights) and 3,613.33 were branch line (3,507.02 owned and 106.31 trackage rights) and are subject to Part I of the Act. Of its owned main line trackage, 34.78 miles are jointly owned with various railroads and .08 mile operated under lease from another railroad, Of its owned branch line, 99.2 miles are jointly owned with various railroad companies. It owns but does not operate 0.26 mile of railroad leased to other railroad companies. Its principal main lines of railroad through 10 states*' and two Canadian prov- inces,’* extend from Duluth, Minneapolis, and St. Paul, Minn., Superior, Wis., and Sioux City, Iowa, westerly to Seattle, Wash., and other western cities, including Vancouver, B. C., and Portland, Oreg., via Willmar, Minn., and Garretson, S. Dak., via St. Cloud, Minn., Fargo, Casselton and Grand Forks, N. Dak., Havre and Shelby, Mont., Sandpoint, Idaho, and Spokane, Wash. Other lines connecting with the principal lines serve the Mesabi Iron Range in northern Minnesota, and Great Falls, Butte and Billings, Mont. Its principal branch line mileage is in Minnesota and North Dakota, A line also extends southerly through central Oregon to Bieber, Calif., over a portion of which between Chemult and Klamath Falls, Oreg., it operates over the tracks of Southern Pacific under a contract expiring in the year 2027, approved in Finance Docket No. 4730, Through an affiliate, The Midland Railway Company of Manitoba, hereinafter called Midland, Great Northern also reaches Winnipeg, Manitoba. Its principal points of interchange with other railroads include, in addition to the terminal points first mentioned, the points of Laurei, Billings, 11 Wisconsin, Minnesota, North Dakota, South Dakota, Iowa, Montana, Idaho, Washington, Oregon, and California. 12 Manitoba and British Columbia. F Butte, and Sweetgrass, Mont., Spokane, Chemult, and Noyes, Minn., Northgate, N. Dak., New Westminster, B. C., and Winnipeg. Great Northern has been fully dieselized since 1958, and as of August 31, 1961, owned 647 diesel units of locomotive, 596 passenger train cars, and 40,635 freight train cars, and leased or otherwise controlled 347 other units. As of December 1, 1961, however, it owned, leased or controlled 47,146 units of freight car equipment, of which 5,837 were refrigerator cars including 360 owned by Western Fruit Express, a wholly-owned subsidiary, 22,198 were box cars, including 5,475 double-door cars and 396 damage-free insulated box cars. In addition to the above-described transportation prop- erties Great Northern holds property rights in the ua- ture of trackage rights to operate over the lines or por- tions of the lines of other railroads and in some instances to utilize jointly with others described terminal or pas- senger station facilities covered by currently effective agreements, the nature and other vital statistics of which are set forth in appendix D. Great Northern also conducts operations as a common carrier by motor vehicle, subject to Part II of the Act. Under effective certificates issued in No. MC-28572 (Sub- No, 3), and various other related sub-numbered proceed- ings, it engages in the transportation of passengers and their baggage and mail, newspapers, and express in the same vehicle with passengers, between Whitefish and Kalispell, Mont.; between Great Falls and Havre; and between Williston, N. Dak., and Scobey, Mont. Such operations as are authorized are restricted to service at stations on the railroad. Under effective certificates is- sued in No, MC-28573 and various related sub-numbered proceedings it engages in the transportation of general commodities between specified points in Minnesota, North Dakota, Montana, and Oregon. Such operations are gen- erally confined to those between points which are sta- tions along the railroad described as “key points”, al- though some are off-line, and the operations carry the usual restrictions including those limiting service to that auxiliary to or supplemental of rail service of the Great Northern, such traffic moving under rail billing. 539 540 The measure of control or ownership exercised by Great Northern over such other carriers, terminal and other railroad service companies, and other significant companies is shown in summary form in appendix E hereto. A description of certain of the various companies in which Great Northern has and New Company would acquire proprietary interest is appropriate. Through 100 percent stock ownership, Great Northern controls the following carriers subject to the Act: (1) Great Northern Pipe Line Company (Pipe Line), (2) Superior & Duluth Transfer Company (S&DT), and (3) Pacific Coast, an applicant herein. Pipe Line, a North Dakota corporation, has been en- gaged as a pipeline common carrier, operating a crude oil pipe line wholly in North Dakota, extending from the Newburg, Wiley and Glenburn fields to terminal and tank-car loading facilities on the main line of Great Northern east of Minot, N. Dak., 49.5 miles. Portal Pipe Line Company (Portal), a Delaware corporation, was organized to construct and operate a common car- rier pipe line approximately 350 miles long for the trans- portation of crude oil from Minot and other points in the area to Clearbrook, Minn. Great Northern, a sub- seriber of 45 percent of the capital stock of Portal has entered into agreement with the latter whereby Portal would acquire and operate all the properties of Pipe Line, the manner of such acquisition to be determined. S&DT, a Wisconsin corporation, acquired by Great Northern pursuant to authority granted in No. MC-F- 7052, Great Northern Ry. Co.—Control—Superior & D. Transfer, 85 M.C.C. 401, decided February 1, 1961, con- ducts motor carrier operations in interstate or foreign commerce, in a pick-up and delivery service for Great Northern freight as well as freight for other railroads, pursuant to superseding certificates issued in No. MC- 1066, on April 21, 1961, authorizing operations between Duluth and Superior, which operations carry the usual restrictions limiting service to that which is auxiliary to or supplemental of rail service. It also operates a retail coal business, storage warehouse, and acts as agent for national furniture movers. | | 541 i. ‘ 3 | Pacific Coast, an applicant, was acquired by Great Northern on August 31, 1951. Its corporate status, oper- ations and properties, as well as contemplated action with respect to its corporate identity and properties, are described elsewhere herein. Great Northern owns and controls jointly with North- ern Pacific, the following carriers subject to the Act: (1) Burlington, an applicant, in which Great Northern holds 830,179 shares or 48.5 percent of the outstanding stocks, of which 842 shares are owned of record by Great Northern and the remaining 829,337 shares are pledged with the trustee under Great Northern’s general gold bond mortgage, and (2) SP&S, also an applicant in which Great Northern is beneficial owner of, and en- titled to exercise voting rights on, 200,000 shares, or 50 percent of the outstanding common stock, and the owner of 50 percent of the outstanding first mortgage bonds of SP&S. The corporate status, operations and proper- ties of each of those carriers are described elsewhere herein. Great Northern owns jointly with Southern Pacific the Oregon, California & Eastern Railway Company (OC&E), a Nevada corporation, that owns and operates a line of railroad extending between Klamath Falls and Bly, Oreg., 64.04 miles, and is engaged primarily in log- ging. It is operated independently, the proprietary lines dividing the profits or losses equally. In addition to those carriers subject to the Act, Great Northern also owns jointly with Northern Pacific, in equal proportions, the capital stock of Midland, a Cana- dian railroad not subject to the Act. Midland, organized by its current owners in 1905 pursuant to an act of the Legislative Assembly of Manitoba passed in 1993, is utilized by its owners to enable each of them to obtain access to Winnipeg. It owns 14.5 miles of terminal tracks in Winnipeg and has trackage rights over the lines of Canadian National Railway from the International Boundary near Pembina, N. Dak., and from Emberson Junction, Manitoba, to Winnipeg. It owns a small amount of rolling stock, and its operations are conducted under a long time agreement with and between Great Northern 542 | and Northern Pacific which provides for consolidation between the International Boundary and Winnipeg of the freight trains of each and furnishing by each on an equalization of mileage basis of the locomotive and ca- booses for that service and operation by each company of its own passenger trains through to the Winnipeg terminals with its own crews, carrying the crews on its own payrolls and paying all expenses connected with such train service direct. Each parent company retains its own earnings, including portions thereof north of the boundary. Other expenses of Midland are paid di- rectly by Great Northern and Northern Pacific in agreed proportions. Earnings accruing to eack of the parent lines and expenses paid by each are absorbed into the accounts of each parent line and are included in reve- nues and expenses reported by each to this Commission. As indicated in appendix E, Great Northern holds minority interests in the capital stocks of a number of other carriers subject to the Act. The principal ones which warrant description are The Lake Superior Ter- minal & Transfer Railway Company (LST&T), The Minnesota Transfer Railway Company (Minnesota Transfer), and The Saint Paul Union Depot Company (St. Paul Depot). LST&T, the capital stock of which is owned 331% per- cent each by Great Northern and Northern Pacific, and 16% percent each by C&NW and Soo, owns and operates terminal facilities at Superior, Wis., and performs trans- fer and terminal switching services for each of its four proprietary lines. Each one-sixth share of ownership is | entitled to one vote and elects one of six directors, Other | — | than transfer to New Company of Great Northern and : Northern Pacifie’s above described stock ownership, few changes are contemplated in the event of approval here- | in. After merger, New Company would elect four di- , rectors. Since under LST&T’s by-laws, five votes are | required to approve any corporate action, either Great | — Northern or Northern Pacific now has veto power which | New Company would possess; similarly C&NW and Soo | together would retain their veto power following consum- mation if approved. Operating expenses of LST&T are | | 543 allocated on a use basis. Following consummation Great Northern cars moving to and from industries served by Northern Pacific and Northern Pacific cars moving to and from industries served by Great Northern, now transferred between the two companies by LST&T would be handled entirely by New Company. In addition, be- cause of elimination of separate billing, there would be reduction in accounting work eliminating three employ- ees. Minnesota Transfer, the capital stock of which is owned by eight railroads (including Great Northern, Northern Pacific, and Burlington, each of which owns a one-ninth interest, except C&NW which owns a two- ninths interest as result of its recent acquisition of Min- neapolis & St. Louis Railroad), owns and operates ter- minal facilities at Twin Cities and performs transfer and terminal switching services for its proprietary lines. With respect to allocation of expenses among the pro- prietary lines, a controversy is now pending before the courts in respect of proper division of expenses as a result of acquisition above described. Neither Great Northern, Northern Pacific nor Burlington uses the fa- cilities in making interchanges with each other, but Great Northern and Northern Pacific use its services for interchange with the Milwaukee and another railroad and any change in method of making interchange with those companies would be a matter of negotiation between them and New Company. St. Paul Depot, the capital stock of which is owned in equal proportions by eight proprietary lines, including Great Northern, Northern Pacific, and Burlington, owns and operates the Union Passenger Station and related facilities in St. Paul, which are used by its proprietary lines, Operating expenses are allocated on a use basis, and changes in allocation require unanimous agreement of the owning companies. In the event of approval he in, following consummation and consolidation of passén- ger trains between St. Paul and Chicago, there would be a reduction in the number of cars handled through its facilities. However, employees would not be affected, _ and its operations and relations would otherwise remain - _- unchanged. 544 , In addition to its transportation properties and other ’ investments, which includes 100 percent stock ownership in Western Fruit Express Company, which owns over 5,800 refrigerator cars and which furnish refrigerator car service to Great Northern and certain other rail- roads, Great Northern’s interest in non-transportation properties is evidenced in its wholly-owned subsidiary, j Glacier Park Company, which in addition to owning 175,- i 000 shares (9.6 percent of the capital stock of Western Pacific, previously described, and 20,264 shares (2.3 per- cent) of the capital stock of Puget Sound Pulp & Timber Company, also owns approximately 152,000 acres of tim- ber and timber growing lands in the Kalispell area of Montana, and mineral rights in 8,700 acres now under lease to a major oil company, in the Waterton Lake area of southern Alberta. The record contains no separate valuations of those properties that is identifiable. Northern Pacific, a Wisconsin corporation, was organ- ized March 15, 1870, as the Superior and St. Croix Rail- road Company. The name of the corporation was changed to its present name on July 10, 1896. On September 1, 1896, it acquired the railroad and land grant of North- ern Pacific Railroad Company, a Federal corporation. The authorized capita] stock of Northern Pacific is 7,500,- 000 shares of common stock, par value $5 each. As of August 31, 1961, it had outstanding 5,993,684 shares. However, as of December 31, 1961, it had issued 5,997,- 577 shares, of which 5,993,276 were outstanding, owned by approximately 32,000 stockholders, and 4,301 were held in treasury, including 28 shares reserved for con- version of. outstanding fractional scrip. It is not con- trolled by any other corporation or company. Northern Pacifie’s long-term debt as of August 31, 1961, consisted of bonds aggregating $209,341,200, and equipment obligations $90,168,857, including $10,207,107 — due within one year, and miscellaneous obligations $284,- 510, including $50,853 due within one year. As of De cember 31, 1961, its long-term debt consisted of bonds — aggregating $208,917,200, and equipment obligations — $88,056,694. Details respecting the various obligations comprising such debt are described elsewhere herein. a eee cates ae andl, nw. NSA a eer ethan kates By Ethy Shed athe belied Melted 6 Wars a POE aS 4 ‘ 4 | LENA ADMD ln an RI eI SR a oN SA SKeaabal eae 545 Northern Pacific has conducted operations under its present name continuously since 1896, as a common car- rier by railroad, and such operations were conducted by its predecessor theretofore since 1872, Its railroad oper- ations as of December 31, 1960, comprised 6,800.31 miles of road, of which 2,784.30 were main line (2,714.89 owned including 6.36 miles jointly with other rail car- riers, 17.40 were trackage rights, and 53.01 were oper- ated under lease), and 4,016.01 miles were branch line (3,718.42 owned, including 35.75 jointly with other rail carriers, 249.19 were trackage rights, and 48.40 operated under lease from the United States Government) and are subject to Part I of the Act. It owns but does not operate 35.49 miles leased to SP&S. Its principal main lines of railroad through seven states ** and the Canadian Province of Manitoba, extend from St. Paul and Minne- apolis, and from Superior and Ashland, Wis., and Du- luth, westerly via Fargo and Bismarck, N. Dak., Billings, Butte and Helena, Mont., Spokane, Seattle and Tacoma, Wash., and Portland. Branch lines connecting with the principal main lines serve the agricultural and lumber producing territories which are intermediate, and a line extending to a connection with its affiliate, Midland, at Pembina, N. Dak., and International Falls, Minn., en- ables it to serve Winnipeg. Its principal points of inter- change are at St. Paul, Duluth, Ashland, Superior, Lau- rel, Billings, Butte, Spokane, Seattle, Pasco and Portland. Internationally, the principal points of interchange with other carriers by railroad are at Sumas, Wash., Pem- bina, and Winnipeg. As of August 31, 1961, Northern Pacific owned 627 diesel units of locomotive, 34,394 freight train cars and 402 passenger train cars and leased 300 freight train ears and four passenger train cars from others. As of December 1, 1961, however, it owned, leased, or con- trolled 34,715 units of freight car equipment, of which 1,404 were refrigerator cars, 19,051 were box cars, in- cluding 4,678 double-door cars, and 747 damage-free in- sulated box cars. 18 Wisconsin, Minnesota, North Dakota, Montana, Idaho, Wash- ington, and Oregon. 546 In addition to the above-described transportation prop- erties, Northern Pacific holds property rights in the na- ture of trackage rights to operate over the line or por- tions of the lines of other railroads and in some instances utilizes jointly with others described terminal or pas- senger station facilities covered by currently effective agreements, the nature of which, and other vital statis- tics of which are set forth in appendix D. The measure of control or ownership exercised by Northern Pacific over such other carriers, terminal and other railroad service companies, and other significant companies is also shown in summary form in appendix E hereto. A description of certain of the various com- panies in which Northern Pacific has, and New Company would acquire, a proprietary interest is appropriate. Through 100 percent stock ownership, Northern Pa- cific controls the following carriers subject to the Act: (1) Walla Walla Valley Railway Company (Valley Rail- way), (2) The Duluth Union Depot and Transfer Com- pany (Duluth Union Depot), and (3) Northern Pacific Transport (NP Transport). Valley Railway, an Oregon corporation, organized April 30, 1910, as an interurban | railroad, independently operates a line of railroad con- sisting of 13.99 miles of main line and 5.16 miles of branch line between Walla Walla and Baker-Langdon, Wash., and Milton-Freewater, Oreg. All of its capital stock was acquired in 1921 by a former wholly-owned subsidiary, since liquidated, and acquired by Northern Pacific pursuant to authority granted in Finance Docket No. 19663, Walla Walla Valley Railway Company Con- trol, 295 1.C.C. 826, decided March 11, 1957. It serves principally as an originator of traffic for Northern Pa- cific. Duluth Union Depot, a Minnesota Corporation, organ- ized March 12, 1889, owns and operates a passenger sta- tion, 2.86 miles of terminal trackage and one diesel elec- tric switching locomotive in Duluth, Minn. Great North- ern, Northern Pacific, and Duluth, Missabe and Iron Range Company (DMI) are tenant lines utilizing its facilities. mS hay du cee wae oidh) hp stan ee SRORLSE Oe en eae ant Ds av 547 NP Transport, a Delaware corporation, organized September 5, 1929, operates as a common carrier by motor vehicle, in interstate or foreign commerce (a) pursuant to effective certificates issued in No. MC-84690 and various sub-numbered proceedings, in the transpor- tation of passengers and their baggage, and express, newspapers and mail in the same vehicle with passen- gers, over regular routes, generally between Billings, on the east, and Spokane, on the west, via Laurel, Living- ston, Helena, Butte, and Missoula, also to Glacier Na- tional Park, via Livingston and Helena, Gardner, via Red Lodge, Mont., and between Missoula and Darby, Mont., and (b) pursuant to effective certificates issued in No, MC-63562, and various sub-numbered proceedings, in the transportation of general commodities, principally over regular routes, generally between Glendive and Sid- ney, Mont., on the east, and Portland, Oreg., and South Bend, Moclips, Bremerton, Everett, and Bellingham, Wash., on the west via Laurel (and south to Bridger, Mont.), Logan, Helena, Butte, Missoula, and Kailespell, Mon., Spokane, Pasco, Lewiston, Seattle, Tacoma, and Sumas, Wash., generally along the rail lines of the rail- road, most of which operations are subject to key point and prior or subsequent rail haul restrictions. Some of its operations were authorized by certificates recognizing certain “grandfather” rights, and are unrestricted. It also performs pick-up and deliver service in the trans- portation of general commodities for Northern Pacific at points in Minnesota, North Dakota, Montana, Idaho, Washington, and Oregon. As of December 31, 1961, it utilized in its operations 808 pieces of equipment con- sisting of 90 trucks, 127 truck tractors, 529 semitrailers, 2 poletrailers, 20 passenger busses, 11 bus-truck combi- nations, and a limousine for special charter parties. It also owned 340 semitrailers leased to Northern Pacific for trailer on flat car (TOFC) service. Northern Pacific also controls, jointly with Great Northern, applicants Burlington and SP&S, as well as Midland described elsewhere herein. It owns 830,179 shares, or 48.59 percent of the outstanding common stock of Burlington of which 842 shares are owned of 548 record and the remaining 829,337 shares are pledged with the trustee under Northern Pacific refunding and improvement mortgage, described elsewhere herein. Northern Pacific owns jointly with Union Pacific in equal proportions the capital stock of Camas Prairie Railroad Company (Camas Prairie), a carrier subject to the Act which operates independently a line of rail- road, 257.77 miles, extending between Riparia, Wash., and Grangeville, Oreg., via Lewiston, Idaho, and between Lewiston and Stites and Headquarters, Idaho. It has connections with each of its proprietary lines, and serves principally as an originator of traffic for them. As indicated in appendix E, Northern Pacific holds minority interests in the capital stock of a number of other carriers subject to the Act. The principal ones which warrant description are: (1) The Northern Pa- cific Terminal Company of Oregon (NP Terminal), (2) LST&T, (3) St. Paul Depot, (4) Minnesota Transfer, and (5) Butte Pipe Line Company (Butte Pipe). The operations of LST&T, St. Paul Depot, and Minnesota Transfer have been described elsewhere herein. NP Terminal, the capital stock of which is owned 40 percent each by Northern Pacific and Union Pacific, and 20 percent by Soutern Pacific, owns and operates exten- sive terminal facilities in and around Portland, Oreg., performs switching service, including to and from in- dustries on its own lines, and transfer work for the proprietary lines and SP&S, and owns and operates the Union Depot and related facilities, performing passenger terminal services for proprietary lines, Great Northern and SP&S. It owns a small yard in which are handled Northern Pacific’s freight trains, and operates the Guild’s Lake Yard owned 75 percent by the terminal company and 25 percent by Great Northern, but used in varying degrees by Northern Pacific, Union Pacific, Southern Pacific and Great Northern. Other than transfer to New Company of Northern Pacific’s above-described stock ownership, in event of approval, few changes in opera- tions would occur. Those include performance on an ownership basis rather than on a tenant line basis of passenger work now performed for Great Northern and yorker inane ted PCR SP&S at Union Depot, reduction in some accounting work performed by the terminal company due to elimi- nation of some billing. It is not anticipated that such changes would affect employees, Freight work performed for Great Northern at Guild’s Lake Yard now on an ownership basis would not be affected. In addition, it is proposed that what are now SP&S freight trains would use Guild’s Lake Yard to which would also be trans- ferred work presently performed for Great Northern and SP&S in its Hoyt Street Yard. It is anticipated that inerease in activity at Guild’s Lake Yard would exceed decrease attributable to New Company’s preferential so- licitation for inside gateways of Klamath Falls and Bieber as against Portland, subsequently discussed, and that the terminal company may increase the number of employees, but its cost would be offset by increased use charges paid to it by New Company. Butte Pipe, in which Northern Pacific owns 10 per- cent of its capital stock, operates as a common carrier by pipe line with 510.373 miles of line in eastern Mon- tana and Wyoming. In addition to its transportation properties and other investments, which include 100 percent stock ownership of Cuyuna Realty Company, Lemhi Telephone Company, and Missabe Realty Company, not engaged in transpor- tation, Northern Pacific has large land holdings which are important sources of income to it. Most of the lands were part of the land grant made by the Act of Con- gress of July 2, 1864, incorporating the Northern Pacific Railroad Company and granting lands to induce con- struction of its railroad from a point on Lake Superior to Puget Sound by the northern route, so as to bring about settlement and development of that region, add value to the government lands therein and establish fa- cilities for the transportation of mails, troops, munitions and public stores to and from the west coast. To aid in the construction 39,473,369 acres of alternate, odd- numbered sections of non-mineral public lands were granted by the original grant together with a right of way of 200 feet on either side of the railroad where it passed through the public domain together with neces- sary lands for station buildings, shops and other appur- 550 | tenances. The rights to them were acquired by Northern Pacific at foreclosure and sequestration sales following foreclosure in 1896 of mortgages placed on the railroad and land grant by the federal corporation. Since the original grant of lands described, Northern Pacific has disposed of considerable acreage by sale over the intervening years. Of the sale of lands since acquisi- tion under the grant, the record shows that the proceeds, net after payment of expenses and taxes paid into the hands of the trustee of the Northern Pacific prior lien mortgage, aggregated approximately $110,000,000. As of December 31, 1960, Northern Pacific and its wholly-owned non-carrier subsidiaries together owned in fee 2,236,992 acres of land (with the exception of cer- tain minerals in 23,177 acres) in Wisconsin, Minnesota, North Dakota, Montana, Wyoming, Idaho, Washington and Oregon; surface only of an additional 1,937 acres of land in Minnesota, Montana, and Washington; and certain mineral rights in an additional 6,075,659 acres of land in the eight states above mentioned, including 5,067,000 acres on which all mineral rights, including oil and gas rights are owned, 999,277 acres on which oil, coal and iron rights are owned, and 9,270 acres on which only coal rights are owned. Although huge, the lands described comprise but a small part of the original land grant lands owned in fee. However, the present holdings of Northern Pacific of such properties are unique as a lands holding. If owned in a separate cor- porate entity, it would probably represent one of the largest and most diversified land companies within the United States. The increasing importance of the proper- ties to Northern Pacific stockholders is prompted by a comparison of earning from such properties in relation to its net income from all sources. By 1961, Northern Pacifie’s net income of $5,913,216 from the natural re- sources properties, without certain deductions, was more ‘ than one-third of the total net income of $16,313,322 as shown in its annual report to stockholders for 1961, an exhibit of record. Of the lands owned in fee, approxi- mately 1,360,000 acres are timber and timber growing lands located in Washington, Oregon, Idaho, Montana, 551 and Minnesota. While Northern Pacific manages its own timber lands, it does not engage in logging or other lumber operations, Such operations are carried out by other companies to whom Northern Pacific has granted cutting rights. Of those lands, Northern Pacific owns in fee, or owns oil and gas rights in, approximately 4,460,000 acres are in North Dakota, Montana and Wy- oming, in portions of which oil and gas production have been developed, and approximately 980,000 acres in areas in which no production has yet been developed in Mon- tana, Washington and Oregon. Northern Pacific does not itself engage in exploration for, development or production of oil or gas. Its oil and gas properties are generally developed through contracts with operating oil companies, which contracts provide for royalties to Northern Pacific and either for exploratory drilling by the operator or for cash bonuses. In some eases Northern Pacific shares in a portion of the working interest production and costs. As of December 31, 1960, 357,000 acres of Northern Pacific’s ownership were com- mitted to leases or agreements. Oil and gas were being produced on approximately 49,500 of such acres and Northern Pacific shared in the production of oil and gas from approximately 75,000 additional acres under unitization or pooling agreements. Average daily rate of Northern Pacific’s net oil pro- duction for the period 1951 through 1960, inclusive, to- gether with the number of wells in which as of the end of each year Northern Pacific shared in the production, is shown of record, as follows: ; qs _....... Bbls of oil per day Year Wells Working Interest Royalty interest Total 1951 229 0 840 840 1952 247 0 932 932 1953 294 45 1,189 1,234 1954 324 236 1,386 1,622 1955 384 608 1,602 2,210 1956 458 1,611 2,292 3,903 1957 514 3,572 2,991 6,563 1958 578 4,297 3,131 7,428 1959 606 4,488 3,210 7,698 1960 664 4,652 3,368 8,020 552 On December 31, 1960, Northern Pacific had estimated net proved developed oil reserves of 18,051,000 barrels (9,805,000 working interest and 8,246,000 royalty) and estimated recoverable net proved developed gas reserves of 6,290,000 mef. Northern Pacific holds extensive acreages of coal lands, principally lignite, and also holds other mineral proper- ties, including several with iron deposits, which lands and properties are not considered by it to be of signifi- cant proportions in relation to its total assets, principally because the total net income from such mining proper- ties has been nominal and no substantial improvement is anticipated. Gross revenues from timber, oi] and gas and other minerals for the ten year period 1951 through 1960, in- clusive, is shown of record, as follows: Year Timber Oil and Gas Other Minerals Total 1951 $ 677,224 $ 695,520 $ 551,890 $ 1,924,634 1952 851,253 851,253 511,449 2,144,076 1953 615,771 987,017 599,160 2,201,948 1954 1,023,063 1,327,019 1,023,711 3,373,793 1955 1,400,000 1,686,153 1,001,885 4,088,038 1956 1,914,538 3,209,362 1,224,277 6,348,177 1957 1,343,951 6,004,294 1,326,927 8,675,172 1958 2,036,313 7,074,439 752,639 9,863,391 1959 3,950,927 7,618,894 519,881 12,089,702 1960 3,584,685 7,387,183 517,457 11,489,325 Northern Pacific represents that net income from timber, oi] and gas, and other minerals cannot be accu- rately stated for the reasons that, with the exception of oil and gas, separate accounting records are not main- tained for these activities; that the expense records main- tained for oi] and gas do not include any allocation of interest on funded debt, real property taxes, pension or overhead costs; and that the accounting records main- tained for timber and mineral properties, while adequate for management purposes, are not kept in the same de- tail as for oil and gas operations, but are partly esti- mated and, as in the case of oi] and gas, does not include eee ee ee Sk eee ae eeths tata (, (Aw Seen, — Ss ee ee ee ee ee ee ee ee ee ee tive: So an Chen sey 553 expenses of the character referred to above. Its estimate of net income from those sources, after income taxes for the 5-year period 1956-1960, inclusive, without taking into account the expenses mentioned above, is shown as follows: Year Timber Oil and Gas Other Minerals Total 1956 $1,183,141 $1,481,226 $724,332 $3,388,699 1957 733,911 2,561,010 809,173 4,104,094 1958 1,246,185 3,095,478 424,617 4,766,280 1959 2,670,577 8,814,752 249,116 6,734,445 1960 2,386,843 8,552,375 241,264 6,180,482 Burlington, an Illinois corporation, was organized June 24, 1864, through the consolidation of two corporations, one of which had been incorporated in 1849 as the Au- rora Branch Railroad Company. It has only one class of capital stock outstanding, consisting of common capital stock, par value $100 each. As of December 31, 1960, it had outstanding 1,708,391 shares, of which all but four shares, reserved for conversion of outstanding fac- tional scrip, were owned by approximately 643 stock- holders, 641 of which held 48,033 shares. As of Decem- ber 31, 1961, no significant change in outstanding shares had occurred. Of its outstanding capital stock, 97.18 percent are owned in equal proportions by Great North- ern and Northern Pacific, each of which owns benefi- cially 830,179 shares, Those shares were acquired through purchase in 1901 to assure Burlington a permanent con- nection by its short line with the Northwest rich in min- erals and lumber, with its markets for agriculture and other products, and with the commerce of the Pacific Ocean by way of Puget Sound and the Columbia River, while the Northern Lines were assured of a permanent connection by the shortest line with the agricultural and manufacturing areas of the middlewest and its markets for the products of the north and eommerce of the Pacific northwest. Of those shares, 842 each are owned of rec- ord by Great Northern and Northern Pacific, respec- tively, and 829,337 shares are pledged with The First National City Bank of New York, trustee under Great Northern Railway Company general gold bond mortgage, and 829,337 shares are pledged with Guaranty Trust Company of New York, trustee under Northern Pacific Railway Company refunding and improvement mortgage. The remaining 48,033 shares, or 2.82 percent, are pub- licly held. Burlington’s long-term debt as of August 31, 1961, consisted of bonds aggregating $128,723,000, and equip- ment obligations $93,604,604, including $11,977,372 due within one year. As of December 31, 1961, its long-term debt consisted of bonds aggregating $127,932,000, and equipment obligations aggregating $92,811,480, including $12,631,662 due within one year. Details respecting the various obligations comprising such debt are described elsewhere herein. Burlington has conducted operations as a common car- rier by railroad since 1864. Its present railroad opera- tions comprise 8,648.31 miles of road, of which 5,111.86 are main line (4,645.22 are owned, including 2.87 miles jointly with other carriers, 435.72 are trackage rights and 30.92 are operated under lease), and 3,536.45 are branch line (3,401.95 are owned and 134.50 are trackage rights), and are subject to Part I of the Act. Its prin- cipal main lines of railroad through 11 states extend from Chicago, Ill., northwesterly to St. Paul and Minne- apolis, and from Chicago westerly and southwesterly to St. Louis and Kansas City, Mo., Omaha and Lincoln, : Nebr., Denver, Colo., and Billings and Huntley, Mont. Connecting main lines extend to Peoria and Rockford, ; Ill., Des Moines and Sioux City, Iowa, Deadwood, S. , Dak., and via the line of a subsidiary (Paducah & Illi- : nois Railroad Company) to Paducah, Ky. It maintains # an extensive branch line system, principally for grain q in Nebraska and Kansas. Its principal points of inter- j change are at Chicago, Peoria, and East St. Louis, IIl., % d St. Joseph, Kansas City and St. Louis, Mo., Omaha and Grand Island, Nebr., Council Bluffs and Sioux City, Iowa, St. Paul, Minneapolis, Denver, Billings, Laurel and Paducah. 14 Tllinois, Iowa, Kansas, Colorado, Minnesota, Missouri, Montana, Nebraska, South Dakota, Wisconsin, and Wyoming. , 555 Burlington’s regular operations have been dieselized since 1957 and most of its operations were conducted with diesels for many years prior thereto. As of Decem- ber 31, 1960, it owned 692 diesel units and 13 steam units of locomotive, 1,024 passenger train cars, of which 79 were leased to others, and 43,509 freight train cars. However, as of December 1, 1961, it owned, leased, or controlled 48,998 units of freight train cars, of which 22,306 were box cars, including 760 double door cars and 549 damage free insulated box cars, and 1,963 were refrigerator cars owned by its wholly owned subsidiary, Burlington Refrigerator Express. Burlington also conducts operations as a common car- rier by motor vehicle subject to Part II of the Act. Under effective certificates issued in No. MC-66580 and sub- numbered proceedings engages in the transportation of passengers and their baggage, and express, newspapers and mail, in the same vehicle with passengers, over reg- ular routes between Miner, Wis., and Winona, Minn., serving no intermediate points, and between Atchison, Kans., and Armour, Mo. Under effective certificates is- sued in No. MC-66581 and various sub-numbered pro- ceedings, it engages in the transportation over regular routes of general commodities, with exceptions between Sterling and Merino, Colo., serving all intermediate points, with restriction; of baggage, express, mail, news- papers, milk and cream between Alliance, Nebr., and Torrington, Wyo., and between Bayard, Nebr., and junc- tion U. S. Highways 26 and 26N, serving all intermedi- ate points, with restrictions; of milk and cream and by- products thereof between Atchison, Kans., and Armour, Mo.; of general commodities between St. Louis, Mo., and Alton, Ill., serving East Alton, Ill., subject to restrictions; of general commodities, moving in express service be- tween Dubuque, Iowa and Savanna, IIl., serving no in- termediate points, with restrictions; and of baggage and express between Rock Island and Savanna, Ill., serving Specified intermediate points. The restrictions indicated are generally those limiting service to that which is aux- iliary to or supplemental of rail service, such operations generally being confined to those between points stations along the railroad, although some are off-line. 556 . In addition to the above-described transportation prop- erties, Burlington holds property rights in the nature of trackage rights to operate over the lines or segments of lines of other railroads, and in some instances utilizes jointly with others described terminal or passenger sta- tion facilities, covered by currently effective agreements, the nature of which, and other vital statistics of waich, are set forth in appendix D. The measure of control or ownership exercised by Bur- lington over such other carriers, terminal and other rail- road service companies, and other significant companies is also shown in summary form in appendix E hereto. A description of certain of the various companies in which Burlington has and New Company would acquire a proprietary interest is appropriate. Those carriers subject to the Act wholly owned or con- trolled through ownership of a majority of outstanding capital stock by Burlington are: (1) Burlington Truck Lines, Inc. (BTL), (2) Missouri and Illinois Bridge and Belt Railway Company (Belt Railway), (3) The Colo- rado and Southern Railway Company (C&S), (4) Fort Worth and Denver Railway Company (FW&D), and (5) Winona Bridge Railway Company (Winona Railway). BTL, an Illinois corporation, wholly owned by Burling- ton, was organized June 14, 1945, to succeed to the freight operations of Burlington Transportation Com- pany, which had been conducted since 1935, operates pur- suant to certificates issued by this Commission in No. MC-107500 and various sub-numbered proceedings, as a common carrier by motor vehicle, in interstate or for- eign commerce, of general commodities, for the most part, with certain exceptions, generally over a network of regular routes throughout eight of the eleven states Q in which Burlington rail operations are conducted, which d routes substantially parallel much of the Burlington rail ‘ operations. Its principal operations are conducted at ; motor carrier rates under motor carrier tariffs and in- volve for the most part truckload traffic. Additionally, it performs on rail freight billing a service for the rail- road (Burlington or its subsidiaries) wherever interests of rail shippers or receivers are promoted. A portion of AH AO oC Nagle Sea ne it a al 3 eee seat anes Senet CO erat - eS il 4, Laie ite en i REF A RAT Ds | | 557 BTL’s operations carry restrictions or limitations to service from or to, or traffic interchanged at points on the rail lines of Burlington or its railroad subsidiaries, or that which is auxiliary to or supplemental of rail service of the railroad. BTL’s operations reach Billings, a point served by Great Northern, Northern Pacific, and NP Transport, at which point its lines connect with the Montana motor carrier operations of NP Transport and Great Northern. The latter’s certificates are restricted to service auxiliary to or supplemental of rail service of Great Northern and it does not participate with BTL in joint through interstate rates. BTL’s operations are duplicative with those of NP Transport to the extent that both operate over U. S. Highways 10 and 310 between Billings and Bridger, Mont., 44 miles, although the serv- ice authorized and performed is not duplicative. NP Transport service over that segment is confined to traffic from Billings area to Bridger or other Montana points whereas BTL handles no traffic locally between Bridger and Billings. There are a limited number of joint through interstate rates via Billings participated in by BTL and NP Transport. Through the Billings interchange, BTL in its operations south thereof participates in some joint through interstate traffic moving to and from points in Montana. As of December 31, 1961, BTL operated ap- proximately 145 trucks, 477 tractors, and 2,243 trailers of various types. Of the latter figure 600 were owned by Burlington. It maintains extensive repair and main- tenance facilities at Galesburg and Berwyn, IIl., Omaha and Denver. BTL maintains its own freight solicitation sources and none of its traffic department personnel are employees of the parent company. Its principal traffic and operating officials are concerned with motor rather than rail transportation. A substantial volume of its tonnage involves interchange traffic. It interchanges traffic with other motor carriers at all connecting points, principally Chicago, Peoria, and St. Louis. In addition, it transports rail less-than-carload freight for Burlington over truck routes serving stations on the railroad, per- forms pick-up and delivery *;vice on rail-less-than-car- load shipments involving some 20 million pounds annually ot ny 3 {° SEE PERI SEINE! NOEL AE TNE at 53 separate locations, transports some mail in peddle service between specified railroad stations, distributes rail carload traffic at eight terminal localities and per- forms pick-up and delivery service on rail trailer-on- flatear loads. Belt Railway, a Missouri corporation, in which Bur- lington owns 81.82 percent of its outstanding capital stock (Missouri Pacific Railroad Company owning the remainder) owns a bridge traversing the Mississippi River between Alton, Ill., and West Alton, Mo., and owns and operates certain railroad facilities near Alton. It performs switching service to and from industries located on its lines, It facilities are used principally by Burlington, but also by several other railroads. C&S, a Colorado corporation, in which Burlington owns | 74.72 percent of its outstanding capital stock, the re — mainder being publicly held, operates as a common Car- rier by railroad in Colorado, Wyoming and New Mexico, its main line extending from Wendover, Wyo., where it connects with Burlington, to the boundary between New Mexico and Texas, near Texline, Tex., where it connects with its wholly-owned subsidiary, FW&D. Its rail oper- ations extend over 713 miles of road of which 610 are owned. FW&D operates as a common carrier by railroad, solely in Texas, from a junction with C&S at the Texas- New Mexico Boundary to Galveston, Tex., with branch lines to Lubbock, Abilene, and Dimmit, Tex. Its rail operations extend over 1,363 miles, of which 1,003 are owned. Winona Railway, a Minnesota corporation, in which Burlington owns 66.66 percent of its outstanding capital ; stock (Green Bay & Western R.R. Co., owning the re ; mainder) owns a bridge traversing the Mississippi River 4 between Winona, Minn., and East Winona, Wis., and : certain rail facilities in that area, used by each of its owners in traversing the river. As indicated in appendix D, Burlington holds minor- ity interests in the capital stock of a number of other carriers subject to the Act. The principal ones which warrant description are: (1) Davenport, Rock Island and | 558 | ee r= ne | 559 Northwestern Railway Company (DRI&N ), (2) Keokuk Union Depot Company (Keokuk Depot ), (3) Atchison Union Depot and Railroad Company (Atchison Depot), (4) Paducah and Illinois Railroad Company (PIR), (5) Chicago Union Station Company (Chicago Station), (6) Illinois Northern Railway Company (lIllinois Northern), (7) Iowa Transfer Railway (lowa Transfer), (8) The Denver Union Terminal Railway Company (Denver Ter- minal), (9) Illinois Terminal Railroad Company (Illi- nois Terminal), Kansas City Terminal Railway Company (Kansas City Terminal) (10) The Belt Railway Com- pany of Chicago (Belt Railway), and (11) Terminal Railroad Association of St. Louis (Terminal St. Louis). Others have been described or are of little significance. DRI&N, the capital stock of which is owned in equal proportions by Burlington and the Milwaukee, owns cer- tain railroad facilities in and near Davenport, Iowa, and Rock Island, IIl., including a bridge across the Missis- sippi River. It performs switching service to and from industries located on its lines for the proprietary lines, and each of those lines uses its properties, particularly the bridge. Keokuk Depot, the capital stock of which is owned 40 percent by Burlington and 20 percent each by Rock Is- land and two other railroads, owns and operates a union passenger depot and related facilities at Keokuk, Iowa. Atchison Depot, the capital stock of which is owned 37.5 percent by Burlington, 25 percent each by Santa Fe and Missouri Pacific, and 12.5 percent by Rock Island, owns and operates a passenger depot facility at Atchi- son, Kans. PIR, the capital stock of which is owned in equal pro- portions by Burlington, and two other railroads, owns certain railroad facilities between Paducah, Ky., and Metropolis, Ill., principally a bridge across the Ohio mi Its facilities are used by each of the proprietary ines. Chicago Station, the capital stock of which is owned in equal proportions by Burlington, the Milwaukee and two other railroads, owns and operates a passenger sta- tion and related facilities in Chicago, used by Burling- 560 ton, the Milwaukee and two other railroads. Operating expenses are allocated on a use basis. Other expenses, such as taxes, bond interest and sinking fund payments are allocated on an ownership basis. Under the merger proposals applicants contemplate consolidation of certain passenger train operations which would reduce the num- ber of cars handled into and out of the subject facilities but it is not anticipated that employees would be affected. Illinois Northern, the capital stock of which is owned 51 percent by Santa Fe, 25 percent by Burlington, and 12 percent each by two other railroads, owns and oper- ates certain railroad facilities in southwestern Chicago, and performs switching service to and from industries on its lines and between railroads. Iowa Transfer, the capital stock of which is owned in equal proportions by Burlington, Rock Island, and two other railroads, operates transfer facilities at Des Moines, Iowa, for the handling of traffic between several rail- roads. Denver Terminal, the capital stock of which is owned in equal proportions by Burlington, The Colorado & Southern Railway Company, The Denver & Rio Grande Western, Rock Island, Santa Fe, and Union Pacific, owns and operates Union Passenger Station and related facili- ties in Denver, which are used by its six proprietary companies. Illinois Terminal, the capital stock of which is owned in equal proportions by 11 railroads, including Burling- ton, operates a railroad between St. Louis, Mo., and East St. Louis, and Springfield, Ill., between Springfield and Peoria, Ill., and between Springfield and DeLong, IIL, performing both switching and line-haul service. Kansas City Terminal, the capital stock of which is owned in equal proportions by 12 railroads, including Burlington, owns and operates extensive terminal facili- ties at Kansas City, Mo., and engages in some switching and transfer work, Operating expenses are allocated on a use basis, but other expenses, such as taxes and inter- est on debt are allocated on an ownership basis. Belt Railway, the capital stock of which is owned by | several railroads including Burlington which has a one- er had Ratha ase tected bBo tee et ae Ws ; 2 % 4 4 ] 561 twelfth interest, operates extensive properties in the Chi- cago area, performing transfer and terminal switching services for its proprietary lines and other railroads. Terminal St. Louis, the capital stock of which is owned by several railroads, including Burlington, which owns one-sixteenth interest, owns and operates extensive ter- minal facilities in the St. Louis area, including a pas- senger depot. Expenses are allocated on a use basis. In addition to its transportation properties and other investments, Burlington controls, through 100 percent stock ownership, Burlington Refrigerator Express Com- pany, Burlington Equipment Company, and St. Louis & Kansas City Land Company. Through the last named, it is beneficial owner of 100,200 shares, or 1.5 percent of the common capital stock of The Denver and Rio Grande Western Railroad Company, and is also owner for investment only of 60,428 shares or 6.59 percent of the common capital stock of Gulf Mobile & Ohio Railroad. Pacific Coast, a Washington Corporation, was organ- ized June 15, 1932, to acquire the properties of its prede- cessor, Pacific Coast Railroad Company. That acquisition was authorized in Finance Docket No. 9576, Pacific Coast R. Co, Acquisition, 187 I.C.C. 563, decided Sep- tember 30, 1932. Pacific Coast has only one class of capital stock outstanding. As of December 31, 1960, it had outstanding 10,000 shares of common capital stock, par value $100 each, all owned by Great Northern. As of December 31, 1961, the record reflects no change. Those shares were acquired by Great Northern pursuant to authority granted in Finance Docket No. 17134, Pa- cific Coast R. R. Co. Control, 282 I.C.C. 600, decided August 31, 1951. It has no other securities authorized or outstanding. Pacific Coast’s railroad operations are all located with- in King County, Wash., and comprise 32.03 miles of road, all owned by it, consisting of 22.29 miles of main line extending from Seattle through Black River and Renton to Maple Valley, Wash.; 7.61 mil [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0030%3A02. Public record. Not legal advice.