# Appendix — City of Chicago v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0132%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1969 - **Citation:** 396 U.S. 162 ## Text la APPENDIX A Interstate Commerce Act. Title 49, United States Code: Section 13a(1). A carrier or carriers subject to this part, if their rights with respect to the discontinuance or change, in whole or in part, of the operation or service of any train or ferry operating from a point in one State to a point in any other State or in the District of Columbia, or from a point in the District of Columbia to a point in any State, are subject to any provision of the constitution or statutes of any State or any regulation or order of (or are the subject of any proceeding pending before) any court or an administrative or regulatory agency of any State, may, but shall not be required to, file with the Commission, and upon such filing shall mail to the Governor of each State in which such train or ferry is operated, and post in every station, depot or other facility served thereby, notice at least thirty days in advance of any such proposed discon- tinuance or change. The carrier or carriers filing such notice may discontinue or change any such operation or service pursuant to such notice except as otherwise ordered by the Commission pursuant to this paragraph, the laws or consti- tution of any State, or the decision or order of, or the pendency of any proceeding before, any court or State authority to the contrary notwithstanding. Upon the filing of such notice the Commission shall have authority during said thirty days’ notice period, either upon complaint or upon its own initiative without complaint, to enter upon an investigation of the proposed discontinuance or change. Upon the institution of such investigation, the Commission, by order served upon the carrier or carriers affected thereby at least ten days prior to the day on which such discontinu- ance or change would otherwise become effective, may re- quire such train or ferry to be continued in operation or service, in whole or in part, pending hearing and decision in such investigation, but not for a longer period than four 1 Eb Se KM we late CPSEE te IIS CARA TA per ya iN SUSI PAS IA RA Nas Bieler mL NS mea SS IWERED 2a months beyond the date when such discontinuance or change would otherwise have become effective. If, after hearing in such investigation, whether concluded before or after such discontinuance or change has become effective, the Commis- sion finds that the operation or service of such train or ferry is required by public convenience and necessity and will not unduly burden interstate or foreign commerce, the Commis. sion may by order require the continuance or restoration of operation or service of such train or ferry, in whole or in part, for a period not to exceed one ye. ¢ from the date of such order. The provisions of this paragraph shall not supersede the laws of any State or the orders or regulations of any administrative or regulatory body of any State applicable to such discontinuance or change unless notice as in this paragraph provided is filed with the Commission. On the expiration of an order by the Commission after such investigation requiring the continuance or restoration of operation or service, the jurisdiction of any State as to such discontinuance or change shall no longer be super- seded unless the procedure provided by this paragraph shall again be invoked by the carrier or carriers. Judicial Code, Title 28, United States Code: Section 1336(a). Except as otherwise provided by Act of Congress, the district courts shall have jurisdiction of any civil action to enforce, enjoin, set aside, annul or suspend, in whole or in part, any order of the Interstate Commerce Com- mission. 3a APPENDIX B UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION No. 68 C 956 City or Cuicaco, THE MeTRoPoLiTaN GOVERNMENT OF NASH- VILLE AND Davipson Cour TENNESSEE, VILLAGE OF MiuForD, Ciry or WatseKa, City or Hoopeston, City oF DANVILLE, Crry or TERRE Haute, City oF VINCENNES and Maurice F. Raprizzi, Plaintiffs, Vv. Unirep States oF America, INTERSTATE CoMMERCE Com- MISSION and CHICAGO AND EasTERN ILLINoIs RatLRoaD Company, Defendants. Memorandum and Order Before Knoch, Senior Circuit Judge, and Robson and Perry, District Judges. Robson, District Judge: This is a suit to review certain findings and conclusions of the Interstate Commerce Commission. The defendant railroad has moved to dismiss. This court is of the opinion that the motion should be granted. On August 31, 1967, the Chicago & Ea’ ern Illinois Rail- road Company (‘‘Eastern’’) gave notice under 49 U.S.C. § 13a(1) that, effective October 1, 1967, its trains numbered 93 and 54 between Chicago, Illinois, and Evansville, Indi- ana, would be discontinued. On September 18, 1967, the Interstate Commerce Commission (‘‘Commission’’) en- tered an order requiring Eastern to continue operating trains 93 and 54 pending an investigation by the Commis- sion. After hearings and briefs, Division 3 of the Com- mission on January 25, 1968 (served January 31, 1968), —_———— PAPI DELLE EDINA BLE LAG AI REE ELMS ON sa 5 Sapte Tie, bd Ca een a 4a decided to terminate its investigation, and filed a report outlining its reasons. A petition for reconsideration was denied on May 8, 1968. This suit was filed shortly there. after. A three-judge court was convened and a joint hear. ing (with Tennessee Public Service Comm. v. United States, 68 C 1666) was held on November 4, 1968. The statute under which Eastern posted its notices to discontinuance is a unique statute passed in 1958 to deal with serious financial problems faced by this nation’s rail. roads. It allows the railroads to discontinue certain inter- state trains without seeking prior approval of the Inter- state Commerce Commission or any state commissions. If $ the Commission does nothing to stop the railroad, the dis- continuance follows automatically by statute, with no need whatsoever for a Commission order to authorize the dis- continuance. 49 U.S.C. §13a(1). The Commission has a short period (30 days) in which to decide whether an investigation is necessary, and, after an investigation (if, of course, the Commission determines it is necessary), the Commission may order the continuance of part or all of the trains involved. This period of continuance is restricted to only one year, after which time the railroad may post further notices and go through the entire process again. It has been conceded by both sides that when the Com. mission decides not to enter into an investigation, there is no judicial review, even though there may be cities and 4 states which might be ‘‘aggrieved’’ by the discontinuances, 4 State of New Jersey v. United States, 168 F.Supp. 324 (D. ‘ a “t oA ¥ arrars. eos vei ies ba eet ae: AS fay eh Sede SURaL Sa j N.J. 1958), affirmed per curiam 359 U.S. 27 (1959) ; Sludden ; v. United States, 211 F. Supp. 150 (M.D.Pa. 1962). In the New Jersey case, supra, at 329, the court said that the ‘ Commission’s order foreclosing an investigation was 4 ‘nothing other than an announcement that the Com- 4 mission intended to take no action with respect to the ; railroad’s notice of intention to discontinue the ferries. Section 13a(1) clearly leaves to the absolute discretion H of the Commission the determination of whether or not — es Sta kan oY bass ras Meee aegis SOLIS LRT AIS! LABELS IEA STASI NOTE! IEA LIAL TAIT LOBES hd os ts —_ Da it... shall make any investigation of the matter or avail itself of its temporary veto power by way of sus- pension within the limitations of the Act.’’ The instant case, contend the plaintiffs, has a crucially dif- ferent element: The Commission here entered into an in- vestigation, held hearings, made findings, and issued an order terminating the investigation. Even though the plaintiffs concede, as they must, that the statute [§ 13a(1)] was the source for the authority to discontinue, and not any order or action of the Commission, they argue that judicial review exists as to the order terminating the in- vestigation under 28 U.S.C. § 1336, which provides for re- view of Commission ‘‘orders’’. The question whether such a Commission order does fall under § 1336 has been dis- cussed at length in several prior decisions. In State of Minnesota v. United States, 238 F.Supp. 107, 112 (D.Minn. 1965), the Court determined that the report and findings filed after the investigation was terminated were both ‘‘gratuitous’’ acts. The reasoning behind the Commission’s decision to terminate, the court continued, even though it showed that the Commission ‘‘decided”’ that the discontinuances were proper, is part of the power to terminate and within the ‘‘sole discretion’? of the Com- mission, and not subject to judicial review. The court rea- soned that the primary purpose of an investigation and the hearings was to give the Commission enough information so that it would be able to reach a sound judgment as to whether it should interfere with the proposed cutbacks in rail service. Two situations were posed: (1) Where the Commission knows enough about the situation, as in the New Jersey case, supra, at 328, it will hold no investiga- tion, and the discontinuance will occur automatically; and (2) Where the Commission does not know enough about the problem, it will investigate, hold hearings, determine (as in this case) that the discontinuance does not warrant its interference, terminate the investigation, and the discon- tinuance will still occur automatically. There is, said the —— POLE ORE SE PSEA AE ES IG AEE BARTHES Rt mt aia GO Re a aca RO RARE — 6a court, no logical difference between the two situations, Where the Commission decided to take action, the order requiring continuance for one year would be reviewable; however, the ‘‘mere decision of the Commission to take no action is not’’. Minnesota, supra, at 112. To provide review of decisions to terminate investigations, concluded the court, would not only be contrary to the clear meaning of § 13a(1), but would be poor policy, ‘since it might even encourage the Commission not to investigate doubtful eases.’’ 7/d., at 113. The court in State of New Hampshire vy. Boston and Maine Corp., 251 F.Supp. 421 (D.N.H. 1965), recognized that there might be some unfairness here. However, it said that Congress, in meeting what was almost a crisis situation, could provide review for one side (the reail- th BRE ae a a care cs 4 f is 3 5 “Mo Rea RR peti roads), especially where the other side would be secking review of Commission ‘‘non-action’’, if there were cogent % policy considerations to call for such a result. /d., at 425. A It is entirely within the spirit of the legislation to have 3 given the railroads rapid relief without lengthy review. In 4 fact, it was the delay inherent in the proceedings before HI the state commissions that called forth the passage of Sec- ¢ tion 18a(1). See the discussion of the legislative history : in, e.g., State of Vermont v. Boston and Maine Corp., 269 : F.Supp. 80, 84 (D. Vt. 1967). These considerations sufficiently meet, in this court’s opinion, the contention by two later courts that Congress did not intend to deny judicial review in the present cir- cumstances, Vermont, supra; City of Williamsport v. United States, 273 F.Supp. 899, 902-903 (M.D.Pa. 1967).* * The same underlying facts were the substance of the case of City of Williamsport v. United States, 282 F. Supp. 46 (M.D. Pa. 1968), affirmed per curiam 392 U.S. 642 (1968). This case decided that the Commission has the power to order a partial continuance of operations, but did not discuss the jurisdictional question at all. There was also no discussion of the jurisdictional issue in People of the State of California v. United States, 258 F. Supp. 950 (N.D. Cal. 1966). EOE MELE SYBASE ATS BRE MEG BI NON ALG GRO S IYE AIIE 7 * — Further supporting this conclusion is the tion 13a(2), which deals Commission approval railroad can discontinue 7a Commission ‘‘orders”’ are view in cases falling unde in Section 13a(1), the parable “‘order’’ of the ( the statute in its entire ty, it seems appa gress intended to deny ju dicial review in the remove any doubt, Vermont, supra, at 83-84, n. 2. This court, in view of its o issues, does not pass on the It is therefore ordered that the defe Eastern Ilinois’ motion to granted and the cause ig hereby dismissed. Win G. Krocn Circuit Judge J. Sam Perry District Judge Epwrn A. Rogsox District Judge January 8, 1969, a PEERED SLA LRP GRA AA iB nt ee fact that in See- with wholly intrastate operations, is expressly necessary before any service, 49 U.S.C. § 13a(2). The provisions, therefore, in 28 U.S.C. § 1336 reviewable, call for r Section 13a(2). But where, as statute is self-impleme Jommission is iny » that only judicial re- nting, no eom- olved. Taking rent that Con. instant case,** position that review is proper under quested an amendment to the Act to pinion on the jurisdictional other questions presented. ndant € thicago & dismiss be, and it is hereby a Sa APPENDIX C Served January 31, 1968 9449 INTERSTATE COMMERCE COMMISSION Finanen Dockwr No, 24725 Citeago & Masrenn Lininon Rainoan Co. -Discontinuanee of Trains Nos. 93 and 54 Between Chieago, Hh, and Kvanaville, Ind. Decided January 25, 1968, Upon investigation, found that operation by the Chicago & Kastern Ilinois Railroad Company of passenger trains Nos, 98 and 54 between Chicago, IL, and Evansville, Ind., is not required by publie convenience and necessity, and that the continued operation thereof will unduly burden interstate commerce. Investigation discontinued. James H. Durkin and Edwin Richardson for rail carrier. J. Fred Parker for Georgia Public Service Commission, protestant. William H. Wilson for Public Service Commission of Indiana, protestant. Mary Louise Wolford for the publie of the State of Indiana, protestant. Edward G. Finnegan, Leon J. Heidgen and James A. Parker for Minois Commerce Commission, protestant, Harold Cowen and Bernard Rane for city of Chicago, IL, protestant. Robert 8. Matthews and Ronald Warrum for city of Evansville, Ind., protestant. Keith E. Roberts for village of Milford, Tll., and city of Watseka, protestants, William E. Nelson for city of Hoopeston, II. protestant. Marion E. Wright for city of Danville, Ill, protestant. — Ya Robert I’. Doolittle, Jr. for city of Vincennes, Ind., prot- estant. Irederick 1. Bauer for city of Terre Haute, Ind., prot- estant. Raymond J. Kearns for Sisters of Providence, St. Mary of the Woods, Ind., protestant. William VP’. Byroad, Gordon KE. Cox, B. L. Dreshach, Thomas J. Duggan, George B. Lee, J. Thomas McNeal, William KE. Nelson, Karl G. Quinn, Keith b. Roberts, J. M1. Smith, and George P. Sheahan for various railway labor organizations. Report of the Commission Division 3, Commissioners Tuggle, Bush, and Stafford Tusate, Commissioner: Pursuant to the provisions of section 13a(1) of the Inter- state Commerce Act as amended, the Chicago & Eastern Mlinois Railroad Company (C&EI1), a common carrier by railroad subject to the provisions of part I of the aet, on August 31, 1967, filed notices and supporting statements in which it proposed to discontinue, effective October 1, 1967, service by its interstate passenger trains Nos. 93 and 54 between Chicago, IL, and Evansville, Ind., a distance of 287 miles. Copies of the notices were duly served and posted in the manner required by section 13a(1) and our rules and regulations thereunder. By petition filed concurrently in Finance Docket No. 24726, C&EI secks authority under section 13a(2) to dis- continue service by its intrastate passenger trains Nos. 3 and 4 between Chicago and Danville, Ill. That proceeding is the subject of a report and recommended order’ of the 1 By petition filed December 14, 1967, C&ET sought omission of the examiner’s report and recommended order in Finance Docket No. 24726 and consolidation of that matter with this proceeding. Replies thereto were filed by certain protestants, and by order entered January 8, 1968 the petition was denied. 10a hearing examiner served separately. C&EI’s application filed with the Illinois Commerce Commission for authority to discontinue trains Nos. 3 and 4 was denied by that body on September 20, 1967. Appropriate notice of the petition filed here in Finance Docket No. 24726 was served on the Governor of the State of Illinois. Protests to C&EI’s proposal in the titled proceeding were filed by communities along the line and State, civic, business, and railway labor interests, as well as users of the trains. By order of September 18, 1967, we insti- tuted an investigation and required continued operation of trains Nos. 93 and 54 pending a hearing and decision (up to the statutory maximum of 4 months). Because of the statutory limitation on the time available for investi- gation and decision, our order provided for omission in the titled proceeding of a report and recommended order by the examiner as part of the decisional process and for certification of the record to us for initial decision. Public hearings were held in Chicago, Momence, Watseka, Hoopeston and Danville, Tll., and Evansville, Vincennes, and Terre Haute, Ind., on a consolidated record with the section 13a(2) proceeding in Finance Docket No. 24726. Briefs were filed by C&EI, the Illinois Commerce Com. mission, and jointly by the village of Milford, the cities of Watseka, Danville and Hoopeston, Ill., and the Brother. hood of Railroad Trainmen. At the hearing protestants moved for dismissal of the proceedings on several grounds, principally that since Missouri Pacific Railroad Company (MoPac) controls C&EI, use of financial data relating only to C&EI and excluding MoPac is grossly misleading and contrary to the provisions of the act. Other relief sought included suspension or termination of the proceedings and oral argument on the motion. C&EI replied in opposition, and the motion was taken under advisement. The protestants pursue the argument on brief. lla The motion is denied. Oral argument is not warranted. By contending MoPac is a necessary party to these pro- ceedings, protestants ignore the plain language of section 13a of the act, which confers upon this Commission juris- diction over proposed passenger train discontinuances by “a carrier or carriers subject to this chapter.’’ Clearly, C&ET falls within the term “a earrier’’ subject to part I of the act. Whether or not the statutory standards for ordering a continuance of service are met is a matter which, in this case, does not depend (as will later be made clear) upon the corporate relationship of MoPac and C&EI. Piercing the corporate veil may be warranted in some situations, as for example, where false and misleading representations are made or where some unlawfulness may be involved, and perhaps in other circumstances, but here no such question is raised and no substantial reason is advanced to pursue that course, The record indicates that C&EI is the proper party in interest and that it has fully cooperated in presenting the data required for our action. Trains Nos. 93 and 54 operate on the following schedules: Train No. 93 Train No. 54 daily Miles Stations daily P.M. AM 3:45 0.0 Ly. Chicago, Ill. ........... Ar 10 :35 3:59 6.6 Chicago (63rd 5 10:21 A4 :30 28.8 Saeed goa vc, : E 9:44 ike 77.5 og G 8:49 6:10 123.2 oe 7:55 7:15 177.5 Terre Haute, Ind. ...._. 6:40 B7 :45 203.7 ie papas pe G 6:11 8:18 234.7 _ a 5:40 D8 :50 259.0 ei 5:05 9 :55 287.2 Ar. Evansville ...........__ Ly. 4:30 A—Stops to receive passengers. B—Stops to discharge revenue passengers from Chicago and Steger. D—Stops to discharge or receive revenue passengers. E—Stops to discharge passengers. G—Stops to receive revenue passengers for Chicago. ee NORE RAR Senger cote ce mee tng LIES PRG LAO IG is A ON I ly tae DLE SS 12a Their operation is in conjunction with trains of the Louis. ville & Nashville Railroad (L&N) similarly designated, which operate between Evansville and Atlanta, Ga., and Montgomery, Ala. The interchange is at Evansville. The L&N splits its southbound No. 93 at Nashville, Tenn., with one section terminating at Atlanta and the other at Mont. gomery. L&N originates one section of its northbound train No. 54 at Atlanta and the other at Montgomery, and consolidates the two at Nashville. The trains, designated ‘‘The Georgia—Hummingbird,” carry passengers and baggage. They are powered with three diesel locomotives, and have a consist of 10 regularly assigned cars daily with 11 cars on Friday, Saturday and Sunday. Train No. 93 leaves Chicago with a baggage-mail car, a dormitory, diner, lounge, sleeper and two coaches destined to Atlanta daily; a coach destined to Evansville on Friday, Saturday and Sunday; two coaches destined to Montgomery daily; and a sleeper destined to Mobile daily. Train No. 54 has a baggage-mail car, a dormitory, diner, lounge, sleeper and two coaches orignating at Atlanta daily ; a coach originating at Evansville on Friday, Satur- day and Sunday; two coaches originating at Montgomery daily; and a sleeper originating at Mobile daily; all cars having destination to Chicago. The passenger-carrying equipment is air-conditioned. Due toa restructuring of mail service by the U. S. Post Office Department, the mail cars were discontinued as of June 10, 1967, except for one storage-mail car from Chicago to Birmingham, Ala., and in October 1967, the Post Office Department removed that ear. The mail handled in the baggage-mail car is minimal. Train No, 93 stil] carries express traffic for the account of Railway Express Agency, Ine., destined to Chattanooga. These trains do not handle the express to or from C&ET points south of Chicago. Alternate passenger transportation service to and from the communities served by C&EI between Chicago and 13a Evansville, and south thereof served by L&N is available by bus and by air at most points. There are four flights daily southbound and three northbound between Chicago and Danville; two flights daily southbound and three north- bound between Chicago and Terre Haute; and four flights daily southbound and five northbound between Chicago and Evansville. Numerous flights are scheduled between Chicago, on the one hand, and, on the other, Atlanta, Chattanooga, Birmingham, Nashville, Montgomery, and Mobile, and between Evansville and Atlanta. Watseka and Hoopeston, Ill., Sullivan, Vincennes and Princeton, Ind., have no air service. A major bus line operates three southbound and four northbound buses daily between Chicago and Evansville, with stops at all intermediate points served by the sub- ject trains. Rail transportation is available, though limited, (a) by C&EI trains Nos. 3 and 4 between Chicago and Danville (but those are the trains involved in Finance Docket No. 24726, the discontinuance proceeding referred to above) and (b) by Illinois Central Railroad (IC) be- tween Chicago and Carbondale, IIl., and points south there- of (four trains daily in each direction). Highway dis- tances between communities served by C&EI and thos: served by IC in Illinois vary from 12 to 35 miles. Bus fares are lower than rail fares between Chicago and all points served by the subject trains, except Sullivan, Ind. Air fares are higher than rail or bus. C&EI maintains that it has lost patronage to the private passenger automobile ‘as a mode of intercity transporta- tion), and, as evidence thereof, introduced statistics show- ing the increase in the number of registered automobiles in the counties of Illinois and Indiana traversed by the subject trains. Considering the five Illinois counties (Cook. Will, Kankakee, Iroquois, and Vermillion) and the six Indiana counties (Park, Vigo, Sullivan, Knox, Gibson, and l4a Vanderburg) it was shown that in 1960 the Illinois counties had 1,653,520 registrations while the Indiana counties had 132,253, and that by 1966, there was an increase of about 20 percent—to 1,994,751 in the Illinois counties and 158,186 the Indiana counties. For the benefit of automobile users, Illinois Highway 1 between Chicago and Danville and U. S. Highway 41 be- tween Danville and Evansville are adjacent to and paralle! the line of C&EI. Also U.S. Highway 41 continues north- ward in Indiana east of Illinois Highway 1 to Chicago. Both are first class highways and U. 8. Highway 41 has substantial segments with four lanes. A number of wit- nesses testified to the effect that driving on the highways is dangerous. South of Chicago and its suburbs the roads traverse sparsely populated areas, are generally straight and the terrain is flat. The population? at the points served by the subject trains was shown as follows: Chicago 3,550,404, Chicago Heights 41,000, Watseka 5,219, Hoopeston 6,606, Danville 41,856, Terre Haute 72,500, Sullivan 4,979, Vincennes 18,046, Princeton 7,906, and Evansville 141,543. A number of those points have commercial or service areas extending beyond their corporate limits and the population reflected by such areas is larger than for the point involved. During the periods 1965, 1966 and first 6 months of 1967. train No. 93 carried 84,259, 82,213 and 31,913 passengers, respectively, of which 53,344, 56,230, and 20,952 were de- livered to L&N at Evansville. The daily average numbers of revenue passengers transported by that train for the same periods were 230,225, and 176, respectively, of which ? Based on the census taken in 1960. Since that time, some of the areas served have had popglation increases. en 15a 84, 71, and 60, respectively, were local passengers (traveling between C&EI stations). During the same periods, train No. 54 carried 76,854, 75,271, and 28,186 revenue passen- gers, respectively, of which 57,983, 60,063 and 21,682, were received from L&N at Evansville. The daily average numbers of revenue passengers transported by that train for the same periods were 210, 205, and 153, of which 51, 40, and 33, respectively, were local. The foregoing data were determined from analysis of records of tickets col- lected by conductors, cash fares received, and tickets honored but not collected, apportioned to the subject trains according to the number of miles traveled thereon. The supporting studies also show the numbers of pas- sengers boarding and deboarding at each station. Con- sidering the last 6 months of 1967 as representing the present level of patronage, of the 176 passengers ou train No. 93, an average of 156 boarded at Chicago, 12 at Steger, 5 at Danville, 2 at Terre Haute and 1 at Vincennes, and 17 left the train at Danville, 20 at Terre Haute, 1 at Sullivan, 7 at Vincennes, 2 at Princeton, 13 at Evansville, and 116 continued on the L&N. Of the 153 passengers on train No. 54 an average of 120 were through passengers from the L&N, 12 boarded at Evansville, 2 at Princeton, 6 at Vincennes, 1 at Sullivan, 11 at Terre Haute, 4 at Danville, and 1 at Watseka, and 3 left the train at Terre Haute, 3 at Danville, 8 at Steger and 139 at Chicago. Thus, the record shows that the C&EI points south of Chicago have had few passengers boarding or leaving the trains. C&EI’s balance sheet statement as of July 31, 1967, shows assets aggregating $119,182,901, including current assets of $10,220,039, special funds $484,841, investments $10,941,671, total properties less depreciation and amortiza- tion $96,182,478, and other assets and deferred charges $1,353,872. Liabilities were: current liabilities of $9,631,- 117, long-term debt of $53,494,944 (including $3,103,470 l6a due within 1 year), reserves $659,983, other liabilities and deferred credits $619,844, capital stock $29,837,372, capital surplus $112,522, and retained income $24,827,119. Its in- come statements for 1965, 1966 and first 7 months of 1967, show railway operating revenues of $40,578,936, $41,780,952, and $23,604,275 ; net railway operating income of $3,486,070, $4,091,786, and a deficit of $1,005,900; and net income after fixed charges and other deductions of $1,736,086, $2,853,372, and a net deficit of $1,757,265, respectively. C&EI has incurred annual net railway operating deficits in its passenger service in amounts in excess of $1 million for the years 1962 through 1966, inclusive. More than 20 percent of freight net income has been required to sub- sidize these rail passenger deficits in each of the years 1957 through 1966, except 1959 when the percent of freight net income so required exceeded 12 percent. C&EI esti- mates that the national award of September 16, 1967 to the shoperaft employees, retroactive to January 1, 1967, will increase its labor costs by $210,000 in 1967 and by $321,000 in 1968. Further, a recent agreement with the Brotherhood of Locomotive Engineers will result in pay- ment of $100,000 to C&EI locomotive engineers in backpay. None of those additional expenses were included in de- termining the cost of operating the subject trains during the first 6 months of 1967, or in projections made. C&EI shows data respecting the financial results of the operation of the trains for the years 1965, 1966, and the first 6 months of 1967. In 1965, train No. 93 had revenues (passenger, diner, express and mail) of $1,096,607 and out- of-pocket expenses of $1,001,950 for a net income of $94,657. For the same year, train No. 54 had similar revenues of $811,156, and out-of-pocket expenses of $862,270 for a net out-of-pocket loss of $51,114. In 1966, the correspond- ing figures for train No. 93 were $1,083,494 revenues, $1,125,287 costs, and $41,793 deficit; for train No. 54 they 17a were $816,863 revenues, $1,022,127 costs, and $205,264 defi- cit; the combined net loss for both trains was $247,037. In the first 6 months of 1967, the corresponding figures for train No. 93 were $420,167 revenues, $522,421 costs, and $102,254 deficit, and for train No. 54, $311,281 revenues, $477,387 costs, and $166,106 deficit; the combined net out- of-pocket loss was $268,360. Details of the revenues and expenses for those periods indicated as computed by the carrier are shown in the attached appendix A. As indicated, actual revenues from these trains, includ- ing carbire revenue are reflected in the data presented. The following actual expenses were also employed: Train engineman expense, traincrew expense, sleeping car ex- pense, insurance, expenses incurred in clearing wrecks, baggage loss and damage claims, injuries to persons and dining car and buffet car service. Other expenses and savings data were computed using methods approved by the Commission in prior proceedings. Increases in ex- penses for 1966 over those of 1965 occurred in four ac- counts (a) passenger train cars—repairs, (b) equipment depreciation—passenger cars, (c) train supplies and ex- penses, and (d) joint facility accounts. These were the subject of detailed inquiry. On (a) an accident to train No. 93 at Hoopeston in April 1966, were required exten- sive repairs to passenger cars ($59,506). Expenses charged to that account in 1965 were abnormally low. On (b) C&EI did not, until 1967, retire its head-end equipment used on other trains in 1965 and 1966, having made such equipment available to the U. S. Post Office Department for use in trains Nos. 93 and 54. Retirements of head-end equipment in 1967, when mail was removed from all C&EI passenger trains amounted to $365,549, but this increase in expense was not reflected in the financial results dis- cussed above. In projecting revenues and expenses in- volved in operating the subject trains without the mail — PPLE TET aE AR LEE ee Ri ae ee ee ee eee 18a revenue equipment, depreciation on only those cars which would be required to operate the subject trains without any head-end business was considered. On (c) the total passenger portion of the account actually decreased in 1966, but spreading the expense over fewer trains than in 1965, resulted in an increased allocation to the remaining trains. On (d) the increase in joint facility expenses jn 1966 was due to the discontinuance of passenger trains by other railroads using such facilities, which added pro- portionally to the expense burden on the remaining trains. Trains Nos. 93 and 54 use joint facilities at Chicago with four other railroads, and with one other at Terre Haute, Vincennes, and Evansville. During the first 6 months of 1967, no C&EI passenger trains, other than the subject trains used the Terre Haute, Vincennes and Evansville facilities, and as a result, all of the amounts paid for use of those facilities ($25,356, $18,136, and $104,328, respec- tively) are savable. Joint facility costs were computed in accordance with those methods and standards approved in Chicago, R. I. & P. Co., Discontinuance of Trains, 328 L.C.C. 278. The foregoing data reflect revenues received by C&EI for transportation of mail. Projected annual revenues and out-of-pocket expenses, exclusive of mail traffic, using 1966 revenue data, show that C&EI would incur an annual loss of $242,850 in the operation of train No. 93 and $191,780 in the operation of train No. 54. In projecting equipment depreciation and other expense items only the equipment that actually would be used was considered. The projected annual revenues and out-of-pocket expenses, exclusive of mail traffic, were shown as follows: 19a Train No.93 Train No. 54 Revenues : cLiin ccadeutewee sd evewey ie $532,953 $468,549 ECT CU ET CRT TET 87,680 113,593 103-108 Baggage and other’ .......... 2,270 1,153 vo dchensee oni seer onexne 587 34,909 13i Dining and bullet® ........00000% 47,844 47,844 i PG i cones eveseetats 671,334 666,048 605-538 Car-hire, net® ............0.. 4,785 4,785 Revenue and income ................... 676,119 670,833 TE MED. stun evévevenenteune 918,969 862,563 NE ss Juke alin ecicmae kicdeme (242,850) (191,730) Expenses : Maintenance of equipment— 311 Repairs, diesel locomotives* ....... 53,406 53,390 317 Passenger train car repairs® ...... 141,817 141,817 331 Equipment depreciation—locomo- CR Pe ys Sen tae 8,760 8,760 331 Equipment depreciation—cars’ .... 30,103 30,103 835 Employee health and welfare EE ibd wae Seve sar we tt.e ws 2,502 2,502 Traffic : 351-360 Passenger traffict ............ 21,996 16,036 Transportation : 373 Station employees* .............. 15,650 14,568 376 Station supplies and expense* ..... 3,062 2,768 878 Yard conductor and brakeman® ... 5,532 5,532 392 Train enginemen™ ............... 50,193 52,987 ere eee 30,400 30,400 397 Water for train locomotion™ ...... 1,781 1,781 398 Lubrication for train locomotion!'. . 3,709 3,709 399 Other supplies for train locomotion™ 168 168 400 Enginehouse expense—train™ .... 8,108 8,108 > SS a 67,844 67,134 402 Train supplies and expenses’? ..... 88,308 88,308 403 Operating sleeping cars* ......... 49,060 37,392 409 Employee health and welfare CE: ss die ivemae eee’ «ed 5090 5,163 5,222 ES ok akan tke nha w'e a0 16,405 16,405 419 Loss and damage—baggage™ ..... 550 480 420 Injuries to persons'* ............. 41,044 2,754 441 Dining and buffet service* ....... 71,188 71,188 Yin Train No. on Revenies Ueneral. 409 Clorka, meoennt inert "tae Aaa 400 Binplovee health and welfare honetitat ne ; no no4 AML joint Paeitity meoonntat® 170,790 170,790 BAY Railway tas neonatal! , Y1,008 YA fay Total exponang OTA One HOD Ha T1088 wetial The number preceding eneh Hem ie the neoount Wimber fy the Comnieaion a Unitorn Ayatem of Avoounta, *Projeetod baad on enrrent toate. *Peajoetod baad on oar meaignmnenta *Prajeetod hagod on feat G monthe (07 PR PeHians *Prajeetod baad on vatimated oar miles (a) feat O months 1907 ovat per ear mile, * Hae on tive anit aeatenmont * Raeed on care required, * Hased on enrmont GMA. rates applied to labor only. * Reset on enrtont masignment. * Tased on 19g6 PAY Mente plug wage inerenged Based on 9 unit Assirriment @D frat month 1007 coat per unit milo Based on estimated oar mile @ firat O month 1967 cost per mile plus crews’ lodiing and moale at current coats * Rased on current premiums. Based on 20 year average * Rased on estimated oar assign monte, Rased on current rates applied to labor only. It is thus apparent that C&HT has incurred substantial losses in the operation of the trains Nos, 93 and 54 and that the losses will substantially inerease as a result of the Post Office Department's removal of mail from those trains and the consequent discontinuance of passenger trains of other railroads using the Chicago terminal facil ity, although the latter factor was not considered in making the above projections, Right communities on the line served by the subject trains intervened in opposition: Chicago, Watseka, Mil- Yin ford, Hoopeston, and Danville, 1, and Terre Haute, Vin vonnea, and Kvanaville, lod. ‘The trains do not serve Milford, Although some Minis residents who ride C&IGI train No. 4 northbound return on train No. 04 southbound, the witnesses testifying at communities in IMlinoia were primarily interested in th continued operation of trains Nos, Hand 4. ‘The latter are the eubject of the section 14n(Z) proceeding in Finance Docket No, JATZ6 and, under the provisions of that section, are being dealt with in the report of the hearing examiner, Indiana inferveners ane witnesses foatifying at Indiana points were concerned with continued operntion of the subject trains. Of the 144 public witnesses who testified on the con solidated record, 90 directed their testimony in whole or in part to the subject trains. Not all use the services of the trains, Thirty one testified on behalf of State, county, city government or municipal organizations, civic or trade organizations, and colleges or universities, and one pre sented the views of a Congressman, A number were con- corned with rail passenger service generally, thongh they themselves did not nse the services provided by the enh ject trains. With few exceptions the public witnesses desire the trains continued in what would be a standhy services for use as convenience in bad weather, at holiday periods and for shopping trips. No public witnesses tes tifled at Chicago. At Watseka, the mayor and representatives of the chamber of commerce and the County Farm Bareag in dicated that, although they do not use the subject trains. there ix need for rail passenger service in indncing industry to locate in the aren. A surgeon testified to using the trains 20-24 times a year to and from Chicago where, he indicates, an increasing number of his patienta require medical service. He owns an automobile, but does not use it on long trips. 29n At Hoopeston, the mayor and the president of the chamber of commerce expreased concern over rail je eenger eervies, Testimony waa given by a department afore Diver and a beautician, Two personnel Managers Of large corporations indicated that prospective employees Inquire vbout franaportation faeilities to and from (hiengo, One could expreaa no opinion as to whether diseontinnanes of the enhjoet trains would have a detrimental effooet on reerniting employees in Hoopeston; the other tees other trains of C&BT and wae more concerned with their po fention. ‘The president of the Hoopeston Industrial Cor poration pointe ont that every prospective industry men finns (raneportation, A representative of a eorn festival held annually each September in Hoopeston urges eon linnation of the eervies, hut of the 100,000 persone af fonding the Inet ovension, he knew of only four whe eame hy rail, The foregoing witnesses themaelyes rarely patron iae the aubject traine. Another witness rides train No, 92 (uring unnsnally heavy enowatorma when other moana of travel are not available, At Danville, municipal, commercial and other organi. ational spokesmen were concerned with rnil passenger service generally and specifeally C&HL traina other than those here involved. Several other witnesses proved to be only occasional patrons of traina Nos, 9% and f4- a bookkeeper, a number of railroad employees (who rated their on-time performance as poor), a housewife (who finds them erowded and often late), another housewife whose children sometimes use the trains going fo and from colleges (particularly in bad weather), and an architect who expressed the view that the discontinunanee would hamper Danville's development. Another witness who neces C&ET trains about once a month, oceasionally drives his automobile to Chicago, but would not go by bus because he considers the bus routes cirenitous and the service time consuming. Support for continued operation was voiced by a junior chamber of commerce spokesman for 110 mem- wa 2Aan bers who testified that he used the trains only onee, but that the majority of the membership use all C&BT trains; and by the chamber of commerce (representing 116 mann facturing firme) as part of its program to promote im- provernent in transportation. Several manufacturing or- ganizations indicated that some of their employees occasion ally use the trains. Spokesmen for three civie organiza lions use the trains several times a year, particularly during inclement weather, but aleo have used alternate transportation, including private automobile. A number of the witnesses testified that the northbound train is fre- quently late and dirty, that this was reported to the rail road and that there was little effective response. At fivaneville, the mayor and a State senator opined that discontinuance of the trains would be detrimental to the growth of industry and commerce in the community. The mayor ses nir service on many occasions and nses rail service about once every 6 months. The senator does not have ocension to use C&EI's service. The chamber of commerce spokesman urged that the discontinnance be deferred until L&N acquires the eastern side of C&BI’s line, although the transportation division which he repre sents voted six to three against opposing discontinuance. An nide to a member of Congress from Indiana presented the Congressman’s views that rail passenger transporta ion service is vital to the economic growth of the com munity, and that all modes of transportation must be kept available. Other witnesses testified to a preference for rail over alternate modes for the occasional trips they take, though some of them found the rail cars crowded, dirty and sometimes unheated. Among then was the representative of a religions community having 0 none stationed at Evansville. She indicated that her order’s recent transportation requirements were accomplished throngh use of charter bus service, and that the sisters have sufficient automobiles at their disposal. Aa At Vincennes, the mayor opposed the discontinuance but, in so doing, was not supported by the city council, The chamber of commerce mailed 475 questionnaires to area residents regarding the proposed discontinuance; 82 were returned showing a 3 to 1 preference for keeping the trains on. A survey at Vincennes University revealed that 22 of the 2,243 students use the trains. Members of the faculty use them twice a year. Seven students said they hope to use them more frequently, particularly during bad weather. A number of other witnesses—all of them only occasional users—complained about the condition of the trains and the station at Vincennes, about a poor on-time record, crowded and dirty equipment. All of the above witnesses urge continuation of the service with improve- ment of quality. At Terre Haute, the mayor pressed the view that pas- senger train service is needed in the development of in- dustry and commerce. On his six trips to Chicago in the past year he used train service once when his air flight was grounded on account of bad weather. The cham- ber of commerce cited statistics showing growth in popu- lation, commerce, enrollment in the universities and retail sales as yardsticks of a demand for improved service. Aware that loss of mail revenues has precipitated dis- continuance of passenger rail service, it argued that the railroad should consider providing complete service, freight and passenger, and should look to the passenger market as any other business man looks at a new market. Further, that a successful company expects to absorb departmental losses within its gross earnings in order to provide a complete service. Professors and students of a local uni- versity, opposing the discontinuance, testified to their use of the trains variously from regular weekend use to once or twice a year during inclement weather. Student owner. ship of automobiles by upper classmen is permitted and some of the students use the trains only when they cannot 25a obtain automobile transportation. Student use of the trains is primarily on holidays and at the beginning and end of summer vacation. While enrollment at the local university has more than doubled in the past 6 or 7 years, use of the trains at Terre Haute has continued to decline. A religious order with national headquarters at nearby St. Mary of the Woods has 350 members who ride the trains to Chicago twice annually for connections east and west thereof. The order has a number of automobiles at its disposal and has used them and bus service for Chicago trips. In advertising for its college the order would like to be in a position to advise prospective students that easy access is available via rail among other modes. It has had some difficulty with on-time performance of the trains, particularly in making connections. The college has about 400 students, a number of whom are from the Chicago area. Some evidence was presented to show the carrier’s car- cleaning program and the problems involved. Sometimes delay in arrival at Chicago requires quick turnaround, and cleaning of the cars leaves much to be desired. The record indicates that C&EI has made some effort to over- come the problem but must deal with C&WI which main- tains the Chicago terminal facility. Discussion and conclusions.—Numerous factors are con- sidered in determining whether to order the continuance of service under section 13a(1) of the act. Among them are public use of the service, population of the area, effect of a train discontinuance upon the communities served, available alternate transportation, financial results of the operation, prospects for the future, and the carrier’s finan- cial condition. The weight to be given each factor depends on the circumstances in a particular case. No one factor is necessarily controlling. The intent of Congress in enacting section 13a was to enable carriers to discontinue train services that no longer pay their way, and for which 26a there is no longer sufficient public need to justify the finap. cial loss involved. See Southern Ry. Co. v. North Caroling. 376 U.S. 93. At one time the passenger train was the pride of the transportation system, This was especially so in the United States where there was vast wilderness to be tamed, rich deposits of natural resources to be tapped, and large, widely-separated cities to be connected. The railroad and its passenger trains provided the strands for tying the far-flung areas together, and the channels for rapid, effi. cient communication and transport. Time and inventive genius created more efficient means for performing a num. ber of the functions for which we formerly relied on the rails. Electronics provide instant communication, and airplanes cut transport time tremendously for people, mail and express. The automobile and the supper highway— The evidence now before us shows that the subject trains no longer are used by express shippers (except for some movements between Chicago and Chattanooga), or by the Post Office Department for mail (once a highly remunera- tive source of traffic and a primary source of sustenance for passenger trains), Passenger traffic has been dwin- dling. In the meantime, costs continue upward inexorably. The general rise in costs throughout the economy are re- flected in the railroad’s expenses for employees, equipment, fuel, supplies, facilities and services. With the loss of mail revenues making a dramatice change in the financial results of the operation, C&ET would have to absorb an out-of-pocket deficit well over $400,000 per year in order to continue trains Nos. 93 and 54. It is likely that the deficit would go beyond a half million dollars. Financially, this carrier is at best marginal. It has a history of deficit operation and is beset with numerous 27a problems flowing therefrom regarding rehabilitation of its line and recovery of traffic. See Missouri Pac. R. Co. —Control—Chicago & E. 1. R. Co., 327 LC.C. 279 (1965). The slender profit shown on this record for 1965 and 1966 occurred at the height of a record breaking period of national prosperity. The relatively slight slowdown in the national economy during 1967 had an immediate and telling effect on C&EI’s operation, creating a net deficit of nearly $2 million in the first 7 months of the year. C&EI is an important link in the national rail system and from the point of service in its own area and as an integral part of the national system, its viability is a thing much to be desired. Continuance of the subject trains would militate against that objective. There is no reasonable prospect for relief from the financial burdens imposed by those trains. To the contrary, all indications are that the burdens would mount. And this, in turn, would soon intensify the railroad’s malaise, all to the detriment of the public. The people who have been using the trains for travel have done so largely on an occasional or standby basis. Their primary means of conveyance are the automobile and other nonrail modes. The testimony of the govern- mental leaders, business representatives, students and housewives is clear proof of that. The witnesses them- selves appear to prefer air and automobile travel. Many gave opinions about a need for rail passenger service in the interest of community and commercial growth, but few hard, realistic facts were advanced by them in support. The passenger-use statistics stand as stark proof that, regardless of what is felt and said, the people along the C&EI’s Evansville-Chicago line are not using the trains. Their patronage is minimal. For those who must depend upon public transportation, bus service is far more plentiful than the train service— at all points on the line. Use of the buses will require —— 28a an adjustment, but whatever inconvenience might be ex. perienced does not outweigh, on the scale of the public interest, the tremendous burden continued operation of the trains would involve. We conclude that discontinuance by C&EI of trains Nos. 93 and 54 is consistent with the purpose of section 13a(1) of the act, and the objectives of the national transportation policy. Certain railway employees seek imposition of the Bur- lington or similar conditions in the event the discontinu. ance is authorized. Similar requests have been considered in prior proceedings of this nature, and the Commission has uniformly held that we do not possess authority to impose conditions for the protection of railway employees who may be adversely affected as a result of the dis- continuance of passenger service under section 13a(1). See Great Northern Ry. Co. Discontinuance of Service, 307 1.C.C. 59. However, the probable effect of such dis- continuance on employees is a matter to be considered in determining whether the public convenience and necessity require the continuance of such service. We have con- sidered that factor, and, in our opinion, the probable adverse effect upon employees does not afford sufficient grounds to order continuance of the service. Contentions of the parties as to fact or law not spe- cifically discussed herein have nevertheless been considered and found to be without merit or material significance. We find that the operation by the Chicago & Eastern Illinois Railroad Company of passenger trains Nos. 93 and 54 between Chica , Tll., and Evansville, Ind., is not required by the public convenience and necessity and that continued operation thereof would unduly burden inter- state or foreign commerce. An appropriate order will be entered discontinuing the investigation herein. 29a Statement of revemmes and expenses for trains Bos. #3 and 54 in 1965, 1066 and ¢ months of 1967 1965 1966 ‘ix 1967 hie eee rein OS rain $ 516,762 $ 2. 19 $ 532,953 $ 466,549 $ 235,099 $ 197,355 90,032 122) 097 87,680 113; ”3 33,431 45,172 othex (1) 1,606 "93 2,270 13153 2,970 1,315 81,043 62,304 82,643 gery 12,483 12,483 106 305,137 50,854 305,621 9, ul 110,356 37,510 wi Santee = zh An 45,875 ay’ ben aries a4 18910 is & buffet (1) 16,910 905-538 Car hire, net (1) 51,842 — yee 21,328 2/008 L280) £3,900) feral =. ‘See below) 1,001,950 __862,270 1,125,287 _ 1,022,127 522° 421 477)387 PROFIT OR ( SWEET TESTI) ART) TMS) «= —TIOTITSE) TTBS TOD) Meintenance of Equ Dil Repairs, diese! lecom- tives (3 54,497 54,897 70,299 70,959 26, 695 7 ex tw cars- a 89, 300 72,511 174,853 163,022 70,864 331 Equip .Deprn xf sires 2 12,996 12, ° 12,996 6,498 2 ete Se sens b>) Wi (6) %,051 35,799 539,211 $8,431 27,882 2,354 2,175 2,916 2/841 1, 250 51-360 Passenger Traffic (8) 17,896 13,539 19,959 146,914 10,998 8,018 373 Station loyees (9) 67,445 26,764 64,723 29,276 24,154 11,641 376 Sta. oant * & exp. (10) 2,568 a 2,568 2,568 1,531 64 378 Yard ¥* - (il) 3,436 3,436 1,661 1°661 1,832 15832 2 Trein enginemen (1) 48, 669 51,395 47,603 50,369 23,674 26,517 394 Trein Fuel @) 58,187 58,614 46,150 46,583 18,407 18,401 39) Weter for Loco. £3 1,306 1,527 486 2,510 1,078 15078 398 Lubs. for trein Loco. 2,76 2,766 3,127 3,156 2,265 2,245 399 Other lies for trein 5 %3) 649 656 377 380 101 101 ‘00 pe. eupanee trein (3) 14,820 14,929 12,395 12,511 4,909 4,908 401 Treinen (1) 61,163 61,861 64,651 63,937 29,278 29,201 402 Train supplies & . a OR 64,778 $7, ,105 84,673 47,025 44,627 43 rE | shoegies @ 44,199 49,385 41,171 31,361 246,530 18,696 its ay 7,727 6 394 2,49 2,468 a) 12,172 12,172 12,178 12,178 8,766 8,766 415 Clearing wrecks (1) --- oo 4,987 ose on ene 2 | AX, A ted 230 20 2 #2 abe oo- Se ee 76,3350 2,375 22,782 2,593 11,000 1,647 at diling & et arly Xy 69,16) 69,161 76,839 76,639 35,594 35,596 452 Clerks, accounting ( 13,566 13,464 10,972 10, 292 4,571 4,129 456 = est od as Ay ‘Gs 580 576 429 604 180 162 “.o