Appendix — Port of Portland v. United States

Supreme Court brief1972

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oF Filed Motion to intorve ene under Rule 24 PROP

of Southern Pacific Transportation Co.

Filed Motion to intervene as deft by Union Paci.

fic Railroad Co. :

Filed Answer of Wales Pacifie Railroad Com.

pany, Intervenor.

. Filed‘ Motion. te eberbenn as deft. (Spokane, _

Portland & Seattle’ rrcaig: fs Co. ) (3 ‘copies reed

8). a 7 -

Filea Motion of Chicago, Milwaukee, St. Pal”

and Pacific Railroad Co. for leave to. intervene:

: Filed affidavit of service of above. motion.

, Filed and Entered Order permitting Chicago,

_ Milwaukee, St. Paul and Pacific as pltf cee ;

~ Co. leave-to intervene.

Filed Complaint i in Panacea of Chicago, Mil

waukee, St. Paul and Pacific Railroad Co.

Filed and Entered: Order allowing intervention :

‘of Southern Pacifie Transportation Co. as pltf.

Filed Complaint of Soutliern Pacific ‘Transpor. :

tation Co.

Filed and Tatared Order (om Motioa) allowing

Union. Pacific Railroad Co. to intervene.

_ Filed Union Pacific Retiroad Co.’s Memorgndum

in opposition te motion for temporary: restrain-

‘ingorder. |

“10. Filed Order allowing intervention, of. Spokane

Portland & Seattle marwey Co.

1969,

Entere) ‘0 ‘Drier that Mr. Wariea #H. Hee:

' * Seattle, Ww ashington, be permitted to appear spe.

‘eially in this case on behalf’ of deft Chicago,

‘Milwepkee, St. -Paul'&, Pacifie RR Co. |

Bécord” of pltf’ s motion for temporary resttain-

“ing order. |

be ¢

, 4

Entered’ Order pustycnins motion until after.

Dec. 15, 1969 or such time as a mcenins and dé.

terminativtt i is made in, athis’ case.

Entered Order that case he tried on ‘thé: merits:

‘BRIEFING SCHEDULE: pltfs 30° days after

‘Govt files its answer; defts 30 days to reply, and

pltfs fifteen days after defts file ‘replies. |

Filed Answ er of Interv enor, —— Portland,

& Seattle Railway Co.

Filed and Entered Notification a and Certificate of

- designation of three- judge. case ( 12/15/69). .

rif Complaint of siiacaes Southern 7

Pacific Transportation )

Filed .and. Entered Order’ designating United

States Cireuit J udge and United States District

Judges pursuant to ¢§ 2284 and 2325, Title 28,

United States Code ( 12/24/69).

Filed Answer of Intervenor-deft ‘Spokane; Port- |

i land and Seattle Railway Company to Complaint’

bet

of interv enor-pltf, Chicago, Milwaukee; St Paul _

‘and Pacific Railroad (% ompany (itHwo. copies).

Filed en of intervenor deft, Spokane, Port.

_Jand and Seattle R: ailw ay Company to complaint.

of interyv enor- pitf, Southern Pacifie: Transporté: -

tion Company (with three copies). 9

Filed Answer of intervenor -deft,, Union Pacifie

‘Railroad / Co. to complaint‘ of intervenor-pltf _

‘ Southern Pacific Transportation Co. (with three

copies). .

Filed ehawet of intery énor-deft Union Pacific

Railroad Co. to complaint of intervenor-plt Chi-

cago, Milwaukee} ‘St. Paul and Pacific Railroad

~. Co. (with three copies).

7. 98

Filed Answer of the U SA with three copies.

Filed Answer of the USA to complaint in inter-

vention of Chicago, Milwaukee, St. Paul and —

Pacific Railroad Company with three copies.

Filed Answer of USA ‘to complaint i in interv en;

tion of” Sonthern’ Pacifié Transportation Com-

pany with three copies.

Filed Answer of the. ICC with three copies,

Filed answer of the ICC to: complaint in inter-

vention of Chicago, Milwaukee St. Paul and

Pacific Railrogel Company with three copies.

“2 4970 | |

2 F9g Filed’ Anayer of of the 10 t to soeibiaind of inter-

ptt. Sopaty ith reer ific Transportation Com-

~ ‘date).

nt PO

29 Filed pltf’s (The Commission of Public sks of —

‘the City of Portland) motion to dismiss as to the .

Commission as party pitf. .

.29 Filed Suwiitmon with marshal’s return, }

Feb. 25 Lodged Brief of pltf Publie Utility Commission-

er of Oregon with three copies (cert copies deliv-

ered to J udges)—this date.

26. Filed Opening Brief of Sout sen Pheific Trans-

portation Company” with three copies (cert

copies delivered this date).

27 Filed Opening brief of Chicago, Milw raukee; St. =

- Paul and Pacific Railroad Company with mince :

copies (cert copies delivered this date). °

27 Filed Brief for the Port of Portland, Pitf (cert -- ”

copies delivered 3/2/70). =. .*

27. Filed Affidavit of Service (copies-cert- daivered

3/2/70). |}

“Mareh 2 Fijed Brief .of ‘Deft United. ‘States’ of America

(cert copies delivered this date). >

12 Filed and Entered Order (on stipulation) that

| defts have to and including April 29, 1970, to file

their answ ering briefs (3/11/70):

12 Filed ORDER (letter) that hearing be ek

— until June 22, ss at 1:30 p. m. (3/11/70). .

: April

°6

6.)

Filed Stipalation re record to be certified to Dis.

_ trict Court (Copies forthcoming).

-Filed and ‘Entered Order (on motion) that

Brotherhood of Locomotive Engineers, a labor —

ortanization, may intervene as a deft (4/2: 2/70)

(cert copies deliv ered 4/23 70), ”

Filed True CERTIFIED Copies of Complete

Record of Hearing before the Interstate Com. |

~ meree Commission (Finance Decket 24679)

- BLUE BOX IN V AULT, H-4 in- the following .

volumes : | | ny a

Vol. I ‘Brief Dated June 14, 1968. -

Vol.. IT Documents filed with ieiterstate Com.

merce Commission.

Vol. TI “ Tg

Vol. IV’ Stenographer’s: Notes of Hearing |”

' Held February 29, March 1, 1968.

Vol. V Stenographer’ s Notes: on Hearing |

| Held February 26, 27, 28, 1968.

- Vol: VI Exhibits: Numbers 1 thru’ 29, 31, 32,

34 thru’ 62 filed at Hearing Held Feb-

+ Tuary 26, 27, 28, 29 and March 1, 1968.

Vol. VIL Exhibit Number 30 (rejected) at,

: - Hearing Held March 1, 1968. |

Vol. VIII Exhibit Number 33 (rejected) *at -

Hearing Held February 28, 1968. |

1970

Filed and Entered Order (on Stipulation) that -

defts have extension of time to file Briefs: defts —

‘Jrave to and ‘includipgp May §,. 1970, to file An. -

swering Briefs; pltf have from May 14 to May |

21, 1970, to file reply briefs a |

Filed and Entered Onder that defts have to aaa

. ineluding May’6, 1970, to file answering briefs .

andl Pitfs have to and including May 21, 1970, to.

7 fille reply briefs (attached to above order) iat .

— 2 copies delivered 4/30/70). °

May 6

Filed Brief of Intervenmg Defts Spokane, Port- |

land and Seattle Railway Co, and Union Pacific.

Railroad Co. with three eopies i= copies: de-

livered 5/7/70). aces

, 21

21°

Lodged Brief*of the Interstate Commerce Com.

mission witlf three copies (cert copies delivered

0/7/70). —, —————

“Lodged Reply Brief of Pitf Publie Utility Com-

missioner of Oregon with three copies “(cert

copies’ delivered to K, Ss, B).. :

Filed Reply: Brief of Southern Pacific Trans.

portation Company with three copies (Gert: copies ,

delivered to K, S,B).

Filed Reply Brief for the Port of Portland,

Plaintiff with three sopies Acert copiks delivered

7 5/22/70).

Filed stipulation for extension of time to file

reply brief. | “.,

- 1970

_ Filed and Entered Order that pltf Chicago, Mil .

watkee, St. Paul & Pacific RR haye to and in.

ding June 1, 1970, to file reply brief (5/20/70).

(cert copies delivered May 25, 1970).

Lodged. Reply. Brief of Chicago, Milwaukee, St

~ _ Paul pnd Pacific Railroad Company with. three

copies (cert copies delivered this date).

Record of Trial before Three-J udge Court, on

decision rendered by ICC. . -. ”

22 Entered Order ease SUBMITTED ‘ oa

' Filed Reporter’ 'S Transeript of ‘Proceedings

dated June 22, 1970. |

‘Filed and Entered affirming ecders of the Com. -

mission and dismissing complaint. _

‘Filed letter designation of appeal to the Su.

_ preme Court of the United States (on behalf of.

pits. Southern Pacific Transportation Company

ie and Chicago, ‘Milwaukee, ee Paul and Pacific

7 RR).

vo —_—- pete

In the United States District. Court.

for the District of Oregon .

Civil N 0. 69-696

_. Port of Portland, ; ds L

_ Sam R. ‘Haley, Public Utility _—-— |

Comnfissioner of Oregon,

Commission. pf Public Docks |

of dons of P ortland, Oregon, ie

, Plaintiffs,

| Xs.

“The United States of Ameriey/

and Atersiate Commerce Cotnmission,”

| - Defendants,

Chicago, Malwaukee, St. Paul

~ and Pacific Railroad Company, .

Plaintiff i in Intervention.

“Oates AND JUDGMENT

The ‘Const finds that the repor® and order of the Inter.

_. State Commerce Commission (Commission), Division - 3,

,” decided. June 6, 1569, and the orders of ‘the Commission,

Division 3, dated October 24,.1969, and Nov ember 40 1969,

-inits Finance Docket Nos. 24679, 24890, and 24891, Spokane,

Portland & Seattle Railway and Union Pacific Railroad —

Company—Control——Peninsula. Terminal Company, 334 .

- ICC 419, are supported by substantial evidence and are

neither arbitrary nor capricious ; is

: ; « a |

* .

Now, Tuererore, the orders of the Commission are af.

firmed, and this action is dismissed. ss \ |

Dated this Sth day. of suly, 1970.

fe John F. Kilkenny

= - United States. Circuit J udge

_ a. .

A eae nr Gus J. Solomon e

United States District Judge

: pt Robert C: Belloni |

| United States District Judge

pee he | Served June 20, 1969 :.

. F-95380 ° re ea ;

ee | Interstate. Commerce Commission 2

| PInaNnce Docket No. 24679" = fe “Se.

| SPOKANE, PORTLAN D &. SEATTLE RAILWAY COM. em

oe |

PANY AND UNION PACIFIC RAILROAD COMPANY.

—CONTRGL—PEN IN BY LA TERMIN AL COMPANY

*. Doce June. 6, 1969

—

LL In Finance. Dockét No. 24679, acquisition. by the

| ‘Spokane, Portland & Seattle Railway Co., and the Union |

‘ Pacific Railroad Co.,_of control of the Peninsula Ter-

minal Company through purchasé of capital stock, ap-

proved and. authorized: Conditions’ prescribed. Petitions.

of: the Chicago, Milwaukee, St. Paul and Pacifiec- Rail-

“road Co., and the Sotithern Pacific Co., for inclusion i in

¢ ~° the trafisaction denied.’ 3

2. In Finance Docket Nos. 24890 and 24891, joint use, ates 2

section 3(5) of the Interstate Commerce-Aet, by South- - |

ern Pacific €p. of facilities of the Peninsula Terminal

Company and trackage of the Union Pacific Railroad |

' €o0., found to be not in the publie: interest and applica-

tions denied. . .

- Hugh L. Biggs, Charles. W. Burkett, James Warren

: Cook, Richard Devers, Thomas H. Gonser, Brrdall B. Kies-

ter, F. J. Melia, Raymond K. Merrill, Warren H. Ploeger,

. Thomas H. Ploss, E. 0, Sehiewe, R. Paul T jossem, John F.

1. This report: also siibixees Finance Docket No. 24890, South:

~ ern Pacifie Co—Common Use of Terminal Facilities—Peningnla

Terminal Co., and Finance Docket No. 24891, Southern Pacifie Co.

a Use of Certain: Terminal Facilities—Union Pacific Rail-.

Co. \ :

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- wv —

| Weisser, W. Harney Wilson and Ogle vo Woy eung for

: aan and petitioners.

- Lloyd A. Combs,.Dale T. Crabtree, Samuel P Delisi, Wil.

\liam “M. Dunegan, John L. Gree n, Richard II. Kraushaar,

‘Robert K, Little; Hollis Menow, Milton A. Mowat, ‘Harold :

A, Ross, Richard W. Sabin, Robert W. Skirvin, Edgar E. ed

Smith, Lofton L. Tatum,. Robert ¥. Thornton, Homra.C. —

Watson, Milton A. White and Henry M. Wick, Jr., for’pro- -

testants and interveners. +e

. Report. OF THE Comission

* Division 3, ComatissjonERs Tvccte, Deason, “AND -SfrarFonD ie

. STAFFORD, Commissioner:

Exceptions to the hearing. examiner’s :report and recom-

mended order have been filed jointly bythe Spokane, Port-

’ land and Seattle Railway Company (SP&S) and the Union

Pacific Railroad Company (UP), separately by “UP, the |

- Southern Pacific Company (SP) and: ‘the Brotherhood of

Locomotive Engineers (BLE )).. Replies to exceptions were -

filed by SP&S. and UP (joint applicants), SP, the Chicago, - .

Milwaukee, St: Paul and Pacific, Railroad Company “(Mil- —

waukee), the Port.of Portland (the Port), and the Public —

Utility Commissioner of Oregon (Orégon Commission).

The applicants request oral argument. However, in our |

opinion the issues herein can be disposed of without hearing

the parties orally dnd the applicants’ request is, denied,

Our conclusions herein. differ from. those’ of the hearing

‘examiner, © aa < sane %

In the title proceeding, Finance Docket No. 24679, the joint

applicants on July 25, 1967, sought authority under section —

5(2) of the Interstate Commerce Act to aequire eontrok

“of the Peninsula Terminal Company ( Peninsula) through

the purchase. of its entire capital stock.j in ‘equal saris: > at

petition ‘filed - August: 23, 1967, Milwaukee, under section

- 5(2)(d) of the act, seeks inclusion.

authority: (1) to purchase one-third.

~~ Peninsula: from its present owner

in the transaction for

of: the capital stock of

upon the same terns’ tee

: aid for the. saine per-share consideration as thie joint. ap- °

plicants ; (2) fo pay one-third of

the ‘purchase price of *

two diese] locomotives sold Peninsula by the latter’s present -

owner; and, (3) to acquire trackage rights ' over tracks

owned jointly by the joint applicant

s and connecting Spas - - f

- with ee. gf Ages filed November 2, 1967, and

amended pe Kition

sion in ‘the transaction (1) as an

2 Peninsula; (2) asa condition to such joint ownership ,to

“acquire trackage rights over UP’s

November 29, 1967, SP seeks: inclu-

equal. joint: Owner ef /

Main line etween. el

UP-SP track connection im. UP’s East Portland Yard (the

_ Present. Portland ‘terminus of SP) and: Peninsula: in North

‘ Portland, via, UP's Albina Yard, S

t. John’s Junetion, the

UP tunnel, Peninsula’ Junction and the UP connection with

Peninsula, approximately 6.75. miles, all.in Fast Portland,

reg.; and (/* in the event the joint applicgpts decline to

‘acquire ownership of Peninsula subject tg SP’s ,inclusion,

_ for an. order pursuant:to section 3(5

) Of the aet anthorizing -.

~ eommon use by SP andthe UP track referred to j jin (2). ,

In Finance. Docket ‘No. 24890, by application filed Decem-

if ber 21, 1967, SP seeks authority un

act, for common use of the terminal

der’ section 3(5) of the:

facilities of Peninsula’ tee

and bridge traffic rights over the line of UP described aboy e

between Peningula and the. UP- SP track connection in Fast .

Portland Yard. .. ~

- In Finance. Docket No. 24891, i

@®.%, °

application also filed _

Deceniber. 21, 1967, SP seeks authority under section 3(5)

_ of the act: for common use of the. te

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ae)

ie .

rminal facilities of UP,

between Peninsula and the UP-SP connection in Kast Port-

~ land Yard. The joint applicants, Milwaukee, SP and Penin-

sula are common carriers by railroad subject to regulation

~ under the provisions of part I of the act. 7 .

| . : oy

: ee: *

‘Tur Parties |

A detailed deseription of the railroad parties to these.

_ proceedings, their operations in the Portland area and their |

' positions with respect to the applications and . petitions

: involved herein are set out in excerpts.from the hearing

examiner’s_ report appended hereto. These excerpts, to *.

’ the extent they describe the common carriers ‘involved in

these proceedings, are adopted as our own and a detailed

‘description-of the railroad parties will not be set out here

_ except as follows for clarity of discussign.

Peninsula.—This carrier ‘was incorporated in Oregon on

June 5, 1918. ‘It operates approximately 3.79 miles of ter-

minal switching railroad in. Kast Portland, serving 14 in

dustries, pursuanteto authority granted i in. Peninsula. Ter .

- Co. Operation, 166-1.€. C.°597. Ownership of the entire 1,500

_ shares of its outstanding capital stock by its present owner,

- United: Stockyards Corporation (United) was authorized -

on. March 9, a in Stockyards Ry. Co. hie 254 I. C.C.

~~ BOT. :

| The interest of the Port, SP and Milwaukee i in et purchase

. of Peningula’s control by SP&S and UP ‘is based on the

’ fact that at the western end of Peninsula’s trackage is the

Rivergate Industrial District (Rivergate), consisting’ of

~ ahout 2,942 acres of land owned, and under development,

by the Part at the junction of the Columbia and Willamette

‘ Rivers, generally north of and adjacent to the corporate. |

limits of Portland, Oreg. Riv ergate has about 6, miles of

e. +

- ¢

waterfropt on the 40-foot navigation channels ofthe two

rivers. Much of the Rivergate land is unoccuppied and has

yet to be reclaimed: According to the Port, about 500 acres ~

are filled t usable grade and anotlier 300 are now under-

. going filling by a pipeline dredge. . o* :

- The Port’s consultants, in an 18-month’s study of the area,

in which Rivergate is located recommended, among other

things, that a’ Rivergate rail system be constructed ¢o con- —

_nect with rail trunklines. Two alternate rail access routes

to Rivergate include a route over existing tracks of the

- Port which connect with tracks jointly owned by-the joint

. applicants entering Rivergate from the southwest and an-

other route based upon the possible construction on the

eastern side of Rivergate of an SP&S main-line extension.

or an extension of Peninsula’s tracks into the area. ‘

Six industries now occupy about: 265 acres, or slightly

less than one-tenth of the Rivergaté area. On the west, or

Willamette River, side of. Rivergate are a chemical lime~

_ plant,-oceupying 30 acres; an aluminum foundry, 20 acres;

“an area packaging plant, 25 acres; an ‘integrated: steel

.- mill, 150 acres > and since the closing of the record herein, a

waterways terminal. The remaining industry is the pole-

vatd of the Crown Zellerbach Corporation (Zellerba¢h).

located on the east, or Columbia River, side of Rivergate.

Of the foregoing Rivergate industries, only ZeHerbach is

- now served by Peninsula. It is served by means of its own

industrial trackage; which. connects with Peningjla’s track.

The remaining 13 industries served by Peninsula are lo- °

eater on, or'adjacent to, its main and side tracks on the land

Which Peninsula occupies. Se =.

. SP€S.—This joint‘applicant was incorporated on Augist

23,1905, in the State of Washington. Its present name was

adopted on February -1, 1908. It owns and operates a line

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of railroad in Oregon and ‘Washington. Tts entire 400,000

| shares of capital stock are held equally by the Great North-

ern Railway Company and the Northern Pacific Railroad |

(NP). It is presently. involv ed with its parent carriers and

another of their subsidiaries, the Chicago, Burlington’ &

Quincy Railroad: Company, in a consolidation of their re-

spective sy ‘stems. This consolidation has been approved and |

authorized by the Commission and is undergoing review by

- the United States Supreme Court. See Great-Northern Pac.

—Merger—Great Northern 331 1.C.C. 228 and 331 1.C.C. 869

(Narthern Lines case.)

As. a condition. to -consummating the ‘consolidation, the

. parties thereto are required by condition No. 24 of appendix

L to the Northern Lines case (see footnote 5, infra)‘ to pro-

vide access, to Milwaukee, via trackage rights, to the city

of Portland, which has not heretofore been served by Mil-

waukee.

UP.—The other joint applicant owns and operates over .

9,500 miles of track in the States of California, Colorado, :

Idaho, ; Towa, Kansas, Missouri, Montana, Nebraska, Ne- -

vada, Oregon, Utah, Washington, and Wyoming. Its out-

‘standing capital Stock ‘is widely diversified and. it is not

éontrolled by any other éarrier.

SP.—This carrier is a Delaware corporation owning and

operating a line of railroad through the States of: Oregon, ,

California, Nevada, Utah, Arizona, New Mexico, Texas,

and” Louisiana. Like UP, its outstanding stock is widely

div ersified and it-is not controlled by any other carrier.

Milwaukee. _The fifth and last’ common earrier involved

here is a Wisconsin corporation operating a line of railroad

Michigan, Minnesota, ’Montana, Nebraska, North Dakota,

South Dakota, Washington, and ‘Wisconsin. Tts principal

3 transcontinental line extends from Chicago to Longv iew,:

- in the States of Idaho, Tllinois, Indiana; Towa, Kansas, .

Wash., a point on the lower Columbia River 46-rail miles

north of Portland. As previously stated, it will obtain ac- .

cess to the latter point, for the first time, via trackage |

rights granted. by: condition No. 24 in the Northern Lines

ease; upon consummation of the consolidation n Ehsanel 7

in that’ proceeding. It is also. presently involved in Finane

Docket No. 24182, Chicago, Milwaukee and Nortli Western

Transportation Company — Consolidation — - Chicago and

North Western Railway Company and Chicago, Milwaukee, -

St. Paul and Pacific Railroad Company. This application —

_ has. been heard. and is, pending decision by the Commission.

THE PROPOSED TRANSACTIONS:

SP&S and UP. —ASs recited in thé appendix, United is no |

longer interested in operating Peninsula. It has no prefer-

ence with respect to purchasers of Peninsula but offered

the property to SP&S as one of the railroads connecting

physically with Peninsula. SP&S communicated United’s

" offer to UP, the other physical connection. The two con-

necting railroads now propose. to purchase, in equal shares,

all of Peninsula’s outstanding stock from United for $299,-

405 in cash, adjusted to reflect changes in value of Penin-

sula’s property ‘occurring between February 8, 1967, the

date of the purchase contract, and the closing date of the:

transaction,” plus the sum of $70,000 to reimburse United

for two switch engines it sold to Peninsula.

Milwaukee.—As indicated above and -in the appendix,

Milwankee presently performs: no _ phy sical operations tq

2 The elosing date. of the transaction will be no later than the

first day of the month following our approval of the purehase of

Peninsula and the acee ptanee by the parties of any conditions we

may impose in connection therewith:

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and from Portland. However: with its entrance into that.

point authorized as an incident to consummation of the

Northern Lines case, and upon its inclusion: in: this trans-

action, it plans to serve all the indystries on Peninsula’s

tracks: with no absorption of switching charges. Contingent

-upon the extension of ‘its operations to Portland pursuant’

to the Northern Lines case,” Milwaukee. requests joint and

equal ownership of Peninsula’s stock with the other trunk:

lines and considers joint ownership of Peninsula essential |

to its Portland operations insofar as the industries located

on Peninsula and in Rivergate are concerned.

Milwaukee asserts. that if its ‘petition for inclusion i is ©

denied and the Northern Lines ‘consolidation is consum-

mated, its traffic to North Portland would move ta Guild’s

_ Lake Yard, about :6 miles south of North Portland. The:

‘traffic would then be switched back to North Portland. This

back movement, according to Milwaukee, would require an

extra day in-transit and be to Milwatikee’s competitive dis-

advantage because the joint applicants, by virtue of their

- ownership of Peninsula, could fix Milwaukee’s switching

charges and direct operation of Peninsula to meet their

own operating requirements: rather than those of Milwau-

kee. a ——? |

_ UP contends, in effect, that we lack jurisdiction to grant

Milwaukee’s petition for-inclusion inasmuch as (1) Milwau-

kee-is not a railroad “in'the territory involved” within the

_meaning of section 5(2) (d) of the act;? (2) Milwaukee will

a . >

3. Seetion 5(2) (ad) of the act nrovides that:

— The Commission’ shall have authority in the ease of a pro-

posed transaction under this paragraph (2) involving a rail-

road or railroads, as a prerequisite to its approval of the

proposed transaction, to require, upon eyuitable terms, the ~

inclusion of another railroad or other railroads in the terri-.

tory involved, upon petition by such railroad or. railroads re-

questing such inclusion, and upon afinding that such inclu-.

sion is consistent with -the public interest.

~ be unable to serve the Portland terminal area, ev en though

the Northern Lines -case is consummated, without further:

authority ‘under sections 1(18) and 5(2) of the act; and (3) _

the tracks connecting Peninsula and SP&S are jointly

owned by’ UP, SP&S and NP, therefore, since condition No.

- 94 of the Northern Lines case is not applicable to UP and’

since joint use of this track cannot be granted over UP’s

objections in these proceedings, Milwaukee would be unable

to reach Peninsula. UP and SP&S contend that Milwaukee’s

joint ownership of Peninsula would be contrary to the pub-

lic interest and UP alleges that sueh joint ownership and

-eontrol would lead to. cumbersome, confused and divided

management and thus, would not be in the public interest.

‘BLE and other labor organizations oppose the Milwaukee

petition | because, if granted, it would reduce employment

at other yards in Portland by eliminating switching and’

interchange operations.

_ §P.—As previously stated, SP requests a condition to.-

approval of the SP&S-UP application providing for its

inclusion as an equal joint ‘partner in the ownership of

Peninsula and as a condition to such ownership, trackage

- rights over UP’s main line and the terminal trackage be-

~_ tween Peninsula and the SP&S- UP track connection at East

‘Portland. SP ‘asks that it be authorized to use the’ UP

trackage under section 3(5) of the act in the event either

or both of the joint applicants decline to participate in the

acquisition of Peninsula subject to the conditions SP re-

_quests.*

4. Section 3(5) of the act tries in nuit that:

If the Commission finds it to be in the public interest.and to

_ be practicable, without substantially impairing the ability ot

a common carrier by railroad owning or entitled fo the enjoy-

ment of terminal. facilities to handle its.own business, it shall

have pore by order: ‘to require me use of any such terminal

ee.

. 20

Also because of the permissive nature of our authoriza-

tions under section 5(2), SP filed its applieations in the

two embraced cases to assure common use of the terminal .

_ facilities of Peninsula and UP’s terminal facilities betweeh |

_Peninsula and the SP-UP connection at East Portland and .

bridge traffic” Tights over UP’s line between Peninsula’s

~ line and the connection between SP- and UP, even though ©

the joint applicants refused to consummate any authoriza-

tion of their purchase of Peninsula. = ~~

: Under its proposals, SP alleges that baatee service to

Peninsula’s industries can be offered through its service

- and that it anticipates no operating difficulties or labor

complications in connection with its proposals. It argues |

that Rivergate is unique in that it includes several thousand,

acres of publicly owned industrial land that depends upon

-. the flexibility of rail service for succes development.

As in the case of Milwaukee’s proposa¥, UP opposes SP’s

petition on the grounds that SP like Milwaukee is not a

railroad “in the territory involved;” the management of

| Peninsula would become difficult and indecisive with four

7. ® owners; and that ownership by the joint applicants would

j . assure keeping the size of Peninsula’s yard facilities and

'.. the cost. of its operation at a minimum. UP opposes the

operation by SP through UP’s Albina Yard, that would

result from the bridge trackage rights requested by SP,

facilities, including main-line track or tracks for a reasonable

_ .distance outside of such terminal, of any common carrier by

‘ railroad, by another such eafrier or other such carriers, on

such ‘terms and for such compensation as the carriers affected

may agree upon, or, in the event of a failure to agree, as the

Commission may’ fix as just and reasonable for the use 80 re--

quired, to be ascertained on the principle controlling compen-

sation in condemnation proceedings. Such compensation shall

- be paid or adequately secured before the enjoyment of the use

nan uahcomenaia adil ied

. °

ser!

sarees a

_ because of the congestion it would. create. It asserts that

- SP operation in the yard would result in ‘uneconomical and

wasteful conditions there and that operation of SP trains

.....through Albina Yard is not practical because. of the large

number of trains already-moving through the yard. |

-. 'Fhé’ labor organizations appearing in the proceeding

_ oppose SP on the samé grounds they oppose Milwaukee;

the.loss of jobs that would ensue from the petitioners’ ~

proposals. oie _

Interveners.—The petitions and applications of Milwau-

kee and SP are supported by the Port, the Portland Com.

mission of Public Docks, city of Portland-and the Oregon :

Commission. The Pgsitions of these interveners are set

_ forth in the excerpts from the hearing examiner’s report

appended hereto and need not be repeated here. .

- SP and Milwaukee, particularly the former, are also sup-

ported by Zellerbach, the Oregon Stee] Mills and Collier

Carbon & Chemiea] Corporation, all industries. located, or

preparing to locate, in Rivergate. Excerpts from the hear-

ing examiner’s report containing a discussion of their posi-

tions are also included in the attached appendix. The ex-

eerpts describing public agency and shipper interveners’

positions are appended for information purposes only. The

- positions they reflect are not to be understood as having ©

_ been adopted by us. Williamette Wood Products; Ine., Mor-

rison Oil Company and Serendip Industria] Materials of

Portland, Oreg., support the application of the joint appli-

. Heartnc ExaMiner’s RECOMMENDATIONS ,

In the title proceeding, generally, the hearing examiner

Tecommends approval of the sale of Peninsula’s stock con-

trol to SP&S, UP, and SP in equal shares, subject to sale

by each of a one-twelfth interest to Milwaukee upon con- |

: tend that SP and Milwaukee are not “rail

| summation of. the Northern Lines. case and the filing by

Milwaukee of an application under section 1(18) of the aet

for authority to operate between Longview Junction and

Portland. He would also grant the joint use authority re-

_ quested by SP under section 3(5) of the act. _

In the embraced proceedings, the hearing examiner would

| grant t the applications of SP under ‘section’ 3(5) of the act. —

For. poe protection of, railway employ ees, the hearing

examiner recommends imposition of the conditions original-

ly ‘prescribed i in Chicago ¢ N. W. Ra y. Co. Werger, 261 L.C.C.

672, 675 (North Western conditions), which provide that:

During the period of 4 years from the effective date :

of our order herein such transaction will not result in

employees of the carrier or carriers by railroad affect- |

ed by such order being in a worse position with respect

to their employment, except that the protection afford-

_ ed. to any employee pursuant to this section shall not

be required to continue for a longer period, following

the effective date of such order, than the period during

__ which such employee was in the employ of such carrier

or carriers Cena to the éffective date of such order.” sail

ivceonae To Hearne Exainer’s REPorT

The parties filing exceptions to the hearing. examiner’s

recommendations continue to press, on exceptions, the same _.

general positions they —— at the outset of these pro-

ceedings. _ EN

Exceptions of SP€S and UP.—The joint pple» ‘con-

mal i within the

territory involved” and that even if the Fortherm ‘Lines |

case is consummated, Milw aukee, under the terms of eondi-

~~. tion No:. 24(a) of appendix L to the Northern Lines case, |

and under the decision of the United States Supreme Court

in Texas & Pac. Ry. v. Gulf, Etc.,.270 U.S. 266 (1926), would

be unable to serve Peninsula and the Portland area vfithout

first securing a certificate of publie convenience and neces-

sity permitting-an extension Of ‘its line of: railroad to

Portland under section 1(18) of the'act.® They contend that

undue emphasis is: placed on the future development: of

Rivergate ‘and that the hearing examiner erroneously holds

the Portland terminal area to constitute one terminal entity.

They argue that the evidence does ngt Support a four-way |

‘ ownership’ of Peninsula, either from a general public or\a

_ shipper standpoint, and that common ie by SP of the:

Peninsula and joint-applicant facilities ; not an the public |

interest. — 6 2 aes | en |

The replies of SP, Milwaukee, the Port.and the Oregon

Commission toghe exceptions of the joint\ applicants are,

like those exceptions, mostly reflections ‘of the repliants

' positions from the outset of the proceedings and agree gen-

erally with the findings of the hearing examiner with respect -

_ to the petitions and applications of SP and “Milwaukee.

Exceptions of SP—The exceptions of SP are taken to

details in the hearing examiner’s findings relating to com-

pensation for the use by SP of UP interchange trackage

ard access by SP over intervening UP trackage. The joint

. applicants, - in reply, take a contrary view to the points | .

Taised by SP. _ ) -eo

5. . Condition No. 24, and subparagraph (a) thereof, state:

“24. At the request of the Milwaukee, presented in writing

not more than 6 months after. date of consummation 6f the

unification authorized herein or not more than 6 months after _

the effective date of any certificate or order of this, Commis-

sion. - ” - . =

; (a) Permitting that railroad to extend its. operations to

Portland, Oreg., and to acquire trackage rights over the line

of NuCo [the consolidated carrier resulting from consumma- See

tion of the Northern Lines case] between Longview: Junction,

(footnote continued on next page) ae

oe 6s * . . . , ; 3

. ri . : 2 :

4 . . . « :

a. EN 4 i a : oe 7 j fr by LEI ELLIE PIII

; E . : . ’

. : . .

. ,

_ tection’ of employees and requests

‘reflect this concept. See Chesapeake & O. Ry. Co. ea.

s Exceptions of BLE.—On exceptions, BLE reiterated its

support for the acquisition of. Peninsula by the joint appli-

_eants, which it considers to be in the public , interest, and

its objection to the petitions and applications of Milwaukee a

‘and SP. It also objects to, the so-called North Western n-

‘ditions recommended by the besiege for the pro- .

e imposition of “attri-

tion” conditions ‘similar to those imposed in:the Northern |

Lines case.* If we consider that tlris case does not. merit full |

attrition conditions, BLE requé¢sts the imposition of the

so-called New Orleans conditions as,prescribed in New Or- +

leans Union Passenger Termi Wl Case, 282 I.C.C. 271.

“Whichever conditions are imposed, the BLE alleges that

. they should be extended to protect the employees of. North

- Portland Terminal ‘Company if the ‘petitions and applica-

tions of Milwaukee and SP-are granted sifce such: grants

would permit. SP, in pérticalar, to bypass North Portland

terminal in serving Peninsula industries, to the detriment

of! the:North Portland mere ee

' fostnate & continued) Me a

- Wash., and Portland, Oreg., NuCo shall grant to the Milwau-

kee, upon such fair and reasonable terms as the parties may

agree, or as determined by this Commission in the event of

their inability to agree, trackage rights to operate freight

trains over NuCo lines between Longview Junction and Port-

_ Jand, ineluding the right to serve on an equal basis all present

and future industries at Portland and intermediate points

and the use of NuCo facilities at Portland necessary for the |

switching of ‘traffic to other railroads and industries. NuCo

Shall maintain Portland as an open gateway on a reciprocal .

with the Milwaukee to the same extent as with other.

ing sede

6. In previous aus “attrition” has been, held to mean that

“no reduction in force of employees shall occur other than princi- — .”

pally by death, retirement, discharge for cause or resignation.” For: ;

simplicity, the phrases “ ‘ition conditions,”’ ‘‘attrition protec-

tion,” or “attrition agreement” are used in Commission reports to:

ern oe Co., 328 1.C.C. ‘684, as ue

gee BEE OME Age upeiiaaininemmenen Pp PAL TN ed

. ¥ . .

In reply to BLE’ s in the jolt applicants itis ‘

that if they are authorized to acquire trot of Peninsula,

there will be little change in ‘the operation of that-carrier.

: Consequently, there will be. little or no-effect on railway |

employees and the North Western conditions recommended

by the hearing examiner will,afford sufficient - protection to

the an aaah

' * Discussion AND Conciusions. est é

Title proceeding.—The record: establishes that the pur- :

‘chase of Peninsula by SP&S and. UP will be in th ‘public

interest. The joint. applicants. now connect with Peninsula

and’ the, present7service by. Peninsula to its industries will

de unaffected by. the substitution of joint applicant’s control

for that. of United. Furthermore, it will be in the public.

interest for control of Peninsula to pass from the. nonear-

rier, which no longer désires it, to carrier auspices and on

, this record the most logical: owners would be Peninsula’s e

connecting carriers. It does not appear. from the record,

nor does any party contend, that the purchase price’ for

Peninsula, arrived at by the parties through arm’s length

bargaining, is unreasonable or that it would jeopardize the

_ financial. structure of the joint applicants. After ‘due -con- .

‘sideration. we can find no reason for withholding approval -

of our authority. for the purchase. However, no stock or.

Securities are to be issued or any obligation or liability as-

sumed in connection with such purchase ee our prior

approval under section 20a of the act.

Jurisdiction, over petitions for inchision —We do not

agree with the joint applicants’ contention that because SP an

-and Milwaukee do’ not physically connect with Peninsula,

they are not “railroads in the territory involved” within the

‘ineaning of section 5(2) (d), and, therefore, that we Jack

aes ea aR da pins oot LES LEN ELL TLR GA CATS HOE NE RIN

« e

jurisdiction to require their inclusion ir the title proceed.

ing.” Our authority to require inclusion of another carrier

. In cases of this nature does not arise primarily from section:

-| - 5(2)(d). Instead it arises from the power conferred upon

us by section —9(2)(b) to impose terms, conditions and

- “modifications to our section 5(2) authorizations.* The only

test required by section 5(2)(b) of terms, conditions, and

modifications is that they be just and reasonable. See Penn- — .

. Sylvania RS Ge.—Merger—New York Central R. Co., 328

. 1.0.0, 304, 326. oo _— - a :

| Section 5(2) (d) does not limit .our conditioning power

under ségtion 5(2)(b)" with respect’ to other railroads. It _-

merely requires us to give weight th the petitions of “other — |

railroads inthe territory involved” and to include such

other railroads\jn a transaction if ‘the public ititerest for -

_-* such inclusion is shown. Ef. Norfolk & W. Ry. Co. and New

Fork, €. & St. L. - Co. Merger, 330 I.C.C. 780, 787-788.

- Accordingly, we may require the inclusion of SP and Mil-.-

> an waukee in the title proceeding, if we_find such inclusion‘to °

be just and reasonable, i.e., in. the. publie interest, regardless _

of whether either or both of the-petitioners can meet the —

joint applicants’. technical definition ofa railroad or “rail- ~

roads in the territory involved.” Of coursé»the Tack of any .

4. See footnote 3-regarding section 5(2)(d) of the act...

. . 8. Seetiqn 5(2) (b) provides that — eee

..* Whenever a transaction is proposed under sub-paragraph

(a) [to.section 5(2)], the carriey or carriers or person seek-

ing authority therefor shall present:‘an application to the .'

Commission, * * *. If the Commission finds that, subject to: °

y/ sach terms and conditions and such modifieations as it shall

find to be just and reasonable, the proposed transaction. is

‘ within the seope of subparagraph (a) and Will be. consistent

- with the’ public-interest, it shall enter an order approving © ~

and authorizing such transaction, upon the terms and corndi-

~ tions, and with the modifications, so foirnd to be just and rea-

ME RO EE 3

physical, connection:is a factor for consideration in deter- |

| mining whether a condition baie inclusion is and

_ reasonable. , .

We also disagree with the joint ‘applicants’ contention

that without a certificate of convenience and necessity un-

der-section 1(18) of the act for an extension of its line of:

railroad to. Portland, Milwaukee cannot be included i in this

proceeding. .

Condition No. 24(a) to the Northern Lines case® grants

_ Milwaukee the right to acquire trackage rights. over North-

ern Lines track between Longview Junction, Wash., and .

Portland, Oreg., prov ided, of course, the consolidation: au-

> thorized in the Northern Lines ase is consummated. -A

_ -¢ertificate under section 1(18) of the act is necessary before

‘a carrier can legally extend its operations over trackage

not theretofore operated in interstate and. foreign com-

"merce. -However, if the trackage is already operated in

interstate commerce (in effect, it is already: certificated), |

_ only section 5(2) authority i is required.. The lessee under a

trackage rights agreement in such case merely sticceeds to

the right to operate the line, within the limits’ of the track-

age rights contract, of the lessor railroad.-See International *

: =A. N. R: Co. Trustee Trackage Rights, 275 1.C.C. 27,.33.

~The joint applicants are misinterpreting éondition No. -

24(a)- by arguing that it requires applications (both of*

which, of course, ‘would be subject to. protests) under sec-

~ tion 1(18) and section 5(2) before Milwaukee can extent .

‘its lines via Northern Lines trackage. into Portland. As

used in: the condition, the language “Permitting that. rail-

‘road to extend its operations to Portland, Oreg., and to

. gequire trackage rights over the line of NuCo between

Longview Junction, Wash., and Portland, Oreg.,” is only.

intended to emphasize the: fact that: os ahtatnnan ts is, in he ee

‘ ‘ -

~<_ 9, ¢ See footnote 5.

ibid MES ath in Seton nig

ans wilds See ah it a eft

28 | -

Northern Lines case, accorded access for the first time to

. -Portiand. The Commission did not intend, and did not state

in condition No. 24, that Milwaukee mist first seek approval

under section 1(18) of the act for an extension of its line of

railroad over Northern Linés trackage before it could re. .

quest authority under. section 5(2) to. acquire the trackage

rights necessary for its entry: into Portland.' The: question

of whether a certificate of public. convenience and necessity

under section 1(18) is necessary before railroad service .

can be extended by trackage rights over the line of another

carrier was decided in the negative by the Commission over

. 20 years ago in Chicago, B. & Q. R. Co. Control, 271 LCG .

63, 66-67,-and we can find nothing in the Northern dines

case to indicate that the Commission intended to reverse

’- that longstanding precedent.

The decision in Texas & Pac. Ry. v. Gulf, etc: Ry. supra,’

‘cited by joint applicants in support of their section 1(18)

argument was,’ of course, decided prior to the enactment of »

‘the Transportation Act of 1940, placing the regulation of.

“trackage rights acquisitions under. the provisions of section

-5(2) of the act instead of under section 1(18) where such

regulation had previously been vested. Accordingly, the

cited proceeding is inapplicable to the situation here. .

We are satisfied, and we so find, that it is within our

jurisdiction to determine whether, on this fecord, SP and | 7

Milwaukee should be included within the transaction:

Merits of petitions for inclusion.—Though we possess the

necessarv jurisdiction to Tequire inclusion. ‘of Milwaukee |

and SP in a four-railroad control of Peninsula and to au-

thorize the common. use of terminals ‘arid facilities requested -

by SP, such control must meet the public: interest require-

- ment before any condition we might impose in these re-

spects can be found just and reasonable.

-W ith respect to Blikwaukes's petition, we wish to soiut

out that this case cannot be viewed as part: of the general

realignment of western railroad competition resulting from

the Commission’s approval of-the Northern Lines merger.

Condition No. 24 of the Northern Lines case grants Mil-

‘waukee the right of. accéss to Portland and the right to

serve industries therein; howev er, this condition is appli-

cable only to Northern Lines trackage and territory. The

condition is silent with respect to trackage and territory

_ in which other carriers, such as UP, have a joint interest

and the effect of the condition upon such joint trackage

and territory was not presented to, nor considered by, the

Commission. Furthermore, the instant application and Mil-

waukee’s petition for inclusion therein, were not filed until

after the record was closed in the NV orthern Lines case, and

not until long after the Northern Lines applicants had

- agreed to Milwaukee’ s request for imposition of condition

No. 24. Thus, the purchase of Peninsula by the joint appli-

ants was not:within the contemplation of the Commission

~ at the -time condition No. 24 was imposed. Milwaukee's

inclusion in that purchase cannot, therefore, be considered

‘to implement that condition; and a. denial of its petition

for inclusion would take nothing from Milwaukee that it |

was granted in the Northern Lines case nor be contrary in

any way to the spirit and intent of the Commission to

accord Milwaukee the right of’ access into Portland over

~ Northern Lines trackage. Accordingly, | we consider the peti- °

_ tion of Milwaukee under the same public interest criteria.

as the petition and applications of SP, rather than as a:

» petition to carry out the provisions of condition ‘No. 24.1°

10," ‘Tineke scupletion of litigation in the Northera Lines case

and consummation of that | merger, Milwaukee may wish to seck

relief from the Commission in that proceeding to determine the °

relationship of condition No. 24, if any, to Peninsula’s tracks whieh

_ Would at that time be aeons owned by the Northern Lines.

sith

Rel MOREA ai dat ist allie

RT AREER EY NOD RNLAS NAN DD NTI ar OHS ah

_ 30

‘The hearing examiner concluded that the entire Portland,

territory is .an industrial transportation area which. in

considering the publie interest can be treated only as one

transportation termhinal entity. He felt that “divisive deter. .

minations would result in multiple problems and prolonged

litigation not conducive to the futufe welfare, growth and

deyelopment of the Portland area.”. Therefore, he based

his recommendations upon. consideration of the involved .

area as a whole. . oO .

We: cannot conclude, however, that the mere presence of

SP, and the prospective plesence. of Milwaukee, in the gen- _

eral Portland area give them the right to serve all indus-

' tries anywhere within that undefined geographical area.

Cf. Nashville, C. € St. L. Ry. Construction, 295 1.C.C. 363,

377. If we were to adopt the hearing eXaminer’s conclusion,

‘we would. be providing grounds for every railroad in the

- undefined Portland area to seek. to serve the stations and

industries of any or all other railroads. The resulting situ-

ation could well give rise to more problems and litigation

and be more disruptive of growth and dev elopment of the

area than the “divisive determinations” frowned upon by

the hearing examiner. Therefore, we do not agree with his

conclusign in this regard and for that reason we consider -

Peninsula, rather than the entire Portland area, to be the

‘focus of our attention here in Eenonyine the public interest

factor.

| + Confining our consideration of the terminal area involved

to Peninsula, we find that since neither SP nor Milwaukee -

now. connect with Peninsula, and have never connected with

‘it in the past, théir direct service to Peninsula’ ’s industries

‘over the objections of SP&S and UP would constitute anew -

operation and an invasion of the joint applicant’s territory.

In the oe the: Commission has usually held that. sound

~ economie conditions in the transportation industfy require:

that a railroad now serving a jiarticular territory should

normally he accorded the right to transport all traffic therein .

which it can handle adequately, efficiently, and econoni-

-eally, before a new operation should be authorized. This

conclusion is applicable not only with respect to existing

traffic but also with Tespect to. potential traffic and is gen-

erally also foHowed in’ proceedings involving motor car:

riers. See Minneapolis, St: P. é 8. SM. R. Co. Acquisition,’

295 I.C.C. 787, 802, and cases cited therein, |

-As shown in the appendix, SP shared, through connec-|

tions and use of joint rates and routes, in only about 20

pereent of Peninsula’s traffie during 1966, and only about

‘17 percent during 1967. Milwaukee’s share; also via connec-

tions and joint rates and routes, -amounted to only 1 -per- - .

cent during those years. Permitting SP and Milwaukee to

acquire access to, and. equal, ownership of, Peninswla. and ©

therefo e participate in its existing. traffic on a direct haul

cape 4 of. course, allow. those two’ railroads: to increase

their share of Peninsula’s declining traffic. (3,640 loaded .

cars handled in 1966 and 2,748 handled in 1967). These in-

creased shares. of SP and Milwaukee could only be at the

expense of the joint applicants and the railway employees

whose jobs would be eliminated by the direct service

‘Planned by SP and Milwaukee. |

Only thrée of the 13 shippers located on Peninsula’s line

participated in these proceedings and they support the joint

applicants. Two of these three desire present service to

continue. Three shippers, all located int Rivergate, support

SP. At the time of the hearing,. only one, Zellerbach, was

“In actual operation and it does not oppose the joint appli-.

. ants. Its interest appears to be in obtaining the maximum

3200

amount of direct service in order to increase its car supply,

It also believes that four- way control of Peninsula would.

result in the elimination of a 22-degree curve in Peninsula’s

line thereby permitting the use of longer ears than are

. presently used for its poles. Its complaint with regard to

present service is that 64 percent of its pole shipments dyr-

ing the period between December 1, 1966 and November 30,

1967, incurred an average delay of 4.5 days each: because

of car shortages. The joint applicants reply that the drop-

end gondola cars, supplied‘ by the railroads for the move-

ment of Zellerbach’s poles, are special purpose cars, not

always immediately available. The record does not war- .

rant a finding that car supply to Zellerbach under four-

- railroad control would be increased or that there would he |

any greater likelihood of track realignment. - |

- The steel mill supporting SP was in the process of con-

struction at the time. of the hearing. According to the rec-

ord, it appears to have been located in Rivergate-in order”

_ to take. advantage of the available water transportation.

Although: it is interested in developing an ore field -near

SP’s line in-California, its Rivergate plant was constructed, ©

in an area where the round trip unit- train SP service, for °

which it states a preference, cannot be instituted without .

_major fill and track construction. The record does not estab-

lish that under. four-railroad control, the other three car-

riers would be willing for Peninsula to incur the expense

of new construction for «the sole benefit of SP. Likewise, -

- the record fails to establish that the steel mill would not

_ develop. the California ore field ‘if SP’s unit-train service

were unavailable because of the joint applicants’ control’

of Peninsula,

The third. shipper iaportae ‘SP is the chemical com-

pany, also under construction in Rivergate at the time of. »

the hearing. ‘The record shows it was located in Rivergate

through the efforts of SP&S. It also intends to utilize water

transportation for its inbound raw-materials and water,

truck, agd rail for its outbound product. Its support of

SP is apparently based on the general supposition that the -

“more rail service it has into its plant; the better such sery-

‘ice will be. It offered no particulars as to the superiority -

of SP service and does not contend that its operations will

_. in any way be hampered if direct SP service is not received.

In our opinion, and we so find, the évidence offered by the

three. shippers.supporting SP’s position, as well as the evi-

dence-offered by the petitioners themselves, fails to estab-

lish that the joint applicants, through control of Peninsula,

cannot handle present and future traffic in the Peninsula

"territory adequately, efficiently, and econornically.

We liave thoroughly considered the briefs and replies to _

exceptions filed by the public agencies participating in.

_ these proceedings. Like the individual shippers supporting ~

SP, the public agencies are apparently motivated by a de-

sire for the service of as many railroads as possible into

Rivergate, However, this objective, if achieved at the ex. -

pense of the joint applicants as proposed in the instant

proceedings, would be directly contrary to the precept of

the Congress, embodied in its national transportation pol- —

icy, to foster sound economic conditions in the transporta-

tion industry. The adverse effect on SP&S and UP, and

the shippers dependent upon them for service, of admitting —

', SP and Milwaukee into ownership and control of Peninsula,

~- would outweigh any advantage accruing to SP, Milwaukee,

and the Rivergate industries of ‘four-railroad ownership.

We cannot find, therefore, that inclusion. of SP and Mil-

waukee in the title proceeding would constitute a just and

‘reasonable term, condition, or modification of the anthoritv

Tequested by the joint applicants. _

Common use applications under section 3( 5).—The intent

of Corigress in enacting section 3(5) was to provide a

method of av oiding the necessity for incurring unnecessary

expense in duplicating existing terminal facilities by a rail- °

road entitled to serve a. particular territory. Cf. Use ‘of .

Northern Pac. Tracks at Seattle by Great Northern, 161.

1.C:C. 699. For a more recent case, see Seaboard Air Line

R. Co.—Use of Terminal Facilities, 327 I.C.C. 1, where one |

railroad was authorized to acquire common use of another’s

facilities in-order to-continue service to a port which had -

been removed to a new location. 11 In the instant case, SP

is not entitled to serve Peninsula or Riv ergate. Therefore, ©

there is. no question. of avoiding costly construction from

SP’s present Portland terminus to Peninsula through the. -

‘acquisition of the common use rights it requests. “Accord-

ingly, we find no ground for authorizing the requested

common use. ae |

‘-Since we find that the common use sissies re-

. quested by SP under section 3(5) of the act should not’ be

authorized for the reasons stated above, we need not reach .

the questions. of whether common use of the facilities in-

- volved would be practicable or would substantially impair |

the ability of Peninsula and UP to handle’ their own busi-

ness. Other ‘contentions of the parties as to fact or law,

both with respect to the title proceeding and the common

_ usé applications: of SP, not specifically discussed herein

have been. given consideration and. found to be without °

‘material significance or not justified.. oS

11. This rase was cited * SP in support of an allegation 1 that

an invasion of territory may be accomplished by means of a séction . °

3(5) authorization. Since the railroad acquiring the common use

" rights ‘was actually serving the port involved, in the port’s old loca-

tion, and would continue to render the same service in the new

* loeation, there was no invasion of another railroad’s territory and

the cited ease does not support SP’s allegation. = j

: ae e

Gan:

ditions :

Ve)

Traffic conditions—Although we find herein that joint

— control of. Peninsula by SP&S and UP, through purchase

of its capital stock, is in the public interest, Peninsula’s

present routings and interchanges should be maintained

unchanged by the joint applicants. SP&S suggests that for

this purpose it is willing to accept imposition of the so-

called standard traffic conditions prescribed i in Detroit, T.- .

4&1. R. Co. Control, 275 I.C.C. 455, 492. We believe that

with some. modification, these conditions will adequately

serve their intended purpose in this case. Therefore, ‘to

protect the present routings and interchanges, our order

herein will impose, by pint the following trafic con-

and until otherwise authorized by the Commission;

. 2. The present neutrality of handling inbound and

- outbound traffic to and from Peninsula by SP&S and ..

* UP shall be continued so as to permit: équal oppor-

' tunity for service to and from all lines reaching: Pen-

_ insula through SP&S and UP without discrimination

as to routing 6r movement of traffic, and without dis-

crimination in the arrangements of: schedules or other-

existing between Peninsula, on the one hand, and, all

_". lines reaching Peninsula through the lines of SP&S

and UP, on the other, shall be continued insofar, as.

such matters are within the.control of SP&S and UP; .

4. Peninsula, SP&S and/or UP skiall accept, han-

dlé, and deliver all cars inbound, loaded and empty,

- service irrespective of destination or Toute of move-

ent ;

| 1. Under the control of SP&S and UP, Peninsula ‘

-shall maintain and keep open all routes and channels -

' of trade via existing junctions and gateways, unless

3. The present traffic and operating relationships’

without discrimination in promptiess or frequency of _

—_—

\ by these conditions; and

5. Sead. SP&S antec UP shall not do any- ,

thing to restrain or curtail the right of industries, now

| located on Peninsula, to route traffic, over any and all —

existing routes and gateways; ©

é., Peninsula, SP&S and/or UP shall refréin pre

ean any existing route or channel - of trade with

SP or Milwaukee on account of the transaction author-

. ized-in Finance Docket No. 24679, unless ang until au-

thorized by this Commission; :

7. Consummation of the transaction ‘authorized i in

‘Finance Docket No. 24679, shall ‘constisute assent: by-—

the corporate parents of SP&S, the members’ of their

respective systems, and any carrier resultiig from con-

summation of the Northern Lines case, to Be bound by.

these conditions to the same extent that SP&S is bound

«8. Any party or person having an intowe t in the

subject matter may at any future time make applica- .

: tion for such modification of the above-stated .condi-

tion’, or any of them, as may be required in the publie

interest, and jurisdiction will be retained to reopen

. the proceeding on our own-motion for the same. pur-

ee — a x : | -

; Employee conditions. —The so-called North Western con-

ditions recommended by the hearing examiner for the

protection of railway. employees are obsolete for transac-

tions stich as this and have not been imposed by the Com-

mission for’ several years due to the uncertain protection _

-. they afford. In our opinion they _are inadequate to protect:

the employees in this ‘proceeding. It is. our opinion, also,

that the purchase of Péninsula’ s.control. by SP&S and UP. :

will not affect employees to the extent that. the attrition”

» - - ‘

_ eonditions agreed: upon by the carriers and employees in,”

the Northern Lines case, and requested here by BLE,

would be merited. a foe

Instead, we believe that the New Orleans. conditions, re-

quested in the. alternative by BLE; will provide sufficient

protection and our order herein will impose, by. reference,

- the conditions prescribed in New Orleans Union Passenger |

Terminal Case, 282 LC.C, 27], for the benefit of railway

employees of, the joint applicants and Peninsula. adversely

affected by: this transaction, subject, however, to.the follow-

- ing arbitration _provision in lieu of those now in the New

- Orleans conditions: : |

- In the event any dispute arises ‘wits ripest 4 to the pro-_

tection afforded by these conditions’ or with respect to their

interpretation, application or enforcement, which canhot

be settled by the carriers and the employee or. his author-

ied representatives within 30 days after. the dispute arises,

it may be referred by either party to an arbitration com-

mittee" for consideration and determination. Upon notice

in writing served by one’ party on the other of intent by

that party to refer the dispute or controversy to ‘an arbi-.

tration committee, each party shall, within 10 days, select ©

one mémber of the arbitration committee and the two ©

members thus chosen shall select a third member who shall

serve as chairman. Should the. two members be unable to

agree upon the “appointment of. the third ‘member - within

‘10 days, the parties shall then within an addj ional 10.

days endeavor to agree to a method by whiel a third, or

neutral member shall be appoin ed, and, failing such agree-

,ment, either party may request the National Mediation

‘Board. to designate the third member, which designation .

“When made will he binding upon the parties. The decision

of the majority ‘of the arbitration committee shall he final, |

° e”

ppm.

a : ’ TE . pa

el | i Aas da. co ae The a and: expenses of the o

\itgce® = . third’ member shall be borne equally ‘by the parties to the °

cari ewan and /all other oapenens shall be paid by the

5 "party incurring them. : .

at SD ee Inasmych as he BLE’s seek for coibditionm to protect

ea hi * the!’ orth Portland: ‘erminal. employees is based on the

eS .: “s ee ~-contingércy thaty ‘SP and. Milwaukee will: participate a

\ a. Peniinstila’s is_pre--/

ae F ‘ = eluded ‘by- our lenial’ of ra petitions and applications ae

De * ee * those “two carriers, there is no’ need . to deal, further: with -

an * the matter, and, tite. contingent request fot the’ protective -

ope A | = ou _ etniditions | is denied. Noreov er: there is no indi¢ation that

a ~ the said - -empléyees come vin the protnctive Paty >

S. of ‘seetion 5)(f).. io . ot maar deat / +

7 . - .

- _¢€ - .e .

Unrnare Finbenas

es _ AS The acquisition by: ‘the. joint’ -applicants\ of : cottrol of.

, q - Peninsula does, not, inv olve’ any guaranty” er “assumptidn, “of

|. 2. ‘the. e- payment of: dividends or fixed charges and will not.

‘4 “t a ~ result iit any increase in ‘total fixed charges. The ‘petitions: -

2. of SP arfd Milwaukee for inclusion therein have been con-—

“~.° G+ © sidered and: disposéd of and no. ‘other, railroad seeks to be |

ed = os included. Adequate transportation service to the public will

Ee: net be: affected and railway employ ees will be protected by _

a the: —— of the, pce enter we have prov ided in their -

of 3. behalf. - ae =e) |

ae Lontrdingyy;s we find in lasek, Docket. INo. 24679 that, ~

Say 4 "ea subject to’ the conditions imposed herein for the protection

a ¢ Soff railway ‘employers and. traffic, the acquisition by the

ee Bes “Spokane, Portland and Seattle Railway: Company and the

@ E oe 5 Union’ Pacific Railroad ‘Company of control of” the Penin-. .

aa sula Terminal’ Gompany throngh the purchase of its entire

Bes capital: stock in equal shares, as déscribed herein, is a tranis-

ae y a ve ‘2; action within the scope of. section 5(2)- of the Inferstate :

en perrenecies <a Te a i

Veale! ars gn

s oe eee * : . es ’ -

. : ‘\ a “8 * _ «

. < . . ag .

. . . : :

‘ 4 : - :

ae . - - a] > . PS

: _ interest. ~

described herein, is not in the public interest. - ~ -

Commerce Act, yen the terms sie conditions thereof are

jet and reasonable, ‘that the transaction will be consistent ~

3 with the public:interest, and: that the inclusion in the trans-

action of thé Southern Pacific Company and the Chicago,

‘Milwaukee, St. Paul and: Pacific Railroad Company i is not, -

for the reasons discussed herdce.. consistent with the og

'-We further. find in Pues Diilicke Nos. 24890 and 24891,

.that the common use. by the Southern Pacific Company of .

the terminal faéilities of the Peninsula Terminal Company

“and a line of railroad of the Union’ Paeifie Railroad Com- —

pany and bridge traffic rights .over the latter line, all as ©

An Nei cite order W ill be entered.

_APPEN DIX: .

Excerpts from. -the report of the Koning examiner

ee: te * . * ~. @ 4 , eo

Peninsula - isa terminal railroad Oregon corporatiort

subject to part I of the Interstate Commerce Act engaged

in switching operations at North Portland, Oreg. North -

7 Portland is within the Portland switching district. Port-

* -land is, a: major deep cliannel sedport, transportation, and -

distribution ¢éenter. serving the Pacific Northwest and the

- Continental United States. The western end of Peninsula’s.

: main line extends to, a Crown Zelkerbach pole vard one,

theeastern tip of Riv ergate Industrial District (Rivergate).

affording potential connec tion with a proposed River- .

gate rail sy stem and the impetus for. unusual carrier, in-

dustry, and publie interest i in these préceedings. Peninsula .

-@wns no. tracks: within Riv ergate. It serves the pole yard’.

"by using industrial tracks of Zellerhach ; ‘there. Peninsular °

was s established as an} essential ioe “ope ration of Portland

woe wen: +

Hee ep cee

| Union Stockyards ° * ° to facilitate handling livestock, and ;

‘to provide a ‘rail connection between the-stockyards and

‘trunkline railroads serving the Portland area. * * * Swift

& Company presently processes only agricultural chemicals,"

‘hides, and wool at North Portland and the volume of that

‘ activity.is expected to decline. Crown Zellerbach Cokpora-

tion (Zellerbach) recently _ acquired the Nort Portland ~

Swift. property and expects to’ establish a 200,000-square ©

‘foot warehouse and an ink manufacturing. factory there.

-Zellerbach also has its Flexible Packaging: Division plant at

North Portland and operates the above-described pole yard:

at the west_end of the ‘Peninsula line in the Rivergate area. _

Peninsula - serves 13 industries on its line other’ than the:

. stockyard. * * * Peninsula has become less. ‘important to

Portland Stockyards and * * * [United Stockyards Corpo-

‘ ration (United), Peninsula’s s present owner] has no interest

"in operating a railroad independent of stockyard operations. |

It therefore proposes to sell all of the stock in+Peninsula

at a reasonable price established through a 1962 appraisal

by American Appraisal Company and has no preference

as to the purchaser. * © * The agreed purchase price of

Peninsula under a contract of purchase dated February 28,

1967, between United and SP&S and UP is’ a total of ©

$299,405 for all outstanding shares of : common stock of ¢

Peninsulé plus a sum of $70,000 to reimburse United for

_two switch engines sold by United to Peninsula represent-

ing an ‘unsecured account payable to United. Settlement to

be. made by: checks 6f. purchasers upon approval of the

transaction. The appraisal was based on empty land, plus

local costs of roadway and strugtures, less depreciation.

Adjustment of the appraisal, at the time of contract of sale

was made only as to rolling stock, working capital, and mis-

' -cellaneous betterments. The president of Peninsula ‘repre:

sents that the contract price is fair and reasonable.

Peninsula properties consist of 13.17 acres of land, none

suitable ‘for industrial development, 15,559 feet of main-

dine track plus spurs‘and sidings or a total of 379 milés of —

main-line and secondary and spur track laid on treated ties

in sand with no rock ballast. The distance from one end of .

. the line to the other is about 8,000 feet with a 5-foot elevation

toits eastern end. The above-noted two locomotives owned by

Peninsula ¢onsist of ‘a 90-ton G.E. electric, and the other, *

— a 70-ton Copper Bessimer electric, including tools and parts

for operation’ and maintenance. Tools for track mainte-_

nance, a conveyance for workmen, a heated enginehouse

for both locomotives, a yard Office (14 feet by 23 feet 6

_ inches in size), and a sand hoiise (11 feet by 18 feet in

size) are also owned. '

¢ : . je * . - eo °

Peninsula receives cars directly from-and delivers cars

‘to SP&S, NP,-UP, and Great Northern Railway Company

(GN) (empty and loaded) at North Portland, which total

(from 10 to 20] * * *«cars daily handled through the North

‘Portland Freight. Station .with an office Ipcated at’ the’

Portland Stockyards. The cars -move. to or froin double

‘ main-line tracks jointly owned by SP&S and NP, extending

from Vancouver, Wash., south across the Columbia River,

through North Portland and across the peninsula at the,

junction of the Columbia‘and Willamétte Rivers (the penin-

sula) to SP&S Doan Street Yard and the Portland Ter-.

minal: Company’s Guild’s Lake Yard, At North Portland

there is, among other things, a head block on the SPES-UP

tracks and a 259.5-foot track extending therefrom to four

North’ Portland interchange tracks "2 * [3 of] Which

| accommodate from’ 30 to 35 cars each. One is used by

Peninsnla for receipt of cars from the trunklines. The see-

-ond is used by Union Pacific to receive cars from Penin-

sula, GN, NP, and SP&S. The third is used by SP&S, NP,-

* “4

STREET gah RENCE TL eR RenmaRTceciemer re

Nabi ad

42°

and GN to receive-cars from Peninsula and UP, and the

fourth is an open or running track. Two of the interchange

tracks are owned, one-half by Peninsula, and one-half.

jointly by UP, SP&S, and NP. The other two tracks are.

owned jeintly by UP, SP&S and NP.. .The interchange

tracks connect directly with Peninsula’s main-line track tq.

the north and ‘also with a‘single-line track of [the Oregon-

Washington Railroad & Navigation Company] (OWR&N),

i=? fis wholly owned UP subsidiary], extending about

17. miles southerly across. tracks of UP to Peninsula June- |

tion; and thence about 2.6 miles ‘through a tunnel. near St.

Johns Junction to Albina Yard. The ‘interchange tracks _

are used by Peninsula, UP, N P, and SP&S as soit owners,

and by GN under a contractual arrangement. The -use

~ includes interchanges between the four trunklines and also. .

between those lines and Peninsula. * * * Service at North

Portland ‘is provided through a joint local freight agent of

the trunklines who informs Peninsula of industry service

- Fequested as to outbound moves. The agent prepares the in-

bound interchange reports and - Peninsula’ the outbound

interchange reports, Outbound bills of lading of the four

trunklines are Signed by the joint agent. Expenses of main- _

taining the North Portland station are prorated among

the four lines by car count, loaded and. empty, with. the 7

joint-facility invoice prepared by the operating road, UP

or SP&S. The joint agent recommends no routings for

shippers ‘and: receives* no open-route car orders. Usually

there are four deliveries and two pickups daily of.cars mov- |

ing to or from Peninsula by SP&S or UP: Cars from Penin- . |

" gyla could move by UP to the pass near Peninsula Junction, :

to Kenton Yard (about 2.6 miles southeast of Peninsula

Junction) orto Albina Yard. Cars picked up from Peninsula

by SP&S usually move to- v ancouver. Ir. addition to the

_- above- ree North Portland Freight Station, there is

a yard office at the eastern end of the interchange tracks.

The y ‘ard oflice i is maintained jointly by SP&S and UP under

terms of a 1912 agreement which established the North

Portland Freight Station. Four clerks at the yard office are

UP employees and four clerks at the North Portland Freight |”

| Station are SP&S employees. .

Peninsula also provides local intraplant al catentar:

minal service. It has established local switching tariff No.

23, effective September 23, 1965 (not applicable to rail line-

haul serv ice), which among other things provides-a $22.44

- per-car charge for each ¢ car movement and service charges |

for the handling of liv estock. Notother switching tariff is

pablished by it. Peninsula solicits no traffic and traces no

shipments moving bey ond its line. Revenue from its con- .

necting rail carrier service is derived from a division of '

revenue, billed and collected by the trunkline, genérally ;

amounting to $29.25 a car when the car revenue exceeds

$60. The agreed rate divi isions were ‘established by Joint

- Division Sheet 8-R issued by North Pacific Coast Freight

Bureau, Seattle, Wash., effective July 1, 1964. Usually the

line- haul carriers absorb the division ¢chargés. Its locomo-

‘tives and-crews operate two 8-hour shifts each day of the

week, one from 9 a.m. to 5 p-m. and the other from 9 p.m.

te 5 aan. Light repairs of roadbed and equipment are

“made by regular Peninsula employees and heavy repairs |

. by- -part- time employees. Since January 1, 1968, by. azrec-_

ment with Portland Liv estock, Peninsula employ ecs load -

and unload livestock.

Basie labor agreements were erttered into’ by Peninsula.

on April 14, 1943, with the Brotherhood of Railroad Train- :

men ‘and on June 15, 1941 (since modified), with the Broth. -

: ethood of Locomotive Firemen and Engineers. Peninsula

engineers’ are paid $29. 05 or $32, 63 a day for seryice eX-

SENTRY ae ey

eee

URS Li tad oe

Ste

Ch RY Fc oa

ist Ye iS Aaa Boat ak Gls bt

CBG A neil ls ap MM NEO A tc te aaa gale

f sinaivs of repairs cand maintenance with no holidays. They

receive vacation and insurance benefits: equivalent: to em-

ployees of trunkline carriers. Switchmen receive $27 -88 a day

and the footboard yardmaster $30.21 with seven annual

~ holidays, extra pay for work on holidays, and vacation,

insurance and welfare benefits similar to thé engineers’.

- United has agreed to manage Peninsula after the pur.

chase in accordance with policies of its. director, including

supervisory, accounting, stenographic and other necessary »:

- managerial services as presently provided. United may |

~ terminate the agreement on 6 months’ notice and the pur- ;

chasers may, terminate it on 30 days’ notice:

During 1960, Peninsula handled 4,993 loaded or partially

loaded cars compared to. 2,748 cars in 1967. The latter |

represents. about 39 percent of all cars interchanged at

North Portland. The other 4,300 cars were interchanged

‘between SP&S, NP, and GN, on the one hand, and, on the

other, UP. From 1960: through 1967, there was a decrease

in movements of livestock and packinghouse products and

an increase in wood products. For example, in 1967, 34

percent of the cars éndled transported wood products, 33

percent, chemicals, 8 percent livestock, 7 percent packing-

house products, 13 percent paper products, and 5 percent

other. In'1960, 16 percent of the cars handled: wood prod-

ucts, 8 percent chemicals, 48 percent liv estock, 15 percent

packinghouse products, 6 oe paper products, and 7

percent other. ,

The statement ‘of assets and liabilities of Peninsula o

of February 1967, reveals total assets $239,716, including

. current assets $35, 038 (cash on hand, $17,365, accounts.

receivable, $7,888, materials and supplies, $8,669, and pre-

| paymeiits of insurance ‘and other, $1,116), properties—".

transportation. road -and - equipment, less depreciation, -

$196,938, and miscellaneous physical property, $7,740. Its

expense and retained income statement for cach of the.

calendar, years,, 1962 through 1966, and for February 1967, |

reveals, among other things, total railway operating ex-

penses for February 1967, $14, 774 and for 1966, $81,244,

total income before fixed charges for February 1967, a |

_ minus ($725) and for 1966, $13,320 less miscellaneous rents |

paid, $1. Rent for leased road equipment for 1966, was _

$3,200 and for January 1967, $533. The balance of retained

income for Febriiary 1967, was’ $7,504 and for 1966, $8, 762. _

‘At the beginning of 1962, its retained income was $151, 208,

| which by the end of February 1967, was reduced to $7,504,

after adding annual income (less losses), and. subtracting -

dividends of $167,556 paid during 1966.

“ig | 4. ._ ‘*@ . * / @

-SP&S’ operates over lines generally extending from

Spokane through Pasco. along the north side of the

Columbia River to Varicouver, Wash:, thence across the

- Columbia River through North Portland, thence across the.

: east-west line of UP on the peninsula, and thence across

‘the Willamette River,’through Doane Lake Yard and Will~

- bridge, Oreg., to’ Guild’s Lake Yard. The latter connects

with Portland Terminal Company tracks i in downtown Port-

- land. A connecting track at the intersection of SP&S and UP

lines on the peninsula affords access to Barnes Yard. SP&S

has trackage rights at Barnes Yard and at Terminal

No. 4. UP and SP&S. jointly own tracks extending from

Barnes yard to‘the ‘southwestern side of Rivergate which

~ connect there with those of the Port of Portland. The SP&S |

-Vancouver-Willbridge track, constructed in about 1908 with .

an industrial ‘spur at North Portland, is jointly owned by —

SP&S and NP. In.1909 * * * [OWREN] constructed a track

connecting Albina with the spur track, and a Year later

4 = + af

46 wy

built a bypass track at‘the North Portland Junction. The

bypass enables operation between Albina and North Port. ’

- land interchange tracks without entering the SP&S-NP main

line. * * * Additionally, SP&S owns Oregon Trunk Railroad

extending from Wishram, Wash., a point on the SP&S line,‘

_ to Bend, Oreg., and also owns Oregon Electric Railway Co.,

‘extending south from Portland to Eugene, Oreg. SP&°

directly serves industries on its lines and those on lines used

jointly by it located on the southwest side of the Willamette |

. River at Portland including industries and docks also served

by Portland Terminal Company. It serves industries at East

Portland by use of the UP-SP steel bridge.across the Wil- —

- . lamette River near the Portland Terminal Company’ s depot

‘. and yard. SP&S switches cars to and fr rom points in the East —

St. Johns and the Terminal No. 4 areas north of the Wil-

lamette River and south of Rivergate. SP&S delivers cars

: daily to the North Portland interchange tracks at.2:30 am.

and 11 a.m. and picks up cars there at 9:30 a.m. and 6 p.m.

UP. also picks up and delivers cars there. daily at 6:30 am.

_and 2:30 p.m. * * * North Portland line-haul traffic of NP

and GN is usually moved twice daily to and from Vancouver.

SP&S switches all Vancouver cars including those of UP.’

SP&S assesses a tariff switching charge for- movement of

cars to and from Peninsula interchange. ° *. * SP&S as.

owner of Peninsula could obtain Peninsula trackage rights —

a which are essential to any agreement for switching opera-

tions. Presently. Milwaukee could «interchange: cars with .

SP&S * * * for movement to the peninsula by payment of —

a division of the through rate. In the absence of Milwaukee

trackage rights there the receiving carrier could designate

_ car delivery points of Milwaukee cars. * * * |

- SP&S indicates that the.extension of Peninsula, to serve .

the Rivergate is uncertain because of heavy curvature,

impaired clearances, and low standard tracks of Peninsula, ;

. @

but aioreticn will become’ necessary with growth of the

district ; that a new direct access track from the $P&S

main line at North Portland may be feasible; and that if —

* such a track is constructed SP&S and UP have assured. the -

' Port of Portland they would provide service similar to that

now available in the southwest part of the district. SP&S

has made no decision respécting the planned additional’ ac-

cess route to- Rivergate.. It expects to provide adequate

switching service inta the area as required.

ey .- ee . es. . / . ..

The. SP&S parent companies’ ownership is in issue in .

[the Northern Eines case] *** Pursuant to: proposals there- .

‘in, on October 26, 1966, Milwaukee entered into a written

agreement with GN, NP, Chicago, Burlington & Quincy

_ Railway, SP&S, and the New Company (The Great Northern

Pacific & Burlington Line, Ine.), which as pertinent pro-:

vides : . ;

Effective upon the consummation of the consolidation

proposed in Finance Nos. 21478, et al., the Milwaukee

shall receive all of the: six (6). conditions as sought by:

it in the aforesaid proceedings, as follows:

***Cortdition No. 2—Entry into Portland and

_Trackage Rights between rice iew Junction and

_ Portland.* . ss :

‘¢e

Provisions of the agreenierit relating to implementation of _

condition. No. 2 require the New Company or of’ SP&S, ‘

Where possible, to. grant Milwaukee trackage, rights over

present NP and SP&S tracks between Longview Junetion

and Portland, including the right. to serve on an equal —

basis all present and futune industries at Portland and

intermediate points and the use of New Company facilities

at Portland necessary for the switehing of. traffie to- other

Tailroads and. industries. There-is no specific reference

therein to North. Portland; or use of -_ North Portland

interchange tracks.

r = . -

* o .

- oad .-

———_— in onnioncrarel ——- .

E Z ‘ . . * -

; ! -. #

a . ‘ .

¥ * . i "

ALG alga Sage ghia ahd

& ‘ke Wa ces

(Cs apaearchiy aad Rb learn ae

otha ack 5 ce hota

‘through Denver, Colo., to Kansas City; Mo., (4). °

UP, a class F railroad corporation, operates over trackage

extending (1) from Seattle to Portland, (2) from Portland,

through O.T. Junction and Hinkle, Oreg:, Pocatello, Idaho,

and Cheyenne, Wyo., to Omaha, Nebr., (3) from Cheyenne, —

Spokane, Wash., to Hinkle, (@ from O, :T. Junction, Ore

to Bend, Dist: and: (6) from Pocatello to Los Angeles, —

' Calif. UP: connects at Befid with GN. *** UP tracks enter

". Portland from the east forming a great loop extending from

-awye near Troutdale, 14 miles east of the Willamette River

at Portland, One track extends from Troutdale generally

west parallel with the Columbia ° River through Kenton

~ Yard, Peninsula J unction, across the SP&S-NP traeks which,

enter Portland from the north, thence through Barnes Yard

to the southwestern Side of Rivergate and Terminal. No.-4, ©

and returns along the north side of the Willamette River 3

. through St. Johns Junction located in Swan Island Indus-

trial Park, through Albina past the entrance of the steel

bridge (which affords. access to ‘the’ ‘Portland "Terminal.

Company’ s yard and depot in downtown Portland) to East

Portland ( junction with SP), thence generally east through.

Sullivan Gulch. to Troutdale.. Track at the vest end of the

‘loop near Barnes Yard jointly owned by SP&S connects

with Rivergate where UP has served Ash Grove Lime and

Cement Company.*An OWREN °** track segment extends ©

' from North Portland interchange tracks, through St. Johns

- RR dod dewans . STs ON ae Cte

: < e

- .

Junction, and Albina Yard to East Portland. This *** main

track, was mentioned in: connection. with SP&S tracks. It-

‘erosses the western end of the UP loop as does the SP&S-NP ,

tracks west thereof. This segment of track is of particular |

significance i in these proceedings. SP traffic now. moves or is’.

- expected to move over it. An issue respecting congestion of

traffic on the track segment is raised by UP in its opposition —

- to the SP proposals. The distancé over the ‘segment from .

Portland. intere lange tracks with’ Peninsula over the

OWREN \tracks to its intersection’ with the’ UP track at

over the turnouts there ‘is limited to 15 miles ‘per hour, Near

‘commodate about 10 cars: The distance ‘from Peninsnla

Junction over the segment south through a. I-mile tunne] to

beyond St: Johns Junctiort over: the segment to. the north

end of Albina Yard is'1.02 miles. The track segment gen-

- erally is level with the exception. of the 5/10 of, 1-pereent

segment at- Columbia Boulevard which has a flashing light:

signal. There are also two or three private grade crossings

near Peninsula Junction. Between Albina Yard and North

Pértland there is a 131-pound single-line track laid on rock

ballast having no curves which create operating problenis.

. Junction and Albina: Yard is presently controlled by a

central traffie control system from Albina Yard. Albina Ya rd

isa large and important classification and-transfer vard of

15 to 20 cars each vxtending about 34 of a mile in length.

. The Williamette River lies along the western side of tho vard

and a super highway and a bluff. lie.along its eastern’ side’

limiting expansion. However, a map in evidence reveals that

the vard aft its sy about 500 vards wide and near its

Portland area moves through this vard. There is-a 400 by

| 50-foot freight ig at the south end of the yard: This is

Noth Portland interchange tracks to the north end of

Albina Yard is. 7 miles, From'the connection of the North,

° \, - . : ot \ - . -

Peninsula, Junction is about 2.04 miles. At this intersection,

connections permit switching in fou; difections. Operation:

. this intersection UP also has a bypass track whieh will ac-~

St. Johns. Junction is about 2.16 miles ‘and the distance.

grade increase from Albina Yard to the center of the tunnel...

There is only one significant liighwav grade crossing on the

Operation over the segment of track between Peninsula -

UP including about 44 tracks which will accommodate from

‘outh end 666 yards Wide. Most UP. traffic to or from. the |

-3 : .

-. . :, — we a ERTL OTE oN

Beir tte: ge eens rer somnos sian ceemaeemoR REE: ae *

ree "Ges

lage depot: by UP. and in part by shippes £

lessees. All of thé trac e used for. switching: purposes © ,

by. UP. It. endeavors to — e or two of the — e

-although a : edbetantiak ‘amount’ of: sedi traffic moves ~

~ through the. yard. UP. operations at Albina Yard are-repre-

sented as taxed to capatity, with no room. for expansion ¢

\there. Switch engines operate But of there to serve Kenton

_ Yard, North Portland Barnes Yard, East. Portland, Sullivan

Gulch, and Portland Terminal Company.. They move, in‘

addition. to freight, passenger trajns to and from’ Portland

Station. Two such trains operate each way daily through

- Sullivan Gulch. ‘Other passenger trains “moved ‘by’ engines

_ from ‘Albina operate out of Portland Station over the SP&S:

"main line through North Portland and not through Albina ’

‘Yard, Five UP freight trains: operate each way daily ‘over:

the track segment between Albina Yard and Nortff Portland

- Junction. Delays ‘at North Point Junction interlqcker are net

_ uncommon’with some delays as long: as 80. minutes. SP uses

‘the track «between. B; ooklyn “Yard: ‘and. Albina Yard for

* freight moving to axd from North Portland. The ‘speed of

~ traffic through the Anterlocker at East Portland is limited -

“8 8 miles an hout. SP. proposes to handle cars froin Brook- -.

_ lyn toN orth Portland:UP represents that if the SP applica

‘tions are’ ‘granted congestion would occur principally on the.

single-track segment between St. Johns J unction, and ‘Penin- .'

sula Junction; that three- fourths of the UP trains arriving

a Albina: Yard via Kentoniare delayed. from 15 - to 180:

minutes because of Albina: Yard congestion. Also, there -

is 4 1. 2-percent grade an the UP track 1 mile east of East-

| Portland: which tends to retard. car movements? ‘Usually :

engines stationed at Kenton: Yard are used for sw ‘itching

as ieee

ere : oo < ’ 5.

* between, ‘Aliion Yar and North Poriiants There-has hell. ne

a -ebnsolidation of the Kenton Yard and Terminal No, 4°.

ve engines to eliminate congestion of traffic. There Were about

40 to. 56 switching [transfer and train] moves ‘daily 4 in the

"Peninsula Junction area during 1967. For example, an aver-

age of 40 *** (switch transfer or train moves] a day moved

~between October 1 through October 14, 1967, and an average

. of 37 ee tswitch, “transfer or train moves ] a day between ee

_ Jamuaty. 14 through~27, 1967. From J anuary. 26 through

January 27, and from October+ through | October 14, 1967,

traffic’ clearances’ in excess, of 30 minutes: between Albin

‘ Yaqd and North Portland interchange occurred from‘aboti

‘4to 11 times or an average of 7.5 times daily. There are four

"transfer SP trains handled daily at Albina Yard. About 6

' UP trains move each way in’ addition to trains of N P, GN,

and SP&S over tracks & of North. Portland ‘ ora total of - s

about 99 trains daily. ‘use those tracks. About 30 minutes :

time should be *equired to operate a switch engine With: aie.

few cars over thé cleared track segment: between North |

Portland and Albina Yard. However, an average of about

- 30 hours has. been required: for the movement of SP cars

and also those of. UP between \Albina Yard and North |

- \Portland. UP does not consider a 30-hour transit time

adequate service and has endeavored to reduce the running —

time by the described consolidation of its Kenton- Terminal aid

No.4 terminal service, by the establishment of the above-

<ideocribed cenfral traffic control, by breaking trains at

' Seattle, Dow, Hinkle, and Pocatello to axgid switching. at

’ Albina Yard, and by increased operation through Sullivan

Gulch: :

* There i isa double track Sxtvedine from the. south end of -

“Albina Yard to East Portland and the junction of the SP

ae: Even’ though traffic congestion exists at Albina Yard,

oe ¥ eae

. fe

i a : ou ~< eee : te

tv)

J }

> .

Pu = *

/ i

rf 4

“BP nevertheless represents that it can prov vide Riv ergate

* ‘any service through Peninsula needed: arid represents that

its” present service in the involved aréa ineets shippers”

demands for service.’ -The- steel bridge | crossing ‘the Wil-.

lamette River at. East Portland is. jointly owne@ hy SP and -

. UP. The bridge, as “noted, allows UP ‘and. SP. to conneet =

_ with. the tracks of the Portland Termirtal Company, the:

"Portland Yard, the” SPES Hoyt! ‘Street | Yard, and ‘the |

- SP&S and NP Guild’s Lake Yard, which - ‘permits: SP. to

"interchange traffievat the latter yard with SP&Ss: or NP. .

Portland Terminal ,Company is a terminal sw ‘itching com-_

- pany owried 40 + aide by U P, 40 percent’ by NP, and 0 <

_ ‘percent by SP.. ao s

é UP, as noted, as sically connects with Peaineeia at North

* Portland, -an .interchange jJun¢tion point and station ‘on

+ © GN, NP, SP&S, and UP, within'tlre Portland switching dis.

Jencuneae trict. The_physical interchange of line-haul traffic moving .

_by UP or: its tonniections is performed by UP. ‘On. traffie

moving to © and from. SP via SP&S, NP, GN, ‘and UP from

and to industries located ‘on Peninsula, SP absorbs the

Peninsula’s rate division, and on traffic in which Milwaukee

participates. through joint routings,.no. switehing charges

' @re passed on to the. shipper or ‘corisignee. UP expeets to

continue its poljcy of permitting line-haul carriers having

no physical interchange with. Peninsula to reach, through 2

existing joint rates and routes, industries on the latter’s

= ft She request of the-Port_and the Commissioner of —

Public Docks, a railroad conference w ‘as held at Portland. -

on June 20, 1967, to consider elimination, of nonconipetitive

switching ‘charges to or from industries located, on the.

Port’s property at Swan Island ( Albina) and Riv ergate to

“eneourage industrial dev elopment there. Thereafter, -rail-

roads, perterpeting in the conference agreed to establish ©

a single bests of witching chases’ at all common points

‘within “Northe Idaho, Washington, and’ Oregon, with 4

switching charg to be absorbed by the line-haul carriers” * ee

. Where’ the line-haul minimum. revenue is $100 a car after |

absorption, artd no absorption of switching charges when =)

~ specific tariff rate items are excluded, UP’ represents that —

~- when the agreement i is implemented all industries Within the

Portland switching district inclyding the Port’s. property 3

-, area served by Peninsula, and points in North Pacific Co oa) &

" territory will be on a competitive relationship pate he. ae / .

the two. conditions noted. . oe ee ae =f Se

2: _* : eS . ce, ea °

SP,-a aun: I Taitroad, eiserites ‘bie ‘radia generally .

. extending (1) from Portland south through‘ Eugene and

Klamath Falls, Oreg., Sacramento, San Francisco, and Los |

- Angeles, Calif., Phoenix and Tucson, Ariz., El Paso’ and s

Houston, Tex., to New Orleans, La., (2) follies San. Fran- ;

cisco through Sacramento, Calif., Reno, Fernley, Weso,

and Alazon; Nev., to Ogden, Utah, and (3) from Fernley to

‘Klamath Falls: Service ovér ‘these’ tracks is rendered by

_ SP at many points south and east of Portland j ip Oregon,

_———

California, Nevada, Utah, Arizona, New Mexico, ‘Texas, °§ — Z

and Louisiana. At Portland, the northern ninus of SP a

tracks, as noted, connects with those of UP at an interlock- a. ...

ing plant. about 375 feet south of the eastern end: of the ae % “

UP-SP. steel bridge across the Willamette River at Port-° =: F ev

land. SP maintains -4 large switching yard at Brooklyn. » —4§

known as the Brooklyn Yard about 2.6. miles south of the

~interlocker—Trains_moving into Portland from the south

over SP lines are generally sorted and blocked at Ehgpne, 7

Oreg., about 125 miles south of Portland and move to Brook-

lyn Yard for further: ‘blocking if required before they are

" teeeiwed by UP at East _Portland. SP ‘traffic to or.from |

| moves’ prencipally cise UP —— from East. _

tap . 4. ‘ , !

ES ‘ . °

= oar al , * ' a a

er e

Portla a india Albjna Sand St. Johns Junetion t to 'the

: th Portland interchange tracks. In some instances SP -

“traffic also moves from Kast. ‘Portland across the’ steel .

bridge to the Portlagd Terininal Company yard, thence to.

Hoyt | Street Yard for interchange ‘with SP&’S and moye-'

‘ment over the: SP&S niain-line tracks:‘to North Portland’ /,

interch nge. The distance. from: Brooklyn. over the UP

tracks to Peninsula i i s about 8.59 miles. An SP engine and :

. @rew is used to move tars from eeone through East. -

a ‘Portland, thence ov oor UP as to Albina Yard where —

they’ are - received, by ‘UP for movement tO Peninsula. ©

. The switch engine and crew of SP- performs Segvice from |

|» North Portland to Albina Yard as UP’s agent. Similarly an

oS SP switch engine and crew moves cars fe ‘om Brooklyn over

- the alternate. SP&S route to North Portland by operating -

as fa¥-as the Portland’ Terminal Company’ s yard where -

they are received by Portland Termirial Company, as :an_

agent for the latter. company. -SP represents that if it is.

granted bridge trackage from the interlocker at East Port-

land to Peninsula at North Portland interchange ‘tracks |

its engines and crews can opcrate from Brooklyn to North ©

——Portiand. About 2 tours switching” time would be required -

for a SP’ engine and crew to operate between Brooklyn

and-Albina Yard and .an additional 15 hours, between .

’ North Portland and Albina Yard or a total of about :

hours and. 30 minutes. \ 7

_: There are delays in the niovement of waffic over’ the UP -

tracks between those: points. A 10-percent randoin sample

_._consisting of 42 _cars_ (froma _total of. 410 cars) of SP”

traffic’ switched to and from Peninsula during 1967 in evi-' °

dence rev eals, among other things, an, average of 32 ours :

and 10 minutes. required for car movements from the SP /

interchange points to Peninsula when-switehed by UP or

SP&S and an average of 55 hours and 16 minutes when

.: &

‘ivi froin Pesiacale to the SP interchange point, SP rep-

resents that 30 hours or more required for the inovement *

of cars between Albina. and. N orth Portland interchange i is-.

excessive and that SP with Bridge rights can: prov idé- faster »

service. From 25 to 57 trains, or an average of 40, move |

over the UP tracks between Albina Yard and North Port.’

land each 24 hours. SP anticipates 1 no operating difficulties :

- or labor. complication in connection with its proposed oper- -

_ ation over the deseribed UP N orth Portland- Brooklyn Yard |

tracks. During 1967 about A90 cars were moved between

Brooklyn « Yard: and North Portland interchange . tracks

over the described routes. It further represents ethat the —

proposed. ‘operation ~of unit’ trains. of jron ore over. the

described UP tracks to and from Peninsula i is feasible. -

:" nae ° 6 ae o.* ee °

Nawiubeo, a class | ‘railroad, operates over main: lines :

from. Seymour, Ind, through: Chicago, Ill., Minneapolis, -

Mirin., Seattle: and Tacoma, Wash., to Longview, Wash., a

the Columbia River about 46 miles from Postlend,

oa lines also” extend from Chicago to to Council Bloffs, :

tig Kansas" €ity; Mor It serves the grain producing

areas in Monfana and eastern Washington’ and provides a

connecting carrier ‘service from those points to Portland:

It also serves much of. the forest products producing area

in Idaho, and Washington and industries i in Tacoma, Seattle,

Everett, and Bellingham, Wash., north of Portland. Also,

service is rendered at the sdiuatetal cities, a

Chicago, Milwaukee, St ‘aul,-Minneapolis, Omaha, Kansas"

City, Davenport, Rock Island,.Moline, and Bettendorf. At

the time of Kearing it performed no physical operations to

tion and @onsummation bigerueg [of ‘the Northern Lines —

case). If the Milwaukee petition. herein for inclusion: is au-

thorized it expects to — fast trains between Canaan,

eo eck

and from the Portland area and was awaiting final “disposi- ei;

e. aS

toe Sing. ual Portland. ‘as hetivekn ‘Portland ‘and Suinas

_. .Wash., with connection at ‘the latter point with British be

"+ Columbia railroads: Howevi er, such service cannot be stab- |

_» lished if terminal delays oceur. atPortland which offset the

' proposed sefvice adv aniages. Ms ts proposed service at Port. ;

- land includes physical operation of its equipment ‘to and

wa. from. the Peninsula interehange tracks at North Portland.

; All the industries on Peninsula would be served as on-line |

industries with no absorption ‘of switching charges. Despite :

postponement | of the effective date of consummation in the

Northern. Lines merger: case pending consideration of var-

". lous petitions, Milwaukee expects. the merger will be. con.

ae firmed and ‘consummated. within a rease time, and —

contingent upon. its’ extension Of operations to. Portland, ..

requests joint ‘and | equal ownership of Peninsula stock with

_ other trunklines and proposes to assume its share of the |

3 portion of the stock angl indebtedness asset. forth in the

application. Its joint. ownership is considered essential to-

‘its Portland - yeration’ to ‘industries located, on, Peninsula i.

and at Riv ergate. Peninsula is the only termingl facility at

_ Portland not owned by trunklines presently serving that

+ ‘point. ts oS :

Milwaukee has a peeing iiosineied expedited |

. service for tracing, reconsigmment, a ‘aid diversion. of cars’

» and for the-elimination of car delays.’ Tt owns 39,000 freight:

cars and in-1967 it transported 61,140 trailers in its trailer- a

on-flatear ( TOFC) service. It maintains facilities at various.

points. for the loading and unloading of this type of. traffic.

Since 1963. it has. niaintained a 55.5- hour ‘schedule sorvice

from Chicago to Seattle and 67. 25-hour return. 6.7 Osis

Milwaukee i is not 6wned or controlled by any gther rail- »

toad and does: ‘nat own or control any other parties to the

instant proceedings directly or- indirectly. Tts officials and

‘directors have no common interest in such partiés ‘to this

oes te

5p ee

nee

5 uesnnding. Milwaukee: Ain own. an batodledi in a ‘muniber

- of other transportation companies ‘not Particdlarly per-

tinent to these proceedings. SAG

; q%

.. ie - o*. ?, ts Tee Se ents je

i _ INTERVENERS' EVIDENCE -

_ be afforded

7 presses-a- heed for fast reliable freight service at Riv ergate

gy ‘through Peninsula provided on equal terms by all present ©

_. and future railroads: serving Portland: which can -be accom-

| plished by joint ownership. The. Port desires -the services

of. all the railroads to facilitate: to mechanized rapid han- *

“flling of liqtid and dry bulk ‘commodities, contai lerized

- commodities, and other. general freight between

"and points: throughout. the United States. It serts: that -

| ‘singlecar switching to and from smail industries with so-

_ ¢alled, one-car sidings has become obsoleté. Such switching _

ds uneconomical. because of engine and crew costs, and ob-

' solete because trucks can eyes perform a small

shipment rv... Ae :

_ The western district class I railr ds traffic increased

36.2 percent in the 9 years: following 1958. The Port’s

transportation consultant estimates that by 1990 traffic’ of |

Xt perating fice to. eersiia It ‘ex- :

of J

those railroads will. double, if adequate rail facilities are:

‘Provi¢ led, and that Portland would share i in its growth. Ade- |:

cilities would include the most efficient mechanically ;

: fitted freight handling terminal with low’ freight handling

_ gosts™: possible through greater movement .of intermodal

‘traffic. After Riv rergate’s dev elopment, the Port: estimates: |

that from 500 to 600 ears or an average of 20, 000 tons. daily

will move to — fromi the. district ; that: daily SCFV. i¢e will -

: OR : : as rd Pe a ees 7

Gd Saye on™ - : v

\ ® : r ““e® +

- sii ‘ e

_. Fequire L unit train, 1 -Sémiuiiit Moa i selniynit: TOFC.

> train, 2 industry trains, and 2 switching runs, ‘and that the’

types of service. would include prov ision for ( 1) ‘TMlk com:

‘'modity unit trains (never: uncoupled), (2) semiunit: train

., service for handling: the less niechanized traffic to. move in —

blocks of 40 to 150 cars, (3) TOFC service, and (4) mis¢el-*

ee, laneous and ‘switching’ serv ice. Rivergate is ‘represented

_as affording opportunity for tid of new technology in rail

terminal se@vice by use of unit and semiunit trains, and the -

; elimination. of lost’ car, mov einentetime- usually. incurred at

f. terminals. UP and SP&S, as noted, are the only carriers *

preséntly having direct accéss to Rivergate through the ©:

eastern and westerr entrances.’ The Port indicates that un-.

less the four applicant railroads are afforded equal access

to Peninsula its owners would‘ create’ unsatisfactory non-

; single-line switching conditions for the other lines; that

unif-train bulk traffic is impeded equally as much by. switch- .

. ing delays as by traffic interchanges ; that if Milwaukee :

traffic.is switched by SP&S or UP before reaching Penin- *

sula, Milwaukee’s sitigle- line efficiency to and from pojnts i in

‘such States as Indiana and Iowa will be impaired; that if

‘SP traffic is similarly switched, its single-line advantage to .

and froin such -points as Medford, Reno, | Stockton, Sdiv .

Francisco, Fresno; Phoenix, El’ Paso, New Orleans, and

“Memphis will be limited. The Port represents that existing —

, uncorrelated. transfer of freight cats within the Portland

switching district will not meet - Rivergate’s rail service

needs ; that uncoordinatéd switching operations at Portland ..

result in a minimum 24-hour-transfer. time, and sometimes

_. 3or 4 days for operations aeross the switching district com- ;

pared to a few hours required for cross-city truck move- |

'ments. Peninsula asseftedly will be useful to Rivergate.

only if it ean handle unt t train's of 100 cars or more which

Peninsyla’ S track facilities presently will not accommodate.

ra i “ ‘i . ’ . - 3 a

: - - . . - os ?. A .

. . . . s - FE

oS . ~ ve F - « . ss . - 8 7

ae, 4 : 8 - 4 / :

Eeaponic and statistical vinieaad salattae fo- Rivergate

‘. presented by: the Port’s Research and Planning. Departfient

reveals, among- -other things, the following: The Columbiz- \

Willamette system i is the’ second largest river improvement

- million. The Research and Planning Department j is respon-

sible for obtaining the described -D.M.-J.M. -commergial.

_ project in the United States.. The Federal Governinent and :

the Port together, up to December 31, 1967, expended $120 |

million i in imptoving the system. Ultimate public and pm

“vate: investrient -at Rivergate is ‘expected , to: ‘exceed $500. ae

_ engineering Rivergate survey, report; and vécoueneudit. :

tions, The Port's long: experience #h marketing and research

and its recognization of current technological transporta-

“tion changes influenced its suppert of Joint ownership of

Peninsula by all the line-hatl railroads -serving Portland. ;° ~

The value. of waterborne imports and exports in the Port-

land Custom District: inereased 313: percent. ftom 1954 to’

» 41966, coinpared toi mereases during that time of 201 percent

- at Los Angeles, 128 percent at San Francisep, and: 132 per-

_ eent at Washington ports:-The Portland oceanborne traffic

‘-inereased from 8,535,686 sshort tons in 1955 to 10, 489, 989 ac

tons in 1965; or 22,9: -percent.-

The Portland Commission of Public Didi City of Port- 2

land, favors joint. ownership and operation. of Peninsula.

“and direct access to Rivergate -by all line-haul railroads

_ serving Portland. It is particularly interested in the trans:

_ portation cost to. shippers \ for movements to and from

: Rivergate, and asserts that noncompetitive transportation %

costs there would preclude consideration: by industries of -

Rivergate as an indwstrial site. The Commission represents

| that establishment of a $100 per car. line-haul revenue mini- |

mum as proposed i in the Conference ofRailroad ‘Presidents 7

‘Tune 20, 1967, agreement to establish a’ single-hasis switch-

ing charge at — Pacific Northwest ‘points would , .

. ° :

- ; Ps

“adversely affect Riv ergate’ shippers’ inborent Ww sistas equal

“ownesship by all the. line- haul railroads in ‘Peninsula. ‘Rail-

_ Toads with no such interest for economic reasons W duld ‘be ae

5 -Fequired to assess switching: charges, while owner -cartiers

re = subjéct to their own tariff provisions could absorb switeing as

; .. costs on. the» basis of a lower ‘applicable ear minimun *

- revenue. N umeroys illustrations oftinstanges i in which ‘Kia

ee. might. occur are in evidence:’ For etample, a nonownler car- —

: “rier ‘subject to the: P. C. EB. tariff. No. 35, I.C.C. 1098, item

685, naming @ rate: on cans, fibreboagd, set: up, of 40.5 cents .

a- htundredweight, 14,000- pound. minimum w eight; from

‘Portland to “Banks, Oreg., . Tepresenting’:a minimum-car -

ee revenue of $84. 70 would be required to‘assess an additional «*

| _ charge while an owner-carner would absorb such a charge.

~ Also, pointed. outt'is the second exception. to the ‘Proposed

. » switching agreement. which provides that switching’ charges |

will not be absorbed i in instances ——s exsluded by —

- tariff provision.

“~The Public Utility Commissioner of Ofeséa, fav ors s joint

; _ ownership of Peninsula by all line-haul. carriers serving

Portland. ‘Evidence presented by the CommisNoner covers

3 s geographical and physical. characteristics of tha inyolved

transportation area. It reveals, among other things, that in

addition fo the ‘five major railroads, NP, GN; SP&S, UP,

and SP presently serving the Portland area, 275 motor.

carriers operate to, from, or within. Portland. Fifty-one Qf

‘thése carriers are regular-route general-commodity carriers

all. authorized to serye Rivergate within the Portland com-

mercial zone. Tables in evidgnce resented by the Commis-

_ sioner show that the annual operating revefiue_of Perrinsula

has ranged from a high of $161, 292 in 1946 to. a low of

es 949 in 1963. ‘Its average revenue per ca for switching

=. » < _ : a

. °

-J : . w/

“¢€

- service nicrenned from $7.9 Jin 1950 - ‘ $27. 71 in. 1966.

Peninsula’s net opérating income has ranged from $39,253

"in. 1955 to a deficit of, $4,153 i in 1962, While-it operated at.a

. defieit ‘in 1962 - and 1963; .its income has since considerably /

improved. The commissioner represents | ‘that the road

“need of Peninsula is closely felated to. development of

Riv ergate ard. the granting to SP and Milwaukee of direct

-aecess ‘to Peninsula would ‘provide present+and _ future .in-

- dustries served" by Peninsula direct service by all — —

‘railroads serving Portland.

‘i ‘Through rates’ and charges of SP&S, GN, NP, ahd UP ©

are presently applicable to industries served by Peninsula.

SP does not interchange traffic. at. Peninsula and depends -

upon SP&S or UP switching service between the SP inter-,

change at Portland (Union Station) or East Portland and,

the North Portland interchange. SP presently absorbs the

switching charges on traffic moved to or from Peninsula ~~

subject toa per-car minimuni charge of $67 plus increases. —

Peninsulé” industries | pay UP or SP&S' for switching be: —

- tween North Portland and East-Portland when“the ‘pub-

lished. through rates do not provide, for “absorption of the

_ switching charg@ For example, .a switching charge is

applicable to’ noncompetitive traffic originated by SP a

Oregon mov ing to Peninsula.

*. 3 ° e ° e. : "9 .

: Zellerbach, the second largest producer. of paper and

per articles i in the ‘United States and also a producer of | »

ustrial chemicals, has its principal manufacturing and

Dine facilities located in the Portland area. It <

has paper mills at Canas, W ash., and Wanna and si

Lind, Oreg. It ships in excess of 1,100 carloads of the de-_ -

scribed commodities each month from the Portland area to

various points throughout the United States. Zellerbach

‘has or expects .to establish four facilities in the. Portland

ared..One is a distribution complex, Water ‘Way Terminal -

~ Companys. served by the Portland Terininal. Company and

Western Traiisportation.: The latter: is a certified water

"” earrier owned by Zellerbach whiclr has connections with .

number of other carriers. At: the ‘time of hearing, W. ater

Way Terminal Company facilities were “being: expanded

and Zellerbach was negotiating for the purchase of a 1,500:.

waterfront property located adjacent -to Ashgrove Lime

* Company at-the western end of Riv ergate. The second is a

pole yard located on 40 acres of land owned by Zellerbach

at the eastern end.of Riv ergate. The pole vard, as noted,

. is served by Peninsula. The third facility is the planned

ss construction - of a 200,000-square ‘foot w archouse to be lo-

-. edted on 44 acres of land purchased from Swift’ & Co. At

the time of. hearing the land purchase ,was waiting: escrow

"clearance. The laid is about 500: yards east of the SP&S

main line at North: Portland. The warelpuse i is expected to

_be used for the storing and distribution of products of the

é adjacent Zelterbach Flexible Packaging Divi ision plant, the

. fourth facility.

During the 12. months ending Novemies 30, 1967, 365.

freight cars moved to or from the Flexible Packaging Divi-

sion plant and 638 freight cars (177 shipments) -to and from

| the pole yard. The shipper’s poles now move in 65-foot drop-

end gondola cars supplied by the rail carriers. Sixty-four

percent of the. 177 pole shipments involved delays due to

Zellerbach’s inability to obtain suitable cars when. needed:

’ The delays ranged from 1 to 26 days, or an average of 4.5

days each. eee a8 vr

, - Zellerbach supports each of the applications and petitions ie

becanise authorization of the proposals’ yrould i increase the

‘number: of ‘carriers havi ing diréet access to Peninsula and

Su increase its: ability to obtain suitable cars, and because it. :

désires. service at its Rivergate facilities. comparable: to

' other transportation’ ‘at.Portland. It represents that such

access could result i in the elimination of a 22- degree curve

- in the. present: Peninsula tracks so that 85- foot .pole cars . v4

can be accommodated thereon. Zellerbach. represents that _

- if SP had direct access to its ‘pole yard, it would request

that cafrier’s service more often.. The Zellerbach repre-

sentative could recall no instafices in which it paid separate |

switching charges for service to and from its facilities lo-."

- eated on Peninsula. Zellerbach indicates that the greater the

number of connecting carriers required for: handling a ship-

ment the greater thé number of rate divisions and cost of ,

service. _

. Oregon Steel. Mills, a division of Gilmore Steel Corpora-

~ tion of San. Francisco, within the past 2.years has acquired

- 152 acres of. Rivergate land where it is presently erecting a .

new steel plate mill. Several phases of construction of ‘the -

mill. are contemplated. The first phase cost is $35 millioh.

- Upon completion of the -first phase-mill, it: will: produce -

, 200,000 tons of steel plate annually and upon completion of .

the entire mill the ultimate mill’s capacity will be 700,000.

- tons. The mill site was located at Rivergate because. it

~ affofds room for the mill’s expansion and for the location:

of related steel fabricating industries ‘near. it and because

@ Riv ergate is ‘considered by this shipper. asa transportation

- hub. There are presently steel plate mills located at Provo,

Utah, ang Fontana, Calif. The Rivergate mill. will be the

. first producing steel plate. mill located in the Pacific. North-

; 7A ° so a ;

Sn a

: thy Pe

. west and its location will ak in.-the establishment of a-

steel basing point at Portland, whereas up to this time the

steel basing points have been at Prov o and Fontana. Ore for

use at the mill presently will be prov ided ty Marconi Com. |

_ pany transported by water. carrier from Peru to Riv rergate. ct

However, Gilmore Steel Corporation owns large iron ore de

posits near Mount Shasta, Calif, near tine of the SP.

Arrangements are in progress for procuring iron ore at the

Shasta location. Oregon Steel~Mills expects to ship unjt

trains of ore f rem Shasta to the Rivergate mill and has ob- |

tained assistance and information respecting - proposed

transportation osts from.SP, which in.turn procured pro-

posed costs of switching at Portland from UP. SP, prior to.

‘the filing of its, applications, proposed to* transport ‘the

shipper’ s ore from Shasta to the UP Portland interchange ‘

in SP equipment, ‘including all terminal sery ice charges at

Shasta at $3.85 a gross ton subject to a tariff docketirig pro- .:

posal, and information received from SP respecting ‘the

proposed UP switching costs which was confirmed through

the UP rate department was $0.23 a gross ton from the_

UP-SP interchange at Portland to Rivergate. Oregon.Steel

Mills prefers a single traincrew and through round trip

unit-train serv ice. UP indicates it cannot provide this type

of service at Portland because union contracts require the

use of local power equipment and the payment of the Port-.

land crew for a minimum worktime. The shipper represents

that it would start mining ore at Shasta as sOon as economi- -

cally feasible, that. its ore can move economically only in unit

trains in the service of a single‘carrier with no connections

and that ‘it supports the SP applications to enable direct

access to its Rivergate plant by sP through North Portland. |

The shipper i is aware that major fill and track. construction

would be necessary before operation | from Shasta through

North Portland bucomes possible. It: indicates. that River-

_ Gate is being dev 1694 d by use of public tax money and it -

believes. direct. access to Rivergate should .be afforded

through all rail carriers.

4 ts.” ast Amey °

Dee a . = @ bd . 2 ; .

” Collier ‘Carbon €\ Chemical Corporation, a Union Oil

Company subsidiary, is constructing a new $2 million ‘dis:

| tribution facility north of the Ashrovér Lime Company.

~ plant on the western side of Riv ergaté. The plant, to be in

operation by the: Fall of 1968, expects. to use the direct serv -

ice of SP, among other. rail carriers, for. the movement. of

its products from Rivergate. Urea, used in the manufacture

of resins ‘and fertilizer and as @ eattle feed ingredient, is to

be shipped by water, carriers to the facility and to be’re-

shipped by rail, truck, and water carriers to its éustomers. .

It is particularly interested in obtaining SP ‘service for |

movements to western Oregon ‘points and supports the SP» ,

&yplications because direct SP service w ould ~~ ide

able _transportation to. western Oregon points

vision-of reasonabte transit time, car avail

it suit- |

in pro-

ability, ie rates.

It has no preference as to the carrier switching its prame to

- abelt-line or terminal company.

. ORDER |

Ata Session of the INTE RSTATE cone Mid I "COM.

MISSION, Divi ision 3, held at its office-i ‘in Ww. ashington, D.C.,

on the 6th day of: nine 1969.

—— -

| 660g,

Finance Docket No. 24679

‘SPOKANE, PORTLAND. & SEATTLE RAILWAY».

COMPANY AND UNION PACIFIC RAILROAD.

nga ism TROL—PENINSULA TERMINAL

COMPANY

” » 4

, awe Finance Docket No. 24890

" SOUTHERN PACIFIC. co. +-COMMON USE OF

TERMIN AL. FACILITI ES—PENIN SULA

Finance Docket No. 24891

\ °

SOUTHERN PACIFIC. CO.COMMON USE OF -

_+ CERTAIN TERMINAL FACILITIES—UNION

. PACIFIC RAILROAD CO. . °°

- Investigation of the matters and things involved in these

eee havihg been made, a hearing having been held,

and said division, on the date hereof, having made. and filed

a report containing its findings of fact and conclusions

_, thereon, which report is hereby referred to and made‘a

. part hereof:

[tis ordered, That, in Pienne Docket No. 246 79, sabjea

to the conditions referred to in said report, acquisition by —

. _the Spokane, Portland and Seat ailway. Company and

_ the Unig Paste Railroad Company of control of the Pen-

insulf Terminal Company through the purchase of ifs —

capital stock, as described in said report and ‘under the’

terms and conditions found therein to be. just ‘and reason-

able, be, and it is hereby, approved and authorized;

i t is further ordered, That the petitions of the Souther

see Pacific Company and the Chicago, Milwaukee, St. Paul and

Pacific Railroad Company for inclusion in the transaction

approved and authorized above in Finance Docket No.

_ 24679, as described in said report, ne and they are hereby,

denied; a oe o

‘It is further prdavcd: That i in Finance Dockets: Nos. 24890.

and 24891, tlie applications of ‘the Southern Pacific Com-

pany for common use of the. facilities of the Peninsula

| Terminal Company and of certain. trackage of the Union nee 7

’ Pacific Railroad Company. as described: i in said report, be, —

and they are hereby, denied; and

It is further oyder red, That this order shall take éffect

- and be in force from’ and after 35 days from the date of

_ its service ; that if the authority granted in Finance Docket - :

_ No. 24679 is not exercised within 180 days from said effec- ~

_.tive date, this. order shall be of, no further force-or effect;

-and that if the authority granted -ir “Finance Docket No.

94679 is consummated, the applicants therein shall. confirm _

in W riting to this Comniission, immediately thereafter, the

date on which consummation has actually taken place.

H. NEIL GARSON, .

Secretary. —

By the Cortinission, —_ 3.

| (SEAL)

—

INTERSTATE COMMERCE COMMISSION -

3 _ Served September 24, 1968

ace NOTICE. TO THE PARTIES

Exceptions, if any, must be filed with the Secretary, ine:

on all other parties in interest, within 30 days from the .

- date Of Serv ‘ice shown above,, or within such: further period:

as may ‘be authorized for the. filing of exceptions. At the’

expiration of the period for* the filing of exceptions, the

j attached order’ will become. the order of the Commission .

and will become effective unless exceptions are filed season-_

_ ably or the order is stay ed or postponed by the-Commission.

To be seasonably filed, exceptions must reach the Commis- .

sion on or beforé the. date they are due. If exceptions are _

filed, replies thereto may be filed within 20 days after the

“final date for filing exceptions. If the recommended’ order . - |

becomes effective as the order of the Commission, a notice

“to that effect, meaner by the Secretary, will -be served.

4 Finance. Décket No. 24679"

| SPOKANE, PORTLAND & SEATTLE RAILWAY

COMPANY AND UNION PACIFIC RAILROAD -

COMPAN Y—CONTROL—PENINSULA |

TERMINAL COMPANY

Decided _ -

“In a Docket No. 24679 and related petitions, control’ .

- by Spokane, Portland & Seattle Railway Company,

‘Union Pacific Railroad Company, and the inclusion

‘therein of ‘Southern Pacific Company, ‘through ‘pur-

1. This report also embraces Pais Docket No. 24890, Southern’

Pacifie Co. —Common Use of. Terminal Facilities—Peninsula Ter:

minal Co.. and Finance Docket No. 24891, Southern Pacifie Co.— — .

Common Use of Certain Terminal Facilities—Union Pacifie Co. -

Rose EI \ “a

BR. Weisser for applicants i in Finance Docket No. 24679.

Boe ae

| deine of all éutstanding stock of Peninsula ‘"Derniinal.

: ‘Company, and sale of an equal interest therein; sub-

ject to conditions subsequent, to Chicago, Milwaukee,

St. Paul & Pacific Railroad Company, and authoriza. .

tion of trackage use for access to. Peninsula Terminal

Company, found to be consistent with the public inter-

- est, and application and petitions in all other respects

denied. Conditions prescribed.

-In Finance Docket Nos: 24890. and 24891, common use by

Southern Pacific Company of the terminal facilities,

including trackage ‘of Union Pacific Railroad Com-

pany between Peninsula ‘Terminal Company and the-

Southern Pacific CCompany-Union Pacific Railroad

Company connection at Hast Portland, Oreg., ‘ound to.

be in the public interest and to be practicable, without :

substantially - ‘impairing the ability of Union Pacific

Railroad Company to handle its own business, and |

_. applications in. all other assoc denied. Conditions

prescribed. )

Hugh L. Biggs, James Witten Cook, Richard Devers,

Randall B. Kester, F. J. ‘Melia, R. Paul Tjossem, and John

Charles W. Burkett, W. Harney Wilson, and. Oglesby W.

Y oung for applicants in Finance Docket ‘No. 24890 and

No. 24891, and petitioner in ‘Finance Docket No, 24679.

"Raymond ‘K. Merrill, Warren H. Ploeger, Thomas _H.

i “Ploss; and E. O. Schiewe for petitioner in Docket No. 24679.

Lloyd A. Combs, William M. Dunegan, Jphn L. Green,

Richard. H. Kraushaar, Robert K. Little, Hollis .Menow,

Harold A. Ross, Edgar' E. Smith, Homra C. Watson, and -

Milton A. White for protestants in each proceeding.

E ate: T. Crabtree, pee P. Delisi, Milton - -Mowgt,

Richard W. Sabin, Robert W.. Skirvin, Lofton Fi Tatum, oe

Robert Y. Thornton, and ae M. Wick, ide for em.

venors —— proceeding. » : Us ee”

- - REPORT AND RECOMMENDED ORDER.

\. BY SAMUEL C. SHOUP, HEARING EXAMINER

In Finance ‘Docket No. 2467 9, by joint application filed

Joly 25, 1967, Spakane, Portland & Seattle. Railway Com- *

pany (SP&S) and Union Pacific Railroad Company (UP), _.

‘ pursuant to section 5(2) of ‘the Interstate Commerce. Act, a

Company (Peninsula) through purchase in n_ equal shares

of all of ‘Peninsula’s capital stock. _ :

~ By petition filed August 23, 1967; Chicago, Milwaukee,

St. Paul & Pacific Railroad Company (Milwaukee) seeks

inclusion in the proposed transaction in Finance Docket

No. 24679 and if consummated authorized (1) to purchase -

* one-third of the’ outstanding capital stock of Peninsula (2): ,

to pay one-third of the contribution to capital of $70,000

to cover the purcliase of two diesel locomotives, and (3)

‘to aeqtiire rights over track jointly owned by UP_ and SP&S

from the main-line of SP&S ‘to Peninsula’s lines upon‘

reasonable terms and conditions as negotiated by the |

parties, or as ‘found just and reasonable. by the Commission.

‘Separate replies to the petition were filed December-.29,

section 5(2) of the act because jt does not serve the Port-

land terminal area, ( 2) that if Milwaukee i is granted track-

age rights, hetweén Longview Junction ‘and Portland as a’

condition of ‘to approval of the Northern Lines merger, in .

Finance Docket “No, 21478, Great Northern Pac.-Merger-

967, by UP. and SP&S. UP. contends. generally (1) that. -

Milwaukee is not a railroad in the territory as used in ~

‘Great Northern, 331 I.C.C. 869, nevertheless it would be.”

unable to serve the Portland Terminal area unless thereisa

separate, application and. Commission’ S approval of opera-

_ tions ‘under such trackage rights, (3) that if Milwaukee

operates to’and from the Portland Terminal area, it would:

not connect with Peninsula. because the segment of track

_ between Peninsula and the Northern Pacific Railway Con- |

“pany (NP)- SP&S main line is jointly owned in whole or in.

part by UP, NP, SP&S, and Peninsula, and joint use. of

7 - such-trackage cannot be granted in these procetdings, and. |

(4) that joimt stéck control as requested is not in the

public interest and’ would lead ‘to cumbersome, confused,

and divided management. SP&S in its reply generally:

- alleges that inclusion of Milwaukee as & joint. stock owner

of Peninsula is not inthe public interest and that joint.use .

ge at North Portland to. reach tracks of. Peninsula

is not in the public interest because: of joint carrier. use ‘of

the interchange tracks there.

By amended ‘petition filed Nov ember 29, i967, Southern ,

- Pacific Company ( SP) requests asa condition to approval —

of the application in Finance Docket No. 24679, (1) that SP

bé included as an equal joint owner of Peninsula, and (2)

_ that SP be granted bridge trackage rights over UP’s main —

line, -and™ ‘terminal trackage between Peninsula and the |

SP-UP track connection at East Portland, Oreg., as. a

° condition.to participation in. joint ownership of Peninsula

under section 5(2) (a) of the Act, and in ‘event either or

iz _ both of pplicants decline to participate in the acquisi-

. sorte to such condition an order be eritered pursuant

to section 3(5) of the Act authorizing SP to use the said -

.UP trackage. UP. -and SP&S by joint. reply thereto, filed

December 13, 1967, (1) contend that to ‘grant petitioner's

a= would padgly broaden the issues, - (2) indicate

that such a request should be made in a’se

pursuant to section 3(5) of the aet. :

-- In Finance Docket Nos,. 24890 ‘and 24891, by separate ay

applications each filed December 19, 1967, Southern Pacific

‘Company, pursuant to section 3(5) of the act, seeks, in

Finance Docket No. 24890; (1) comnion use of the terminal

- facilities of Peninsula and (2) bridge trackage rights over

- UP between Peninsula and the SP-UP connection ‘ai East

Portland, Oreg., and in Finance Docket No. 24891

use of the terminal facilities of UP between Peninsula ‘and

ff the SP:UP connection at East Portland, Oreg. These appli-

. cations were filed, in addition to the above described SP

Petition, to' assure relief both under section 5(2)(d) and |

section 3(5) of the Act because of the permissive. nature -

_ of conditidnal grants by the Commission under section 5(2)

which the parties, in their discretion, may elect to. exercise:

Houston Belt & Term. Ry. Co. Control, 275 I.C.C. 289,°312..

- The applications, and the petitions and ‘replies thereto.

were referred to the examiner for hearing on a consolidated -

_ record and the recommendation of an appropriate order

: thereon. Hearing was held’at Portland, Oreg., on February

26 through. 29 and March 1, 1967. Eight railway employee 7

organizations? oppose each of the applications. The Port

ofPortland Commission, the Publie Utilities Commissioner —

of Oregon, and Crown Zellerbach Corporation intervened in

parate proceeding

» common

2. )Brotherhood of Locomotive E

notive--Engineers Division Tepresentin

rad Company ;.Southern Pacific Railroad Yardmasters of North

ricea, Ine.; Railroad Yardmasters of North America, Ine.;_

and Terminal Railroad Co. ; and Switchmens’ Union of North

a. - - =

i —

each cof the proceedings j in support of positions hereinafter :

described. UP and SP&S oppose. the SP applications in

Finance Docket Nos. 24890 and. 24891 and request that the’ -

petitions of Milwaukee and SP be denied: The parties

hereto are hereinafter referred to by appropriate short

titles. Briefs were filed separately by each of the applicants

and petitioners in , the proceedings, ' and by The Port of

Portland Commission (The Port) and the Public Utility :

‘Commissioner of Oregon and Brotherhood of Laccotnotin

Engineers.

Peninsula is a terminal railroad Oregon corporation

subject to Part I of the Interstate Commerce Act engaged

_ in switching operations at North Portland, Oreg. North

Portland is: within the Portland switehing district. Port.

land is a major deep channel seaport, transportation, and

. distrihution center ‘serving the Pacific Northwest and the

Continental United States. The western end of Peninsula’s

main line extends to a Crown Zellerbach pole yard (See

’ Map, Appendix A) at the eastern tip of Riyergate Indus-.

trial District (Rivergate), hereinafter described, -affording

potential connection with a proposed Rivergate rail.system

and the impetus for unusual carrier, industry; and public

interest in these proceedings. Peninsula owns no tracks:

within Rivergate. It serves the pole vard by using industrial

tracks of Zellerbach there. Peninsula was established as

an essential for operation of. Portland Union Stockyards

(Portland Stocky ards) to facilitate handling livestock, and

to provide a rail connection between the stockyards and

trunk-line railroads serv ing the Portland area. The Com-

mission in Docket Number 8389 on October 18, 1930, author-

ized Peninsula to operate as a terminal switching’ railroad.

Sometime prior to 1936, Swift & Company acquired inter-

-ests in’ various stocky ards and terminal rail facilities, in-

75.

cluding the Portland Stockyards and Peninsula which the

former owned. Pursuant 'to a consent decree obtained by the

U.S. Attorney General in a U.S. Court injunction proceed-

‘ing brought under the Sherman “Act and the Clayton Aet,.

" Swift divested itself of stock interest in certain stockyards

and terminal carriers. One of the properties, Portland

| Stockyards, was sold to United Stockyards Corporation 7

(United), presently.a division of the latter. Since January

1, 1968, Portland Stockyards has been leased to and oper-

ated by Portland Livestock Market, Ine. (Portland Live-

" stock). Control of Peninsula, through stock ownership by

' United, was authorized by the Commission, Division 4, on.

March 9, 1943, in Stockyards Ry..Co. Control, 254 I.C.C.

207. United’s interest in railroad operations extends onty to

“those necessary for its Stockyards’ operation. Since it ae-

quired Portland Stockyards, operations there have mate-

rially changed. Whereas, it: was used to supply cattle for .

Swift’s meat packing operations, it presently is an auction

yard. Swift & Company presently processes only agricul-

tural chemicals, hides, and wool at North Portland and the

volume of that activity is expected to decline. Crown Zeller-

bach Corporation (Zellerbach) recently acquired the North

Portland Swi property and expects to establish a 200,000

square foot warehouse and an ink manufacturing factory

there. Zellerbach also has its. Flexible Packaging Division

plant at North. Portland and operates the above-described

pole yard at the west end of the Peninsula‘line in the River.

gate area. Peninsula serves thirteen industries on its line

‘other than the stockyard. As a result of the changes; Penin- °

sila has become less important to Portland Stoekvards and

Tnited has no interest in operating a railroad independent

of stockyard operations. It therefore proposes to sell all of

the stock in Peninsula. at a reasonable price established

76 |

through a 1962 appraisal by American Appraisal Company

and has no preference as to the purchaser. The Commission

is represented as having accepted the valuation of the -

properties of Peninsula based upon historical book cost. .

The agreed purchase price of Peninsula under a contraet

of purchase dated February 28, 1967,,between United and |

SP&S ard UP is a total of $299,405 for all outstanding

shares of common stock of Peninsula plus a sum of $70,000

to reimbursé United for two sw itch engines sold by United

to Peninsula representing an unsecured account payable to

- United. Settlement to be. made by checks of: purchasers |

upon approval of the transaction. The appraisal was based

on empty land, plus local costs ‘of. roadway ‘and structures,

less depreciation. Adjustment of the appraisal, at the time .

of contract of sale was made only as to rolling stock, work-

- ing capital, and miscellaneous betterments. The President

of Peninsula represents that the contract price is fair

and reasonable. | a

Peninsula properties consist of 13. 17: acres of land, none

suitable for industrial ‘dev elopment, 15,559 feet of main line ~

main line and secondary and spur track laid on treated ties

in sand with no rock ballast. The distance from one end

of the line to the other is about 8,000. feet with a 5-foot

elevation to its eastern end. The above-noted two locomo-

tives owned by Peninsula consist of a 50-ton G. E. electric, -

and the other, a 70-ton Copper Bessimer electric, including

~ «tools and. parts for operation and maintenance. Tools for

7 track maintenance, a conveyance for: workmen, a heated

engine house for both locoinoaves. a vard office (14 feet

by 23 feet 6 inches in size), and a sand house (11 feet by

18 feet in size) are also owned. :

Officials of: Peninsula are T. E. Rockford, President (also

an employee of United), R. W. Hunt, Vice-President, C. N.

Curtis, Secretary -Treasurer.’ All except Hunt are stationed

in North Portland where they handle accounts, labor,

claims, demurrage, and interchange, and clerical work of .

the carrier: They are all United-Peninsula joint employees. —

United pays them and bills Peninsula for a portion of

their services. Insurance matters of Peninsula. are handled

_ by United in Chicago where Hunt is stationed.

Peninsula receives cars directly from and delive ers cars.

to SP&S, NP, UP, and Great Northern Railway Company

(GN) {empty and loaded) at North. Portland, which total

about 30 cars daily handled through the North Portland

‘Freight Station with an office located at the Portland Stock-

yards. The cars move to or from double main-line tracks

jointly owned by SP&S and NP, extending from Vancou-

ver, Washington, south across the Columbia River, through

North Portland and across the peninsula at the Junction

vf the Columbia and Willamette Rivers (the peninsula) to:

| P&S Doan Street Yard:and the Portland Terminal Com: .

pany’s Guild’s- Lake Yard. At North Portland there is,

among other things, a head block on the SP&S-UP tracks

and a 259.5- foot track extending therefrom to four North

Poftland interchange tracks 2,400 feet in length which ac-

eommodate from 30 to 35 cars each. One, is used by Penin-

sila for receipt of cars from the trunk lines. The second is .

used by Union Pacific to teceive cars from Peninsula, ‘GN,

NP, and SP&S. The third is used by SP&S, NP, and GN to

receive cars from Peninsula and UP; and the. fourth is an

open or running track. Two of the. interchange tracks are

owned, one-half by Peninsula, and oné-half jointly by UP,

UP, SP&S, and NP. The perenne: tracks connect directly

SP&S, and NP. The other two tracks are owned jointly by - 7

.« Junetion, and thence about 2.

with Péninsula’s main line track to the-north and also with

a single-ling track: ‘of OWREN (a UP subsidiary) extending

about 1.7 miles: southerly — tracks of UP to Peninsula

6\miles through a tunnel near

St. Ji ohn§ Junction to Albina Yard. The interchange tracks _

~ a¥e used by Peninsula, | UP, NP, and SP&S as joint t owners, _

and by GN under a contractual arrangement. The use in-.

a ~ eludes interchanges between the four trunk lines and also

between those lines and Peninsula. Actually about 8,100

ears are interchanged there of which 39 percent. represents

Peninsula interline business. All the cats are either billed

from or consigned to industries in the Portland area. Serv-

ice at North Portland is provided through a joint local

freight agent of the trunk lines who informs Peninsula of

industry. service requested as to outbound moves. The agent

prepares the inbound interchange’ reports and Peninsula

the outbound interchange reports. Outbound bills of lading

of the four trunk lines are signed by the joint agent: Ex. -

penses of maintaining the North Portland station are pro-

rated among the four lines by car count, loaded and empty,

_ with the joint facility invoice ‘prepared by the operating

~~-road, UP or SP&S. The joint agent regommends no rout-

ings for shippers and receives no open-route car orders.

Usually there are four deliveries and two pickups daily of

_cars moving to or from. Peninsula by SP&S: or UP. Cars |

- from Peninsula éould move by UP to the pass near Penin-

sula Junction, to Kenton Yard (about 2.6 miles: southeast

- of Peninsula J unction) or to Albina Yard. Cars picked up

from Peninsula by SP&S usually move ‘to Vancouver. In

addition to the above- described North Portland Freight: :

Station, there is a yard officerat the eastern end of the in-

tercharige Ta The yard office is maintained jointly by

SP&S and UB, under terms of a 1912 agreement which

established the N orth* Portland Freight Station. Four

derks at thé yard office are UP employees and four clerks

at the North Portland Freight Station are SP&S employees.

_, Péninsula also provides local. intra-plant and intra-ter-

‘minal service. “Te Wids" estabtished-Local. Switching Tariff

No. 23, effective September 23, 1965 (not applicable to rail

line haul service), which among other’ things provides a

$22.44 per car charge for each car movement and service

charges for the handling of livestock. No othér switching

tariff is published ‘by it. Peninsula solicits no traffic and

traces no shipments moving beyond its line. Revenue from

its connecting rail carrier service is derived from a division

of revenue, billed and collected by the trunk line,. generally

amounting to $29.25 a car when the car revenue exceeds

$60. The agreed rate divisions were established by Joint

Division Sheet 8-R issued by North Pacific Coast Fyeight

Bureau, Seattle, Wash., effective July 1, 1964. Usually the

line-haul carriers absorb the division charges. Itsdocomo-. ~

tives and crews operate two 8-hour shifts each day of the

week, one from 9:00 a.m. to 5:00 p.m. and the other from

9:00 p.m. to 5:00 a.m. Light repairs of roadbed and equip-

ment are made by regular Peninsula employees and heavy

repairs by part-time employees. Singe January 1, 1968, by

agreement with Portland Livestock, Peninsula, employees _

lad and unload livestock. =. oo

Basic Labor agreements were entered into by Peninsula

™ April 14, 1943, with the Brotherhood of Railroad Train.

men and on June 15, 1941,- (since modified) with the Broth-

ethood of Locomotive Firemen and Engineers. Peninsula

engineers are paid $29.05 or $32.68 a day for service exclu-

tive of repairs and maintenance with no holidays. They re-

ive vacation and insurance benefits equivalent to employ-

> +

2 -

5 . e

—— 7 . a gna: 2

* : :

. : >

\sr 0: Os. ay

_ . : ‘ “+4

“%

ees of trunk-line carriers. Sw itehmen receive $27.88 a day

and the foothoard yard master $30. 21 with sev en annual ;

holiday s, extra pay for work on holidays, and: vacation,

insurance and welfare benefits similar to the engineers’.

United has agreed to, manage Peninsula after the pur.

~ chase in &ccordance with policies of its direetor, including

supervisory, accounting, stenographic and other a

managerial services as presently provided: United ay ter-

_ Ininate the-agréément on 6 month’s notice and the purehas-

ers may terminate it on 30 day’s notice. — 4

During 1960, Peninsula handled 4,993 voaded or partially

loaded cars compared to 2,748 cars in 1967. The latter Fep-

resents about 39 percent of.all ears interchanged at North

Portland. The other 4,300 cars were interchanged between.

SP&S, NP, and GN, on the one hand, and, on the other, UP.

From 1960 through 1967, there was a decrease in ‘move-

ments, of livestock and packinghouse_ products and an in-

crease in wood ucts. For example; in 1967, 34 percent

of the cars-tHandled transported wood products, 33 percent

chemicals, 8 percent livestock, 7 percent packinghouse prod-

ucts, 13 percent paper produets, and 5 percent other. In

"1960, 16 percent of the cars handled wood products, 8 per-

cent chemicals, 48 percent livestock, 15 percent’ packing-

house products, 6 a paper products, and 7 percent |

- other.

The statement of assets and liabilities of Peninsula as -

of February 1967, reveals total assets $239,716, including

current assets, $35,038 (cash on: hand, $17, 365, accounts re

ceivable, $7, 888, materials and supplies, $8, 669, and prepay: y

ments of insurance and _ other, $1,116), properties— ans.

" portation road and equipment, léss depreciation, ‘$19 38,

and miscellaneous — Property, $7,740. Its expense

* and retained: income. statement for each of. the. calee ae .

years, 1962 through 1966, and for February 1967, reveals,

- among other things, total railway operating expensés for —

February 1967, $14 »1 44, and for 1966, $81,244, total income

before fixed charges for February 1967, a minus ($725)...

and for 1966, $13,320 less miscellaneous rents paid, $1. Rent 5

| for leased road equipment for 1966 was $3,200 and for Jan-

“wary 1967, $533. The balance of retained income for Feb-

ruary 1967, was $7,504 and for 1966, $8,762. At the ‘begin-

—

ning of 1962, 2, its retained income was $151,208, which by —

the end of February 1967, was reduced to $7,504, afr add.

ing annual income (less losses), and aia dividends

of $167,556 paid during 1966.

Rivergate Industrial District (Rivergate) consists \ of.

about 2,942 acres of public owned peninsula land at the

junction of the Columbia and Willamette Rivers generally

north of and adjacent to Porffand’s corporate limits. This.

land is under the jurisdiction of, and is being developed by, _

“

front on 40-foot navigation channels of the Willamette and:

Columbia Rivers. Presently there are five industrial: activi- _

ties within: Rivergate together occupying 265 acres, or less"

than one-tenth of the ultimate available area. These are.

Ashgrove Lime and Portland Cement Company, Conmetco

Division of Consolidated Freightways, Collier Carbon and

Chemical Company, and Oregon Steel Mills on the western

side and the Zellerbach Pole Yard on the eastern end. Much

of it is marsh land to be filled by. dredging operations. An

‘Waonth planned study of a 14 Square-mile peninsula area

mpuding Rivergate by The Port’s consultants, Daniel,

Johnson, and Mendenhall of Los Angeles, Calif.,

‘inown as the D.M.-J.M. report was dated September 14,

1967. Recommendations therein: include a Rivergate rail.

“Way system connecting with rail trunk c Lines. Two alternate

oa -

= d

—

@ 7

: Alternating’ . Additionally, SP&S owns Oregon Trunk

Rivergate rail access routes inchide.(1 ) that over the exist:

ing tracks of The Port ‘which connect ‘with those jointly .

owned by SP&S and UP entering the southwestern area *

of Rivergate, and (2) the possible construction on the east.

‘ern side of Rivergate of an SP&S main line extension or '

an extension of Peninsula’s. tracks into the area. ee

SP4S, a class I railroad, and a wholly owned subsidiary |

of NP and GN, operates over lines genefally extending —

from Spokane through: Pasco along the north. side of the

Columbia River to’ Vancouver, Wash., thei |

- Columbia River through North Portland, thence across tlie ’

east-west line of UP on the-peninsulaj and therice across

_ the Willamette River, through Doane Lake*Yard and Will-

. bridge, Oreg., to. Guild Lake Yard. The latter connects with _

' Portland: ‘Terminal Company ‘tracks in downtown Portland.

“A. connecting track at the intersection of SP&S and UP

~ lines on the peninsula affords access to Barnes yard. SP&S

has trackage rights at Barnes Yard and at Terminal No. 4.

UP and SP&S jointly own tracks extending from Barnes

Yard to the southwestern side of Rivergate which connect |

there with those of the Port of Portland. The SP&S Van- a

couver-Willbridge track, constructed in about 1908 with.an -

_ industrial spur at North Portland, is jointly owned by SP&

-S and: NP. In 1909 OWR&N (UP) constructed a track’con-

' neeting: Albina with the spur track, and a year later built

a bypass track at the North Portland Junction. The bypass

enables operation between Albina and Nofth Portland in-

terchange tracks without entering the: SP&S-NP. main line.

SP&S and NP switch cars at: North Portland on a 2-year

Railroad’ exten ing from Wishram, Wash., a point on the

_ SP&S line, to Bend, Oregon, and also éwns Oregon Electric :

Railway, Co.,. “extending south from Leaman: to Bugem,

~ Oregon.. SP&S directly serves. industries on its lines and. :

those on lines used jointly by it located on the southwest ae

side of the Willamette River at Portland including indus- °

tries and docks also served by Portland Terminal Com: ’

pany. It serves industries at Fast Portland by, use of the

-UP-SP steel bridge across. the. Williamette River near the *.

switthes cars to and from points in the Kast St. Johns and

the Terminal -No. 4 areas north ‘of the Williamette River .

and south of Rivergate.. SP&S delivers cars daily to the

' North Portland interchange tracks at 2:30 a.m. and‘11:00

a.m. and picks up cars there at 9:30 a.m. and 6:00 p.m: UP ~

also picks up and delivers ears there daily at 6:30 a.m. and

2:30. p.m. The switching distance from North Portland in;

terchange tracks to connettion with SP at Albin yard or

Portland Terminal Company Hoyt Street-yard is about 6.

miles and cars switched from and to those points should

Tequire about one hour. North Portland line haul traffic of

NP and GN is usually moved twice daily to and from Van-

~ couyer. SP&S switches all Vancouver cars including those.

stip SP&S assesses a tariff switching charge for move- °

‘ment of cars to and from Peninsula interchange. It is pos-

sible for.GN, NP, and. Burlington under joint arrangements

to handle Milwaukee traffic to’ and from North Portland —

_ interchange tracks. SP&S as owner of Peninsula could ob-

tain Peninsula, trackage rights which are essential to any

agreement: for switching operations. Presently Milwaukee

could interchange cars with SP&S at Vancouver for move-

ment. to the peninsula by payment of a division of the “ \

through rate. In. the absence of Milwau ee tfackage rights’

there the receiving carrier could designate’ car delivery |

points of Milwaukee cars. With. interchange trackage rights

at North Portland it could enter into a ear pulling agree-

-mnent for movements from Vancouver. as

-SP&S indicates that the extension of Peninsula to serve

-the Rivergate is uncertain because of heavy curvature, im-

paired clearances, and low, standard tracks of Peninsula,

but alternation -will become necessary. with growth of the -

district; that a new direct access track from the SP&S' ’

‘main line at North Portland may be feasible; and that if _

such a track is constructed SP&S and UP have assured the

- Port of Portland they would provide service similar ‘to that:

now available in the southwest part of the district. SP&S.

has made no. decision respeeting the planned. additional |

access route to\Rivergate. It- expects to provide adequate ;

switching servicé\into the area as required. -

_. SP&S sss yori of, or ETE rights to

serve, Peninsula by and Milwaukee, and indicates such

: rights and ownership result in unnecessary -duplica at

: _ ing tracks and service ¢o trary to the ‘public interest. It

represents that sexisting rou es, rates, and traffic will not

be affected by the SP&S-UP praposed purchase of Penin-

Sula. Milwaukee and SP now serve Peninsula shippers

airing. connecting carriers and use of joint, rates and.

3, 640 cars 5 handled during 1966, between Peninsula and

and SP&S. and parent lines was 54 percent for SP&S ani

_ parent lines and'46 percent for UP. Twenty percent of th -

cars were routed SP and 1 percent Milwaukee. In 1967, Sk.

routed 17 percent and Milwaukee. 1 percent f the line ham

for 2,748 handled ‘by Peninsula. Neverthelesor’ representa”

tive, of: SP&S doubts that carriers with no direct Rivergate

access rights would have as _much incentive to-do business »

- there~as-a direct access carrier, Normally ‘the switching

carrier has.a solicitation advantage. If Milwaukee. has no

direct Rivergate access on competitive traffic it must absor)

~ an SP&S switching charge (presently 6 cents a. hundred-

weight) and pay a Peninsula rate division of $29.25 a car _

when the car revenue exceeds $60, on its traffic which would .

‘move through East St. Johns. Usually, line-haul carrier’ -

absorb no. switching’ charges on: unit train service or cars - |

‘containing low rated commodities, and the payment.of such

charges by shippers discourages: business. SP&S indicates

Milwaukee might participate in a greater share of Penin-::

sula traffic if its operation is extended to Portland. The

-SP&S representative concedes that if Milwaukee owns no

part of Peninsula and cannot use the North Portland inter-

change tracks, it cannot compete equally with SP&S for

: Peninsula traffic. However, SP&S is willing to. accept the

standard section 5(2) proceedings’ conditions (See South-

Yorn ‘Pacific Company—Merger—Pacific Electric ‘Railway

Company, 327 I.C.C. 38) in evént of a grant to assure par-

.ti¢ipation, by SP and Milwaukee in traffic moving to and

from Peninsula as follows: ae ke : - a,

Upon consummation of the acquisition, Peninsula shall].

: maintain and keep open all routes and channels ‘of

"trade via existing junctions -and gateways unless: and,

_ until otherwise authorized by the Commission...

he present neutrality of handling traffic inbound ‘to.

. _ Peniisula by UP and SP&S Shall.be continued so as to”

permit equal opportunity for service to and from all.

lines reaching’ Peninsula through their connections

- ,with UP and SP&S and its parent lines, without dis-

~ erimination as to routing or movement of. traffie and

-: without discrimination in arrangement of schedules or

otherwise. | | . se

¢ td -

; The present traffic and operating relationships existing

_ between Peninsula on the one hand and all lines reach:

_ ing Peninsula through UP, SP&S or its parent lines on

the other, shall be continued .insofar as such matters

are within the control of UP, SP&S or its present lines,

UP, SP&S and its parent lines shall accept, handle and

deliver all cars inbound and outboun®, loaded and emp.

ty, without discrimination, in promptness or frgguency -

of service as between cars destined to or received from |

‘competing carriers, and inTCepeetwe of destination or

_ route of movement.

_ UP, SP&S or its parent lines shall not do anything to

restrain or curtail-the right of industries, now located

on Peninsula, to route traffic over any and all existing ~

’ routes and gateways. oO ,

Any party or person having an interest in the subject

matter may at any. future time make ‘application for

such modification of the above conditions, or any of.

them, as ‘may be required in the public interest, and

jurisdiction of the Commission may be retained to re-

open this proceeding on the Commission’ ‘S Own motion

for the same purpose.

SP&S first became aware of United’s desire to sell Penin-

‘sula in 1963, but serious purchase negotiations were not

commended until sometime in 1966. When UP learned of

_ ithe negotiations it became a party to them. If the applica-. .

‘tion of these carriers is granted they intend to continue the

corporate entity of Peninsula and its. present management |

‘with present employees under joint supervision’ by the pur-

chasers. The same management would permit an omerly

‘carrier transition. SP&S has no objection to the Commis-

sion’s prescription-of conditions for protection of employees

.-°

87 a >

as set forth in Chicago € N.W. Ry. Co. Merger, 261 1.C.C.

- 672, as follows: «: OO , 4

During the period of 4 years from the effective date of

our ordér herein such transaction will not result in

_ employees of the carrier or carriers by railroad affect-

ed by such order being in a worse position with respect

to their employment, except that the protection afforded

to any employee pursuant. to this stction shall not be

‘required to continue for a longer period, following the

. effective date or such order, than the period during —

which such employee was in the employ of such carrier

or carriers prior to the effective date of such order.

The SP&S parent companies’ ownership is in issue in .

Great Northern. Pac.—Merger—Great Northern, supra. :

Pursuant to proposals thereth, on October 26, 1966, Milwau-

‘kee entered into a written agreement with GN, NP, Chicago

‘Burlington & Quiney Railway, SP&S, and the New Company

(The Great Northern Pacific & Burlington Line, Inc.),

which-as pertinent provides: — | .

Effective upon the consummation of the consolidation *

proposed in Finance Nos. 21478, et al., the Milwaukee’

_~ Shall receive all of the six (6) conditions as sought by —

it in the aforesaid proceedings, as follows: 2 5

_ ***Condition No. 2—Entry into. Portland and’.

Trackage Rights between Longview .J unction and

| Portland.*** | |

Provisions of the agreement relating to implementation of .

ondition No. 2 require the.New Company or SP&S, where

possible, ‘to grant Milwaukee. trackage riglits over. present —

NP and SP&S tracks between Longview Junction and Port- ;

land, including the right to serve on an equal basis all pres-

‘ent and future industries at Portland and intermediate

points and the: use ‘of New Company facilities at Portland

necessary for the switching of traffic to other railroads and.

_ industries. There is no specific reference therein to North

‘Portland, or use of the North Portland interchange tracks. —

The SP&S financial statement as of February 28, 1967, ~

shows total assets, $139,634,532, including current_assets, .

$12,775,147, special; funds, $123, 381, investnients, $30,586,097,

properties less depreciation and amortization, $95,735,982,

and total other assets and deferred charges, $413,925. Liabil-

ities include current liabilities (exclusive of long-term debt _

due within 1 year), $8,928,010,. long-term debt due within 1 |

year, $793, 842, long-term debt due after 1 year, $45,650,781,

reserves, $156, 042, other liabilities and deferred credits,

— $158,704, capital ‘stock, $40,000,000; capital surplus, $9,300,:

000, and retained income, $34,647,153. | |

UP, a class I railroad corporation, as pertinent, operates

over trackage extending (1) from Seattle’ to Portland, (2)

from Portland, through. O. T. Junction, ‘and Hinkle, Ore.,

Pocatello, Idaho, and Cheyenne, Wyo., to Omaha, Nebr., (3). .

from Cheyenne, through Denver, Colo., to Kansas City, Mo.,

(4) from Spokane, Wash., to Hinkle, ( 5) from O. T. Junc¢tion, |

Oreg., to Bend, Oreg:, and (6) from Pocatello to Los.Angeles,.

Calif. UP connects at Bend with GN which latter carrier’s:

_line extends through Chemult and Klamath Falls, Oreg.,

and Bieber, Calif., to connect there with Western Pacific

_ extending through Sacramento to San Francisco, Calif. UP

_ tracks enter Portland from the east forming a great loop

extending from a wye near Troutdale,.14 miles east of the

Williamette River at Portland. ‘One track extends from |

Troutdale generally west parallel with the Columbia River

_ through Kenton Yard, PeninsulaJunction, across the SP&S-

--NP tracks which enter Portland from the north, thence

through Barnes Yard to thé southwestern side of Rivergate

- and Terminal No. 4; and returns along the-north side of the ¢

Williamette. River through St. Johns: Junction located in |

“Swan Island Industrial Park, through Albina past the en-’

trance.of the Steel Bridge (which affords access to the Port-

land: Terminal Company’s yard and. depot ‘in: downtown

| Portland) to East Portland (junction with SP), thence gen-

erally east through Sullivan Gulch-to. Troutdale. Track at

the wést end of the loop near Barnes Yard Jointly owned by -

SP&S connects with Rivergate where UP has served Ash

Grove Lime and Cement Company. An OWRE&N (UP)

track segment extends from North Portland interchinge

tracks, through St. Johns Junction, and Albina Yard to Kast |

- Portland. This track, not a main track, was mentioned in

connection with SP&S: tracks. It-erosses the western end of

the UP loop as does the SP&S-NP tracks west thereof. This _

segment of track is of particular significance in these pro-

ceedings. SP traffic now moves or is expected to move over,

it. An issue respecting congestion of traffic on the track seg-.

ment is Taised by UP in its opposition to the SP proposals.

The distance over the segment from North Portland inter-

_ change tracks to the north end of Albina Yard ‘is 5.2 miles.

From the connection of the North Portland interchange.

tracks with Peninsula over the OWREN tracks to its inter- |

section with the UP track at-Peninsula J unction is about

- 2.04 miles. At this intersection connections permit switching

- in four directions. Operation over the turnouts there is lim-

ited to 15 miles per hour. Near this intersection UP also has °

a bypass track which will accommodate about 10 cars. The

distance. from Peninsula Junetion over the segment south -

through a 1 -mile tunnel to St. Johns Junction is about 2.16.

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