# Appendix — Port of Portland v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0069%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1972 - **Citation:** 408 U.S. 811 ## Text i) e - 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- i) 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 93 °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 28 > 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° 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 21 ' 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 ry 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 rz 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. \ : \, ‘\ nine . . >a - °. - 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 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 / i 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 \;@ 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. + 8 - ¢ 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 ail Sila’. Det. Noe ee wits sev in aise ia OED ib Bs init irate eansiitirtsccommaiie dons s * alata RAMAN Sh MAAN Bi ae Hila GOR ane lb Mie aigphalbe Ata WALvinianR glut ° ad . . e . . _ ; , —_" —16— 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. é 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: & Sarg yet re Fe ee ee eee elarer ae baad ities BRET ye on PR eR ners gen RULE Cw Rey OA cyt ren nm » ; w'? ° Lb CAMA scot Bye Wy ey Perea a Aes 18° 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 s 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 . ° vw : ser! sarees a 2 ee _ 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 22 | 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 7 e. 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 ° f 26 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 ‘ ‘ - ~ ° 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 . PS : _ interest. ~ described herein, is not in the public interest. - ~ - A 39 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 a '-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. o. . _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 , 40 | 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. N 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 ° 2 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 s 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- aa 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, - 4 $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, ; . @ b 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 . 2 - 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 : . 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 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 , . re . ° : - ; 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 \ \ =. » + 2 - 5 . e —— 7 . a gna: 2 * : : . : > r \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, _ “ | The Port for industrial use. It has about 6 miles of water © 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 3 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 *. Portland Terminal Company’s Depot and yard’ SP&S © 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 Cc _& 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 - 86 ; 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. thiles and the distance hevond St. Johns Junction over the segment to the north end of Albina Yard is 1.02 miles. The track segment generally is level with the exception of the 5/10 of 1 percent grade increase from Albina Yard to the PS» ee Phe: OER GD TIL BED . x ‘ center of the tunnel. There is only one. significant highway: a grade crossing on the segment at Columbia Boulevard which . _ has a flashing light signal. There are also two or three pri- | vate grade crossings near Peninsula Junction. Between’ Albina Yard and North Portland there is a 131-pound single. . line track laid on rock ballast having. no curves which create operating problems. Operation over the segment of track ? between Peninsula Junction and Albina. Yard is presently ~ controlled: by a central traffic control system from Albina will accommodate from 15 to 20. cars each extending about 34 of a mile in length. The Williamette River lies along the western side of the yard and a super highway and a bluff . lie along its eastern side limiting expansion. However, a map in evidence reveals that the yard.at its center is about _ 500 yards wide and near its south end 666 yards wide. Most UP traffic to or from the Portland area moves through this - yard. There is a 400 by 150-foot freight house at the south | end of the yard. This is used in part as a salvage depot by | UP and in part by shipper lessees, All of the tracks are used for switching purposes by UP. It endeavors to keep open one or two of-the center tracks in the yard to accommodate through traffic. None of the tracks are permanently desig- nated as running tracks although a substantial amount of through traffic moves through . the yard. UP operations-at Albina Yard are represented as taxed to capacity; with no room for expansion there. Switch engines operate out 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, Yard. Albina. Yard is a large and. important classification — and transfer yard of UP including about 44 traeks which _ trains to and from Portland Station. Two such trains operate _ each way daily through Sullivan Gulch. Other passenger — 91 trdins moved Ay-engines from Albina operate out of Port- land station over the SP&S.main line through North Port- land ‘and not through Albina Yard. Five UP freight trains operate each way daily over the track segment between Albina Yard and N orth Portland Junction. Delays at North Portland Junction interlocker are not uncommon with some delays as long as 80 minutes. SP uses the track between Brooklyn Yard and Albina Yard for freight moving to and from North Portland. The speed of traffic through the inter- .’ locker ‘at East Portland is limited to 8 miles an hour. SP proposes to handle cars from Brooklyn to N orth Portland. UP represents that if the SP’applications are granted con- gestion would oeeur'’ principally on the single-track segment | between St. Johns Junction and Peninsula Junction; that three fourths of the UP trains arriving at Albina Yard via Kenton are delayed from 15 to 180 minutes because of Al- bina Yard congestion. Also, there‘is'a 1.2 percent grade on the UP track 1 mile east of East Portland which tends to retard car movents. Usually engines stationed at Kenton ‘Yard are used for switching between Albina Yard’ and North Portland. There has been a consolidation of the Ken. ton Yard and Terminal No.4 engines to eliminate congestion - of traffic. There were about 40 to 56 switching moves daily inthe Peninsula Junction area during 1967. For example, an average of 40 cars a day moved between October 1 through October 14, 1967, and an average of 37 cars a day. moved between January 14 through 27; 1967. From January through January 27 and from October 1 through October -1# 1967, traffic clearances ‘in excess of 30 minutes between - Albina Yard and North Portland interchange occurred from . about 4 to 11-times or an average of 7.5 times daily. There are four transfer SP trains handled daily at Albina. Yard. About six UP trains move each way in addition to trains of * ; —s | NP, GN, and SP&S over tracks nor of North h Portland or a total of about 55 trains daily use those tracks. About 30 . minutes time should be required to operate a switch engine with — a few cars over the cleared track segment between . . North Portland and Albina Yard. However, an average of | * about 30 hours ‘has been required for the movement of SP - ears and also those of UP between Albina Yard and North - Portland. UP does not consider a 30-hour transit time ade- ‘quate service and has endeavored. to reduce the. running ~ time by the described consolidation of its Kenton-Terminal | - No. 4 terminal service, by the establishment of the above described central traffic control, by breaking trains at Seat- - tle; Dow, Hinkle, and Pocatello to dvoid switching at Albina Yard, and by increased operation through Sullivan Gulch. There is a double track extending fromr the south end of : Albina Yard to. East Portland and the junction of the SP _ there. Even though traffic congestion exists at Albina Yard, UP nevertheless represents that it can provide Rivergate _ any service through Peninsula needed and represents that’ ‘its present ‘service in the involved area meets shippers’ de- mands for service. The Steel Bridge crossing the William- -ette River at East Portland is jointly owned by SP and UP. The bridge, as noted, allows UP and SP to connect with the tracks’ of the Portland Terminal Company, the Portland Yard,-the SP&S Hoyt Street Yard, and the SP&S and. NP Guild’s Lake Yard, which permits SP to interchange traffic at the latter yard with SP&S or NP. Portland Terminal Company is a terminal switching company owned 40 percent. by UP, 40 percent by NP, and 20 percent bt SP. UP, as noted, physically connects with Peninsula at North Portland, and interchange junction point and station. on GN, NP, SP&S, and UP, within the Portland switching _ district. The physical interchange of line-haul traffic moving _ by UP or its connections is performed by UP. On traffic 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 switching charges are passed on to the shipper or consignee. UP expects to | continue its policy of permitting line-haul carriers having |. “no physical interchange with Peninsula to reach, through © _ existing joint rates ‘and routes, industries on the latter’s line. ae oe - ~~ e UP’s position in Supporting its application and in oppos- ing the. petitions for inelusion and applications for rights is that a grant of the UP-SP&S application would permit continuation of the Peninsula operation as a separate switch- ing company by trunk line owners at North Portland inter:. change tracks and the joint operation of the freight station and yard there for their own traffic and an extension of the responsibility of these carriers for continuation of switch- ing services at North Portland for other carriers, UP rep-. | resents that management of Peninsula would become diffi- cult and indecisive with four owners and that limited owher-. } ship would assure keeping the size of the.yard facilities and | costs of its operation at North Portland at a minimum. UP - opposes the-SP operation through Albina Yard principally . | because of congestion which it might create and believes the ‘tions there: It represents that the operation of SP trains” through Albina Yard is not practical because of the large | number of trains already moving through the yard. — At the request of The Port and the Commissioner of Pub- - - lie Docks, a railroad conference was held at Portland: on June 20,.1967, to consider ‘elimination of Een ragecuse a. operation would result in uneconomical and wasteful condi- a '- . switching charges t6 or from industries located on Tle Port’s property at Swan Island (Albina) and Rivergate to encourage industrial development there. Thereafter, rail- ' roads participating i in the conference agreed to establish a | single basis of switching charges at all common points within Northern ‘Idaho, Washington, ‘and Oregon, with ‘ switching charges, to ‘be absorbed. by the line-haul carriers . where the line-haul. minimum revenue is $100 a car after i. ‘absorption; and no absorption of switching charges when specific tariff rate items are excluded. UP represents that when the agreement is implemented all industries within 3 the Portland Switching District including The Port’s Prop- erty area served by. Peninsula, and points in North Patific | Coast Territory will be on a competitive relationship exetpt - resents that all industries located on Peninsula can be served for r the two conditions noted. UP opposes the petitions Wf Milwaukee and SP and the SP applications because it adequately... either directly or through applicable effective joint rates and through routes, ander the UP-SP&S pro- posal. It desires to protect its existing traffic and facilities . investment. However, a representative of UP indicates that the cost to Milwaukee for handling traffic moving to or from Peninsula with no atcess right there would be greater than - that of UP. It is possible under the conference switching agreement-that by payment of the UP or SP&S switching - charge the minimum car ‘revenue would be less than $100 resulting in payment of the switching charges by the shipper. - and refusal of the shipper to use -Milwaukee’s service. Also, ona shipment moving from a Péninsula industry to Arizona, " . outed UP from Peninsula interchange tracks to East Port- land, thence SP beyond; SP would, absorb the switching charge. from Peninsula interchange to. East Portland. The - | principal interest to — in such a'move would -be the — 2 PASE LLL TPS Bae Fn ge ee a ae ee ee SF COE OEM BME GIN TOG ARE ES SR EOS EIGER EE ~ SEIT LEE 95. a "ing ‘charge, UP gencrally has been ‘unwilling ‘to negotiate joint rates. with Milwaukee between competitive points such as Spokane, Seattle, and Tacoma. Line-haul rates of carriers (but not all carriers) are applicable on traffic moving to or from Peninsula industries, and when line-haul rates are ° switching charge. Le Se ais Si _ The UP financial statement as of December 31, 1966, re- veals total assets of $1,902,430,048, including current assets, $279,303,599, special funds,’ $819,004, investments, $479,-. tion, $1,136,364,928, and other assets and deferred charges, rent liabilities, $17,797,009, long term. debt due within one "year, $17,757,016, long term debt due after:one year, $199,- 999,694, reserves, $34,423,776, other liabilities and deferred ‘plus, $9;374,305, and total retained income, $1,195,492,071: _The UP income statement’ for years 1962 through 1966 re- veals among ‘other things, total fixed charges of $9,104,258 | in 1962 and $13,035,761 in 1966, and net income after fixed ‘charges and other deductions transferred to retained in- come, unappropriate, for 1962, $80,550,226, and for 1966, at the end of 1966 was $1,160,899,972. -- - extending (1) from Portland south. through Eugene and Klamath Falls, Oreg.,’Sacramento, San Francisco, and Los- Angeles, Calif., Phoenix and Tueson, Ariz., El Paso and through Sacramento, Calif., Reno, Fernley, \Weso, and Ala- wn, Nev., to Ogden, Utah, and (3) from Fernjey to Klamath ~ ‘not applicable, ‘the shipper or consignee must pay an extra — _ 073,070; properties less recorded depreciation and amortiza-_ $6,869,447. LiaVilities and shareholder equity include cur- - eredits, $28,293,827, capital stock, $299,292,350, capital sur. ° $106,268,617. The total UP retained income, unappropriate, : SP, a class I railroad, operates wver trackage generally I Houston, Tex., to New Orleans, La., (2) from San Franciséo . Falls. Service over these tracks is rendered by SP at many © i Pree ae , => “ - . — LEP RE LLG BE a cain +4 =e s PEM, Pe EN MRE LEVEL SOLO REE AN SIM IAS EEL ORL EL 5 a en SO a ~~ nats points ‘south ani east of Portland- in peiien: Califtrnig \ 7 Neyada, Utah, Arizona, New Mexico, Texas, and Louisiana, \At, Portland, thié north rn. tertninus ‘of SP tracks, as noted, : connests’ with those of! UP. at an interlocking plant about . ~ ABTS. feet south of the ipatece' end of the UP-SP Steel Bridge 7 Yard ‘about 2.6 mi . ‘illiamet River at Portland. SP maintains a yard at/Brooklyn. “known as the Brooklyn south of the interlocker. Trains moving. into Portland’ froin: the south over SP line’ are generally sorted and blocked at Engene,, Oregon, about 125 miles south large ‘switching - es of Portland and move to srooklyn Yard for further block- : ing. if required before 1 they are received by UP at East Port- .. - land. SP traffic to or from Peninsula moves’ principally over” UP tracks from ‘East Portland through Albina Yard; St. - ~ Johns Junction to the North Portland interchange tracks. . In some” instance s SP traffie also moves from East Portland | “across the Ste ridge to the Portland: Terminal Company ” yard thence to Hoyt Street Yard for interchange with SP&S and. movement over. the SP&S main line tracks to” ‘North - Portland interehange. ‘The distance from Brooklyn over the “UP tracks to Peninsula is about 8.59 miles. An SP engine: = and crew is used to move ¢ars from: Brooklyn. through East Portland thence over the UP tracks to Albina. Yard. where ~” they. are: received by UP for movement to Peninsula. The switch engine and. -erew of SP. performs service from North Portland to Albina Yard as UP’s. . agent. Similarly an SP switch: engine and crew moves cars from Brookly hi over the alternate’ ‘SP&S route to North. Portland by operating as y “far as the Portland Terminal Company’s yard: where they .. are, received by Portland, ‘Terminal: ‘Company; as an agent for the-latter: company. SP represents that if it is granted” bridge trackage from the: interlocker at East Portland to”, a) | id at North Portland interchange tracks its engines and erews ean operate from Brooklyn to North Portland. : About 2 houts switching time would ‘be ‘required for a SP engine and créw to opérate between Brooklyn and Albina _ Yard/and an additional 1.5 hours between North Portland tracks between those points, A ‘10 percent random sample : consisting of 42 cars (from a total of 410 cars).of SP traffic switched to and-from Peninsula during 1967 in evidence-re. veals among other things an average of 32 hours and 10 ° ‘minutes required for car movements from. the SP inter- _ change points to Peninsula when switched: by UP or SP&S ~ -/and an average of 55. hours a % and Albina Yard or a total of about 3 hours and‘30 minutes, There are delays in the movéinent’ of traffic. over the UP » from Peninsula to the SP interthange point. SP represents that 30 hours’or more requiréd for the movement of cars between Albina and North Portland interchange is exces- sive and that SP with bridge rights can provide 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 no operating difficulties or labor complication in connection with its. proposed opera- tion over the described. UP North Portland-Brooklyn Yard tracks.. During 1967 about 490 cars were moved between Brooklyn Yard and North Portland interchange tracks over the described routes. It further represents that the proposed operation of ‘unit trains of iron ore over the described UP tracks to and from Peninsula is feasible. ‘SP proposes to provide service whieh will meet. the ship- pers’ transportation needs including. a scheduled operation: ; toand from Peninsula and-to establish Portland rates which inelude’ service to and from. Rivergate. Presently. local hoves between Peninsula and many non-competitive Oregon *. - ‘Ke h ae # . {8 ; SOE Re eeieae ween ~*. > nd 16’ miriutes when moved c.f! . BORNE Re gre sos cpg 1 peas erase ape on 98 re points require. the payment of switching cy, in addition’ - ‘to the rate to or from Portland. For example, four carloads - of lumber moved during January, ‘February, and April, 1967, by SP from Dallas, Springfield, Millersburg, and ~ North Bend, Orég., to Shefton Plywood Company, North | Portland, for which separate switching charges were paid by the shipper: Such charges usually amount to $32.29 a ear. SP absorbs switching charges'in the Portland area if. the circumstances justify, but does not absorb such charges on shipments from Oregon origins to Peninsula on low. - ‘rated non-competitive traffic. SP represents that Rivergate is unique in that it includes sevefal thousand acres of, pub- licly owned industrial land adjacent to a metropolitan. area " suitable for usé by industries; that’ the successful dey elop. ment of that property depends upon the flexibility of rail. | service - and that such service for- the development involves . major markets i in California and other states serv ed by SP. © | The SP financial statement as of December 31, 1967, shows total assets’ $2,449,441,331, including total current assets, $223,519,955, total special funds, $1,490,344; net investments, | $182,223,376, total properties less recorded depreciation ant | amortization, $2,028,866,435, and other assets and deferred charges, $13,341,221. Liabilities include current liabilities, . $186,038,487, long-term debt due within 1 year, $45,704,211, long-term debt, $730,579,135, reserves, $10,234,715, other liabilities and deferred credits, $19,328,532, and total share- holders equity, $1,497,556,251. The SP. retained income ac- . count as of December 31, 1967, reveals a eredit balance of ~ $1,032,681,210, The SP i income account fer the vears ending December 31, 1966, and December 31, 1967, rev eals among other things that for 1967 net railway operating income, $52, 521,146, total other income, $39,927,418, miscellaneous deductions from income, $86,324,468, fixed charges, $31) 607,- 107, and ordinary i income, $54, 717, 361. _ Uitwaukee, a dla I railroad, operates over main lines °° - froin Seymour, Ind.; through Chieago, Tl. -- Mimneapolis, Minn., Seattle and Tacoma, -Wash., to Longvi lew, ‘W. ashy a “point on. the Columbia River about 46 miles from Portland. Its main lines also extend from Chicago ta Council Bluffs, Towa, and to Kansas City, Mo. It serves the: grain producing _areas in Montana 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 in Tacoma, Seattle, - Everett, and Bellingham, Wash., north of Portland. Also, service is rendered at the industrial cities, among others, of ' Chieago, Milwaukee, St. -Paul, Mj neapolis, Omaha, ‘Kansas ' City, Davenport, Rock Island, Moline and Bettendorf. At the time of hearing it performe no physical operations to and from the Portland area and was awaiting final disposi- tion and consummation in Great Northern Pac.—Mi erger— Great Northern; supra. In that proceeding, the merger of GN, NP, Pacific Coast R. R. Company, and the Chicago, Burlington and Quincey Railroad Company into Great Northern Pacific & Burlington Lines, Inc., was authorized - by the Commission -i in its report of ovine 30, 1967, sub- \ ject to coriditions set forth in Appendix “L” thereof, w hich among things, perntits upon consummation of the trans- action entry by. Milwaukee into Portland and trackage. rights between Longview Junction and: Portland destribed | above in connéction with the evidence presented by SP&S. If the Milwaukee pétition herein for inclusion i8 authorized it expects to operate fast trains between Chicago, Seattle, and Portland and between Portland and Sumas, W ash., with connection at the latter point with. British - Colauabia railroads. .Howev er, such service cannot be established if Mamal delays*occur at Portland which offset the proposed 100 service advantages. Its proposed service at Portland in-. cludes physical operation of its equipment to and from the Peninsula interchange tracks at North Portland. All the ie --dustries on Peninsula would be served as on-line industries . ~ with no absorption of switching charges. Despite postpone- ment of the effeétive date of consummation in the Narthern Lines merger. case pending consideration of various peti- tions, Milwaukee expects the merger will be confirmed and. ‘consummated within a reasonable time, and contingent upon — its extension. of operations to Portland, requests joint and equal ownership of Peninsula stock with other trunk lines and proposes to assume its share of the portion of the stock ‘and indebtedness as set forth in the application. ‘Its joint - ownership is considered essential to its Portland operation - to industries located on Peninsula and at Rivergate. Penin-. sula is the only terminal facility at Portland not owried by trunk lines presently serving that point. Milwaukee has a centralized, computerized expedited service for tracing, reconsignment, and diversion of ¢ars, and for.the elimination of car delays. It owns 39, 000 freight cars and ‘in 1967 it transported 61, 140 trailers in its trailer- on-flat-car service. It ‘maintains facilities at various points . for the loading. and unloading of this type of traffic. Since 1963 it has ‘maintained a 55.5 hour schedule service from . _ Chicago to Seattle and 67.25 hour return. Milwaukee rep- resents that if its request for joint ownership and direct’ access to Peninsula is denied arid the northern lines merger consummated, Milwaukee traffic to North Portland would. move to Guild’s Lake Yard located about 6 miles south of North Portland, by Milw aukee and thence sw itched by other carriers from that point back to North Portland requiring an extra day in transit. It further. represents that such de- 101° a. a - nial would place. it ‘at great disadvantage in-competing in the Portland area because exclusive control by UP and - SP&S of Peninsula would enable those carriers -to fix the. switching charges of Peninsula to be absorbed by Milwanu- kee or paid for by shippers; that those carriers could obtain 7 trackage rights over the Peninsula lines because of their joint ownership; and could direct the service and switching | ‘to and from points on Peninsula tailored to meet operating conditions of the owner lines with lesser considerations for. operations of Milwaukee. If Milwaukee’s requests are granted, it expects to absorb the switching charges in the - Portland area to the same extent that other carriers absorb ' them. It représents that the granting of its petition would - take nothing of real importance from UP and SP&S because the real potential traffic lies in Rivergate’s future develop- ment and that the purpose of its petition was to obtain as- — “surance that it will not be foreclosed from serving Peninsula and Riyergate shippers. | Milwaukee ‘is not owned or controlled by any other rail-. toad and does ‘not own-or control any other parties to the instant proceedings directly or indirectly. Its officials and - directors have no. common interest in ‘such parties to this © proceeding. Milwaukee does own an interest in a number of other transportation companies not particularly pertinent - to these proceedings. + | As of December 31, 1967, the Milwaukee financial statement _ reveals fotal assets of $733,708,671 including current assets, : $76,187,097, ° and. special funds, $1,676,358, _investmeénts, | $26,067,221, total. property less depreciation and amortiza- tion, $625,512,008 ; other assets and deferred. charges, $4,265,987. Liabilities include current liabilities, $54,060,146, long-term debt due within 1 year, $15,925,685, long term debt due after 1 year, $284,381,173, reserves, ‘$1,448,596, s « © » . «- . . A PUT AAaae SAN Neeser feats ASRS gags Sein min e other liabilities and deferred at $4,085,187, and share- holder equity, $373, 807,884. Its inconie account for the years ° ending December 31, 1963, to and including December 31, : 1967, reveals, among other things, 1967 net railroad operat. . ing revenue, $11 439, 385, other income, $17,177 ,970,. fixed charges; $8,403,546, other deductions, $5,669,621, ordinary income, $2,733,925, prior period items, $10,222,000, and net income transferred to retained income unappropriated, © $12,955,925. Its retained income statement for the years December 31,1963 to 1967,-inclusive, reveals a credit bal- ance as of December Bh 1967 of ewe GOST STUDIES OF SP AND: UP ae SP presented cost study evidence to show (1) the esti- mated variable cost to SP for UP and SP&S to handle traffic between SP and Peninsula, (2) the estimated vari- | able cost to SP for handling traffic to and from Peninsula,. and (3) the estimated annual net effect on SP resulting , from handling traffic directly to and from Peninsula instead of bridging via UP and SP&S. The study covers a proposed operation, and certain trackage assumptions, operating -estimates of informed _personnel, all known. factors, and - @ 10 percent (42 cars) random sampling of 418 cars han- dled during 1967 by SP moved to and from Peninsula : -, were relied upon for its preparation. The study shows a weighted average car cost (35 UP cars and 7 SP&S - cars) of $44.27 to SP when UP and SP&S handled the _ traffic. Effective tariff charges of the: involved carriers were used in this portion of the ‘study. The second. part of the study shows the’ estimated variable cost to SP when handling its own traffic between East Port land and Peninsula for 1 varload-per round trip as $166.64, - - 5 carloads $12.93, 10 carloads $20.94,'15 carloads $15.53, and 90 carloads $12.93. The total of trackage, Switching, and car- | rental costs were used in computing this portion of the study. The trackage costs are calculated upon a percentage of tise by SP basis (0.58% fog 1 carload round trip and varied increased petcentages for greater numbers of cars), including 9 percent interest on reproduction costs, less depre- ciation ($5,360,000), estimated taxes ($22,000), and main- tenance ($36,300). The use basis .of computation was em- “ployed by assumption that the involved traffic Would be a small percent of the total moved over that line and that a trackage arrangement-similar to that used by SP in a Beau- . 2 mont, Tex., arrangement would be applicable. An estimated - round trip time of 205 minutes expanded 33 percent for non- productive time and expanded and-contracted for varying - the study. The third part of the study, based upon the other net loss to SP of $44,600 and Savings of $13,100 for 5 ear- loads, $85,200 for 10 carloads, $157,400-for 15 carloads, and _ loads a round a: a Ree ee UP presented similar cost study evidence which differed in three material respects, (1) the use of trackage cost based upon a numerical basis (described by UP as “user basis”); -numbers of loads:at $0.6755 average engine cost per minute . was used in calculating the switchhug costs in this part of | two parts, reveals that for one, carload. round trip, if a . handled directly by SP, would result in an estimated annual - $228,800 for 20 carloads, with a breaking point’ of 4.09 car- 3. In’ Missouri_K —7 R..Co. v. .Kansas City Terminal Co., - . that is, adjusted in relation to the number of users regard. less of individual use, (2) ‘use of the actual tax value ($122, 000) on the involved property and maintenance, both comn- puted on a “use” basis, and (3) use of a projection of the Portland ee Study costs expected. to be imple- “mented durifg 1968.: With these modifications, the UP — study reveals (1) restated estimate of variable costs to SP by UP and SP&S handling of traffic between SP and Penin- sula of $15.87 a carload weighted average (35 UP cars and 7 SP&S cars), (2) a restatement of estimated variable costs to SP for handling its own traffic from and te Peninsula for 1 carload round trip as $531.08, 5 earloads $109.55, 10 ear. loads $56.89, 15 carloads $39.30 and 20 carloads $30.63, and. (3) a-restated estimated annual'net effect on SP. resulting. from its direct handling of traffic to and from Péninsula in- stead of using UP or SP&S connections, reflecting losses of a $188,051 for 1 carload round trip, $170,965 for 5 carloads, $149,720 for 10 carloads, $128,280 for 15 carloads, and $107,- 740 for 20 carloads. Generally the studies of SP and UP differ. substantially in.their estimated annual net effects. In_ their preparation there was certain reliance upon estimates, - at least one variation in the random sampling used, impor: _derables such as estimates. and judgment factors used in calculations, and use of a.418 car frame (an unusually small - number for most satisfactory results) from which a ten per- cent sampling was taken: | os. upon the fair value of those zones of the*terminal which petitioner ~ has.acquired the right to use. Two methods of.computing that return are urged. upon us. Petitioner urges the user. basis, by which is meant that the petitioner should pay upon basis of the © relation which its use of the terminal bears to the use of all, the using carriers. This has been averaging somewhete in the neighbor- hood. of 5 percent. Respondent urges the numerical. basis, that is, adjustment in relation to. the number of users of the terminal. _ regardless of the extent of the individual use by those lines. As there are 11 users, petitioner's proportjon. under this basis would | bé one twelfth, © -- .. 2 ee Ve Zellerbach, “the ‘second largest’ producer of paper and | 105° & r _ SHIPPERS’ EVIDENCE paper articles in the United Sta of industrial chemicals, scribed.commodities each month froni the Portland area 7 __ to variou’“points throughout the. United States. Zellerbaech. has or expects to establish four facilities in the Portland area. One-is a distribution complex, Water Way Terminal number of other. carriers. At. the time of hearing, Water Way Tefminal Company facilities were being expanded _ and Zellerbach was negotiating for the purchase of a 1,500 - water-front: property located. adjacent to Ashgrove Lime Company’ at the western end of Rivergate. The second isa pole yard located on 40 acres of land owned by Zeller- bach 9 the eastern end of Rivergaté. The pole yard, as s ” noted, is served by Peninsula. The third facility is the planned construction ofa 200,000 square-foot warehouse to be located on 44 acres of land purchased from Swift & Co. At the time of hearing the land.purchase was waiting escrow dearance. The land is about 500 yards east of the SP&S __ main line at North Portland. The warehouse is expected to | ‘be used for the storing and distribution of products ofthe ~ ~ adjacent Zellerbach Flexible Packaging Division plant, the fourth facility. | oe ae During the 12 months ending November 30, 1967, 365 freight cars moved to or from the Flexible Packaging Divi- : . SAE wees ys 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. I'he delays ranged from 1 to 26 days, or an average of. 4.5 days each. ay Zellerbach supports each of the OP is and petitions e because. authorization of the proposals would increase: the number of -carriers. having direct access to Peninsula and _ inerease its” ability to obtain suitable cars, ‘and because it _ desires serv iee at, its Rivergate facilities comparable. to other transportation at Portland. It. represents. that ‘such . access could result. in the. elimination of a 22 degree curve in the present Peninsula. tracks so that 85-foot pole cars ~ can be accommodate(Mhereon. Zellerbach represents, that if SP had direct access to its’ pole yard; it would request that carrier’s service moré often. The Zellerbach representa- __ “tive Could recall no instances in’ which jit paid separate a ” ® -. & * teers re Bie hex ; ; switching charges for service to and from its facilities lo- eated on Peninsula. Zellerbach indicates that the greater the nuntber of connecting carriers required for handling ‘a shipment the greater the number of rate divi isions and cost of service. ; . ee - Oregon Steel Mills, a divietle of Gilmore Steel Corpora- tion of. San Francisco, within the past 2 years has acquired wie 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 million.” 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 tans. . The —_ site was located at Rivergate\because | it \ affords room for the mill’s expansion and for thé location. - “gi related steel fabricating industries near it\and because’ Rivergate is\considered by this ‘shipper as a transportation ‘hub. There are presently Ateel plate mills located at: Provo, | Utah, and Fontana, Calif. The Rivergate mill will be the _ first producing steel plate mill located in the Pacific North- °° | &* and its location will result in the establishment of ‘a. | ¢: basing point. at \Postland, whereas up to this time the . steel basing points’ have been at Provo and Fontana. Ore for use at the mill presently will be provided by Marconi Company transported by water carrier from Peru to River- — gate. However, Gilmore Steel Corporation*owns large iron “ore deposits near Mount Shasta, Calif., near a line of the ! __ SP. Arrangements are in progress for procuring ‘iron ore " atthe Shasta location. Oregon Steel Mills expects to ship mit trains of ore from Shasta to the Rivergate mill and ‘las ohtained assistance and information respecting pro- posed transportation costs .from SP, which ‘in turn pro- cured proposed costs of switching at Portland from UP. 7 _ SP; prior to the filing of its applications, proposed to trans- . port the shipper’s ore from Shasta to the UP Portland interchange in. SP equipment, including all terminal service charges at Shasta at $3.85 a gross ton subject to a tariff ; docketing proposal, and information. received from SP "respecting the proposed UP switching costs which was con- irmed through the UP rate department was $.23 a gross _ Oregop Steel Mills prefers a single train crew a [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0069%3A01. Public record. Not legal advice.