1. Where most of a short railway was included in the limits of a
government flood control reservoir, and continued operation of the
remaining portion would serve no practical purpose, and the cost of
relocating and rebuilding the line, and the increased expenses of
operating it if relocated, would not be justified by pubic
convenience and necessity, the Interstate Commerce Commission was
authorized by § 1(18) of the Interstate Commerce Act to permit
abandonment of the line in its entirety. P.
315 U. S.
383.
2. In such a case it was proper for the Commission to consider
the cost of relocation, even though it would be paid not by the
railway company, but by the Government, for, in determining such
applications, the interests of those served by the existing line
are balanced against the interests of the carrier and the
transportation system, and operation of that system without waste
was one of the objects of the Transportation Act of 1920. P.
315 U. S.
384.
41 F. Supp. 309 affirmed.
Appeal from a decree dismissing a bill to annul an order of the
Interstate Commerce Commission permitting abandonment of a railway
line.
Page 315 U. S. 382
MR. JUSTICE BLACK delivered the opinion of the Court.
A federal district court, composed of three judges in accordance
with 28 U.S.C. § 47, dismissed the appellants' bill which prayed
for the annulment of an order of the Interstate Commerce
Commission. 41 F. Supp. 309. The order permitted the Confluence and
Oakland Railroad Company, as owner, and the Baltimore and Ohio
Railroad Company, as lessee, to abandon a railroad line
approximately 20 miles long and to discontinue service entirely in
the area now served: a semi-mountainous section along the
Youghiogheny River between Confluence and Oakland Junction,
Pennsylvania, and Kendall, Maryland. The appellants, who also
appeared as protestants before the Interstate Commerce Commission,
are the Public Service Commission of Maryland and the McCullough
Coal Corporation, a coal mining company which alleges it will be
forced out of business if railroad service is discontinued.
The application to the Commission for abandonment was not made
because the line had been operating at a loss. On the contrary, the
Commission concluded that there was no evidence that the line had
theretofore been a burden on the Baltimore and Ohio system, of
which it was a part, or that a predictable decline in the volume of
traffic would make it one in the future if it were allowed to
continue in existence undisturbed. 244 I.C.C. 451, 458; 247 I.C.C.
399, 401. But continued undisturbed existence would be an
impossibility in view of a flood control project already begun by
the War Department under authority of an Act of Congress. 52 Stat.
1215-1216. This project entails the construction of a dam which
will create a reservoir covering an area in which twelve miles of
the line are now located. It is conceded that, unless a new
connecting section is built, the sections of the line not to be
inundated -- a detached six mile segment above the dam,
Page 315 U. S. 383
and a one mile segment connecting with the main line of the
Baltimore and Ohio below it -- would serve no practical purpose
justifying continued operation.
The appellants do not challenge the statutory authority of the
War Department to submerge the line as it proposes to do. Nor do
they suggest that the Commission could or should take any action to
deter completion of the project. Nevertheless, they contend that,
since
"the sole reason for the abandonment was the flood control
project, the application should have been denied forthwith by the
Commission because of lack of jurisdiction to grant an abandonment
on such ground."
But, under § 1(18) of the Interstate Commerce Act, the standard
prescribed for the Commission in cases of this kind is whether "the
present or future public convenience and necessity permit of such
abandonment." 49 U.S.C. § 1(18). It is difficult to imagine what
consideration of present or future public convenience could
reasonably impel the Commission to decline to authorize abandonment
of a line admittedly doomed to be rendered inoperable regardless of
what action the Commission might take. And the appellants suggest
none. We must dismiss the appellants' contention on this point as
without merit. [
Footnote 1]
The appellants make the further argument that, even if the
Commission did not err in permitting abandonment of the line, its
order cannot stand because of the failure to
Page 315 U. S. 384
impose a condition that substitute service be provided by
relocating the line. [
Footnote
2] After hearing testimony on the probable cost of relocation
and the probable cost of maintaining a relocated line, the
Commission concluded that,
"considering the expenditure necessarily incident to that
relocation and the increased costs of operating the line that will
be caused thereby . . . , we are not justified by the public
convenience and necessity in taking action herein that will require
the relocation of the line."
The appellants do not contest the Commission's finding, amply
supported by evidence, that the relocated line would require
increased operating expenses. If the Commission had based its
conclusion on this finding alone, there would seem to be no
adequate ground for setting its order aside in judicial
proceedings. The Commission did consider relocation costs, however,
and the appellants contend that this was an improper consideration
which invalidates its order.
In making this attack on the order, the appellants contend that,
under the statute authorizing the War Department to construct flood
control projects, the cost of relocation would have to be borne by
the government, rather than the railroad. Cost thus borne would not
affect the financial condition of the railroad itself, the
appellants urge, and therefore there could be no such weakening of
the railroad's capital structure as would adversely affect the
transportation system. Hence, the argument continues, in that
balancing of the interests of those now served by the present line,
on the one hand, and the interests of the carrier and the
transportation system, on the other, which a proper disposition of
abandonment
Page 315 U. S. 385
applications requires,
Colorado v. United States,
271 U. S. 153, the
former interests must prevail.
As the court below pointed out, however, "an uneconomic outlay
of funds would not be in the interests of transportation even
though the money be derived from the national government." This
Court has recognized that operation of the national railway system
without waste was one of the purposes the Transportation Act of
1920 was intended to further.
Texas v. United States,
292 U. S. 522,
292 U. S. 530;
Texas & Pacific Ry. Co. v. Gulf, C. & S.F. Ry.
Co., 270 U. S. 266,
270 U. S. 277.
And a stated purpose of the Transportation Act of 1940, in the
light of which Congress prescribed that the "Act shall be
administered and enforced" is "to promote . . . adequate,
economical, and efficient service and foster sound economic
conditions in transportation and among the several carriers." 54
Stat. 899. When materials and labor are devoted to the building of
a line in an amount that cannot be justified in terms of the
reasonably predictable revenues, there is ample ground to support a
conclusion that the expenditures are wasteful whoever foots the
bill. The fostering care of the railroad system entrusted to the
Commission is not so circumscribed as to leave it without authority
to pass on the economic advisability of relocation in a situation
where someone other than the carrier provides the money. The weight
to be given to cost of a relocated line, as against the adverse
effects upon those served by the abandoned line, is a matter which
the experience of the Commission qualifies it to decide. And, under
the statute, it is not a matter for judicial re-decision. Nor is
there any indication in the Flood Control Act of 1938 that Congress
desires to take away from the Commission any of the powers to make
decisions of this kind which the Interstate Commerce Act had
previously granted it.
The judgment of the court below is
Affirmed.
[
Footnote 1]
Where projected inundation of a line made discontinuation of
operations over it compulsory, the Commission has consistently
given its authorization for abandonment.
See Los Angeles
& S.L. R. Co. Abandonment, 212 I.C.C. 597, 598:
"It is apparent from the record that, under the circumstances
stated above, the proposed abandonment is compulsory, and will not
result in public inconvenience."
In some such situations, the Commission has attached the
condition of relocation.
E.g., St. Louis S.F. Ry. Co.
Trustees Abandonment, 244 I.C.C. 485. In others, it has not.
E.g., Southern Ry. Co. Abandonment, 217 I.C.C. 764.
[
Footnote 2]
The Commission is empowered to attach conditions by Section
1(20) of the Interstate Commerce Act which provides in part: "The
commission . . . may attach . . . such terms and conditions as in
its judgment the public convenience and necessity may require." 49
U.S.C. § 1(20).