Finance Docket No. 10234
ST. LOUIS - SAN FRANCISCO RAILWAY COMPANY ABANDONMENT
Submitted November 23, 1934. Decided December 27, 1934.
Certificate issued permitting the St. Louis - San Francisco Railway Company and its trustees to abandon portions of the line formerly owned by the Kansas City, Clinton & Springfield Railway Company in Johnson County, Kansas, and Jackson, Cass, Henry, St. Clair, Polk, and Greene Counties, Mo. Condition prescribed.
M. G. Roberts and J. W. Murphy for applicants.
Floyd L. Sperry for protestants.
W. M. Anderson for Missouri Public Service Commission
J. H. Tedrow for Chamber of Commerce, Kansas City, Mo.
REPORT OF COMMISSION
DIVISION 4, COMMISSIONERS MEYER, PORTER, AND MAHAFFIE
BY DIVISION 4:
Exceptions to the report proposed by the examiner were filed and the case was argued orally.
The St. Louis - San Francisco Railway Company, hereinafter sometimes called the Frisco, and J. M. Kurn and John G. Lonsdale, its trustees, on November 22, 1933, jointly applied for permission to abandon those portions of the line formerly owned by the Kansas City, Clinton & Springfield Railway Company, hereinafter called the K., C., C. & S., extending from Stanley, Kans., southeasterly through Belton and Harrisonville, Mo., to Clinton, Mo., and from Tracy Junction, Mo., to Phenix, Mo., an aggregate distance of 110.3 miles, all in Johnson County, Kans., and Jackson, Cass, Henry, St. Clair, Polk, and Greene Counties, Mo. Opposition to the proposed abandonment was made by and on behalf of the communities and shippers served by the lines in question and a hearing has been had. Following the argument a petition of protest, said to contain some 10,000 signatures, was field with us. No representations have bee made by any State authority.
The portion of the line proposed to be abandoned between Stanley and Clinton will be referred to as the northern segment and the portion between Tracy Junction and Phenix as the southern segment. The portion of the northern segment between Stanley and Raymore Junction, Mo., was constructed in 1871 by a predecessor of the K., C., C. & S. and the remainder of the line was constructed by the K., C., C. & S. in 1886. By report and order in Kansas City, Clinton & Springfield Ry. Control , 94 I.C.C. 5, we authorized the Kansas City, Fort Scott & Memphis Railroad Company to acquire control of the K., C., C. & S. by purchase of capital stock and authorized the Frisco to acquire control of the properties of the K., C., C. & S.under lease. By report and certificate in St. Louis-S. F. Ry Co. Acquisition, 145 I.C.C. 110, we authorized the Frisco, inter alia to acquire and operate the lines of the K., C., C. & S. By report and certificate in St. Louis-S. F. Ry Co. Abandonment , 145 I.C.C. 379, we permitted the Frisco to abandon operation of that portion of the northern segment between Stanley and Belton, 8.98 miles. Operation was abandoned September 20, 1928.
The northern segment connects with the Frisco's Kansas City - Springfield, Mo. line, generally called the high line, at Belton and parallels that line generally to another connection with it at Clinton, approximately 57.2 miles. The southern segment extends from a connection with the high line at Tracy Junction to a connection with the Frisco's Springfield - Fort Scott line at Ash Grove, Mo., and generally parallels the high line for the entire distance. The applicants proposed to abandon this segment between Tracy Junction and Phenix, 44.1 miles, the latter point being located about 5.4 miles north of Ash Grove.
The applicants state that the line of the K., C., C. & S.is in poor physical condition. It is laid principally with 56-lb rail, which has been in the track for about 50 years and is service bent and line kinked. The lines originally had several light steel bridges, a number of which have been replaced with pile trestles and some have been strengthened by doubling the girders. There remain two of these weak bridges which must soon be replaced. Meanwhile they limit the car and engine loading on the line. There are 52 bridges on the segment between Belton and Clinton and 44 bridges between Tracy Junction and Phenix, aggregating 9,218 feet in length. Their maximum height is 41 feet. The maximum grade on the line is 1.75 percent and the maximum curve is 6 degrees. The ties generally are in poor condition and the track is inadequately ballasted. The applicants estimated the cost of rehabilitation of the northern segment from Belton to Clinton and the entire southern segment, including deferred maintenance, at $526,312.[?? -need to check these figures] This estimate contemplates the continued use of 56-pound rail. The cost of similar rehabilitation of the line between Stanley and Belton is estimated at $93,447. The cost of rehabilitating the lines and using 90-pound rail is estimated at $798,908 and $150,446 respectively. It is contended that the installation of 90-pound rail would permit of the handling of heavier cars and loads on the lines, resulting in greater economy in operation and maintenance.
The K. C., C. & S. is divided into two operating subdistricts, namely Ash Grove to Clinton and Clinton to Grandview, the latter point being located on the high line north of Belton. On the southern segment mixed service is afforded triweekly, trains moving from Ash Grove to Clinton on Tuesday, Thursday, and Saturday, and in the opposite direction on Monday, Wednesday, and Friday. On the northern segment, service is afforded from Clinton to Grandview on Monday, Wednesday, and Friday, and in the opposite direction on Tuesday, Thursday, and Saturday. The service is coordinated with that on the high line so as to result substantially in daily service on the segments. For instance, a shipment leaving Kansas City on Monday destined for Urich would be transferred at Grandview for movement on the southbound train over the segment on Tuesday; while a shipment leaving Kansas City on Tuesday for the same destination would be taken to Clinton and there turned over to the northbound train on the segment for delivery Wednesday. The same system prevails on the southern segment.
The area traversed by both segments is devoted chiefly to farming and stock raising. The communities served by the northern segment and their populations are as follows: Belton 992, Raymore 222, Coleman 37, Harrisonville 2,306, Daugherty 65, Garden City 632, Creighton 289, Urich 507, Hartwell 116, and Clinton 5,744. Belton, Harrisonville, and Clinton will continue to receive service from the high line in the event of abandonment as proposed herein. Harrisonville and Clinton are served by the Missouri-Kansas-Texas and Harrisonville also is served by the Missouri Pacific. On the southern segment the communities served and their populations are show as follows: Collins 243, Humansville 1,022, Dunnegan 275, Fairplay 454, Aldrich 283, Eudora 75, and Walnut Grove 387. The point last named is also served by the high line.
The testimony on behalf of the applicants is that the principal traffic moving to and from the segments consists largely of the heavy and bulky commodities not readily moved by truck, such as livestock, grain, hay, wheat, petroleum products, coal, fertilizer, salt, etc. Most of the general supplies for the various communities are trucked in and a considerable volume of agricultural and daily products and livestock moves out by truck. The highways throughout the area are generally good. Coal is produced in the vicinity of Clinton and adjacent to the portion of the high line between Clinton and Tracy Junction. A considerable quantity of this coal is trucked to the communities in the areas traversed by the segment in question.
The principal industry at Raymore is a lumber and hardware business. While considerable livestock is raised in the vicinity, a large part of it is trucked to Kansas City, a distance of 28 miles. In the event of abandonment the nearest point at which rail service could be had is Belton, 4.9 miles by highway. At Daugherty there is an elevator, which has not been used for several years. Garden City has an elevator, grain mill, telephone-pole yard, two retail coal yards, and three bulk-oil stations. In the event of abandonment the principal point for shipping and receiving freight would be Harrisonville, about 12 miles by highway. The principal industry at Creighton is a lumber yard. There are stock pens at that point, but no livestock has been shipped since 1931. Urich has two elevators, three bulk-oil stations, two produce houses, and a coal yard. The applicants state that considerable livestock and dairy products are trucked from this point to Kansas City. At Collins there are a lumber yard and a canning factory, but the latter has not been in operation for several years. The filling stations secure their supplies by truck from Weaubleau and Osceola on the high line, 5 and 13 miles distant, respectively, and Humansville on the segment. At Humansville there is a berry-loading platform which has not been used for several years, also a feed mill and elevator, three bulk-oil stations, an ice plant, and a cheese factory. The two last named furnish but little traffic for the line. A considerable volume of traffic is trucked from Kansas City, Springfield, and Clinton. The nearest point on the high line is Flemington, about 5 miles by road. There are stock pens at Dunnegan, but they have not been used since 1930. The filling stations receive their supplies by truck. Fairplay has an elevator, two feed mills, two bulk-oil stations, and a lumber yard. The elevator has not been operated for several years and this is also true of a canning factory at that point. The nearest point on the high line is Bolivar, about 10 miles by highway. The principal industry at Aldrich is a lumber and grain business. The nearest high-line point is Bolivar, approximately 13 miles. No carload traffic has been handled to or from Eudora for several years. Graydon Springs on the high line is about 3 miles distant. At Phenix there are two industries, one producing rough and finished marble and the other crushed stone. This community will continue to be served as the terminus of a branch line extending from Ash Grove.
In support of their contention that the segments in question do not handle sufficient traffic to justify their continued operation, the applicants submit figures on traffic handled during the period 1928-1933 which show carload traffic received ranging from a high of 2,006 cars in 1932 to a low of 1,090 cars in 1933. The corresponding figures for traffic forwarded as 1,108 cars in 1928 and 271 cars in 1933. Less-than-carload traffic received and forwarded ranged from a high of 3,789 tons in 1928 to a low of 699 tons in 1933. During the five years 1928-1932 an average of 1,534 cars were handled annually over the segments in through or bridge movement.
A statement submitted by the applicants for the purpose of showing results of operation on the segments in question jointly for the years 1928-1933, indicates that freight revenues declined from $80,018 in 1928 to $40,250 in 1933; passenger revenues declined from $12,529 to $732, mail revenues amounted to $10,197 in 1928, $11,165 for each of the three years following, $214 in 1921, and none in 1933; express revenues declined from $6,104 to $1,508, and miscellaneous revenues from $3,516 to $455. Operating expenses declined from $201,357 in 1928 to $93,414 in 1933. Taxes average $11,393 a year for the 6-year period. Net deficit in railway operating income is show as $101,403 in 1928, $97,818 in 1929, $119,134 in 1930, $76,874 in 1931, $38,705 in 1932, and $59,844 in 1933.
Of the freight revenue mentioned, the following amounts represent revenue received for the movement of material for construction of highways, considered to be nonrecurrent traffic; 1929, $649; 1930, $5,734; 1931, $936; and 1932,$18,424. Revenues from freight traffic originating and terminating on the segments are assigned 100 percent thereto and the same method is followed so far as divisions are concerned for traffic originating or terminating on their segment and interchanged directly between such segment and a foreign line. For traffic originating on the segments and destined beyond the revenue is ascertained in total and prorated to the segments on a mileage basis. For traffic normally received on the lines an apportionment of 25 per cent of the total revenues accruing to the applicants was made, and on certain commodities not handled in regular movement the revenues were apportioned on a mileage basis. Revenue from bridge traffic moving over the segments was apportioned on a mileage basis and amounts to the following sums for the years 1928-1932: 1928, $30,708; 1929, $23,477; 1930, $28,965; 1931, $27,332; and 1932 $24,142. Passenger revenues are assigned on a mileage basis. On express revenues 40 percent of the gross was determined as the net revenue received by the applicants and 50 percent of that amount was assigned to the segments. The mail revenues shown are actual, but which the elimination of operation of a passenger motor car daily in 1932 this revenue ceased. Miscellaneous revenues are derived from excess baggage and milk and cream, the former being assigned 100 percent to the segments and the latter 50 percent.
Expenditures for maintenance of way and structures are actual, maintenance of equipment, including depreciation, is apportioned on a mileage basis, and transportation expenses are actual so far as wages and other ascertainable items are concerned and are apportioned for fuel, enginehouses expenses, water, lubricants, etc. Taxes are actual. Nothing is included for supervision, general, or traffic expense, or hire of equipment. At Grandview, a track of the Kansas City Southern Railway Company is used in securing fuel and water for locomotives. The rental for this track is prorated on the basis of its use by the locomotives serving the northern segment. Nothing, however, is included for the use of a switching engine at Clinton, which serves both segments and another line of the Frisco at that point. No deduction in revenue has been made for traffic moving over that portion of the high line between Clinton and Tracy Junction, nor was any expense assigned for such operation., No assignment of expense for the movement of trains between Belton and Grandview Junction, 5.5 miles, has been made. The above figures do no, of course, apply to the portion of the northern segment between Stanley and Belton.
Separation of the income statement figures for the year 1928 shows for the northern segment total operating revenues $58,370, total operating expenses $93235, taxes $6,348, and net railway operating deficit $41,213, and for the southern segment total operating revenues $53,994, total operating expense $108,122, taxes $6,062, and net railway operating deficit $60,190.
Total freight revenue accruing to the system from traffic originating or destined to points on the segments are shown as follows: 1928, $173,608; 1929, $161,836; 1930, $149,677; 1931, $95,002; and 1932, 122,858. For the same years the amounts accruing to the system from bridge traffic moving over the segments were $84,791, $72,108, $124,854, $111,876, and $80,958 respectively. The following daily averages for the years 1928-1932 on the bases of 366 days in 1928 and 1932 and 365 days in the other years and operation of 101.3 miles of line (excluding the portion Stanley to Belton) are shown as follows: Operating revenues $245, operating expenses $451, taxes $32, net railway operating deficit $238; cars of revenue freight, received, 4.3, delivered 1.7, pass over 4.2, total 10.2; and tons of less-than-carload freight, received 5.8, delivered 0.6, total 6.4. By eliminating the bridge traffic, which could move as well over the high line, there was an average of six cars received and delivered on the segments in question, involving train movements of 202.6 miles. Using the basis of an average of 2,212 cars a year received and delivered on the segments during the same 5-year period and one trip daily except Sunday, for a distance of 101.3 miles, it is shown there were handled an average of 42.64 cars a week or 7.09 cars a day, including road-building material.
As indicating the extent to which trucks are used in the area traversed by the segments, the applicants show that there are 54 common-carrier truck lines, 7 regular truck operators, and 50 uncertificated and private truck operators handling traffic to and from the various communities served by the railroad. There are also two bus lines in operation. A check made on Highway No. 13, at Osceola, a point on the high line about 5 miles north of Tracy Junction, for the 24-hour period from noon of April 17 to noon of April 18, 1934, shows 51 loaded trucks and 25 empty trucks. Of the total of 76 trucks, 25 were private, 11 displayed Public Service Commission numbers, and 40 did not. There were also three buses in each direction and a total of 456 passenger automobiles. A similar check made at the intersection of Highways 13 and 36, near Clinton, for the 24-hour period from noon of April 18 to noon of April 19, 1934, showed 68 loaded trucks and 55 empty trucks, of which 42 were private trucks, 18 displayed Public Service Commission numbers, and 63 did not. Five busses passed in each direction and 1,018 passenger automobiles were counted. The applicants further show that in 1925 the Frisco handled into Kansas City a total of 364,968 head of livestock and there were brought in by all railroad lines a total of 6,171,016 head, which 354,184 head, or 5.4 per cent, were handled by trucks. In 1933 the Frisco hauled to Kansas City 106,139 head, the total for all railroad lines was 3,129,851 head, and trucks handled 2,338,315 head, or 42.7 per cent. The number of trucks engaged in this business increased from 90,010 in 1928, the first year in which a count was made, to 170,363.
On behalf of the protestants, the testimony generally is that the area traversed by the segments has been seriously affected by the economic depression; that many banks have failed, and that the resultant shortage of funds has prohibited the purchase of commodities in carloads by the traders; that the abandonment of the segments will result in ruin to many merchants located in the communities served; that serious depreciation of property values will result from such abandonment; and that some of the highways in the area will not permit of all-weather heavy trucking. Criticism is also made of the rates and minimum rates applying on certain traffic and of the applicants' failure generally to meet truck competition.
Under present conditions towns on the northern segment take the Kansas City rate on grain from certain points in Kansas and Nebraska and the same is true of corresponding stations on the high line. This rate situation also exits on some commodities to towns on the southern segment, while in other instances the rates are slightly higher, and the protestants allege that the abandonment of the segments will result in cessation of all grain movements to or from communities now served by the K. C., C. & S., as the additional trucking charge from the high line would be prohibitive. It is admitted, however, that practically all the grain coming into the area is now moved by trucks, but the protestants contend that this could be remedied and the traffic returned to the railroad if the carload minimum weights were reduced. Corn is trucked for distances ranging from 150 to 300 miles.
A witness who is undertaking to develop a coal deposit about 2 miles north of Urich testified he is preparing to purchase a large shovel for stripping operations, with which he can produce 8 to 12 carloads of coal a day, but that he is handicapped in reaching Kansas City, his principal market, because of lower freight rates in effect from competitive points principally east of Kansas City on other lines of railroad. It would be necessary to truck the coal from the mining operations to the line at Urich. On behalf of the applicants it is shown that rates on coal from Missouri and Kansas mines, interstate and intrastate, have been fixed by this commission and the State commission following investigations. The record shows that coal produced in the area is trucked extensively to the communities on the line sought to be abandoned, while at least one coal dealer receives his supply by rail from Illinois. Considerable coal is produced along the portion of the high line between Clinton and Tracy Junction, and the testimony is that there are considerable volumes of unmined coal between Clinton and Urich.
A representative of a produce company engaged in the handling of eggs, poultry, and country produce, and having branches and agents at points served by the segment involved, testified that the service and rates offered have been such that the use of trucks became necessary. In warm weather it is not possible to hold butter fat and other perishable products to await movements under triweekly service. Increase in less-than-carload rates on egg-case material prohibits the purchase of that commodity in carload lots for redistribution in small consignments along the line. Prior to about a year ago the same rate applied on eggs moving from Humansville and Springfield to St. Louis. The rate from Springfield to St. Louis proper was then reduced to meeting truck competition, leaving a higher rate in effect from Humansville on that traffic, while the rate on eggs store in transit at St. Louis for movement to points east of the Indiana State line remained the same. This resulted in the trucking of a large quantity of eggs to St. Louis. The distances via highway and railroad are approximately the same.
The protestants attack the applicant's evidence relating to highways, especially those roads connecting towns on the southern segment with shipping points on the high line. It is alleged that the roads from Eudora to Graydon Springs, Aldrich to Wishart or Bolivar, Dunnegan to Cliquot, and Humansville to Flemington are not of the type that will permit of heavy trucking. The are described generally as narrow, with heavy grades, and the portions that extend through the draws at the base of the grades are subject to overflow after heavy rains. This latter condition is particularly true where the roads cross the creeks on concrete slabs laid on the creek beds to permit vehicles to ford the streams. It is further alleged that the roads are unsafe for travel when wet. The applicants submitted numerous photographs of the highways adjacent to the segments and the high line and these photographs indicate that such highways generally are in good condition for the transportation of the traffic that would move over them. It is contended by the protestants that the worst spots in the highways are not shown in the photographs and that the highways are not stronger than there weakest links. It would appear, however, that any weak spots may readily be strengthened, but in any event, the absence of adequate highways would not justify the continued operation of a line of railroad at a substantial loss to the carrier.
The protestants also question the applicant's statement that the road-building material handled in previous years is nonrecurrent traffic. They undertake to show, principally by cross-examination of applicants' witness, that the construction or improvement of various highways is in prospect and that the material for such work would move from Phenix over the lines here in question. It appears, however, that crushed limestone, such as is produced at Phenix, is not used for highway construction in Missouri. The materially generally used is either bank, creek, or river gravel, and there is nothing to show any movement of that material from Phenix or vicinity.
The protestant assert that the volume of traffic on the segments is greater than on the high line; that the use of the segments shortens the distance between Kansas City and Springfield; and that the paralleling high line could be abandoned with less inconvenience to the public than could the segments. The applicants show, however, that for the period 1926-1933 the average train-miles, gross and net ton-miles, and gross tons per train on the high line substantially exceeded those on the segments.
At the hearing, counsel for the parties stipulated that the record in Finance Docket No. 6598, St. Louis-S.F. Ry. Co. Abandonment, supra, be included in the record herein form the purpose of showing that at the time of that proceeding (1928) the Frisco state that it had no intention of abandoning the line of the K. C., C. & S. piecemeal and that, following the acquisition by the Frisco of the K. C., C. & S., through traffic moving via Olathe had been rerouted away from that line. It is further alleged by the protestants that while our authorization permitted abandonment of operation only, part of the line has been removed. In regard to the point last mentioned, the applicants state that the crossing of the Missouri Pacific track at Mastin has been removed, that some of the goods ties have been taken out for use elsewhere, and that a farmer through whose property the line ran removed about a mile of rail and defied the Frisco to require him to replace it. The remaining allegations of the protestants regarding the line west of Belton appear to be irrelevant to the present inquiry, inasmuch as the applicants were permitted under date of January 29, 1934, to abandon that portion of the line between a connection with its main line near Olathe and Stanley, St. Louis-S. F. Ry. Co. Abandonment, 199 I.C.C. 153. With the abandonment of that line it would be impossible to handle through traffic to and from points beyond Olathe over the line of the K. C., C. & S.
Witness for the protestants state that the residents of the communities served by the segments would be willing to cooperate with each other and with the applicants in an effort to furnish sufficient traffic for the segments to justify continued operation, and counsel for the protestants request that before permission to abandon is granted an opportunity be given to negotiate with the applicants along this line. It appears, however, that the protestants consider necessary the reduction of carload rates and minimum weights and also a reduction of less-than-carload rates to meet the rates charged by the truck. Truck rates are prescribed by the State commission.
It appears from the record that there is not, and will not be, sufficient traffic available to the segments of the K. C., C. & S. to justify their continued operation. As previously state, the segments are not needed by the Frisco for the handling of through traffic, inasmuch as the carrier has a main line between Kansas City and Springfield via Fort Scott, as well as the high line which parallels the segments. The receipt and delivery of an average of seven carloads of freight a day, including nonrecurrent road-building material, for a hual of approximately 100 miles indicates that the volume of traffic is too light to justify the expense of operation. While the protestants content that the lines would receive a larger volume of traffic if the rates and carload minimum weights were reduced, there is no showing that the existing rates and weights are unreasonable. The fact appears to be rather that the dealers can trade better in volumes or truck loads than carloads. While the protestant contend that the depression has seriously affected the volume of traffic moving over the line, the fact is that the average number of cars received and delivered during the years 1928 and 1929 was 7.83 a day for a distance of 101.3 miles as compared with 7.09 cars for the 5 year period 1928-1932. The protestants further contend that the K. C. C. & S. was operated at a profit prior to its acquisition by the Frisco and that it has become a losing line only since the Frisco undertook its operations. The testimony on behalf of the applicants , however, is that prior to 1924 the K. C., C. & S. was independently operated and that, despite the absence of present-day truck competition, an average operating deficit of $52,233 was incurred for the years 1916-1924. The continued operation of the lines in question would impose an undue burden upon the applicants and upon interstate commerce.
At the hearing, witnesses for the protestants state that in the event of permission to abandon being granted it was desired that the protestant be given an opportunity to purchase the lines at their salvage value. On argument, counsel for the protestants stated that it would be useless for them to purchase and operate the lines because of the fact that the applicants will retain the terminals and Harrisonville and Clinton and there would be no connection between the segments. it is possible that the disadvantages mentioned by counsel might be corrected through the granting of terminal rights at the points named and trackage rights over the line between Clinton and Tracy Junction, such rights to be accorded on fair and reasonable basis. Our certificate herein will contain the condition that the segments shall be sold to any person, firm, or corporation offering to purchase them for continued operation and willing to pay therefore not less than the fair net salvage value thereof, and that terminal and trackage rights shall be accorded as state above.
We find that the present and future public convenience and necessity permit abandonment by the St. Louis-San Francisco Railway Company, and by J. M. Kurn and John G. Lonsdale, its trustees, of the lines of railroad in Johnson County, Kans., and Jackson, Cass, Henry, St. Clair, Polk, and Greene Counties, Mo.,,described in the application. An appropriate certificate will be issued, effective from and after 60 days from its date and containing suitable provision for the cancellation of tariffs. Such certificate will also provide that prior to the effective date thereof the said lines of railroad shall be sold, and terminal and trackage rights granted as stated herein.