10. In Finance Docket No. 28583 (Sub-No. 9F), the Chicago and North Western Transportation Company application for trackage rights over Burlington Northern, Inc. between East Minneapolis, MN, and East Superior, WI, is dismissed. 11. In Finance Docket No. 28583 (Sub-No. 10F), the application of William M. Gibbons, trustee of the property of the Chicago, Rock Island and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Lincoln and Havelock, NE was dismissed.2 12. In Finance Docket No. 28583 (Sub-No. 11F), the application of William M. Gibbons, trustee of the property of the Chicago, Rock Island and Pacific Railroad Company, debtor, for trackage rights over the Colorado and Southern Railroad Company between Denver and Golden, CO, is denied. 13. In Finance Docket No. 28583 (Sub-No. 12F), the application of William M. Gibbons, trustee of the property of the Chicago, Rock Island and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc., between Ottawa and Streator, IL, was dismissed." 14. In Finance Docket No. 28583 (Sub-No. 13F), the application of Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Terry, MT, and Spokane, WA, was dismissed.' 15. In Finance Docket No. 28583 (Sub-No. 14F), the application of Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Tacoma and Chehalis, WA, was dismissed." 16. In Finance Docket No. 28583 (Sub-No. 15F), the application of Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc., between Miles City, MT, and all present and future coal mines located on BN in Montana was rejected." 17. In Finance Docket No. 28583 (Sub-No. 16F), the application of Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Council Bluffs, IA, and Kansas City, MO, was dismissed." 18. In Finance Docket No. 28583 (Sub-No. 17F), the application of Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Bellingham and Cherry Point, WA, was dismissed." 19. In Finance Docket No. 28583 (Sub-No. 18F), the Southern Pacific Transportation Company application for trackage rights over Burlington Northern, Inc., and the Union Pacific Railroad Company, between the connection of BN and the Portland Terminal Railroad Company and (1) trackage serving North Rivergate and (2) the Barnes Yard of Union Pacific Railroad Company, as amended, is denied. The decision to dismiss this proceeding was made November 29, 1978, and served December 5. 1978. Id. 'Id. Id: "The decision to reject this application was made August 18, 1978, and served August 25, 1978. 'The decision to dismiss this proceeding was made November 29, 1978, and served December 5, 1978. "Id. 20. In Finance Docket No. 28583 (Sub-No. 19F), the Atchison, Topeka and Santa Fe Railway Company application for trackage rights over the St. Louis-San Francisco Railway Company between Tulsa and Oklahoma City, OK, is dismissed. 21. In Finance Docket No. 28583 (Sub-No. 20F), the Montana Wheat Research and Marketing Committee application for Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, to obtain trackage rights over Burlington Northern, Inc., lines in Montana was rejected." 22. In Finance Docket No. 28583 (Sub-No. 21F), the Wyo-Ben, Inc., application for Stanley E. G. Hillman, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, to obtain trackage rights over Burlington Northern, Inc., between Billings, MT, and Shobon, WY, was rejected."" 23. In Finance Docket No. 28583 (Sub-No. 22F), the application of Richard B. Ogilvie, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor, for trackage rights over Burlington Northern, Inc. between Miles City, MT, and Big Sky and Kuehn, MT, is denied. 24. In Finance Docket No. 28583 (Sub-No. 23F), the Illinois Central Gulf Railroad Company application for terminal operations over the Missouri Pacific Railroad Company in Memphis, TN, is denied. Christian Campbell, Eric Cunningham, Donald Engle, Frank Farrell, John Haley, Martin Lucente, G. Paul Moates, Nicholas P. Moros, and James Walker for applicants Burlington Northern, Inc. and St. Louis-San Francisco Railway Company. James Armstrong for the Department of Defense. Barbara Anthony, Arthur Federman, Joen Grant, and Cristy Passman for the Department of Justice. James Baxendale, Robert Heath, and Diane Liff for the Department of Transportation." Toby Dress for the Interstate Commerce Commission, Section of Energy and Environment. Michael Blaszak, Harry DeLung, Milton Nelson, Craig Smetko, and Dennis Wilson for Atchison, Topeka and Santa Fe Railway Company. Louis Duerinck, Stuart Gassner, Christopher Mills, and Anne Valle for Chicago and North Western Transportation Company. Sarah Holzsweig, Thomas Ploss, and William Sippel for Richard B. Ogilvie, trustee of the property of Chicago, Milwaukee, St. Paul and Pacific Railroad Company, debtor. Martin Cassell, Nicholas Manos, and Don McDevitt for William M. Gibbons, trustee of the property of the Chicago, Rock Island and Pacific Railroad Company, debtor. "The decision to reject this application was made August 18, 1978, and served August 25, 1978. Id. "DOT did not cross-examine witnesses, present evidence, take a position, or file a brief in these proceedings. It will not be mentioned again in this decision. Fritz Kahn and Kendall Sanford for Denver and Rio Grande Western Railroad Company. John Adams and Howard Koontz for Illinois Central Gulf Railroad Company. Philip Brown for Kansas City Southern Railroad Company. Michael Roper, Harry Silleck, and William Thie for MissouriKansas-Texas Railroad Company. Leon Leighton for Missouri Pacific Railroad Company. Emreid Cole and Edward Tannen for Seaboard Coast Line Railroad Company, Louisville and Nashville Railroad Company, Clinchfield Railroad Company, Georgia Railroad, Atlanta and West Point Railroad Company, and Western Railway of Alabama. F. W. Crouch, Robert Gehrz, and C. Harold Peterson for Soo Line Railroad Company. Charles Burkett, Marc Feldman, Carol Harris, and Jane White for Southern Pacific Transportation Company and St. Louis Southwestern Railway Company. R. Allen Wimbish for Southern Railway Company. Joseph Adams, William Higgins, Peter Hohenhaus, Mark Kalafut, James Lowe, and John Weisser for Union Pacific Railroad Company. T. Scott Bannister for the Iowa Department of Transportation, Transportation Regulation Board. Richard Friedman and Harold Mesirow for the Illinois Department of Transportation. John Finnigan for the Nebraska Public Service Commission. David Tiistola for the North Dakota Public Service Commission. William Hickey and Thomas Woodley for the Railway Employees' Department, AFL-CIO. John Clark, Joseph Guerrieri, and William Mahoney for the Railway Labor Executives' Association. Gordon MacDougall for John W. McGinness, Illinois Legislative Director of the United Transportation Union and M. S. Stuckey, general chairman of United Transportation Union on Illinois Central Gulf Railroad Company. M. M. Winter for the United Transportation Union. James Irlandi for Garvey, Inc. Jon Hansen for the Kansas City Board of Trade. Mike Miller for the North Dakota State Wheat Commission. Griffin Dorschel for the Wisconsin Power and Light Company. John O'Neil, pro se. BY THE COMMISSION: DECISION INTRODUCTION Burlington Northern, Inc. (BN or Burlington) and the St. LouisSan Francisco Railway Company (SLSF or Frisco), common carriers by railroad with principal offices at St. Paul, MN, and St. Louis, MO, respectively, propose to merge Frisco into Burlington. The resulting entity will be a single railroad operating over more than 29,000 miles of track through the northern tier of States between the Pacific Northwest and the Great Lakes, and between the Great Lakes and the Gulf of Mexico. The merger proposal is contained in: (1) a joint application filed by BN and Frisco on December 28, 1977, seeking authority for the merger under 49 U.S.C. 11343, et seq.; (2) a concurrently filed application under 49 U.S.C. 11301 in which BN seeks authority to issue certain securities and to assume certain obligations and liabilities in connection with the proposed merger; and (3) an application filed January 16, 1978, under 49 U.S.C. 11343, et seq. in which BN seeks authority to acquire control of Frisco's wholly owned motor carrier subsidiary, Frisco Transportation Company (FTC). We accepted these applications for filing on January 27, 1978, and published an appropriate notice in the Federal Register.12 In that notice we waived an initial decision by the Administrative Law Judge, and determined that the merits of these applications would be decided in the first instance by the entire Commission. 13 Public hearings were conducted by Administrative Law Judge Paul J. Clerman, on a consolidated record, beginning May 16, 1978, and concluding June 28, 1979. The record was closed and certified to us on October 24, 1979. On November 14, 1979. we held oral argument on specific issues in these proceedings. In all, the record reflects 46 days of hearing, comprising 8,370 pages of transcript and 222 exhibits received in evidence. Appendix B identifies the related proceedings embraced in this decision. The position of parties in these proceedings is summarized later in this decision. Burlington is the largest railroad system in the United States in miles of road operated, and the second largest in transportation revenues." 243 F.R. 3799 (1978). 149 U.S.C. 11345(e). In its present form Burlington commenced operations in March 1970, following the merger of its predecessors, The Great Northern Railway (GN), Northern Pacific Railway (NP), Chicago, Burlington and Quincy Railroad (CB&Q), and other subsidiary lines, which was approved by the Commission." As a system, BN and its subsidiaries operate over almost 25,000 miles of track serving points in 19 States and two Canadian provinces. Its lines extend generally between Chicago, IL, and St. Louis, MO, in the east; Houston and Galveston, TX, in the south; Duluth, MN, Superior, WI, and Winnipeg, Manitoba, and Vancouver, British Columbia, in the north; and Seattle, WA, Portland, OR, Bieber, CA, and Denver, CO, in the west. Its principal routes are between: Denver and Chicago via Lincoln, NE; Chicago and the Pacific Northwest via Minneapolis and St. Paul, MN, Omaha, NE, and Billings, MT; Seattle and Portland and Vancouver, British Columbia and northern California via Wishram, WA; Lincoln and Laurel, MT via Alliance, NE; and Spokane and Portland. BN's facilities, equipment, traffic, and financial data are described in appendix D. BN and subsidiaries connect with Frisco primarily at Dallas-Fort Worth, Kansas City, and St. Louis, MO. Frisco and a subsidiary operate over some 4,700 miles of track in nine States. Frisco's lines generally extend between Kansas City and St. Louis in the north; Dallas and Fort Worth, TX, Mobile, AL, and Pensacola, FL, in the south; Quanah, TX, in the west; and Birmingham, AL, in the east. Its principal routes are between: Kansas City and Birmingham via Springfield and Memphis; St. Louis and Dallas-Fort Worth via Springfield and Tulsa; Kansas City and Tulsa, OK; Amory, MS, and Pensacola, FL, and Mobile, AL; and St. Louis and Memphis, TN. Frisco's facilities, equipment, traffic, and financial data are described in appendix E. The merger was initially conceived by senior management officials of BN, in a continuing search for ways to strengthen their system. They recognized that an end-to-end merger with Frisco would provide BN access to the "Sunbelt." the Southeastern and Southwestern States in which economic growth and development are said to be occurring at the highest rate. A merger was suggested to the chairman and chief executive officer of Frisco on January 27, 1977. A joint study team was established to investigate the potential benefits to the shareholders, employees, and public from a unification of the two systems. It reported that the consolidation was "Great Northern Pac.-Merger-Great Northern, 331 I.C.C. 228 (1967), sometimes referred to as the Northern Lines Merger. |