Electric believes that it probably would not be necessary to pay for overtime. In any case, the Southern Pacific could provide the service at less cost than the Oregon Electric. The possibility of electrifying the Southern Pacific line for joint operation between Forest Grove and the mill is also mentioned.

In reply the Southern Pacific contends that the 1-way service is likely to continue for a long time; that the train crew has made overtime in 10 out of 12 trips recently; that the direct cost of the extra movement for the Oregon Electric would be $14 a day and that, in addition, a car inspector at the interchange track would cost $1,500 a year. The Southern Pacific believes that the cost would be no less if 2-way service were restored, as the work would then be divided between two train crews, delaying both. A connection between the two lines at Forest Grove would cost about $7,500.

Operation by the Oregon Electric over the Southern Pacific's track would require electrification of the line between Forest Grove and the mill, would be otherwise expensive, and some delays would result from concurrent operations. On the Southern Pacific lines it is almost the universal practice to alternate operation to avoid such. delays, but the method is not applicable in the present case, as the line between Seghers and Detour could not be set apart for alternate operation.

The Southern Pacific contends that the most economical way to handle the traffic to the northern lines would be by interchange at Portland. The Oregon Electric admits that the northern lines get, by solicitation, a considerable volume of traffic that originates on the Southern Pacific in Oregon and is interchanged at Portland.

The lumber company asserts that it would profit by having both railroads. Such carrier companies are large buyers of lumber, but it would be more difficult to sell to the northern lines if they were obliged to pay freight. It would be advantageous also to have the Rafton booming facilities available. Mills on the lower Columbia River would no doubt benefit by having logs delivered as near to them as possible. Stimson expects to saw all his fir logs, but may sell his hemlock logs, which would comprise from 12 to 15 percent of the total. The log traffic seems relatively unimportant, at least for some years.

There are at Forest Grove three industries served only by the Oregon Electric, but they are within a few hundred feet of the Southern Pacific and could be reached by it easily.

A prune-packing plant ships 20 to 25 cars a year and receives about 5 cars of box shooks. Normally most of its output goes to points in the United States and Canada, by rail, but for three or

four years there have been few rail shipments, most of the output going to Europe. A witness for this concern believes that the rail movement will return and that continued service by the Oregon Electric is important to the plant.

A dealer in bulk grain and hay at Forest Grove has a warehouse on the Oregon Electric 300 or 400 feet from the nearest track of the Southern Pacific. His shipments in and out amount to about 22 cars a year, and he contends that continued service by the Oregon Electric is important to him.

Another local witness testified that Forest Grove wishes to keep the Oregon Electric because of the taxes it pays and because its line to Portland is shorter than the Southern Pacific's and makes the rate. He admits that if either line were abandoned there would be no physical difficulty in adjusting the tracks of the remaining one to serve all industries, but states that under existing conditions few industries could afford to pay the cost involved.

Testimony for the Hillsboro Chamber of Commerce is to the effect that abandonment of the Oregon Electric's line west of Orenco Junction would reduce taxes paid to Hillsboro and to the county, would take away competitive service, and would also tend to take away business of the northern lines from small mills tributary to Hillsboro and embarrass the Copeland sand and gravel bunkers. Hillsboro is nearly 4 miles west of Orenco Junction and is served also by the Southern Pacific.

The line proposed by the Southern Pacific is urgently needed to serve the Stimson mill and its construction is not opposed. The only remaining question is whether the Oregon Electric should be given access to the mill and the timber territory, either by permitting it to build its proposed line or by requiring the Southern Pacific to enter into some suitable arrangement, subject to our approval which would accomplish the same end at less cost. Either plan would aid in conserving the investment of the Oregon Electric in its Washington County lines, and would tend to insure the communities which have been reached by them that continuity of service which they desire and claim to need.

Duplication of facilities or service is not justified when reasonable efforts on the part of interested carriers may preserve the benefits of competition without serious burden or impairment of the ability of either to function. Carriers have no legal right to exclusive occupancy of a territory, Indian Valley R.R. v. United States, 52 Fed. (2d) 485; and, so far as the equities of the situation are concerned, the Oregon Electric is on a parity with the Southern Pacific. The small margin of distance in the latter's favor has resulted from loca

tion of the Stimson mill and the logging road west of Seghers station, on the Southern Pacific, rather than nearer to the Gales Creek & Wilson River Railroad, which was projected to the northern border of the timbered area in the expectation of timbering developments in that region. But superior to these considerations is the paramount interest of the public in securing untrammeled, efficient, and economical transportation of the territory's traffic to destinations best served by or through the northern lines, and to choose the carrier it desires for a particular service.

The record is convincing to us that both the Oregon Electric, the direct connection with the Great Northern and Northern Pacific Railways, and the Southern Pacific, with its lines to the South and thence to the East, should have equal access to the territory in question, in the interest of public convenience and necessity. The exigencies of the occasion call for the prompt building into the area of some line. That of the Southern Pacific can be most cheaply and quickly built, and we therefore affirm the original finding that public convenience and necessity require construction by that company of a line of railroad as described in its application in Finance Docket No. 9779. We also find that the present and future public convenience and necessity require construction by the Oregon Electric Railway Company of the line of railroad in Washington County, Oreg., proposed in its application in Finance Docket No. 9006. We further find that it should be possible for the two carriers mentioned, by mutual agreement, to work out a plan for the joint or common use of facilities or for switching arrangements in lieu thereof, which will avoid the necessity for the actual construction of the line described in Docket No. 9006 and the expense incident thereto, while at the same time preserving to the two carriers involved equality of opportunity to reach the area sought to be served as if upon their individual rails, and giving to consignors or consignees located thereon equal and untrammeled right to use whatever line is constructed as if it were the individual line of each carrier. Pending the outcome of negotiations to this end, which we recommend, no order will be entered in no. 9006; if such negotiations are not entered upon or prove abortive, we will give consideration without further proceedings to the entry of an appropriate order upon the findings here made. The interests here involved are not unaware of the problems presented by the course we have suggested: they have (speaking, with respect to the Oregon Electric, of an affiliate) met the situation before and have solved it. Construction of Lines in Eastern Oregon, 111 I.C.C. 3; 117 I.C.C. 737; 124 I.C.C. 529; 138 I.C.C. 99.

BRAINERD, Commissioner, concurring:

I concur herein except in the finding that public convenience and necessity require construction by the Oregon Electric of the line of railroad proposed in its application. Instead, the certificate granted to the Southern Pacific should, in my opinion, be so conditioned as to require the Southern Pacific to permit the joint use of its line by the Oregon Electric on just and reasonable terms. Duplication of facilities such as proposed is hardly justified on the present record.

MAHAFFIE, Commissioner, dissenting in part:

The majority grant a certificate to the Southern Pacific. With that action I agree. Clearly the mill located so near a station on that railroad should be served by it. The necessary construction is estimated to cost $54,000.

With the further finding that public convenience and necessity also require the construction by the Oregon Electric of a parallel and duplicating line to serve the same mill, I do not agree. The additional line found to be required is 5 miles longer than the Southern Pacific line and is expected to cost $259,000. It would parallel the existing Southern Pacific line for 5 miles and cross it three times. No suggestion is made that physically the Southern Pacific will have any difficulty in handling the prospective traffic. It appears, as a matter of fact, that with that construction it can move the traffic of the mill to any point that could be reached by the Oregon Electric. Solely in order to create competition at this mill site the majority find the additional initial expenditure of over a quarter million dollars, and the continuing cost of duplicate operation, justified. That competition in railroad service is the only consideration is apparent from the majority's attempt to compel the Southern Pacific to grant trackage or make other arrangements to give the Oregon Electric access to the mill. If the Southern Pacific is sufficiently impressed by the economic folly of duplicate railroad investment by its rival, and grants it trackage or common use, as the majority obviously hope, the mill will be served by only one track. The majority is willing, in order to compel indirectly a grant of common use it cannot require lawfully, to permit wasteful construction or, at least, to threaten it. Just why it is thought that the Southern Pacific may have a greater regard for the national interest than we, ourselves, have is not easy to understand, especially as we have a statutory obligation in that regard and the Southern Pacific has none. Naturally, most operators of lumber mills desire service by more than one railroad. It is usually thought that by playing one against

the other in the routing of traffic advantages can be gained that neither, unless compelled to do so by competition, would feel justified in extending. This by no means constitutes public convenience and necessity. On the contrary, it may, and sometimes does, lead to serious abuses. A realization of the national loss caused by duplication of construction and operating cost such as is approved by the majority, led the Congress, in 1920, to forbid the construction of extensions except on our certificate. Section 1 (18-21) of the Interstate Commerce Act. In construing those provisions the Supreme Court, in Texas & P. Ry. Co. v. Gulf, C. & S. F. Ry. Co., 270 U.S. 266, at page 277, said:

By that measure, Congress undertook to develop and maintain, for the people of the United States, an adequate railway system. It recognized that preservation of the earning capacity, and conservation of the financial resources, of individual carriers is a matter of national concern; that the property employed must be permitted to earn a reasonable return; that the building of unnecessary lines involves a waste of resources and that the burden of this waste may fall upon the public; that competition between carriers may result in harm to the public as well as in benefit; and that when a railroad inflicts injury upon its rival, it may be the public which ultimately bears the loss. See Railroad Commission v. Chicago, B. & Q. R.R. Co., 257 U.S. 563; The New England Divisions Case, 261 U.S. 184; The Chicago Junction Case, 264 U.S. 258; Railroad Commission v. Southern Pacific Co., 264 U.S. 331. The Act sought, among other things, to avert such losses.

Only a few months ago, Congress, in the Emergency Railroad Transportation Act, 1933, indicated its policy in regard to waste, in the following language.

SEC. 4. The purposes of this title are (1) to encourage and promote or require action on the part of the carriers and of subsidiaries subject to the Interstate Commerce Act, as amended, which will (a) avoid unnecessary duplication of services and facilities of whatsoever nature and permit the joint use of terminals and trackage incident thereto or requisite to such joint use:

Such action as the majority here take goes far to negative the theory of Congress that we can be depended upon to prevent waste. The Oregon Electric, which the majority would permit to spend $259,000 in duplicating facilities, furnishes an illustration of the evils the Congress, since 1920, has depended upon us to curb. It was built entirely as a competitive line serving no traffic of importance not easily accessible to other railroad facilities.

In its comparatively short history it has accumulated a deficit of over $100,000 per mile of road owned. In 1932 it earned less than 40 percent of its operating expenses. It has already sufficiently demonstrated the loss involved in duplicating railroad facilities in this territory. It has survived so long only by the financial support of