Southern Railway Company v. North Carolina

PETITIONER:Southern Railway Company
RESPONDENT:North Carolina
LOCATION:Cumberland Hospital

DOCKET NO.: 74
DECIDED BY: Warren Court (1962-1965)
LOWER COURT:

CITATION: 376 US 93 (1964)
ARGUED: Jan 14, 1964 / Jan 15, 1964
DECIDED: Feb 17, 1964

Facts of the case

Question

  • Oral Argument – January 14, 1964
  • Audio Transcription for Oral Argument – January 14, 1964 in Southern Railway Company v. North Carolina

    Audio Transcription for Oral Argument – January 15, 1964 in Southern Railway Company v. North Carolina

    Earl Warren:

    Number 74, Southern Railway Company, Appellant, versus North Carolina et al., and number 93, United States et al., versus North Carolina et al.

    Mr. Joyner.

    William T. Joyner:

    Mr. Chief Justice if it pleases the Court.

    I expect to discuss the substantial quality of the evidence, which supports the judgment conclusion of the commission, that public convenience and necessity permit the discontinuance of the trains in question.

    The commission below, a court and each party filing a brief has I think cited the case in Colorado against the United States as stating clearly the basic law applicable here.

    That was a case involving the discontinuance of a line, intrastate line of railroad under Section 18 of the Transportation Act, but the Court there said in substance that the substantial problem was the balancing of the needs of the community and individuals in a community against the burden on commerce and the commission is to balance those needs.

    The commission in this case has balanced the needs and has made its decision.

    I think we’ll also agree that the point then presented is the question as to whether the evidence, the relevant evidence is such that a reasonable mind might accept it as adequate to support the conclusion.

    That’s a consolidated Edison case which they cite and I accept that as a governing principle.

    On the question of the burden, the facts are undisputed, that is the question of the loss Mr. Ginnane has stated that, there is a burden which the commission found exceeded $90,000 per year, but that would be saved by taking the trains off.

    May I comment here that the figures which are recited and the figures which we quote as to money and losses, expenses are computed on the out of pocket expenses, not the way the expenses for the national figures, passenger figures are computed, there is nothing in there for maintenance of right of way, nothing for overhead.

    It’s wages of train crew, cost of fuel, oiling and grease, the money that it costs to turn the wheels over.

    And as Mr. Ginnane said yesterday, the total passenger receipts are less than one-forth of the wages of the train crew.

    But for the purpose of my argument, I emphasize the number of passengers and the diminishing passenger travel, because it indicates that the passengers are leaving the railroad, and that indicates that there are available other adequate means of transportation and that people deliberately choose those means rather than the railroad, and that is in itself substantial evidence of the lack of public convenience and necessity, of the lack of the need for the travel.

    I think a most significant figure with respect to my portion of the argument is the breakdown of the figure given yesterday that the passengers had diminished in 12 years from an average of 77 per trip to an average of 20, but the breakdown of the 20 or stating another average is very important.

    I suggest that one of the most significant things in this case is the undisputed fact that the average passenger per train mile, the average of passengers per train mile is just seven.

    That this train which has a combination coach, a day coach and all the time a Pullman most of the time, on the average mile of haul has an average of seven passengers.

    Earl Warren:

    (Inaudible) this train travel between those two points.

    William T. Joyner:

    On the two parts, it takes merely four hours.

    Earl Warren:

    Now what is the distance?

    William T. Joyner:

    129 miles, but as I’m going to get to next in my argument, the real point in controversy is the point of Durham, because when we begin —

    (Inaudible)

    William T. Joyner:

    D-U-R-H-A-M, the city of Durham North Carolina.

    Oh yes.

    William T. Joyner:

    Because when we begin to analyze and get ready to balance the convenience and necessity, I suggest that we look at the passengers and how they evidenced the need what their travel is and what would be their situation if the train is taken off.

    Now that is stated very clearly indeed in the brief of appellees and they say on page 22 of that brief, the principal public convenience presently affected by the trains arises from the interconnecting service at Greensboro with the north-south trains on Southern’s main line, so as to furnish convenient overnight sleeper service to New York and other east coast cities is inescapable if consideration is given to the entire record.

    The evidence on this part is clear.

    It is undisputed and it is shown at no less than 30 places in the record.

    We concede that.

    I think at this time it might be well for me to refer again to the map that was before the Court yesterday, it’s in volume one of the transcript, page 79.

    William T. Joyner:

    I think that it might be helpful to have that map as I discussed the convenience and necessity.

    I will argue that the convenience and the necessity is almost demonstrated by the map itself.

    From Greensboro to Goldsboro, and that is the line in question, Greensboro is on the main line of the Southern and it’s 129 miles to Goldsboro.

    It’s approximately 55 miles to Durham as you go east from Greensboro and Durham is — well North Carolina, one of it’s largest cities, it’s a large educational center, it’s a thriving community.

    From Durham it’s 26 miles to Raleigh making 81 miles, Raleigh is the capital of the state, and to Goldsboro it’s 129 miles.

    Now in this proceeding there was no passenger who complained of service, who said that he desired service east of Raleigh.

    I take it, if my recollection is correct and I think it is, there was no complaint by any passenger from Raleigh and there was no complaint by any person seeking to use the service east of Durham.

    I will comment in a few minutes on why that’s true.

    There was a great deal of complaint for Durham.

    It is true that the Pullman is put on in Raleigh, but the Durham passengers are the only ones that testified as to their use or need.

    If you look at that map I think it will become reasonably apparent why that is true.

    At Raleigh there is a train connection with the mainline of the Seaboard Air Line Railway.

    The Seaboard runs from New York to Miami and the schedules in the record show fast and very adequate service.

    They have six trains each way each day.

    (Inaudible)

    William T. Joyner:

    The Seaboard at Raleigh.

    Now the Seaboard at Raleigh, Raleigh is exactly 26 miles from Durham, there are two paved highways leading from Raleigh to Durham as is shown by another map.

    One of those paved highways is a four-lane highway.

    There are frequent bus schedules.

    The record shows there are 15 buses each way, each day between Raleigh and Durham and the record also shows that those buses have a running time of approximately 35 minutes, it’s a 35 minutes bus ride from Durham to Raleigh.

    It would be a little less than that by private automobile.

    So any passenger in Durham is within 35 minutes from service that Raleigh has found adequate, because there is no protest from Raleigh, any Raleigh passengers and time wise they are no further from Raleigh than is the average one in any city in the United States.

    But we go to Durham, now if you’ll follow the map up to Durham, one significant thing about Durham, and I hope to be get this in my argument, Durham is served by a five railroads as is shown by that map, the Durham and Southern, the Norfolk and Southern, the Norfolk and Western, the Seaboard Air Line and by the Southern.

    None of the five has passenger train except the Southern.

    Durham has a plentitude of great service, a great deal of freight service.

    It has little railroad passenger service and witnesses testified that they use the Pullman.

    I’ll comment on that, that every witness who complained about lack of transportation was a Pullman passenger, was a Pullman passenger destined for points north, was a Pullman passenger, making the connection at Greensboro is the train 38 to go to Washington and points north of Washington.

    Now between Durham and Greensboro, if you follow that map, there is ample bus service.

    There are 15 buses each way, each day between Durham and Greensboro.

    The running time of those buses is from two hours and five minutes for local buses to an hour and twenty minutes for through buses.

    William T. Joyner:

    Again there are two paved highways paralleling that road.

    There is an original paved highway that followed the railroad and there are four lines, there’s a four-lane highway from Durham to Greensboro, an hour twenty minutes by express bus.

    The record shows that there is a bus leaving Durham at precisely the same time that this Pullman leaves Durham, and it gets to Greensboro and has thirty eight minutes in which to connect with the same train that this Pullman is now put on, taken off, the bus can be taken.

    Another significant thing about the testimony of those passengers, because —

    Earl Warren:

    (Inaudible) Mr. Joyner as I computed the figures you gave us, it takes the buses an hour and 55 minutes to go the length of this distance, 35 minutes for one leg of it, then an hour and 20 minutes for the rest of it.

    It takes an hour and 55 minutes for the bus, but it takes four hours for the railroad.

    William T. Joyner:

    No sir, Your Honor, four hours I meant from Goldsboro to Greensboro.

    Earl Warren:

    Oh I see.

    William T. Joyner:

    But as I say there is no complaint beyond Durham and I think we can simplify that Durham is the contesting point.

    Now from Durham to Greensboro by train takes approximately an hour, I think it’s an hour and 55 minutes for one train and an hour and 45 for another.

    There are two flag stops, one stop that they may go in one direction that they don’t make in the other.

    Earl Warren:

    The reason that I asked it was there was something in the opinion of the Court below to the effect that the railroad had made no effort to get this passenger traffic, isn’t that right?

    William T. Joyner:

    Yes sir I think — I’m sure that is something of that, there is a great deal of facts and I expect the Court will hear about that from the other side.

    The permission —

    Earl Warren:

    What is your viewpoint?

    Was there testimony on that?

    William T. Joyner:

    Yes sir, there was testimony on that.

    Earl Warren:

    What is the nature of it?

    William T. Joyner:

    The nature of the testimony and the commission found that, that testimony is supporting it, that the railroad had made efforts to get the passengers, that it had made numerous efforts, that its equipment was air- conditioned, it was clean, it was modern equipment, and that in-spite of that the passengers had continued to leave the line.

    There was compliant that the new dining service on it, but with seven passengers or with an average of 20 passengers in all, the railroad couldn’t continue that dining service, there was testimony that there had been dining service on that, it had been forced to be dropped, because of lack of patronage.

    There was testimony for example that there had been either a restaurant or a news van from which food could be purchased in Durham and that, that had to be abandoned because of lack of passengers.

    There was no specific testimony as to neglect, rather than some painting that had not been done, and I think there was testimony that on one or more occasions in a period of years, the cars had not been pre-cooled and were hot when the passengers got on.

    Well as a matter of fact the cars are air- conditioned and the service is substantially adequate.

    To get to time, Your Honor referred to the time, the railroad schedule is from an hour and 45 minutes for one train an hour and f55 for another.

    I’m speaking now from Durham to Greensboro.

    That is going west to make connection with the main line of the Southern. The bus schedule is from two hours and five minutes for local buses to an hour and 20 minutes for the expresses buses.

    Now to Raleigh, the train schedule is from an hour — from 45 minutes to an hour, the bus schedule is 35 minutes.

    As I say there has been this great diminution.

    The great diminution has been primarily due to the adequacy of other transportation, may I address myself to that for just a moment?

    There is an airport, Raleigh-Durham airport, which serves practically all of eastern North Carolina.

    William T. Joyner:

    It’s 12 miles from Durham, it’s 14 miles from Raleigh, it’s between the two.

    There are numerous flights.

    I believe it’s nine flights to New York and Eight flights to Washington and flights to Atlanta.

    That airport is very heavily patronized.

    The figures were that, that airport had an annual take of passengers of 134,000 as compared to 14,000 for the railroad, approximately 10 to 1.

    Another significant fact to give at this part, Mr. Watts Hill who was chairman of a number of things in Durham, a very prominent citizen, but who is also Chairman of the Research Triangle Institute, which is a party to this.

    It’s a very fine and very laudable research project in which the state of North Carolina is interested, which is located, it’s called the Research Triangle because it’s located in the triangle formed by State College at Raleigh, Duke University at Durham and University of North Carolina at Chapel Hill.

    And Mr. Hill testified against us, he testified against the taking off of the trains, and he gave specific figures.

    He said that for the eight months from January the 1st 1959 until August of 31st, 1959 the Research Triangle Institute of which he was Chairman of the Board had expended $13,211 for air transport and $361.62 for rail travel.

    On cross examination he was asked to break down that rail travel to find out how much of it was Southern Railroad trains and how much of it was for other trains and he said that he would bring that evidence in the next day, he did not do.

    But at any rate that’s 36 to 1 air travel over rail travel.

    There are a few other significant things I would call to Your Honor’s attention about the airport and air travel.

    It’s in the record that Burlington Industries man testified that 30 to 40 employees of Durham Industries are regular users of that transportation.

    On cross examination he changed that estimate to five, and the Court below uses that 30 to 40.

    The Court below referred to some army witnesses that testified as to their use of the train and I call Your Honor’s attention to a quotation on cross examination where one of the army officers says, the normal individual with whom I am associated would probably travel by air.

    The figures support that.

    As I say from Durham to Greensboro there are 15 buses each way, each day and this passenger travel has diminished because the passengers have — the potential passengers have exercised their privilege of using other transportation.

    They are just a few left, just a very few left.

    Just one or two other things that I want to say, because I like to leave sometime for reply.

    The Court below said practically nothing about other means of transportation.

    The witnesses said practically nothing.

    The brief of the state says practically nothing.

    The state referred to some witnesses and the only witness who testified was a Mr. George Klux I believe and he testified that the buses were dirty and inconvenient and hot.

    He didn’t testify that he had ever enquired about a schedule.

    One of the plaintiffs for the witnesses against the railroad testified as to any knowledge of the bus schedules, of the use of the buses.

    There were people evidently who did not care to use buses and hadn’t used buses.

    As matter of a fact there was testimony in the case, that testimony was in 1960, 1961 that the modern buses were air conditioned, that they were all General Motors buses, they were air conditioned and furnished with rest rooms.

    The state also referred to the necessity of a railroad — the opinion of the Court referred to weather conditions and the necessity of the railroad as a standby service.

    Well that’s about what it has resolved itself into, and we submit that it is not proper and it is not supported for the Court and commissioner was proper in saying that the standby service was a service that railroads should not be called on to use.

    As a matter of fact there is nothing in the record to indicate that the bus service is not completely adequate.

    William T. Joyner:

    There are 15 buses each way each day, between Raleigh and Greensboro and Raleigh and Durham.

    There is nothing in the record, there is nothing the opinions to indicate that the bus service isn’t adequate and it is certainly service that most of the people must have taken, because we, the railroad now has a very minimum of passengers.

    The only passengers it has to speak of are the intrastate passengers who are bound for the connection at Greensboro and points north.

    Potter Stewart:

    Mr. Joyner what kind of service is there on the Seaboard and on the Atlantic Coastline for such passengers?

    Seaboard goes to Raleigh and the Atlantic Coastline goes to Goldsboro, is there Pullman service?

    William T. Joyner:

    Yes sir, there is very, very adequate service at Raleigh.

    There are six trains, I think that it’s in the record there are six trains each way, each day.

    Potter Stewart:

    It’s basically north and south service.

    William T. Joyner:

    Yes sir, that’s north and south.

    Potter Stewart:

    Is there Pullman service to Washington and New York from Raleigh?

    William T. Joyner:

    There is Pullman service to Washington and New York from Raleigh.

    That is the most convenient part.

    The coast line, as a matter of fact, the coast line I think has only two — it is on the main line of coastline goes through Selma which is between Raleigh and Goldsboro, but that is not a point of great interest to us here because there are no complaints below of Raleigh.

    Evidently the people there do take the coast line train at Selma, but there are no complaints they have and there is frequent service on the Seaboard.

    There is evidenced for the fact that there are no passengers on this train from Raleigh, although the Pullman begins at Raleigh, passengers get on it at Durham.

    Now by taking a ride, a very short ride of some 30 minutes, 35 minutes, they can get from Durham to Raleigh, that’s less than if you were to get to a station in the ordinary city, in the fact that the service there is very active.

    As a matter of fact you can leave Washington, that’s shown on the record, you can leave Washington at 2:18 or 2:15 I think it this afternoon, get into Raleigh, at 7:13 and you can be in Durham by 8:30, you spend the night at home rather than waiting to take the Pullman out of Raleigh.

    There is ample service over the Seaboard to Raleigh.

    It’s a very, very short distance.

    There is frequent bus service between Durham and Raleigh and approximately 35 minutes of travel.

    I would save the rest of the time.

    Earl Warren:

    Mr. Battle.

    Gordon Battle:

    Mr. Chief Justice and may it please the Court.

    My purpose is to discuss the appellee’s contention as to the proper interpretation of Section 13 a (2), as it applies to the facts of this case.

    The remainder of our argument will be by Mr. Barbee, the Assistant Attorney General of North Carolina.

    It is our position that in determining whether or not the continued operation of these last two passenger trains imposes an unjust and undue burden on Interstate Commerce in the language of the Court below.

    All material factors bearing on the question must be taken into account.

    The Interstate Commerce Commission must consider a fair picture.

    Our argument on this is bottomed on two cases that this Court decided in 1958, first of those is the Chicago, Milwaukee, St. P. & P Railroad Company versus Illinois, 355 U.S. 300.

    In that case Interstate Commerce Commission acting under Section 13 (4), the Act as it was written then, had authorized an increase in the railroads intrastate passenger rates on the trains commuter service to make up for an annual deficit of $306,000.

    Gordon Battle:

    Under the statue the ICC was authorized to do this upon a finding that the existing intrastate rate “causes any undue unreasonable or unjust discrimination against interstate commerce.”

    This Court in considering that case pointed out that the intrastate rates were primarily the concern of individual states involved.

    That the justification for the exercise of federal power must clearly appear and this Court held, “we do not think that the deficit from this single commuter operation can fairly be adjudged to work an undue discrimination against the Milwaukee Road’s interstate operations without findings which take into account, the deficit in the light of the carrier’s other intrastate revenues from Illinois’ traffic, freight and passenger.”

    Now following that case in May of 1958, this Court also decided the case of Public Service Commission of Utah versus the United States, 356 U.S. 421.

    In the Utah case, the Interstate Commerce Commission had authorized an intrastate freight increase and this Court in a five to four decision held among other things that it was error for the Interstate Commerce Commission, not to have considered the revenues and conditions incident to intrastate passenger operations.

    In other words, this Court was taking the position that in determining whether the state rates posed an unjust, an undue burden on interstate commerce the ICC was required to look at more than just the loss from the particular operation involved.

    They had to look at the total intrastate situation as it existed.

    Now following those two decisions, in 1958 the Congress enacted Section 13 a (2) and we say that in looking at the language of Section 13 a (2), we see that among other things after a full hearing the Interstate Commerce Commission is required to find that the continued operation of such train without discontinuance will constitute an unjust and undue burden upon the interstate operations of such carrier or upon interstate commerce.

    Now we feel that the language there is similar to the language that was in Section 13 (4) that was passed upon by this Court.

    We feel that taking off a passenger train is obviously more serious matter to a state than fixing the rate or the charge that is going to be made for the service.

    Therefore, it’s a matter of more concern and stricter requirements must be met and we say that Congress would not have used that language unless they expected the Interstate Commerce Commission in considering whether or not to allow a passenger train to be discontinued.

    To look at more than just the loss resulting from the operation of that one train there must be an unjust and undue burden on interstate commerce.

    How do you determine whether a burden is just or unjust when you fail to take into consideration, the profit made by the railroad on its freight operations on the same line of track, without looking at the profit made by the railroad from its intrastate service in North Carolina?

    Now our opponents say that this is not so, that we should look at the legislative history surrounding the enactment of the statute and they say they find there an interpretation contrary to what I have given.

    We are delighted to look at the legislative history surrounding the enactment of this statue and contend that the legislative history very much supports our position.

    When these two decisions were handed down Congress was considering the Transportation Act of 1958 as originally reported by the House Committee, the proposal that ended up as Section 13, would not have applied at all to intrastate trains.

    Therefore, we say that quotations from that House Report in Southern’s, in the ICC brief, do not show the legislative intent regarding something that was not even proposed at that time.

    Now — the House by amendment also deleted what has been referred to by the Interstate Commerce Attorney as the net loss provision that had been of concern in the Senate, particularly by Senator Javits.

    The opponents of the net loss provision, Senator Javits and others were afraid it would become the sole controlling factor.

    Whereas the members of Congress who were in favor of the legislation has originally proposed, argued that as it was worded then it would be only one factor to be considered.

    At any rate as originally reported, the senate bill provided the same criteria for the discontinuance of an interstate or an intrastate train.

    Senator Russell called this a “direct and drastic blow to the authority of the state regulatory bodies” and the bill was amended to limit the ICC’s discontinuance authority to interstate trains.

    In the Conference Committee the bill was divided into Section 13 a (1) pertaining to interstate trains and Section 13 a (2) pertaining to totally intrastate trains.

    Section 13 a (1) gave rather broad powers to the ICC involving the discountenance of interstate trains while 13 a (2) gave the ICC limited appellate control over totally intrastate trains.

    Contrary to the contention of the appellants, we say there is a great deal of difference between Section 13 a (1) and Section 13 a (2) and invite the court’s comparison of the two statutes.

    Now, at the same time that Section 13 a (1) and (2) was enacted, Congress amended Section 13 (4), the section of the statute of which had been construed by the Court in the Chicago and Utah cases.

    And the court, but the Congress added to Section 13 (4) a parenthetical provision after saying that the rate to be changed are upon the finding of the unreasonable or undue burden and the parenthetical expression was which the commission may find without a separation of interstate and intrastate property, revenues and expenses and without considering in totality the operations or results thereof of any carrier or group of carriers, wholly within any state.

    Now that amendment may it please the Court was prompted by the dissenting opinion in the Utah case.

    Justice Frankfurter in his dissenting opening had expressed grave concern that this requirement of considering the total intrastate operations imposed an impossible burden on the Interstate Commerce Commission that they shouldn’t have to look into all of this and have all of these accounting procedures every time they wanted to change it right.

    Now we say that if Congress which, look flip this amendment in Section 13 (4) at the same time Section 13 a (2) was enacted, and while the Chicago and Utah cases were ripe in the mind of the congressmen and the senators that the very least that Congress would have done had they not — had they wanted the ICC to only look at the loss from the particular train involved, the very least they would have done was put this same language in Section 13 a (2) that they added to Section 13 (4).

    Gordon Battle:

    This wasn’t done and I argue to you that the reason that it wasn’t done is because Congress knew that this was the most serious thing that could be done to the states, that this was the real area where the state regulatory commissions were primarily concerned.

    Now in addition to that point, when Section — when the housing senate conference committee reported back to the senate, Senator Smathers who had been Chairman of the Subcommittee on the Interstate Commerce Committee that proposed these amendments to Section 13 a made the following comment.

    Now this was in regards to compromised version and this is in regards to the statute as it was finally enacted.

    He said with respect to the discontinuance of service we have given the Interstate Commerce Commission for the first time the right to discontinue service where the service crosses a state line.

    That was Section 13 a (1).

    However, we protected the right of the states so ably explained by the distinguished senator from Georgia and those are those concerned about states’ rights, by leaving to the state regulatory agencies, the right to regulate and have a final decision with respect to the discontinuance of train service which originated and ended within one particular state except when it could be a established that intrastate service was a burden on interstate commerce.

    May it please the Court, the intrastate service in North Carolina is not a burden on Interstate Commerce.

    Southern makes a profit on its intrastate operations in North Carolina, not a loss.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    Yes.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    Yes sir.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    As a matter of theory, I think so, yes sir.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    Yes sir, the, we argue more the 630,000 in the 30 million, but certainly it’s of interest whether this is a distressed railroad or not.

    We think the $630,000 is something that has to be put on the scales not just left off and forgot about.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    No Your Honor, no Your Honor.

    We the record in this case for example shows that the passengers are increasing for the years shown by record, not decreasing.

    We say that taking the record as a whole there is no substantial evidence in this record that could lead a reasonable man to believe that these trains are imposing an unjust and undue burden on Interstate Commerce or that the present and future public convenience a necessity, as require them.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    Yes sir.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    Yes sir, but I believe five months in 1961, but I believe also the 1960 showed a slight increase over 1959 and of course the record, there is a great deal in the record about the type of areas served by these trains, Durham, Orange and Alamance counties.

    The Durham has a population in excess of 70,000 people.

    Southern’s witness could recall only five cities in the United States of that size that didn’t have passenger service, the need of Duke University, the University of North Carolina basically Mr. Barbee has argued.

    Now I quoted what Senator Smathers had to say.

    Southern Railway in its brief on Page 13 quotes a statement by Senator Javits.

    We think that statement is very much in support of our position.

    Gordon Battle:

    The total, this comment by Senator Javits came when Senator Bricker was explaining to Senate about the conference committee version of the Section 13 a (1) and (2), and Senator Javits interrupted Senator Bricker and said, the point I raised in which the Senator from Connecticut was so deeply concerned was the question of discountenance if a net loss was shown, that being in effect the sole ground.

    As I understand the conference report eliminates the net loss test and the new test which is now the test provided by the bill as to the discontinuance of any commuter service, because that was what troubled us particularly, is that it would constitute an undue burden upon the operation of such carrier or carriers or upon interstate commerce.

    As I construe that provision, the commission would have to look at the overall situation of the entire railroad in order to determine the inequity of requiring it to continue a particular commuter branch and Senator Bricker replied to that said the question involves the relation between the commuter income and income from the other services which the railroad renders.

    So we say that there is no question but what any and all relevant factors should be concerned.

    It’s interesting that the Utah case involving Section 13 (4) after the enactment of this statute that case went back to the lower court and the lower court construed the addition to 13 (4) as meaning not that as being a matter of procedure rather than of substantive change of the law and said that unless that were so they would be serious constitutional and conception question involved and said that still the Interstate Commerce Commission what when there was evidence presented should consider any and all relevant factors.

    Now may I please the Court, Southern Railway when it filed this petition with the Interstate Commerce Commission, accused the State of North Carolina her utilities commission and her courts of imposing an unjust, an undue burden on interstate commerce.

    This was the state may it please the Court that until 1954 it had three pairs of passenger trains running on this line of track.

    In 1954, the State of North Carolina authorized one of them to be removed.

    In April of 1958, the State of North Carolina authorized two more to be removed, leaving this one last train.

    In February of 1959, the State of North Carolina authorized the discontinuance of a sleeper car that went from Raleigh to Asheville on this line.

    Between 1951 and 1956, of the 44 requests for discontinuance filed with the State of North Carolina 42 were approved.

    Arthur J. Goldberg:

    (Inaudible)

    Gordon Battle:

    I do not know some of them were.

    Shortly after the February 1959, decision allowing the sleeper to be taken off, in July of 1959, Southern filed this petition for discontinuing these last three passenger trains and when North Carolina refused to let the last ones come off.

    On this line of track that the State of North Carolina itself had build in the 1800s to provide railroad service for it’s people and leases to Southern Railway, when North Carolina refused to let the last passenger trains taken off, they were accused of imposing an unjust and undue burden on interstate commerce.

    May it please the Court, the State of North Carolina pleaded not guilty and we plead not guilty now.

    We say that we have not imposed any unjust and undue burden on Southern Railway or any other railroad.

    What we have done is ask for minimal service for the people of North Carolina, that the railroad makes a profit and that North Carolina pays its fair share.

    Thank you very much.

    Earl Warren:

    Mr. Barbee.

    Charles W. Barbee, Jr.:

    Mr. Chief Justice, may it please the Court.

    I would like first, if I may, to clarify what is possibly some misunderstanding on the factual matter concerning the sleeper.

    Mr. Ginnane yesterday in outlining that referred to it as being a sleeper between Raleigh and Washington which it is.

    However, the — as the situation existed at the time of hearing and at the time of hearing in the Court below and before the commission below, it was a New York sleeper.

    It was taken off for a short while and before the court’s the decision came down and then was put back upon, but no longer taken to New York, it stops in Washington D.C.

    Potter Stewart:

    It used to be Washington and New York, is that right?

    Charles W. Barbee, Jr.:

    Yes sir, Mr. Justice.

    Potter Stewart:

    Go between Washington and New York and (Inaudible)

    Charles W. Barbee, Jr.:

    Known as the Raleigh New York car, you could board in Raleigh or Durham or any point between Raleigh and North, and stay on that very same car until you got to New York City or any place in between.

    That is one of the principles if not the principle public convenience and necessity afforded by the service of these trains between Goldsboro and Greensboro and I was happy to hear Colonel Joyner, as I understood him to concede that, because the question, it had been contested in brief that the Court below made a finding which was beyond it’s function and that that’s the type of finding that the commission should make, but I think the record when viewed as a whole makes it abundantly clear that that is the principle public convenience and necessity.

    Charles W. Barbee, Jr.:

    As testified to by a great may witnesses, we referred to some 30 places in the record where that is one of the principle conveniences.

    It is very convenient and especially in — for those people who won’t have a days work in New York as many of the professors at Duke University and members of the Office of Ordnance Research located at Duke, testified they frequently having meetings in Washington or in New York, they find it convenient the board the train there in Durham on the afternoon around 5:30 or 6 o’clock and without having to move they can get off the car in New York the next morning around, 8 o’clock I believe it is and complete their day’s work and board the train that afternoon, after the workday is completed and return, arrive back in the Raleigh or Durham the next morning around 7 o’ clock.

    Potter Stewart:

    Does the Seaboard operate overnight public service to New York?

    Charles W. Barbee, Jr.:

    I believe it does Mr. Justice. —

    Potter Stewart:

    That’s through Raleigh.

    Charles W. Barbee, Jr.:

    From Raleigh, to get on that of course from Durham you have to go by car or bus.

    Potter Stewart:

    And how many miles is that?

    Charles W. Barbee, Jr.:

    It’s about 25 miles.

    Potter Stewart:

    25 miles?

    Charles W. Barbee, Jr.:

    It’s about a 35 minute bus ride I believe.

    Potter Stewart:

    Yes and there is overnight service I suppose on the Atlantic Coast Line through Selma and we’re talking about the area between Raleigh and Goldsboro.

    Is there?

    Charles W. Barbee, Jr.:

    I believe there is Mr. Justice.

    Potter Stewart:

    And of course from Greensboro itself on the mainline of the Southern, there is overnight —

    Charles W. Barbee, Jr.:

    Yes sir there is.

    Potter Stewart:

    Overnight service to Washington and New York.

    Charles W. Barbee, Jr.:

    That very same train that affords that service — well this Raleigh New York sleeper to Raleigh.

    To Washington —

    Potter Stewart:

    (Inaudible) Atlanta —

    Charles W. Barbee, Jr.:

    Yes sir, a great many.

    Incidentally it’s also important and borders on the necessity, absolute necessity for this rail travel in times of extreme weather.

    As testified to by a good many people in the record, that’s one of the reasons they find it necessary and when we refer to public convenience and the necessity we don’t — it doesn’t mean absolutely imperative, the definition is given in Seaboard Air Line Railway Company versus Commonwealth, a Virginia case reported in 71, Southeast Second, page 146 and refer to page on 27 of our brief.

    It is necessary if it appears reasonably requisite, “Is suited and tends to promote the accommodation of the party” and many of the witnesses in this case testify that it was much more convenient.

    For example patients at Duke Hospital who had to come by some stretcher service and others who had been advised by their doctors not to fly and others who didn’t like or didn’t want to ride automobiles or for some reason could not.

    Potter Stewart:

    The Duke Hospital is some special type of hospital or — it’s connected with the university is it?

    Charles W. Barbee, Jr.:

    It is part of the university and it is some kind of a special hospital in some respects.

    They have a good many people who come to Duke to take the rice diet and they have a lot of the specialized treatments there, like most hospitals do I guess, but it is a big hospital and there are a lot of patients there from the north and the west.

    There Mr. Battle referred to the fact that there had been several instances in which the Southern had been permitted in the past to discontinue passenger trains on this line when requested and the state has permitted them to do that, everyone accept this last one.

    And the state has asked them, as in this case, has not permitted them to or did not.

    They entered their order, that in this case in its early days referring to the fact that this was the very last passenger, rail passenger service between these two points and would leave some of the communities without any rail passenger service of any kind.

    Charles W. Barbee, Jr.:

    And one of the witnesses for the Southern referred to the fact that he could not recall, but five cities in the entire United States that did not have some form of a rail passenger service and the —

    Potter Stewart:

    — it is in the same size.

    Charles W. Barbee, Jr.:

    Yes sir, 70,000 people.

    The North Carolina Commission has gone further than just allowing them to discontinue all of their trains but one.

    There have been in the past ten years six freight rate increases allowed by the North Carolina Commission and the Interstate Commerce Commission and every single one of which the deficit resulting from passenger train operations was taken into consideration as a factor in allowing the freight rates to be increased, but that is a fact which was stipulated to in the record, page 361 I believe it is.

    The 13 a (2) requires two things.

    It requires that there be not only a finding that public convenience and necessity at present or future permit of the discontinuance, but it also requires that the finding based on substantial evidence that the continued operation of the train would result in a burden which is undue and unjust.

    Now this operation between Greensboro and Goldsboro, the passenger operation, the $630,000 figure was referred to by Mr. Ginnane yesterday as having been arrived at by a felicitous computation made by the court below.

    In that regard and in reply to that I am referring to page or in volume number two of the record, on page 374, and I won’t — the testimony of Mr. Gleeson who is the chief statistician for the Southern Railroad and who himself by his testimony at that point on cross examination establishes that the $630,000 figure would be a good estimate of the freight profits, net freight profits after taxes for the year 1960 and that the method of estimating that income gives them a good estimate.

    It was not — in fact the court below did not even purport to make a calculation, it referred to the fact that the calculation currently was made from a comparison of the average density on this line with that of the overall Southern Railway operations.

    So we submit the $630,000 figure is not one that was computed by the Court below but was established by Southern own witness and the fact that the hearing examiner below and the Interstate Commerce Commission failed to take that into consideration, was the type of gross error that entitled the Court below to set aside the Interstate Commerce Commission’s order.

    The hearing examiner found that the railroad contended that their loss on this line per year was $117,000.

    The hearing examiner found that the loss was $90,000 per year.

    The company wide net operations net railway operations in 1960, after taxes were $36 million.

    After paying all fixed charges, their net income from all operations was $30 million.

    They paid of that in dividends $21 million.

    They put the rest in surplus which brought their surplus as of 1960 to $343 million over a third of $1 billion, as compared with a loss, all these figures are a bit after taxes and the $90,000 figure found the examiner reveals I think clearly and the results inescapably an absolute, should be an absolute finding that this — if it is a burden could not under any stretch of the imagination be said to be unjust or undue.

    (Inaudible)

    Charles W. Barbee, Jr.:

    I believe that’s true, I believe —

    (Inaudible)

    Charles W. Barbee, Jr.:

    Yes sir, I believe that’s true.

    As I understand the statements by the courts, they have to balance one against the other and that’s what we think that the hearing examiner in this case failed to do proper because as the Court has said in many cases where a regulation which is principally traditionally of that of the state and has come to be authorized by the Congress for the federal government to do so, it should be exercised only.

    If the justification for it clearly appears, and we submit that in the light of the whole record, taken as a whole that, that justification does not clearly appear and that in this case the Court below was correct in setting aside the order of the Interstate Commerce Commission and that it should be affirmed.

    Thank you.