Chesapeake & O. Ry. Co. v. United States

• Decision Date: 16 November 1929
• Citation: 35 F.2d 769
• Court: U.S. District Court — Southern District of West Virginia
• Parties: CHESAPEAKE & O. RY. CO. v. UNITED STATES et al. (INTERSTATE COMMERCE COMMISSION, Intervener.)

35 F.2d 769 (1929)

CHESAPEAKE & O. RY. CO. v. UNITED STATES et al. (INTERSTATE COMMERCE COMMISSION, Intervener.)

District Court, S. D. West Virginia.

November 16, 1929.

Herbert Fitzpatrick, of Huntington, W. Va., and Robert B. Tunstall, George H. Gardner, and Thomas L. Preston, all of Richmond, Va., and Fitzpatrick, Brown & Davis, of Huntington, W. Va., for complainant.

James Damron, U. S. Dist. Atty., of Huntington, W. Va., and Elmer B. Collins, Sp. Asst. to Atty. Gen., for the United States.

Daniel W. Knowlton and Nelson Thomas, both of Washington, D. C., for intervener.

John H. Holt, of Huntington, W. Va., Robert E. McCabe, of Charleston, W. Va., D. Lynch Younger, of Washington, D. C., and Theodore W. Reath, of Philadelphia, Pa., for defendants Guyandot & T. R. Ry. Co. and Norfolk & W. Ry. Co.

Before NORTHCOTT, Circuit Judge, and BAKER and McCLINTIC, District Judges.

McCLINTIC, District Judge.

The Chesapeake & Ohio Railway Company (hereinafter referred to as the C&O), filed its petition in this court against the United States of America, Guyandot & Tug River Railway Company and Norfolk & Western Railway Company, under the provisions of the Urgent Deficiencies Act Oct. 22, 1913 (38 Stat. 208, 219), to set aside and annul that portion of the certificate and order of the Interstate Commerce Commission authorizing the Guyandot & Tug River Railway Company, a subsidiary of the Norfolk & Western Railway Company, to build a line of railroad from Gilbert to Wharncliffe, in Mingo county, W. Va.

For convenience the Norfolk & Western Railway Company and its subsidiary, the Guyandot & Tug River Railway Company, will hereinafter be referred to as the N&W. The Virginian Railway Company and its subsidiary, the Virginian & Western Railway Company, while not a party to this suit, will necessarily have to be referred to many times, and for convenience will be called the Virginian.

In order to make a proper setting for the decision of this cause it will be necessary to make a rather full statement of facts, and, in doing that, it will be necessary to give a somewhat detailed description of the country wherein the proposed railroad is to be built and the connections proposed to be made therewith.

The part of the territory of West Virginia south of Kanawha and New rivers therein is underlaid with enormous quantities of coal. The C&O, N&W, and Virginian are the only railroads that haul to market the vast amount of coal shipped from the mines in that part of the state of West Virginia. The C&O, with its main line and it subsidiaries, serves that portion thereof immediately below the Kanawha and New rivers. The N&W runs along the Big Sandy river and its branch, the Tug river, which rivers form the boundary line between the states of West Virginia and Kentucky. Each of these railroads has a tidewater connection at Hampton Roads; the eastern terminus of the C&O being at Newport News, and the eastern terminus of the N&W at Norfolk, Va.

The N&W also has western connections in the cities of Cincinnati and Columbus in the state of Ohio. The C&O has western connections in the cities of Cincinnati, Chicago, Columbus, and the Great Lakes region. The Virginian runs westerly from Norfolk, Va., to the coal fields of Southeastern West Virginia a distance of about 450 miles. Each of these railways has many branches running from their respective lines in Southern West Virginia. The branches of the Virginian are in Mercer, Wyoming, and Raleigh counties. The Virginian has no western connection of its own, and such products as originate on its line going west must be transferred either to the C&O, which connects with it at Pemberton, on one of its branch lines, or at Deepwater, on its main line, or such products must be transferred to the N&W at Matoaka, on one of its branch lines.

By a decision of the Interstate Commerce Commission (for convenience hereinafter called the ICC), which decision is found in Wyoming Coal Co. v. Virginian R. Co., 96 I. C. C. 359, and Id., 98 I. C. C. 488, and which was affirmed by the Supreme Court of the United States, Virginian R. Co. v. U. S., 272 U. S. 658, 47 S. Ct. 222, 71 L. Ed. 463, the Virginian was compelled to adopt and file joint rates with the C&O and N&W, respectively, for the coal shipped west from its line. A large number of mines located on the Virginian are likewise accessible to branch lines of the C&O, and a large number of these mines located on the Virginian can only ship coal by the Virginian. For some reason best known to the shippers, about 80 per cent. of the coal shipped west from the lines of the Virginian was routed via Matoaka and the N&W line.

There is a river called the Guyandot which has its head, with many branches, in the southeasterly portion of West Virginia, and which flows westerly into the Ohio river at Huntington, W. Va. About 30 years ago the C&O commenced the construction of a branch line from Barboursville, ten miles east of Huntington on the main line of the C&O, up this Guyandot river, and subsequently extended the same to a place called Gilbert, in Mingo county, W. Va., which point is about 90 miles from Barboursville. This line has developed an enormous coal shipment and delivers to the C&O at Barboursville, on the main line, about 35 per cent. of all the coal shipped on the C&O lines. The C&O also has a branch line which leaves the main line at Prince, in Fayette county, W. Va., and extends southeasterly to a place called Stonecoal, which point is about 55 miles from Gilbert; both places being situate on the waters of the Guyandot river. The N&W has the branch line to Matoaka, and other branch lines extending north from its main line to or near to the Guyandot river. The Virginian has its main line at a place called Mullens and another place called Elmore, on the head of the Guyandot river. The Virginian also has a line extending from Elmore down the Guyandot river to a place called Itmann. All of these lines are in what is called the New River, Tug River, and Pocahontas coal districts, and, under the decision of the ICC, carry the same freight rate on coal going west.

From the joint coal mines which are served by the C&O and the Virginian, if the coal is shipped west by the C&O, the Virginian has no division of rates. The distance from Itmann to Gilbert is about 40 miles. There is no railroad line along this river between those two points. The distance from Gilbert to Wharncliffe, on the main line of the N&W, is about 10½ miles. The valley of the Guyandot is narrow and quite mountainous between Gilbert and Mullens. The water flows through a narrow, crooked valley or gorge, in which there is but little level land. This part of the river is located a distance of 8 to 12 miles north of the N&W main line, from which it is separated by a high mountain divide. The Guyandot basin between Itmann and Gilbert is estimated to contain about 330 square miles, nearly all underlaid with coal. The coal commercially marketable and recoverable under present conditions is variously estimated to be a quantity not less than 500,000,000 gross tons and up to 1,444,000,000 short tons. It is also estimated that there is about 118 square miles of land bearing merchantable saw timber at least 12 inches in diameter, which it is thought will produce about 355,000,000 feet, board measure, of timber, nearly all hardwood.

The important resources of the region, for which all of this development is being made, are the coal and the timber, and the full exploitation thereof will require the construction of branch lines on the principal tributary creeks, notably on Clear fork, north of the river, and on Pinnacle creek, south of the river, as well as on several smaller creeks; but large areas of coal and timber can be reached from the proposed main line along the river by ordinary industrial spurs therefrom.

A company called the Pocahontas Coal & Coke Company owns a great many thousands of acres of this coal and timber land. About the end of the year 1901 the N&W purchased all the stock of the Pocahontas Coal & Coke Company, and thus is the beneficial owner of these holdings of the coal and coke company. The W. M. Ritter Lumber Company owns about 70,000 acres of this coal and timber land along the Guyandot river in this basin. There are some other owners thereof therein, but the quantities are comparatively small.

On the 7th day of May, 1925, the C&O filed its application with the ICC (Finance Docket 4818) for a certificate that the present and future public convenience and necessity require the construction by it of (a) an extension of its line of railroad, known as the Logan subdivision, from the southern terminus of said division, at or near Gilbert, easterly to a point at or near Mullens, a distance of 47 3/10 miles, in Mingo and Wyoming counties, W. Va.; and (b) an extension of its Winding Gulf branch from its southern terminus at or near Stonecoal westerly to a point at or near Mullens, 8 2/10 miles, in Raleigh and Wyoming counties. Permission was also requested under paragraph 18 of section 15a of the Interstate Commerce Act, as added by Act Feb. 28, 1920, § 422 (49 USCA § 15a (18) to retain the excess earnings from the proposed extensions. On October 29, 1925, the Guyandot & Tug River Railroad Company filed its application in Finance Docket No. 5161 for a certificate that the present and future public convenience and necessity require the construction by it of a line of railroad extending from a connection with the Virginian Railway at or near Elmore in a general westerly direction to Wharncliffe, 53 miles, in Wyoming and Mingo counties. The Norfolk & Western and the Virginian joined in this application. An amended application was filed December 24, 1925, which was joined in by the Norfolk & Western only. On January 21, 1927, the Virginian & Western Railway Company filed its application for a certificate that the present and future public convenience and necessity require the...