In computing revenues, those from passengers were determined by the application of the system average revenue per passenger-mile (determined from special studies made in earlier years and appropriately adjusted to give effect to increases in passenger fares) to the total revenue passenger-miles provided by trains Nos. 5 and 6. Mail revenues, and revenues from news agents and from the transportation of milk, cream, and newspapers are actual as shown on the carriers' books and records. Revenues from less-than-carload express were determined on the basis of car-foot miles, and the carload express revenues are actual. The expenses for locomotive repairs, locomotive depreciation, passenger car repairs and depreciation, lubricants, supplies and enginehouse expenses, and train supplies and expenses were estimated based on system averages. The cost of fuel was estimated based upon the average consumption of fuel per diesel unit-mile for the previous year for class groups of diesel units used on trains 5 and 6 as applied to the unit miles operated by such trains and priced out at current prices per gallon. The wages of trainmen and enginemen were estimated based upon the average cost per trainmile for normal train and engine crews on trains Nos. 5 and 6 at current rates of pay, including vacation allowances, as applied to the total train-miles of each train. The wages of baggagemen and baggage messengers are actual. Yard switching expenses were estimated based on normal yard-switching minutes consumed per day at intermediate points in switching equipment of trains 5 and 6 multiplied by the system average yard switching cost per minute for the previous year. The expenses for operating sleeping cars represent the net amount paid to the Pullman Company for the use of Pullman Company equipment on the trains under consideration over and above the revenues received therefrom. News agents' expenses represent the proportion of the total news agency expenses that are chargeable to trains 5 and 6. The expense item identified as "Savable Station

Employees' Wages" represents the actual amount of wages paid to station employees whose positions would be eliminated if the trains were discontinued. The expenses for the use of Southern Pacific Company tracks, Rosenberg to Houston, are the actual amounts paid the Southern Pacific for use of its tracks in the operation of trains 5 and 6 between Rosenberg, Tex., and Houston. Terminal expenses represent an estimate of the expenses incurred at the respective terminals specified solely because of the use thereof by trains 5 and 6 computed on a unit basis measured by the number of units consumed in serving those trains at each of the terminals named. Payroll taxes are estimates based on the ratio of system operating expenses to system payroll taxes applied to the operating expenses of the trains under consideration. Equipment rental is the actual amount paid, based upon mileages, for the use of other carriers' cars on trains 5 and 6. Maintenance-of-way and structures expenses were estimated under a formula developed by the carrier.

The carriers' losses for 1959, computed on a fully distributed cost basis, are shown to have totaled $1,454,333. The carriers contend that the discontinuance of trains 5 and 6 not only will eliminate the out-of-pocket losses shown in the foregoing table, but will enable them to realize savings substantially in excess of the out-of-pocket deficit specified. They estimate that, through the use of their other trains operated between Kansas City and Houston, they would retain $770,137 of the passenger, mail, and express revenue earned by trains 5 and 6 in 1959, if the latter were discontinued, and only $303,280 of additional expense would be incurred in handling such traffic on other trains. Giving consideration to such items, they assert that net savings could have been realized in 1959 of $1,136,404, rather than the out-of-pocket loss shown for that year, of $669,547.

Certain of the expenses claimed by the carriers appropriately may not be considered in this proceeding. The carriers contend that a formula used by them for measuring maintenance-of-way and structures expenses attributable to the trains fairly reflects out-of-pocket expenses and should be considered as such. In previously decided cases we have held that maintenance-of-way expenses are not out-ofpocket costs which would be eliminated as a consequence of the discontinuance of two specific daily trains on heavy traffic lines. See Louisville & N. R. Co. Discontinuance of Service, 307 I.C.C. 173. While there might be some slight saving in such expense by reason of the discontinuance of trains 5 and 6, and also some slight increase therein by reason of other trains operated by the carriers handling traffic now handled on trains 5 and 6, it does not necessarily follow that the amounts specified by the carrier, which concededly are submitted as estimates only, should be accepted as accurately measuring

the expenses or anticipated savings. Maintenance-of-way expenses incurred by one or two trains on a heavy traffic railroad are incapable of being determined with any degree of exactness and, therefore, for the purposes of this case, will be disregarded.

The carriers also include as out-of-pocket expense the joint terminal expenses at Kansas City, Wichita, Fort Worth, and Houston for the respective years. The total terminal expense for all 4 terminals for 1959 was $192,798. It appears doubtful whether the joint-facility expenses at any of the points named will be saved or reduced to any appreciable extent if trains 5 and 6 are discontinued. While the carriers might realize some savings by a lesser usage of the joint facilities, their other passenger trains operating in and out of the terminals would necessarily have to absorb a portion of the expenses no longer chargeable to trains 5 and 6. Any savings that might be realized by the carriers would, of course, involve a redistribution of the total joint facilities expenses among other carriers using the terminals and would place an additional burden on such carriers. In our opinion, the amounts specified for joint-facility expenses are not savable expenses which we must consider in making our determination herein and, for the purposes of this proceeding, should be disregarded.

After eliminating maintenance-of-way and terminal expenses, outof-pocket operating losses for 1957, 1958, and 1959 would be, respectively, $454,912, $346,135, and $335,965. The carriers' claimed net saving, considering retained revenue, predicated on the 1959 operation, would be reduced to $802,822. In this connection the carriers included joint-facility and maintenance-of-way expenses amounting to $51,825 and $43,762, respectively, as expenses that would be involved in handling, on other trains operated by the carriers, some of the traffic presently transported on trains 5 and 6. If those charges were eliminated, the claimed net savings to be realized by the carriers by the discontinuance of trains 5 and 6, taking into consideration retained revenue, would amount to $898,409. While retained revenues are appropriate for consideration, our conclusions must be based primarily on the actual result of operating the trains under consideration.

Aside from trains Nos. 5 and 6, the carriers operate trains Nos. 11-111 and 12-112 between Kansas City and Fort Worth, and trains Nos. 15 and 16 (the Texas Chief) between Chicago and Galveston via Kansas City. In addition there are several other trains operated by the Santa Fe between Kansas City and Wichita, and between Kansas City and Newton, providing service at certain of the intermediate points involved herein. Trains 11-111, 12-112, 15, and 16 are streamlined trains that operate on expedited schedules and make

stops at only a limited number of the stations along the route. They do, however, handle large volumes of mail and express and, at many of the smaller stations, drop off and pick up mail without stopping. There are other railroads providing passenger service in the affected area which serve certain of the points presently served by trains 5 and 6. The Union Pacific Railroad Company operates between Kansas City and Topeka; the St. Louis-San Francisco Railway Company between Kansas City and Oklahoma City; and the Chicago, Rock Island and Pacific Railroad Company between Kansas City and Fort Worth via Topeka, Wichita, and Oklahoma City. The Rock Island also operates between Kansas City and Houston via Topeka, Wichita, Oklahoma City, and Fort Worth.

There is a considerable volume of motorbus service in the area served by the trains. The Greyhound lines and the Continental Bus System provide numerous schedules daily between Kansas City and Topeka and also have frequent schedules serving a great many of the other points on the route under consideration. Bus service is also provided many of the towns involved herein by the Oklahoma Transportation Company and Central Texas Bus Lines-Kerrville Bus Company.

The carriers interchange passengers, mail, express, milk, cream, and baggage with other railroads at six points on the route here considered. This traffic is interchanged with 9 other railroads at Kansas City, with the Frisco at Wichita, with the Rock Island, the Fort Worth and Denver Railway Company, and the Texas and Pacific Railway Company at Fort Worth, the Missouri-Kansas-Texas Railroad Company at Temple, the Missouri Pacific Railroad Company at Milano, Tex., and with the Rock Island, the Fort Worth & Denver, the Missouri Pacific, and the Southern Pacific at Houston. The carriers keep no record of the number of passengers on trains 5 and 6 that are interchanged with other railroads, but the record indicates that the number is very small.

In addition to the other transportation service available in the area, the principal points on the route in question are also provided with direct airline service. Braniff Air Lines serves Kansas City, Wichita, Oklahoma City, Fort Worth, and Houston on scheduled daily flights. The Continental Air Lines serves Kansas City, Topeka, and Oklahoma City on regular flights daily, and TWA serves Kansas City and Wichita on regular flights each day. In addition, Central Air Lines serves Kansas City, Topeka, Wichita, Ponca City, Fort Worth, and Houston regularly and Trans-Texas Air Lines operates regular flights between Houston and Fort Worth.

The express and mail traffic handled in 1957 accounted for approximately 69 percent of the revenue earned by the trains, and approxi

mately 73 percent of the revenue earned by the trains in that year was derived from the transportation of head-end traffic. In 1959, the head-end traffic accounted for approximately 80 percent of the revenue earned by the trains. While the principal volume of the mail and express moves between the larger cities on the line, there is a considerable volume interchanged at Temple and Milano, Tex., that moves to and from those points on other trains operated either by the carriers herein or by other railroads. There is no indication of any intention by the Railway Express Agency, Inc., or the Post Office Department to reroute the mail and express to other carriers if operation of trains 5 and 6 is continued.

Seventeen communities presently served by trains 5 and 6, having a total population of 18,683 or about 14 percent of the total population served, will have no public passenger service if operation of the trains is discontinued. Of the communities that would be deprived of passenger service, 1 had a population of 5,855, 4 have populations ranging from 1,075 to 2,162, and the remainder have populations ranging from 85 to 700 persons. Eleven of the seventeen communities are located south of Purcell and none of these was represented at the hearing in opposition to the proposal here considered. Of the 6 remaining communities, 2 have populations of less than 600, 3 have populations ranging from 1,075 to 2,162, and 1, the town of Derby, Kans., has a population of 5,855.

In the event of the discontinuance of the trains, the carriers propose to provide additional car space on their existing trains for the handling of mail and express presently handled on trains 5 and 6. After conferences with officials of the Post Office Department, and after being advised as to the mail traffic that would be retained if the trains here considered are discontinued, the carriers estimate that they will salvage approximately $310,325 of the gross revenue presently earned by trains 5 and 6 from the transportation of mail. Also, a considerable volume of the express presently handled by trains 5 and 6 will be diverted to the remaining trains operated by the carriers. The carriers anticipate, however, that certain express and mail traffic presently handled will be diverted to other railroads serving some of the points now served by trains 5 and 6 or will be handled through the motor-carrier service provided by Santa Fe's motor-carrier subsidiary, the Santa Fe Trail Transportation Com

pany.

The Post Office Department is presently engaged in establishing metropolitan area mail improvement plans for the larger cities involved in this proceeding designed to effectuate improved mail service in areas 90 to 100 miles surrounding these cities. Such plans already are in effect at Kansas City, Wichita, Oklahoma City, Fort