The history of the market quotations, as shown by the evidence of record, which covers the 24-year period 1926 to 1949, inclusive, indicates the most erratic and irrational price activity in these stocks. Thus, contrary to the logic of the 1926 agreement, the quotations for the stamped old (plain) preferred and common stocks, from which the agreement takes liquidation value, which constitutes the essential difference between the stamped and the unstamped stocks, and gives it to the stamped first-preferred stocks, have consistently been higher than for the unstamped old preferred and common. In view of all the facts, we do not find that the division's conclusions are erroneous in this respect. Both petitioners repeat their contentions, previously advanced, that the real solution to the applicant's financial difficulties is for it to undertake a stock purchase program, whereby it could not only elimnate the dividend arrearages but also simplify its stock structure. Among other things, they urge that other corporations have found it practicable and beneficial to adopt such a program, and they refer particularly to the experience of the Alleghany Corporation. However, no showing was made in this record by these petitioners or other interveners as to what operation was undertaken by that corporation and the attendant circumstances, which might afford some basis for judging the comparability of the two situations. Under the proposal, as made by the intervener Sakis, to be applied to the applicant's situation, it would appear that no modification or alteration of securities would be necessary and it would not be a matter for an order in a proceeding under section 20b of the act. We affirm the conclusion reached by the division that the record in this proceeding affords no justification for adopting the course suggested by the intervener Sakis. Both petitioners seek reconsideration and modification of the division's denial of their request for allowance of expenses and attorney's fees. For reasons stated by us in Lehigh Valley R. Co. Securities Modification, 271 I. C. C. 655, 657-658, we affirm the conclusion of the division that the interveners' request for such allowance should be denied. Upon consideration of the entire record in this proceeding and of the petitions and the reply thereto filed herein, we find that there has been presented no error of fact or law in the report and order by division 4 herein dated April 19, 1950. We further find that no showing has been made warranting reargument, or vacation of the order and entry of an order denying the application herein, or modification of the report and order as requested by the petitioners. We further find that the report and order should be affirmed in all respects and that 275 I. C. C. the petitions, except so far as they ask reconsideration, should be denied. Contentions and requested findings not specifically discussed in this report nor reflected in our findings or conclusions herein have been considered and found not justified. An appropriate order will be entered. CHAIRMAN JOHNSON did not participate in the disposition of this proceeding. FINANCE DOCKET No. 16954 EAST TENNESSEE & WESTERN NORTH CAROLINA Submitted August 7, 1950. Decided September 6, 1950 Certificate issued permitting abandonment by the East Tennessee & Western North Carolina Railroad Company of a line of narrow-gage railroad in Carter County, Tenn., and Avery County, N. C. Conditions prescribed. Eugene T. Liipfert and James H. Eppes for applicant. G. Edward Friar for the Railroad & Public Utilities Commission of Tennessee. George F. Dugger, John F. Dugger, Robert H. Lacey, Robert C. Borienbrock, and Oscar M. Fair, Jr., for protestants. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS MAHAFFIE, ROGERS, AND KNUDSON BY DIVISION 4: The East Tennessee and Western North Carolina Railroad Company, on April 4, 1950, applied for permission to abandon its branch line of railroad extending from O'Brien, in Carter County, Tenn., southeasterly, approximately 22.62 miles, to the end of the line at Cranberry, Avery County. N. C. Protests were filed and a hearing was held, at which the Railroad & Public Utilities Commission of Tennessee was represented by counsel in opposition to the proposed abandonment. Briefs have been filed. The service of an examiner's proposed report has been waived. The line in question was built for the purpose of serving an iron mill at Cranberry. Construction was started in 1868 and was com pleted in 1882, following two changes in beneficial ownership, the first as the result of insolvency and the other through purchase of the stock by the iron company to be served. Control of the applicant was acquired in 1942, by the E. T. & W. N. C. Transportation Company, pursuant to our authority of August 29, 1941, in Cranberry Corp.-Control and Merger-ET&WNC M. Transp., 37 M. C. C. 253. The entire system, extending from Johnson City, Tenn., to Cranberry, was originally narrow gage (36 inches wide). The portion between Johnson City and Elizabethton, Tenn., has been converted to standard gage, while that between Elizabethton and O'Brien has three rails and can be used by standard-gage and narrow-gage equipment. The line sought to be abandoned is narrow gage. Most of the rail weighed 50 pounds per yard when new, but had been used by other railroads before it was acquired by the applicant 30 or more years ago. The applicant represents that only 8,367 of the 67,000 ties in the track are sound, and that about 6,000 of them will not be in good condition more than another year. In order to place the track in reasonably good condition, not less than 52,000 ties should be installed, at a cost of $3.17 each in place, or a total of $164,840. It also estimates the cost of removing rock and dirt deposited on the roadbed by slides, and providing necessary drainage for the track at not less than $150,000. The line has five tunnels, none of which are lined. One of them has been damaged by cave-ins and slides and must be repaired soon if operation is continued. This will cost approximately $6,750. Approximately 400 telegraph poles should be replaced, and the cost thereof is estimated by the applicant at $4,000. Of the seven bridges on the line five are of steel construction and are in fair condition, but are in need of some painting and repair, and replacement of some of the piers. The two wooden bridges contain the original timber placed in use about 1880. No estimate of the cost to repair the entire line was presented. It is shown, however, that operation cannot be continued unless the structure is practically rebuilt. In its present condition safe operation cannot be performed. The only repairs made are those necessary to make it possible for trains to run. The track is in a mountainous region and is about 1,600 feet higher at Cranberry than it is at O'Brien. In addition to being a steep grade from end to end it is almost entirely a series of very sharp curves. The equipment used is in little, if any, better condition than the track. Trains proceeding toward Cranberry cannot haul more than 250 gross tons, while those moving in the other direction must use the brakes practically all the way in order to stay on the rails. Trains operate only as carload traffic demands, averag ing approximately two round trips a week. No passenger service is rendered. The stations on the line, with approximate population as shown by the applicant, and distance, in miles, by highway to a railroad station if the line is abandoned, are Hampton 600, 5; Blevins 50, 12; Roan Mountain 250, 18; Shell Creek 50, 20; Elk Park 467, 26; and Cranberry 100, 24. All are in Tennessee except Elk Park and Cranberry, which are located in North Carolina. Roan Mountain and the two North Carolina stations are the only points having agents. The applicant estimates the population of the tributary territory within 5 miles of the track at 5,000. The protestants contend that the populaion of the territory from O'Brien to Cranberry within 5 miles of the line is from 12,000 to 20,000, and that the village of Roan Mountain has a population of from 800 to 850. An improved highway parallels the line throughout its length, passing through all villages served by the railroad. At least three motor freight carriers, including the applicant's parent company, hold certificates authorizing them to serve all points on the line. The E. T. & W. N. C. Transportation Company now handles all less-than-carload freight offered for shipment over the line sought to be abandoned. It expects to continue to handle such traffic if the application herein is granted. In addition the record shows that it has applied for authority to handle such traffic as coal, crushed stone, and timber products in bulk,' and will be able, if that authority is received, to handle any freight which, in the usual course, would be handled by the narrow-gage line in question. Carloads of freight handled on the line during each of the years 1948-49, and the first 4 months of 1950, are shown, in order, as follows: In-bound 748, 470, and 58; or in tons, 15,235, 8,176, and 2,045, respectively; out-bound 946, 189, and 145 carloads, or 13,649, 2,595, and 4,269 tons, respectively; totals 1,694, 659, and 203 carloads, or 28,884, 10,771, and 6,314 tons. Less-than-carload freight handled for the applicant by its parent company is shown in tons as 310, 188, and 48. The financial results of operation of the line during the same periods are shown as follows: System revenues $46,251, $22,493, and $10,893, of which $31,280, $15,103, and $7,534 are assignable to the branch on a mileage prorate; operating expenses on the line, maintenance of way and structures $5,458, $13,812, and $7,689, maintenance of equipment $4,708, $6,805, and $2,446, transportation, including transfer costs hereinafter explained, $30,624, $16,021, and $7,342; amounts paid parent motor carrier for handling less-than-carload 1 Pending in No. MC-52593 (Sub-12-TA), for authority to transport commodities in bulk between Elizabethton, Tenn., and Cranberry, N. C. freight $2,309, $1,368, and $353; total $43,079, $38,006, and $17,830; railway tax accruals $19,627, $8,441, and $3,021; cost of handling the freight of the line over other parts of the system, 50 percent of the revenues assigned thereto, $7,485, $3,695, and $1,679; and net loss $14,691, $27,649, and $11,637. The operating expenses on the line represent out-of-pocket costs. No charges are included for depreciation of way and structures or equipment or for overhead expenses. Of these items, depreciation of equipment is the only one which might be given consideration. In 1949, it amounted to $2,714. The freight handled consists of cordwood and lumber out-bound with an occasional car of other traffic, and coal, crushed stone, fertilizer, building materials and small quantities of miscellaneous products in-bound. The wood shipments totaled 12,784, 2,160, and 4,050 tons, or approximately 44, 20, and 64 percents of all the traffic handled during the periods stated. This article moves at a very low rate. All the freight handled moved between points on the narrow-gage line and points on standard-gage railroads and was, therefore, transferred from or to standard and narrow gage at Elizabethton, the end of the narrow-gage mileage. The cost to the applicant of such unloading and loading totaled $12,857, $5,372, and $2,313. The record does not indicate that the volume of traffic or revenues of the line will increase materially if operation is continued. Witnesses for the protestants stated that the tributary territory contains considerable quantities of iron and timber which in their opinions may provide business for the railroad. A company affiliated with the applicant owns some of the mineral rights. No iron mining or smelting has been performed in the community for many years, and no definite plans for any such business are shown to be in existence. Most, if not all, of the timberland has been cut over, and the second growth timber is used principally for cordwood. A mill at Roan Mountain produces from 18,000 to 22,000 feet board measure of flooring per day, and expects to increase its output to perhaps 40,000 feet after the employees become more familiar with some new machinery which has been purchased. The mill employs about 80 men. Those running the plant are engaged in other activities in the general community, and predict that shipments over the railroad, particularly from Roan Mountain, will increase in the future. The company expects to begin the mining and shipping of vermiculite from a local deposit. No estimate was offered as to the quantity to be shipped. It also assembles and ships some roots and herbs for medicinal manufacture. The exact quantities of such shipments are not shown, but it is clear from the record that the volume is small. The company has an investment of approximately $500,000, about one-half of which |