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In re Proposal of New Jersey and New York Railroad Co.

Decided: May 4, 1953.

IN THE MATTER OF THE PROPOSAL OF THE NEW JERSEY AND NEW YORK RAILROAD COMPANY TO DISCONTINUE OPERATION OF TRAIN NO. 613 BETWEEN JERSEY CITY, NEW JERSEY, AND SPRING VALLEY, NEW YORK, EFFECTIVE AUGUST 1, 1951


On appeal from the Appellate Division of the Superior Court.

For affirmance -- Chief Justice Vanderbilt, and Justices Oliphant, Wachenfeld and Burling. For reversal -- Justices Heher, Jacobs and Brennan. The opinion of the court was delivered by Vanderbilt, C.J. William J. Brennan, Jr., J. (dissenting). This dissent is joined in by Justice Jacobs.

Vanderbilt

This is an appeal from a judgment of the Appellate Division of the Superior Court affirming an order of the Board of Public Utility Commissioners denying permission to the New Jersey and New York Railroad Company to discontinue operation of westbound passenger train No. 613 leaving Jersey City, New Jersey, at 4:45 P.M. daily except Saturdays, Sundays and holidays.

The run in question extends from Jersey City to Spring Valley, New York, a distance of 30.7 miles, of which 7.5 miles extends over the main line of the Erie Railroad while the balance of 23.2 miles is over the tracks of the New Jersey and New York Railroad. There are 22 stations on the line, including the two terminals, located in 18 different municipalities. The entire run consumes one hour and 22 minutes. The railroad operates five eastbound morning trains arriving at Jersey City between 6:54 A.M. and 8:35 A.M., and six westbound evening trains that depart from Jersey City between 4:45 P.M. and 6:55 P.M.

The facts developed at the hearing below were uncontradicted. Approximately 80% of the stock of the railroad is owned by the Erie Railroad. Since 1938 its business has been conducted by a trustee in reorganization appointed by the United States District Court under section 77 of the Bankruptcy Act, 11 U.S.C.A. ยง 205. During this entire period the railroad as a whole has been operating at a deficit. In 1950 there was a net passenger operating loss of $218,709 and a net freight operating profit of $53,406, leaving a net railway operating loss of $165,303. In that year the net deficit of the railroad after fixed charges was $209,220 and the figures for the first six months of 1951 indicated a larger deficit for that year.

The average monthly revenue from train 613 is $1,351, while the out-of-pocket operating costs are $4,204 a month, leaving a monthly net operating deficit of $2,853. The number of passengers carried by the railroad has been gradually decreasing in recent years, although figures for the first six months of 1951 show an increase over 1950 in the number of westbound passengers. In fact, train 613 shows an average monthly increase of 13% over 1950. The number of paying passengers carried each trip on train 613 varied from 133 to 145, approximately 95% of whom are commuters.

The railroad proposed to add the coaches from train 613 to the next westbound train leaving Jersey City at 5:13 P.M., or 28 minutes after train 613, on a schedule which would bring the train into Spring Valley 19 minutes after the presently scheduled arrival time of train 613.

The application was opposed by representatives of several of the municipalities involved as well as by the Brotherhood of Railroad Trainmen, some of whose members would be affected if the application were granted. After formal hearings the Board of Public Utility Commissioners denied the application, holding that:

"In passenger train cases, our primary considerations must be the requirements of public convenience and necessity for continuation of a service. In respect to such service we adhere to the view that mere failure to earn a proper return on a line which is part of a system is not sufficient ground for discontinuance of a service.

On the record before us we find:

(1) that considerable public opposition to discontinuance of train No. 613 prevails in the communities on the line;

(2) that no material change in the circumstances attending the operation of train No. 613 has occurred since our prior Decision in ...


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