IS L-41-184 MEMORANDUM

Washington, D. C. April 14, 1941

TO The Director, Retirement Claims

FROM The General Counsel

SUBJECT Creditability of service rendered to Great Eastern Fast Freight Line National Despatch Fast Freight Line National Despatch - Great Eastern Fast Freight Line Re:

The ruling made herein with respect to the creditability toward annuities under the Railroad Retirement Act of service rendered to the Great Eastern Fast Freight Line, the National Despatch Fast Freight Line, and National Despatch - Great Eastern Fast Freight Line covers the subject matter of your memorandum of March 5, 1941, in con­ nection with the claim of the above-named applicant.

On September 1, 1880, an agreement was entered into between the Grand Trunk Railway Company, of Canada, the Chicago and Grand Trunk Railway Company, the Central Vermont Railroad Company, the Flint and Pere Marquette Railway Company, the Indianapolis, Peru and Chicago Railroad Company, the Louisville, New Albany and Chicago Railway Com­ pany, the Illinois Midland Railroad Company, the Chicago, Milwaukee and St. Paul Railway Company, and the Chicago and Eastern Illinois Railroad Company for the purpose of establishing a freight line known as the Great Eastern Fast Freight Line "for the accommodation and development of through business between agreed points and districts, upon and reached via their respective lines and systems of railway and their connections." The line was operated over the Chicago and Grand Trunk and the Grand Trunk Railway and their connections via Port Huron, Toronto and Montreal.

The general management of the Line was vested in a Board of Directors composed of one representative from each company with equal voting power. The agreement provided that the Board should elect annually a Chairman to give effect to such orders and regulations as might from time to time be adopted by it and a Secretary to keep min­ utes of its proceedings. The Board was also empowered to appoint a General Manager, agents, clerks and other joint-line employees who were to be paid by the Line. The agreement further provided for the -2- Memo to Director, Retirement Claims R.R.B. No,

creation of a permanent line fund of ten thousand dollars for the prompt payment of expenses and other charges of the Line. Contribu­ tions to the fund were to be made in proportion to the number of cars furnished by each member to the Line equipment. The expenses of the Line were to be authorized by the Board and then divided monthly among the parties to the agreement in the proportion of their several earn­ ings from the business of the Line for the same month.

In a letter dated December 23, 1937, addressed to the Chair­ man of the Railroad Retirement Board, Mr. Comptroller of the Canadian National Railway, enumerates the contributors to the Great Eastern Line Fund, and it appears that the following additional carriers entered into the agreement and contributed to the fund: Chicago, Rock Island & Pacific Railway; Toledo, Ann Arbor & Northern Railroad; Cincinnati, Hamilton & Dayton Railway, and the Wabash Rail­ road Company. All the companies which participated in the Great Eastern Line were "employers’1 under the Act or carrier by railroad predecessors of companies which were "carrier employers" under the Act on August 29, 1935.

On January 1, 1892, another fast freight line, known as the National Despatch Fast Freight Line, was organized as the result of an agreement between the Grand Trunk Railway Company of Canada acting for itself and all other lines in Canada and Michigan then owned or controlled by the Grand Trunk Railway Company of Canada, and also act­ ing for the Chicago and Grand Trunk Railway Company and the Detroit, Grand Haven and Milwaukee Railway Company and the lines owned or con­ trolled by the Chicago and Grand Trunk Railway Company and Detroit, Grand Haven and Milwaukee Railway Company, and the Central Vermont Railway Company acting for itself and its connections and all roads owned or controlled by it. These Railways had operated a fast freight line, known as National Despatch Line, for several years prior to the agreement and had entered into the formal agreement for organization and operation of the line so as to strengthen and harmonize the inter­ ests of the various parties and place the line on a permanent basis. Under the agreement the management of the line was to be vested in a Board of Directors composed of the General Manager for the time being of the Grand Trunk Company and the President for the time being of the Central Vermont Company. The Board was empowered to appoint a General Manager of the Line and from tine to time such agents, clerks and other joint-line employees as the Board should determine and approve.

The agreement also provided for the creation of a permanent line fund of twenty thousand dollars, each party to the agreement con­ tributing to the fund in proportion to the percentage of mileage be­ tween Boston and Chicago, the Central Vermont Railway Company assuming the mileage to Boston between St. Johns and Boston. -3- Memo to Director, Retirement Claims R.R.B. No.

The operation of the National Despatch Fast Freight Line was exactly the same as the Great Eastern Line and served the same purposes in a different geographical area and the two railroad com­ panies controlling the Line through the President and the General Manager were carrier by railroad predecessors of companies which were "carrier employers" under the Act on August 29, 1955.

On August 16, 1909, both the National Despatch and Great Eastern Fast Freight Lines were dissolved by written agreement, and on the same date a new agreement was entered into by the Grand Trunk Rail­ way Company of Canada, the Grand Trunk Western Railway Company, the Detroit, Grand Haven and Milwaukee Railway Company, the Central Vermont Railway Company and the Boston and Maine Railroad providing for the establishment of a cooperative Fast Freight Line, to be known as the "National Despatch - Great Eastern Fast Freight Line," for the accommo­ dation and development of through business between agreed districts and points upon and reached via their respective lines and systems of rail­ way and their connections. The new Fast Freight Line was managed by a Board of Directors comprised of one representative from each company with equal voting power. The agreement provided that they should elect annually a chairman whose duty was to give effect to such orders and regulations as might from time to time be adopted by the Board and appoint a Manager, agents, clerks and other joint-line employees. As in the case of the two former fast freight lines, a permanent line fund (Boston and Maine Railroad not contributing) was created for the sole purpose of paying promptly authorized Line expenses and other charges of the Line. The expenses of the Line were to be authorized by the Board and then divided monthly between the parties to the agreement. All the railroad companies who were parties to this agreement were "em­ ployers" under the Act or carrier by railroad predecessors of companies w h ^ ^ w e r e "carrier employers" under the Act on August 29, 1935. Mr. | states that the National Despatch - Great Eastern Line had em­ ployees on its pay rolls up to July 3, 1918, although its operations between 1910 and that date were greatly reduced.

describing the operations of all three Fast Freight Lines, Mr. states

"Fast freight lines were in reality a cooperative arrangement between various interested railroads and instead of each road maintaining separate soliciting organizations the staff of the fast freight line repre­ sented them all. The purpose of these lines was so that the roads comprising the routes to and from cer­ tain points would get more traffic over their own lines of railway from such points at a minimum cost by having the fast freight line employees solicit such traffic

L -4- Memo to Director, Retirement Claims R.R.B. No.

at points of origin for forwarding in the special cars assigned by interested roads to the line as in­ dicated in the agreement."

It is apparent that the parties to the three agreements main­ tained and controlled the three respective Fast Freight Lines, and in view of the well-known interstate nature of their railroads there can be little doubt that after February 4, 1887, the date of enactment of the Interstate Commerce Act, they were carriers by railroad subject to Part I of the Interstate Commerce Act.

On the basis of the foregoing, it is my opinion that the Great Eastern Fast Freight Line, the National Despatch Fast Freight Line and the National Despatch - Great Eastern Fast Freight Line were "employers" within the meaning of Section 1 (a) of the Railroad Retirement Act as organizations controlled and maintained wholly or principally by two or more employers and engaged in the performance of services in connection with or incidental to railroad transportation. See L-39-492 and L-39-520. In the absence of information as to whether the principal part of the business of the Fast Freight Lines was per­ formed in the United States or in Canada, only service rendered in the United States is creditable toward annuities under the Act. Such service to Great Eastern is creditable from February 4, 1887, to August 16, 1909, to National Despatch from January 1, 1892, to August 16, 1909, and to National Despatch - Great Eastern Fast Freight Line from August 16, 1909, until at least July 31, 1918, the last date it was known to have employees on its pay rolls.

General Counsel