property, on account of previous operations, and a statement of the necessities then confronting the receivers are set forth. Subsequent developments and present conditions are reflected to some extent in the balance sheet for February 28, 1933, and statement of earnings filed with the supplementary application.

On that date the liabilities of the receivers included $954,721 of receivers' certificates and $303,744 of current liabilities, of which $233,142 represented audited accounts and wages payable. Current assets totaled $151,230, of which $46,070 represented special deposits. Gross revenues in January, February, and March 1933, were $56,003, $52,123, and $81,032, respectively. There was a deficit before interest charges for these 3 months of $58,624. For the 12 months of 1933, gross revenues of $995,158 are estimated by the receivers, and earnings applicable to interest amounting to $41,100. The estimated results are based on operating expenses, including depreciation accruals amounting to $47,676. The receivers, by eliminating the depreciation accruals, show that there would be a cash balance applicable to interest of $88,776.

The improvement in gross earnings for March and April as compared with January and February, the recent increase in value of cotton and other products of the territory, and other conditions, prompt the receivers to hope for continued improvement in earnings. The movement of watermelons and tobacco in July and August, and of cotton and farm products in the fall, is expected to result in substantially better earnings for the second half of the year. It is asserted that operating expenses will be further reduced, and taxes have already been reduced to the lowest level since 1917. Conclusions.-We conclude:

1. That we should approve a modification in the terms under which the previous loans were made to the receivers by the Finance Corporation so as to permit the use of the unexpended balance of the proceeds thereof for the purposes set forth in the pending supplemental application; and

2. That, except as thus modified, the terms and conditions prescribed by us in our previous reports and certificates should remain in full force and effect.

An appropriate certificate will be issued.

193 I.C.C.

FINANCE DOCKET No. 9710

ST. LOUIS-KANSAS CITY SHORT LINE RAILROAD COMPANY RECONSTRUCTION LOAN

Submitted May 22, 1933. Decided May 27, 1933

Application by the St. Louis-Kansas City Short Line Railroad Company for a loan of $35,000,000 from the Reconstruction Finance Corporation, dismissed. George R. Collins for applicant.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, EASTMAN, BRAINERD, AND
MAHAFFIE

BY DIVISION 4:

The St. Louis-Kansas City Short Line Railroad Company, on November 5, 1932, filed an application, and on January 27, 1933, a supplementary application, to the Reconstruction Finance Corporation, hereinafter called the Finance Corporation, for a loan under the provisions of section 5 of the Reconstruction Finance Corporation Act, approved January 22, 1932, as amended. By the terms of that act our approval is a condition precedent to the granting of loans to railroad companies. We have made the required investigation. Objections to the granting of the application have been filed by the Chicago, Burlington & Quincy Railroad Company, the Missouri-Kansas-Texas Railroad Company, the Missouri Pacific Railroad Company, the Alton Railroad Company, and the Wabash Railway Company and its receivers, Walter S. Franklin and Frank C. Nicodemus, Jr.

The applicant requests a loan of $35,000,000 for a term of 3 years, to be expended for the completion of the construction of its railroad. The applicant is not engaged in interstate commerce. The only steps taken toward securing its line of railroad have been the acquisition of about 176 miles of right of way and some preliminary engineering work. The applicant was incorporated under the laws of the State of Missouri on November 28, 1924. The railroad, as projected, will be double track, extending for a distance of 236 miles between St. Louis and Kansas City, Mo., and will consist of 512 miles of track, 472 miles of which will be main line and 40 miles yard tracks and sidings. The applicant's authorized capital stock consists

of 24,000 shares of common stock, of which 2,981 shares have been issued. The applicant contemplates increasing the amount of authorized capital stock to $70,000,000, par value, when and if the additional amount of stock is required for construction financing. There is no funded debt as yet authorized.

No certificate of public convenience and necessity under paragraphs 18 to 21 of section 1 of the Interstate Commerce Act has been issued by us authorizing the construction of the proposed railroad. The capital stock which is now outstanding has been issued without our authority.

Conclusions. We conclude the applicant is not a qualified applicant for a loan under the provisions of section 5 of the Reconstruction Finance Corporation Act, as amended. An appropriate order dismissing the application will be entered.

193 I.C.C.

FINANCE DOCKET No. 9937

MICHIGAN CENTRAL RAILROAD COMPANY ET AL. ABANDONMENT

Submitted May 24, 1933. Decided May 27, 1933

Certificate issued permitting the Michigan Central Railroad Company to abandon a branch line of railroad in Bay County, Mich., and the New York Central Railroad Company to abandon operation thereof.

John J. Danhof for applicants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, EASTMAN, AND MAHAFFIE BY DIVISION 4:

The Michigan Central Railroad Company and the New York Central Railroad Company, on April 8, 1933, jointly applied for permission to abandon the so-called Bentley branch of the former, which extends from a connection with the Gladwin branch of that company at Mount Forrest in a general northerly direction to Bentley, 4.689 miles, all in Bay County, Mich. No representations have been made by any State authority, and no objection to the application has been offered.

The Bentley branch was constructed about 50 years ago, and is part of a line built by a predecessor of the Michigan Central for the sole purpose of hauling timber from the tributary territory. All the timber has been cut, and there is no prospect of any traffic to take the place of products of forests which have comprised most of the tonnage handled. The branch has been operated by the New York Central since the effective date of the latter's lease of the property of the Michigan Central, February 1, 1930.

There are no incorporated places along the branch, and no industries are in the territory except a few small farms which do not produce agricultural products in sufficient quantity to require rail transportation. The population of the tributary territory is about 788. Bentley is slightly less than 5 miles from Mount Forrest over an improved county road, and about 6 miles from Standish, a station on the applicants' Mackinaw division, over an improved State highway.

Freight tonnage for the years 1928-32 was 2,985, 10,055, 1,350, 1,209, and 1,827 tons, respectively. Of this tonnage sand and gravel

constituted 1,702, 7,838, 603, 532, and 1,463 tons, respectively. No passengers were carried since September 28, 1930.

The gross revenues of the branch were $284.76 in 1928, $587.14 in 1929, $111.54 in 1930, $180.89 in 1931, and $120.24 in 1932. The deficit in gross income for the same years was $7,668.71, $6,837.53, $5,756.48, $2,659.92, and $1,527.74, respectively. It is stated that in arriving at figures for the last two items, operating revenues and expenses were actual so far as could be determined, and the remainder was allocated on mileage and other bases.

The applicants state that there is now practically no traffic for the branch, and that there is no prospect of a material improvement. It is apparent from the record that the continued operation of the branch will impose a burden on interstate commerce, and that the proposed abandonment would not result in serious public inconvenience.

We find that the present and future public convenience and necessity permit the abandonment by the Michigan Central Railroad Company of its Bentley branch in Bay County, Mich., described in the application, and the abandonment by The New York Central Railroad Company of operation thereof. An appropriate certificate will be issued effective from and after 30 days from its date. Suitable provision will be made therein for the cancelation of tariffs.