A federal grand jury indicted five Northeastern railroads yesterday, charging them with violating the nation's antitrust laws by conspiring to curb competition in the shipment of iron ore from Lake Erie docks to steel mills in the Ohio area.
The indictment, issued after nearly a year of investigation by a federal grand jury in the District, names the government-subsidized Consolidated Rail Corp., Norfolk & Western Railway, Bessemer and Lake Erie Railroad and two subsidiaries of CSX Corp. -- Baltimore and Ohio Railroad and Chesapeake and Ohio Railway.
The indictment said a number of other companies also participated in the antitrust violations but were not indicted. Neither were the individuals involved. The unindicted companies and individuals were not named in the indictment, and Justice Department officials declined to say who they were.
According to the indictment, the railroads entered into a variety of arrangements from 1956 to 1978 to eliminate competition among themselves and the docks they controlled and from trucking companies and private docks that handled iron ore on Lake Erie.
For example, the indictment said, the railroads fixed their rates to allow only the railroad-owned docks, and not the private docks, to take advantage of special discount rates.
Moreover, in rates filed with the Interstate Commerce Commission, the railroads barred private docks from handling ore that arrived in self-unloading ships in which the ore could be removed from a vessel easily on a conveyor belt. Instead, under the rate agreements, private docks had to use the more costly method of cranes to unload the ore.
The indictment also charges the companies with trying to hinder competition from trucking companies. The companies refrained from lowering their rates in order to meet truck competition and sought to eliminate the trucking of ore in one case by setting an arbitrary usage charge applicable only to the transportation of iron ore by truck, the indictment said.
Norfolk & Western vigorously denied the charges. Noting that the railroad has not been a major factor in the shipment of ore from the Great Lakes, a company spokesman said the charges are "simply without merit."
Similarly, a spokesman for CSX Corp. said the Richmond company "believed the charges to be unfounded."
Conrail had no comment.