The Interstate Commerce Commission yesterday ordered a group of Midwest railroads to take over freight services on the lines of the strike bound Rock Island Railroad to assure transportation of the nation's bumper fall harvest.
Grain that has been piling up for almost a month should be moving early next week, making way for the shipment of record corn and soybean harvests, which begin in a few days, Vice President Mondale said yesterday.
Announcement of the rare ICC action, which could cost taxpayers about $50 million during the next 60 days, was made at the White House by Mondale, an indication of the importance the administration attached to the ICC move.
Mondale called the action "absolutely crucial" to the health of Midwest agriculture.
The shutdown of the Rock Island, which normally moves between 10 and 15 percent of all Midwest grain over its 13-state system, has had a "very serious and adverse impact" on the whole area, Mondale said, resulting in farm losses of between $4 million and $5 million a day. The strike has left 1,650 grain elevators served by the Rock Island filled to capacity and has snarled grain shipments to domestic and foreign markets.
Agriculture Secretary Bob Bergland told reporters at the White House that the disruptions of grain shipment have so far had no measurable impact on prices at the retail level but have impeded the movement of grain destined for export, thus creating balance of payment implications.
The ICC action directs the Kansas City Terminal Railway Co., jointly owned by a dozen Midwest railroads, including the Rock Island and the ailing Milwaukee Road, to operate over the Rock Island's 7,200 miles of track for a 60-day period, using the Rock Island's equipment and employes. Under the law, the ICC order guarantees the substitute railroad its costs and a 6 percent profit.
The Rock Island -- known officially as the Chicago, Rock Island & Pacific Railroad -- has been closed by the strikes of two major rail unions since Aug. 28. In explaining the ICC'S action, Chairman A. Daniel O'Neal said the order was technically independent of the strikes. Even if the railroad's employees returned to work without government intervention, the Rock Island wouldn't have sufficient cash to resume freight services, he said, making the ICC action both legal and necessary.
President Carter last Thursday ordered the striking employes back to work for a 60-day cooling-off period.The workers have ignored the order. But administration officials voiced optimism yesterday that the unions would respond to the latest government move. Mondale said Stuart E. Eizenstat, assistant to the president for domestic affairs and policy, had talked personally with the presidents of the two striking unions in an effort to get their cooperation.
Fred Hardin, president of the United Transportation Union, assured the White House he would order his 2,500 members back to work immediately. Fred Kroll, president of the Brotherhood of Railway and Airline Clerks, said he looked forward to sitting down with the management team of Kansas City Terminal to work out the details of the recall of the 1,600 employes who are members of his union.
Paving the way for the expected return is the administration's commitment to assure the striking workers the pay for work in August they have not yet received -- about $4 million -- as well as the prevailing national wage for rail workers during the next 60 days.
At the time of the strike, the clerks were making less than the national rate because the union hadn't reached a contract settlement with the railroad.
Although the ICC order runs for 60 days, it can be extended for 180 days. If extended, the total cost to the government would be between $80 million and $90 million, O'Neal said yesterday.
The ICC'S action was the second of its kind. The first such order directed service on a small railroad in 1974. But it may soon be faced with making a similar decision to assure service along the bankrupt Milwaukee Road.
U.S. District Court Judge Thomas R. McMillen in Chicago yesterday granted Milwaukee's request to abandon service over large parts of its system. McMillan said the railroad would be out of cash by Nov. 1 and ordered the railroad to suspend service on those parts of the 9,800 mile system that are not self-supporting by that date.
The judge said he expects the ICC to direct other railroads to take over service on the routes the Milwaukee abandons.