August 13, 1975

All Directors:

At the June 4th Board meeting we discussed the possibility of keeping Raritan River out of Conrail. I assume by now that you have read the final system plan and the notations on page 228 of Volume I to the effect that Raritan River is included. The designations of the portions to be included are set forth on page 279, which Mr. Kipp advises are deficient in that they do not include the line which serves National Lead and Hercules Powder. However, I have discussed this matter with counsel for USRA who said they realize their error and they are issuing an errata sheet to correct this and several lines on other railroads that they unintentionally overlooked.

At this stage at the proceedings I think there is, as a practical matter, nothing that Raritan River can do to stay out of the Conrail system inasmuch as only affirmative action by Congress or a court decision could accomplish that objective. As to the former, I see very little possibility of any such action since our only reason for keeping Raritan River out of Conrail is a selfish reason that it would mean more financially to the owners of Raritan River, Penn Central and CNJ. We have no real public interest reasons that we could put forth in support of exclusion. As to the latter, I think the courts would interpret the statute to include properties of railroad subsidiaries owned by railroads in reorganization. I therefore think that a court test would be a waste of our money and our counsel’s time.

Under these circumstances, I do not propose to take any further action in this regard.

Sincerely yours,
R. B. WACHENFELD

RBW:mz
cc: Mr. R. G. Kipp