concurring.
I join the Court’s opinion. In its determination whether the merger is consistent with the public interest, the.ICC did not discharge its statutory duty to consider the effect upon that interest of the inclusion, or failure to include, the E-L, D & H and B & M. The ICC order authorizing immediate consummation of the merger as consistent with the public Interest must therefore be set aside.
I.
The ICC’s approval of the Penn-Central merger is the last of three authorizations for consolidation of major eastern roads. In the first, the C & 0 was allowed to control the B & O.1 In the second, the N & W was permitted to merge with the Nickel Plate.2 The ICC has been confronted with the problem of what to do with the E-L, D & H and B & M since they petitioned for inclusion in the proposed N & W-Nickel Plate system as a condition of approval. E-L’s precarious financial condition led to that carrier’s withdrawal of its petition in favor of inclusion by negotiation, 324 I. C. C. 1, 21, and as a consequence of the denial of the D & H and *398B & M petitions, 324 I. C. C„ at 31-32. In the meantime, the Penn-Central proposal had come before the Commission, and D & H, fearful that the Penn-Central merger .might be approved and consummated before its inclusion in a major system was assured, argued that approval of Penn-Central be held up by consolidating the two proceedings, or that immediate consummation of N & W-Nickel Plate should be made contingent on inclusion upon equitable terms of the three roads in the event Penn-Central is later approved. * 324 I. C. C., at 30-31. The ICC denied these requests, but recognizing there, was substance to D & H’s fears, it retained jurisdiction for five years to permit the roads to'file petitions for inclusion in the N & W system. Inclusion was to be required upon equitable terms.if “found consistent with the public interest,” and consummation of the merger would constitute “irrevocable assent” by N & W to the condition. 324 I. C. C., at 148.
Before N & W-Nickel Plate was approved, the Penn-Central proposal had been filed. The three roads, appreciating the' danger Penn-Central would pose to their survival, sought inclusion, conditioned upon denial of their inclusion in N & W. Soon after, negotiations between E-L and N & W for voluntary inclusion apparently broke down, because' at approximately the same time the three roads filed petitions for inclusion in N & W, and N&WandC&O filed applications to merge with each other, stating that only such a merger could support the inclusion .of the three roads in N & W on equitable terms and consistently with the public interest. The three roads urged in their applications both for inclusion in Penn-Central and for inclusion in N & W, that Penn-Central be delayed until their inclusion in one of the systems was assured. This was tantamount to a request that the two proceedings be consolidated for decision, and the Department of Justice supported their position.
*399The ICC found, as the three roads alleged, (1) the service rendered by the three roads “is essential and the public interest dictates that it be preserved,” and (2) it is “doubtful that, without inclusion in a major system, these three carriers could withstand the competition of, the . applicants merged . . . .” 327 I. C. C. 475, 529, 532. All the.parties concerned recognized, however, that inclusion of the roads in N & W would be preferable to inclusion in Penn-Central, and that jt would be some time before the N & W inclusion proceeding was completed.. Rather than delay consummation' of Penn-Central, which the ICC found would result in substantial savings and improved service, the ICC ordered immediate consummation. It pointed out that the three roads had petitions for inclusion in N & W pending, and provided that, in the event inclusion in N & W was denied, the three roads could petition the ICC for one year following the judgment of denial to allow or require inclusion of the roads in Penn-Central, on equitable terms, if found to be in the public interest. 327 I. C. C., at 553.- Meanwhile, in addition to usual conditions for preserving existing routes and gateways, the ICC prescribed “unprecedented” conditions of two kinds: (1) traffic conditions requiring Penn-Central to. continue existing practices and route patterns with respect to traffic competed for by the three, roads; (2) conditions guaranteeing the three roads an indemnity computed on'the basis of a fixed share of the combined total of the revenues realized by them and Penn-Central; this .was to compensate the roads for income lost from diversion of their traffic to Penn-Central. 327 I. C. C., at 532. These conditions were acceptable to Penn and Central but not to the three roads or to N & W and C & O-B & 0.
Proceedings to set aside the ICC order were brought in the District Court and petitions for reconsideration were also filed with the ICC. Some of the latter attacked *400the validity of the conditions on the ground that they were imposed without hearing. E-L and D & H, however, renewed their complaint against the approval before assurance of their inclusion in a major system.and alternatively attacked the conditions as indefinite and inadequate, demanding in addition to be indemnified for capital loss. C & O-B & 0 and their family lines for the first time introduced evidence that the^merger would adversely affect them, and argued that the indemnification condition of the original order would create a community of interest between the protected roads and Penn-Central. The Department of Justice urged postponement to consider the questions raised concerning the conditions and the evidence of adverse effect offered by C & O-B & O.3
*401The ICC rescinded the indemnity conditions pending a hearing on whether they should be modified and whether a capital loss indemnification condition should be added, but refused on the ground of laches to hear the evidence offered by the C & O. 328 I. C. C. 304, 318. The ICC reaffirmed its approval of the merger subject to Penn-Central’s acceptance of the conditions as finally formulated, although not foreclosing Penn-Central from seeking judicial review of any provision for capital loss indemnification. 328 I. C. C., at 329. The District Court denied interlocutory relief enjoining Penn and Central from going forward with the merger.4
II.
The statutory duty of the ICC is clear. Section 5 (2)(b) of the Interstate Commerce Act, as amended by the Transportation Act of 1940, authorizes the agency to approve only those consolidations it finds “will be consistent with the public interest . . . .” 54 Stat. 906, 49 U. S. C. § 5 (2)(b). The statute creates no presumption that mergers generally are either consistent or inconsistent with that interest; rather, it requires that each proposal be examined in depth to determine its effects upon the national transportation system. Thus, the ICC is explicitly directed to consider “(1) The effect of the proposed transaction upon adequate transportation service to the public; (2) the effect upon the public interest of the inclusion, or failure to include, other railroads in the territory involved in the proposed transaction; (3)- the total fixed charges resulting from the proposed transaction; and (4) the interest of the carrier employees *402affected.” 49 U. S. C. § 5 (2)(e). The National Transportation Policy is the controlling guide, McLean Trucking Co. v. United States, 321 U. S. 67, 82, and that policy requires the Commission “to promote safe, adequate, economical, and efficient seryice and foster sound economic conditions in transportation and among the several carriers . ... to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense.” 49 U. S. C., note preceding § 1. These provisions call for the application of discerning judgment to a wide range of factors, and preclude the position that the purpose of the 1940 Act is simply to promote railroad consolidation.5 The ICC has recognized that inquiry into a proposed transaction does not end with the possibilities for increased economies, but extends to “the effect of the transaction upon adequate transportation service to all parts of the public which would be so affected,” 6 which encom*403passes-.the “duty, as an administrative matter, to consider the effect of the merger on competitors and on the general competitive situation-in the industry in the light of the objectives of the national transportation policy.” McLean Trucking Co. v. United States, supra, at 87. “The public interest is the prime consideration, and in making that determination we must have regard for all relevant factors.” Toledo, P. & W. R. Co.—Control, 295 I. C. C. 523, 547.
A critical factor, not in my view properly applied in this case, is “the effect upon the public interest of the inclusion, or failure to include, other railroads in the territory involved in the proposed transaction . ...”7 The Commission is authorized, “as a prerequisite to its approval of the proposed transaction, to require, upon equitable terms, the inclusion of another railroad or other railroads in the territory involved, upon petition by such railroad , or railroads requesting such inclusion, and upon a finding that such inclusion is consistent with the public interest.” 49 U. S. C. §5 (2)(d). The ICC recognizes that it is required to consider the issue of inclusion even when no petition is filed,8 because if a proposed , transac*404tion “would endanger or'impair the operations of other carriers contrary to the public interest,” Chicago, B. & Q. R. Co.—Control, supra, 271 I. C. C., at 157, inclusion of the affected carriers is required by and not merely consistent with the public interest.
In this case the ICC, although determining that the three roads perform an essential service and that their inclusion in some, major system is required by the public interest, takes the position that’ its duty as to inclusion is sufficiently dischargéd when it provides for the possibility of inclusion in either N & W or Penn-Central, and meanwhile promises to impose protective conditions. My disagreement is not with the proposition that the Act vests wide discretion in the agency to allow a merger to go forward while conditions as to inclusion are- worked out. The Commission has broad authority to approve transactions “subject to such terms and conditions and such modifications as it shall find to be just and reasonable ... ,” § 5 (2)(b), and “may from time to time, for good cause shown, make such orders, supplemental to any order made under paragraph (1), (2), or (7), of this section, as it may deem necessary or appropriate,” § 5 (9). It has in fact occasionally reserved jurisdiction (1) to work out equitable terms for an inclusion it has already determined is required by the public interest, New York Central Unification, 154 I. C. C. 489, 493-494;9 and even (2) to determine, after consummation whether inclusion will be consistent with or required by the public interest, Union Pac. R. Co. Unification, 189 I. C. C. 357, 363.10 But *405decisions of this sort proceed upon the assumption that inclusion will later be possible, and that therefore the finding that the proposed consolidation is in the public interest will not be undermined. This assumption is not always warranted. An inclusion may turn out to be impossible, either because of inability to work out equitable terms, a circumstance upon which inclusion orders have invariably, been conditioned, or because upon full consideration the effects of the contemplated inclusion might be regarded as so. detrimen tal that the proposed merger which made necessary the inclusion would be against the public interest.
The Commission must decide, in the,first instance, whether the risk of such ultimate developments is acute enough to counsel against approval of a consolidation-subject to the working out of the terms of an inclusion or to the working out of both the terms and the inclusion. See Jaffe,. Judicial Control of Administrative Action 565-567 (1.965). But resort to the practice of deferring the accomplishment of inclusions or other ends required by the public interest must be carefully weighed and reviewed. Where there is little or no danger that inclusion consistent with the public interest and upon equitable terms might turn out to be impossible, it is sufficiently likely, despite deferral, that the Commission will have fulfilled its basic statutory , duty. Where there is a significant possibility, however, that a deferred inclusion upon which a' finding of public interest is premised will be unattainable or attainable only by setting into motion new forces which have not been weighed in evaluating the basic proposal, then the Commission’s statutory duty to consider all the relevant factors has *406pot been properly discharged. And ICC action of this sort generally creates, dangers far greater than those which normally accrue when an agency or court fails to apply the governing standard to all the relevant facts, since the decision to allow consummation is often irreversible, as it concededly is in this case, or reversible only at enormous expense. °
Prior authorizations deferring decision on inclusions held to be required' by the public interest entailed no significant risk that the ICC had approved a consolidation without fulfilling its statutory duty. When, in New York Central Unification, supra, the Commission authorized immediate consummation but retained jurisdiction to assure that terms would be worked out for the purchase of lines whose purchase it had required because their preservation was found , to be essential to the public interest, there was no doubt that equitable terms could be arranged. The -roads to be included were short lines, complementary to the New York Central system, so consummation of the proposed unification created no reason to expect a detrimental effect. Moreover, the roads were required to submit the issuerof value to arbitration in the event, they failed to agree. 154 I. C. C., at 493. When, in Union Pac. R. Co., supra, the Commission deferred until after consummation both the question whether the public interest required inclusion and the matter of working out terms, there was no indication that inclusion might be- impossible because of its effects without rendering the proposed transaction against the public interest, or that equitable terms for inclusion might be unattainable, or that the short lines involved would be subjected to danger from traffic diversion or otherwise during the period between consummation and inclusion. The transaction authorized only accounting changes; no change in *407operation was either contemplated or possible. 189 I. C. C., at 363.11
This case is in striking contrast. Allegations are made by the Department of Justice and numerous other parties that inclusion of the protected roads in either of the major systems contemplated by the Commission might not be possible consistent with the public interest or upon equitable terms. These arguments demonstrate that, because of possible difficulties involved in the inclusion proceeding and in .establishing acceptable interim conditions, the “opportunities for. the ultimate inclusion of E-L, D & H and B & M in a major rail system . . .” which the Commission has endeavored to preserve create serious uncertainties.-
The first and more obviously uncertain alternative is inclusion in Penn-Central itself. The Commission *408retained jurisdiction to allow the three carriers to seek inclusion in Penn-Central within one year after final denial of any of their petitions for inclusion in N & W. All concerned recognize that inclusion in N & W is the preferable solution, since inclusion of the roads in Penn-Central would create a virtual monopoly of all rail traffic in most of New England and New York.12 (See Appendix A for a map depicting this result.) It is true that Commissioner Webb said in the N & W inclusion proceeding that “the Penn-Central reports indicate that the. merger would be consistent with the public interest notwithstanding any lessening of intramódal competition result--ing from inclusion of EL, D & H, and B & M,” Norfolk & W. R. Co.—Merger, F. D. No. 21510, p. 27, but this statement is refuted by the Penn-Central reports themselves. Both the Examiners and the Commission expressly reserved for a later time the question whether inclusion of the roads in Penn-Central would be consistent with the public interest,13 and rather than implying that the merger would be in the public interest despite inclusion of the protected roads, the Examiners’ Report and the Commission’s opinions indicate that the merger *409was approved under the assumption that the protected roads would be included in N & W.14
The “opportunity” for inclusion in the N & W hardly presents a less risky alternative. The N & W proceeding has gone to hearing and Commissioner Webb, acting as Presiding Officer, has issued a report recommending inclusion in N <fe W of E-L and D & H, and authorizing inclusion of B & M if the parties are able to agree to terms. There has as yet been no action by the ICC on the report; and based upon its contents and the objections raised in this Court, there is a significant possibility, given the present state of circumstances, that inclusion in N & W might be unattainable or attaináble only at the price of *410rendering the Penn-Central merger ■ against the public interest, and that, even if inclusion could be accomplished consistent with the public interest, it might be impossible to work out equitable terms. Appellees make much of the fact that N & W, by consummating its merges with Nickel-Plate, “irrevocably agreed to include these three petitioners in their system upon terms agreed upon among themselves or, if necessary, prescribed by [the ICC], provided such inclusion is found to be consistent with the public interest.” 327 I. C. C., at 529. But this, condition expressly-assumes a favorable resolution of both of the questions in dispute. As Commissioner Webb said in the N & W inclusion report:
“the only obligation expressly imposed on N & W ... was to include the petitioners if the Commission found such inclusion to be consistent with the public interest and if the Commission also found that the inclusion could be effected on terms ‘equitable to all parties involved/ both findings to be subject to full judicial review.” N & W Inclusion Report, at 16.
Commissioner Webb’s recommended disposition reveals clearly that the dangers stemming from deferral exist even as to inclusion in N & W. He rejected an argument of C & O that its plan for absorption of the three roads into a merged C & O-N & W system was mutually exclusive with inclusion of the roads into an independent N & W, and the contentions of C & 0 and others that they would be adversely affected by the inclusion. He found inclusion of all three roads consistent, with the public interest, pointing out that the roads would be able to survive in N & W despite significant losses to Penn-Central, and that greater intramodal and intermodal competition and better services would become possible. N & W Inclusion Report, at 31-32. However, he found substance to arguments relating to each of the three roads *411that their required inclusion would be against the public interest. Since authorization of the Pénn-Cehtrál merger is premised on a finding that the roads must be included in a major system, these arguments are of great relevance here, and I address myself to them.
As to E-L, N&W argued inclusion would be too great a burden in light of its financial condition; for, although E-L showed a modest profit in 1965 for the first time in years, N&W contended it was too soon to draw any optimistic conclusion and that it was no more able now to absorb E-L than it had been a few years before when the Commission refused to require E-L’s inclusion in N & W because of E-L’s “precarious financial plight” and “the burden another railroad would assume if it absorbed the Erie-Lackawanna now . . . .” 3241. C. C., at 25. Commissioner Webb recognized that this argument had some merit, and characterized E-L’s growth as “erratic.” N & W Inclusion Report, at 17,10. So enormous is E-L’s debt, in .fact, thát the parties themselves agreed it “precludes a merger of N&W and EL now or at any time in the near- future.” Id., at 84. As a. consequence, the Commissioner recommended that only control of E-L by N & W be required, looking to eventual merger, with assumption of liabilities when circumstances would permit. D & H has no'financial problem which would interfere with immediate merger, but Commissioner Webb found that the only sufficient connection between D & H and N&W was E-L, and therefore recommended that an order requiring inclusion of D & H in N & W l>e conditioned on inclusion of E-L, id., at 139, which consequently makes the arguments relating to E-L applicable to D & H as well. With respect to B & M, Commissioner Webb agreed with N&W and refused to recommend that its inclusion in any form be required, because of B & M’s poor financial condition and limited prospects for recovery. He recommended only that inclusion be *412authorized, in the unlikely event N & W saw fit to agree to pay, within five years of the inclusion, a minimum rate for B & M shares equal to almost twice their value under Commissioner Webb’s own appraisal. Id., at 153, 156.
It is not entirely clear, therefore, that E-L and D & H will be ordered included in N & W, and the likelihood that B & M will not be included under present circumstances is great. Therefore, it is reasonably possible that the premise upon which the Commission has proceeded in authorizing consummation of Penn-Central — that all three must be included in a major system — may be unattainable through inclusion in N & W because the required inclusion of at least one and possibly all three may not be consistent with the public interest. Neither is it a sufficient answer to this uncertainty that B & M could be included in Penn-Central, since its value to that system because of the monopoly it would make possible in large areas of New England would make inclusion economically feasible at equitable terms. As we have seen, whether Penn-Central would be worth the price despite this result is a matter of some dispute, which the ICC has never considered.
The Commission’s duty to consider all the relevant effects of a consolidation before authorizing it extends, moreover, not only to whether an inclusion necessary to make the proposed transaction consistent with the public interest is in fact attainable, but also to whether such an inclusion, even though attainable, might set in motion events which could put the basic transaction proposed in a less favorable light. Thus, even .if it is assumed that inclusion of E-L and D & H in N & W will occur, and that leaving B & M temporarily independent would not undermine the consistency of the Penn-Central merger ,. with the public interest, it is incumbent upon the ICC to «b.psider the potential effects on the public interest of *413such an outcome before authorizing consummation. Clearly, the ICC has not done so, and on this record there is a substantial likelihood that effects of enormous significance to the public interest might result.
Commissioner Webb refused to consider N & W and C & O’s plan for merger with inclusion of the smaller roads, because he concluded the issue of inclusion could be settled without regard to the plan. It is clear, however, from the Commissioner’s recommendations, that-adoption of the N & W-C & O plan may well be a consequence of^the Penn-Central merger both through its effect on the smaller roads and its effect directly upon N & W and C & 0. The. uncertainties with respect to inclusion of the roads in N & W will be highly probative evidence when the Commission gets around to considering the N & W-C & O proposal. E-L’s large debt, for éxample, which now prevents its .outright merger in . N & W, would be less of an obstacle if N & W and C & O were- combined and thereby strengthened. Even more significant is the fact that B & M’s inclusion, presently regardéd as impossible in N & W, would probably be possible if N & W were combined with C & 0-B & O.15 *414There is.no doubt, moreover, that C & O and N & W .will,' in addition to offering a solution to the inclusion problem, allege that they stand to be seriously hurt by the Penn-Central system unless they are allowed to combine. Although Commisioner Webb refused to hear evidence offered by C & 0 to prove such allegations, and although the Commission also refused on the ground of laches to grant C & O’s petition, to reopen Penn-Central to introduce evidence of traffic diversion, the ICC agreed to modify the finding of the Examiners in this case, Penn-Central Report, at 305, that the net effect of Penn-Central will not be detrimental to C & 0, CNJ and other carriers or to their ability to provide general transportation serv-icé. Instead, the Commission substituted the finding that a detrimental effect “has not been shown of record . . . ,” 328 I. C. C., at 318, and thereby left it open to C & 0 to allege and prove at some later time that its merger with N & W is in the public interest at least in part because of traffic diversion caused by Penn-Central. With respect to N & W, some evidence of adverse effect from Penn-Central seems probable in light of Commissioner Webb’s refusal to deduct from the value of the three roads the losses anticipated through diversion of traffic to Penn-Central, because “N & W has resisted corresponding adjustments, in its own. earnings despite its admissions that it would suffer serious losses of traffic to Penn-Central . . . .” N & W Inclusion Report, at 44. The refusal to deduct any of the anticipated losses meant, in effect, that Commissioner Webb proceeded upon the assumption that N & W would lose the same proportion of traffic to Penn-Central as E-L expected to lose.16
It therefore appears that Penn-Central will increase the likelihood of, and may actually cause, an affiliation *415of N & W and C & 0. . The ICC has given no thought to whether such an affiliation would-be in the public interest. . It would create a virtual rail monopoly in some southeastern States (see Appendix B for a map depicting this result), which includes important traffic in. coal between the border States and the Norfolk port area, from where it is exported abroad, and it is strongly opposed by both Penn and Central. Had the ICC faced the problem of inclusion, it might have been led to consider the possibility that Penn-Ceritral could cause or increase the likelihood of an N & W-C & 0 affiliation. Only by coñsidering this possibility could the ICC fulfill its obligation to consider all the relevant factors ^before approving the merger.
The “opportunity” reserved by the ICC for inclusion of the roads in N & W is therefore, like the “opportunity” reserved for inclusion in Penn-Central, shrouded in doubt as to whether inclusion could be required consistent with the public interest. Concededly, there is far more reason to believe that voluntary inclusion in N & W could at least be accomplished consistent with the public interest than could inclusion in Penn-Central. But on the other hand, while equitable terms could probably be arranged for inclusion in Penn-Central, it is open to serious controversy whether equitable terms will be attainable for inclusion of the roads in N & W. Commissioner Webb has found, of course, that equitable terms for B & M’s inclusion in N & W cannot be worked out, and a possible consequence of this will be to create pressure in favor of the N & W-C & 0 plan or compel inclusion of B & M in Penn-Central. But even as to E-L and D & H (because its inclusion will probably be dependent on E-L’s), the present controversy surrounding the conditions designed for interim protection makes considerably uncertain whether equitable terms will be possible once Penn-Central is consummated.
*416The purpose of the traffic and indemnity conditions originally imposed but now being reconsidered is to maintain the preconsummation status quo, between Penn-Central and the three roads. One obvious end inferred from this purpose is to prevent irreparable harm to the three roads. But inherent in the finding that the public intérest requires eventual inclusion of the roads in a major system and in the fact that the protective conditions are interim only is the purpose of keeping the roads intact so their inclusión on equitable terms will be possible. There is substantial controversy, however, over the validity and effectiveness of each of the proposed conditions. The Commission has, in fact, reopened the Penn-Central proceeding for hearings to determine in what respects the conditions originally imposed should be modified and whether or not a capital loss indemnity should be imposed. 328 I. C. C., at 328. Modifications are to be applied retroactively, and Penn-Central is to have judicial review only on the capital indemnity issue. But despite these assurances, the three carriers and other non-protected carriers attack the conditions on several grounds, at least some of which cannot lightly be dismissed.
There are three types of conditions involved: (1) traffic conditions; (2) indemnity for loss of revenue; and (3) indemnity for capital loss. The traffic conditions are expressly devised to prevent Penn-Central from increasing its competition with the protected roads. In brief, they restrain Penn-Central from taking any action or engaging in any practice “which would divert or tend to divert traffic . . . ,” either directly or indirectly, from the protected roads. 327 I. C. C., at 561. While the ICC’s authority to impose this restriction is unquestioned, great controversy exists concerning its intended scope. The three roads, relying upon the ICC’s expressed intention to prevent “any” loss of revenue “as a direct result” of con*417summation, 327 I. C. C., at 532, claim that Penn-Central may take no step to improve service on routes in which they participate, even if the improvement is designed, for example, to meet truck competition. They also claim that the conditions should be applied retroactively to April 27,1966, when the ICC released its original decision, in order to eliminate the possibility that Penn and Central could defeat the purpose of the conditions by continuing competitive practices begun between April 27 and consummation or by instituting changes during the intervening period. Penn and Central, on the other hand, take a far more limited view of the conditions’ scope, despite their assurances before the District Court that the conditions prevent even solicitation of shippers.17 Their position at the reopened. proceeding, based upon the Commission’s reference to 'maintaining the pre-consummation “status quo,” 327 I. C. C., at 532, is that they should be free to offer any amount or quality of service after merger which they, could perform individually or jointly before merger. This interpretation apparently would leave Penn-Central free, for example, to reduce rates on any route which was formerly all-Central or all-Penn, or on any presently existing joint route of Penn and Central, or to pool their cars for better flexibility, even though these actions might result in diversion of traffic from a protected line. See generally Brief for the United States on Appendix G Conditions, F. D. Nos. 21989 and 21990, Jan. 16, 1967, pp. 8-12. Whether the traffic conditions will succeed in preventing the deterioration of the three roads to the point at which equitable terms may be unattainable is a question of some diffi*418culty. Traffic conditions are limited in their usefulness because they cannot eliminate entirely the more general benefits often obtainable through consolidation (such as unified management, better schedules, simplified tracing of cars, less switching and inspection of cars, and greater advertising resources), and because they cannot be operative upon the shipper. Since the ICC deemed the traffic conditions imposed essential to protect the roads, and since even the most rigid traffic conditions are of limited value, the question whether the view of the three roads or that of Penn and Central should be adopted is as important as it is difficult, and its unsettled state contributes to the doubt as to inclusion.
The indemnity for loss of revenue, now being reconsidered by the ICC, is'to be payable to any of the three threatened lines in the event that it fails to realize, during the indemnity period, gross revenues in the same proportion to the combined gross revenues of Penn-Central and the protected line as the indemnity formula fixes for the protected line in the base period. The indemnity is obviously designed to make up for losses of traffic to Penn-Central despite the traffic conditions. The three roads have argued that the indemnity should be modified to increase payments, but take the position that, even as modified, the conditions would be inadequate. The nonprotected roads claim the indemnity condition is unlawful. Quite clearly, the indemnity would provide a financial interest to the protected lines to divert to Penn-Central traffic they would normally handle in connection with other carriers, such as N & W and C & O, in order to increase Penn-Central’s proportion of their combined revenues and thereby to increase their own indemnities. Correspondingly it would provide an interest to Penn-Central to divert traffic to the protected lines to increase their proportion of combined revenues and thereby to reduce or avoid indemnity payments. *419Whether this community of interest is unlawful or would otherwise be against the public interest has not definitively been settled, since the ICC is still in the process of reconsidering its position. It is relevant here, however, simply to note that the indemnity, viewed by the ICC as essential to interim protection, is meaningfully challenged both as unlawful and as inadequate, and therefore that it too cannot be relied upon to eliminate the doubt concerning whether the protected roads may be damaged during the interim to an extent that would make equitable terms unattainable.
The indemnity for capital loss is advanced by the three roads as essential if the merger is to be consummated prior to inclusion. It is directly related to the problem of assuring that equitable terms for inclusion in N & W can later be reached. Commissioner Webb’s definition makes clear the proposed condition’s purpose:
“The term ‘capital loss,’ as used by N & W, EL, D & H and B & M in their petitions for reconsideration in the Penn-Central case, refers to losses of EL, D & H, and B & M traffic to Penn-Central to the extent not offset by traffic gains attributable to their inclusion in the N & W system, with the net annual loss of income, if any, capitalized at an appropriate rate.” N & W Inclusion Report, at 25, n. 21.
In effect, this condition would guarantee the three roads the difference between what they would lose to Penn-Central and what they would gain by inclusion in N & W. Unquestionably, its adoption would facilitate inclusion, but the fact is that it has not been adopted, and its adoption in any form would be subject to judicial review at the request of Penn and Central. Moreover, the usefulness of the capital indemnity approach has been vigorously challenged by C & O and N & W. They assert that the indemnity will not succeed- in keeping- the three *420roads in viable condition, since traffic, once diverted, is likely to stay diverted. The ICC should not, they claim, rely upon an indemnity provision which fails to accomplish the continuation of service it has found to be so essential. C & O-B & 0 Brief on Capital Loss Indemnification, F. D. No. 21989, November 28, 1966. In this connection they raise once again the specter of an N & W-C & O merger, arguing that their proposal is the only acceptable solution to the inclusion problem.
There appears to be some merit in the arguments that some sort of capital indemnity is necessary to assure the attainability of equitable terms for inclusion. While Commissioner Webb left to the ICC in the Penn-Central case the issue whether capital loss indemnification should be paid' he did conclude that inclusion of the three roads “in the system chosen by the Commission in the furtherance of national transportation objectives should not be on terms which reflect any diminution of capital value attributable to the traffic diversion impact of the other system. In other words, the petitioners should not be penalized for anticipating the Commission’s desire to preserve rail competition in the territory they serve.” N & W Inclusion Report, at 28. His valuation of the smaller roads, therefore, did not reflect the diminution of válue anticipated to be caused by Penn-Central, and his apparent conviction was that equitable terms could not be worked out on any other basis, unless a capital indemnity were granted. See, id., at 43.18 In light of these, conclusions it can *421readily be seen that the unresolved issue of capital indemnity is important, and therefore that the objections to it create uncertainty on this score as well as over, whether equitable terms are possible.
What the ICC has done here by deferring. inclusion of the three roads is to defer confronting numerous difficult and important issues, which cast substantial doubt upon whether the roads can be included in any major system contemplated for the purpose consistent with the public interest and on equitable terms. In the process it has approved an irreversible consolidation which it found to be in the public interest only upon the premise that the affected roads would be included in a major system. By proceeding in this manner, the ICC has in my view failed to fulfill its fundamental duty to determine whether consolidations are in the public interest on the basis of all the relevant facts. The problems created by a required inclusion obviously are relevant to the question whether the proposal which makes their inclusion necessary is in the public interest. And where, as here, the many problems created are serious and far-reaching, the Commission must consider* them before arriving at and implementing with finality its ultimate conclusion.
. While I consider it the ICC’s responsibility to weigh the feasibility and effects of an inclusion it deems required by the public interest, I recognize the importance of leaving great flexibility with the agency to deal with emergency situations in order to avoid serious damage to the national transportation system. But it is clear there is no pressing need here which could justify the ICC’s action. Commission counsel represent in this Court that the ICC has found “that the merger would *422result in substantially improved service for the shipping public and in annual savings of at least $80 million for the merged company . . . Brief of the I. C. C., p. 52. Improved service and economies are commonly the claimed results of rail consolidations, and proportionately the improvements and savings anticipated in this case are no more substantial than in many other mergers. Moreover, ..the anticipated $80,000,000 annual saving is to be reached about eight years after consummation, 327 I. C. C., at 501, and even this estimate does not take .into account the sharp curtailment that would-result from the interim protective conditions which were formulated with the avowed intention of maintaining the pre-consummation status quo, see 327 I. C. C., at 532.19 The ICC stressed the financial condition of Penn and Central, including their “persistently low rates of return” and their need for improved equipment, as a ground for authorizing immediate consummation, 327 I. C. C., at 501-502, but once again, this is a stock reason for merger, usually alleged by at. least one party. The fact that a merger will provide financial assistance militates in favor of approval, but it is only one of the many important factors which must be considered, and, in the case of Penn and Central this point has lost much of its force, since both have had substantial and consistent increases in their earnings in recent years. See Brief of the I. C. C., ■ p. 55. While this does not necessarily lessen the long-*423term need for consolidation, it does show there is little need for immediate consummation on this ground.
The argument that the survival of the New Haven depends upon undelayed consummation is not pressed here with the samp intensity with which it was embraced at the agency level. See 328 I. C. C., at. 312. Judge Friendly’s opinion put this matter in proper perspective by pointing out that it is “unrealistic to suppose that inclusion of NH in the Transportation Company can be accomplished-.» before conclusion of the Commission’s reconsideration in this case . . . .” 259 F. Supp., at 973. The tenable argument here is that, the longer consummation is delayed, the more difficult will become the task of NH’s Trustees in reorganizing the company, and the more possible it becomes due to some unanticipated change of circumstance that the merger may fall through entirely. While every effort consistent with the public interest should be made to protect the invaluable services the NH performs, the difficulties anticipated are largely speculative. If this merger is to benefit its proponents as greatly as they contend, it is no fragile package. And although no unnecessary risks should be taken even with a plan so enthusiastically supported and elaborately designed,' a proper concern for the public interest and for the protection of the roads threatened by this merger should have led the ICC to delay consummation.
The projected effects*of Penn-Central on E-L, D & H and B & M are anything but speculative. Those roads unquestionably will be destroyed unless included in a major system, and the fact that inclusion somewhere is implicitly assured us may be further cause for concern, in light of the contemplated alternatives and of the difficulty and consequences involved in the.adoption of either of them. If the ICC should ever be allowed to depart from its statutory duty to consider all the relevant factors before determining the public interest, it certainly should *424not be upon the mere recitation of factors favorable to the plan’s adoption and of speculative dangers and the inconveniences of private parties. The reason Congress has ordered that all factors, including the effects of inclusion or failure to include, be considered, is to avoid danger to the public interest caused by precipitate action, and there is more than ample evidence of danger to the public interest in this case to warrant unhesitating enforcement of Congress’ directive.
III.
The ICC argues that to delay the merger until the three roads are assured inclusion would amount to a consolidation of the proceedings in Penn-Central with the N & W inclusion proceeding, at least for decisiohal purposes, and that this would constitute a return to the “master plan” approach for railroad unification “unsuccessfully tried under the Transportation Act of 1920, and would probably preclude the consummation of any major rail unification, regardless of its merits.” Brief of the ICC, pp. 43-44. The Commission points out that it “consistently has refused to consolidate the Eastern railroad merger or control proceedings,” id., at. 48, and that the Government’s position here is the same as its unsuccessful contentions for consolidation in the C & O-B & 0 and N & W-Nickel Plate proceedings.
It is difficult to understand exactly what the ICC is arguing. Certainly no one contends that the Commission is required, as it was by the Act of 1920, to “prepare and adopt a plan for the consolidation of the railway properties of the continental United States into a limited number of systems.” 41 Stat. 481. Nor is it argued that the ICC is required to draw up regional plans for consolidation. ~
On the other hand, it can hardly be said that the ICC is powerless to consolidate proceedings, or for that matter *425to plan or to take any other reasonable step to enable itself to perform its statutory obligation as custodian for the development in the public interest of a national transportation system; that the ICC is no longer told to plan does not mean it is unable to do so when planning is necessary to fulfill its duties. The ICC is told in the 1940 Act to “conduct its proceedings under any provision of law in such manner as will best conduce to the proper dispatch of business and to the ends of justice,” 49 U. S. C. § 17 (3), and it has in fact recognized that it possesses “the power in appropriate circumstances either to consolidate proceedings in which the issues are similar or closely related, or to postpone a particular decision when so required by the public interest.” C & O-Control, supra, 317 I. C. C., at 266. But apart from this explicit power, it is clear from a close appraisal of the 1920 and 1940 Acts that the ICC’s responsibilities are far broader now and, therefore, that it would be anomalous to find in a comparison of these two pieces of legislation a basis for the sweeping contention that the Commission can no longer plan.
The 1920 and 1940 Acts are similar in several respects. Under both, applications for consolidation are initiated by the parties and approved if found to be in the public interest, and under neither may a consolidation be compelled. The salient difference is that under the 1920 Act the ICC was required to draw up a plan for all the Nation’s railroad properties, and. was called upon to judge the proposals for railroad consolidation filed with it by private parties in terms of the master plan it had created. Proposals that advanced the plan’s fulfillment stood a far greater chance of approval than those that did not, and only in this sense could it be said that parties were unable to initiate plans of their own choice. While the planning function is broad procedurally, however, it was designed to serve only limited ends. Congress’ *426concern was “largely with financial problems,” its chief aim being to overcome the problem which arose from the fact that “rates which would provide reasonable returns for strong systems would not permit weak lines to survive, and iL rates were raised to take care of the weak roads, the more prosperous roads would enjoy excessive returns.” Leonard, Railroad Consolidation Under the Transportation Act of 1920, at 57, 59 (1946). The decision to encourage consolidation into a limited number of systems was of course designed to establish a stronger railroad industry, but it “was riot grounded on the ^premise that economies from operation and the avoidance of competitive wastes would be the principal means of insuring an efficient and economic railway system . . . , but, rather, on the conclusion that the financial prosperity of rail carriers would be promoted and effectuated if the weak and the strong railroads which exist side by side in the same territory were to be consolidated into balanced railroad systems with respect to earning power.” S. Rep. No. 445, Report on the National Transportation Policy by the Special Study Group of the Committee on Commerce, 87th Cong., 1st Sess., p. 234 (1961). In fact, the Act specifically .directed the ICC, in drawing up the plan, to preserve competition as fully as possible and to maintain existing routes and channels of trade wherever practicable. In other words; although the ICC was directed to draw up a national plan against which it was to judge whether applications for consolidation were’ in the public interest, the judgment was to be made rather mechanically, and the plan itself was to be designed to achieve limited, primarily financial goals.
In contrast, as we have seen, the purposes sought through consolidation under the 1940 Act are wide-ranging, and the public interest includes consideration of all factors relating to the National Transportation *427Policy. Financial manipulation was deemed inadequate, and the ICC was ordered to weigh numerous, often conflicting, considerations. In light of this “enlarging of the factors or values which an agency must take into consideration,” Reich, The Law of the Planned Society, 75 Yale L. J. 1227, 1248 (1966), it seems incongruous to assert that the change from the 1920 Act approach to that of the 1940 Act signifies a change from planning to strictly ad hoc adjudication.
It should be clear, in fact, from a full consideration of the ICC’s powers, and of the consequences of failing to use those powers, that consolidation and the use of other procedural techniques is not only within the agency’s authority, but is often essential if it is to fulfill its function as guardian of the public interest. Section 17 (3), referred to above, appears sufficient to authorize the Commission to adopt procedures calculated to develop complete records with respect to the public interest in particular merger proceedings, and to coordinate separate merger proceedings when necessary to secure. the best possible results. Tucker & O’Brien, The Public Interest in Railroad Mergers, 42 B. U. L. Rev. 160, 184 (1962). Within the context of a case-by-case approach, the Commission is authorized under § 16 (11) to “employ such attorneys as it finds necessary ... for proper representation of the public interests in investigations made by it or cases or proceedings pending before it, whether at the commission’s own instance or upon complaint . . . ,” and it has done so.20 It may and often has called upon its staff to develop information in pending cases. In the N <& W-Nickel Plate proceeding, for example, it called upon its Bureau of Inquiry and Compliance to study *428and report on which railroads would be affected by the merger. It possesses, with appropriate safeguards, broad powers of official notice,21 and in recent merger cases it has frequently referred to facts and arguments in other, related merger cases. Moreover, like most other agencies assigned similar functions, it has broad investigative power, which may be used in- the context of adjudication or simply to provide background. Section 13 (2) confers “full authority and power at any time to institute an inquiry, on its own motion, in any case and as to any matter or thing . . . concerning which any question may arise under any of the provisions of this chapter, or relating to the enforcement of any of the provisions of this chapter,” which includes § 5. The ICC has resorted to various forms of investigations and studies to enable itself to perform its obligations. See generally S. Doc. No. 10, Monograph of the Attorney General’s Committee on Administrative Procedure, Part 11: Interstate Commerce Commission, 77th Cong., 1st Sess., pp. 93-96 (1941). Particularly noteworthy is the Staff Study on Railroad Consolidations and the Public Interest, by the Commission’s Bureau of Transport Economics and Statistics, which contains an analysis of the Commission’s decisions;in railroad consolidation cases. Reprinted as Exhibit 11, Hearings before the Subcommittee on Antitrust and Monopoly on S. 3097, 87th Cong., 2d Sess., pt. 2 (1962).
Finally, although the ICC does not promulgate general plans for consolidation, it has the power under § 5 (2) (b) to approve consolidations “subject to such terms and conditions and such modifications as it shall find to be just and reasonable . . . This authority encompasses the power under § 5 (2) (d) to make inclusion of a railroad a prerequisite to approval of a merger, and it does *429not depend upon the request of any private party involved. It has been broadly construed to enable the ICC to implement previously found conditions and to cope with, changed circumstances, e. g., United States v. Rock Island Motor Transit Co., 340 U. S. 419; American Trucking Assns. v. United States, 355 U. S. 141; American Trucking Assns. v. Frisco Co., 358 U. S. 133, and. thé Commission has applied this power, when it has seen fit to do so, with great liberality. It has even gone to the point of conditioning its approval of applications to consolidate upon actions to be taken by railroads not even party to the proceeding.22 In sum, the Commission’s practice-certainly is not consistent with its assertion here that its “only ‘planning’ power” under the 1940 Act is to include railroads in the region. Brief of the ICC, p. 46.
The ICC is pre-eminently an agency, “directly and immediately concerned with the outcome of virtually all proceedings conducted before it. It is not intended to be a passive arbiter but the -guardian of the general public interest,’ with a duty to see that this interest is at all times effectively protected.” H. R. Doc. No. 678, Practices and Procedures of Governmental Control of Transportation, 78th Cong., 2d Sess., p. 53 (1944); see Southern Class Rate Investigation, 100 I. C. C. 513, 603. It is empowered to investigate and gather evidence beyond that presented by the parties where exercise of that power will advance the determination of what best *430serves the public interest.23 To the same end, the agency has wide latitude in fashioning procedures, and a broad power to condition its approval of proposals. In other words, the ICC is not the prisoner of the parties’ submissions.24 Rather, the agency’s duty is to weigh alternatives and make its choice according to its judgment how best to achieve and advance the goals of the National Transportation Policy.25
*431-I am therefore not reassured by the ICC’s representation that it has “consistently” refused to consolidate the eastern railroad merger proceedings for any purpose or to any degree. The ICC’s prior refusals to -consolidate are entirely distinguishable, since none of them entailed the risk under the Commission’s own findings that a railroad performing essential public service could be destroyed.26 But more generally, while consolidated consideration provides no simple answer to the ICC’s problems, see generally Shapiro, The Choice of Rule-making or Adjudication in the Development of Administrative Policy, 78 Harv. L. Rev. 921 (1965), the very complexity of its task suggests that consolidated consideration may be a useful procedural device, short of an investigation or prearranged plan, for offsetting at least in part the disadvantages inherent in the isolated case-by-gase approach, both in formulating and applying policy.
Although a case-by-case adjudication may offer advantages in flexibility and continual exposure to concrete situations) “the disadvantages of developing policy through a sequence of limited cases are both numerous and impressive.” H. R. Doc. No. 678, supra, p. 81. A significant disadvantage is that individual proceedings “seldom if ever produce sufficiently comprehensive records for the adequate solution of questions of major importance.” Id.; at 82. Obviously, without all the relevant facts, the chance of a satisfactory disposition is diminished. Although the ICC has tools to assemble complete factual records, it employed virtually none of them in these highly interrelated proceedings,27 including the *432power to consolidate the proceedings on common issues. Rather, the cases * have been rigidly segregated, leading the ICC to resort to extraordinary, interim conditions instead of resolving definitively the fate of the three threatened roads. This- has had the undesirable effect of enabling each of the major carriers to control the basis for judgment by deciding what evidence to offer or withhold, depending on which course best served its own interest. Evidence of competitive impact has been withheld in one proceeding only to appear at later pro*433ceedings in the form of evidence that- the company-affected must be permitted to merge with another company to protect itself, or that the anticompetitive impact of the later merger will be limited in light of the increased strength and ability to compete of the companies already allowed to merge.28 The carriers have been well aware of the opportunity the Commission’s practice provides them, as is illustrated by the statement of the Chairman of the Board of Pennsylvania that “if the C. & O.-B. & 0. is approved, that is going to' help the Nickel-Plate case and if that is approved, it is going to help our case, going to go right around the circle.” Hearings, supra, n. 24, at 397.
*434It is not that the ICC has been unaware of what has been going on. Commissioner Tucker, in the first of the recent trilogy, pointed out that the “failure of the large eastern railroads to present evidence against consolidation is ... a natural consequence of their own self-interest which dictates a reciprocity of silence.” C & O- Control, supra, 317 I. C. C., at 326. The fact is that, despite some lip-service to the contrary,29 the Commission has proceeded under the assumption that competitive impact is to be evaluated with the position of the railroads affected very much in mind. Thus the Examiners in this case, when called upon by the Justice Department to weigh the possibly, serious adverse effect of Penn-Central upon N & W, C & O-B & O and others, pointed out that the roads allegedly affected had introduced no evidence of adverse effect. They added, realistically and revealingly:
“We are fully cognizant of the fact that in the evolving merger picture in the northeast section of the nation, the carriers involved may well have refrained from participation in these proceedings or influenced their subsidiaries not to participate on - the grounds that they did not desire to upset their own merger prograna. Such action, however, infers a managerial decision by each that the anticipated benefits from its individual merger program will *435outweigh any injury or harm which may result from other merger plans.” Penn-Central Report, at 304.30 ■
The approach which this statement and many of the Commission’s rulings and practices reveal is based upon a series of unacceptable assumptions. It is simply unrealistic, for example, to believe that all the railroads will always be correct in their estimate even of their own best interests. When a railroad has incorréctly estimated its self-interest, moreover, its reaction may well upset the private agreements or understandings upon which the Commission has in effect allowed its findings to rest. Thus when E-L realized that Penn-Central might be approved before it had secured voluntary inclusion in N & W, it abandoned its agreement with N & W, upon which the Commission relied, and petitioned for inclusion in Penn-Central, thereby setting into motion the controversy in this case. See 324 I. C. C., at 61-62 (representation. of counsel quoted in dissenting opinion). Most recently, C & O-B & O, and their family lines, sought to reopen Penn-Central to introduce evidence of traffic diversion. The Commission observed, in refusing to hear the evidence, that the Examiners’ findings that.the net *436effect of the merger would not be detrimental to these carriers or to their ability to provide adequate -service “are as much based on a failure of the several petitioners to come forward with assertions or proof of injurious traffic diversion as on any ^affirmative showing of no effect.” 328 I. C. C., at 317. For the first time revealing indignation toward a practice long condoned, the ICC stated that the “measured and deliberate silence” of the railroads at the hearing supports “the inference that they saw more to be gained thereby in their own system-building aspirations than would result from forceful opposition likely to arouse counter opposition. Now, with the N & W-Nickel Plate merger and the C & O-B & O control transactions safely beyond challenge,.. .. petitioners have nothing to lose and perhaps much to gain by breaking their silence.” Ibid.
Ultimately, however, the reason reliance upon the estimates of railroads of their own best interests is objectionable is simply that the best interests of the railroads are not necessarily consistent with the public interest, and it is the latter which the Commission.is directed to advance. • It may be, as Commissio'ner Tucker stated early in this “gigantic game of dominoes” the Commission has been playing, 327 I. C. C., at 550, “that each carrier has the unalienable private right to abdicate its prerogatives to oppose any consolidation. It is the primary responsibility of the Commission, however, to preserve the development of a sound transportation system in the public, interest, and where an application may offer the possibilities of public injury, the Commission .must strive to obtain a record which comprehensively covers.public considerations.” C & O-Control, 317 I. C. C., at 326. See generally, The Railroad Merger Problem, Report of the Subcommittee, on'Antitrust and Monopoly of the-Senate *437Judiciary Committee, 88th Cong., 1st Sess. (Comm. Print 1963). The commendable industrial statesmanship demonstrated by the railroads on many occasions in these recent proceedings only serves, because of the cohesion this demonstrates, see Jaffe, op. cit. supra, p. 405, at 11-13, to aggravate the danger that “grows out of the tendency of these giant corporations to compromise their own differences at the expense of the unorganized public,” 2 Davis, op. cit. supra, n. 21, at 378. The regulatory agency must be the bulwark against such compromise. It is “a requisite for administrative viability,” 31 that “[t]he outlook of the Commission and its powers must be greater than the interest of the railroads or of that which may affect those interests.” I. C. C. v. Chicago, R. I. & P. R. Co., 218 U. S. 88, 103. See Scenic Hudson Preservation Conference v. F. P. C., 354 F. 2d 608 (C. A. 2d Cir.), cert. denied, 384 U. S. 941.
This merger may well be in the public interest, as well as in the interests of the railroads involved. But the Commission has failed to go about deciding this question in a manner designed to accomplish its statutory responsibility. “Deference to administrative decisionmaking assumes procedures which assure a fair hearing to the affected interests . . . .” Jaffe, op. cit. supra, at 566. “As soon as the search for the public interest, even seemingly, becomes a secondary consideration in cases involving more than the adjudication of private rights, no matter how conclusive the exigencies of the situation *438appear, the independent Commission is doomed to impotency as an instrument of government.” C & O-Control, 317 I. C. C., at 297 (dissenting opinion).32
Chesapeake & O. Ry. Co.—Control—Baltimore & O. R. Co., 317 I. C. C. 261, sustained sub nom. Brotherhood of Maintenance of Way Employees v. United States, 221 F. Supp. 19 (D. C. E. D. Mich.), aff’d per curiam, 375 U. S. 216.
Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co.—Merger, 324 I. C. C. 1.
Pennsylvania and Central claim we should not pass upon the Department of Justice’s contention that the Commission should have delayed consummation until inclusion of the smaller roads in a major system was assured. The issue is, however, presented by the ICC itself, in its statement of Questions Presented, where it recites that, whether the District Court erred in refusing to enjoin consummation pending assurance of inclusion, is a question embraced within the general question presented on these appeals. Brief of the ICC, p. 4. A number of the railroad appellants, moreover, claim they have properly presented the question of delay pending inclusion. These representations amply fulfill the requirement of this Court’s Rule 15(1) (c)(1), and the point has in fact been fully briefed and argued.
Neither is there merit to the claim that this issue, clearly raised before the ICC, 327 I. C. C., at 528, was not raised before the District Court. Counsel for D & H complained that the Commission found “the only way the D & II could be protected is through inclusion in some system, but they have not yet made a finding . . . as to whether our inclusion in any system is consistent with the public interest,” Transcript, p. 58, and counsel for C & 0 was unable to answer meaningfully Judge Friendly’s (comment that his “position is really that the merger cannot be consummated until all these other proceedings are carried to a conclusion id., at 80. The District Court explicitly rejected “the claims that con*401summation of the merger should be deferred until conclusion of all pending rail merger proceedings-. . . 259 F. Supp. 964, 972.
Although this case arises as an -appeal from the District Court’s denial of motions for interlocutory injunction, the parties recognize that the lawfulness of the ICC’s order permitting immediate consummation of the merger is in issue before this Court.
The ICC’s most recent pronouncement on the issue is in Great N. P. & B. L. R. Co. — Merger, F. D. No. 21478, p. —, decided March 31, 1966, reconsideration granted January 4,' 1967:
“The legislative history of section 5 clearly shows that the Congress did not adopt a policy fostering or encouraging railroad unifica-tions. It’ was the Transportation Act of 1920, not the Transportation Act of 1940, that embodied a policy favoring railroad consolidations. ... No such policy is expressed in section 5. To interpret section 5 as implying such a policy is a perversion of legislative history and intent. The public interest scale is balanced. It is not to be tipped by the slightest presumption for or against merger.”
It is meaningless, of course, to contend that the Act favors unifica-tions that are otherwise consistent with the public interest; it also disfavors unifications inconsistent with the. public interest.
Chicago, B. & Q. R. Co. — Control, 271 I. C. C. 63, 146. See also Detroit, T. & I. R. Co. — Control, 275 I. C. C. 455,489, sustained sub nom. New York, C. & St. L. R. Co. v. United States. 95 F. Supp. 811 (D. C. N. D. Ohio).
The Staff Study by the Commission’s Bureau of Transport Economics and Statistics on “Railroad Consolidations and the Public Interest” (p. 46), accurately labels this factor “a highly important criterion, since it involves the basic problem of competition among railroads.” Reprinted as Exhibit 11, Hearings before the Subcommittee on Antitrust and Monopoly on S. 3097, 87th Cong., 2d Sess., pt. 2, p. 859 (1962).
When E-L, for example, withdrew its petition for inclusion in N & W the Commission expressly stated that the Transportation Act of 1940 “does not limit our participation in carrier-initiated consolidations to passing upon a proposal on a take-it-or-leave-it basis. We are specifically enjoined to consider, among other things, the effect . . . upon the public interest of the inclusion, or failure to include, other railroads in the territory involved in the proposed transactions.” 324 I. C. C., at 26. Accord, N. Y. Central Securities Corp. v. United States, 287 U. S. 12, 28; Toledo, P. & W. R. Co.—Control, supra, 295 I. C. C., at 529.
Accord, Alton R. Co.—Acquisition, 175 I. C. C. 301, 313, where the Commission later, concluded, 189 I. C. C. 271, 285, that the public convenience and necessity did not require acquisition of the short lines ihvolved. This is also the course followed by the ICC with respect to the New Haven in the Penn-Central proceeding.
Accord, New York, C. & St. L. R. Co.—Control, 224 I. C. C. 259, 269, where-the Commission, in' approving a control application, *405imposed a condition requiring the applicant to abide by its findings concerning^ whether the applicant should acquire certain affected short lines.
In New York, C. & St. L. R. Co. — Control, swpra, one of the two short lines seeking inclusion introduced no evidence at all, while the other made an inadequate showing that the public interest required its preservation and no showing whatever that the proposed control transaction would result in diversion- of its traffic. 224 I. C. C., at 266-268. Going out of its way “to the end that the intents and purposes of section 5 may be accomplished . . . ,” the ICC left open the door to the short lines’ inclusion if they could demonstrate its necessity or desirability. 224 I. C. C., at 269. Other examples of deferral- of agency action cited by appellees are inapposite. The ICC has deferred employee protection, reserving jurisdiction to impose necessary terms and conditions. A. C. Allyn & Co. — Control; 50 M. C. C. 305, 310-311. The likelihood that this sort of problem will have, unexpected consequences is very slight. In Atlantic Rfg. Co. v. Public Serv. Comm’n, 360 U. S. 378, 392, the Court ruled the FPC could issue a certificate without making a final determination of the vital matter of price, so long as the certificate was conditioned so “that the consuming public may be protected while the justness and reasonableness of the' price fixed by the parties is being determined” in subsequent hearings. No injury was contemplated, and the ultimate issue was not likely to be prejudged.
The Examiners found it “highly likely that the public interest” lies in the direction of inclusion in N <fc W. Penn-Central Report, F. D. No. 21989, Feb. 26, 1965, at 415. The Commission had indicated in the N & W-Nickel Plate proceeding its receptiveness to inclusion in N & W, and it postponed consideration of inclusion in Penn-Central pending the outcome of the N & W inclusion proceeding.
The Examiners stated: “No consideration has been given to the effect of the proposed inclusion here of the D & H, B & M and/or E-L upon competition, and no effort has been made to assess or accommodate the anti-trust laws in light of such action. We believe resolution of such issues would be premature.” Penn-Central Report, at'418. The Commission adopted these findings, 3271. C. C., at 481-482, and explicitly reserved, until after inclusion in N & W was denied, the question “whether inclusion of any one or all of E-L, B <fe M and D & H in the Transportation Company’s system would be consistent with the public interest . . . ,” 327 I. C. C., at 531.
An elimination of competition in New England and New York was not among even the possible anticompetitive effects of the merger contemplated and weighed. To the contrary, the Examiners drew up a chart (Appendix T-2 of their Report) which incorporated the three roads in the N & W system, and which they used to measure competitive impact. Moreover, the Examiners recommended as a condition of approval that Penn agree to grant trackage rights to N & W between Hagerstown, Maryland, N & W’s northernmost terminus in the East, and Wilkes-Barre, Pennsylvania, the southwestern terminus of D & H operations, thereby connecting the roads and enabling them to compete with Penn-Central for traffic between northern New York-New England and the South-southwest. Penn-Central Report, at 429-430. The Commission found it unnecessary to uphold the Examiners’-action, since the parties had voluntarily entered into an agreement effectuating the Examiners’ views, and since an application for Commission approval of the agreement had not yet been filed. 327 I. C. C., at 528. Finally, in appraising the effect of the merger upon service to New York City, the Examiners anticipated that E-L and N & W together would provide one line of competition. Penn-Central Report, at 433. The Commission likewise assumed in appraising anticompetitive effect that E-L would continue to compete with the applicants in the New York port area, and specifically cited as an example of continuing lines of competition that “N & W can join with E-L, LV [the Lehigh Valley], D <fe H and B & M, among others, In handling transcontinental traffic to and from the Port of N. Y. and New England 327 I. C. C., at 517, 514. ■
In refusing to recommend requiring B & M’s inclusion, Commissioner Webb pointed out that such a course would expose N & W to serious risk “and would foreclose B & M from seeking inclusion in the Penn-Central system or in the proposed N & W-C & 0 system on terms which, by reason of its strategic value or improved earnings, are more favorable than those justified by the record herein.” N & W Inclusion Report, at 154. An N & W-C & 0 •system would, as the Commissioner recognized, be far more able financially to absorb the risk of including B & M,' and would be willing to offer more than B & M’s actual value, possibly out of the > savings contemplated in the N & W-C & 0 merger. In fact, under the plan offered by N & W-C & O for merger and inclusion, B & M shareholders would receive almost twice the actual value of their holdings, and, significantly, Commissioner Webb settled on this'same amount as the minimum rate which N & W must pay if it decides to absorb B & M. Id., at 156.
N & W Inclusion Report-, at 43. See note 18, infra, for further explanation.-
Counsel for Penn and Central represented in the District Court that he construed the traffic conditions to prevent Penn-Central from Using its solicitation force to get traffic normally moving on the lines of the three roads routed to the lines of Penn-Central. Transcript, p. 132.
In working out the value of E-L’s stock for the purpose of an exchange with N <fe W, Commissioner Webb, applying, the principle of reciprocal adjustments, refused to deduct from E-L’s value the estimated impact of Penn-Central without also deducting from N & W’s value the estimated impact of Penn-Central. Since N & W submitted no evidence, he proceeded upon the assumption that the impact upon N & W would be proportionate with the estimated impact upon E-L. The result of this was to enable,him to discount *421completely E — L’s capital loss. If this method of valuation were approved, he noted, “the question of capital loss indemnification . . . [in Penn-Central] will become moot.” Id.. at 47.
In fact, the more effective are the protective conditions, the greater will be their interference with achievement of the planned economies and improvements. Penn Vice-President Large recently testified at the reopened hearings that “the first two million dollars we save as a result of merger is a good five years away.” Transcript of Hearing of December 15, 1966, F. D. 21989, p. 22343. Qualified by the statement that he had made no studies on the matter, he testified that he saw “no chance of any substantial savings in the next two years.” Id., at 22344.
Under this power, the Commission called upon Mr. Louis D. Brandéis, later Mr. Justice Brandéis, to represent the public in a general rate increase ease. The Five Per Cent Case, 31 I. C. C. 351.
See generally 2 Davis, Administrative Law §§ 15.01-15.14 (1958).
In the Penn-Central case, the Examiners recommended, as a condition to approval of the merger, that Penn be required to sell the Lehigh Valley to C & O-B & O, if such sale were, later found to be in the public interest, in order to assure New York City an additional competitive line. Penn-Central Report, at 434-435. The Commission felt it did not have to pass upon this recommendation, since Penn agreed after the Examiners’ Report was issued to sell LV to C & O-B & O. 327 I. C. C., at 517.
“A regulatory body such as the Interstate Commerce Commission cannot properly discharge its duty if it remains ignorant of relevant facts simply because they were not introduced in evidence. The Commission should itself supply deficiencies in the record. It should bring to light material which the parties have either overlooked or have willfully failed to call to its attention. It should aid those parties who through lack of resources are unable adequately to present their cases. It should make full use of the expert knowledge of commissioners and staff, and of the mass of transportation information that it has accumulated through the years.'’ H. R. Doc. No. 678, supra, p. 70. See Eastern-Central Motor Carriers Assn. v. United States, 321 U. S. 194, 208-210, 212, 216-217.
It was the position of the Chairman of the Board'of Pennsylvania before Congress that the ICC should leave the fate of the smaller roads to be worked out after the principal mergers had been approved. Hearings on S. 3097 before the Subcommittee on. Antitrust and Monopoly of; the Senate Judiciary Committee, 87th Cong., 2d Sess., p. 385 (1962). He testified that if an attempt was made to stop the three main proceedings, the entire process “would stop, there is no doubt about it,” id., at 384, and responded to the query whether the ICC “has no alternative but to buy the package or nothing at all,” that “It is the fact . . . ,” id., at 397.
There are indications that the ICC has planned all along for three systems. The most striking of these is the use by the Penn-Central Examiners of a chart to evaluate the merger’s anticom-petitive effect which accounts for all the smaller roads. Penn-Central Report, Appendix T-2. It need hardly be said that the ICC would be proceeding unlawfully if it had determined; without notice or hearing, that a three-system structure was essential, and had then gone through the motions of adjudication.
The ICC made no finding that either C & O-B & 0 or N & W-Nickel Plate would lead to the destruction of any other road. See 317 I. C. C., at 265-266, 282; 324 I. C. C., at 27-31.
There is abundant evidence that the three recent proceedings are highly interrelated. ' Central petitioned'for a general Commission *432investigation during the C & O-B & 0 proceeding, alleging that the ICC should not upset the existing competitive balance before evaluating all the facts and determining the part each proposal should play in the solution of the eastern railroad problem. Numerous other parties in that case also petitioned for consolidation of the proceedings, either for hearing or decision, with N & W-Nickel Plate and later with Penn-Central.
In the N & W case,, the Justice Department argued that the record was inadequate to determine competitive impact and stated “that only through consolidation can a clear picture be obtained of the effects of the Norfolk & Western-Nickel Plate and Pennsylvania-Central mergers on the Erie-Lackawanna, the Delaware & Hudson, and the New England lines.” The relationship between the N & W-Nickel Plate and Penn-Central proceedings was palpable, not only on the ground that Nickel Plate competed with Central, but also because of the facts that (1) Penn controlled N & W and had taken the position that it would divest only when it knew how it stood with respect to its application to merge with Central, and (2) it was only through Penn’s acquiescence that N & W managed to contract for the purchase of the .108-mile Sandusky line which enabled it to link its main line with Nickel Plate’s main line, 324 I. C. C., at 74.
Commissioner Webb felt that neither the N &" W inclusion proceeding “nor the Penn-Central case can be fully understood if consideration of one is divorced from the other. Unfortunately, the Commission’s action in deciding the cases separately.has tended to blur vital issues common to both proceedings.” , N &- W Inclusion Report, at 23.
The best possible example is what happened in this case. Evidence which Central might have presented earlier in the form of an appraisal of the effects of C & 0-B & 0 and N & W-Nickel Plate upon its ability to operate, took the form in the Penn-Central proceeding of the contention that, without a Penn-Central merger, both Penn and Central would be at a competitive disadvantage since neither “separately would compare with C & 0-B & O or N & W-Nickel Plate in any element of strength, whether tested by traffic volume, financial results, or the means for improving service.” Brief of Applicants, F. D. Nos. 21989-21990, dated June 1, 1964, p. 141. And in appraising the anticompetitive effects of a Penn-Central merger, the Examiners in this case stated that, “ [although in certain . . . categories, the increases [to be brought about by the merger] are significant, the degree of relative dominance by P. R. R. in comparison with the other roads, has been decreased significantly as a result of the consummation of the N & W and C & 0-B & 0 transactions by reason of the fact that these latter two systems have also increased their relative share.” Penn-Central Report, at 424. The Commission, too, indicated its conviction that Penn-Central became more justifiable now that the other systems were authorized, by citing “the growing strength of the N & W and C & 0-B & 0 systems” as a check against possible abuse of economic power by Penn-Central, and by pointing out “that applicants will face increasing competition from those two greatly strengthened rail systems.” 327 I. C. C., at 514, 519.
The Commission said, for example, in the C & O-B & O case: “Notwithstanding Central’s withdrawal from these proceedings, the effect of the proposed transaction on the operations and traffic of Central and other carriers is an issue to be considered.” 317 I. C. C., at 280. It took insignificant steps, however, to resolve the conflicts of evidence concerning competitive impact upon Central, and failed entirely to weigh the combined effects on Central of both C & O-B & O and the pending N & W-Nickel Plate merger. See 317 I. C. C., at 319.
The District Court, in the C & O-B & O case, took basically the same position when, in rejecting the Justice Department’s contention that the proceeding ought to be consolidated with others, it considered “significant” the fact that no railroad had joined the' Department in its request and stated that self-interest would have required them to do so if the adverse impact was actually serious. 221 F. Supp., at 31. The Penn-Central Examiners were more accurate in their appraisal, since they impliedly recognized that the decision not to appear meant only that the road had decided the benefits from its own merger plans outweighed the disadvantages to it of another merger, and not that the railroad in fact contemplated no serious adverse impact upon itself;
Huntington, The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest, 61 Yale L. J. 467, 509 (1952). Compare'Morgan, A Critique of “The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest,” 62 Yale L. J. 171 (1953).
I find it surprising that my Brother Fortas refers to today’s decision as “a reversion to the days of judicial negation of governmental action in the economic sphere.” In those days the Gourt took a restricted view of the power of Congress and its agencies to regulate our economy. That view “has long since been discarded.” Ferguson v. Skrupa, 372 U. S. 726, 730. Our position today, shared by the Solicitor General and the Department of Justice, is not one of judicial negation but of insistence that the ICC fulfill Congress’ directive to supervise in the public interest the destiny of this Nation’s transportation system: