No. MC-F-977 EVANSVILLE & OHIO VALLEY RAILWAY COMPANY, INC.-PURCHASE-EVANSVILLE & OHIO VALLEY RAILWAY COMPANY (WILLIAM A. CARSON, RECEIVER) Submitted October 17, 1939. Decided December 20, 1939 Application of Evansville & Ohio Valley Railway Company, Inc., for authority to purchase motor-carrier operating rights and property of Evansville & Ohio Valley Railway Company (William A. Carson, receiver) dismissed. Robert D. Markel for applicant. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS PORTER, MAHAFFIE, AND MILLER BY DIVISION 4: Evansville & Ohio Valley Railway Company, Inc., of Evansville, Ind.,1 by application filed August 4, 1939, seeks authority under section 213, Motor Carrier Act, 1935, to purchase the motor-carrier operating rights and properties of Evansville & Ohio Valley Railway Company (William A. Carson, receiver), also of Evansville, hereinafter called the old company. Hearing has been held. The joint board has made no recommendation and has indicated that it is agreeable to having the matter disposed of without its filing its report and recommended order. Applicant is an Indiana corporation organized July 7, 1939, by the holders of first-mortgage bonds of the old company for the sole purpose of taking over and operating all the properties of the latter. Its authorized capitalization consists of 1,000 shares of common stock, $100 par value, of which 830 shares would be issued to such bondholders as hereinafter more fully explained. The old company has been operating both as an electric interurban rail carrier of freight and as a motor carrier of passengers and freight. Its rail operations extend between Evansville and Grand View via Richland Junction, and between Richland Junction and Richland, approximately 38 miles. In conducting such operations, it transports freight 2 in intrastate commerce and in interstate or for 1 All points mentioned are in Indiana unless otherwise indicated. The old company's rail traffic moves principally in carload lots and averages approximately 2,500 cars annually. Its total traffic for 1938 was 80,427 tons, of which 72,627 tons originated on its own line. eign commerce, interchanges traffic with connecting steam railroads, participates in joint tariffs and through rates with such carriers, files annual reports with this Commission, and clearly is a carrier as defined in section 1 (3) of part I of the Interstate Commerce Act. On September 4, 1937, in No. MC-39305, issuance of a certificate to the old company under the "grandfather" clause was authorized, covering operations as a motor-vehicle common carrier of passengers and their baggage, and of express, mail, and newspapers, in interstate or foreign commerce, between Evansville and Mount Vernon, over Indiana Highway 62, between Evansville and Henderson, Ky., over U. S. Highway 41, between Rockport and Owensboro, Ky., over unnumbered highway to Marco, Ky., thence over U. S. Highway 60, and between Grand View and Cannelton over Indiana Highway 66, serving all intermediate points. Pursuant to authority granted in Evansville & O. V. Ry. Co., Extension of Operation, 13 M. C. C. 161, a certificate was issued to the old company in No. MC-39305 (SubNo. 1) on March 20, 1939, covering similar operations between Evansville and Grand View, over Indiana Highway 66, serving all intermediate points and Richland as an off-route point. These routes immediately parallel its rail operations. On September 4, 1937, in No. MC-39306, issuance to it of a certificate under the "grandfather" clause was authorized, covering operations as a motor-vehicle common carrier of general commodities, in interstate or foreign commerce, between Evansville and Owensboro, using the same highways as those over which it is authorized to conduct passenger-carrying operations and also paralleling its rail operations between Evansville and Rockport, serving all intermediate points. Its passenger operations aggregate approximately 110 route miles, and its motor-freight operations approximately 50 route miles. The old company has been in receivership since October 25, 1927. On June 1, 1939, by order of the probate court, Vandenburg County, Ind., its properties were offered for sale, and on June 15, 1939, they were sold for $10,500 and assumption of outstanding receiver's obligations, to Robert D. Markel, trustee, who was acting for and on behalf of the holders of $133,000 of first-mortgage 6-percent gold bonds out of a total issue of $166,000 secured by deed of trust, which constituted a first and prior lien against its properties. The purchase price was paid by $3,850 in cash, and by surrender of the $133,000 of first-mortgage gold bonds on the basis of 5 cents on each dollar of the principal amount thereof, amounting to $6,650. Of the cash received from the sale, $2,200 was used to satisfy obligations arising out of the receivership and $1,650 was deposited in escrow for payment to nonparticipating bondholders on the basis of 5 cents for each dollar of the principal amount of their holdings. Pursuant to the plan of the purchasing bondholders, approved by the court, applicant would take over and operate all of the old company's railroad and motor-carrier operating rights and properties as a unit, and would issue not exceeding $83,000 of its first-mortgage 6-percent income bonds, and 830 shares of common capital stock of a par value of $100 per share. To the holders of each $1,000, principal amount, of first-mortgage gold bonds participating in the organization of applicant, there would be distributed 5 shares of common capital stock and $500 in new income bonds. The nonparticipating bondholders would have the option, exercisable on or before January 15, 1940, to participate on the same basis as above or, in the alternative, would receive out of cash now in escrow 5 cents for each dollar of the principal amount of their bond holdings. It is estimated that the value of the physical properties used in motor transportation, including approximately 18 motor vehicles, aggregates approximately $25,000. Certain authority has been granted applicant under sections 5 (4) and 20 (a) of part I in Evansville & O. V. Ry. Co., Inc., Acquisition and Operation, 236 I. C. C. 340, and Evansville & O. V. Ry. Co., Inc., Securities, 236 I. C. C. 343. 4 The old company's balance sheet as of July 31, 1939, shows assets aggregating $2,534,931, consisting of: Investments $2,513,215, representing investment in road and equipment $1,906,124,3 sinking fund $15, and investment in affiliated companies $607,076; current assets $15,477, including cash $6,628 and accounts receivable $7,967; and unadjusted debits $6,239, principally discount on funded debt $5,765. Liabilities were: Capital stock $511,985; funded debt unmatured $2,174,700; current liabilities $951,846, chiefly matured interest unpaid $648,007 and matured funded debt unpaid $290,600; accrued depreciation $478,389; and corporate surplus (debit balance) $1,581,989. As previously stated, applicant was organized by certain bondholders of the old company for the sole purpose of taking over and operating the properties of the latter, performing the same service as formerly. It is not now a carrier, and it would be controlled through stock ownership by individuals who were also financially interested in the old company and who have no interest, directly or indirectly, in any other carrier. Section 213 (a) of the act provides in part as follows: It shall be lawful, * * * * * * to con * ; or for any • Represents value of old company's physical property based on valuation by Public Service Commission of Indiana when company was organized in 1919, and also includes its motor-carrier properties. • Represents investment in stocks and bonds of affiliated electric railway and traction companies which are no longer in existence. * such motor carrier or two or more such carriers jointly, to purchase, lease, or contract to operate the properties, or any part thereof, of another such carrier; or for any such motor carrier or two or more such carriers jointly, to acquire control of another such carrier through purchase of its stock; or for a person to acquire control of two or more motor carriers through ownership of their stock; or for any such person which has control of one or more motor carriers to acquire control of another such carrier through ownership of its stock; or for a carrier by railroad, express, or water to consolidate, or merge with, or acquire control of, any motor carrier or to purchase, lease or contract to operate its properties or any part thereof. The instant transaction does not involve unification of two or more carriers through purchase, merger, consolidation, lease, or contract to operate; nor does it involve acquisition of control of a motor carrier by an existing rail or motor carrier, or by a person or persons who control or are affiliated with any carrier. Hence this transaction would not result in control or management of two carriers in a common interest within the meaning of section 213 (b) (1), as amended. Upon the acquisition of the properties by applicant, a noncarrier, the status of the old company as a carrier would be terminated. At no time would there be more than one corporate entity with properties and rights to conduct motor-carrier operations. It follows, therefore, that this transaction is in effect a reorganization of the old company of which the transfer of motor-carrier properties is a part, and that our approval of the transaction under section 213 is not required. We find that, as the proposed transaction is not a matter requiring our approval under section 213, the application should be dismissed. Applicant may file appropriate application under section 212 (b) to effect transfer to it of the operating rights confirmed in Nos. MC-39305, MC-39305 (Sub-No. 1), and MC-39306. An appropriate order will be entered. 35 M. C. C. No. MC-F-890 CRESCENT STAGES, INC.-PURCHASE-MOUNT PINSON TRANSFER COMPANY, INCORPORATED Submitted November 20, 1939. Decided December 20, 1939 Application of Crescent Stages, Inc., for authority to purchase certain operating rights of Mount Pinson Transfer Company, Incorporated, dismissed. L. B. Liles for applicant and vendor. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS PORTER, MAHAFFIE, AND MILLER BY DIVISION 4: Crescent Stages, Inc., an Alabama corporation, of Anniston, Ala.,1 by application filed May 2, 1939, seeks authority under section 213, Motor Carrier Act, 1935, to purchase for $12,500 certain operating rights of Mount Pinson Transfer Company, Incorporated, of Mount Pinson. Hearing has been held. The joint board has made no recommendation and has indicated that it is agreeable to having the matter disposed of without its filing its report and recommended order. On October 8, 1937, in No. MC-61916, issuance of a certificate to applicant under the "grandfather" clause was authorized, covering operations as a motor-vehicle common carrier of passengers and their baggage, and of express, mail, and newspapers, in interstate or foreign commerce, principally between Huntsville and Montgomery via Albertville, Attala, Gadsden, Anniston, and Sylacauga, returning to Sylacauga via Kellyton; between Gadsden and Rome, Ga., via Center; between Anniston and Birmingham; between Attala and Birmingham via Walnut Grove, Oneonta, Village Springs, and Palmerdale; and between Birmingham and Opelika via Sylacauga; serving all intermediate points and Altoona as an off-route point. Pursuant to authority granted in Crescent Stages, Inc., Extension of Operations, 7 M. C. C. 367, a certificate was issued to applicant on June 17, 1938, covering similar operations between Talladega and Lincoln. Applicant has an application pending, under section 207, in No. MC-61916 (Sub-No. 3) for authority to extend its operations between Opelika and Columbus, Ga. * All points mentioned are in Alabama unless otherwise indicated. |