pally cash $5,659 and accounts receivable $18,648; carrier operating property, including 40 motor vehicles, less depreciation, $93,613; investment securities and advances $20,762; and prepayments $1,155. Liabilities were: Current liabilities $16,926, representing accounts payable, accrued taxes and wages payable; equipment obligations $19,402; other long-term obligations $20,667; subordinated obligations, unsecured, $15,500; reserves $7,400; capital stock $40; and surplus, earned $18,910 and unearned $50,092. Income statements for 1937, 1938, and the first 9 months of 1939 show net incomes of $17,254, $16,749, and $41,497, respectively.

Steele's personal balance sheet as of September 30, 1939, shows assets aggregating $132,497, consisting of: Current assets $35,016, principally notes, accounts, and salary receivable from Alabam; investments $68,592; advances $2,500; assigned claims due by Alabam $17,805; land and equipment, less depreciation, $5,784; and other physical property $2,800. Liabilities were: Notes payable $2,900; interest payable $38; balance due on purchase of stock $7,125; and net worth $122,434.

Consolidated's balance sheet as of September 30, 1939, shows assets aggregating $112,469, consisting of: Current assets $29,947, principally cash, notes, and accounts receivable; carrier operating property, including approximately 40 motor vehicles, less depreciation, $67,076; intangible property $11,128; investments $450; and prepayments $3,868. Liabilities were: Current liabilities $32,343; equipment obligations $29,256; capital stock $13,000; and surplus, unearned $33,018 and earned $4,852. Its income statements for 1937, 1938, and for the first 9 months of 1939, including results of operations over the routes of Martin, doing business as Copper State Transportation Company, for the period March 4 to August 30, 1939, show deficits of $1,068 and $2,993 and net income of $5,504, respectively.

Consolidated and its predecessors have been handicapped by insufficient financial resources and have experienced difficulty in meeting operating expenses. With the additional capital which applicants are willing and able to furnish, together with additional tonnage they are in position to direct over its routes, if the transaction is approved, it is expected that service improvements would follow and that more-profitable operations would result. Consolidated's common-carrier routes, except between Phoenix and Globe, are complementary to those of Alabam, and it is planned to conduct both operations so as to minimize interchange delays at connecting points and thus speed up service between Los Angeles and El Paso, and intermediate points. Another purpose of the transaction is to provide a satisfactory connection or outlet for Alabama's traffic moving

westward from El Paso, and, at the same time, make available the facilities of Consolidated in connection with tonnage originating at Los Angeles destined to points served by Alabam east of Phoenix.

The record indicates that, if the transaction is approved, Allen, at Los Angeles, and Steele, at Phoenix, propose to divide the management of Consolidated, Allen taking care of the California end of the business, and Steele the Arizona end. In this connection, it is not clear what part Service, as a corporation, would take insofar as Consolidated's operations are concerned, apart from furnishing its agreed share of the purchase money, lending financial aid, and holding title to the stock purchased, nor does the record disclose any relationship between Service and Steele, the two applicants, except through Allen, as hereinafter discussed. Reliable, controlled by Allen through stock ownership, is engaged principally in the transportation of petroleum products from the Los Angeles Harbor area to points in Arizona, where such products are distributed by the Texas company, controlled by Steele. This business relationship between Allen and Steele began in the latter part of 1938 at the time Allen acquired the present operating rights of Reliable from their original owner, and, because of the interdependence of the two activities, such relationship has continued. It apparently constitutes the only tie between Allen, Service, Reliable, or Calizona, on the one hand, and Steele, Alabam, or the Texas company, on the other, although the record indicates interchange of some freight between Calizona and Alabam because of the complementary nature of their routes.

We may approve or disapprove the instant transaction only if it falls within the lawfully permissive forms of unification prescribed in section 213 (a), the pertinent portions of which read as follows:

It shall be lawful, under the conditions specified below, but under no other conditions, * * * for any 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 which is not a motor carrier or a carrier by railroad, or express, or water 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; *. [Emphasis supplied.]

The word "person" as here used, has been construed to include the plural, Union Pac. R. Co.-Control-Union Transfer Co., 15 M. C. C. 101; and in Minardi-Control-Coast Line Truck Service, Inc., 15 M. C. C. 412, it was stated: "Similarly, there is no reason to believe that the Congress intended to prohibit two or more individuals now jointly controlling a motor carrier from jointly acquiring control of another such carrier." It should be observed that the instant applicants do not now jointly control a motor carrier.

Service and Steele are not motor carriers, and therefore the transaction is not within the meaning of the first italicized phrase in the above-quoted language. Unless applicants, as "persons", come within the second italicized clause, the transaction is not one of the type which may be approved under section 213 (a). Steele, in control of Albam, a motor carrier, is a "person" within the meaning of this clause, but as he would obtain only 40 percent of Consolidated's stock he would not thereby acquire control through majority stock ownership. Unless, therefore, we are able to find such an identity of interest in a motor carrier between Steele and Service as would warrant the belief that their stock interest in Consolidated would be voted substantially as a unit, the transaction is not within the meaning of the clause in question.

As previously indicated, it is not possible to find that Service has any direct interest in Alabam, or that Steele has any such interest in the only motor carrier in which Service is directly interested, namely, Calizona. Under these circumstances, we are unable to find that the proposed transaction, whereby Service and Steele would join as "persons" in control of a motor carrier, to acquire control of Consolidated through stock purchase is within the provisions of section 213 (a). Compare Chaddick-Control-Bates Motor Transport Lines, Inc., 25 M. C. C. 229, and Clover-Leaf Freight Lines, Inc.-Purchase-Clover-Leaf, 25 M. C. C. 742, 746. It is obvious that there are innumerable ways in which control or management in a common interest may be effectuated, and some even though not enumerated in section 213 (a), may appear otherwise unobjectionable, if not indeed conceivably desirable in the public interest. However, the Congress has not authorized us to determine whether or not a given transaction is desirable or otherwise consistent with the public interest, unless it comes within the forms of unification enumerated in section 213 (a); and transactions which would effectuate other forms of unification are declared unlawful. In this connection, section 213 (b) (1) reads:

It shall be unlawful for any person, except as provided in paragraph (a), to accomplish or effectuate, or to participate in accomplishing or effectuating, the control or management in a common interest of any two or more motor carriers which are not also carriers by railroad, however such result

The ownership of such a percentage may, where ownership of the remainder is widely diffused, be sufficient to constitute control, but in the instant case the remainder would be held by only two parties, Service and Blankenship. In this connection Steele testified that he and Service had obtained from Blankenship, an employee of Consolidated, a 1-year option to purchase the remaining 20 percent of the latter's stock. The primary purpose of such option was to prevent sale of such stock to an unfriendly interest, and the record indicates that it would not be exercised so long as satisfactory relations exist between the three parties.

is attained, whether directly or indirectly, by use of common directors, officers, or stockholders, a holding or investment company or companies, a voting trust or trusts, or in any other manner whatsoever. [Emphasis supplied.]

Although the instant transaction is not a lawfully permissive transaction which we may authorize, it may be desirable to mention certain of its objectionable features. In substance, this transaction contemplates a joint undertaking by Allen and Steele, under which Consolidated's facilities would be utilized to assure Alabam a portion of the through business between Los Angeles and El Paso, and, conversely, Consolidated would also be assured a larger share of such traffic by reason of the relationship with Alabam. While the evidence indicates that service to the public would be improved, the record does not disclose what effect the transaction may have upon Calizona. This carrier, controlled by Allen, operates over substantially the same routes as Consolidated between Los Angeles and Phoenix, although the latter's routes are more extensive. It would seem, however, that any of the freight which would be interchanged between Alabam and Consolidated at Phoenix, which could be interchanged between Alabam and Calizona at that point, would present a conflict between Allen's independent interests in Calizona and (through Service) his proposed "joint" interest in Consolidated. Objectionable features of transactions involving similar conflicting interests were discussed in Union Pac. R. Co.-Control-Union Transfer Co., 15 M. C. C. 101, where it was stated, at page 105:

The identity of interest of the three railroads is such primarily only insofar as would be necessary for this acquisition and subsequent operation of Union. This identity of interest has far more significance when the operations of Union as a motortruck carrier per se are considered, and much of the "jointventure" aspect would seem lost as to operations of Union auxiliary and supplementary to the train operations of the respective railroads. Each applicant obviously is interested in securing for itself the greatest benefit possible from coordinated operations with Union, and these railroads are, to some extent at least, competitors. There clearly is insufficient community of interest as to the respective railroad operations to warrant such treatment here, and the effect of this arrangement, at least as to the motortruck operations as such, would be to extend territories served by each applicant into that of each other in proportion to their respective financial interests. Divided ownership and responsibility, particularly where the interests of those in control may be somewhat opposed, often produces poor results. [Emphasis supplied.]

* * *

We find that the proposed transaction does not come within the lawfully permissive terms of section 213 (a), and that the application should be dismissed. This action is, however, without prejudice to submission by the parties of a revised plan in accordance with the provisions of that section.

An appropriate order will be entered.

pally cash $5,659 and accounts receivable $18,648; carrier operating property, including 40 motor vehicles, less depreciation, $93,613; investment securities and advances $20,762; and prepayments $1,155. Liabilities were: Current liabilities $16,926, representing accounts payable, accrued taxes and wages payable; equipment obligations $19,402; other long-term obligations $20,667; subordinated obligations, unsecured, $15,500; reserves $7,400; capital stock $40; and surplus, earned $18,910 and unearned $50,092. Income statements for 1937, 1938, and the first 9 months of 1939 show net incomes of $17,254, $16,749, and $41,497, respectively.

Steele's personal balance sheet as of September 30, 1939, shows assets aggregating $132,497, consisting of: Current assets $35,016, principally notes, accounts, and salary receivable from Alabam; investments $68,592; advances $2,500; assigned claims due by Alabam $17,805; land and equipment, less depreciation, $5,784; and other physical property $2,800. Liabilities were: Notes payable $2,900; interest payable $38; balance due on purchase of stock $7,125; and net worth $122,434.

Consolidated's balance sheet as of September 30, 1939, shows assets aggregating $112,469, consisting of: Current assets $29,947, principally cash, notes, and accounts receivable; carrier operating property, including approximately 40 motor vehicles, less depreciation, $67,076; intangible property $11,128; investments $450; and prepayments $3,868. Liabilities were: Current liabilities $32,343; equipment obligations $29,256; capital stock $13,000; and surplus, unearned $33,018 and earned $4,852. Its income statements for 1937, 1938, and for the first 9 months of 1939, including results of operations over the routes of Martin, doing business as Copper State Transportation Company, for the period March 4 to August 30, 1939, show deficits of $1,068 and $2,993 and net income of $5,504, respectively.

Consolidated and its predecessors have been handicapped by insufficient financial resources and have experienced difficulty in meeting operating expenses. With the additional capital which applicants are willing and able to furnish, together with additional tonnage they are in position to direct over its routes, if the transaction is approved, it is expected that service improvements would follow and that more-profitable operations would result. Consolidated's common-carrier routes, except between Phoenix and Globe, are complementary to those of Alabam, and it is planned to conduct both operations so as to minimize interchange delays at connecting points and thus speed up service between Los Angeles and El Paso, and intermediate points. Another purpose of the transaction is to provide a satisfactory connection or outlet for Alabama's traffic moving