Page images
PDF
EPUB

No. MC-F-1055

YREKA WESTERN RAILROAD COMPANY (O. G. STEELE, RECEIVER)-PURCHASE-LEONARD H. AYRES

Submitted January 20, 1940. Decided April 25, 1940

Purchase by Yreka Western Railroad Company (O. G. Steele, receiver) of operating rights and property of Leonard H. Ayres, doing business as Etna, Fort Jones, Yreka Stage, approved and authorized, subject to condition.

J. P. Correia for applicant and vendor.

F. X. Vieira for interested parties.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS PORTER, MAHAFFIE, AND MILLER BY DIVISION 4:

Yreka Western Railroad Company (O. G. Steele, receiver 1), of Yreka, Calif.,2 by application filed November 7, 1939, seeks authority under section 213, Motor Carrier Act, 1935, to purchase the operating rights and property of Leonard H. Ayres, of Etna, doing business as Etna, Fort Jones, Yreka Stage, for $3,000. Hearing has been held, at which Southern Pacific Company, herein called Southern Pacific, and its affiliate, Pacific Motor Trucking Company, intervened in support of the application but offered no evidence. 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, a California corporation, maintains and operates approximately 8 miles of standard-gage track between Yreka and Montague, connecting at the latter point with a main line of the Southern Pacific, with which it interchanges traffic and has joint through rates and fares. It also transports general commodities and passengers between the same points, over California Highway 88, as a motor-vehicle common carrier, in interstate or foreign commerce, pursuant to rights confirmed under the "grandfather" clause. Issuance of a certificate was authorized in No. MC-52389, on June 14, 1938, covering its freight operations as a motor carrier and in No.

1 The receiver was appointed by order of the Superior Court of California in and for Siskiyou County, on September 16, 1935, in Southern Pacific Company v. Yreka Western Railroad Company, cause No. 8774.

All points mentioned are in California.

MC-1182, on June 17, 1938, covering its passenger operations. Applicant also has filed separate registration application in No. MC-67566, describing the same freight and passenger operations. Vendor has filed separate registration applications, supported by California decision No. 27329, of September 4, 1934, in application No. 19542, describing operations in interstate or foreign commerce under the second proviso of section 206 (a), as a motor-vehicle common carrier of freight and passengers between Yreka and Etna, over California Highway 88. Vendor's route, approximately 35 miles, for the most part traverses mountainous territory and is an extension of applicant's route beyond Yreka, serving Fort Jones, Greenview, and Etna, with an aggregate population of approximately 1,200. Vendor is the only common carrier operating between the considered points, and, in providing the combined freight and passenger service, it utilizes one motor vehicle and maintains one round-trip schedule daily.

Pursuant to agreement of February 17, 1939, as last amended October 31, 1939, applicant would purchase, free of encumbrances, vendor's previously described operating rights, including intrastate rights, and one motor vehicle valued at $1,500. Under the terms of the contract, $100 of the purchase price has been paid; $1,500 has been deposited in escrow for payment upon approval of the transaction by this Commission and of transfer of the intrastate rights by the California commission; $1,300 would be paid in deferred monthly installments of $130 each, the first of which would be due within 30 days from such approval; and $50 would be paid within 30 days after the last payment as provided next above. The remaining $50 is represented by a State commission filing fee, which has been paid by applicant in the name of vendor. The proposed transaction has been approved by the court having jurisdiction over applicant, and application for authority to transfer the intrastate operating rights has been made to the California commission.

Applicant's balance sheet as of August 31, 1939, shows total assets of $98,108, consisting of: Investment in road and equipment $82,087; current assets $14,163, chiefly cash and material and supplies; deferred assets $60; and unadjusted debits $1,798. Liabilities were: Receiver's certificates $16,000; current liabilities $54,461, including $35,391 miscellaneous accounts payable, prior to receivership; unadjusted credits $6,693, including accrued depreciation, road $4,325 and equipment $1,777; receiver's equity $21,242; and earned surplus (debit balance) $288. Income statements for 1937, 1938, and the

Nos. MC-54651 (passenger) and MC-54659 (freight).

This amount was originally $25,000, of which $20,000 was loaned by Southern Pacific for purposes of rehabilitation of applicant's railroad properties.

first 8 months of 1939 show deficit of $4,187, net income of $3,230, and deficit of $288, respectively.

Vendor's balance sheet as of October 31, 1939, shows total assets of $3,881, consisting of: Current assets $1,042; carrier operating property, less depreciation, $1,339; and franchises $1,500. Liabilities were: Other liabilities $25; and sole-proprietorship capital $3,856. His income statements for 1937, 1938, and the first 10 months of 1939 show net incomes of $709, $684, and $38, respectively.

Applicant's present rail transportation consists principally of carload shipments. Less-than-carload freight and passengers are transported by motortruck and bus. It was testified that continued maintenance of the rail line is possible only by reason of its motor-carrier operations. Vendor considers that he is financially unable to continue providing adequate service to the communities involved and desires to enter other employment. Applicant has ample available personnel and facilities to assume the additional operations. It is confident that, by reason of the establishment of joint through rates and fares with Southern Pacific, to which the latter has agreed, by coordination of the operations acquired with those presently conducted, and by anticipated economies through use of more efficient equipment, an improved and profitable operation will result. The proposed acquisition would provide applicant with a feeder route and with direct access to Etna, an origin and destination point for surrounding agricultural, dairy, and cattle-raising territory.

The territory is sparsely settled, and the towns are small. The evidence shows that there is a public need for continuance of the service, and there can be little doubt that the shipping and traveling public would be better served by applicant. The considered route, extending as it does beyond the railhead, is equivalent to the building by applicant of a branch or feeder line into territory not hitherto occupied, and hence auxiliary and supplementary to train service. Santa Fe Trails Stages, Inc.-Control-Central Arizona, 1 M. C. C.

225.

Applicant now has no account designated "Intangible Property", but the amount here proposed to be paid for intangibles would be recorded in such an account, and applicant has indicated that it is agreeable to any plan for its amortization or write-off which we might prescribe. Our findings will be conditioned accordingly.

We find that purchase by Yreka Western Railroad Company (O. G. Steele, receiver) of the previously described operating rights and property of Leonard H. Ayres, doing business as Etna, Fort Jones, Yreka Stage, including all lawful rights of the latter to operate in interstate or foreign commerce under the second proviso of section 206 (a), as described in Nos. MC-54651 and MC-54659, which

rights are herein authorized to be unified with rights otherwise confirmed in applicant, upon the terms and conditions above set forth, which terms and conditions are found to be just and reasonable, will be consistent with the public interest, will promote the public interest by enabling the Yreka Western Railroad Company (O. G. Steele, receiver) to use service by motor vehicle to public advantage in its operations, and will not unduly restrain competition, and that the conditions of section 213 have been or will be fulfilled; provided, however, that if the authority herein granted is exercised, applicant shall amortize in equal annual amounts over a maximum period of 5 years, commencing with the date of consummation herein, the amount properly assignable to the "Other Intangible Property" account under the uniform system of accounts for class I motor carriers as result of the purchase, in a manner consistent with the provisions of said uniform system of accounts, or in lieu of amortization in any year of the 5-year period applicant may write off to surplus, in accordance with said accounting provisions, one-fifth or more of the amount so recorded in the "Other Intangible Property" account, so as to remove from such account within said 5-year period, either through amortization or write-off, the entire amount.

An appropriate order will be entered.

35 M. C. C.

No. MC-F-1048

M & D MOTOR FREIGHT LINES-PURCHASE-ERNEST AND HENRY PICKETT

Submitted January 16, 1940. Decided April 25, 1940

Purchase by M & D Motor Freight Lines of operating rights of Ernest and Henry Pickett, doing business as Pickett Bros. Truck Line, approved and authorized, subject to condition.

Max G. Morgan for applicant.

Walker C. Hay and Leonard E. Roach for protestant.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS PORTER, MAHAFFIE, AND MILLER

BY DIVISION 4:

M & D Motor Freight Lines, of Duncan, Okla.,1 by application filed October 31, 1939, seeks authority under section 213, Motor Carrier Act, 1935, to purchase, for $3,750, operating rights of Ernest and Henry Pickett, partners, of Walters, doing business as Pickett Bros. Truck Line. Hearing has been held, at which a motor carrier opposed the application and cross-examined witnesses but offered no evidence. The joint board has made no recommendation and has indicated that it is agreeable to disposition of the matter without its filing its report and recommended order.

Applicant's corporate history and operations, in interstate or foreign commerce, as a motor-vehicle common carrier of general commodities over regular routes between Oklahoma City and Fort Worth, Tex., via Comanche, Waurika, Ryan, and Rhome, Tex., between Rhome and Dallas, Tex., and between Waurika and Ardmore, via Walters and Comanche, are more particularly described in M & D Motor Freight Lines-Purchase-Perkins and Jones, 25 M. C. C. 292.

On August 9, 1939, in No. MC-52537, division 5 authorized issuance of a certificate to vendors covering operations in interstate or foreign commerce as a motor-vehicle common carrier of general commodities over a 74-mile regular route serving all intermediate points, between Lawton and Terral, via Walters and Waurika. The rights described are a portion of those originally claimed under the "grandfather" clause by Clanton Transportation Co., Inc., hereinafter called Clanton,

1 All points mentioned are in Oklahoma unless otherwise indicated.

« PreviousContinue »