On July 30, 1938, in No. MC-67390, embracing No. MC-25183, issuance of a certificate to vendor was authorized under the "grandfather" clause, covering operations in interstate or foreign commerce as a motor-vehicle common carrier of general commodities, with exceptions, over regular routes, serving specified intermediate and offroute points, generally between Chicago, on the one hand, and, on the other, Aurora, Joliet, and Chicago Heights, Ill., and Detroit; and of fruits, processed agricultural commodities, and vinegar, over irregular routes, during the period from June 1 to November 15, inclusive, between two points in Wisconsin, on the one hand, and numerous points in Indiana and Illinois, on the other. Included in vendor's regular-route authority are routes (1) between Chicago and Muskegon via Benton Harbor, Holland, and Grand Haven, and (2) between Holland and Muskegon via Grand Rapids; and applicant would here purchase that portion of the first route between Holland and Muskegon over U. S. Highway 31, approximately 33 miles. The second route between the same points via Grand Rapids, 67 miles, would be retained by vendor with its other routes. The segment which applicant would purchase would, in effect, extend its Chicago-Holland route, which duplicates vendor's route between those points.

Under agreement of January 25, 1939, applicant would pay $2,500 in cash upon approval herein, of which $1,500 has been placed in escrow. The remainder of the consideration, evidenced by notes with interest at 5 percent per annum, is payable in $100 monthly installments, commencing the date on which this Commission issues to applicant a certificate covering the considered rights. The agreement further provides as follows:

Seller hereby agrees, in the event that this agreement is approved, that he will not either directly or indirectly compete with buyer [applicant] on traffic moving in either direction between Chicago, Illinois, and Muskegon, Michigan, or between Chicago and points intermediate between Holland and Muskegon (but not including Holland). Seller shall not however be precluded or restrained from transporting freight from or to Muskegon to or from points west or south of Muskegon, on seller's routes.

The above-quoted provision would, in effect, modify vendor's operating authority granted by this Commission, which is without the restriction here proposed, and would prevent vendor from rendering the service authorized over its retained route via Grand Rapids as well as prevent vendor from interchanging certain traffic with other carriers moving to or from intermediate points on the route purchased. Such modification of operating authority may not be accomplished by contract between the parties, and the record fails to

"The power to attach terms, conditions, and limitations to certificates granted in section 208 (a), is a broad one, the standard being that they must be reasonable, that they

convince us that imposition of such a restriction in this proceeding would be consistent with the public interest. This provision of the contract is accordingly not approved. Central M. Freight CoPurchase-Michicago M. Exp., Inc., 15 M. C. C. 575. Wheeler Transp. Co.-Purchase-Yellow Truck Lines, Inc., 25 M. C. C. 599. Applicant's balance sheet as of April 30, 1939, shows assets aggregating $71,088, consisting of: Current assets $17,286, principally cash and accounts receivable; carrier operating property, less depreciation, $42,476; intangible property $3,166; prepayments $6,435; escrow deposit on instant transaction $1,500; and other deferred debits $225. Liabilities were: Current liabilities $12,103, principally notes and accounts payable; equipment and other long-term obligations $25,009; capital stock $25,000; and surplus, unearned $17,924 and earned (debit balance) $8,948. Income statements for the years ended March 31, 1937, and 1938, for the 9 months ended December 31, 1938, and the 4 months ended April 30, 1939, show net income of $144, deficit of $3,677, and net incomes of $1,156 and $5,946, respectively.

Vendor's balance sheet as of March 31, 1939, shows assets aggregating $39,079, consisting of: Current assets $10,555, including accounts receivable $10,245; carrier operating property, less depreciation, $28,124; and deferred debits $400. Liabilities were: Current liabilities $12,418, principally notes and accounts payable; equipment obligations $2,280; and sole proprietorship capital $24,381. Income statements for the entire operations for 1937, 1938, and for the 3-month period ended March 31, 1939, show deficits of $15,492, $17,814, and $1,729, respectively. No segregation was made showing results of operation over the segment to be purchased.

At present applicant transfers at Grand Rapids approximately 20,000 pounds of freight per month moving from Chicago to Grand Haven and Muskegon. The proposed unification would eliminate necessity for transfer and rebilling of such freight and enable applicant to provide direct service via Holland. Applicant's present tonnage is preponderantly east-bound, but it expects to transport considerable traffic out of Muskegon for Chicago, which should result in a more balanced lading. Overnight service would be provided between these two points. Representatives of three shippers that are using applicant's facilities testified in support of the application. The record shows that there are at least five motor-carrier competitors operating between Chicago and Muskegon.

must be required by the public convenience and necessity, or that they are necessary to carry out the requirements established under section 204 (a) (1) and (6)." Southwest Missouri R. Co. Common Carrier Application, 4 M. C. C. 582, 584. See also Towns of Bristol and Hill, N. H., v. Boston & M. Transp. Co., 20 M. C. C. 581, and Inter City Transp. Co., Inc., Ext.-Jersey City-Liberty, 11 M. C. C. 109, 110.

Protestants contend, and introduced evidence tending to show, that service provided by existing transportation facilities within the territory considered is adequate, that there is insufficient traffic warranting additional through service, and that the purchase would make possible additional competition which would have a serious effect on them from a traffic and revenue standpoint. On the evidence we are not convinced that the operations of protestants would be endangered or impaired to an extent sufficient to warrant us in finding the transaction would not be consistent with the public interest, notwithstanding the fact that some loss of revenue to protestants might result. Lee Way Motor Freight, Inc.-Merger, 25 M. C. C. 520.

Subsequent to the hearing, applicant advised that it planned to amortize the entire amount of the instant purchase price in equal monthly amounts over a period of 3 years. Our findings will be appropriately conditioned to secure amortization or write-off within that period.

We find that purchase by Blue Arrow Transport Lines, Inc., of the previously described operating rights of Joseph R. Mammina, doing business as Michigan Tri-State Motor Express, including the right to a certificate issuable in No. MC-67390 (embracing No. MC-25183) covering rights herein authorized to be purchased, upon the modified terms and conditions above set forth, which terms and conditions, as so modified, are found to be just and reasonable, will be consistent with the public interest, 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 3 years, commencing with the date of consummation herein, the amount of increase in the "Other Intangible Property" account as result of the instant transaction, in a manner consistent with the provisions of the uniform system of accounts for class I motor carriers, or in lieu of amortization in any year of the 3-year period applicant may write off to surplus, in accordance with said accounting provisions, one-third or more of the amount of such increase in the "Other Intangible Property" account, so as to remove from such account within said 3-year period, either through amortization or write-off, the entire amount of the increase.

An appropriate order will be entered.

35 M. C. C.

No. MC-F-290

AMERICAN MOTOR TRANSPORT, INCORPORATED-PURCHASE-B. J. LEWIN (W. F. STEWART, RECEIVER)

Decided December 27, 1939

Findings in prior report, 25 M. C. C. 236, modified so as to eliminate proviso in the findings requiring certain corporate unification.

Appearances as in prior report.

SUPPLEMENTAL REPORT OF THE COMMISSION

· DIVISION 5, COMMISSIONERS EASTMAN, LEE, AND ROGERS

BY DIVISION 5:

In the prior report, 25 M. C. C. 236, in authorizing American Motor Transport, Incorporated, of St. Louis, Mo., to purchase the operating rights of B. J. Lewin, of Kansas City, Mo., doing business as American and Transport Freight Lines (W. F. Stewart, receiver), we conditioned our findings as follows:

provided, however, that, subject to our approval, such steps shall promptly be taken as are legal and necessary to effectuate a corporate unification of applicant and other motor carriers controlled by the said J. R. Brashear, Roy A. Brashear, and Roy B. Chipps.

The commonly controlled carriers are Brashear Freight Lines, Incorporated, and M-K Express Company, herein called Brashear and Express, respectively. Express is a small company whose operations are largely of a local nature. Brashear operates approximately 120 vehicles and has recently been subjected to a very substantial damage claim owing to the insolvency of the insurance company with which it carried insurance. Hence if Brashear and applicant were now to be unified, applicant's assets would seriously be imperiled. By reason of such situation, applicant has petitioned for elimination of the above findings proviso. Corporate unification ordinarily is desirable, but under the circumstances here disclosed there is merit to the petition, and appropriate modification of our prior findings will be made accordingly.

Upon further consideration, we are of the opinion and find that our prior findings should be modified so as to eliminate the findings proviso above quoted.

An appropriate supplemental order will be entered.

No. MC-F-1051

VALLEY TRANSPORTATION COMPANY, INC.-MERGEREMMOTT TRANSPORTATION COMPANY, INC.

Submitted November 29, 1939. Decided December 20, 1939

Merger in Valley Transportation Company, Inc., of operating rights and property of Emmott Transportation Company, Inc., approved and authorized.

Francis E. Nute for applicants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS PORTER, MAHAFFIE, and Miller BY DIVISION 4:

Valley Transportation Company, Inc., and Emmott Transportation Company, Inc., both Massachusetts corporations, of Uxbridge, Mass., herein called Valley and Emmott, respectively, by joint application filed November 3, 1939, seek authority under section 213, Motor Carrier Act, 1935, to merge the operating rights and properties of Emmott into Valley, for ownership, management, and operation. Hearing has been held, at which the parties waived service of a report and recommended order by the examiner.

Valley and Emmott are controlled through ownership of their entire capital stock by Edward Emmott and members of his family. On February 26, 1938, in No. MC-84442, issuance of a certificate to Valley under the "grandfather" clause was authorized, covering operations in interstate or foreign commerce as a motor-vehicle common carrier of general commodities, with exceptions, over regular routes, principally between Uxbridge and New York, N. Y., via Farnumsville, Larnedville, and Springfield, Mass., and Hartford, New Haven, and Bridgeport, Conn.; between Uxbridge and New Haven via Slaterville, Providence, and Hopkinton, R. I., and New London, Conn.; between Larnedville and New London via Webster, Mass., and Putnam, Danielson, and Norwich, Conn.; between Putnam and Slaterville via Chepachet, R. I.; between Boston and Worcester via Marlboro, and also over Massachusetts Highway 9, via Framingham Center, Mass.; and between Boston and Providence via Dedham and North Attleboro, Mass.; serving numerous intermediate and off-route points.

On February 26, 1938, in No. MC-40031, issuance of a certificate to Emmott under the "grandfather" clause was authorized, covering