INDEX DIGEST

[Numbers in parentheses following citations indicate pages on which subjects are considered.]

ABANDONMENT.

Authorized Operation: See CONVENIENCE AND NECESSITY (CERtificates). Routes: See ROUTES (ABANDONMENT). Saving Clause Rights: See ROUTES (ABANDONMENT); Saving ClauSES. Substitution of Service not Constituting: See SERVICE (SUBSTITUTION).

ACCOUNTS. See also EQUIPMENT (ACCOUNTING); INTANGIBLE PROPERTY (ACCOUNTING).

Findings in prior report, 25 M. C. C. 675, modified to authorize consolidation, under a revised plan, that eliminated the amount on pro forma balance sheet formerly proposed to be recorded in "Other Intangible Property" account, and reduced the amount under item "Organization, Franchises, and Permits". However, a portion of the reduced amount was found more properly assignable to "Other Intangible Property" account, because of inclusion therein of certain amounts paid to other carriers in purchasing their operating rights, and findings were conditioned to require that any amount properly assignable to the "Other Intangible Property" account be amortized or written off, in manner specified. Trek, Inc.-Control-L & L Freight Lines, Inc., 310 (312, 314).

Method of determining book value per share of stock for purposes of merger was not to be construed as approved upon grant of authority to merge. However, findings were conditioned to require that if authority granted was exercised, the surviving company, Consolidated, should immediately charge off to unearned surplus the amount that would otherwise properly be included in its "Other Intangible Property" account. Consolidated Bus Lines, Inc.-Merger, 375 (377, 378).

Purchase of operating rights of vendor authorized on condition that applicant charge directly to his sole-proprietorship capital account entire amount of purchase price. Spitzer-Purchase-Mackey, 398 (400).

In view of fact that no journal entries were submitted, as required in prior report, 35 M. C. C. 33, wherein applicant was authorized to acquire joint control of Motor Lines as result of reacquisition and retirement by Motor Lines of 20 shares of capital stock, authority for applicant to acquire complete control by purchase of its remaining outstanding shares was conditioned on the submission, within 30 days from date of approval, of related journal entries, in triplicate, showing the manner in which Motor Lines proposed to revise its accounting for this reacquisition cost item consistent with the provisions of the uniform system of accounts for class I motor carriers. Hogshire-Control-N. B. & C. Motor Lines, Inc., 487 (488).

The uniform system of accounts for class I motor carriers does not permit the purchaser of intangible property to record under account 1550 an amount in excess of cost to purchaser of such property, after deducting from cost the amount properly assignable to account 1550. United Truck Lines, Inc.--PurchaseBeardmore Transfer Line, Inc., 705 (709).

The increase in fixed charges resulting from increase in purchase price of vendor's properties to include a new motor vehicle, acquired in exchange for old vehicle after execution of agreement but as provided for therein, at depreciated value of vehicle on date of consummation of transaction, was not inconsistent with public interest. Georgia Stages, Inc.-Purchase-Toms, 736 (738). ACQUISITION OF CONTROL. See CONSOLIDATION AND CONTROL; LEASE. ADEQUACY OF SERVICE. See SERVICE (Adequate TransportatiON). ADJACENT FOREIGN COUNTRY.

The jurisdiction of the Commission over foreign motor carriers extends only to services performed in the United States. Direct-Winters Transport-Consolidation, 489 (493).

Operations within the United States, of the two Canadian carriers, while constituting only a small fraction of their entire operations, were subject to the authority and jurisdiction of the Commission as to all provisions of the act, including requirements respecting accounts, records, and reports. Upon effectustion of proposed unification of the operations within the United States into one Michigan corporation, their dual status as Canadian and United States carriers and present doubts concerning their responsibilities under the act would cease. Id. (493).

AFFILIATED COMPANIES. See also CONSOLIDATION AND COntrol; RailAND-MOTOR (COORDINATION).

Applicant's affiliation with the Norfolk, Baltimore and Carolina Lines, Inc., a motor carrier as well as a common carrier by water, does not render the transaction involving acquisition of control by applicant of another motor carrier, subject to the proof requirements of the proviso of sec. 213 (a) (1), as amended, as the water carrier is not a carrier as defined in sec. 1 (3) of part I of the set. Hogshire-Control-N. B. & C. Motor Lines, Inc., 33 (34).

Subsequent to service of report and recommended order, Riss, president and director of applicant, increased his holdings of applicant's common voting stock from 49.35 percent to over 50 percent, and thereby acquired control of applicant. Therefore, approval of proposed purchase requires a finding only that transaction is consistent with the public interest, and the requirements of the proviso of sec. 213 (a) (1) do not apply because of any possible affiliation at the time of the hearing between applicant and a carrier by rail as defined in sec. 1 (3) of part I of the act, arising from ownership by Phillips Petroleum Co. of 39.55 percent of applicant's capital stock as well as 41 percent of the capital stock of the Okmulgee N. Ry. Co. and the entire stock of two pipe-line companies. Riss & Co., Inc.Purchase-Ringsby Truck Lines, Inc., 61 (62–63).

Although Bulk Haulers, Inc., is a nonoperating company, organized to acquire and operate motor-carrier properties of Petroleum Transit Corp., its acquisition of such properties must be authorized under sec. 213 because of the relationship of Bulk Haulers' officers, directors, and stockholders to other motor carriers. Clardy-Control-Bulk Haulers, Inc., 93 (94).

Purchase by Morse and Dupont of the stock of Century System, Inc., is in substance an acquisition by persons controlling one or more motor carriers of control of another such carrier through ownership of its stock, as Morse, in addition to managing the American Terminal Co., and Atco Service Co., a motor carrier, with Dupont, controls both companies through stock ownership or affilistion. Century System, Inc.-Purchase-Ajax Motor Service, Inc., 97 (98).

Applicant, a motor carrier, was affiliated with Chesapeake W. Ry., a rail carrier, within meaning of proviso of sec. 213 (a) (1), by virtue of ownership by D. W. Thomas, director and principal officer of applicant, of the capital stock of both corporations. C. W. Motor Lines, Inc.-Purchase-Motor Transport Corp., 103.

Applicant, controlled through ownership of its entire outstanding stock by Milwaukee Electric Ry. & Transport Co., a rail carrier within the meaning of sec. 1 (3) of part I of the act, in seeking authority to purchase operating rights and properties of vendors endeavored to avoid the proof requirements of proviso under sec. 213 (a) (1), by amending its articles of incorporation and trusteeing its stock under a four-party agreement. Acquisition by applicant's president, Tiernan, under trust indenture, of 60 percent of applicant's voting stock did not vest in him complete control or power to exercise control of applicant in view of the restrictions placed on holders of voting stock and the powers retained by the railway, and did not terminate the affiliation between applicant and the railway. Motor Transport Co.-Purchase-F & H Truck Lines, Inc., 163 (164, 170–172). Applicants, Service and Steele, proposed to acquire joint control of Consolidated Copperstate Lines. The only tie between applicants was a business relationship between Steele, an individual, not engaged in motor-carrier transportation except through the corporations he controlled, and Allen, the latter president and sole owner of Service, a motor carrier engaged in intrastate transportation only. This business relationship resulted from the interdependence of the Steele and Allen interests, with Allen, Service, Reliable Transp. Co., controlled by Allen and Calizona Transp. Co., one-third of which stock was owned by Service, on the one hand, and Steele, Alabam Freight Lines, and Texas Independent Oil Co., both controlled by Steele on the other, with some interchange of freight between Calizona and Alabam because of the complementary nature of their routes. Reliable and Texas were engaged in intrastate transportation only. Inasmuch as applicants were not motor carriers as defined in the act and the business relationship was not such an identity of interest in a motor carrier as would warrant the belief that the stock proposed to be acquired would be voted as a unit, the proposed transaction was found not to be within the provisions of sec. 213. Service Tank Lines and Steele-Control-Consolidated Copperstate Lines, 193 (197-198).

Acquisition of proposed stock control by applicant would remove any doubt as to legality of present situation within meaning of sec. 213 (b) (1), since evidence indicated a close operating relationship between Gordons Transports, Inc., controlled by applicant, and Gordon Interstate, Inc., in which applicant has stock interest, and apparent management of both. Gordon-Control-Gordon Interstate, Inc., 369 (371).

Applicant, Valley Exp. Co., controlled through stock ownership by Harold B. Frasher and George Harm, does not physically operate trucks as a line-haul carrier but utilizes the services of so-called underlying motor carriers among which is Valley Motor Lines, Inc., also controlled by Frasher and Harm. Stock of Motor Lines, sufficient to control, was transferred to Valley without approval of the Commission in cancelation of indebtedness arising from sale of equipment to Motor Lines. Therefore, direct control of that carrier by Valley through transfer of the stock did not change the operating relationship as both were already controlled and managed in common interest by Frasher and Harm. Valley Exp. Co.-Control-Valley Motor Lines, Inc., 495 (496-497).....

The question of legality of arrangement whereby applicant, through affiliation with Manlowe Transfer Co., Inc., and Manlowe Transfer and Distributing Co., Inc., a forwarding company, was enabled to consolidate freight over a period of time for shipment at quantity rates, a practice unfair to competitors and a service which applicant could not legally perform directly, was not strictly at issue in a sec. 5 proceeding. Other sections of the act provide adequate remedies for correction of discriminatory or prejudicial practices of motor carriers. However, findings authorizing purchase were conditioned to prohibit extension of such unfair

and destructive practices to considered routes. United Truck Lines, IncPurchase-Beardmore Transfer Line, Inc., 705 (711-712).

Effectuation of the authorized consolidation will place Heller and Savage in joint control of the new company, Pacific Intermountain Exp. Co., with resulting control or management of such company in a common interest with Savage Transport, Inc., and Savage Transp. Co., two corporations controlled by Savage. Heller-Control-Conyes Freight Lines, 721 (723-725).

AGENTS:

Carriers': The New York Central R. Co., through stock ownership and working relations, controls and dominates the Universal Carloading and Distributing Co. so as to constitute the latter an agency or instrumentality of the New York Central for the consolidation of less-than-carload shipments into carloads. See 229 I. C. C. 201 (297). Hancock Truck Lines, Inc-Purchase-Motor Freight Corp., 7. AGREEMENTS:

Lease: See LEASE.

Operating: Modification of operating authority may not be accomplished by contract between the parties. An agreement that vendor will not compete, directly or indirectly, with applicant on certain traffic, which agreement would prevent vendor from rendering authorized service over its retained route and from interchanging traffic with other carriers on route sold, was not approved, and the Commission was not convinced that imposition of such restriction in findings would be consistent with public interest. Blue Arrow Transport Lines, Inc.-PurchaseMammina, 37 (38-39).

Findings in prior report, 35 M. C. C. 37, modified to authorize purchase of additional rights under a supplemental agreement that eliminated objectionable provision in original contract, which was found to effect modification of operating authority retained by vendor through an agreement that vendor would not compete with applicant on traffic over duplicate segment of route purchased. Blue Arrow Transport Lines, Inc-Purchase-Mammina, 302.

The findings authorizing consolidation into applicant, a newly formed Michigan corporation, of operating rights within New York and Michigan of two Canadian motor-carrier corporations, were not to be construed as approving any feature of proposed plan of operation which would be inconsistent with applicant's status as a common carrier where, under separate lease agreements renewable annually, the Canadian corporations would furnish equipment and personnel and bear ali expenses and costs thereof, operating within the United States, with reimbursement to be made at stated amount per pound on merchandise transported. Direct-Winters Transport-Consolidation, 489 (491–492).

Purchase and/or Sale: See also CONTRACTS (PURCHASE AND/OR SALE); and Operating, this heading.

The purchase of capital stock of Sunshine Bus Lines, Inc., does not involve acquisition of control of that carrier within the meaning of sec. 213, as applicant already controls Sunshine through ownership of a majority of its capital stock, but, as such purchase is included among the terms of a single transaction whereby applicant seeks authority to acquire control of Dixie Motor Coach Corp., the Commission's consideration and findings will relate to entire transaction, including purchase of Sunshine stock. Kittrell-Control-Dixie Motor

Coach Corp., 25 (26).

Nothing in opinion is to be construed as approval of a provision in the purchase contract, requiring that, in event of default of payment of purchase price of capital stock of the Sunshine Bus Lines, voting power shall vest in vendor, and vendor shall have right to sell said stock at public or private sale, to the extent