the witness, after examining a road map, expressed the opinion that the crossing was made at the Chester-Bridgeport ferry, which appears to be approximately 2 or 3 miles from the Delaware-Pennsylvania State

line.

There are four available routes from Claymont to Jersey City, (1) by way of the New Castle-Pennsville ferry, approximately 132 miles, (2) over the Wilmington, Del.-Penns Grove, N. J., ferry, 120 miles, (3) over the Chester-Bridgeport, 112 miles, and (4) over a route through Philadelphia of approximately 105 miles. Over the two shorter routes through Pennsylvania, shipments of 24,000 pounds, which the record indicates is the maximum respondent may transport under the Pennsylvania load limits, would yield truck-mile earnings of 32.1 cents and 34.3 cents, and, over the longer routes, not including any movement in Pennsylvania, shipments of 26,000 pounds would yield 32.5 cents and 29.5 cents, respectively. Respondent is not now transporting any of the traffic, which was lost to the rail carriers because of the lower rate of the latter, but any of the above-mentioned routes would be available for movement of shipments which could be transported lawfully over such routes.

The earnings on shipments of 24,000 pounds or more compare favorably with those found reasonably compensatory in other proceedings. Fertilizer, Carteret, N. J., to New York and Vermont, 28 M. C. C. 261; and Trunk Line Territory Motor Carrier Rates, 31 M. C. C. 541.

This commodity comprises low-grade, desirable traffic which would be transported by respondent under especially favorable conditions. Amounts from 100,000 pounds to 400,000 pounds are tendered at one time, and shipments may be transported in the manner most convenient to the carrier. Vehicles are either loaded to maximum carrying capacity with the commodity, or available tonnage may be used to complete loading of vehicles partially loaded with other freight. On exceptions, the conference stresses the fact that respondent admitted on cross-examination that the proposed rate would not be maintained if no traffic in the opposite direction were available. Respondent's traffic between these points at the time of the hearing, which included no movement of the commodity under consideration, was approximately 60 percent south-bound and 40 percent north-bound. While this situation presents an added incentive to maintain rates which would obtain a portion of the movement of this commodity, it does not indicate that the proposed rate would be unreasonably low or that it would not earn anything above out-of-pocket costs. The rates of common carriers usually are predicated on the assumption that some traffic is transported in both directions. Furthermore, the fact that the proposed rate is lower than that maintained by the conference

carriers, and that of the rail carriers, minimum 40,000 pounds, is not necessarily indicative of their unlawfulness. In proceedings in which the lawfulness of motor-carrier rates is under attack on the ground that they are lower than a minimum reasonable basis, the predominant element to be considered is whether they are reasonably compensatory.

On exceptions the conference insists also that the evidence does not justify the examiner's findings with respect to the proposed rate from North Claymont and Marcus Hook. Since respondent has no authority to transport the commodity from Marcus Hook, further discussion of the rate proposed from that point is unnecessary. Respondent testified that the plant of the shipper from which the commodity moves is located directly on the Delaware-Pennsylvania State line, although the shipping platform is in Delaware. Under the circumstances, it appears that the movement is actually from North Claymont rather than from Claymont, and this assumption is strengthened by the fact that the rail carriers maintain competitive rates only from North Claymont. The revenue from North Claymont would be approximately the same as that from Claymont, being somewhat lesser or greater, depending on the route of movement. We conclude, therefore, that a rate found reasonable from Claymont would also constitute a reasonable rate from North Claymont.

At the hearing, respondent indicated that it is not interested in the minimum weight to which the rates are subject, since the commodity is tendered in amounts which would permit the loading of vehicles to maximum capacity in all events. The minimum of 100,000 pounds was proposed in order that it would be the same as that maintained by the rail carriers in connection with their present rate of 14 cents. It is necessary that respondent maintain rates not more than 1 cent higher than that maintained by the rail carriers in order to obtain any of the traffic. Since the proposed minimum weight of 100,000 pounds is clearly far in excess of amounts which could be loaded in respondent's vehicles or which could be transported lawfully, a rate subject to this minimum is manifestly unlawful. Rugs and Matting from East to W. T. L. Territory, supra.

We find (1) that the proposed rate from Marcus Hook is unlawful because respondent lacks authority to serve that point, and (2) that the proposed rate from the other origins, subject to the proposed minimum weight of 100,000 pounds, would be unjust and unreasonable, but that the same rate, subject to a minimum weight of 24,000 pounds, would not be unreasonable or otherwise unlawful.

An order will be entered requiring cancelation of the schedules which were under suspension, without prejudice to the filing of new schedules in conformity with the findings herein.

No. MC-60890 (BMC-1)

1

LYNCH TRANSFER & STORAGE COMPANY COMMON CARRIER APPLICATION

Submitted April 18, 1940. Decided July 22, 1943

1. In No. MC-60890 (BMC-1), applicants found entitled to continue operation, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of household goods, between points in 22 States and the District of Columbia, by reason of their operation on June 1, 1935, and continuously since.

2. In No. MC-60890 (BMC-8), public convenience and necessity found to require continuance of operation by applicants, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of household goods, between points in Kentucky and Tennessee in connection with the above authorized nonradial "grandfather" operations.

3. In No. MC-60891, applicants found to have failed to establish that they or their predecessors were in bona fide operation, in interstate or foreign commerce, as a contract carrier by motor vehicle, on and since July 1, 1935, between any points whatsoever.

4. In No. MC-12202, operation by applicants as a broker in arranging transportation by motor vehicle of general commodities, including household goods, between Cedar Rapids, Iowa, and points in the United States, found not to be consistent with the public interest, and the national transportation policy.

5. Issuance of an appropriate certificate in No. MC-60890 (BMC-1 and BMC-8) approved upon compliance by applicants with certain conditions, and applications in all other respects denied.

Stewart Holmes and D. R. Lynch for applicants in Nos. MC-60890 (BMC-1 and BMC-8) and MC-60891.

D. R. Lynch for applicants in No. MC-12202.

P. F. Gault, A. B. Enoch, J. N. Davis, W. E. Davis, H. H. Larimore, M. G. Roberts, Robert Thompson, John N. Hughes, W. J. Barngrover, C. E. Bellew, W. E. Ausman, E. F. Moberg, Harry C. Chapman, and B. F. Batts for protestants in Nos. MC-60890 (BMC-1 and BMC–8) and MC-60891.

H. C. Marcusen for Iowa State Commerce Commission, intervener in Nos. MC-60890 (BMC-1 and BMC-8) and MC-60891.

O. W. Laurence for intervener in No. MC-12202.

1 This report also embraces No. MC-60890 (BMC-8), Lynch Transfer & Storage Co. Extension of Operations; No. MC-60891, Lynch Transfer & Storage Co. Contract Carrier Application; and No. MC-12202, Lynch Transfer & Storage Co. Broker Application.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON

BY DIVISION 5:

These four applications concern related matters and will be disposed of in one report. Exceptions were filed by applicants and rail-carrier protestants to the recommended order of the examiner in Nos. MC-60890 (BMC-1 and BMC-8) and MC-60891. No exceptions were filed to the recommended order of the joint board in No. MC12202, but it was stayed by us. Our conclusions differ from those recommended by the examiner.

By application No. MC-60890, as amended, filed February 3, 1936, under the "grandfather" clause of section 206 (a) of the Interstate Commerce Act, D. R. Lynch, E. A. Lynch, G. M. Lynch, and C. W. Whipple, copartners, of Cedar Rapids, Iowa, doing business as Lynch Transfer & Storage Co., as successor of Lynch Transfer Company 2 seek a certificate of public convenience and necessity authorizing continuance of operation, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, (a) of household goods and related articles, between points in Arkansas, Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, West Virginia, Wisconsin, and the District of Columbia, and (b) of general commodities, except livestock, in transfer, collection, and delivery service for rail carriers, motor carriers, and forwarders within the corporate limits of Cedar Rapids.

By another application, also numbered MC-60890, filed February 3, 1936, as amended, the same applicants seek a certificate of public convenience and necessity authorizing an extension of operations, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes (a) of household goods, between points in Kentucky, Tennessee, Alabama, Arizona, California, Colorado, Florida, Georgia, Idaho, Louisiana, Michigan, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, South Carolina, Utah, Vermont, and Wyoming, and (b) of general commodities, except livestock, within the corporate limits of Cedar Rapids for certain rail carriers.

By application No. MC-60891, as amended, filed February 3, 1936, under the "grandfather" clause of section 209 (a) of the act, the same

On February 20, 1937, in No. MC-FC-909, substitution of applicants in lieu of Lynch Transfer Company, the original "grandfather" claimant, was approved.

applicants seek a permit authorizing a continuance of operation, in interstate or foreign commerce, as a contract carrier by motor vehicle, over irregular routes, of general commodities, except livestock, (a) between points in Iowa, on the one hand, and points in the United States, on the other, and (b) between Cedar Rapids and Iowa City, Iowa, over an undisclosed route, including collection and delivery service at both termini, and (c) in the leasing of equipment to other carriers or shippers.

By application No. MC-12202, filed June 19, 1939, the same applicants seek a license authorizing operation as a broker in arranging for the transportation by motor vehicle, in interstate or foreign commerce, of general commodities, including household goods.

The Iowa State Commerce Commission intervened, and the Iowa Warehouse and Motor Carrier Association, Southwestern Transportation Company, and several rail carriers oppose both applications Nos. MC-60890 and MC-60891. Hawkeye Motor Express intervened in No. MC-12202 but offered no opposition thereto.

The original predecessor of applicants inaugurated a local general drayage business at Cedar Rapids in 1884. Sometime prior to June 1, 1935, this business expanded to include (1) a warehouse and services incidental thereto, (2) the interstate transportation of freight, chiefly household goods, (3) certain supposed contract-carrier operations, and (4) certain supposed brokerage services. The four applications here considered were filed by applicants' predecessor 2 seeking definition of its status and a grant of such authority therefor as may be required. The incidents of the various services will be separately discussed below.

No. MC-60890, "grandfather" common-carrier application.--A. Local cartage operations.-We shall consider first the evidence in connection with the local cartage operations. Such operations have been confined to the corporate limits of Cedar Rapids. The services rendered consist (1) of independent operations performed at the request and direction of shippers and consignees and paid for by them, and (2) of transfer, collection, and delivery services for forwarders and line-haul rail and motor carriers. The record fails to disclose the limits of the terminal areas of the forwarders and carriers for which these services are performed, but it may be assumed that they are at least coextensive with the corporate limits of Cedar Rapids. It follows that no authority is required to conduct any of these operations for they are either performed in intrastate commerce, or else they are exempt from the certificate requirements of the act under the provisions of section 203 (b) (8) or 202 (c) of the act. Compare Palisano Common Carrier Application, 41 M. C. C. 229. This phase of the application will therefore

42 M. C. C.