fide operation as a common carrier by motor vehicle, in interstate or foreign commerce; and that the application should be denied. We find, in No. MC-73728, that applicant has failed to establish that the proposed operation as a broker will be consistent with the public interest and the national transportation policy; and that the application should be denied. An appropriate order will be entered. 42 M. C. C. No. MC-96488 LUKENS STEEL COMPANY CONTRACT CARRIER Submitted January 14, 1943. Decided August 24, 1943 1. Operation by applicant in the transportation of the property of two subsidiaries wholly owned by applicant found to be that of a contract carrier by motor vehicle, as defined in section 203 (a) (15) of the Interstate Commerce Act. 2. Operation by applicant as a contract carrier by motor vehicle of steel and steel products from Coatesville and South Coatesville, Pa., to New York, N. Y., and points in New Jersey, over irregular routes, found consistent with the public interest and the national transportation policy. Issuance of a permit approved upon compliance by applicant with certain conditions, and application denied in all other respects. Charles J. Hepburn and Philip R. Hepburn for applicant. REPORT OF THE COMMISSION DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON BY DIVISION 5: No exceptions were filed to the order recommended by the examiner, but it was stayed by us. Our conclusions differ from those recommended. By application filed March 18, 1942, Lukens Steel Company, a corporation, of Coatesville, Pa., seeks a permit authorizing operation, in interstate or foreign commerce, as a contract carrier by motor vehicle, of iron and steel articles, from Coatesville to points in New York and New Jersey, over irregular routes. Joint Northeastern Motor Carrier Association, Inc., opposes the application. The instant application was filed as a precautionary measure to protect applicant's right to continue operations instituted prior to July 1, 1935, and to determine its status under the Interstate Commerce Act. By petition filed with the application, applicant alleges that its operation constitutes private carriage for which no certificate or permit from us is necessary and requests that the application be dismissed. In view of our findings herein, this petition will be denied. Applicant's operation comprises the transportation of its own property and that of two subsidiaries, By-Products Steel Corporation, and Lukenweld, Inc., hereinafter called By-Products and Lukenweld, respectively, which are wholly owned by applicant. Applicant and its two subsidiaries are engaged in the manufacture of steel articles at Coatesville or South Coatesville, Pa. Applicant's plant is at Coatesville. The plant of By-Products adjoins that of applicant and is only a short distance from the plant of Lukenweld. It appears that the plant of Lukenweld and possibly portions of those of applicant and By-Products are in South Coatesville, which is contiguous to Coatesville but which is not embraced in the application as filed. The evidence discloses that shipments transported by applicant originate in South Coatesville as well as Coatesville. In the circumstances, the application will be considered as amended to include South Coatesville since the issues will not be unduly broadened thereby. The businesses of applicant and its subsidiaries are closely interconnected. Applicant's chief product is steel plate and its two subsidiaries are its principal customers. By-Products is engaged in the manufacture of various articles from steel plate, and it utilizes the plate ends and plate trimmings which are the byproducts of applicant. The principal business of Lukenweld consists of welding into finished products steel plate and other steel articles produced by applicant and By-Products. The three corporations have mutual customers, and each of them often receives orders for articles which are manufactured in part by the others. All general accounting and auditing of the three corporations, including the payment of salaries to their employees, is done in a central office, and other facilities such as maintenance shops and storehouses are also used jointly by the corporations. The joint facility expenses are prorated between the three corporations. Applicant owns approximately 25 motor vehicles and operates 2 or more vehicles owned by its subsidiaries. Some of these vehicles are used exclusively in intrastate operations but 14 of applicant's vehicles and 1 vehicle owned by By-Products are used in transporting the shipments of the 3 corporations in interstate or foreign commerce. The lading in such vehicles usually comprises shipments of each of the corporations. All expenses incidental to operating the vehicles, both in interstate and intrastate commerce, are paid by applicant irrespective of the ownership of the vehicles. A record is kept by applicant of all expenses incidental to operating the vehicles, including a proportion of miscellaneous general expenses attributable to motor-vehicle operations. Its records show the number of hours the vehicles have been employed in interstate and other "outside hauling" operations and the number of hours the vehicles have been engaged in interplant or local operations. The charges assessed against each corporation for trucking service are based on a rate per hour which is computed by dividing the total operating expense by the total number of hours the vehicles were operated during each accounting period. To this basic rate, the sum of 25 cents is arbitrarily added in determining the charges for "outside hauling," including interstate operations. After deducting all "outside hauling" charges from the total operating expense, the remainder is divided by the total number of hours the vehicles were operated other than in "outside hauling" to determine the basis of charges for the local or interplant service. In this manner, the total operating expenses are prorated between the three corporations in the proportions that each has used the joint trucking service for interstate and other "outside hauling," on the one hand, and for local intrastate shipments, on the other. Operating expenses are computed on an actual cost basis, and the operation is conducted by applicant without any intention to receive a profit therefrom. It is applicant's position that its entire operations are in private carriage and that they are not subject to the certificate permit requirements of the act. The primary question here presented, therefore, respects the status of the described operations under the act. Applicant has not held itself out to serve the general public, and it is clear that its operations are not those of a common carrier. It is also clear that applicant's operations in the transportation of its own property are merely incidental to and an integral part of its regular business. Such operations do not constitute contract carriage but are those of a private carrier. See Spanhake Common Carrier Application, 21 M. C. C. 258, and Woitishek Common Carrier Application, 42 M. C. C. 193, decided May 6, 1943. The operations of applicant on behalf of its subsidiaries, however, cannot be considered to be a part of the business in which it is primarily engaged. Although applicant claims that the two subsidiaries are merely "departments" of its business, they are in fact separate entities and, except to the extent that the three corporations have common employees and use joint facilities, each of the two subsidiaries maintains its own plant and conducts a business separate from that of applicant. The fact that the corporations maintain joint facilities indicates nothing more than that they have found the use of joint facilities to be economical. In the instant case there is no direct payment of specified rates or charges to applicant under written or oral contracts, and applicant derives no direct profit from its operations on behalf of its subsidiaries. Applicant, however, does benefit from the transportation of shipments of each corporation in the same truck to points in the same territory. Since each corporation shares the expense of such transportation, a saving results in reduced transportation costs to applicant. This saving constitutes compensation received by applicant indirectly in connection with most or all of its interstate operations in the territory embraced in the application. Applicant's operations for its subsidiaries embrace the essentials of a contract carrier as defined in the act, and we therefore conclude that such operations constitute contract carriage for which a permit from us is required. Compare Southern Fruit Distributors, Inc., Contr. Car. Applic., 31 M. C. C. 771, Enterprise Trucking Corp. Contract Carrier Application, 27 M. C. C. 264, and Lee Wilson & Co. Contract Carrier Application, 29 M. C. C. 525. Applicant has conducted operations in the transportation of steel and steel products for By-Products from Coatesville or South Coatesville to New York, N. Y., and scattered points in New Jersey continuously since prior to July 1, 1935, and it has been performing similar service for Lukenweld to points in New Jersey since 1938. Undoubtedly, it would have been entitled to "grandfather" rights had it seasonably filed an application. It transports only a small proportion of the traffic of its subsidiaries. Each of the subsidiaries uses the services of rail carriers and motor common carriers, and they use applicant's service chiefly for the transportation of shipments requiring expeditious handling. Clearly, they have a need for the service proposed by applicant. As applicant has been serving its subsidiaries, in the operation under consideration for a number of years, it does not appear that the granting to it of appropriate authority to continue such service will affect adversely the rights of any other carrier. There seems to be no question but that applicant is fit and able, financially and otherwise, to perform the proposed operation. We conclude that operation by applicant to the extent hereinafter specified will be consistent with the public interest and the national transportation policy. We find that applicant's operations in the transportation of property for its subsidiaries are those of a contract carrier as defined in section 203 (a) (15) of the act. We further find that operation by applicant as a contract carrier by motor vehicle, in interstate or foreign commerce, of steel and steel products, from Coatesville and South Coatesville, Pa., to New York, N. Y., and points in New Jersey, over irregular routes, will be consistent with the public interest and the national transportation policy; that applicant is fit, willing, and able properly to perform such service and to conform to the requirements of the act and our rules and regulations thereunder; that a permit authorizing such operation should be granted; and that in all other respects the application should be denied. Upon compliance by applicant with the requirements of sections 215 and 218 of the act, with our rules and regulations thereunder, and with the requirements established in Contracts of Contract Carriers, |