Richmond and Roanoke terminals without loads, compared to 37 such vehicles released into Virginia terminal points. Approximate gross income for 1971 was 16.5 million dollars, for 1972 was 17.5 million dollars, and for the first quarter of 1973 was approximately one million dollars more than for the first quarter of the preceding

year.

Ace Doran Hauling & Rigging Co., a corporation, of Cincinnati, Ohio, is an irregular route motor common carrier authorized by this Commission under Docket No. MC-112304, so far as here pertinent, to transport heavy commodities requiring special equipment, between Clarksburg, W. Va., and points within 50 miles of Clarksburg, on the one hand, and, on the other, points in Maryland, Virginia, and the District of Columbia, and those points in Pennsylvania east of U.S. Highway 15. By tacking at Clarksburg, W. Va., or points within 50 miles thereof, it is also authorized to transport such commodities between that point and points in Ohio, Indiana, Kentucky, West Virginia, Michigan, and that part of Pennsylvania not included in the prior authority. Further, by tacking at any point in Ohio it can operate to and from points in Illinois and Wisconsin, and, circuitously, New York and New Jersey. It is presently purchasing, and has been granted authority by the Commission temporarily to manage and control another carrier, which would extend its "size and weight" authority to and from points in Missouri.

From 42 terminals, including those at Chesapeake, Roanoke, and Richmond, Va., the carrier operates 530 tractors and 637 trailers, of various descriptions, including approximately 600 flat-bed, lowboy and goose-neck trailers of different types, as well as other equipment. Gross revenues for the first half of 1973 exceeded 10 million dollars. The carrier's traffic data recorded that the first 7 months of 1973, for an area of Virginia including Norfolk, Richmond, and a 75 mile radius from Newport News. there were 108 deliveries and only 5 outbound movements, the remaining 103 vehicles being sent out of the area for loading.

The carrier is willing to "spot" its trailers at loading locations where warranted by the volume of traffic; it provides jobsite deliveries, partial loading and unloading, and scheduled deliveries to meet construction requirements. As to the service complained of herein by Liebherr-America, that a shipment tendered had remained at the terminal for three weeks, the witness for this carrier testified that the shipment was an oversize load; that, though permits can be obtained in a matter of hours and mechanically transmitted to drivers at points en route, they still had to be obtained and limitations of hours of operations on such loads observed; that the load was picked up on February 1, 1972, and delivered February 8, 1972; and that no complaint was received at the time.

International Transport, Inc., of Rochester, Minn., appearing in protest only of Gregory's application, is an irregular route motor common carrier authorized by this Commission under Docket No. MC-113855, as here pertinent, to transport commodities which, because of size or weight, require the use of special equipment or handling, and self-propelled vehicles over 15,000 pounds. Through tacking at one or more points within the scope of its varied authority, this carrier can generally provide service between points in Virginia, on the one hand, and, on the other, points in Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin. An application now pending before the Commission seeks to discontinue the necessity of a gateway for this transportation into Illinois, Iowa, and Wisconsin. From terminals in Minnesota, Iowa, Illinois, Ohio, Connecticut, and Harrisburg, Pa., the last being the one nearest to the Norfolk area, the carrier operates approximately 704 tractors and 1,097 trailers of various descriptions, including flatbeds, single and

double drops, and lowboys, and particularly including 36 lowboys with 18” high decks and 50 with 21" high decks. Gross revenue for 1971 was approximately 24 million dollars, for 1972 was approximately 30 million dollars, and, for the first half of 1973, had increased over the same period of the preceding year.

This carrier is authorized to transport movements bringing its vehicles into Virginia. It also has provided transportation for Liebherr-America, Liebherr Crane, and the Munck Corporation, from the Norfolk area. The services it provides include jobsite and timed deliveries for single or multiple truckloads, and it will spot a trailer where the volume of traffic warrants.

Bowman Transportation, Inc., of Atlanta, Ga., appearing in protest to Daily's application, is a regular and irregular route motor common carrier authorized by this Commission under Docket No. MC-94201, as here pertinent, to transport general commodities, with the usual exceptions, and particularly except for commodities requiring special equipment, between the Norfolk area, by a combination of regular and irregular routes, to points in Alabama, Florida, Georgia, Massachusetts, North Carolina, Rhode Island, South Carolina, and Tennessee, and to specified points in Connecticut, Delaware, Maryland, New York, New Jersey, and Philadelphia. From a number of terminals this carrier operates 986 tractors, 162 trucks, and 2,189 trailers of various descriptions, including 123 flat-bed trailers. It operates no lowboy or drop frame trailers. 124 M.C.C.

No. MC-C-4201'

MIDWEST EMERY FREIGHT SYSTEM, INC.-INVESTIGATION AND REVOCATION OF CERTIFICATES

Decided December 19, 1975

1. In No. MC-C-4201, respondent found to have willfully failed to comply with the Commission's prior cease and desist orders of December 28, 1965, and April 16, 1971, in that respondent has been (a) extending credit for the payment of tariff charges for periods in excess of that permitted by the Commission's regulations, (b) falsifying records in connection with the trip leasing of vehicles, and (c) serving between authorized points without observance of required gateways. Order entered (1) requiring respondent to cease and desist and thereafter to refrain and abstain from the performance of all operations of the character found in this decision to be unlawful, (2) suspending, for a period of 180 days, respondent's privilege to engage in trip leasing of any kind, and (3) suspending for an equal period, to run concurrently with the above-noted suspension, respondent's privilege to interline or interchange traffic with other motor common carriers.

2. In No. MC-114019 (Sub-No. 199) found that applicant has failed to establish that it is fit, properly to conduct the proposed operations or to conform to the requirements of the Interstate Commerce Act. Application denied.

Arnold L. Burke, Charles Ephraim, and Carl L. Steiner for respondent-applicant.

Arthur F. Bronczyk, John J. Charuhas, and Manuel A. Lojo for the Bureau of Enforcement, Interstate Commerce Commission.

REPORT OF THE COMMISSION

DIVISION 1, CommissionERS MURPHY, GRESHAM, AND CLAPP

MURPHY, Commissioner:

Exceptions to the initial decision of the Administrative Law Judge were filed by the Commission's Bureau of Enforcement (Bureau) and by respondent. Both the Bureau and respondent filed appropriate replies. Our conclusions differ, in part, from those recommended.

'This report embraces No. MC-114019 (Sub-No. 199), Midwest Emery Freight System, Inc., Extension-Meats.

By order dated June 29, 1972, the Commission, division 1, reopened the proceeding in No. MC-C-4201 (the investigation proceeding) for further hearing in accordance with the provisions of section 212(a) of the Interstate Commerce Act, and respondent Midwest Emery Freight System, Inc. (Midwest), was notified and required to appear for hearing and show cause why an order should not be entered suspending or revoking, in whole or in part, the certificates issued Midwest, if it is found that Midwest has willfully failed to comply with orders of the Commission entered December 28, 1965, and April 16, 1971, (1) by serving between authorized points without observing gateways, in violation of section 206(a) of the act and the terms, conditions, and limitations of its certificates, (2) by falsifying records in violation of section 222(g) of the act, (3) by fraudulently seeking to evade regulation provided by part II of the act for motor carriers in violation of section 222(c) of the act, and (4) by failing to maintain compliance with regulations as to lease and interchange of vehicles (49 CFR 1057), and as to the collection of rates and charges (49 CFR 1322). The Bureau was directed to participate as a party in this proceeding.

In another order, also dated June 29, 1972, division 1 reopened the proceeding in No. MC-114019 (Sub-No. 199) (the application proceeding) and designated it for oral hearing on a consolidated basis with No. MC-C-4201 for the purpose of determining Midwest's fitness to conduct new operations for which a need had been found by a prior order of the Commission, Operating Rights Board.

Pursuant to lawful notice, a consolidated oral hearing in these proceedings was held January 15-17, 1973, at Columbus, Ohio, and an initial decision was served therein on November 7, 1973.

The Administrative Law Judge found that respondent had willfully disregarded the Commission's credit regulations specified in 49 CFR 1322.1, that respondent had systematically and unjustifiably falsified its records regarding the trip leasing of vehicles, and that respondent was providing service beyond that specifically authorized in an unlawful manner by failing to observe all of the required gateways. The Administrative Law Judge concluded that respondent has manifested as a general pattern of conduct, established through its past actions, that it will directly or by subterfuge engage in unlawful operations beyond, and in disregard of, the provisions of the act and the rules and regulations of this Commission promulgated thereunder.

In the investigation proceeding, the Aaministrative Law Judge recommended that a cease and desist order be entered and that any and all trip leasing of motor vehicle equipment at all terminals of respondent's Interstate Division should be suspended for a period of 180 days. In the application proceeding, the Administrative Law Judge found that respondent has failed to show that it is fit to conduct the proposed operation, or to conform to the requirements of the act and the Commission's rules and regulations thereunder, and recommended that the application should be denied.

In each proceeding, the evidence, the Admistrative Law Judge's recommendations, the initial decision, and the pleadings have been considered. We find the statement of facts contained in the initial decision to be substantially correct. The nature of these proceedings, however, requires that we set forth the evidence to a substantial extent, as such treatment is necessary for clarity of discussion. Otherwise, the statement of facts contained in the initial decision is adopted as our own.

HISTORICAL BACKGROUND

The protracted and complex series of events which lead us to the investigation proceeding requires recital in order to place our ultimate discussion and conclusions in proper perspective. This proceeding involves the Interstate Division of Midwest which is headquartered at Martins Ferry, Ohio. In 1963 Midwest received temporary authority to control and manage Interstate Truck Services, Inc., which held authority to operate primarily between. points in Ohio, Pennsylvania, New York, and West Virginia, and was, at that time, having serious managerial and financial problems. Interstate Truck Service, Inc., was operated as a separate entity until it was merged into Midwest on December 1, 1969. Since then it has been operated as the Interstate Division of Midwest. In 1971 Midwest's gross revenue was nearly $60 million, of which the Interstate Division accounted for approximately $8 million. The Interstate Division serves over 1,000 shippers, providing generally an on-call, irregular-route service to shippers and consignees in numerous small communities in Ohio, Pennsylvania, West Virginia, and New York. In some instances, traffic moving from or to points beyond those normally served by the Interstate Division may move in conjunction with other authority held by Midwest.

Under the then existing regulatory scheme, motor common. carriers holding separate and unrestricted grants of irregular-route