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regulations of this Commission. See Melton Truck Lines, Inc., Extension-Roofing, 88 M.C.C. 723 (1962); L&M Express Co., Extension-Crewe, Va., 106 M.C.C. 334 (1968); and Johnny Brown's, Inc., Extension-Winchester, Va., 111 M.C.C. 905, 908909 (1970). These considerations are critical, for otherwise the denial of a certificate on the basis that applicant is not shown to be fit would be a punitive measure directed only at past unlawful operations.

In order for this Commission to evaluate Midwest's willingness and ability to conduct its future operations in a lawful manner, Midwest must first meet its burden of refuting the import of its past conduct in order to establish its fitness to receive additional authority. Baltimore-Solomons Bus Lines, Inc., Ext.Deale, Md., 108 M.C.C. 31 (1968). Midwest has failed to meet this burden and, accordingly, we conclude that it cannot here be found fit to receive a grant of additional authority in No. MC-114019 (Sub-No. 199), and that the application therein should be denied in its entirety. Under the circumstances presented on this record, Midwest's past conduct convinces us that it is unlikely that it will be willing and able to comply in the future with the applicable rules and regulations.

We wish to point out that our refusal to issue a certificate on the basis that applicant is not shown to be fit is not a punitive measure aimed at past unlawful operations. Rather, it is the result of our evaluation.of Midwest's willingness and ability to conduct its future operations in a lawful manner. Fournier's Express, Inc., Ext. Hartford, Conn., 108 M.C.C. 584 (1969). To find as we do, that Midwest has not shown itself to be fit to perform the proposed service, casts doubt that this carrier is fit to perform any of its presently authorized service. We believe that it is Midwest's responsibility to operate lawfully and that this responsibility cannot be shifted. To exact anything less from carriers subject to our regulation would be a dereliction of duty on our part, as it would encourage the adoption of a "wait and see" compliance attitude by carriers, a practice which is totally inimical to sound regulation.

Section 207 of the act establishes as preconditions to the issuance of a certificate of public convenience and necessity, findings (1) that the applicant for a certificate is fit, willing, and able properly to perform a proposed service, (2) that the proposed service is required by the present or future public convenience and necessity. Both findings must be made, and one may not be based on the other. The findings concerning fitness should be grounded on evidence concerning the carrier alone and not on how strong a case has been

presented by the supporting shipper or protestants. Metler Hauling & Rigging Ext.-Loudon County, Tenn., 117 M.C.C. 557, 560 (1972). A determination of a carrier's fitness cannot be based on shipper need or other collateral factors. Such a determination would permit an unfit

carrier to obtain authorization to provide transportation services, and would not be in the public interest because a need for service cannot be met by an unfit carrier. Nationwide Carrier, Inc., Ext.-Foodstuffs, 120 M.C.C. 353, 358 (1974). We cannot allow our judgment to slip to the consideration of leniency in the interest of shippers which have supported this application, or any other applications which have been held open pending the qutcome of this proceeding, and thus outweigh the seriousness and persistence of Midwest's past violations.

Although Midwest may not be found fit simply because the supporting shippers may need the proposed service, we do not wish to appear unsympathetic to the supporting shippers' expressed needs. Motor carrier regulation is not so narrow as to preclude shippers from obtaining relief elsewhere. Shippers may immediately support another carrier for temporary authority to provide the proposed services. They may also support another carrier for permanent operating authority similar to that sought in No. MC114019 (Sub-No. 199). And they may at the same time make reasonable efforts to utilize the existing available services of presently authorized carriers.

FINDINGS

We find in No. MC-C-4201 that respondent Midwest Emery Freight System, Inc., has willfully failed to comply with the 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; that an order should be 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, that is, the trip leasing by respondent of its vehicles to any other carriers, including affiliated carriers, for use by the lessee, or the trip leasing by respondent of equipment from another carrier, including affiliated carriers, or person for use by respondent, regardless of the nature of the commodity previously transported or to be transported under the trip-leasing arrangement, and (3) suspending for an equal period, to run concurrently with the above noted suspension, respondent's privilege to interline or to interchange traffic with other motor common carriers including carriers with which it is affiliated or under common control.

We find in No. MC-114019 (Sub-No. 199) that applicant Midwest Emery Freight System, Inc., 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 and our rules and regulations thereunder.

We further find that this decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969.

An appropriate order will be entered.

124 M.C.C.

APPENDIX A

The Administrative Law Judge's summary of the violations in three areas

Extension of credit:

Between March 11, 1971, and March 24, 1972, Interstate Division handled 91 shipments for six of its customers without collecting the applicable freight charges within 7 days of delivery or within 7 days of the presentment of the respective freight bill, if presented after delivery, as specified in 49 CFR 1322.1. The delinquencies range from a high of 126 days to a minimum of 17 days, exclusive of Saturdays, Sundays, and legal holidays. The occurrences were repetitive in that shipments continued to be transported and delivered even after expiration of the permissible credit periods on prior shipments.

Falsification of records:

The second type of violation occurred between August 1971 and February 1972, at three (Columbus, Ohio, Reading, Pa., and Circleville, Ohio) of Interstate Division's 17 terminals, consisting of 39 instances in which the drivers of leased equipment signed a "Statement of Exempt Hauler," certifying that the movement "prior to this one was of exempt commodities or was one of a series of movements returning to point of origin or home base." The Commission's regulations (49 CFR 1057.4 (a)(3)(i)) provide that when a vehicle has completed the movement of an exempt load, upon receiving such representation of the driver of the vehicle, a regulated carrier can trip-lease that vehicle, exempt from the 30-day minimum period, back in the general direction of its home base upon the execution of a statement by the driver that he prior load was exempt.

Falsification of records with respect to the 39 trip leases is substantiated by 11 statements taken from two representatives of Interstate Division and from nine of the involved drivers. Documentation of 18 of the shipments was prepared by Interstate Division's dispatcher at Circleville, Ohio, and in his signed statement he admits fabricating the origin, destination, dates, and times in the "Statement of Exempt Hauler" under the instructions of the Circleville terminal manager. Interstate Division's terminal manager at Reading, Pa., states that no one “ever explained to me or my representatives what the exempt commodities were that could be used to qualify equipment for trip leasing." He was involved in 17 of the trip leases and admits that he never checked drivers' logs or shipping documents to ascertain the accuracy of the "Statement of Exempt Hauler." The statements of the truck drivers uniformly reveal that they signed the exempt statements under direction of Interstate Division's employees, often without being aware of the purpose or meaning of such statements. In fact, in some instances the “prior movement” was under lease to Interstate Division in which nonexempt commodities were transported.

Gateways:

The third type of violation occurred between August 1971 and March 1972, consisting of 88 shipments in which service was rendered between authorized points without traversal of the necessary gateways. The lawful transportation of each of the 88 shipments required the traversal of a gateway to tack two separate pieces of authority, but in none of these shipments was such gateway traversed. The movements originated at points in Pennsylvania and terminated at points in Michigan, Illinois, and Ohio. Lawful transportation of the shipments necessitated Interstate Division's

vehicles moving from origin to Belmont County, Ohio, thence recrossing the Ohio River to Wheeling, W. Va., thence proceeding to destination. Statements of the truck drivers show that in each instances there was no recrossing of the Ohio River after entering Belmont County.

APPENDIX B

Evidence adduced by respondent

The Administrative Law Judge's statement of respondent's evidence with minor additions, including a footnote, and modifications.]

With respect to credit violations, respondent contends that the stipulation relating to charges not collected within the prescribed period demonstrates de minimus and wholly unavoidable technical noncompliance and not a willful or flagrant disregard of regulations. In support of this contention Midwest showed that 27,209 shipments (21,000 of which were truckload) were handled by Interstate Division for 1,074 shippers in 1971. During the first 10 months of 1972, Interstate Division handled 23,164 shipments (20,000 of which were truckload) for 989 shippers, which traffic produced revenues of $6,994,609. During the period covered by the Bureau's investigation, only six shippers have been dilatory in paying freight bills aggregating some $30,000. The procedures utilized by Interstate Division for collection of freight charges include follow-up letters, calls, personal visits, threats to discontinue service except on a cash basis, and lawsuits. In fact, Interstate Division had either retained counsel or sued for collection of charges on nine of the involved shipments prior to the institution of the instant proceeding. As a result of these efforts, during the last half of 1971 collections totaling $3,922,784 were made by Interstate Division on acccounts receivable aggregating $3,938,484, and, as of December 31, 1971, only $4,922 were outstanding on accounts over 30 days old. Plagued by delays on the part of shippers and poor mail service available (transit time ranging from 1 to 33 days from date of postmark to date received in Interstate Division's office in Martins Ferry), the collection of all freight charges by Interstate within 12 working days of the presentment of freight bills is better than the industry average of 17 days. Thus, respondent contends, that between the entry of the order of April 16, 1971, in MC-C4201 and the commencement of the Bureau's investigation resulting in the instant proceeding, compliance efforts have been substantial and the results meaningful. On brief and again on exceptions, respondent submits that the problems encountered in this regard by Interstate Division are not unlike those described by the Commission in its order of March 14, 1973, as reasons for reopening Ex Parte Nos. 73 and MC-1, Payment of Rates and Charges.

With respect to the charge of falsifying records in connection with the trip leasing of vehicles, in February 1972, prior to completion of the Bureau's investigation and commencement of this proceeding, those accused of falsifying records were summarily discharged or demoted, and the practice of trip leasing was discontinued at the Columbus, Circleville, and Reading terminals. Furthermore, since the truthfulness of the driver's assertion that he was engaged in the transportation of exempt commodities prior to seeking a regulated load is difficult at best to check and cannot be determined from the carrier's own records except in rare instances and after auditing of documents, the trip leasing of exempt vehicles has been nearly eliminated. In those few instances where certain agents of the carrier in the field are still permitted to trip lease exempt vehicles, additional material must be attached to the trip lease sent to the main office at Martins Ferry. By this means the veracity of both

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