Applicant's less-than-carload traffic to and from the points involved, except Nashville, declined from 161,985,336 pounds in 1928 to 42,132,716 pounds in 1938, or 74 percent. For its entire system, applicant's less-than-carload traffic declined from 1,515,105 tons in 1928 to 686,654 tons in 1937, or 54.7 percent, and the revenue therefrom declined from $13,093,441 in 1928 to $6,302,895 in 1937, or 51.9 percent. Similar figures for carload traffic show that in 1937 the carload tonnage for the system was 72.9 percent of that in 1928, and the revenues therefrom were 70.7 percent. These and other data of record show that there has been substantial decline in applicant's less-than-carload traffic, and that such decline in respect of traffic to and from the points here involved has been materially greater than for its system as a whole.

A large number of shippers testified in support of the application. Merchandising methods have undergone changes, and merchants are now operating on a basis which requires frequent replenishment of stocks. As a result both shippers and consignees are demanding that their shipments be expedited in every way possible. Applicant believes that this demand can best be served by transporting less-than-carload shipments by rail in through cars with comparatively heavy loads to convenient distributing or key points and establishing coordinated service at the distributing points for movement to final destination by truck. Similar service would be provided in the reverse direction. It estimates that the coordinated service will result in reductions in time of delivery of lessthan-carload freight to the points herein involved of from 1 to 3 days.

The trucks would be used in lieu of rail service now provided through the use of way-freight trains. The operations of these trains would continue, but they would be confined to the handling of carload freight, and applicant estimates that there would be a saving in rail operating costs of $34,372 per annum, owing to reductions chiefly in expense of switching and of loading and unloading cars, but including savings in car maintenance and depreciation. This saving, however, is somewhat speculative, and whether it would actually amount to as much as the added cost of operating the trucks is problematical. It is clear that the main advantage of the new service to applicant would be in the improvement of service and in the prospect that it would result in substantial traffic gains.

The interstate transportation service which applicant seeks authority to perform by truck relates primarily to traffic which will receive either a prior or a subsequent movement by rail. However, appli

cant also contemplates transporting shipments from origin to destination solely by truck in both interstate and intrastate commerce. Applications for authority to engage in intrastate operations in Tennessee and Kentucky have been filed with the appropriate State authorities.

Applicant has been serving the points under consideration as a common carrier by railroad for over 50 years, and without question is fit, willing, and able properly to perform the proposed service.

The protesting motor carriers in this case, with the aid of the American Trucking Associations, Inc., presented much more elaborate and comprehensive evidence in opposition to the application than was presented in any of the prior cases hereinbefore discussed. As has been seen, this evidence was persuasive to the joint board which conducted the hearings, for in its recommended report and order the proposal was that the application be denied, a fact which must be given the weight to which it is entitled. Protestants undertake to show that the proposed operations are not required by the present or future "public convenience and necessity," in the light of the interpretation of those words which was given by division 5 in Pan-American Bus Lines Operation, 1 M. C. C. 191, where it was said, at page 203:

The question, in substance, is whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; whether this purpose can and will be served as well by existing lines or carriers; and whether it can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest.

While they admit that the proposed operations will result in service better than applicant is affording and better in some instances than is afforded by competing motor carriers, protestants introduced evidence to show, by a cost study, that the less-than-carload service rendered by applicant on its system as an entirety is carried on at a large loss. This forms the basis for a contention that the proposed operations "will prove disserviceable to the public by imposing an additional burden upon applicant's other traffic." The cost study, as revised to give effect to criticisms made by applicant, showed a loss of over $1,100,000 per year out of traffic which produced total revenues of $6,300,000, without taking into account terminal, switching, and pick-up and delivery deductions. This loss was based on the full allocated cost of handling the traffic. That there is such a loss is not conceded by applicant, which makes the usual criticisms of the assumptions upon which such estimates of cost are necessarily based but presented no study of its own. Without making a finding of the exact amount, we are of the opinion that upon the basis of full allo

cated cost there can be little doubt but that the less-than-carload service of applicant results in considerable loss.

The record contains no proof, however, that applicant would be better off financially if it were able to discontinue this service or, in other words, that the service does not yield a substantial excess of revenue over and above the out-of-pocket expense of producing it, which may be taken as the expense which would be saved if it could be discontinued. That it could lawfully be discontinued without public authorization or approval may be doubted. Protestants endeavored to show that the loss would be increased, if truck service were substituted for rail service to the extent proposed, but this, we think, they have failed to show. While applicant's evidence is not conclusive that the amount which will be saved in rail service is equal to the cost of the new truck operations on the basis of existing traffic, the conclusion is justified that the new method of handling the traffic will, by reason of the improved service and consequent traffic gains without proportionate increase in cost, more than pay its way. This conclusion does not take into account evidence offered by protestants to the effect that the Railway Express Agency cannot without loss furnish the proposed truck service at the stipulated prices of 14.35 and 12.5 cents per truck mile. This evidence was supplemented by reference to the uniform express contract between the agency and the railroads, under which the latter receive what is left out of the express revenues after all expenses of the agency have been paid, an arrangement which offers little inducement to the agency to be meticulous in the ascertainment of the cost of any particular or special service for the railroads. However, the evidence in regard to this matter is conflicting and, while there is room for doubt, it is not sufficient to justify a finding that the stipulated prices of the Agency are below cost.

For the reasons given hereinbefore in the discussion of the prior cases, we find that the proposed substitution, in part, of a new means of providing applicant's less-than-carload service will, to the extent hereinafter indicated, serve a useful public purpose, responsive to a public demand or need, and from that point of view is required by the public convenience and necessity.

Protestants in this case, however, did what was not done by the protesting motor carriers in the prior cases: they undertook to show that the useful public purpose which the proposed operations would serve could and would be served as well by existing carriers without adding new operations to the sum total of existing facilities. Manifestly unnecessary and wasteful duplications of service should be

avoided in the public interest, and for this reason the evidence of protestants in this respect merits the most careful consideration. Three alternative plans were proposed.

Under the first of these plans, the improved service would be provided by the Railway Express Agency through the use of applicant's passenger trains. It is shown that the agency is now engaged in the business of handling in passenger-train service some lessthan-carload freight at regular freight rates to and from applicant's freight stations which would be served by the proposed truck operations. It is contended that this service could be expanded to include all of the less-than-carload freight which would be handled by truck under applicant's plan, and that passenger trains are available which would provide an expedited service equal to that which the trucks could give. There is no showing, however, that the Agency would be willing to furnish such service or could do so without loss, or that the existing service of this kind which it furnishes by passenger trains at freight rates is profitable either to it or to the railroads. We therefore dismiss this plan from further consideration.

The other two plans contemplate provision of the desired service by the use of existing motor carriers. The principal such carrier is the Whitney Transfer Company, which operates between Louisville and Nashville, Bowling Green and Hopkinsville, and Nashville and Evansville, serving all intermediate and many off-route points. It could supply service between practically all points on both route 1 and route 2. Meeks Motor Freight operates between Louisville and Nashville and between Bowling Green and Hopkinsville, serving all intermediate points. It could supply service between practically all points on route 1. The Bowling Green Express operates between Louisville and Nashville, serving all intermediate points. It could supply service between practically all points on the section of route 1 between Elizabethtown and Bowling Green. The Southeastern Motor Truck Lines operates between Nashville and Evansville, with closed doors between Nashville and the Tennessee-Kentucky State line. It could supply service between practically all points on route 2, except those located between Nashville and the State line.

Under one plan the desired service would be supplied by these motor carriers through the establishment of through routes and joint rates with applicant and its connections. The motor carriers have offered to join in such routes and rates, and are willing also that the Commission shall fix the divisions, if the participating carriers are unable to agree upon them. Under the other plan, which protestants preferred, the motor carriers would publish proportional rates applicable on less-than-carload freight moving on applicant's

billing. These would be truckload rates between the termini of the routes subject to a maximum and a minimum weight of 10,000 pounds, but would permit split deliveries in one direction and split pick-ups in the other at the intermediate stations. Under these rates applicant would, technically, be a shipper or forwarder over motor-carrier lines. So far as the actual shippers of the freight were concerned, applicant's own less-than-carload rates would have through application to or from the destination or origin served by the motor-carrier line.

Since these proportional rates were proposed, the Supreme Court in United States v. Chicago Heights Trucking Co., 310 U. S. 344, has sustained the decision of the Commission in Chicago and Wisconsin Points Proportional Rates, 17 M. C. C. 573, in which proportional rates which had been published by motor carriers and were closely analogous to those here proposed were found to be unlawful. This decision, in our opinion, precludes further consideration of the proportional-rate plan, leaving the through route and joint rate plan as the only one which need be discussed.

Applicant makes numerous objections to protestants' plan. It contends that if the contemplated rail-truck service is to function properly there must be unity of interest in, and common management of, the project; that applicant could not expect to obtain from competing motor carriers the attention and devotion to the service necessary to make of that service what the public requires and should be accorded; that the shipping public desires, as the testimony taken indicates, service for which applicant will be wholly responsible; and that the plan would in effect eliminate applicant in the affected area as a competitor for the traffic in question. It seriously objects to opening its depots to joint use with those who are its intense competitors and to making available to those competitors full information in regard to the shippers which it serves in the affected area and their traffic. It alleges that the principal protestant, the Whitney Transfer Company, has made it a practice to defy the law of the State of Kentucky applicable to the weight of trucks and their loads and as a result has incurred frequent arrests, and that other protestants have conducted unauthorized operations. It further points out that the protesting motor carriers have no authority to serve all the points to be served under applicant's plan, and alleges that they have not indicated a willingness to handle all of the less-than-carload traffic which applicant is obliged to haul.

Some of these objections are of very minor importance. While it is true that there are seven points on applicant's rail lines in the affected area which none of the protesting motor carriers is authorized to serve, the record shows that two of them each have a popula