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tion of about 100, and a third has a population of about 50. The other four apparently have populations of less than 50. An exhibit filed by applicant descriptive of the traffic under consideration shows no traffic moving to or from these stations for a period of 10 years. If need for their service by motor carrier were found to exist, there is no reason to believe that difficulty would be experienced in obtaining the necessary operating authority. With respect to the traffic to be handled, protestants restricted their offer to the commodities which are generally handled by common carriers of general commodities by motor vehicle. With the exception of articles of excessive value, such as bullion, and traffic which is dangerous to handle or contaminating to other lading, protestants say that they can and will handle all less-than-carload traffic which could be handled in Railway Express Agency trucks under applicant's own plan.

With respect to the alleged violations of law by the protesting motor carriers, suitable penalties are provided for the punishment of such violations. Under section 212 (a), also, willful failure to comply with any provision of part II, or with any lawful order, rule, or regulation of the Commission promulgated thereunder, or with any term, condition, or limitation of a certificate, permit, or license, if continued after an order of the Commission has been issued commanding obedience, constitutes a ground for revocation of a certificate, permit, or license. Violations of law by a motor carrier in the past may likewise be considered in determining its fitness to receive a grant of operating authority. We have no such proceedings before us here, however.

Nor are we impressed with the danger to applicant which would result if the motor carriers were given access to some of its depots or provided with more direct opportunity to become informed in regard to the shippers which applicant serves and their traffic. The communities involved are none of them very large, and it may be doubted whether there is much, if any, of this information which applicant has been able to keep secret from its motor-carrier competitors.

There are objections, however, which have greater importance. Protestants realized that the through route and joint rate plan has certain disadvantages, and for that reason they preferred the proportional-rate plan. Applicant is now, and for many years has been, engaged in handling the less-than-carload traffic in question wholly with its own facilities. It seeks to continue this status, substituting the truck in part as the means of transportation but maintaining direct control and responsibility for the entire service. Under the joint-rate plan, applicant would divide control and responsibility with one or more motor carriers, and the latter would deal directly

with the shippers at one end of the joint haul. Under such an arrangement applicant would, unless it continued to provide the present service by rail, retire in part from the less-than-carload service with its own facilities in which it has so long been engaged. Moreover, the motor carrier or carriers upon which it would depend in part for the performance of an efficient joint service would also be engaged, solely or jointly with motor-carrier connections, in a competitive all-motor service. Moreover, the joint service would entail additional billing, checking, and transfer expense.

The proportional-rate plan was intended to avoid these objections, at least in considerable degree. In practical effect it would be equivalent to the employment of motor-carrier service under contract. Applicant would continue to deal directly with the shippers, for its own less-than-carload rates would continue to apply over the through movement. The motor carrier would have no dealings with the shipper, but would receive for its part of the work a payment from applicant based on a simple truckload rate. The protesting motor carriers offered to agree to furnish applicant, upon 3 hours' notice, with necessary equipment at Bowling Green, Guthrie, Hopkinsville, Nashville, Madisonville, and Elizabethtown, which are the points at which applicant proposes to transfer from rail to truck or vice versa, and also at Louisville and Evansville, if desired, at the time designated, and on the schedules fixed, by applicant. Shipments from and to agency stations would move under seals, and would be loaded and unloaded by applicant's employees; motorcarrier employees would load and unload only at nonagency stations. For reasons already stated, however, the proportional-rate plan must be dismissed from consideration.

Protestants urge that even under the joint-rate plan, it would be in the self-interest of the motor carriers to make the joint service as efficient and attractive to the shippers as possible, and also that the cost to applicant would be less than under its own plan. The preponderant movement of the present traffic of the motor carriers is south-bound. They operate on the average to about 75 percent of capacity in that direction, whereas north-bound the average is only about 25 percent. Accordingly they have arranged their proposed schedules for the coordinated service with applicant so that their part of the haul would be largely north-bound. This, they say, would improve their load factor, a result greatly to be desired. However, a considerable part of the traffic would move south-bound. Their claim that the cost would be less to applicant than under its own plan is based wholly upon calculations that they could perform the service with less truck-miles. They propose to secure for their service revenue of 20 cents per truck-mile, which is much higher

than the charges of 14.35 cents over one route and 12.5 cents over the other which the Railway Express Agency proposes to make. An additional charge of 2.5 cents per 100 pounds would be made for any loading or unloading done by their employees. With equal truckmiles, therefore, the cost under protestants' plan would be materially higher. Their claim that they could perform the service with a sufficient saving in truck-miles so that the total cost would be lower is based on assumptions, some of which were sharply challenged by applicant. Thus, it was assumed that the type of truck to be supplied by the Agency for route 1 could carry no more than 4 tons, whereas it was testified for applicant that it is capable of carrying as much as 5 tons. It was also shown by applicant that some of protestants' proposed schedules contemplate deliveries in early morning hours when no station employees of applicant would be available, thus entailing payments to the motor carriers for unloading at the rate of 2.5 cents. per 100 pounds. It was further shown that the schedules would make it necessary for applicant to transfer freight at Bowling Green from one through railroad car to another at an early morning hour when applicant would have no employees available for the purpose. We are not satisfied on the evidence of record that such a saving in truck-miles as protestants estimate could actually be made. In this connection it should be borne in mind that their calculations were based on traffic handled by applicant in the past. If the traffic should grow under the coordinated arrangement, as is probable, the traffic problem presented would change, and it is difficult to believe that savings in truck-miles could always be made to offset in whole or in large part the very large excess in unit price per truck-mile. It is also to be borne in mind that protestants' proposed schedules under the proportional-rate plan were based, as we understand it, on the use of the facilities of all four of the motor carriers which operate in the affected area, under a sort of a pooling arrangement. While, as we have seen, there are no more than seven small stations which none of these carriers is authorized to serve, the Whitney Transfer Company is the only one which could serve the entire area with the exception of these stations, and the others lack authority to serve other intermediate points on their more limited routes. The problem presented by points which the motor carriers lack authority to serve, therefore, would be of increasing importance if it were necessary to utilize the services of the three other carriers as well as the Whitney Transfer Company. Under a joint-rate plan embracing all four carriers, with each of them operating independently, it would seem that much duplication of service would result, but if to avoid such duplications applicant should confine the joint rates to the Whitney Transfer Company, it seems most unlikely that it could perform the

required service with the same economy of truck-miles that was contemplated in the proposed schedules under the proportional-rate plan.

Having in mind that, for the reasons above indicated, only the joint-rate plan is available, that under that plan applicant would find it necessary to divide control over and responsibility for less-thancarload service in the affected area with motor carriers which would continue to afford a competing all-motor service, and that the unit costs of the motor service would be materially higher than under applicant's plan with no assurance of offsetting savings in truck-miles, we find that the useful public purpose which would be served by coordination of rail and truck service could not be served as well by existing motor carriers as under applicant's proposed plan.

Protestants finally showed that the four motor carriers serving the affected area suffered operating deficits prior to 1938, and in that year enjoyed a combined net income of $32,433 out of total operating revenues of $962,135. From this they argue that if applicant should divert as little as 3 percent of their present traffic, it would endanger the "operations of existing carriers contrary to the public interest." The traffic which applicant proposes to transport by truck rather than by rail now amounts to about 50 tons per day, and applicant proposes to use only three trucks of small capacity to haul it. This traffic could double in size without assuming large proportions. Following the conclusions reached in the discussion of the prior reports, we shall not authorize applicant to haul by truck between its key points, which are, of course, the larger and more populous communities in the affected area. Any diversion of traffic, therefore, will be only to or from the smaller towns or hamlets which are now served by way-freight trains. Whether such diversion, if any there proves to be, will be harmful to the motor carriers may be doubted, but we are of the opinion that the public is entitled to the improvement in service which applicant proposes, regardless of the fact that it may have some slight adverse effect on competing carriers. We find, therefore, that the proposed new operation will not endanger or impair the operations of existing carriers contrary to the public interest.

As has been indicated, applicant intends to conduct the considered operations in vehicles furnished by the Railway Express Agency. If such vehicles are used, it will be necessary that they be operated under the direction and control of applicant and under its responsibility to the general public as well as shippers, and they may not be operated under the direction, control, and responsibility of the Railway Express Agency. See Dixie Ohio Exp. Co. Common Carrier

407283m 41-vol. 28- -4

Application, 17 M. C. C. 735, and Railway Exp. Agency, Inc., Determination of Status, 21 M. C. C. 161.

Ultimate findings.-In No. MC-89811, we find that the present and future public convenience and necessity require operation, in interstate or foreign commerce, by applicant as a common carrier by motor vehicle, of general commodities, over the regular routes described in appendix A hereto, serving the termini, all intermediate points, and the off-route points indicated in said appendix, subject to the following conditions:

1. The service by motor vehicle to be performed by applicant shall be limited to service which is auxiliary to, or supplemental of, its rail service.

2. Applicant shall not serve any point not a station on its rail line.

3. No shipments shall be transported by applicant as a common carrier by motor vehicle between any of the following points, or through or to or from more than one of said points: Elizabethtown, Bowling Green, Hopkinsville, Guthrie, and Madisonville, Ky., and Nashville, Tenn.

4. Such further specific conditions as we, in the future, may find it necessary to impose in order to restrict applicant's operations by motor vehicle to service which is auxiliary to, or supplemental of, its rail service.

In the same case, we further find that applicant is fit, willing, and able properly to perform such service and to conform to the provisions of the act and our rules and regulations thereunder; and that a certificate authorizing such operations should be granted. Upon compliance by applicant with the requirements of sections 215 and 217 of the act, and our rules and regulations thereunder, an appropriate certificate will be issued. An order will be entered denying this application, except to the extent that operations are authorized by the certificate herein granted.

In the two extension applications, each numbered MC-61438, prior report 10 M. C. C. 221; in No. MC-86687 and subnumbers 1 to 10, inclusive, and subnumbers 15 and 18, prior report 17 M. C. C. 413; in No. MC-88370, prior report 22 M. C. C. 213; and in No. MC48602, subnumbers 2 to 5, inclusive, prior report 19 M. C. C. 702, we affirm the findings of division 5, except we find that condition 2 (other than in the prior report 17 M. C. C. 413) and condition 3 should be modified to read as shown in appendix B hereto.

No order has heretofore been entered in No. MC-86687 and subnumbers 1 to 10, inclusive, and subnumbers 15 and 18, denying such applications to the extent not granted. An order will be entered vacating and setting aside the order of October 28, 1939, in No.

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