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by the employees of the Hoey Company or of the warehouse operators. Applicant has no knowledge of the character of the goods transported, the original point of shipment, the ultimate destination, or the identity of the actual shipper or consignee. The Hoey Company has seasonably filed an application with this Commission seeking "grandfather" authority in the transportation of general commodities over the same routes and between the same points as those covered by the instant application.

2

It is apparent that the operation which applicant has conducted under the above-described arrangement with the Hoey Company has been similar in all essential respects to that of the owner-drivers considered by division 5 in Dixie Ohio Exp. Co. Common Carrier Application, 17 M. C. C. 735, and that he therefore has no independent status under the act as a motor carrier with respect to such operation.

In addition to transportation performed under the direction of the Hoey Company, applicant claims to have conducted an independent operation in the transportation of eggs from certain points in Nebraska on return trips to Chicago. Applicant testified that from 5 to 7 loads of eggs were transported during each month of the egg season, usually from February to June. He stated that he has transported eggs from Kearney to Chicago continuously since prior to June 1, 1935, and that eggs had occasionally been hauled from Columbus, Nebr., to Chicago. The dealer at Chicago to whom the eggs were consigned testified that it was his impression that in 1935 a couple of loads of eggs moved each week from Columbus, that some movements occurred from Kearney, and that shipments were made at irregular periods from Hastings, Nebr. He stated that he now receives eggs over the lines of applicant and other trucking companies, and that no record is kept as to which carrier effects the delivery of eggs. He was certain, however, that shipments were delivered on the bills of the Bear Trucking Company and that he had seen checks drawn at his office in favor of the applicant.

All commodities transported on return trips to Chicago, other than eggs, are billed to the Hoey Company and are covered by insurance carried by the latter. Applicant carries cargo insurance on eggs. The only documentary evidence submitted with respect to the transportation of eggs consists of delivery receipts issued in the name of the Hoey Company showing one shipment each of eggs and of other commodities consigned on January 19, 1936, and January 13, 1937, by the Central States Freight Service from Kearney and Omaha to the Hoey Company at Chicago. The transportation of eggs is performed under the State permits of the Hoey Company

NO. MC-29781.

and in vehicles displaying the name of that company. The application, which was signed by Wm. J. Hoey, president of the Hoey Company, as agent of applicant, does not state specifically that eggs were transported from any of the points which applicant now claims to have served since prior to the statutory date, and the evidence is not convincing that he has been in continuous and open operation in his own right and name as a common or contract carrier since June 1 or July 1, 1935.

We find that applicant has failed to show bona fide operation, in interstate or foreign commerce, on June 1, 1935, or July 1, 1935, as either a common or a contract carrier by motor vehicle, of any commodities, between the considered points, and that the application should be denied.

An appropriate order will be entered.

LEE, Commissioner, dissenting:

Applicant has been engaged in the transportation of general freight by motor vehicle between the points covered by his application, as amended, continuously since the summer of 1933. He was registered as a motor carrier in 1934 under a code of fair competition for the motor-carrier industry. On July 1, 1935, he operated two tractorsemitrailer outfits, and he has since acquired three more. The arrangement between him and the Hoey Company prior to 1937 is not clearly shown in the record, but the evidence nevertheless indicates that he was not and is not an employee of, or lessor of equipment to, or agent for that company, but that, on the contrary, he was and is engaged in the transportation business for and on his own account. For instance, delivery receipts received in evidence indicate that applicant paid the Hoey Company for loading his trucks; that he paid for cargo insurance; and that he paid "four percent for the Hoey Company," probably as a commission. These same delivery receipts name the Hoey Company as consignor. It is difficult to reconcile the Hoey Company as both the carrier and the consignor of the traffic moved on applicant's trucks.

In my opinion the record does not establish that applicant's motor vehicles were or are operated under the direction and control of the Hoey Company. Incidentally, that company does not contend that they were or are so operated. It claims operating rights in its "grandfather" application, No. MC-29781, only with respect to operations conducted with its own vehicles. I would grant the permit sought by applicant.

28 M. C. C.

No. MC-61438 1

KANSAS CITY SOUTHERN TRANSPORT COMPANY, INCORPORATED, COMMON CARRIER APPLICATION

Submitted June 19, 1940. Decided January 24, 1941

1. In No. MC-89811, public convenience and necessity found to require operation, subject to certain conditions, by applicant as a common carrier by motor vehicle, in interstate or foreign commerce, of general commodities, over specified routes between Elizabethtown and Madisonville, Ky., and between Nashville, Tenn., and Hopkinsville, Ky., serving certain intermediate and off-route points which are stations on its rail lines. Issuance of certificate, subject to conditions, approved on compliance by applicant with certain requirements, and application in all other respects denied.

2. Upon oral argument, conditions attached to certificates granted in prior reports, 10 M. C. C. 221, 17 M. C. C. 413, 19 M. C. C. 702, and 22 M. C. C. 213, authorizing operations in interstate or foreign commerce, by applicants as common carriers by motor vehicle of general commodities in coordinated motor-rail service between various points over various routes, modified. Issuance of certificates authorized on compliance with certain conditions, and order entered vacating and setting aside certain prior orders and denying the applications in part.

Appearances in reports other than No. MC-89811 as shown in prior reports, and, in addition, H. Z. Maxwell, C. O. Heinley, C. F. Real, Harvey F. Krogman, and S. C. Lush on oral argument.

William A. Northcutt and W. L. Grubbs for applicant in No. MC-89811.

J. R. Turney, G. R. Rives, James W. Wrape, B. W. LaTourette, H. W. Vincent, Charles E. Banks, R. W. Brunow, Richard Gleaves, James H. Denney, Reuben Crimm, Charles Roser, Morgan J. Parlin, Charles B. Skimerton, D. M. Miles, and W. S. Daugherty for protestants in No. MC-89811.

William C. McMurry, L. A. Gossage, and Walter C. Newkirk for interveners in No. MC-89811.

1 This report also embraces two applications by the Kansas City Southern Transport Company, Inc., for extensions of operations, each numbered MC-61438, prior report 10 M. C. C. 221; No. MC-86687, and subnumbers 1 to 10, inclusive, and subnumbers 15 and 18, Seaboard Air Line Railway Company (Legh R. Powell, Jr., and Henry W. Anderson, Receivers) Motor Operation-Gaston-Garnett, S. C., prior report 17 M. C. C. 413; No. MC88370, LandA Motor Lines Contract Carrier Application, prior report 22 M. C. C. 213; No. MC-48602, subnumbers 2 to 5, inclusive, Chicago, Rock Island & Pacific Railway Company Extensions-Iowa, Missouri, Kansas, and Nebraska, prior report 19 M. C. C. 702; and No. MC-89811, Louisville & Nashville Railroad Company Common Carrier Application.

407283m 41-vol. 28- -3

REPORT OF THE COMMISSION ON ORAL ARGUMENT AND RECONSIDERATION

EASTMAN, Chairman:

Each of the applications herein considered, except No. MC-89811, has been the subject of a prior report by division 5, as indicated in footnote 1, and has been reopened for oral argument and reconsideration upon petitions of applicants.2 No. MC-89811 has been the subject of a recommended report and order of a joint board to which applicant filed exceptions. Upon petition of the American Trucking Association, Inc., it too was reopened for oral argument along with the other cases herein considered. Our conclusions in this case differ

from those recommended by the joint board.

Applicants in each case are railroads or companies subsidiary to or affiliated with railroads. In each application authority is sought to engage in motor-vehicle operations in the transportation of general commodities in line-haul operations between points on rail lines of applicants or of railroads associated therewith. In all of the cases, except No. MC-89811, which will be more fully discussed hereinafter, division 5 found that the proposed motor-vehicle operations were those of a common carrier by motor vehicle, and that public convenience and necessity required the proposed service to the extent it would be auxiliary to or supplemental of rail service, and authorized the issuance of certificates subject to certain conditions which were imposed for the purpose of limiting the authorized operations to those which would be in fact auxiliary to or supplemental of rail service. Specifically the conditions imposed by division 5 in No. MC-61438 are as follows:

1. The service to be performed by applicant shall be limited to service which is auxiliary to, or supplemental of, rail service of the Kansas City Southern Railway Company or the Arkansas Western Railway, hereinafter called the railways. 2. Applicant shall not serve, or interchange traffic at, any point not a station on a rail line of the railways.

3. Shipments transported by applicant shall be limited to those which it receives from or delivers to either one of the railways under a through bill of lading covering, in addition to movement by applicant, a prior or subsequent movement by rail.

4. All contractual arrangements between applicant and the railways shall be reported to us and shall be subject to revision, if and as we find it to be necessary in order that such arrangements shall be fair and equitable to the parties.

5. Such further specific conditions as we, in the future, may find it necessary to impose in order to restrict applicant's operation to service which is auxiliary to, or supplemental of, rail service.

a The title case, No. MC-61438, is the "grandfather" clause application of the Kansas City Southern Transport Co., Inc., which was denied in the prior report and order of November 12, 1938. Though reopened with the related extension applications of the same number, it offers no present issue and need not be further considered. The order of denial, as far as it is concerned, is still effective.

In prior reports in the other cases, each of the certificates granted was made subject to similar conditions. In some, involving railroad applicants, the wording of condition 3 was changed by omitting the words "it receives from or delivers to either one of the railways" and inserting in lieu thereof the word "move," and condition 4 was also omitted as not applicable. In No. MC-86687, the words "or interchange traffic at" were omitted in condition 2, apparently on the theory that motor carriers may not interchange traffic at points other than those which they are authorized to serve.

In the prior report in No. MC-61438, 10 M. C. C. 221, division 5 discussed at some length the question of what restrictions should be imposed, and stated that, if applicant should be of the opinion that the limitations imposed would prevent it and the associated rail carriers from providing an adequate coordinated rail-and-motor service or that public convenience and necessity require the institution of service wholly by motor vehicle to and from the smaller points which now are without such service, it might bring the matter to our attention by a petition that the proceeding be reopened for further hearing and consideration.

The purpose of the conditions imposed was to limit the motor-carrier service to that which is auxiliary to, or supplemental of, the rail service and to prevent applicants from engaging in motor-carrier operations unconnected with any rail service.

On oral argument applicants contend that condition 3 should be eliminated because it prevents them from providing an economical, efficient, and adequate coordinated rail-and-motor service and results in the continued use of both way-freight trains and trucks, lightly loaded, between various points, and because the performance of allmotor service between certain points is a necessary and integral part of the plan of coordinated operations. Representatives of commercial organizations of St. Joseph, Mo., and Hutchinson and Topeka, Kans., support the position of applicant in No. MC-48602, subnumbers 2 to 5. The Railway Labor Executives' Association urges the retention of condition 3. The Brotherhood of Railroad Trainmen goes even further and takes the position that no authority to engage in such motorvehicle operations should be granted railroads or their subsidiaries, because, in its opinion, the public need in the transportation of less-thancarload freight is one of service and rates which could be met by allrail service, if the railroads would give the problem adequate attention. The representatives of independent motor carriers contend that the applications, for the most part, should be denied for lack of public need, since there is already available both rail and motor-carrier service which, if the railroads would cooperate with the existing motor car riers, could be linked together to provide an adequate and efficient

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