No. MC-74791

LINCOLN TRAILS SYSTEM, INCORPORATED, EXTENSION OF OPERATIONS PITTSBURGH

Submitted May 24, 1940. Decided April 4, 1941

On further hearing, findings in prior report, 2 M. C. C. 627, that public convenience and necessity do not require continuance of operation by applicant as a common carrier by motor vehicle of passengers and their baggage, and of mail, express, and newspapers in the same vehicle with passengers, between Columbus, Ohio, and Pittsburgh, Pa., over a regular route, affirmed. Application denied.

Francis J. Ortman, Thos. F. Barry, and W. A. Roberts for applicant.

Gilbert Nurick and R. L. Jacobs for protestants.

Other appearances shown in prior report.

REPORT OF THE COMMISSION ON FURTHER HEARING

DIVISION 5, COMMISSIONERS EASTMAN, LEE, AND ROGERS

BY DIVISION 5:

In the prior report herein, 2 M. C. C. 627,1 we found in the "grandfather" application that applicant was entitled to a certificate under the "grandfather" clause of section 206 (a) of the Interstate Commerce Act, authorizing operation as a common carrier by motor vehicle of passengers and their baggage, and of mail in the same vehicle with passengers, between Chicago, Ill., and Columbus, Ohio, serving all intermediate points, over a specified route; and in the Logansport extension application that public convenience and necessity required the same type of operation by applicant between Logansport, Ind., and Van Wert, Ohio, serving intermediate points, over a specified route. We further found in the Pittsburgh extension application that public convenience and necessity did not require a similar operation by applicant between Columbus, Ohio, and Pittsburgh, Pa., over U. S. Highways 40 and 19, and entered an order denying this application effective August 11, 1937. On petition of applicant, by order of October 20, 1937, we reopened the latter proceeding for further hearing and indefinitely postponed

This report embraced No. MC-74791, Lincoln Trails System, Incorporated, Common Carrier Application, and No. MC-74791, Lincoln Trails System, Incor Extension of Operations-Logansport, Ind.

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the effective date of the denial order therein. The joint board in its recommended order and report on further hearing found that applicant had failed to show that public convenience and necessity required continuance of the Pittsburgh extension. Applicant filed exceptions to the joint board's recommendation, and protestants replied thereto. The evidence submitted at the prior hearing is discussed in our prior report, and, although we have considered the entire record, we will discuss only the evidence adduced at the further hearing in detail, and so much of the prior evidence as is necessary to the proper disposition of the issues.

Operation was commenced by John B. Wallace, as an individual, between Chicago and Columbus, in December 1934, and such operation was extended from Columbus to Pittsburgh on August 17, 1935. The entire operation was conducted by him until December 16, 1935, on which date he assigned all his interest therein to applicant, and it has continued the operation since that date. Wallace is president of applicant. The operation between Columbus and Pittsburgh having been commenced prior to the effective date of section 206 (b) of the act, and an application in respect thereof having been filed within 120 days thereafter, continuance of the operation is and has been lawful.

While operating as an individual between Chicago and Columbus, Wallace interchanged passengers with other motor common carriers at Columbus for a period of time. In January 1935 he was advised by two such carriers that they would no longer honor his tickets for transportation to points east of Columbus because of a reduced fare he established between Fort Wayne, Ind., and Chicago. The Great Eastern System continued to accept his tickets, but it was necessary for passengers using its service to stop over in Columbus 7 hours on east-bound trips. Wallace therefore arranged to have his tickets for transportation east of Columbus reissued by Buckeye Stages, Inc., which tickets were acceptable to Red Star Way, Inc. Such arrangement continued until sometime prior to June 1, 1935, when it was discovered by Red Star Way, Inc., and ordered discontinued. Wallace was transporting an average of seven or eight passengers each trip from points west of Columbus destined to points east thereof; and, because of the refusal of other carriers to accept his tickets, he found it necessary to provide through service to Pittsburgh. He asserts that the Public Utilities Commission of Ohio would not accept his application for authority to extend operations to points east of Columbus because of certain provisions of the National Industrial Recovery Act. However, after that act was declared unconstitutional, he filed an application in Ohio and re

ceived authority to extend interstate operations from Columbus to the Ohio-West Virginia State line on June 20, 1935, and similar authority from the State Road Commission of West Virginia to operate from such State line to the West Virginia-Pennsylvania State line on August 7, 1935. On further hearing, an attorney employed by Wallace prior to June 1, 1935, testified that Wallace requested him to file an application with the Public Utilities Commission of Ohio for appropriate authority to extend operations in that State east of Columbus in May 1935; and that the application for State authority was in the course of being prepared on June 1, 1935. The fact that the operation was planned prior to the "grandfather" date, and instituted shortly thereafter, may be considered in connection with the proof of present or future public convenience and necessity.

Protestants explain that they discontinued the acceptance of applicant's tickets for transportation over their lines east of Columbus because they doubted his financial ability to pay their reclaims for such tickets issued. There is no evidence, however, that they have suffered any loss on any such tickets.

Twenty-one patrons of applicant testified in support of the application. Each expressed a preference for applicant's service over that of other motor carriers operating between points served by it, and they were in general agreement that applicant had been performing satisfactory service. One witness who makes about 12 trips per year between Chicago and Washington, Pa., testified that she needs applicant's through service between these points. Another witness who makes 6 or 7 trips per year between Chicago and Pittsburgh likewise testified as to his need for continuance of applicant's service. Other witnesses who expressed their need for the service between Columbus and Pittsburgh were as follows: 2 from Washington, Pa., 1 from Columbus, 1 from Keltonville, 6 from Cambridge, 1 from Zanesville, Ohio, 2 from Wheeling, W. Va., and 1 from Pittsburgh. Two drivers for an automobile drive-away concern testified that they used applicant's through service between Pittsburgh and points west of Columbus in returning to their headquarters with tow-bar equipment, and that they had found it more convenient than the service of other motor carriers operating between the same points.

A representative of Burlington Transportation Company testified that his company transferred to applicant at Chicago many passengers whose destinations were points east of Columbus, making direct connections without change of stations in Chicago, whereas a transfer to other motor carriers requires a change of stations at such

point. A representative of Santa Fe Trailways testified as to the importance of applicant's operation between Columbus and Pittsburgh as a connecting link in the National Trailway Transcontinental bus service, because his company delivered to applicant at Chicago in excess of 100 passengers per month, of which 10 percent were destined to points between Columbus and Pittsburgh, 5 percent to either Columbus or Pittsburgh, and 80 percent to points east of Pittsburgh; and that the service of applicant is a convenience to passengers originating in his company's territory west of Chicago and traveling to points east of Columbus.

Applicant submitted evidence showing that during the last 6 months of 1938 it transported an average of 64 passengers per day between Columbus and Pittsburgh; and that it received at Columbus 629 passengers during the same period from Pennsylvania Greyhound Lines for transportation to points east thereof.

An officer of the National Trailways System testified that it was an association of bus companies organized for the purpose of coordinating the service of 27 member companies to form a national highway-transportation system, and that applicant's operation was an important link in such system.

The evidence establishes that there is an abundance of service between Columbus and Pittsburgh and at intermediate points. It was shown that in addition to the 2 trips each way daily by applicant over its routes, 4 trips daily are operated between Pittsburgh and Wheeling over a portion of the same route by Atlantic Greyhound; 3 trips each way over the route involved between Pittsburgh and Columbus by Pennsylvania Greyhound (2 of such trips being a limited service with intermediate service only at Wheeling) and 3 trips each way over another route serving only the termini; 6 trips each way between Columbus and Zanesville by the Arcodel System, Inc.; 11 trips each way between Pittsburgh and Wheeling and 7 trips each way between Pittsburgh and Washington by Blue Ridge Lines; 6 trips each way between Columbus and Pittsburgh by the combined services of Arcodel, Blue Ridge, and Red Star Way, Inc., 2 of such trips being through service without a change of busses; a service every 30 minutes from 5:15 a. m. to 6:15 p. m. and every hour from 6:15 p. m. to 12:15 a. m. between Pittsburgh and Washington by an interurban line; 9 trips each way daily between Columbus and Pittsburgh with service shown at Zanesville on only 1 trip, 3 trips each way between Wheeling and Pittsburgh, and 6 trips each way between Washington and Pittsburgh, by the Pennsylvania Railroad; 2 trips each way between Columbus and Pittsburgh, with service shown at Zanesville, Wheeling, and Washington, by the

Baltimore & Ohio Railroad; and 1 trip each way daily over another route between Columbus and Pittsburgh by the All American Bus Lines, Inc.

The record at the prior hearing shows that all such service was being performed by protestants on August 17, 1935, the date on which applicant commenced operating one trip each way daily over the involved route.

An officer of Red Star Way, Inc., testified at the prior hearing that its revenue and expenses were so nearly equal that a loss of one passenger per trip to applicant would result in a loss being suffered by it on its bus operation. On further hearing he testified that the company had operated at a profit in 1937 and at a loss in 1938 and in 1939 up to the date of hearing, saying, however, that the discontinuance of its operation between Columbus and Detroit, Mich., was reflected in 1939 earnings.

Certain protestants, on brief and in their exceptions, challenge. applicant's fitness and ability to continue operations between the points covered by the application. They contend also that applicant has failed to establish present or future need for continuance of its service.

Financial statements submitted in evidence by applicant show that its liabilities have exceeded its assets as follows: $47,505 as of December 31, 1937, $62,181 as of December 31, 1938, and $61,765 as of January 31, 1939. As of the latter date, its total assets were $51,715 and its liabilities, less capital stock, $113,480. Its income statements show that in the last 6 months of 1938 it operated at a net profit in the months of July, August, September, and December; however, the net result for the year was a deficit of $14,690. Its most recent statement for January 1939 indicates a net income of $415 for that month. Its revenue per bus-mile was 10.18 cents in January 1938, but increased to 14.29 cents in January 1939, to 15.78 cents in March 1939, and to 18.07 cents in the first half of April 1939. For the year 1938 the operating costs were approximately 15.5 cents per bus-mile.

Applicant attributes its past losses, in part, to infrequency of the operation of the connecting carrier at Pittsburgh, failure of that carrier to solicit business, and certain financial difficulties. However, that carrier is now affiliated with National Trailway System, and its financial difficulties have been relieved. It now operates two daily schedules to Pittsburgh, connecting with applicant's. The evidence does not show the extent of the business applicant is receiving from this connecting carrier at Pittsburgh, or whether such business has resulted in a material increase in applicant's operating

revenues.