Phillip Porter for Public Service Commission of Wisconsin, and Herman L. Bode and D. L. Kelley for Board of Railroad Commissioners of South Dakota, interveners.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON BY DIVISION 5:

Exceptions were filed by applicant, the rail protestants, certain of the motor protestants, the Public Service Commission of Wisconsin, and the Board of Railroad Commissioners of South Dakota to the recommended order of the examiner in No. MC-52110, by applicant to the recommended order of the joint board in No. MC-52111, and by protestant Minneapolis & St. Louis Railroad Company to the recommended order of the joint board in No. MC-52110 (Sub-No. 1). The orders recommended by the joint board in Nos. MC-49470 and MC-52110 (Sub-No. 2) were stayed by us. Our conclusions in No. MC-52110 differ slightly from those of the examiner.

By application 2 in No. MC-52110, filed February 12, 1936, Brady Transfer and Storage Company,3 a corporation, of Fort Dodge, Iowa, seeks a certificate of public convenience and necessity authorizing continuance of operations as a common carrier by motor vehicle of general commodities, including used furniture and household goods, with exceptions, in interstate or foreign commerce between points in Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South Dakota, Virginia, Wisconsin, and the District of Columbia, over regular and irregular routes as hereinafter described.

By application in No. MC-52111 filed on the same date, under the "grandfather" clause of section 209 (a), the same applicant seeks a permit authorizing continuance of operations as a contract carrier by motor vehicle of general commodities, with exceptions as hereinbefore shown, in interstate or foreign commerce, between various points in Iowa, over regular routes.

On February 12, 1936, applicant also filed an application, in No. MC-49470, seeking a license authorizing it to continue operations as a broker for the purpose of procuring or arranging for the transportation by motor vehicle of general commodities, in interstate or foreign commerce, between various points.

■ Under the "grandfather" clause of section 206 (a) of the Motor Carrier Act, 1935. Also doing business as Brady Motor Freight Lines and Brady Forwarding Company. Loose bulk commodities, livestock, bullion, articles of virtu, articles contaminating and injurious to lading, and articles exceeding size and capacity of equipment and loading facilities.

By applications filed September 203 and November 1, 1937, applicant seeks a certificate of public convenience and necessity authorizing operations as a common carrier by motor vehicle of general commodities, with exceptions hereinbefore shown, between points in Iowa, in interstate or foreign commerce, over regular routes as shown in appendix F.

In No. MC-52110, certain motor and rail carriers in the same general territory opposed the application. Other motor carriers, the Iowa State Commerce Commission, Public Service Commission of Wisconsin, Board of Railroad Commissioners of South Dakota, Waterloo and Cedar Falls Traffic Association, and the Waterloo Chamber of Commerce intervened as interested parties. In Nos. MC-52111 and MC-49470, the rail carriers opposed the granting of the applications, and Orchlen Brothers Truck Lines, Inc., intervened as an interested party. Various motor and rail carriers opposed the applications in Nos. MC-52110 (Sub-No. 1) and MC-52110 (Sub-No. 2), and the Iowa State Commerce Commission intervened in such proceedings and in No. MC-52111 as a party in interest. Separate recommended orders were issued by the examiner in the "grandfather" common-carrier proceeding and by joint board No. 92 in the contract-carrier, broker, and extension proceedings, respectively. Such proceedings present related matters and will be disposed of in one report.

"Grandfather" common-carrier application.-Applicant was incorporated under the laws of Iowa in 1921. Prior to that time it operated as a partnership. It has conducted teaming, trucking, and transfer operations since 1903. Its operations as a motor carrier were instituted in 1921. It was registered under a code of fair competition for the trucking industry on August 14, 1934. It has a large terminal and warehouse at Fort Dodge and also maintains terminals at Boston, Mass., New York, N. Y., Chicago, Ill., Omaha, Nebr., and Des Moines, Sioux City, Waterloo, Denison, Spencer, Algona, Webster City, and Sheldon, Iowa. It employs a large number of freight solicitors, and approximately 140 regular employees are carried on its pay roll.

On June 1, 1935, applicant was operating 48 units of owned equipment and 55 units of leased equipment. On January 1, 1938, its owned equipment consisted of approximately 63 units, and 90 units were leased. It has obtained authority from the State boards or commissions of Connecticut, Indiana, Iowa, Missouri, New Jersey, Ohio, South Dakota, and Wisconsin, for operations in those States. The Indiana, New Jersey, Ohio, South Dakota, and Wisconsin permits or certificates are restricted in respect of territory, routes, or commodi

No. MC-52110 (Sub-No. 1).
No. MC-52110 (Sub-No. 2).

ties, as the case may be. Mileage taxes have been paid in certain of the other States.

Applicant's operations in Iowa have been conducted over regular routes 1 to 7, inclusive, as shown in appendix A hereto, and over numerous irregular routes. The territorial description of its irregular-route operations in Iowa and certain points served in such operations are set forth in appendix B. Operations between points in Iowa, on the one hand, and points in the other States, on the other, have been conducted over irregular routes. The points served by applicant in its irregular-route operations in States other than Iowa are shown in appendix C hereto.

Daily-except-Sunday services have been maintained over applicant's regular routes and over some of its irregular routes between Iowa points and Boston, New York, and Chicago. Generally, triweekly services have been performed over the remaining irregular routes. Applicant has maintained pick-up and delivery services and interchanged shipments with other motor carriers at various points on its routes.

A large portion of applicant's operations in Iowa has consisted of the transportation of general commodities from Des Moines and other railhead points to various destinations in Iowa under contracts with approximately 25 carloading and forwarding companies. These shipments have originated at various points in other States and have been consolidated and moved in carload quantities over rail lines to railheads in Iowa. From the latter points, such shipments have been transported to ultimate destination by applicant at common-carrier rates named in the tariffs of the forwarding companies in which applicant has been named as a participating carrier. In No. MC-52111, applicant has requested authority to continue these operations as a contract carrier, in the event that they are found not to be those of a common carrier.

Applicant has also distributed, to various points on its regular and irregular routes in Iowa, interstate less-than-carload shipments of various commodities which have moved as consolidated shipments over the rail lines to Fort Dodge and Mason City, Iowa. Similar distribution of catalogs, seeds, and soap, moving in rail services from points in other States to Des Moines, Council Bluffs, Fort Dodge, and Algona, Iowa, and certain other railheads, has been made by applicant over its regular and irregular routes to ultimate destinations in Iowa. During the month of December, each year, rail carload shipments of Christmas trees originating at points in the far West and consigned to various destinations in Iowa have been transported by applicant from Fort Dodge to such Iowa points. The shipments of Christmas trees and catalogs have been transported from the rail

heads to Iowa destinations under contracts with the shippers, in which the rates or charges to be applied were specified.

In all of applicant's distributing operations from the railheads, the shipments have originated at the initial origin in common-carrier services. They have been marked and tagged at such origins and consigned to the final destinations in Iowa. There was an intention on the part of the shipper that there should be a continuous movement of such shipments from initial origin to ultimate destination regardless of the character of transportation services in which such shipments moved. Obviously, the mere incidents of billing and the manner of handling of such shipments could not change the essential character of the traffic. It is clear, therefore, that the transportation of such shipments by applicant constituted an essential part of a through common-carrier movement in interstate commerce, and that such operations have been those of a common carrier as defined in section 203 (a) (14) of the act. See Novick Common Carrier Application, 12 M. C. C. 213.

Applicant also transported, during 1935 and prior thereto, certain commodities between points on its routes under oral agreements with at least 25 large industrial concerns in various States. It did not limit its transportation services to any particular persons or classes of shippers, but entered into contracts with all shippers who desired to avail themselves of its services. Such contracts were terminated prior to April 1, 1936, and since that time shipments from these industrial concerns have moved in applicant's common-carrier services at its common-carrier rates. In view of the holding out of its services for hire under similar agreements to the general public, it is apparent that applicant's operations in such respects were, and have been, those of a common carrier, as defined in section 203 (a) (14).

At Fort Dodge, Sioux City, Des Moines, and Waterloo, Iowa, and certain other of its terminal points, applicant has received interstate carload shipments from the rail carriers and delivered them to certain other rail carriers and to line-haul motor carriers at such terminal points, for transportation in less-than-carload and less-than-truckload quantities to final destinations. It has also performed pick-up and delivery services within the switching or corporate limits of Fort Dodge for rail carriers. Operations embracing pick-up and delivery services for the rail carriers within such terminal district are exempt from regulation under part II of the Interstate Commerce Act, and authority therefor is not necessary. See Scott Bros., Inc., Collection and Delivery Services, 2 M. C. C. 155 and 4 M. C. C. 551. Any operations in the performance of pick-up and delivery services for line-haul motor carriers are those of a common carrier

by motor vehicle, and authority for the continuation thereof is necessary. Dick's Transfer & Truck Term. Contr. Car. Application, 10 M. C. C. 74 and 20 M. C. C. 785.

A comparatively small portion of applicant's operations has been conducted with leased equipment under verbal agreements with the owner-operators. Under such agreements, the owner-operators devoted their entire time to applicant's services. Applicant solicited the shipments, which were transported by such operators under its billing and rates. It collected the charges thereon, handled the accounting, and provided, at its own expense, cargo, property-damage, and public-liability insurance. It selected the routes to be traversed by the owner-operators and under the agreements retained the exclusive control and direction over such operators. The operations were conducted under the State certificates or permits of applicant. The owner-operators provided gasoline and oil for the operation of, and maintained repairs on, their equipment, purchased their license plates, and received as compensation a certain percentage of the freight charges. They did not solicit any freight and had no dealings with or responsibility to the shipping public. Three of the operators testified that they had filed no applications for authority to operate in their own names, and the record does not show that any others of the owner-operators employed by applicant have filed similar applications. Applicant has not conducted operations over any of its routes with leased equipment exclusively but has operated its own equipment intermittently over routes traversed by the owneroperators. Inasmuch as the vehicles of the owner-operators were operated under applicant's direction and control, as well as under its responsibility to the general public and to the shippers, the operations in which such vehicles were employed come within the phrase "or by a lease or any other arrangement" of section 203 (a) (14); and applicant, in respect thereof, is a common carrier by motor vehicle. See Dixie Ohio Exp. Co. Common Carrier Application, 17 M. C. C. 735. It is entitled to the benefit of such operations in determining rights under the "grandfather" clause of the act.

Voluminous exhibits consisting of abstracts of freight bills and other shipping documents were introduced in evidence and supplemented by the oral testimony of applicant's president and certain other employees, as well as that of several owner-operators employed by applicant. It also had at the hearing approximately 750,000 freight bills covering shipments transported by it over a period of several years, which it considered impracticable to submit to us, but which were available for inspection by all of the parties in the proceeding. An effort was made to submit proof which would be fairly representative of the considered operations.