tains but a passing reference to the fact that the remaining three units are held in reserve for use in emergencies. There is nothing to indicate the extent, if any, of the use of these three remaining units in the past or of their probable use in the future.

Applicant uses the services and facilities of approximately 13 socalled owner-operators, hereinafter called operators, one of whom leases the semitrailer mentioned above, which is owned by applicant. Presented for determination, therefore, is the issue of whether applicant as to the proposed operations will have the status of a carrier by motor vehicle within the meaning of the act. Unless such be the case, we are without power to issue the authorities sought. As indicated, in our prior report we concluded that there was little real difference between applicant's planned mode of operation and that of freight forwarders in general, and denied all of the applications. In his petition, however, applicant contends that the proposed operations will be conducted under his direction and control; that as to such operations he will be a contract carrier by motor vehicle; and that authorities should be granted accordingly.

STATUS

Prior to 1937, applicant's agreements with the operators were oral. Now, however, a written form entitled "lease agreement," is entered into between applicant, as "employer," and each operator, as "employee." Under its terms the operator "leases" his equipment, consisting, with one exception, of a tractor and a semitrailer, to applicant and agrees to furnish one or more drivers, subject to applicant's approval at all times, in the transportation under the latter's permits and contracts of freight as, where, and when the latter desires. The operator is required to keep and maintain the equipment in good mechanical and physical condition and equipped with all necessary safety devices prescribed by applicant, this Commission, and the several States in which operation is conducted. The operator is allowed to operate the equipment alone or to obtain the services of a helper whom, however, he is to pay and who is to be regarded as his own, and not applicant's employee. The helper is also required to abide by the pertinent laws and regulations, including the regulations of applicant, and must attend applicant's and other indicated safety meetings. Such meetings are held approximately every 6 or 8 weeks. The operator and helper are at all times to "abide by orders and directions of" applicant, and an operator found guilty of carelessness, negligence, or law violation in the operation of the equipment may be suspended by applicant for a period not in excess of 60 days. During the period of suspension, or if for any other reason applicant

is not satisfied with the operator's services, applicant may relieve him from duty and provide and use another driver in the operation of the equipment. Applicant provides public-liability, propertydamage, and cargo insurance and carrier social security and workmen's compensation insurance on the operators and drivers. With one exception, the operator is compensated by a sum equal to 76 percent of the gross earnings realized from the use of his equipment and out of this sum bears all expenses connected with or incidental to the maintenance and operation of the equipment such as cost of oil, gasoline, repairs, license fees, and other taxes. Finally, the agreement provides that the equipment, operator, and his helper, if any, shall at all times "remain" under the approval and satisfaction of applicant and that none "may be employed by any other motor carrier during the term of this agreement." This agreement is effective for 1 year, and unless concluded by either party upon 10 days' notice, is thereafter by its terms renewed from year to year.

The operator who leases the semitrailer owned by applicant, unlike the other operators, receives 54 percent of the gross revenue. The 22 percent difference between this percentage and that received by the other operators constitutes a rental charge for the use of the semitrailer. Otherwise, however, this operator is subject to the same lease terms and conditions as above described.

As indicated, all operations are conducted under authorities granted to applicant. His employees handle all business transactions with shippers, prepare shipping orders, collect freight charges, and instruct the operators as to where and when to pick up freight. The record reveals numerous instances in which applicant has paid shippers' claims, and apparently he settles all such claims growing out of the normal conduct of the business. None of the operators has applied for operating rights from this Commission. It is estimated that some of them have hauled for applicant for as long as 6 or 7 years at a time and that the average length of their services for him is from 3 to 4 years. They can haul for no one else while hauling for applicant under their "lease agreements." They are paid by applicant on a weekly basis, each receiving a statement showing the services performed, mileage traveled, weight of cargo, and gross receipts therefrom. Applicant's name appears on all of the equipment. The name of the operator is shown on some and is placed above applicant's

name.

In the circumstances, we are of the opinion, on reconsideration, that as to the proposed operations applicant is a carrier by motor vehicle. It is he who undertakes to provide the transportation and who assumes responsibility for the shipments insofar as the shippers are

concerned. Further, the vehicles, while used by him, are operated under his direction and control and under his responsibility to the general public. See Dixie Ohio Exp. Co. Common Carrier Application, 17 M. C. C. 735; O. L. D. Forwarding Corp. Contract Carrier Application, 26 M. C. C. 481; Exchange Forwarding Corp. Common Carrier Application, 27 M. C. C. 767; and Higley Forwarding Co. Common Carrier Application, 30 M. C. C. 577.

Having determined that the proposed operations are those of a motor carrier, we will next consider the question whether applicant's carrier status, as to such operations, is that of a contract or common carrier. The evidence with respect to the number of contracts under which applicant would consider operating is general and rather indefinite. Specifically, he states that he would take "no more contracts than he could handle" and that he would not "take any that he would have to let sit still and delay the freight." The general manager stated that probably no more than 2 shippers for each of 12 commodities transported would ever be served. The number of contracts which applicant held with shippers on October 28, 1938, the date of the hearing in No. MC-70243 (Sub-No. 1), is not of record. On December 7, 1938, the date of the hearings in Nos. MC70243 (Sub-No. 2) and MC-70243 (Sub-No. 3), and on July 15, 1940, the date of the hearing in No. MC-70243 (Sub-No. 4), however, he held 14 such contracts. If the authorities now sought are granted, contracts with 5 additional shippers will be entered into. These contracts, added to those which applicant already holds, will make a total of 19. Of the equipment used, only the semitrailer owned by applicant and leased to one of the operators, referred to above, can be considered as special equipment. This unit is 33 feet in length, has a drop frame, and is used for the transportation of such light and bulky materials as corrugated paper. Applicant holds permits from the appropriate State commissions of Indiana, Ohio, Wisconsin, and West Virginia, and has applied for a permit from the Illinois Commerce Commission.

The number of contracts held by a carrier is not, in itself, the criterion of the carrier's status, but must be considered in conjunction with other pertinent facts. Compare Ratner Contract Carrier Application, 24 M. C. C. 11. Applicant does not interchange traffic with other carriers. Neither does he solicit freight from the general public but clearly limits his service to those shippers with whom he holds contracts. He serves a limited number of responsible shippers who furnish a substantial amount of through traffic, and confines his services to the transportation of limited classes of commodities. Of the shippers whom he proposes to serve, those with whom he at

present holds contracts find his services particularly adapted to their needs. Difficulty has been experienced by some of them in obtaining satisfactory or adequate motor common carrier service. While the equipment to be used by applicant for the most part is not different from that generally used by common carriers, it will be put to special use in transporting, as indicated, certain classes of commodities for particular shippers. In our opinion, the proposed operations are those of a contract carrier as defined in section 203 (a) (15) of the act.

Applicant is fit, willing, and able to perform the considered operations. Obviously, there is no evidence in these records to establish that Leo V. Knecht, as successor to applicant, is fit, willing, and able to perform such operations. In No. MC-FC-18439, however, the latter was found to be fit, willing, and able to perform the service previously rendered by applicant and we have no doubt but that Leo V. Knecht also is fit, willing, and able to perform any extended operations which may be granted herein. With a view to avoiding a further hearing on these applications, with the accompanying inconvenience to the parties, we shall grant any authority found to be warranted herein to Leo V. Knecht. In the event that any party to the proceedings is, by such procedure, deprived of any of his rights in the matter, he may within 30 days after the service of this report petition for reconsideration or further hearing under our rules. Any permit to be issued will be withheld for such period of time.

NO. MC-70243 (SUB-NO. 1)

By this application applicant seeks authority to transport (1) scrap and mixed paper, in bales, from points in Indiana to points in Michigan on and south of U. S. Highway 12, (2) strawboard from Vincennes and Hartford City to points in Michigan, as specified above, and (3) fiberboard from points in the above-indicated portion of Michigan to Hartford City. This service is to be performed for one shipper, The Fort Wayne Corrugated Paper Company, of Fort Wayne, Ind., hereinafter called the Fort Wayne Company, for whom applicant has been hauling boxboard and related commodities since 1931. Applicant, his general manager, and the traffic manager of the Fort Wayne Company supported the application.

The testimony of applicant and his business manager pertained primarily to the former's present and proposed methods of operation, and only in a general way did either refer to a need for the service proposed in the instant application. While the traffic manager of the Fort Wayne Company requested applicant to file the application and expressed a general interest in the granting of authority

to serve the entire territory, the only evidence submitted by him with respect to freight available for transportation was in connection with the movement of fiberboard from Three Rivers, Mich., to Hartford City. Prior to 1938, that company owned a paper mill and a paperproducts factory at Hartford City. About February 28, 1938, however, the paper mill was sold. Since then the Fort Wayne Company has been obtaining the fiberboard used in its paper-products factory from the Eddy Paper Company, of Three Rivers. The Eddy Paper Company at present transports this fiberboard, as a private carrier, to Hartford City where it is delivered to the Fort Wayne Company. On the whole, this transportation arrangement appears to be satisfactory with the latter company. In fact, the only reasons advanced for desiring applicant's services from Three Rivers are the facts that his other services are very satisfactory, that the trucks of the Eddy Paper Company might at times be busy, and that the paper companies might enter into an arrangement whereby the Fort Wayne Company would buy the fiberboard at Three Rivers. In this event, the latter company would desire to use applicant's facilities to transport the fiberboard. It is stated that such transportation, performed under contract, would be more economical than the present method. No such arrangement has been entered into between the paper companies, however, and should such an arrangement not be made the Fort Wayne Company definitely desires to continue the present arrangement with the Eddy Paper Company. Neither is it shown that the latter company was ever unable to perform the transportation because its trucks were otherwise engaged.

In the circumstances, the record fails to establish an existing need for any part of the proposed operation. Only in the event that the new speculative arrangement between the paper companies, referred to above, is entered into will applicant's services be desired and then only in connection with the movement of fiberboard from Three Rivers to Hartford City. We conclude, therefore, that the instant application should be denied.

NO. MC-70243 (SUB-NO. 2)

By this application authority is sought to transport fertilizer and fertilizer materials from Chicago Heights to points in Indiana and from Lockland to Louisville. The proposed service is an extension of that at present rendered from Lockland, Cincinnati, and Louisville to points in Indiana for International Agricultural Corporation, of Cincinnati. Applicant, his business manager, and the assistant sales manager of the International Agricultural Corporation supported the application.

In the spring of 1938 the above-named shipper constructed a fertilizer factory in Chicago Heights in order to better serve its customers