III

Finding 8 which approves a differential either of 15 percent under the corresponding class rates or 85 percent of first class as reasonable for assembling rates (the report is not clear as to which basis will become effective) finds no support in the report. The report states, "No question concerning the measure of the rates is involved." In my opinion, the approval of the differential is tantamount to a finding as to the measure of the rates.

Section 408 provides that assembling and distribution rates and charges which differ from other rates or charges contemporaneously applicable must be justified "by a difference in the respective conditions under which such instrumentalities or services are employed or utilized." Whether any or a particular differential is lawful based only on the physical differences in the service performed by the carrier has not been proved in this proceeding. Findings 4, 5, and 6 are the support for the differential approved by the majority. A discussion of these findings follows.

Finding 4.-This finding, in my opinion, is unrealistic. This proceeding is a test case. When this report is issued, other carriers may be expected to establish competitive rates, and solicitation of business will follow which will necessarily result in solicitation expense. Finding 5.-The accumulation of claims against a carrier will not be, and is not, peculiar to shippers or shipper associations receiving the benefit of the assembling or distribution rates. Freight bill auditing companies, traffic bureaus, and others perform the same service for other shippers and shipper associations. Furthermore, each claim must be separately adjusted by the carrier, and any substantial reduction in cost from the mere presentation of numerous claims by one organization on behalf of numerous shippers is not apparent.

Finding 6.-The concentration of numerous less-than-truckload shipments for delivery at one time in order to save delivery costs, is commonplace in motor-carrier operations. It is my understanding that many large receivers of less-than-truckload or less-than-carload shipments insist that this be done in order to avoid congestion of their shipping facilities, and good management on the part of the carrier would require that it arrange its delivery service so as to provide the minimum number of deliveries to a consignee or to a group of consignees at the same location.

I am authorized to state that COMMISSIONER MAHAFFIE joins in this expression.

COMMISSIONER ROGERS did not participate in the disposition of this proceeding.

581984-45-vol. 43- -86

INVESTIGATION AND SUSPENSION DOCKET No. M-12161 RUGS AND MATTING FROM THE EAST TO WESTERN TRUNK LINE TERRITORY

Decided July 10, 1944

On reconsideration, in the light of respondents' motions, proceedings, dealing with ratings and rates on hard-surface floor covering from certain points in New England and trunk-line territories to certain destinations in central and western trunk-line territories, discontinued. Prior reports 31 M. C. C. 193 and 34 M. C. C. 641.

Appearances shown in prior reports.

REPORT OF THE COMMISSION ON RECONSIDERATION

BY THE COMMISSION:

These proceedings deal with proposed ratings and rates on hardsurface floor covering from certain points in New England and trunk-line territories to certain destinations in central and western trunk-line territories. The issues and the facts of record are discussed in the prior reports, 31 M. C. C. 193, and 34 M. C. C. 641, and need not be repeated in detail here. In general, the proceedings brought in issue the lawfulness of proposed ratings and rates on hard-surface floor covering approximately 45 percent of first class, minimum 30,000 pounds, and 47.5 percent of first class, minimum 20,000 pounds. The record established that 20,000 pounds of this commodity could be loaded in one of the vehicles ordinarily used by the respondents in its transportation, but that at least two vehicles were required for the transportation of 30,000 pounds. Division 3 in its report, 31 M. C. C. 193, found that the ratings and rates proposed were just and reasonable and otherwise lawful except to the extent they were subject to a minimum of 30,000 pounds. It was further found that the proposed minimum of 30,000 pounds was unjust and unreasonable, and a minimum of 20,000 pounds was approved. The proposed schedules, to the extent they were found not just and reasonable, were ordered canceled without prejudice to the establishment of truckload rates, minimum 20,000 pounds, not less than 45 percent of the corresponding first-class rates.

1 This report also embraces I. and S. Docket No. M-1445, Linoleum and Related Articles from the East to Ohio.

Later, Investigation and Suspension Docket No. M-1216 was reopened and the parties were heard in oral argument. In our report on oral argument, 34 M. C. C. 641, we affirmed the findings of division 3 that the proposed rates 45 and 47.5 percent of first class were not unjust or unreasonable except to the extent that the proposed rates, 45 percent of first class, were subject to a minimum of 30,000 pounds. We further found that the proposed rates, minimum 30,000 pounds, would give an unjust advantage to shippers of 30.000-pound lots and be unjustly discriminatory to shippers of 20,000-pound lots. An examination of their tariffs indicated that the respondents had complied with the order of division 3 by establishing rates either 45 percent of first class, minimum 20,000 pounds, or 47.5 percent of first class, minimum 20,000 pounds. As those bases of rates did not appear to be unjust, unreasonable, or unjustly discriminatory, no order for the future was entered.

The respondents filed a suit in a three-judge district court to annul and set aside the order requiring the cancelation of the schedules proposed in I. & S. No. M-1216. The district court dismissed the bill of complaint, Eastern Central Motor Carriers Assn. v. United States, 48 Fed. Supp. 432, and on an appeal by the respondents to the Supreme Court of the United States, the judgment of the district court was reversed in Eastern Central Motor Carrier Assn. v. United States, 321 U. S. 194.

Division 3, in its report, adopted as a policy the condemnation of motor-carrier volume minimum weights unless it is shown clearly that the motor carriers can transport the traffic at the volume minimum weights at costs per 100 pounds which are less than the costs incurred at a reasonable truckload minimum weight. In our report on oral argument, we said that, for the future, we would follow the policy announced by division 3. The Supreme Court condemned these announcements of policy on the ground that the record did not supply a sufficient basis for its formulation. The Court pointed out that factors other than the cost of transportation, such as competition between carriers, should be considered by us in determining lawful rates. It emphasized that it did not question our authority to adopt and apply general policies appropriate to particular classes of cases, so long as they are consistent with the statutory standards which govern our action and are formulated, not only after due consideration of the factors involved, but with sufficient explication to enable the parties and the Court to understand, with a fair degree of assurance, the reasons for our action.

Pursuant to the decision of the Supreme Court, we reopened I. & S. No. M-1216 and its related proceeding, I. & S. No. M-1445, for further hearing. The parties were informed in a notice of the matters which

it was considered should be developed at the further hearing, and a questionnaire was directed to the respondents calling upon them to supply information respecting the amount of hard-surface floor covering transported by them in truckloads from and to the points, the weight of the shipments tendered, the carrying capacities of the vehicles in which the service was performed, and other facts bearing on the issues.

The respondents, by motions, ask that the proceedings be discontinued. In their motions they state that they no longer desire to maintain ratings or rates on the commodity subject to a minimum of 30,000 pounds, because the circumstances surrounding the transportation have been changed by recent economic conditions affecting transportation costs. They point out that they do not have rates in effect on the commodity from and to the points subject to a 30,000pound minimum, and they inform us that they do not now seek approval of the schedules which were found unlawful and do not at present intend to refile schedules in which the ratings and rates will be subject to a minimum of 30,000 pounds.

That further action by us was required by the decision of the Supreme Court is recognized by the respondents, but in view of their disavowal of any present purpose or desire to maintain ratings and rates on the commodity subject to a minimum of 30,000 pounds, they ask that we discontinue the proceedings. In a reply to the motions, the National Industrial Traffic League, one of the protestants, does not oppose the discontinuance of the proceedings.

The force of railroad competition was the principal ground relied upon by the respondents to justify the proposed ratings and rates. In their managerial discretion, the respondents have now decided they no longer desire to establish rates on the traffic subject to the same minimum as that of the railroads. There is, therefore, little reason for us to proceed further in our efforts to obtain the kind of record in the proceedings contemplated by the opinion of the Supreme Court.

In the instant proceedings, we believe the motions of the respondents should be granted since the actions of the respondents as described in the foregoing have made moot the proceedings before us. There are numerous rates maintained by motor common carriers subject to minimum weights higher than can be transported in a single motor vehicle, but we cannot deal with such rates except in the event of a complaint against them or the institution of a general investigation. We are not warranted, at this time, in entering into a general investigation of these rates and minimum weights.

We find that the motions of the respondents should be granted. An order will be entered discontinuing the proceedings.

No. MC-2880 (Sub-No. 1)

SOMERSET BUS CO., INC., EXTENSION OF OPERATIONSSOMERVILLE-NEW YORK CITY

Submitted December 24, 1942. Decided July 19, 1944

Public convenience and necsessity found to require operation by applicant, in interstate or foreign commerce, as a common carrier by motor vehicle, of passengers and their baggage, between Somerville, N. J., and New York, N. Y., over a regular route, serving certain intermediate points. Issuance of a certificate approved upon compliance by applicant with certain conditions, and application in all other respects denied.

F.X O'Brien for applicant.

Earle J. Harrington, Leland Taliaferro, John F. Finerty, John E. Buck, W. Eugene Turton, Robert W. Lishman, George D. Rives, C. F. Cook, and George F. Conway for protestants.

Charles Wagner, George M. Eichler, Henry P. Goldstein, and Walter Hoagland for interveners.

REPORT OF THE COMMISSION

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

Exceptions to the order recommended by the examiner were filed by certain rail and motor-carrier protestants, and applicant and an intervener replied.

By application, as amended, filed May 18, 1940, Somerset Bus Co., Inc., of Mountainside, N. J., seeks a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle of passengers and their baggage, and express, mail, and newspapers in the same vehicle with pasengers, between Somerville, N. J., and New York, N. Y., over the routes described in the appendix hereto, serving all intermediate points except those in Essex and Hudson Counties, N. J. The Brotherhood of Locomotive Firemen and Engineers, The Order of Railway Conductors, the city of New York, and certain rail and motor carriers oppose the application. The township of Union, of Union County, N. J., and Essex Lodge 993 of the Brotherhood of Railroad Trainmen intervened in support of the application. Alma Lines, Inc., withdrew its opposition to the application at the time of the hearing. DeCamp Interstate Transit Company intervened in the proceedings as its interests might appear.