ADMISSIBILITY: See also HEARSAY, under this heading. Evidence of interim
operations, introduced in "grandfather" proceeding, was considered in extension
proceeding in which continuance and expansion of operations originally claimed
in the "grandfather" application was sought, to avoid further hearing for resub-
mission of such evidence. Interstate Truck Service, Inc., Com. Car. Applic..
375 (381, 399).

EXPERT OPINION: Opinion of traffic consultant as to need for bus service over
proposed route, based on data other than returns to questionnaires, was entitled
to some weight. Public Serv. Interstate Transp. Co.-Bergen Turnpike, 599
(607, 614, 619); Somerset Bus Co., Inc., Ext.-Somerville-New York, 543 (547).
HEARSAY: Petitions, letters, affidavits, and returns to questionnaires are inad-
missible over objection, because of their hearsay character and inability of oppos-
ing parties to cross-examine the signers. Public Serv. Interstate Transp. Co.-
Bergen Turnpike, 599 (607); Somerset Bus Co., Inc.. Ext.-Somerville-New
York, 543 (547).

EXEMPTIONS. See also ACCOUNTS; Agricultural COMMODITIES; CONTRACT
CARRIERS (Schedules); CONTRACTS; FISH; REPORTS; TERMINAL AREAS.
SINGLE-STATE OPERATION: Certificate exempting contract carriage of explo-
sives within Okla., granted when applicant's total operations were small and no
other carrier transpo ted explosives between the points considered. Hudson
Exempt. Applic., 136.

EXPRESS AND MOTOR. Extension authority granted express company for
operation as a motor carrier, restricted to express auxiliary service incidental to a
prior movement by rail or air, to Mich. points at which local passenger-train
service had been discontinued as a war-emergency measure, when carriage of
express in local reight trains was slow and inadequate; but authority denied for
points which were signal stops on schedules of remaining passenger trains. Rail-
way Exp. Agency, Inc., Ext.-Jackson-Saginaw, 416.

EXPRESS RATES. See TERMINAL AREAS.

EXTENSION OF OPERATION. See CONVENIENCE AND NECESSITY; Evi-
DENCE (Admissibility); OPERATION (Temporary); RAIL AND Motor; ROUTES;
THROUGH ROUTES (Single-Line Service).

FAIR RETURN. See INCREASED RATES (General Increases).

FILING. See CONTRACT CARRIERS (Schedules); CONTRACTS.

FINANCIAL CONDITIONS. See INITIATION OF RATES; INSURANCE.
FISH. Transportation of frozen sea foods in same vehicles as fresh-frozen fruits
and vegetables found to be manufactured agricultural products was not within
exemption of sec. 203 (b) (6). Newton Ext.-Frozen Foods, 787 (789).
FORWARDERS. See ASSEMBLING AND DISTRIBUTION RATES.

FREIGHT CONSOLIDATORS. See ASSEMBLing and DISTRIBUTION RATES;
SCHEDULES (Definiteness).

"GRANDFATHER" OPERATING RIGHTS. See OPERATION (Unauthor-
ized); SAVING CLAUSES.

GROUPS AND GROUP RATES. See also DESTINATION.

PREFERENCE AND PREJUDICE: When Fargo and Grand Forks, N. Dak., and
points adjacent thereto were generally treated as unit destination areas under
class rates to and from Minn., and wide variations in commodity rates to points
within those areas were unexplained, rates of all motor carriers between Twin
Cities group and any point in those areas were unduly preferential to extent they
were lower, and unduly prejudicial to extent they were higher, than to other
points in same area. Minn.-N. Dak. Motor Carrier Rates, 289 (297. 306)

RATE COMPARISONS: Rate on paint from south Chicago to Milwaukee, 112.5
percent of that from north Chicago, was not unreasonable when average distance
from the former group was 133 percent of that from the latter. Sherwin-Williams

Co. v. Advance Transp. Co. of Wis., 186 (188).

HEARING. IN GENERAL: Contrary to usual practice, purchase application sub-
ject to sec. 212 (b) was set for hearing when there was serious doubt as to vendee's
fitness and willingness properly to conduct the acquired operations. Federal
Stor. Whses., Inc.-Purchase-Wm. Schafer & Son, 673 (674).

HOLDING OUT. See Bona Fide, under Operation and Saving Clauses.
HOUSEHOLD GOODS. See also BROKERS (Licenses); OPERATION (Bona
Fide) (Temporary). When applicant's household-goods service had always in-
cluded emigrant movables such as farm equipment and livestock, "grandfather"
authority limited to household goods as defined in 17 M. C. C. 467 was broadened
accordingly. Elders Transfer Co., Inc., Com. Car. Applic., 63 (70).

Although Commission recognizes the practical problem of producing witnesses
in support of new or extended household-goods operation, because such goods
move with less frequency than general freight and a given point may never be
served twice, burden is nevertheless on applicants to show affirmatively that it
will fulfill a public need and not imperil existing carriers. Bogovich Ext.-House-
hold Goods, 745 (747).

INCREASED RATES.

See also CLASS RATES (Minimum-Rate Restriction);
INITIATION OF RATES; INVESTIGATION AND SUSPENSION; LESS THAN TRUCK-
LOAD; PRICES; PROFIT; REASONABLENESS, ETC.

GENERAL INCREASES: In considering a general rate increase to meet revenue
needs of a group of carriers, findings must be based on average conditions, as
any increase inevitably benefits some not in need of improved net revenue and fails
to render profitable the operations of all. Increased Com. Car. Truck Rates in
New England, 13 (17).

General increase of 12.5 percent proposed by New England carriers, half of
which was intended to insure a fair return on future services, on basis of existing
costs, and the other half to recoup past losses, was not justified. As their aver-
age operating ratio approximated that of trunk-line carriers and increases in their
operating costs were substantially the same, general increase of 4 percent author-
ized for that territory, which would produce an average operating ratio approxi-
mating 93 percent, would place the New England carriers in the same position
to earn a fair return. Id. (23);

-As class II and III carriers were affected by the same increases in operating
costs as class I carriers, they were entitled to the same general increase. Id. (20).
JUSTIFICATION: While increased costs of respondent's distribution service had
recently resulted in a deficit, proposed cancelation of joint rates between points
served by it, and increase of 20 percent in its local rate, confined to shipments
under 10,000 pounds. was not justified. Although such shipments formed 60
percent of its traffic. increased costs affected all operations. and should not be
borne solely by shippers of small lots. Increased Rates. Hayes Frt. Lines, 173.
Although carrier's operating ratio of 108 percent was inflated by extraordinary
costs due to circuitous hauls necessitated by road conditions, cost data were
convincing that its rates on petroleum products from Tulsa. Okla.. to Ark. and
Mo. were noncompensatory. However, as increases proposed appeared too
43 M. C. C.

high, reasonable rates were fixed on basis of scale previously prescribed as mini-
mum in same territory, increased 20 percent for distances up to 170 miles. Pe-
troleum Products Between Ark., Kans., Mo., and Okla., 261 (267).

Increased rates on shoes in New England and to and from eastern N. Y. and
N. J., found unreasonable when they were improperly related to distance and ex-
isting rates were as high as or higher than proposed rates to Boston. Latter
rates would be reasonable if confined to less than truckloads. Boots, Shoes, and
Paints in New England, 627 (635).

INITIATION OF RATES. Initiation of rate increases to improve their
financial condition is within carriers' managerial discretion, and unless their
action would jeopardize sound economic conditions. Commission should not
prevent management from adopting new bases of rates. The question is not
whether the proposal is a wise exercise of managerial discretion, but whether the
rates are reasonable and otherwise lawful. Increased Com. Car. Truck Rates
in New England, 13 (21).

INSURANCE. INSURANCE COMPANIES: Imposition of a minimum financial
standard for companies filing motor-carrier insurance would not indirectly subject
them to Federal regulation Commission's duty under sec. 215 to prescribe
reasonable regulations for filing and approval of insurance cannot be discharged
without authority to prescribe such reasonable standards of eligibility for insur-
ance companies as will provide adequate protection for the public, and prescription
of such standards does not constitute supervision. Motor Carrier Insurance for
Protection of Public, 355 (359).

To require stock companies to maintain a minimum policyholders' surplus of
$200,000, not less than $150,000 to be paid-in capital, would be reasonable, as
State laws provide less control over free surplus exceeding capital than over
minimum capital, and only when such surplus disappears and capital is impaired
do most States require a company to cease operating. Minimum capital larger
than surplus would better protect policyholders and claimants, and any reduction
in proposed requirement would diminish that protection below a desirable mini-
mum. Id. (363);

-When 67 percent of the companies which had failed after filing insurance
certificates with Commission were nonstock institutions issuing assessable policies.
and collection of a substantial percentage of assessments against policyholders
was exceptional, requirement that such companies maintain a minimum surplus
of $150.000 would not discriminate unfairly against them as compared with stock
companies. Id (361);

-That nearly all the companies which had failed had never been able to
comply with such a standard, and had a poor record in settlement of damage
claims, indicated that it was necessary in the public interest, as it would have
averted substantial loss to carriers and public. Id. (366).

Requirement that insurance companies be licensed by each State covered by
the policy protected the public to a greater degree than prescribed minimum
financial standard alone, and its elimination would justify prescription of a higher
financial standard, which would narrow the insurance market by eliminating
some companies meeting that approved. Id. (364).
INTERCHANGE. See also TRANSPORTATION.

IN GENERAL: "Interchange" connotes reciprocation, and means an under-
taking by two or more carriers to transport a shipment from origin to destination.
each carrier's service being specifically authorized. A radial carrier may inter-
change with other carriers at any point in its authorized territory, provided its
service begins or ends at an authorized base point; but it may not, under fiction

of interchange with itself at the base point, perform nonauthorized service between
two radial points. G. & M. Motor Transfer Co., Inc., Com. Car. Applic., 497
(501); Gay's Exp., Inc., v. Haigis and Nichols, 277 (280).

CONNECTING CARRIERS: Certificate authorizing service to Missoula, Mont.,
as intermediate point between Idaho and Butte, Mont., permitted interchange at
Missoula of freight from Pacific Northwest to Butte, and did not restrict carrier
to traffic from Idaho. Daniels v. Rose, 726 (727).

INTERMEDIATE POINTS. See also CONVENIENCE AND NECESSITY (Exten-
sion of Operation); ROUTES (Substitution or Change); Transportation. When
applicant who lacked intermediate-point authority for Rutland, Vt., furnished
more expeditious service on shipments from N. Y. and N. J. than carrier serving
Rutland, although they had to be back-hauled from Burlington, Vt., by con-
necting lines, extension authority was granted for all intermediate points between
Burlington and N. Y. State line, and for Vt. points within 25 miles of Rutland.
Marcell Ext.-Rutland-Burlington, Vt., 283 (287).

INTERMEDIATE RULE. Tariff circular provides no intermediate rule for
irregular-route carriers, as a rule definitely indicating whether particular points
are intermediate to named points is difficult to devise. Although rule proposed
by such a carrier conformed to that authorized for regular-route carriers, it was
not justified when rates to the unnamed points would vary with routes used, and
similar existing rules should be canceled. Rules of Mich. and Nebr. Transit
Co., 269 (271, 276).

See SAVING CLAUSES.

INTERRUPTION OF SERVICE.
INTERSTATE COMMERCE ACT. PART II Construed:

Sec. 208 (a) (13):

437 (441); Sec. 203 (a) (17): 451 (455); Sec. 203 (b) (6): 787 (789); Sec. 208 (a):
421 (423); 495 (500); Sec. 209 (b): 755 (758); Sec. 212 (a): 707 (711, 712); Sec. 215:
355 (360); Sec. 216 (a): 51 (54); Sec. 216 (b): 189 (198).

PART IV Construed: Sec. 402 (c): 527 (535); Sec.408: 527 (530, 534, 535).
INTERTERRITORIAL RATES. See RATE COMPARISONS.

INTEREST OF INTERVENER: All passenger carriers in territory in which bus line
sought authority conceivably had a direct interest in its application and were
entitled to intervene, under sec. 204 (c). Greenfield Com. Car. Applic. 555 (556);
-Bus line which did not operate directly between proposed termini was entitled
to intervene when it participated in through service by interchange. Id. (556);
-Railroad association was a proper intervener when two of its members
furnished competing service. Id. (556).

INTRASTATE COMMERCE. INTRASTATE RATES AS BASIS FOR INTERSTATE
CHARGES: Since sec. 216 (e) prohibits regulation of intrastate motor rates by
Commission for any purpose, reasonable minimum charges on interstate ship-
ments may not be conditioned on level of intrastate charges, even if latter dis-
criminate against interstate traffic. Minimum Charges in Central Territory,
145 (154).

INVESTIGATION AND SUSPENSION. BURDEN OF PROOF: Carriers should
be prepared to prove that a proposed general rate increase is required to im-
prove their financial condition, or that increases in individual rates thought to
be too low will be just and reasonable. Minimum Rate Restrictions to, from,
within Southwest. 161 (170);

-That increases would not adversely affect shippers did not relieve carriers
of that burden. Wallboard to and from New England, 763 (766).

DISCONTINUANCE OF PROCEEDING: Although Supreme Court's condemnation
of Commission's announcement of policy as to volume minima in 34 M. C. C. 641,
on ground that that record afforded insufficient basis, required reopening of that

proceeding, in which suspended rates on 30,000-pound minimum were found
unlawful, it was discontinued at carriers' request. Because of changed condi-
tions affecting transportation costs, they no longer sought approval of rates found
unlawful, and further efforts to obtain the kind of record contemplated by the
Supreme Court would be futile. Rugs and Matting from East to W. T. L. Terri-
tory, 540.

JOINT OPERATION. See CONVENIENCE AND NECESSITY (Certificates);
OPERATING RIGHTS; OPERATION.

JOINT RATES AND FARES. See also CLASS RATES (Minimum-Rate
Restriction); INCREASED RATES (Justification); PASSENGERS (Through Routes);
THROUGH ROUTES.

CANCELATION: Restriction of joint rates on printing paper not to apply over
respondent's line, found not justified when such routes were more direct than
others over which joint rates applied, and no showing was made that resulting
increases would be reasonable. Printing Paper over Dixie Frt. Lines, Inc., 352.
REASONABLENESS: Operating cost of one participating carrier affords no meas-
ure of reasonableness of a through rate. Leather, Sault Ste. Marie to Chicago
and Milwaukee. 131 (134);

-Nor comparison of average truck-mile expense with revenues yielded by
divisions. Printing Paper over Dixie Frt. Lines, Inc., 352 (354).

JURISDICTION. See DAMAGES, and other pertinent subjects.

KEY POINTS. See ASSEMBLING AND DISTRIBUTION RATES; RAIL AND MOTOR.
LESS THAN TRUCKLOAD. See also CLASSIFICATION (Property); CLASS
RATES (Minimum-Rate Restriction); COMMODITY RATES; COST OF SERVICE
(Apportionment); INCREASED RATES (Justification).

MINIMUM CHARGE FOR SINGLE SHIPMENT: Although minimum charges on single
shipments in central territory and between that and trunk-line and New England
territories were too low, in view of carriers' increased costs, proposed basis was
not justified by defective cost studies on small shipments. Minimum Charges
in Central Territory, 145 (157).

Provision in minimum-charge rule for application of different specific charges,
depending on whether corresponding first-class rate was over or under 46 cents,
referred to conditions as of time of acceptance of particular shipment. As first-
class rate between considered points exceeded 46 cents after general increase
became effective, the higher minimum charge, similarly increased, became
applicable. Bendix Aviation Corp. v. Giaras, 685 (687);

-That resulting charge represented a 60-percent increase did not per se estab-
lish that it was unreasonable. Id. (688).

LEVEL OF RATES. See PROFIT.

LIABILITY OF CARRIERS. See ASSEMBLING AND DISTRIBUTION RATES;
REMEDIES.

LICENSES. See BROKERS; INSURANCE.

LIKE CONDITIONS. See ASSEMBLING AND DISTRIBUTION RATES.
LIMITATION OF ACTIONS. Since part II does not provide a limitation
period for bringing suits to recover damages for exaction of unlawful charges,
the statute for the jurisdiction in which suit is brought must govern. Bell
Potato Chip Co. v. Aberdeen Truck Line, 337 (343).

LINE HAUL. See TERMINAL AREAS.

LOADING. See TRANSIT (Stoppage).

LOCAL OPERATION. See OPERATION (Bona Fide); ROUTES (Scope of
Operation).