Interstate Commerce Commission Reports

Lease by Jesse O. Willett, doing business as J. O. Willett, of certain operating rights of William B. Thomas, doing business as Thomas Motor Freight, denied.

Walker C. Hay and Virgil L. Livingstone for applicants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND ROGERS

BY DIVISION 4:

Jesse O. Willett, doing business as J. O. Willett, of Monroe, La., and William B. Thomas, doing business as Thomas Motor Freight, of Dallas, Tex., by a joint application filed July 10, 1947, seek authority under section 5 of the Interstate Commerce Act for the lease by the former of certain operating rights of the latter. Lessee operates more than 20 motor vehicles. The application is not opposed. No public hearing appears necessary.

Lessee operates,1 in interstate or foreign commerce, as a motor common carrier, over irregular routes, (1) (a) of machinery, materials, supplies and equipment, incidental to or used in, the construction, development, operation, and maintenance of facilities for the discovery, development, and production of natural gas and petroleum, (b) of machinery, materials, supplies, and equipment, incidental to, or used in the construction, operation, repair, servicing, dismantling, and maintenance of natural gas and petroleum, recycling, repressuring, blending, or storage plants and facilities, and (c) of pipe, pipe-line material, machinery, and equipment, incidental to and used in connection with the construction, repairing, maintenance and dismantling of

1 Pursuant to certificates issued on August 29, 1946, and November 22, 1944, in Nos. MC-704 and MC-704 (Sub-No. 1), respectively.

pipe lines, including the stringing of pipe, between points in Arkansas, Louisiana, Oklahoma, and Texas; and (2) (a) of pipe, and such machinery, materials and supplies as are incidental to or used in connection with the construction, operation, maintenance, and dismantling of gas, gasoline, and oil-pipe lines, and (b) of machinery, materials, supplies, and equipment, incidental to or used in the construction, development, operation, and maintenance of facilities for the discovery, development, and production of natural gas and petroleum, between points in Mississippi and Alabama, and between points in these two States, on the one hand, and, on the other, points in Arkansas and Louisiana. On July 21, 1947, in No. MC-704 (Sub-No. 10-TA), the lessee was granted temporary authority to transport pipe-stringing material, in interstate or foreign commerce, from a point on the Mississippi-Tennessee State line near Michigan City, Miss., to a point in Tennessee near Bethel Springs, for a period expiring on September 4, 1947. He is a party to two pending section 5 applications, in one of which he would dispose of certain of his operating rights to another carrier, and in the other of which he would acquire certain operating rights from another carrier.

Lessor operates,3 in interstate or foreign commerce, as a motor common carrier, over irregular routes, (a) of oil-well equipment, heavy drilling machinery, and oil-field pipe, between points in Illinois, Indiana, Louisiana, Kentucky, Missouri, and Tennessee, and between points in Oklahoma, on the one hand, and, on the other, points in the the above-named States, (b) of machinery, materials, supplies, and equipment incidental to, or used in, the construction, development, operation, and maintenance of facilities for the discovery, development, and production of natural gas and petroleum, between points in Oklahoma, Kansas, Arkansas, New Mexico, and Texas, and (c) such commodities as require specialized handling or rigging, because of size or weight, between points in Arkansas, Illinois, Indiana, Kansas, Kentucky, Louisiana, Missouri, New Mexico, Oklahoma, Tennessee, and Texas.

Under an oral agreement of an unspecified date, the lessee would lease, for a period of 6 months, that portion of the lessor's operating rights included in the description in (a) and (c) above-which

No. MC-F-3396, Howard Tellef Tellepsen, et al.-Purchase (Portion)-Jesse O. Willett, and No. MC-F-3399, Jesse O. Willett-Purchase (Portion)-M. A. Dixon.

Pursuant to authority contained in certificates Nos. MC-43163 and 43163 (Sub-No. 2), issued April 24, 1942, and October 16, 1942, respectively, to C. R. Busch and L. M. Busch, a partnership, doing business as B. & B. Supply Company. The operating rights described in the certificates were transferred to W. H. Lundquist and L. M. Lundquist, a partnership, doing business as L. & L. Trucking Company, pursuant to order dated January 24, 1946, in No. MC-FC-22267; and subsequently they were transferred to the lessor herein pursuant to order dated June 10, 1946, in No. MC-FC-23503, dockets Nos. MC-105646 (SubNo. 2) and MC-105646 (Sub-No. 3) having been assigned to the lessor to cover the said operating rights.

authorize transportation of the indicated commodities between points in Tennessee and Kentucky, for a total consideration of $2,500, payable upon our approval of the proposed transaction.

Lessee's balance sheet as of December 31, 1946, shows assets aggregating $331,283, consisting of: Current assets $157,251, including cash $4,796 and accounts receivable $151,130; tangible property, less depreciation, $157,028; investment securities and advances $1,000; and prepayments $22,004. His liabilities were: Notes payable $107,986, accounts payable $52,236, accrued taxes and wages $13,034, and sole proprietorship capital $158,027. His income statements for 1944, 1945, and 1946, show net incomes of $56,310, $26,456, and $39,799, respectively. Lessor's balance sheet as of December 31, 1946, shows assets aggregating $195,797, consisting of: Current assets $42,325; tangible property, less depreciation, $134,203; intangible property $17,380; and deferred debits $1,889. His liabilities were: Current liabilities $54,256; other advances payable $9,447; equipment and other long-term obligations $134,809; deferred credits $345; and sole proprietorship capital (debit balance) $3,060. His income statements indicate that operations have been conducted at a loss.

Lessee has been engaged by a shipper to perform transportation in several southern States, as part of a complete trucking undertaking, which requires the use of special equipment owing to the size and weight of the commodities involved. A pipe line, now under construction, is being extended into Tennessee and Kentucky. The lessee has authority in all of the other States involved but has none in the two States named other than the previously indicated temporary authority in Tennessee, and he desires to lease the operating rights of the lessor in those two States to enable him to complete his transportation undertaking. He has the necessary equipment, and estimates that the undertaking will be completed within a period of 6 months. The lessor has insufficient special equipment to perform the required service, and prefers to lease his operating rights between points in Tennessee and Kentucky to the lessee for the indicated period rather than to augment his present equipment and perform the service himself.

While the operations proposed to be conducted by the lessee under the operating rights he would lease are not disclosed in detail, it appears that his operations in Tennessee would include the transportation of pipe from a point on a rail line to the pipe-line right of way as a part of a continuous movement in interstate commerce, and that the "stringing of a 26-inch gas pipe line is involved in the operation of said proposed lease authority between points in Tennessee and Kentucky."

The original grant of the operating rights now held by the lessor was not primarily for the purpose of authorizing pipe-stringing oper

50 M. C. C.

ations; and there is no evidence in the instant proceeding that he has conducted such operations in the two States mentioned. Question arises as to whether, and if so to what extent, the involved operating authority authorizes the transportation and stringing of pipe. However, in view of our denial of the application on other grounds, it is unnecessary for us to further consider this question.

Lessor's operating authority is that of a motor common carrier, and he has the right and obligation, within the terms of the certificates under which he operates, to serve the general shipping public. In so far as appears herein, the lessee desires to lease a portion of these rights solely for the purpose of completing a single undertaking, already commenced, which he estimates will require not in excess of 6 months. In our opinion the lease of these rights solely for the purpose of enabling performance of transportation in connection with a single pipe-stringing operation as here proposed, would not be consistent with the public interest and should not be authorized under section 5 of the act. Particularly is this true in view of the emergency relief which is available to the lessee under other provisions of the act. The application will be denied without prejudice to the filing by the lessee, if he so desires, of an application for temporary authority under section 210a (a) of the act to render the required service.

We find that the transaction proposed would not be consistent with the public interest, and that the application, accordingly, should be denied.

An appropriate order will be entered.

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Interstate Commerce Commission Reports: Motor carrier cases ..., Volume 50