Although not specifically questioning our jurisdiction, applicants' counsel has expressed a doubt that the transaction is one requiring our approval under section 5. It appears to be their view that no person now in control of a carrier will acquire control of another carrier through ownership of a majority of its capital stock.

In contracting to purchase the stock of Transportation, it is obvious that Donohue, Rosen, Theurer, and Abrams acted together, that Donohue, Rosen, and Theurer are affiliated with each other by reason of their past association in the arrangement of Follmer, and that, as a result of their acquisition of Transportation's stock, these four individuals would control that carrier jointly. The fact that the stock would not be held jointly, but would be divided among them in proportion to their contributions to the total consideration, does not alter the true nature of the transaction as a joint acquisition of control. Unless the acquisition, as proposed, is within the purview of paragraph (2) of section 5, and thus one which we are empowered to approve, it would clearly be prohibited by paragraph (4) because the result would be control or management of two carriers in a common interest. Referring to paragraph (5) (c) the instant transaction is by "two or more persons acting together," at least one of whom [Rosen] "is affiliated with a carrier," and the effect of the transaction would be to place such persons "taken together, in control of another carrier." Under these circumstances the statute creates a conclusive presumption that the transaction, if consummated, would effectuate or accomplish the control or management in a common interest of two motor carriers. Jessup-Control-Safeway Trails, Inc., 39 M. C. C. 233 and Suwak-Control-Trolley Transfer Service, Inc., 39 M. C. C. 753. It follows that we have complete jurisdiction in the premises.

Protestants call attention to a pending complaint filed October 14, 1946, in No. MC-C-870, Costal Tank Lines, Inc., et al. v. Charlton Bros. Transportation Company, Inc., wherein they and other carriers challenge Transportation's right under its certificates to transport petroleum products, in bulk. A report and recommended order of the examiners was served in that proceeding on April 25, 1947, recommending dismissal of the complaint. Protestants state that they have no objection to the proposed acquisition of control, as such, but do object if any monetary value is placed by the applicants on any right supposedly held by Transportation to transport petroleum products, in bulk. In that connection, it should be noted that the contract covering the sale of Transportation's stock specifically mentions the pending complaint. It further appears that, although Transportation does handle some bulk petroleum products in leased vehicles, such traffic represents only a small part of its total business, and that, whether or not Transportation is authorized to transport such commodities,

this question was not a determining factor in arriving at the purchase price for the stock. Regardless of the final outcome of the complaint proceeding, we are of the opinion that the price proposed to be paid by applicants for the stock is not unreasonable.

The instant transaction would result in effectuating control in a common interest of two motor carriers, with duplicating operating rights between Harrisburg and Philadelphia via Lancaster, and between Reisterstown and Baltimore, the duplications representing approximately one seventh of their regular-route operations. Although proposals to maintain separately two or more companies, under common control, rendering substantially the same service between the same points and over the same routes, have been disapproved in numerous cases, we are of the opinion that the duplications in the instant case are not so substantial as to require denial of the application, particularly when the proposed distribution of the stock among the individual stockholders of Transportation is also considered.

We find that the acquisition by Edward J. Donohue, Daniel F. Theurer, Arthur Rosen, and Samuel L. Abrams of joint control of Charlton Bros. Transportation Company, Inc., through ownership of its stock, upon the terms and conditions above set forth, which terms and conditions are found to be just and reasonable, is a transaction within the scope of section 5 (2) (a), and will be consistent with the public interest.

An appropriate order will be entered.

50 M. C. C.

No. MC-F-3531

JOHN C. AND RUTH R. KILGO-CONTROL; KILGO TRANSFER COMPANY, INCORPORATED-PURCHASE (PORTION)-WOOD-RIDGE TRUCKING CORP.

Submitted November 12, 1947. Decided December 22, 1947

Application of Kilgo Transfer Company, Incorporated, for authority to purchase certain operating rights of Wood-Ridge Trucking Corp., and of John C. and Ruth R. Kilgo to acquire control of said operating rights through said purchase, denied.

H. F. Gillis for vendee and its controlling stockholders.

August W. Heckman for vendor.

A. R. Eldred for interveners in opposition.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL BY DIVISION 4:

Kilgo Transfer Company, Incorporated,1 of Charlotte, N. C., and Wood-Ridge Trucking Corp., of Wood-Ridge, N. J., by joint application filed July 16, 1947, seek authority under section 5 of the Interstate Commerce Act for purchase by the former of certain operating rights of the latter for $5,000. By a supplemental application filed concurrently therewith, John C. Kilgo and his wife, Ruth R. Kilgo, both also of Charlotte, who control the vendee through ownership of a majority of its outstanding capital stock, seek authority under the same section to acquire control of the operating rights through the proposed purchase. A hearing has been held, at which rail carriers in trunk-line territory, except The Chesapeake and Ohio Railway Company, opposed the application but confined their participation to cross-examination of applicants' witnesses. The parties agreed to the omission of an examiner's proposed report. The vendee operates more than 20 motor vehicles.

The vendee, a North Carolina corporation, has outstanding 200 shares of capital stock, par value $100 each, of which John C. Kilgo,

1 By an amendment to its articles of incorporation on April 12, 1941, vendee's corporate name was changed from Kilgo Transfer Company to Kilgo Transfer Company, Incorporated, and on June 3, 1941, the Commission, division 5, ordered that a certificate be issued in the new name, superseding the certificate of April 18, 1941, issued in the old name.

its president, owns 152 shares, Ruth R. Kilgo, its secretary-treasurer, owns 47 shares, and Oliver E. Grist, its vice president, owns 1 share. All of these persons compose its board of directors. It conducts operations, in interstate or foreign commerce, as a motor common carrier of general commodities, with certain exceptions, (a) over regular routes, (1) between Kings Mountain, N. C., and New York, N. Y., via Charlotte, Greensboro, and Henderson, N. C., Baltimore, Md., Wilmington, Del., Philadelphia, Pa., Trenton and Newark, N. J., and also between Kings Mountain and Henderson via Raleigh, N. C., serving specified intermediate points, including Trenton and Newark, and certain off-route points, including Paterson, Bayonne, Jersey City, Perth Amboy, and Hoboken, N. J., and (2) between Charlotte, N. C., and New York, N. Y., via Chester, Pa., serving specified intermediate and off-route points in North Carolina, Virginia, and Delaware; and (b) over irregular routes, between Charlotte, and points in North Carolina within 30 miles of Charlotte, on the one hand, and, on the other, 20 named points in Virginia, including Roanoke, Richmond and Norfolk, 8 named points in West Virginia, including Charleston and McArthur, and Dayton, Ohio, Washington, D. C., Baltimore, Cumberland, Hagerstown, and Havre de Grace, Md., Wilmington, Del., Harrisburg, Reading, Philadelphia, and Scranton, Pa., Swedesboro, Jersey City, and Perth Amboy, N. J., Rochester, Utica, Syracuse, and New York, N. Y., and points in North Carolina and South Carolina. It may also transport linoleum carpets, linoleum paste, linoleum and other mats and rugs, and felt base, over regular and irregular routes, between Salem, N. J., and points within 1 mile of Salem, on the one hand, and, on the other, Charlottesville and Doswell, Va., points in that part of Virginia on and south of U. S. Highway 60, and those in North Carolina and South Carolina, serving no intermediate points.

The vendor, a New Jersey corporation, is authorized to conduct operations, in interstate or foreign commerce, as a motor common carrier of general commodities, with certain exceptions, over irregular routes, between points in Morris, Passaic, Bergen, Hudson, Essex, Union, Somerset, Mercer, Middlesex, and Monmouth Counties, N. J., on the one hand, and, on the other, New York, N. Y., points in Westchester County, N. Y., and those in that part of Connecticut west of a line beginning at the Connecticut-New York State line and extending south through Stamford, Conn., to Long Island Sound, including Stamford.

Pursuant to certificates issued in Nos. MC-13268, MC-13268 (Sub-No. 1), and MC13268 (Sub-No. 2), on April 18, 1941, August 26, 1941, and January 20, 1944, respectively. Pursuant to certificate issued in No. MC-53661 on October 13, 1943.

Under an agreement of April 30, 1947, the vendee would purchase for $5,000, that portion of the vendor's operating rights authorizing the transportation of general commodities, with certain exceptions, between points in Morris, Passaic, Bergen, Hudson, Essex, Union, Somerset, Mercer, Middlesex, and Monmouth Counties, on the one hand, and, on the other, points in Westchester County, and those in that part of Connecticut west of a line beginning at the ConnecticutNew York State line and extending south through Stamford, Conn., to Long Island Sound, including Stamford. Of the purchase price, $1,000 has been deposited in escrow for delivery to vendor upon approval of the transaction by us, and the balance would be payable within 5 days after such approval.

Vendee's balance sheet as of September 30, 1947, shows assets aggregating $96,171, consisting of: Current assets $51,012, principally cash $789, accounts receivable $43,622, and material and supplies $5,600; carrier operating property, less depreciation, $32,060; and deferred debits $13,099. Liabilities were: Current liabilities $52,260, principally accounts payable $40,040; equipment obligations $4,938; capital stock $20,000; and earned surplus $18,973. Its income statements for 1945, 1946, and the first 9 months of 1947, show net incomes, before provision for income taxes, of $676, $2,715, and $7,748, respectively, and for the first 9 months of 1947, after such provision, net income of $4,248.

Vendor's balance sheet as of September 30, 1947, shows assets aggregating $32,925, consisting of: Current assets $4,521, principally cash $1,522, and accounts receivable $2,923; carrier operating property, less depreciation, $10,058; intangible property $18,000; and prepayments $346. Liabilities were: Current liabilities $1,574, composed of accounts payable; equipment obligations $6,572; capital stock $25,000; and surplus (debit balance) $221. Its income statements for 1945, 1946, and the first 9 months of 1947, show a deficit of $260, and net incomes, before provisions for income taxes, of $1,273, and $758, respectively.

Protestants urge denial of the application on the grounds (1) that, in the event of approval of the unification, vendee neither could nor would maintain the irregular-route service contemplated by vendor's certificate, and (2) that the division of vendor's irregular-route rights in the manner proposed would not be consistent with the public interest.

As indicated, vendee may operate (a) over regular routes (1) between Kings Mountain and New York, N. Y., via Charlotte, Greensboro, and Henderson, and also between Kings Mountain and Henderson via Raleigh, serving certain intermediate points, including Trenton