porters, Incorporated, and Transporters Terminal, Incorporated. Except for 12 tractors leased by lessee from owner-operators, the former provides lessee with all the automotive equipment used in its operations under written leases providing for payment of 1.1 cents for each tonmile that each complete tractor-trailer unit is operated. A copy of the lease form used is part of the record. Approximately 42 tractortrailer units are now leased in this manner by lessee. The equipment rental company was formed for tax purposes and also because at the time Wartena and Tiedeman acquired control of lessee, its financial position would not permit it to borrow additional funds without also investing additional capital in lessee to improve its financial position. Transporters Terminals, Inc., provides supplies as well as terminal facilities to lessee in Detroit, Mich., and is in the process of erecting additional terminals at St. Louis, Mo., and Metuchen, N. J. Lessee pays no fixed terminal rental, but the profits of the terminal company from sale of its supplies to lessee are considered as its compensation for lessee's use of the facilities.

On August 20, 1943, in No. MC-87928, a certificate was issued to lessee authorizing operations, in interstate or foreign commerce, as a motor common carrier (a) of new automobiles, trucks, bodies, cabs, chassis, and parts, over irregular routes, restricted to initial movements, in truck-away and drive-away service, from places of manufacture and assembly in Wayne County, Mich., to Pittsburgh, Pa., and points in Illinois, Indiana, Kentucky, Michigan, Ohio, Virginia, and West Virginia, and from such places in Cincinnati to points in the same States, all points in Pennsylvania west of U. S. Highway 219, and in North Carolina, South Carolina, and Tennessee; and (b) automobiles, trucks, bodies, cabs, and chassis, new, used, unfinished and/or wrecked, restricted to secondary movements, in truck-away and driveaway service, between all points described above. On May 1, 1947, in No. MC-87928 (Sub-No. 1), a certificate was issued to it authorizing transportation of a portion of the commodities first mentioned, in initial movements, in truck-away and drive-away service, over irregu lar routes, from points in Raritan Township, Middlesex County, N. J., which embraces principally Metuchen, to points in the same States mentioned above and those in Alabama, Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and the District of Columbia, and of rejected shipments from the specified destination points to the specified origin points. On September 10, 1947, a certificate was issued to lessee, in No. MC-87928 (Sub-No. 3), authorizing transportation of the same commodities, in initial movements, in truck-away and drive-away service, over irregular routes, from the site of the

Lincoln-Mercury Division of the Ford Motor Company situated near St. Louis, to points in Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Nebraska, Oklahoma, Tennessee, and portions of Alabama and Mississippi, and rejected shipments in the reverse direction. In No. MC-87928 (Sub-No. 2), it seeks a certificate of public convenience and necessity under section 207, authorizing an extension in its operations covering transportation of the indicated commodities from Wayne County to points in portions of New York and Pennsylvania entirely overlapped by the rights which it proposes to lease from the lessor. However, it was stated at the hearing that if the fact that lessee has pending a section 207 application seeking these rights should interfere with approval of this transaction, then lessee is willing to request dismissal of that application following consummation of the lease. In our opinion, the public interest requires that lessee request dismissal of its extension application in No. MC-87928 (Sub-No. 2) following consummation herein, and our findings will be conditioned to require that the request for dismissal be filed.

The lessor, as above indicated, is composed of 4 members of the Boutell family, each owning a one-fourth interest in the partnership. These same individuals also control, through majority stock ownership, and are officers and directors of, F. J. Boutell Driveaway Co., Inc., of Flint, herein called the Boutell corporation. Anna Boutell owns 2,124 shares of its stock and is vice president and treasurer. Each of the other 3 owns 708 shares and, in the order first named, are its president, secretary, and assistant secretary, respectively. On June 20, 1944, in No. MC-72253, a certificate was issued to the lessor authorizing operations, in interstate or foreign commerce, as a motor common carrier, over irregular routes, in truck-away service, (a) of new automobiles, trucks, bodies, cabs, and chassis, restricted to initial movements, from places of manufacture and assembly in Flint and Pontiac, Mich., and those in Wayne County and Warren Township, Macomb County, Mich., to Detroit, and to points in Ohio, Pennsylvania, and in that portion of New York north of a line generally extending from the New York-Pennsylvania State line through Hancock, Wurtsboro, and Kerhonkson to the New York-Connecticut State line; (b) of the same commodities, restricted to secondary movements, during the season of open navigation on the Great Lakes, from Cleveland, Ohio, Erie, Pa., and Buffalo, N. Y., to points in Ohio, Pennsylvania, and the above-described portion of New York; and (c) of the same commodities, new, used, unfinished, and/or wrecked, restricted to secondary movements, between all points and areas described above. Insofar

1 An examiner's report and recommended order was served in this proceeding on April 28, 1947, recommending denial of the application, and applicant has filed exceptions.

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as pertinent herein, the Boutell corporation holds a certificate in No. MC-3408, issued May 16, 1944, authorizing operations in interstate or foreign commerce, as a motor common carrier of the same commodities authorized to be transported by lessor, over irregular routes, in truck-away service, (a) in initial movements, from places of manufacture and assembly in Flint, Pontiac, and points in Wayne County and Warren Township, to points in Pennsylvania, Ohio, and New York, (b) in secondary movements, during the season of open navigation on the Great Lakes, from Cleveland, Erie, and Buffalo to points in the same 3 States, and (c) the same commodities, new, used, unfinished and/or wrecked, in secondary movements, between all points mentioned. These are only a small portion of its operating rights and, as seen, entirely overlap those of the commonly controlled lessor.

Before the war, lessor's traffic consisted entirely of the products of the Chrysler Corporation. It received this traffic through direct contacts with the dealers and distributors who then controlled the selection of carriers and the routing of shipments. During the war, lessor suspended all operations. On January 1, 1947, it complied with the insurance and tariff requirements of the act, but it has not been able to resume operations because of the Chrysler Corporation's recent change in policy whereby its own traffic department now designates all routings and selects the carriers to the exclusion of lessor and a number of other small operators. At present lessor has no equipment, terminal facilities, or employees. The Boutell corporation, on the other hand, has concentrated on the handling of products manufactured by the General Motors Corporation, and now transports a considerable volume from that company's plants in Flint and Pontiac. Although lessor and the Boutell corporation are and have been under common control, and are authorized to operate in substantially the same territory, when lessor did operate, its traffic came from a manufacturer whose products compete with those of the manufacturer served by the Boutell corporation.

Under an agreement of September 25, 1947, lessee would lease, subject to approval by this Commission, those portions of lessor's operating rights covering the transportation of the commodities indicated, (a) in initial movements, from points of manufacture and assembly in Wayne County and Warren Township, Macomb County, to Detroit and to points in Ohio, Pennsylvania, and in the authorized portion of New York, (b) in secondary movements, during the season of open navigation on the Great Lakes, from Cleveland, Erie, and Buffalo, to points in Ohio, Pennsylvania, and the same area in New York, and (c) in secondary movements, between all the points and areas named

above. The lease would be for a term of 5 years beginning with the date of consummation of the transaction, and provides for a term rental of $12,500 payable at the rate of $2,500 a year, $300 at the beginning of each year, and $200 a month for the remaining 11 months of each year. It further provides that lessee may cancel the lease at the end of any contract year upon 30 days' advance written notice to the lessor. The agreement also grants lessee an option to purchase the considered rights at any time during the lease term for $12,500, plus any and all remaining rental payments for the full 5-year term of the lease. The parties herein are only seeking our approval of the proposed lease, and our findings are not to be construed as authorizing lessee to purchase the operating rights.

Lessee's balance sheet as of October 31, 1947, shows assets aggregating $74,152, consisting of: Current assets $65,050, principally cash $19,936, notes receivable from Transporters Terminal, Incorporated, $17,000, and accounts receivable $24,722; carrier operating property, less depreciation, $4,969; intangible property $4,000; and deferred debits $133. Its liabilities were: Current liabilities $33,452, principally acounts payable $22,665; capital stock $40,000; and surplus $700. Its income statement for 1946 shows a net income, before provision for income taxes, of $2,187, and the statement for the first 10 months of 1947 shows net income of $10,754, before, and $9,105, after, provision for income taxes.

Balance sheet of Transporters, Incorporated, as of October 31, 1947, shows assets aggregating $150,975, including automotive equipment, less depreciation, $141,662. Its income statements for the fiscal year ended May 31, 1947, and for the 5 months ended October 31, 1947, show net incomes, before provision for income taxes, of $19,973 and $1,314, respectively. Balance sheet statement of Transporters Terminal, Incorporated, as of October 31, 1947, shows assets aggregating $41,424, consisting of: Current assets $10,148, principally accounts receivable from lessee $7,604; tangible property, less depreciation, $30,969; and deferred debits $307. Its liabilities were: Current liabilities $39,107, principally notes payable to lessee $17,000, and to others $16,000; capital stock $3,000; and earned surplus (debit balance) $683. Its income statements for the fiscal year ended August 31, 1947, and the 2 months ended October 31, 1947, show a deficit of $1,456 and net income, before provision for income taxes, of $773, respectively.

Lessor's balance sheet as of August 31, 1947, shows assets aggregating $22,651, principally cash $4,528, and United States savings bonds $16,470. Its partnership capital was $22,651. Its income statements for 1945, 1946, and the first 8 months of 1947, show net incomes of $620,

$2,987, and $167, respectively. As previously stated, lessor has not operated since before the war.

Lessee's truck-away rights duplicate those portions of the rights sought to be leased covering the transportation (a) in initial movements, from points in Wayne County to Detroit, to Pittsburgh, and to all points in Ohio; (b) in secondary movements, during the season of open navigation on the Great Lakes, from Cleveland and Erie to all points in Ohio and Pennsylvania; and (c) in secondary movements, unrestricted as to the season, between points in Wayne County, Warren Township, Macomb County, Detroit, Ohio, and Pennsylvania. Lessee would acquire, through the lease, nonduplicating authority covering truck-away service (a) in initial movements, from points in Wayne County to points in Pennsylvania other than Pittsburgh, and points in the authorized area in New York, and from Warren Township, Macomb County, to Detroit and points in Ohio, Pennsylvania, and the authorized area in New York; (b) in secondary movements, during the season of open navigation on the Great Lakes, from Cleveland, Erie, and Buffalo to the authorized area in New York, and from Buffalo to points in Ohio and Pennsylvania; and (c) in secondary movements, unrestricted as to the season, between points in Wayne County, Warren Township, Macomb County, Detroit, and points in Ohio and Pennsylvania, on the one hand, and, on the other, points in the authorized area in New York. Ordinarily, especially before the war, we have withheld our approval of the leasing of duplicating rights except where special circumstances warranted. Compare Patz-Lease-Huckabee, 35 M. C. C. 113, Southeast Ark. Frt. Line, Inc.-Lease-Herrin M. Lines, Inc., 38 M. C. C. 334, and Scherer Bros. Transfer & Storage Co.-Lease-Markel, 50 M. C. C.

In the instant case, lessee's operating rights duplicate less than half of the authority which it would lease. It would receive extensive nonduplicating rights, principally in the handling of initial movements from the Detroit area. On the other hand, lessor's operating rights are entirely duplicated by the operations of its commonly controlled affiliate, the Boutell corporation. Although, in our opinion, the purchase of these operating rights by the lessee, with the resulting elimination of the duplication, would be preferable to preservation of the rights by means of the lease, it appears that the proposed transaction may properly be approved.

Lessor would retain initial-movement rights from Flint and Pontiac to Detroit, and to points in Ohio, Pennsylvania, and the authorized area in New York. Under the division proposed in the agreement, lessor would also retain secondary-movement rights between Flint and Pontiac, on the one hand, and, on the other, points in Ohio,