Diversion of traffic by more aggressive carrier: In merger application proceeding, commission found no evidence of any substantial adverse effect upon competition in the immediate territory to be served by enlarged surviving carrier; at least one connecting carrier may be helped by proposed unification.--Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co. Merger, 324 I.C.C. 1(15, 31). Monopoly: Union of first and sixth largest tank line carriers in nation does not per se connote monopoly nor does fact that Chemical Leaman will be allowed to serve a larger portion of the United States in single-line service allow this conclusion. Numerous tank line carriers remain, and their operations are large and growing. Tank carriage is relatively new and faces an accelerated demand for service.--Chemical Leaman Tank Lines, Inc.--Pur.-Ryder, 104 M.C.C. 686(694,699). New and different service: The institution of single-line service in lieu of joint service is not a new service.-Michigan Express, Inc.-Control and Merger-Cushman, 104 M.C.C. 894(897). Single-line service: Commission held that a restriction against service between certain points in Michigan and Ohio recommended by hearing examiner should not be imposed. Although applicants were not substantial competitors in the area to be served they have conducted modest operations. What is contemplated is the institution of singleline service in lieu of joint service, which is not a new service. There is no basis for conclusion that vendee's operations will be detrimental to protestants.--Michigan Express, Inc.-Control and Merger-Cushman, 104 M.C.C. 894(897). 15. Routes, rights, transferred, retained, combined.--Vendor permitted to retain operating rights which allow service between Atlanta, Ga., and Birmingham, Ala., while selling rights. which permit some service over a different route inasmuch as vendor's serious financial difficulties make sale imperative, and it would be reasonable to assume sale would not be consummated if this service were discontinued, rendering rehabilitation of vendor's retained operations impossible.--Theatres Serv. Co.-PureDixie Highways, 104 M.C.C. 778 (782-3). Commission held that the transaction herein, if consummated, would not alter the competitive situation because consummation would result in the same number of carriers, two, providing the service at issue, as were providing it previously. Protestants' evidence of diversion is speculative in nature and the fact that vendee may be a more vigorous competitor than vendor does not warrant denial.-Fredrickson Motor Express Corp.-Purchase--Cope, 104 M.C.C. 670(674). Regular- and irregular-route operations: The unification of regular-route with irregular-route operating rights has been found consistent with the public interest, B. & E. Transp., 36 MCC 561, and it cannot be assumed that vendee would conduct unlawful operations. All of vendor's irregular-route authority covering a vast amount of easily defined territory, will be retained and the territory outside such authority can only be served by vendor's irregular-route authority.--Red Arrow Frt. Lines, Inc.--PurchaseGalveston, 104 M.C.C. 820 (825-6). 45. Control--Acquisition by International Utilities of 27 percent of Chemical Leaman as a result of the transaction does not indicate control in the face of strong evidence and direct testimony that the person in control of Chemical Leaman will continue to exercise that control; although if such a change were to occur, the situation would be subject to further review. --Chemical Leaman Tank Lines, Inc.--Pur.--Ryder, 104 M.C.C.. 686(705-8). Common control of vendee and vendor found not to exist in view of showing that vendor's stockholder borrowed on own credit, interest was paid on large loan from vendee, and hiring of an independent manager not previously affiliated with vendee.--Illinois-Calif. Express.--Purchase--Ariz.-Utah Express, 104 M.C.C. 578(584-5). 48. Purchase--Considering all circumstances, price for purchase herein does not appear unreasonable as Commission has consistently held that a price arrived at by contracting parties as a result of arms' length bargaining is entitled to great weight unless contrary is established by definitive evidence.--Consolidated Freightways Corp. of Del.--Control, 104 M.C.C. 658(660-1)*. Application herein approved inasmuch as the procedural defect (failure of all parties in control of applicant to join the application) which required denial in the initial report, 104 MCC 578, has been corrected.--Illinois-Calif. Express--Purchase--Ariz.-Utah, 104 M.C.C. 815 (817-8)*. Applicant, a non-carrier affiliated with a railroad in Hawaii, was allowed to buy a truck line in Ohio. The purpose of §5(2)(b) is to protect competing motor carriers from dual competition of an all-motor service in addition to rail service. It was found that the distances involved between the rail and motor carriers prevented the normal prescription of restrictions for protecting motor carriers inasmuch as the grant of authority had not and probably will not result in undue restraint of competition and the public interest requires the proposed operation.-Propane Transport, Inc.--Pur.--Propane Transport, 109 M.C.C. 384(387-90). Denial, effect: Commission approved transaction herein as vendor is facing potential bankruptcy and prompt sale of the involved operating rights is imperative if it is to avoid financial catastrophe inimical to the public interest.-Theatres Serv. Co.--Pur.--Dixie Highways, 104 M.C.C. 778 (782-3). Discontinued operations: To overcome apparent dormancy, applicants must show a real need for service and not just a preference for the service of applicants. Testimony of shipper failed to indicate that adequate service was difficult to secure from other carriers including protestant, or that the service offered was inferior, the supporting shipper merely indicated preference for vendee's service. Denied.--Ruffalo's Trucking Service--Purchase--Worster, 104 M.C.C. 593 (597-8). Where vendor has suffered economic setbacks and daily faces loss of equipment through repossession by chattel mortgage holders such factors may be considered in the determination of rendition of substantial operations under the rights sought to be transferred. Under such circumstances vendor's showing of activities consisting of 326 shipments within Texas in cited period is adequate to meet the requirement. Such service may include service to a single large point. Approved.--Red Arrow Frt. Lines, Inc.-Purchase--Galveston, 104 M.C.C. 820 (823-4). Intermediate points between Louisville, Ky. and Nashville, Tenn., (with two exceptions) cancelled as a condition to approval based upon evidence by protestants, two small distribution carriers, that vendor did not serve the intermediate points but rather interlined with them for service to those points, a practice that had been discontinued when vendee took control of vendor under temporary authority.--Theatres Serv. Co.-Pur.--Dixie Highways, 104 M.C.C. 778 (780-781). A highly specialized carrier is not expected to show extensive operations under any particular grant of authority, but portions under which no operations at all have been conducted are dormant and should be canceled absent a showing of shipper need therefor. The burden was on applicants to identify the segments to which shipments in its abstract pertained or show need for inactive rights which they did not do. individual segments will not be fragmented as to territory or commodities, totally dormant segments must be canceled as a condition to approval.-Chemical Leaman Tank Lines, Inc.--Pur.--Ryder, 104 M.C.C. 686(700-703). While Intrastate operating rights: Situation wherein sale by vendor of corresponding intrastate operating rights to another which had been registered under the second proviso of §206(a) creating duplicate operations was eliminated by the repeal of the second proviso. Procedural safeguards now exist to prevent the registration of newly acquired intrastate operating rights by a one-State carrier until the State Commission finds that public convenience and necessity demands their use in interstate service also which decision is subject to review and countermand by this Commission--Illinois-Calif. Express--Purchase--Ariz.Utah Express, 104 M.C.C. 578(585-7). Operating rights: Commission authorized the transaction herein, finding that vendor's retention of irregular-route authority, similar to a portion of its regular-route authority to be sold, by virtue of its continuing control of its subsidiary would not be violative of the public interest inasmuch as the rights of the two carriers were not merged, and their operation was separate and distinct over the routes in question.-Fredrickson Motor Express Corp.--Purchase--Cope, 104 M.C.C. 670(673-4). 50. Leases.--See also Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co. Merger case, n. 52, below. 52. Mergers.--Where railroad system is or should be operated in competition with other carriers, its power to control or substantially influence the management of such other carriers through preferential routing of traffic or otherwise should be restricted. Thus, in view of substantial stock holdings, the widespread holdings of the remainder of stock of survivor in proposed merger transaction (the Norfolk & Western), and the historical posture of and close management relationships between the Pennsylvania and the N&W, the former has the power to control the N&W and is in a position to extend its control over the proposed system. Moreover, the Pennsylvania now controls the Wabash, which seeks inclusion in the merger, and together with its power to control entire N&W system proposed, it is able to influence routing of substantial traffic over new N&W system to the detriment of other carriers; the Pennsylvania must be completely divorced from that system and have all its interests therein terminated.--Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co. Merger, 324 I.C.C. 1 (32-4). Further, if Pennsylvania's influence over N&W is eliminated, the merger of the Nickel Plate into Norfolk & Western and other transactions proposed in connection therewith are in the public interest without the inclusion of any other railroad or without the consolidation of proceedings with any other unification proceeding pending. While the Transportation Act of 1940 relieved the commission of its duty to initiate consolidations and left such function completely in the hands of the carriers, in considering railroad's petition for inclusion in merger and control transaction, the statute does not limit its participation to passing upon a proposal on a take-it or leave-it basis; however, the commission is specifically enjoined to consider, among other things, the effect of considered transaction upon adequate service to the public and effect upon public interest of the inclusion or failure to include other railroads. To allow full exploitation of plans voluntarily developed by the parties and to afford the fullest protection to the public interest required by §5(2)(c) and (d), the commission's jurisdiction is reserved for 5 years to permit interested railroads to petition for affiliation with new system.--Id., pp. 16, 26, 28, 32. Furthermore, lease of Wabash by Norfolk & Western approved for period of 8 years rather than 50 years, and in connection therewith stock exchange agreement authorized, provided transaction is completed within 6 years. Approval of merger conditioned upon the Pennsylvania's divesting itself of any present or future stockholdings in N&W and the Wabash within 10 and 6 year periods respectively, the severing of any management relationships between the former and latter within 60 days and acceptance of these conditions by written notice from the Pennsylvania. Pending completion 70. Employees.--Determination by local of union that this transaction was a purchase, requiring vendor's employees to be placed at bottom of seniority list, was based upon inadequate and incorrect information. While recourse to NLRB may be open to employees to correct situation, this is not necessary where the action affects employees as a result of §5 transaction. Condition imposed requiring that Chemical Leaman devetail Ryder's drivers and mechanics with its own as required in its master labor agreement on the occurrence of a merger.--Chemical Leaman Tank Lines, Inc.--Pur.--Ryder, 104 M.C.C. 686(708–9). In merger proceeding, conditions prescribed in Southern Ry. Co.--Control-Central of Georgia Ry. Co., 317 ICC 557, as supplemented and clarified in 317 ICC 729 and 320 ICC 377, imposed for protection of railway employees not covered by agreements and adversely affected by the transaction.--Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co. Merger, 324 I.C.C. 1(50). 110. Scope of issues. Control within §5: See also Norfolk & W. Ry. Co. and New York, C. & St. L. R. Co. Merger Case, n. 52, above. Certificate under $207: Evidence of past unlawful operations conducted by vendor pursuant to a certificate of registration, in good faith under color of right, is entitled to appropriate consideration in connection with whether a continuance thereof by vendee would meet a public need. See Helphrey, 97 MCC 549, as affirmed in Best Way, 253 F.Supp. 314, and cases cited therein.--Wilson Trucking Corp.--Purchase--Compton Lines, Inc., 104 M.C.C. 806(811). Fitness: Working capital (current assets less current liabilities) equal to one month's expenses exclusive of depreciation is not a minimum requirement for financial fitness as was stated in prior reports in this proceeding. Consequently, applicants' capital needs were overstated and source of capital underestimated. Such prior findings withdrawn-Consolidated Freightways Corp. of Del.--Control, 104 M.C.C. 658 (661-2)*. Regular, irregular routes: As applied to regular route operations evidenced by certificates of registration, it was found that regular routes should not be pulverized by requiring a showing of operations to and from each and every point on those routes. Evidence of substantial past operations is sufficient, despite the fact that it was shown by protestants that some of the points had never been served. In these circumstances, a public need by supporting shippers is cumulative, and therefore, unnecessary. --Wilson Trucking Corp.--Purchase--Compton Lines, Inc., 104 M.C.C. 806(811-12). |