assification of a commodity is clearly not warranted. Proposed increased ratgs on blankets, whose dominant transportation characteristic is density, shown st and reasonable but schedules ordered canceled and proceeding held open until oponent adduces evidence that such increases are justified under regulations of e Economic Stabilization Program.-Increased Classification Ratings on Blankets, 1 I.C.C. 760 (764-69).

16(e). COMPLAINTS TO AND INVESTIGATION BY COMMISSION; POWER OF COMMISSION TO FIX REASONABLE RATES, REGULATIONS, ETC.

2. Construction and interpretation.--See Notice of Increases in Frt.

tes and Pass. Fares, at $204 (c), n. 27.

16(g). NEW RATES; DETERMINATION OF FAIRNESS BY COMMISSION; SUSPENSION (COMMON CARRIERS)

10. Evidence, in general.--Commission has previously used the "carried sis" as the criterion for measuring revenue-cost relationships, and respondents ve not convinced us that we should change that criterion. Use of that eachreach basis provides a more accurate comparison of revenues and costs for rriers involved. The introduction of only a portion of nonstudy carriers' venues for comparison with territorial costs applied for such carriers introces a bias that has not been corrected. Suggestion to remove such bias by clusion of the nonstudy carriers' costs would be difficult and would unduly roaden territorial scope being considered.--General Increase, East-South erritory, 341 I.C.C. 735 (755-58).

Commission found that all proof of commodity transportation charactertics need not be established through probability sampling. Whether such saming is necessary depends on the complexity and magnitude of the data to be veloped. Evidence of record shows that proponent's study was adequate and probability sampling was required.--Increased Classification Rating on ankets, 341 I.C.C. 760 (762-64).

65. Reasonableness of proposed rates.--Commission found proposed creases in rates and minimum charges not shown just and reasonable because spondents did not use the "carried basis" criterion, established in New ocedures, 339 I.C.C. 324 and 340 I.C.C. 1, for measuring revenue-cost lationships and have not convinced us that we should change that criterion. spondents' introduction of nonstudy carriers' revenues introduces a bias at has not been corrected. Therefore, we are unable to conclude the prosal is cost-justified or necessary to meet future needs or provide good rvice.--General Increase, East-South Territory, 341 I.C.C. 735 (755-58). 20 (d). ACCOUNTS; RECORDS; FORMS; PERIOD OF PRESERVATION; ACCESS TO BY COMMISSION OR AGENTS

2. Inspection of equipment.--It is well established that a person king an equipment inspection should not be in any material way connected with, Owe allegiance to, the owner of the equipment. In this regard, Administrave Ruling No. 106 (January 22, 1958, Question 16), states that "the person king the inspection must make it as a representative of the carrier under

whose rights the transportation will be performed, and the carrier may not employ as its representative a person who has an adverse interest, such as the driver or an employee of the owner." See also, Bowling Green Exp., Inc., Interchange Practices, 74 M.C.c. 167 (173), and E.L. Powell & Sons Trucking Co. Extension--Arizona, 77 M.C.C. 501 (508).--Diamond Transp. System, Ext.--Wis. and Okla. Origin, 117 M.C.C. 706 (712).

$222 (b).

JURISDICTION OF DISTRICT COURTS TO RESTRAIN VIOLATIONS AND ENFORCE
ORDERS

11.

Interstate operation without certificate or permit.--By agreement of the parties in proceedings to enjoin trucking company from interstate transportation of considered products without appropriate authority, and all the factual issues having been resolved by written stipulation, the question for the court's determination is whether lactose and Culturemate (produced from milk) are exempt agricultural commodities, within $203 (b) (6), that may be transported by defendant company even though it does not hold interstate authority. Applying standards set forth in the East Texas Motor Freight Lines case, 351 U.S. 49, to resolve the challenged exemption, therefore, the court concludes that lactose retains its substantial identity as milk sugar, notwithstanding the processing changes, and is an exempt commodity. However, since Culturemate has lost its original characteristics and has been manufactured into a different article with its own distinctive name, character and use, that commodity is a new, manufactured product which is not within the $203 (b) (6) exemption. Order accordingly.-I.C.C. v. Schaetzel, 339 F. Supp. 1345 (1346-47).

In action to enjoin defendant carriers from conducting further line haul motor operations between nonairfield points in and around Benton Harbor and Kalamazoo, Mich., and O'Hare Field and Midway Airport at Chicago, Ill., comprised of local pickups in Michigan by carrier having no interstate authority, in his vehicle, and over-the-road movement to Illinois by carrier holding authority only between Benton Harbor and Kalamazoo airports, on the one hand, and, on the other, named Chicago airports, such operations of defendants are line-haul interstate motor carriage which require authorization. Since specific authority to operate between named airports does not imply authority to serve any nonairfield points within "commercial zones" of cities where those airports are located, and since Michigan origin points are well outside "terminal areas" of the Chicago airports, challenged operations are not within either the commercial zone, or the incidental-to-air, exemption provisions of the Act.-I.C.C. v. Howard, 342 F. Supp. 1112 (1114-15).

All in all, defendants have the right, without authority, to collect goods in and around the Michigan airports and to deliver them to those airports, respectively, for subsequent air shipment and, in addition, the general-commodity authority granted by the Commission allows them to transport goods from those airports to O'Hare and Midway airports at Chicago. But transportation from nonairfield points in Michigan to any interstate destination is not authorized and such motor carrier operations must be authorized to be lawful. Accordingly, defendants are ordered to cease and desist from all interstate motor carriage, except that authorized between the named airports, unless and until appropriate authority therefor is obtained from the Commission.--Id., pp. 1116.

14. Operation beyond scope of authority granted.--See I.C.C. v. Howard, n. 11, above.

PART IV

§402 (a) (5). FREIGHT FORWARDERS

1. Freight forwarder defined.--Commission notes that our regulatory jurisdiction in connection with the performance of an intermodal land-water-land service extends only to that part of the through movement conducted by underlying carriers subject to our jurisdiction under parts I, II, or III of the Interstate Commerce Act. A nonvessel-operating common carrier, such as applicant, remains subject to jurisdiction of the Federal Maritime Commission while utilizing services of a vessel-operating (ocean) common carrier by water. situation is analogous to that of air freight forwarders stated in Emery, 339 I.C.C. 17. Applicant's questioned inland operations are those of a freight forwarder.--CTI-Container Transport Internat., Frt. Forwarder Applic., 341 I.C.C. 169 (184-88).

This

Although applicant explicitly conceded that its questioned operations are those of a freight forwarder thus rendering that issue uncontroverted and moot, the Commission's conclusion is in no way altered. All elements delineated in $402 (a) (5) as definitive of a freight forwarder's operations are shown by either applicant or its proposed agent.-Id., pp. 188-91.

$402 (b). EXEMPTIONS

30. Household goods.--"Used household goods" reflects only a portion of the commodity description "household goods as defined by the Commission, and does not encompass those services performed in relation to unaccompanied baggage and the other two categories of goods included within the phrase "household goods as defined by the Commission," nor does it include "new" articles.--Home-Pack Transport, Applic. for Forwarder Permit, 340 I.C.C. 98

(102-03)*.

$410 (b). APPLICATION FOR PERMIT; FORM; CONTENTS

18. Burden of proof.--The burden of proof is upon an applicant seeking a freight forwarder permit to show that the proposed service is, or will be, consistent with the public interest and the national transportation policy. The "public interest" test is not the equivalent of the more stringent "public convenience and necessity" test which must be met by applicants seeking motor common carrier authority. A forwarder applicant bears the burden of proving by substantial evidence a need for the essence of the operation, i.e., the nature of the commodities to be transported, and the scope of the territory to be served, in order to justify a grant of the authority sought.--Home-Pack Transport, Applic. for Forwarder Permit, 340 I.C.C. 98 (102) *.

Burden of proof is upon applicant seeking a forwarder permit to show that the proposed service, to extent authorized by permit, is or will be consistent with the public interest and national transportation policy. Applicant

must also establish by substantial evidence a need for the essence of the operation, i.e., the nature of commodities to be transported and the scope of the territory to be served. See D. C. Andrews, 326 I.C.C. 743.--KYFI, Inc., Freight Forwarder Application, 341 I.C.C. 725 (729).

$410 (c). ISSUANCE OF PERMIT; APPLICANT CONTROLLED BY OR WITH COMMON CARRIER

25. Necessity, demand for service.--Pursuant to $410, freight forwarder applications may be granted if it appears that the proposed service is or will be consistent with the public interest and the national transportation policy. The burden of proof is upon the applicant seeking a forwarder permit to show such consistency. In D. C. Andrews & Co., 326 I.C.C. 743, it was pointed out that the "public interest" test is not the equivalent of the more stringent "public convenience and necessity" test which must be met by applicants seeking motor common carrier authority. It also has been indicated that a forwarder applicant bears the burden of establishing by substantial evidence a need for the essence of the operation, i.e., the nature of the commodities to be transported, and the scope of the territory to be served, in order to justify a grant of the authority sought.-Jet Forwarding, Inc., Freight Forwarding Application, 340 I.C.C. 337 (347-48)*.

As was pointed out in Smyth Worldwide Movers, 337 I.C.C. 721 (739), DOD support is not essential to a grant of authority where, as here, there is adequate shipper support for the grant of domestic authority.--Id., pp. 348*.

Considered in light of basic criteria of $410 (c), the evidence of record, coupled with evidence of past operations, established a need for applicant's proposed coordinated intermodal service, restricted to forwarding of import shipments having an immediately prior movement by water in applicant's nonvessel-operating (NVO) service.--CTI-Container Transport Internat., Frt. Forwarder Applic., 341 I.C.C. 169 (193-99).

Commission approved sought authority as evidence of record reveals that no refrigerated forwarder service is shown to be available to meet needs of the supporting shippers.--Honolulu Freight Service Ext.--California, 341 I.C.C. 657 (666)*.

Upon reconsideration, the record, updated as required in prior report, 335 I.C.C. 861, demonstrates a clear need for proposed service and applicant's ability and willingness to properly perform the service. Applicant has made substantial investment to provide service and proposes further addition to its facilities and supporting witnesses (appendix A) demonstrated their desire to deal with applicant who meets their requirements and provides flexibility in scope and directional flow of traffic.-Brinke Freight Forwarder Application, 341 I.C.C. 670 (683)*.

Commission's review of evidence herein persuades us that supporting shippers have a need for containerization of small shipments and single-carrier responsibility at Louisville, Ky., a service not presently available from protestants. Evidence convincingly demonstrates that the three supporting shippers would use proposed service. Application approved.---KYFI, Inc., Freight Forwarder Application, 341 I.C.C. 725 (728-29).

26. Fitness, generally.--Applicant's past operations were conducted before clearly resolved guidelines as to whether and when activities of a Federal Maritime Commission classified nonvessel-operator (NVO) may be those of a part IV freight forwarder subject to our jurisdiction and were not patently unlawful. Although applicant would have demonstrated good faith had it sought authority from this Commission, there is no basis to find that applicant is not ready, able, or willing properly to conduct proposed operations.--CTI-Container Transport Internat., Frt. Forwarder Applic., 341 I.C.C. 169 (192-93).

Applicant's past operations involving rail transportation of trailers in TOFC Plan III conducted under its broker's license were in fact operations as a freight forwarder. However, it was determined that applicant's operations were conducted under a color of right resulting from a misconstruction of its broker's license in part due to error by the Commission and that applicant had not acted in bad faith and no finding of unfitness is warranted but issuance of sought permit will be conditioned upon cancellation of applicant's broker license.--Brinke Freight Forwarder Application, 341 I.C.C. 670 (682-83)*.

$410 (e). TERMS AND CONDITIONS; TERRITORIES; RESTRICTION

30. Restrictions.--Commission rejected imposition of a restriction limiting applicant's authority to "commodities requiring refrigeration." mission affirmed the principles stated in Fox-Smythe, 106 M.C.C. 1, that such a limitation is not proper for use in any type of operating authority issued by this Commission. The term "refrigeration" is susceptible to many varied meanings and the term "requiring" has consistently presented substantial interpretation problems.--Honolulu Freight Service Ext.--California, 341 I.C.C. 657 (667-68)*.

SUPPLEMENTAL ACTS

ADMINISTRATIVE PROCEDURE ACT

5 USC

Burden of proof: On review of Interstate Commerce Commission decision that plaintiff's heavy-hauling certificate did not authorize it to transport 500- and 750-pound bombs, there is no merit in contention that the "Dillner presumption" that classes A and B explosives are outside the commodity authority of heavy haulers, as used in the agency proceeding, improperly changed the burden of proof to respondent heavy haulers in violation of the APA and of constitutional due process. Where the facts shown give rise to a presumption, usual function of the presumption is to constitute prima facie proof on issue involved and shift to the other party the burden of going forward with the evidence as to that issue. In instant case, the history, facts, and data before the Commission provided a sound basis for it, in exercising its expertise, to recognize and apply the general rule or rebuttable presumption in question and, thus, place burden on the heavy hauler to produce evidence to overcome that presumption. The challenged presumption was not created out of thin air; nor did it shift the ultimate burden of proof in the case. Commission decision sustained.-International Transport, Inc. v. United States, 337 F. Supp. 985 (997, 1000-03, 1002)*.