a finding as to the reasonableness of rates or charges which may be filed thereunder, nor do they amount to a prescription thereof. The reference therein to Ex Parte No. 148, which is relied upon by the complainant, is descriptive in a general way of the class of increases which the motor carriers proposed to establish. The complainant's contention that the motor carriers were, by the terms of the order, limited to the establishment of a maximum increase of 6 percent is without merit. In Ex Parte No. 148, rail and water rates were under consideration, but motor-carrier rates were not in issue therein. To find that the special permission order prescribed rates and charges for the motor carriers would amount to a determination of the reasonableness of rates and charges prior to their filing without affording the shipper and carriers an opportunity to be heard. Notwithstanding that special permission was granted to depart from the tariff rules, the increased rates were subject to protest by shippers and to suspension by us. When changed rates and charges become effective, carriers and shippers alike are bound to observe them.

It is also contended that the assailed minimum charge was and is unreasonable. The principal evidence adduced in respect of unreasonableness is that the assailed minimum charge reflects an increase of 60 percent over the corresponding former charge. While this illustrates that the increase was substantial, it does not establish, per se, that the assailed charge was or is ureasonably high. No evidence other than the comparison between the minimum charges in effect prior to and effective March 18, 1942, was presented by complainant in support of its allegation of unreasonableness. In our opinion, the minimum charge of 88 cents per shipment has not been shown to be unreasonably high.

We find that the applicable minimum charge for a single shipment, from one consignor to one consignee on one bill of lading, between St. Joseph, Mich., and South Bend, Ind., from March 18, 1942, to March 6, 1944, was 88 cents, and that such charge has not been shown to be unreasonable or otherwise unlawful.

An order will be entered dismissing the complaint.

43 M. C. C.

No. MC-C-3831

UNITED PARCEL SERVICE OF PENNSYLVANIA, INC., FILING OF CONTRACTS AND SCHEDULES

Submitted March 18, 1944. Decided August 28, 1944

Belief from provisions of section 218 (a) of the Interstate Commerce Act, relating to filing of schedules of minimum rates and charges, and from requirements of orders entered pursuant to section 220 of the act, relating to filing of contracts and reports and keeping of accounts, denied.

Bernard G. Segal and Chester E. King for applicants.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND ALLDREDGE BY DIVISION 2:

In No. MC-C-383, the United Parcel Service of Pennsylvania, Inc., of Philadelphia, Pa., a contract carrier by motor vehicle, hereinafter termed the Philadelphia company or applicant, applies for relief from the provisions of section 218 (a) of the Interstate Commerce Act, relating to the filing of schedules of minimum rates and charges, and from the requirements of the orders in Filing of Contracts by Contract Carriers, 2 M. C. C. 55 and 41 M. C. C. 527, entered pursuant to section 220 (a) of the act.

In No. MC-C-388, the United Parcel Service of New York, Inc., and the United Parcel Service of Cincinnati, Inc., contract carriers by motor vehicle, hereinafter termed the New York and Cincinnati companies, respectively, and the Philadelphia company, collectively referred to as applicants, sought to be exempted from the requirements relating to the filing of annual and quarterly reports and the requirement of keeping accounts in accordance with the uniform system of accounts prescribed by the Commission for class I motor carriers of property pursuant to section 220 of the act. On March 4, 1942, applicants were informally granted relief from complying with the requirements until otherwise ordered. On December 21, 1943, the application was assigned for hearing to permit applicants to show why the relief should be continued.

These proceedings were heard on a consolidated record, present related issues, and will be disposed of in this report.

This report also includes No. MC-C-388, United Parcel Service of New York, Inc., et al., Exemption from Regulations.

Applicants are 3 of 92 affiliated companies which are all owned and controlled by the United Parcel Service of America, Incorporated, and which conduct substantially similar operations in 16 cities throughout the United States. Of the 9 companies, applicants are the only class I motor carriers, and, with one of their affiliated companies, the United Parcel Service of Portland, are the only companies who have filed applications with this Commission for authority to operate in interstate or foreign commerce. The other companies operate solely in intrastate commerce or within commercial zones where no permit authority is required.

Pursuant to authority granted in United Parcel Service of Pa., Inc., Contr. Car. Application, 10 M. C. C. 83, as amended in 20 M. C. C. 799 and 22 M. C. C. 243, the Philadelphia company was issued a permit on April 29, 1940, authorizing operation, over irregular routes, as a contract carrier by motor vehicle, under special and individual contracts or agreements, of such commodities as are sold by department stores and retail specialty shops, from such stores, shops, or warehouses in Philadelphia to customers of the stores and shops in New Jersey, Delaware, Maryland, and the District of Columbia, returning with rejected shipments to Philadelphia.

On March 10, 1944, in No. MC-63063, the New York company was issued a similar permit, between New York, N. Y., and points in nearby counties in New York, Connecticut, and New Jersey; and in No. MC-13426, the Cincinnati company was issued a similar permit between Cincinnati, Ohio, and nearby points in Kentucky and also covering the transportation of new furniture and household furnishings between Cincinnati and points in Indiana and Kentucky.

In 1938, the Philadelphia company had written contracts with 4 of the largest department stores in Philadelphia. Since then it entered into numerous other contracts with large and small specialty shops, and now has 112 effective contracts, 4 with the large department stores, 11 with large specialty shops, and 97 with small specialty shops. The New York company has 244 effective contracts, 21 with department stores and 223 with specialty shops. The Cincinnati company has 4 effective contracts, all with department stores.

In normal times approximately 85 to 90 percent of the service performed by the Philadelphia company, 90 percent of that by the New York company, and 98 percent of that by the Cincinnati company is within the respective commercial zones of the cities they serve, and such operations as are in interstate or foreign commerce within those

Other companies are United Parcel Service of Portland, United Parcel Service of Illinois, Inc., United Parcel Service of Milwaukee, United Parcel Service of Los Angeles. Inc., United Parcel Service of Seattle, United Parcel Service, Bay District.

'Carriers having average gross revenues of $100,000 or over annually from their motorcarrier operations.

zones are exempted from the permit requirements of the act. Services, however, are rendered to points beyond the commercial zones in interstate or foreign commerce, but not to the same extent as prior to the present war. Applicants transport all of the merchandise of the stores with whom they have contracts, with few exceptions, such as pianos, perishable commodities, and pets. The Philadelphia and New York companies transport merchandise from all the stores and specialty shops to their central stations, where it is sorted and sent to substations from which deliveries are made in the territory served by the particular substation. The Cincinnati company has but one station to which merchandise from the department stores is transported and from which deliveries to customers are made. Because of wide fluctuations in the volume of deliveries, owing to special sales, weather conditions, and holidays, and in order that delivery schedules may be observed at all times, a large reserve fleet of trucks is maintained.

The applicants have acquired the entire delivery equipment and personnel of the delivery departments of the department stores and of certain of the large specialty shops, and operate those delivery departments as they were operated by the stores themselves. Their trained employees work closely with those of the stores to the end that the stores' operations and the service of the stores' customers will be dependable, efficient, and economical. Applicants have devised and installed in the stores systems for the handling and auditing of c. o. d. shipments and for the safe delivery of merchandise, particularly furs, jewelry, and other valuables. They have aided the stores in acquiring the most modern systems of wrapping and packing; in revising sales books and other forms used by the stores; and in the collection of ration stamps in making delivery of rationed merchandise. Systems have been installed whereby stores may, up to within 30 minutes of the time a truck leaves to make deliveries, change the form of delivery, as, for example, a charge shipment to a c. o. d. shipment. Applicants' representatives also assist stores in training their personnel in matters pertaining to delivery. Direct telephone lines are maintained from the stores to applicants' stations. The New York Company has certain employees permanently stationed in the department stores to assist in sorting and checking merchandise. Prior to the war, the Philadelphia company had certain employees similarly engaged. Its representatives, as well as those of the New York and Cincinnati companies, constantly advise employees of the stores in the proper handling and preparing of merchandise for delivery.

Drivers employed by applicants act as representatives of the stores whose merchandise they deliver. They are trained, and required, among other things, to wait while a customer tries on a garment; to

take back merchandise; to pack it so that it may be returned to the store without damage; to arrange with the store for the payment for part of the merchandise and the return of part; to adjust complaints; to make exchanges of merchandise; to accept messages from customers and transmit them to the stores promptly; and to set up furniture and lay rugs in customers' homes.

The specialty shops do not require and are not furnished the extensive services supplied to the department stores, but have many of the services available and use certain of them, for example, the method of handling c. o. d. shipments or returned merchandise, and the advice on preparing and packing for shipments so as to avoid damage.

The Philadelphia company is the only applicant which seeks relief respecting the filing of schedules containing its minimum rates and charges and the filing of copies of its contracts.

Under the orders in Filing of Contracts by Contract Carriers, supra, entered pursuant to section 220 (a) of the act, each contract carrier of property by motor vehicle, with certain exceptions, is required to file with the Commission a true copy of every contract for the transportation of property between it and the shippers it serves, which shall contain the actual rates and charges and any rule, regulation, or prac tice affecting the actual rates and charges, and the value of the services rendered under the contracts.

In compliance with these orders, the Philadelphia company submitted for filing all of its contracts. The contracts with the four large department stores are effective for 5 years, terminable by mutual consent, or canceled at the option of either party. The contracts contain detailed provisions relating to the services to be rendered, the territory to be served, the kinds of merchandise to be delivered, the schedules of delivery, the recording, handling, and charging of packages, responsibility for loss and damage, and many other matters. Payment for services rendered under these contracts is determined by the use of a rate-making formula. The pertinent provisions quoted from a representative contract are as follows:

*

The base rate for the first fiscal year shall be per package-count (as defined). The Delivery Company's cost per package-count (computed as herein provided) for the fiscal year ending August 31, 1942 [term of contract since extended] shall be the base rate per package-count for the fiscal quarter beginning September 1, 1942. The base rate per package-count shall be separately determined and shall be a sum equal to the Delivery Company's cost per package-count (computed as herein provided) for the immediately preceding fiscal quarter. The billing rate for any fiscal quarter shall be the base rate plus cent per package-count.

In Contracts of Contract Carriers, 11 M. C. C. 693, contract carriers by motor vehicle engaged in the transportation of bullion, currency, jewels, and other previous and very valuable articles, were exempted from complying with the requirements of the orders.