the order of September 19, 1946, and requested a further extension of the lease authority pending consideration of the petition. On May 1, 1947, division 4 authorized continuance of the lease until May 31, 1947, and on May 12, 1947, we reopened the proceeding for further hearing, which was held June 23, 1947, and vacated and set aside the order of division 4 entered September 19, 1946, to the extent it vacated the authority granted by the order of June 14, 1946.

On June 10, 1947, Rodgers, Jr., filed a supplemental application herein in the form of a petition of intervention, seeking authority under section 5 to acquire control of the operating rights and property of vendor through the proposed purchase, in lieu of the application previously filed by Rodgers, Sr., seeking that authority.

Evidence presented at the third hearing was confined chiefly to showing the further changes that have been effected in the stock ownership of vendee since the report and order of September 19, 1946, brought about through the sale, for cash, by Rodgers, Sr., of his entire stock holdings in vendee, consisting of 85 shares, or 42.5 percent, 5 shares to one Louis Pizzo, superintendent of vendee's operations, with whom he has no family or other relationship, for $150 per share, and 80 shares to Rodgers, Jr., pursuant to memorandum of agreement dated April 15, 1947, at the same price per share. At that hearing, Rodgers, Jr., who, as a result of the purchase from his father, now owns 120 shares, or 60 percent, of vendee's outstanding capital stock, stated that he is willing to accept, as a condition to approval of the purchase, a condition requiring him to divest himself of any and all interests he has at present in the two previously mentioned noncarrier corporations controlled by Rodgers, Sr. It is contended that approval of the purchase transaction is now warranted as Rodgers, Sr., and Rodgers, Jr., are no longer affiliated with each other and that, therefore, vendee is no longer controlled or managed in a common interest with Eschenbach.

At the time of the third hearing herein, the officers, directors, and stockholders of vendee were as follows:

The corporate organization of Eschenbach is the same as at the time of the report of September 19, 1946.

Prior to the purchase by Rodgers, Jr., on June 21, 1947, of the mentioned 80 shares of his father's stock in vendee, he owned 40 shares or 20 percent of that company's stock, of which 20 shares were purchased from A. A. Eschenbach in May 1941, for $140 per share and paid for with his own funds. The other 20 shares were purchased from his father in June 1946, for $150 per share, or an aggregate price of $3,000, and paid for from funds borrowed from the First National Bank, of Scranton, secured by a mortgage on his home. The additional 80 shares of stock, which gave him majority stock control of vendee, were purchased from his father for $150 per share, or an aggregate price of $12,000. These funds were also borrowed from the afore-mentioned bank, secured by a lien on the 80 shares of stock. The last loan was approved by the executive vice president of the bank on the sole credit and responsibility of Rodgers, Jr., without security, collateral obligation, or encumbrance of any kind whatsoever from, to, or by Rodgers, Sr. Neither Rodgers, Sr., nor Rodgers, Jr., is a stockholder, officer, or director of the bank, although each of them has a personal account with the bank, and the bank holds some equipment notes of vendee.

Under the afore-mentioned agreement between Rodgers, Jr., and his father respecting the sale of the 80 shares of vendee's stock, it is provided, among other things, that the father is divesting himself of all stock ownership and interest whatsoever in vendee and that he will not in any way whatsoever exercise any influence or power in or with respect to the management of vendee, and that Rodgers, Jr., will manage, control, operate, and supervise the operations of vendee subject only to the direction of the board of directors, and free from any and all control by his father.

Vendee's balance sheet as of April 30, 1947, which gives effect to the instant transaction, shows assets aggregating $285,252, consisting of: Current assets $67,457, principally cash $7,774, special deposits $9,620, and accounts receivable $49,504; carrier operating property, less depreciation, $201,613; nonoperating property $339; intangible property $5,000; investment securities and advances $600; and prepayments $10,243. Liabilities were: Current liabilities $129,685, principally notes payable $46,700, accounts payable $70,375, and wages accrued $6,261; equipment obligations $65,099; other long-term obligations (balance due on purchase price of instant transaction) $53,725; reserves $2,514; capital stock $25,000, and earned surplus $9,229. Vendee's income statements for 1946 and the first 4 months of 1947, show a deficit of $2,163, and net income, before provision for income taxes, of $11,924 and, after such provision, of $8,902, respectively. Its income statements covering the leased operations of vendor

for 1946 and the first 4 months of 1947, show a deficit of $2,007, and net income, before provision for income taxes, of $1,384, and, after such provision of $1,051, respectively.

The net book value of vendee's capital stock as of April 30, 1947, was $29,229, exclusive of intangibles, and $34,229, inclusive of intangibles, or a value per share, for its 200 outstanding shares of capital stock, of slightly more than $146 and $170, respectively, which compares favorably with the price of $150 per share paid by Rodgers, Jr., for the 100 shares of vendee's stock purchased from his father. As of the date of the last hearing herein Rodgers, Jr., had a net worth of approximately $55,000.

Whether or not there exists control or management of these two carriers in a common interest is a question of fact which must be determined from a consideration of all pertinent facts and circumstances existing at any particular time. The first question to be decided is whether, the divestment by Rodgers, Sr., of all of his stock ownership in and his resignation as an officer and a director of vendee, has brought to an end the affiliation previously found to exist between him and his son. If they are no longer affiliated within the meaning of section 5 (6), the conclusion would be warranted that vendee and Eschenbach are not controlled or managed in a common interest on the basis of facts now of record. As previously pointed out, Rogers, Jr., is willing to discontinue his business relationship with his father in other companies by accepting, as a condition to approval of the instant purchase, a requirement that he divest himself of all of his interests in Ted V. Rodgers Company, Inc., and Airline Petroleum Company.

In several cases under section 5, as for example, Whitney-Purchase-Neisler, 25 M. C. C. 101, Dunne-Purchase-Wilcox, 25 M. C. C. 359, Doudell-Purchase-Yasunaga, 25 M. C. C. 641, and Temple-Control-Bluebird Coach Lines, Inc., 36 M. C. C. 583, weight was accorded the fact of family relationship in finding that there existed effective control or management in a common interest. The facts in the instant proceeding are distinguishable from those in the cases cited. In those cases, the financial interests of the related persons were parallel if not virtually identical. Here, however, Rodgers, Jr., has purchased 100 of the 120 shares of vendee's stock which he now holds from his father at a price per share comparable with their net book value, which purchase, as seen, was financed by him through a bank loan made on his sole credit and responsibility. It cannot be said therefore, that his financial interest is identical with or even parallel to that of his father. Nor can it be said that Rodgers, Jr., is inexperienced in conducting motor-carrier operations. The evidence shows that in November 1944, he suc

ceeded Morris Trexler as general manager of vendee; that he has continued in that position up to the present time, in the meantime being elected president; that prior to November 1944, he had been learning the business through Trexler; and that full and complete responsibility for the successful conduct of vendee's operations is reposed in him exclusively by reason of the fact that his father, as president of American Trucking Association, Inc., since 1933 has been compelled to spend 95 percent of his time away from Scranton, the headquarters of vendee.

Upon compliance with the condition proposed by Rodgers, Jr., that he be required, if necessary, to sever his interests in the other business enterprises in which he is at present associated with his father, the only remaining facts pointing toward affiliation between them, or toward common control or management of vendee and Eschenbach, would be the past business associations between Rodgers, Sr., and the officers, directors, and stockholders of vendee, and the family relationship of Rodgers, Sr., to Rodgers, Jr., Hugh J. Rodgers, Daniel C. Rodgers, and John Barrett. Based on these facts alone, a finding is not warranted that vendee and Eschenback are now under common control. There remains for consideration the question whether the purchase by vendee of vendor's operating rights and property is consistent with the public interest. The respective operations of these carriers, in interstate or foreign commerce, as motor-vehicle common carriers of general commodities, over regular and irregular routes, and the terms and conditions of the transaction, are described in the report of March 29, 1946, and will be repeated herein only to the extent necessary for clarity.

Vendee's regular routes extend from Homer, N. Y., to New York, N. Y., via Binghamton, N. Y., Scranton, and such New Jersey points as Denville, Paterson, and Elizabeth. Similar routes of vendor extend from Endicott, N. Y., to Philadelphia, Pa., via Binghamton, and Scranton, Stroudsburg, and Easton, Pa., and are embraced within the territory in central and western New York and eastern Pennsylvania where he also has authority to operate over irregular routes, which authority also includes service to and from Baltimore, Md., Wilmington and Dover, Del., and points in southern New Jersey. The regular routes of these carriers are duplicated between Endicott and Stroudsburg. Vendor has intrastate authority over his regular route between Scranton and Philadelphia, while vendee has no such authority over any of its routes in Pennsylvania.

As shown in the report of March 29, 1946, vendee entered into an &greement dated September 24, 1945, to purchase from vendor, for $90,000, all of his interstate rights, Pennsylvania intrastate rights,

certain improved real estate located in Scranton, and equipment, consisting of 17 trucks, 16 tractors, and 20 semitrailers. The real estate was valued at $5,000, the operating rights at $5,000, and the equipment at $80,000. Under the terms of that agreement, $25,000 of the purchase price was to be placed in escrow and the balance was to be evidenced by a promissory note, secured by a mortgage on the real estate and equipment involved, payable in monthly installments of $1,000 with interest at 4 percent on the unpaid balance beginning on the first day of the month following approval of the transaction. At the third hearing, vendor stated that, as a result of his failure to produce a certain truck involved in the sale, a credit of $500 on account of the purchase price was agreed to by the parties, which reduced the purchase price from $90,000 to $89,500. As of the date of that hearing, approximately $39,000 of the adjusted purchase price had been paid. The increase in vendee's fixed charges resulting from the instant purchase would not be contrary to the public interest.

Transfer of vendor's Pennsylvania intrastate rights and title to all of his equipment involved in the instant transaction was approved by the Pennsylvania Public Utility Commission on January 11, 1946. In explanation of the partial consummation of the transaction, counsel for vendee stated that the orders of the Pennsylvania commission approving transfers of this nature require acquiring carriers to comply therewith within 30 or 60 days and that failure of compliance may result in the withdrawal of the approval. Under the circumstances, denial of the application because of the unauthorized partial consummation is not warranted.

Approximately 90 percent of the traffic handled by vendee under the leased rights of vendor moves in intrastate commerce under the latter's Pennsylvania rights between Scranton and Philadelphia. If the transfer of vendor's interstate rights involved herein should be disapproved, vendee intends to continue to operate under the intrastate rights already acquired, but would be seriously handicapped by the loss of supporting interstate traffic which would be diverted to competing carriers in the territory offering a combined intrastate and interstate service. Approval of the purchase would afford vendee access to Philadelphia over a regular route, which authority it does not now possess. Vendee has retained all of vendor's employees in the leased operations and will continue their employment with it if the instant unification is approved. In conducting the unified operations, vendee will be expected to preserve the separate and distinct nature of its regular-route and irregular-route operations. Thurston-Purchase-Merritt, 15 M. C. C. 358.

The proposed accounting by vendee for the operating rights and property will not be approved herein, but will be reserved for con

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