actions by the public generally. Compare Deluxe M. Stages of Ill.— Lease-Santa Fe Trail Transp., 39 M. C. C. 715.

FIXED CHARGES

Balance sheet of Dixie as of June 30, 1947, set out above under "Financial Data" includes item "Bonds" $1,000,000. These bonds, which are secured by a first mortgage on all of Dixie's properties, except for certain specified exceptions, were issued pursuant to authority granted in Finance Docket No. 15446, Dixie Motor Coach Corporation, Securities, in connection with Dixie M. Coach Corp.Control-Airline M. Coaches, Inc., supra, and are at present held by the Massachusetts Mutual Life Insurance Co. As indicated under "Description of Proposed Transactions" Transcontinental would acquire the operating rights and certain property of Dixie free and clear from encumbrance. No definite arrangement is shown of record for the retirement of these bonds, but it was stated that they would be retired, as the terms of the agreement covering the Dixie transaction specified that the assets of the latter would upon consummation be delivered to Transcontinental free and clear of encumbrances. Our findings herein will contemplate retirement of these bonds by Dixie. As a result of consummation of the proposed transactions Transcontinental would assume certain fixed charges in the form of interest on equipment obligations assumed in connection with the Trail purchase, and interest on the debentures issued as part of the financing of the instant transactions. On the basis of the amount of equipment obligations of Trail as of June 30, 1947, reflected in appendix A, the interest thereon for the first year (1.75 percent) would be $18,813; and the interest on the debentures (4 percent) $271,020.

Consolidated net income of Transcontinental (present operations of Dixie and Trail plus Continental, herein called the consolidated operations) would be such that after provision for all fixed charges, and income tax, it would be sufficient to permit Transcontinental to meet its normal equipment replacement requirements and at the same time retire the debentures within 4 years. The net operating revenue figure used as a basis for arriving at the foregoing estimated net income is based on the actual results of operations of Dixie, Trail (passenger) and Continental for the first 6 months of 1947, and estimates for the remainder of 1947 based on actual figures for the first 6 months projected over the remainder of the year. In making the projection, allowance was made for the decrease in revenue which motor passenger carriers generally have experienced during the past 2 years. The estimated net operating revenue for the consolidated operations for the full year 1947 or $2,550,124 which the parties claim includes ample

allowance for decline from the wartime high revenues, is 56.5 percent less than the (actual) comparable figure for 1946, and 34 percent less than the average for the previous 5 years. For the first year after consummation herein, based on the above amount of $2,550,124 for net operating revenue, it was estimated that the consolidated operations would produce a net income, after all income deductions, including $67,290 for interest on equipment obligations and $271,020 interest on the debentures, and after provision for income taxes, of $1,566,539. To the latter amount there was added the amount $1,528,719 representing the estimated depreciation to be accrued during 1947, making a total of $3,095,258 of funds available for use as follows: (1) Retirement of (a) present equipment obligations $700,000, (b) new equipment obligations $127,500, (c) debentures $1,885,500, and premium on debentures $51,675; (2) down payment on purchase of new buses $225,000 per year; and (3) terminal improvements $100,000 per year; or a total of $3,089,675. It was further estimated that the level of revenues from the consolidated operations for the following 3 years would remain the same as those estimated for 1947, and on this basis it was claimed that the remaining debentures could be retired within that period, or an over-all retirement within 4 years from date of consummation herein. While the latter phase of the foregoing estimates relating to the retirement of the debentures within 4 years appears to be tinged with optimism, from the evidence adduced it can be said that the earnings from the consolidated operations should be sufficient to meet the fixed charges resulting from the instant transactions, and the sinking fund requirements of the debentures based on retirement within the 15-year life specified therein; and that the assumption of such fixed charges would not be contrary to the public interest.

CONCLUSIONS

In Nos. MC-F-3504 and MC-F-3505 we find that (1) acquisition by Transcontinental Bus System, Inc. of (a) control of Continental Bus System, Inc., and (b) joint control of Southern Kansas Greyhound Lines, Inc., through ownership of capital stock, and (c) joint control of Panhandle Stages, Incorporated, through ownership of capital stock of Continental Bus System, Inc.; and (2) purchase by Transcontinental Bus System, Inc., of (a) certain operating rights and property of The Santa Fe Trail Transportation Company, and (b) operating rights and certain property of Dixie Motor Coach Corporation; upon the terms and conditions set forth above, which terms and conditions are found to be just and reasonable, are transactions within the scope of section 5 (2) (a) and will be consistent with the public interest, and that if the purchase authority granted in No. MC-F-3505

is exercised, Transcontinental Bus System, Inc., will be entitled to a certificate covering the operating rights granted in Nos. MC-1862 (embracing subnumbers 1, 2, 3, 5, and 7); No. MC-30600 (BMC-9) (embracing subnumbers 2, 7, 9, 11, 13, and 15), No. MC-30600 (BMC-2), No. MC-30600 (Sub-No. 5) (embracing Sub-No. 54), No. MC-30600 (Sub-No. 6) (embracing subnumbers 8, 10, 17, 19, 21, 24, 27, 31, 32, and 48), No. MC-30600 (Sub-No. 12), No. MC-30600 (SubNo. 18), No. MC-30600 (Sub-No. 22) (embracing subnumbers 23, 33, 34, and 35), No. MC-30600 (Sub-No. 29), No. MC-30600 (Sub-No. 37) (embracing Sub-No. 38), No. MC-30600 (Sub-No. 39) No. MC30600 (Sub-No. 40), No. MC-30600 (Sub-No. 41), No. MC-30600 (Sub-No. 42), No. MC-30600 (Sub-No. 43), No. MC-30600 (Sub-No. 44), No. MC-30600 (Sub-No. 45), No. MC-30600 (Sub-No. 46), No. MC-30600 (Sub-No. 49), No. MC-30600 (Sub-No. 50), No. MC-30600 (Sub-No. 51), No. MC-30600 (Sub-No. 52), No. MC-30600 (Sub-No. 53), No. MC-30600 (Sub-No. 55), No. MC-30600 (Sub-No. 56), No. MC-30600 (Sub-No. 59), No. MC-30600 (Sub-No. 60), No. MC-30600 (Sub-No. 62), No. MC-30600 (Sub-No. 63), and No. MC-30600 (SubNo. 65); provided, however, that if the authority herein granted in No. MC-F-3504 is exercised, Transcontinental Bus System, Inc., shall immediately write off to its "Unearned Surplus" account the amount by which the amount recorded in its "Investments and Advances-Associated Companies" account for the stock of Continental Bus System, Inc., exceeds the net book value thereof, exclusive of intangibles, at date of consummation, such write-off to be accomplished in the manner to be determined upon submission of the journal entries proposed to record the transaction, as required by our order herein; provided further, that, if the authority herein granted in No. MC-F3505 is exercised, Transcontinental Bus System, Inc. shall immediately write off to its "Unearned Surplus" account that portion of the amount assigned to its "Other Intangible Property" account, as a result of the purchase of the herein described operating rights and certain property of Dixie Motor Coach Corporation equal to the remaining balance in the "Unearned Surplus" account of Transcontinental Bus System, Inc., after giving effect to the write-off required above in connection with No. MC-F-3504; and amortize in equal monthly amounts over a maximum period of 5 years, commencing with the date of consummation of the purchase, the remaining portion of the amount so assigned to its "Other Intangible Property" account, or, in lieu of amortization in any month of the 5-year period, Transcontinental Bus System, Inc., may write off the unamortized balance of the amount so assigned, such amortization or write-off to be accomplished in the manner to be determined upon submission of the journal entries proposed to record the transaction, as required by our order herein.

We further find in connection with the purchase transaction herein authorized in No. MC-F-3505, lease by Transcontinental Bus System. Inc., of the operating rights of Forest S. Whittlesey, doing business as East Texas Motor Coaches, at present under lease to Dixie Motor Coach Corporation, pursuant to authority granted in Dixie M. Coach Corp.-Control-Airline M. Coaches, Inc., supra, upon the same terms and conditions as were approved in that proceeding, which terms and conditions are found to be just and reasonable, will be consistent with the public interest; provided, however, that, concurrently with exercise of the purchase authority herein granted, and assumption of operations under said lease, Transcontinental Bus System, Inc., shall file herein a certified and one conformed copy of a new lease agreement executed by Transcontinental Bus System, Inc., and Forest Whittlesey covering lease of said rights, in accordance with the authority granted herein.

We further find that the applications in Nos. MC-F-3504 and MC-F-3505, insofar as they request authority for A. C. Allyn and Company, Equitable Securities Corporation, Paul Davis, Parkes Armistead, Einer Nielson, Franklin Garment Company, G. Russell Brown, R. E. Stueber, R. A. Lile, M. E. Moore, The Continental Lines, Inc., Dixie Motor Coach Corporation, American Liberty Pipe Line Company, Atlantic Life Insurance Company, American Liberty Oil Company, C. W. Murchison, Toddie L. Wynne, Clint W. Murchison, Jr., John Dabney Murchison, and The Santa Fe Trail Transportation Company, to acquire control of Transcontinental Bus System, Inc., through stock ownership, should be dismissed.

We further find that the applications in Nos. MC-F-3504 and MC-F-3505 insofar as they request authority for Transcontinental Bus System, Inc., to acquire joint control of (1) Texas, New Mexico and Oklahoma Coaches, Inc., Union Bus Lines, Inc., and Robert F. Grozier, M. E. Moore, Southwestern Motor Carriers Corp., and MidContinent Coaches, Inc., a partnership, doing business as Rainbow Coaches, through ownership of capital stock of Continental Bus System, Inc.; and (2) West Coast Bus Lines, Ltd., through ownership of capital stock, should be dismissed.

In Finance Docket No. 15752 we find that the issuance by Transcontinental Bus System, Inc., of not exceeding (1) 896,100 shares of common capital stock, par value $1 per share, and (2) $6,775,500 aggregate principal amount of 15-year, 4-percent, sinking-fund debentures, upon the terms and conditions set forth above, (a) is for a lawful object within its corporate purposes, and compatible with the public interest, which is necessary or appropriate for, or consistent with, the proper performance by Transcontinental Bus System, Inc., of service to the public as a common carrier, and which will not impair

its ability to perform that service, and (6) is reasonably necessary and appropriate for such purpose; provided, however, that Transcontinental Bus System, Inc., shall file a certified specimen of such debentures as executed, and a certified copy of the indenture or indentures of mortgage as finally executed.

An appropriate order will be entered.

MILLER, Commissioner, dissenting:

In granting these applications, the majority find that the top resulting company, Transcontinental, will not, as a result, "be affiliated with the Santa Fe railroad within the meaning of section 5 (6), so as to make applicable the proof requirements of the proviso of section 5 (2) (b)." I disagree because I believe Transcontinental will unquestionably be affiliated with the railroad.

The negotiations leading up to these transactions were entered into by representatives of Continental, Dixie, and Trail, the latter a wholly owned subsidiary of the Santa Fe railroad.

The statute provides that a person shall be held to be affiliated with a railroad if, because of the relationship of that person (Transcontinental) to the railroad, it is reasonable to believe that the affairs of such person shall be managed in the interest of the railroad. One of the tests prescribed is the manner in which the person in question is organized. Transcontinental has been organized by the railroad and two other groups, acting together. Clearly, so long as Trail has 39 percent stock voting power and the same debenture veto power, an investment of $4,520,000, and a guaranteed representation on Transcontinental's board of directors, it is reasonable to believe that the latter will be managed and operated in the interest of Trail and the railroad to a substantial degree-a degree much greater than that of any other stockholder. See discussion in Richmond-Greyhound Lines, Inc.-Control-Peninsula, 5 M. C. C. 394 and Southwestern Greyhound Lines, Inc.-Merger, 39 M. C. C. 243, 253. I believe that the instant decision goes a long way toward nullifying the proviso of section 5 (2) (b), which was placed in the act to preserve the independence of motor carriers from railroad domination or affiliation, except under special safeguards there imposed.

No attempt was made by applicants to introduce evidence which would permit of the finding that the "transaction proposed will be consistent with the public interest and will enable such carrier (the railroad) to use service by motor vehicle to public advantage in its operations and will not unduly restrain competition." Because, in my opinion, Transcontinental unquestionably would be affiliated with the Santa Fe railroad, I would deny these applications for lack of evidence necessary to make the findings required by the statute.