and Harrisburg, and of returned, rejected, or damaged shipments of the same commodities in the reverse direction.

Under an agreement of January 22, 1947, as amended, vendee would purchase for $6,000 all of vendor's regular-route operating rights in Nos. MC-54744 (Sub-No. 14) and MC-54744 (Sub-No. 17). The purchase price, less $1,500 paid upon the execution of the agreement and $1,500 paid upon the filing of the application, would be payable upon approval herein. The agreement provides that the advance payments would be returned to vendee in the event of denial of the application. No fixed charges would be incurred by vendee in financing the transaction.

Vendor's regular routes are generally complementary to those of vendee, connecting principally at Scranton, Easton, and Philadelphia. They duplicate vendee's regular routes between Snydersville and Sciota, 2 miles, between Saylorsburg and Stockertown, 11 miles, and between Easton and Scranton, 70 miles.

Vendee's balance sheet as of December 31, 1946, shows assets aggregating $501,819 consisting of: Current assets $215,051, principally cash $10,773, notes receivable $25,000, accounts receivable $133,403, and material and supplies $39,823; carrier operating property, less depreciation, $226,141; and prepayments $60,627. Liabilities were: Current liabilities $157,822, chiefly accounts payable $106,735, wages payable $22,233, and other current liabilities $17,975; equipment obligations $190,668; reserves $10,000; capital stock $93,340; and earned surplus $49,989. Its income statements for 1945 and 1946 show net incomes, before provision for income taxes, of $19,073 and $7,542, respectively, and, after such provision, net incomes of $13,107 and $5,742, respectively.

Vendor's balance sheet as of December 31, 1946, shows assets aggregating $67,174 consisting of: Current assets $10,960, principally accounts receivable; carrier operating property, less depreciation, $39,587; intangible property $11,900; and prepayments $4,727. Liabilities were: Current liabilities $40,796, chiefly accounts payable and taxes accrued; equipment and other long-term obligations $43,971; deferred credits $2,850; and sole-proprietorship capital (debit balance) $20,443. His income statements for 1945 and 1946 show deficits of $28,573 and $21,547, respectively.

Vendor's losses are attributable principally to labor difficulties. At the time the vendee took over a part of his operations under temporary authority, vendor had curtailed his service to the extent that he was transporting principally truckload freight over irregular routes between Lancaster, Reading, Harrisburg, and Easton, on the one hand, and authorized points in New York, on the other hand. He has

closed two of the three terminals which he previously maintained in New York State and has disposed of his equipment, with the exception of two tractors and two semi-trailers.

Vendee is a well-established operator with adequate resources and facilities to conduct the proposed operation. It maintains terminals in 10 cities, including 1 at Syracuse, which it established subsequent to the grant of temporary authority herein. Upon approval, vendee proposes to establish another terminal at Binghamton. It is primarily interested in acquiring the considered rights in order that it may render direct single-line service between points which it now serves, on the one hand, and, on the other, the industrial centers in New York State, such as Syracuse, Binghamton, Auburn, and Utica.

Witnesses representing shippers in Syracuse, Minetto, and Delair, N. J., testified in support of the application. All had used vendor's service, but found that his service had deteriorated and had become inadequate for their needs. At least four other carriers would afford competition to vendee in the proposed operation. Vendor's employees would not be adversely affected by the transaction.

As stated, vendor would sell all his regular-route operating authority and would retain all his irregular-route operating authority. The regular-route authority permits service at all off-route points within 10 miles of the regular routes, except off-route points in New York west of U. S. Highway 96, and at all intermediate points on that portion of the regular routes in New York, except points intermediate between Ithaca and Auburn; but it does not authorize intermediate point service on that portion of the regular routes in Pennsylvania. The irregular-route rights authorize service between points authorized to be served on the regular routes in New York, on the one hand, and, on the other, points in Pennsylvania on and south of U. S. Highway 1, and those in a defined area west of U. S. Highway 611 between Easton and Philadelphia. If the transaction were approved and consummated as proposed, vendee would be authorized, under the regular-route rights purchased, to serve Philadelphia and all off-route points within a 10-mile zone west of U. S. Highway 611 between Philadelphia and Easton, and all off-route points within a 10-mile zone east of U. S. Highway 611 and on and south of U. S. Highway 1; and, at the same time, vendor would be authorized under his retained irregular-route rights, to conduct radial operations between Philadelphia and all points in those two 10-mile zones, on the one hand, and, on the other, points on the regular routes in New York. No evidence was introduced showing the manner in which vendor proposes to conduct irregular-route operations between the identical points which the vendee would serve under the regular-route rights

purchased, or that available traffic and the demands of shippers would support both an irregular-route and a regular-route operation by these two competing carriers between the same points. Considering the nature of these rights and the territory involved, our findings, accordingly, will be conditioned to require that, concurrently with consummation of the transaction, the irregular-route operating authority retained by vendor in No. MC-54744 (Sub-No. 14) shall be modified by canceling the right to serve Philadelphia and those points in Pennsylvania west of U. S. Highway 611 between Easton and Philadelphia which are within 10 miles of U. S. Highway 611, and those points east of U. S. Highway 611 and on and south of U. S. Highway 1 which are within 10 miles of U. S. Highway 611. Compare No. MC-F-3389, Shoe City Exp. Co., Inc.-Purchase-Marshall, 45 M. C. C. 778.

Vendee is willing to write off immediately the amount assigned to its "Other Intangible Property" account as a result of the purchase, and our findings will be conditioned accordingly.

We find that purchase by Shirks Motor Express Corporation of the previously described portion of the operating rights of Edwin E. Clarke, doing business as Clarke Motor Express, and acquisition of control of the operating rights by S. Robert Posey, through the purchase, upon the modified terms and conditions above set forth, which terms and conditions, as modified, are found to be just and reasonable, constitute a transaction within the scope of section 5 (2) (a), and will be consistent with the public interest, and that, if the transaction is consummated, Shirks Motor Express Corporation will be entitled to a certificate covering the described portion of the operating rights granted in Nos. MC-54744 (Sub-No. 14) and MC-54744 (Sub-No. 17), which rights are herein authorized to be unified with rights otherwise confirmed in Shirks Motor Express Corporation, with duplications eliminated; provided, however, that if the authority herein granted is exercised, Shirks Motor Express Corporation shall immediately write off the amount assigned to its "Other Intangible Property" account as a result of the instant transaction, the 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; and provided further, that if the authority herein granted is exercised, and concurrently therewith, the operating rights granted in No. MC-54744 (Sub-No. 14) shall be modified by excluding therefrom the right to transport general commodities over irregular routes between authorized points in New York, on the one hand, and, on the other, Philadelphia and those points in Pennsylvania west of U. S.

Highway 611 between Philadelphia and Easton, which are within 10 miles of U. S. Highway 611, and those points east of U. S. Highway 611, and on and south of U. S. Highway 1, which are within 10 miles of U. S. Highway 611.

An appropriate order will be entered.

50 M. C. C.

No. MC-F-3587

J. H. SPRECHER-CONTROL; J. H. SPRECHER, INCORPORATED-LEASE (PORTION)-FRED W. YEAGLE AND ROSCOE C. YEAGLE

Submitted November 14, 1947. Decided January 30, 1948

Lease by J. H. Sprecher, Incorporated, of certain operating rights of Fred W. Yeagle and Roscoe C. Yeagle, partners, doing business as Yeagle Brothers, and acquisition of control of the operating rights by J. H. Sprecher through the lease, approved and authorized, subject to condition.

S. Harrison Kahn for applicants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL BY DIVISION 4:

J. H. Sprecher, Incorporated, Lebanon, Pa., and Fred W. Yeagle and Roscoe C. Yeagle, partners, doing business as Yeagle Brothers, of Muncy, Pa., by a joint application filed September 3, 1947, as amended at the hearing, seek authority under section 5 of the Interstate Commerce Act for lease by the former of certain operating rights of the latter. By the same application, J. H. Sprecher, also of Lebanon, who owns all the outstanding capital stock of lessee, seeks authority under the same section to acquire control of the operating rights through the proposed lease. A hearing has been held, at which the parties agreed to the omission of an examiner's proposed report.

By an order entered under section 210a (b), on September 25, 1947, lessee was authorized to lease the operating rights involved herein except those covered by No. MC-62104 (Sub-No. 7-TA), hereinafter described, for a period expiring March 22, 1948, at a rental of $25 per month.

Lessee, a Delaware corporation, operates in interstate or foreign commerce as a motor common carrier of automotive equipment, over irregular routes, in Michigan, Ohio, New York, West Virginia, Pennsylvania, and Delaware from and to the points and areas hereinafter indicated. On October 16, 1941, in No. MC-16651,' a certificate was

1 On November 15, 1946, in No. MC-FC-24631, the transfer to lessee from J. H. Sprecher, doing business as Sprecher Brothers, of the operating rights under No. MC-16651 was approved and No. MC-107879 was assigned thereto.