the purchase price out of its general funds, and does not expect to borrow money for such purpose. However, as of May 31, 1947, balances on notes payable to banks were substantial, and the record shows that vendee generally has notes payable outstanding in varying amounts, which are issued from time to time to meet its current requirements. It appears, therefore, that payment of the purchase price would be likely to result, directly or indirectly, in increasing the amount of its outstanding notes. However, considering the benefits which would flow from the transaction, in our opinion, the resulting increase in vendee's fixed charges which might be occasioned by the payment would not be contrary to the public interest.

Vendee's officers expressed a desire that it be permitted to amortize, over a period of 5 years, the amount of the purchase price assigned to its "Other Intangible Property" account. Considering the balance in its surplus accounts, it does not appear that immediate write-off of this amount would cause undue hardship, and our findings will be conditioned accordingly.

At the hearing, the interveners in opposition to the application moved that final action herein be deferred pending determination of the complaints in Nos. MC-C-896 and MC-C-904, hereinbefore referred to, and until such time as an application concerning the proposed purchase by Harrington of the Memphis-Little Rock route is filed and disposed of by the Commission. No reasons or argument were advanced in support of the motion. No evidence was offered to show, nor was it even alleged, that consummation of the transaction would be injurious to interveners in any respect. Notwithstanding nonoperation thereunder since January 1946, vendor's certificates are in full force and effect, and may be acquired by vendee, if we find that the transaction is consistent with the public interest. Smith Bros. Revocation of Certificate, 33 M. C. C. 465, 472; Quaker City Bus Co.-Purchase-Blackhawk Line, Inc., 38 M. C. C. 603.

We see no valid reason for withholding action herein awaiting determination of the complaints. Even if the complainants establish their allegations, under the provisions of section 212 (a), before the certificates may be revoked, the holder thereof must be given an opportunity to comply with an order commanding obedience to the provisions of the act, or regulations issued thereunder, or a condition of the certificate found to have been violated. Obviously, vendee is in better position to resume the considered operations than is vendor, and approval and consummation of the transaction here proposed would tend to cure the very condition which is the basis of the complaints. On the other hand, if action here were delayed pending final action on

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the complaints, the Commission would be placed in the anomalous position of hindering the resumption of operations and, provided the relief prayed for in the complaints is granted, hindering compliance with its own order requiring such resumption. If and when an application is filed for the purchase by Harrington of the remainder of vendor's rights, it must be decided upon its own merits. The evidence herein shows that the instant transaction would be consistent with the public interest whether or not vendor disposes of its remaining operating rights. Interveners' motion to defer action herein is overruled. We find that the purchase by Strickland Transportation Company, Inc., of the above-described operating rights of Gordons Interstate, Inc., and the acquisition of control of those operating rights by L. R. Strickland, through the purchase, upon the terms and conditions above set forth, which terms and conditions 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, Strickland Transportation Company, Inc., will be entitled to a certificate covering the operating rights granted in Nos. MC-52509 (Sub-No. 3) and MC-52509 (Sub-No. 5), and the described portion of those granted in No. MC-52509, which rights are herein authorized to be unified with rights otherwise confirmed in it, with duplications eliminated; provided, however, that, if the authority herein granted is exercised, Strickland Transportation Company, Inc., shall immediately write off the amount assigned to its "Other Intangible Property" account as a result of the instant transaction, such write-off to be accomplished in the manner to be determined upon submission of the journal entries proposed to record the purchase, as required by our order herein.

An appropriate order will be entered.

50 M. C. C.

No. MC-F-3406

M. H. BRANDON ET AL.-CONTROL-TRANSWAY, INC.

Submitted July 31, 1947. Decided October 14, 1947

Application of M. H. Brandon, Mrs. M. H. Brandon, John H. Vickers, Nina H. Vickers, John Harmon Vickers, L. D. V. Benton, and Roy D. Gallagher for authority to acquire control of Transway, Inc., through ownership of capital stock, dismissed.

Harold S. Shertz for applicants.

REPORT OF THE COMMISSION

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

M. H. Brandon, of Memphis, Tenn., John H. Vickers, of Charlotte, N. C., and L. D. V. Benton, of Atlanta, Ga., by application filed February 19, 1947, seek authority under section 5 of the Interstate Commerce Act to acquire control of Transway, Inc., of New Orleans, La., herein called Transway, through ownership by applicants and members of their families of a majority of the outstanding capital stock of Transway. By a supplemental application filed July 31, 1947, Mrs. M. H. Brandon, of Memphis, wife of Brandon, Nina H. Vickers, and John Harmon Vickers, of Charlotte, wife and son, respectively, of Vickers, and Roy D. Gallagher, of New Orleans, join with the original applicants for authority under the same section to acquire control of Transway, through ownership of its capital stock, if we determine that they are required to obtain such authority. More than 20 motor vehicles are involved. The application is not opposed. No public hearing appears necessary.

Transway was incorporated in Louisiana on March 11, 1946, for the primary purpose of effectuating the purchase which was approved in No. MC-F-3158, Transway, Inc.-Pur.-Mike Heck's Delivery Service, Inc., 45 M. C. C. 811, decided October 14, 1946, and consummated November 8, 1946, herein called the prior case. It has outstanding 500 shares of capital stock, par value $100 each, owned 137 shares (27.4 percent) by Brandon and members of his family,1

1 Brandon owns 115 shares, his wife 18 shares, and 8 children (Daniel M. Brandon, Guilbert L. P. Brandon, and Gail Laine Brandon) and a son-in-law (Wm. A. Watson II) each own 1 share.

128 shares (25.6 percent) by Vickers and members of his family, 50 shares (10 percent) by Benton, 100 shares (20 percent) by Gallagher, 22 shares (4.4 percent) by E. R. Henderson, 13 shares (2.6 percent) by G. W. Simpson, and 50 shares (10 percent) by Herbert Kohn. Brandon is president and treasurer, his wife is secretary, his son-in-law is vice president, and Gallagher is traffic manager of Transway. These 4 individuals compose its board of directors.

Brandon is president and the owner of a majority of the outstanding capital stock of Film Transit, Inc., of Memphis, herein called Transit, of which Simpson is traffic manager. Vickers is vice president and a minority stockholder of Transit, and president, director, and the owner of a majority of the capital stock of Carolina Delivery Service, à corporation, of Charlotte, herein called Carolina, of which Henderson is traffic manager. Benton and his brother, B. D. Benton, equally own a partnership, doing business as Benton Brothers Film Express, of Atlanta. The operations of Transit, Carolina, and the Benton partnership, in interstate or foreign commerce, as motor common carriers engaged primarily in the distribution of motion picture films and related commodities, in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, Tennessee, North Carolina, South Carolina, and Virginia, are described in the prior case and need not be repeated here.

3

In the prior case, we approved the purchase by Transway of certain operating rights and property of the vendor therein and the acquisition by Brandon and members of his family, Vickers and members of his family, Benton, and Gallagher of joint control of the operating rights and property through the purchase. Under the rights acquired pursuant to the authority granted therein, Transway operates, in interstate or foreign commerce, as a motor common carrier (a) of motion picture films, theater equipment, and advertising matter, over regular routes, between New Orleans, La., and Moss Point, Miss., over U. S. Highway 90, serving all intermediate points; (b) of newspapers and periodicals over the same route from New Orleans to Moss Point, serving intermediate points for delivery only; and (c) of the commodities listed in (a) and (b) above, excepting periodicals, between New Orleans and Picayune, Miss., over three different routes, serving all intermediate points.

Pursuant to an application filed May 15, 1946, under section 207, in No. MC-107304, Transway, Inc., Common Carrier Application, 46 M. C. C. 1185, the examiner whose recommended order therein became

2 Vickers owns 84 shares, and his wife and son each own 22 shares. Confirmed in certificates issued April 19, 1941, and July 28, 1942, în Nos. MC-31825 and MC-31825 (Sub-No. 1), respectively, in the name of Transway's predecessor.

effective February 5, 1947, as the order of division 5 of the Commission, found that a certificate should be issued to Transway, authorizing operations, in interstate or foreign commerce, as a motor common carrier, over irregular routes, of motion picture films, supplies and commodities used in the operation of motion picture theaters, and dated publications, between points in a described territory in Louisiana, Texas, Arkansas, Mississippi, Alabama, and Florida, "upon condition that the parties who control applicant (Transway) obtain approval under section 5 (a) of the Interstate Commerce Act." Transway has temporary authority, in No. MC-107304 (Sub-No. 4-TA) to conduct the described operations until the certificate is issued, unless otherwise ordered.

The instant application was filed in an effort to comply with the above-quoted condition precedent to the issuance to Transway of the certificate authorized under section 207. A question arises whether a matter is presented requiring our approval and authorization under section 5 (2). The premises upon which the condition is based are that Brandon, Vickers, and Benton are persons which control one or more carriers; that upon the commencement by Transway of operations authorized under section 207, they would acquire control of another carrier, through their ownership of a majority of its outstanding capital stock; and that in that event, without approval under section 5 (2) to control Transway, they would immediately be in violation of the specific prohibition of section 5 (4). Compare Hannon-Control-Hannon Motor Lines, Inc., 39 M. C. C. 620.

The condition referred to was imposed without consideration being given to the transaction approved in the prior case, and consummated on November 8, 1946. Transway was not a carrier, except with respect to its temporary operations, until it purchased the operating rights and property of the vendor pursuant to the authority granted in the prior case. Upon consummation of the purchase by Transway, Brandon, Vickers, and Benton, each of whom controls one or more carriers, with our approval, jointly acquired control of the additional carrier, through ownership by themselves and members of their families of a majority of its outstanding capital stock. Applicants do not propose any significant change in the form of control of Transway which has been approved. The issuance of the certificate conditionally author

In the prior case, it was contemplated that Transway would have issued and outstanding 375 shares of capital stock, par value $100 per share, owned 131.25 shares (35 percent) by Brandon and members of his family, 131.25 shares (35 percent) by Vickers and members of his family, 37.5 shares (10 percent) by Benton, 37.5 shares (10 percent) by Gallagher, and 37.5 shares (10 percent) by Kohn. The issuance of 125 additional shares resulted in an increase in Gallagher stockholdings to 20 percent and a decrease in those of the Brandon group, including the traffic manager of Transit, and of the Vickers group, including the traffic manager of Carolina, to 30 percent each.