tion of the initial authority in sections B and C, on the one hand, and, on the other, the secondary authority in section D, (2) under a combination of the initial authority in sections C, D, E, and F, on the one hand, and, on the other, the secondary authority in sections A and B, and (3) under a combination of the secondary authority in sections A and B, on the one hand, and, on the other, the secondary authority in section D, provided that in effecting such combinations the movement is made through an authorized gateway point.

Under an agreement dated November 5, 1947, as clarified at the hearing, Commercial would purchase for $14,000 the operating rights of Keal as follows: (1) That portion of the authority in section C covering operations from Detroit and points in Warren Township to points in North Carolina, Oregon, South Carolina, and Washington and return with the rejected commodities from points in those four States to Detroit and points in Warren Township, (2) that portion of the authority in section D covering operations from points in Wayne County to points in Hennepin and Ramsey Counties and those in Massachusetts and New Jersey, (3) that portion of the authority in section E covering operations between points in Wayne County and those in Warren Township, which is an extension of the authority to be acquired in section D, and (4) all of the authority in section F covering operations from points in Wayne County to those in Florida. The purchase price has been deposited in escrow by Commercial from its current cash and would be payable to Keal upon approval herein. In the event the application is denied, the escrow deposit would be returned to Commercial. No fixed charges would be incurred as a result of consummation of the transaction.

Commercial's balance sheet as of September 30, 1947, shows assets aggregating $1,749,021, including cash $146,400; capital stock $150,000; and surplus, unearned $8,500, and earned $218,493. Its income. statements for 1945, 1946, and the first 9 months of 1947 show net incomes of $101,552, $11,595, and $191,438, respectively, before provision for income taxes, and $26,450, $8,595, and $99,395, respectively, after such provision. It is willing to write off immediately the amount assigned to its "Other Intangible Property" account as a result of the instant transaction, and our findings will be conditioned accordingly.

Keal's income statements for 1945 and 1946 show deficits of $7,464 and $10,045, respectively, and for the first 8 months of 1947 net income of $1,942.

Commercial, as previously indicated, at present transports automotive equipment from Detroit, Wayne County, and Warren Township to numerous States. It serves points in Massachusetts, New

Jersey, and Florida from Toledo, Ohio, and points in North Carolina and South Carolina from Toledo and Galion, Ohio, and from Evansville, Ind., but does not have authority to serve points in Oregon and Washington. It maintains terminals and operating personnel at the three origin points indicated and would be able to take over the considered operations without any increase in overhead and supervisory expense. It anticipates it would be able to realize approximately 40 percent of Keal's present revenues and at the same time effect reduction in the related operating expenses. It estimates that had it conducted the operations proposed to be purchased during the first 8 months of 1947, it would have increased its net income during that period by $26,759, before provision for income taxes. Employees of Commercial and Keal would not be adversely affected by consummation of the transaction. Keal desires to dispose of the operating rights here considered in order to confine his operations to a less extensive destination territory.

The operating authority in section E was initially granted to Service Driveaway Corporation, herein called Service, under a certificate issued March 27, 1940, in No. MC-3166 (Sub-No. 3), as an extension of its then authorized operations, following the removal of certain automobile and truck manufacturing plants from Wayne County to Warren Township. At that time Service was not authorized to serve Florida, but had pending in No. MC-3166 (Sub-No. 2) an application for initial-movement authority from Wayne County and Warren Township to points in Florida, Maryland, and a portion of Texas. On August 27, 1940, in No. MC-3166 (Sub-No. 2), issuance to Service of a certificate was authorized covering operations from Wayne County to Florida. The application was denied in all other respects, however, on the ground that the evidence submitted by Service related only to transportation from Wayne County to Florida. Subsequently, on November 4, 1940, a certificate was issued to Service in No. MC-3166 (Sub-No. 2), covering the operations now embraced in section F. Pursuant to authority granted in Fleming-Purchase— Service Driveaway Corp., 36 M. C. C. 149, decided December 20, 1940, the operating rights in section F were transferred by Service to John P. Fleming, doing business as John P. Fleming Driveaway Service. A certificate covering the rights in section F was issued to Fleming, February 10, 1941, in No. MC-48654 (Sub-No. 5). The operating rights of Service in section E, together with those in section D, previously had been acquired by Fleming from Service on August 13, 1940, pursuant to authority granted in Fleming-Purchase-Service Driveaway Corp, 35 M. C. C. 607. The operating rights as now described

in sections D, E, and F, together with the operating rights in section C, which were initially granted to Fleming, were acquired by Keal July 26, 1944, pursuant to authority granted in Keal-PurchaseFleming, 39 M. C. C. 829.

The authority granted in section F, as previously indicated, covers initial-movement operations from points in Wayne County to points in Florida. Keal contends, however, that, by "tacking" the initialmovement authority in section F with the initial-movement authority in section E, he may lawfully transport traffic from points in Warren Township, which is contiguous to Wayne County, to points in Florida, and represents that he and his predecessors in interest have moved traffic in the manner indicated for the past several years. Commercial concurs in the construction placed by Keal on his operating authority in sections E and F, and states that consummation of the transaction would be materially impaired if this interpretation is incorrect, as it has been requested by one of its principal shippers to obtain operating rights from Warren Township to Florida.

The operating authority in section E specifically states that operations between Warren Township and Wayne County are an extension of the operations in section D, which does not include Florida as a destination territory. The authority granted in section F was authorized from Wayne County to Florida only. Under the circumstances, neither Service, to whom the authority in sections D, E, and F was initially granted, nor Fleming, as the successor in interest, was ever authorized to transport traffic from Warren Township to Florida points. Keal, however, as the successor in interest to Fleming, may lawfully transport trucks, automobiles, and chassis from Warren Township to Florida points by "tacking" the operating authority acquired from Fleming in sections D and E, authorizing initialmovement operations from Warren Township to points in Ohio, with his authority in section A, authorizing secondary-movement operations from Cleveland to Florida points. The acquisition by Commercial of Keal's secondary-movement authority from Cleveland to Florida points, in conjunction with its present initial-movement authority from Warren Township to points in Ohio, would permit it to operate from Warren Township to points in Florida provided the traffic moved through Cleveland as a gateway. As presented to us, however, the transaction does not embrace the purchase of Keal's secondarymovement authority under section A from Cleveland to Florida points.

The acquisition by Commercial of Keal's initial-movement operating authority in section F, of the previously indicated portions of his initial-movement operating authority in sections C and D, and of that

portion of his initial-movement authority in section E, which is an extension of the operations to be acquired in section D, would be consistent with the public interest. Under these rights, unified with its own, Commercial will not hold authority to render an initial-movement service from Warren Township to Florida points.

Commercial proposes to perform only the initial-movement and the secondary-movement operations specifically authorized by the operating rights to be acquired. It has no intention of "tacking" those rights either with its present initial-movement operating authority or with its present secondary-movement operating authority for the performance of a single-line through service under the unified rights. Our findings will be conditioned to preclude the through transportation of traffic by the coupling of vendee's present authority with the authority authorized herein to be purchased. Compare Commercial Carriers, Inc.-Pur.-J. & H. Transport, Inc.; 45 M. C. C. 261.

In the event the transaction is consummated, Keal should no longer hold authority to perform through service under a combination of the initial-movement rights authorized to be purchased by Commercial under sections C, D, E, and F, with the secondary-movement authority retained by him under sections A and B, which arose from the unification of those rights pursuant to authority granted under section 5, and our findings will be conditioned to require that, concurrently with consummation of the transaction, Keal's operating authority shall be specifically modified to exclude any right to render such service. Compare Bonacci-Purchase-Meyer, 39 M. C. C. 181.

We find that purchase by Commercial Carriers, Inc., of the previously described portion of the operating rights of W. Curtis Keal, doing business as Curtis Keal Transport Company, and acquisition of control of the operating rights by W. F. Carey and B. B. Beveridge 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, Commercial Carriers, Inc., will be entitled to a certificate covering the said portion of the operating rights confirmed in No. MC-48846, which rights are herein authorized to be unified with rights otherwise confirmed in it, provided, however, that, if the authority herein granted is exercised, Commercial Carriers, Inc., shall immediately write off the amount assigned to its "Other Intangible Property" account as a result of the purchase, the 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; provided, further, that upon consummation of the trans

action, the unified rights shall be subject to a restriction against the performance of through service under a unification of any of the rights embraced with any of the present operating rights of Commercial; and provided, further, that concurrently with consummation of the transaction, the operating authority of W. Curtis Keal, doing business as Curtis Keal Transport Company, shall be subject to a restriction against the performance of through service under a combination of the initial-movement authority sold in sections C, D, E, and F, with the secondary-movement authority retained in sections A and B. An appropriate order will be entered.

COMMISSIONER MILLER did not participate in the disposition of this proceeding.

50 M. C. C.