Exchange Com'n., 327 U. S. 686, that control can be present without any affirmative exercise of power when it declared:

The Commission was thus warranted in considering the harmonization of local policies with those of North American as a fact, the absence of conflicts making affirmative action by North American unnecessary. But it does not follow that North American's domination of its system was any less real or effective. Historical ties and associations, combined with strategic holdings of stock, can on occasions serve as a potent substitute for the more obvious modes of control. [Citations omitted.] Domination may spring as readily from subtle or unexercised power as from arbitrary imposition of command. To conclude otherwise is to ignore the realities of intercorporate relationships.

The purchase by Atlantic of only 40 percent of Southeastern's stock, as it claims solely as an investment, would not be inconsistent with a finding that control, or the power to control, was acquired as an incident thereto. United States Freight Co.-Investigation of Control, 39 M. C. C. 623, 636. Control, or the power to exercise it, does not necessarily depend upon ownership of a majority of the capital stock of a corporation, but may be accomplished, as here, through other devices. See the Southern Ltd. case; Colletti-Control-Comet Freight Lines, 38 M. C. C. 95; Rochester Telephone Corp. v. United States, supra; Universal Carloading & Distr. Co. v. Railroad Retire. Bd., 71 Fed. Supp. 369; and North American Co. v. Securities and Exchange Com'n., supra. In Southwestern Greyhound Lines, Inc.—Merger, 39 M. C. C. 243, it is stated that the phrase "managed in the interest of such other carrier" means "managed in the interest of such other carrier in any material degree." In this instance the degree is shown to be complete satisfaction on all matters of policy. The record shows that Southeastern and Atlantic (and its predecessor) have maintained particularly friendly business relations since about 1934, have cooperated closely, and have taken joint or parallel action in matters of common interest. In some respects, such conduct is not unusual, as is illustrated by exhibit 10 which was filed in the record after the hearing for the purpose of showing that Southeastern's relations with Atlantic were no different from those with other motor carriers. In other significant respects, however, the action of Southeastern and Atlantic is indicative of a close association built on a community of interest, united effort, and mutual confidence, which seldom is the case with connecting carriers. Exhibit 10 consists of 97 pieces of correspondence between Southeastern and other motor carriers from October 1, 1940, to December 12, 1946. It does not contain, however, any communication indicating that Southeastern, before purchasing the terminal property in Decatur, consulted Smoky Mountain, which

also serves that city; it does not include any letter showing that Southeastern, before constructing its terminal in Athens, considered preliminary plans with Smoky Mountain, Southern Stages, Inc., Service Coach Line, Inc., or Neal Gap Bus Line, Inc., all of which occupy that terminal; it does not show any example of cooperation between Southeastern and any other carrier in dividing routes, to their mutual advantage, in a pending application for operating rights; and it fails to mention any case of joint or parallel action by Southeastern with any other carrier in opposing an application of a third party for operating rights. In each of these instances, according to the record, Southeastern consulted and acted jointly with Atlantic and no other carrier. It is true that these matters antedate Atlantic's purchase of Southeastern's stock, but they also disclose a historical tie and affinity of interest which largely account for the absence of need for an affirmative demonstration of the former's power over the latter.

The agreement of July 16, 1943, restricts Southeastern in the exercise of fundamental corporate powers. The agreement deprives Southeastern of the right to amend its charter, create a new class of stock, or increase the shares outstanding, without Atlantic's consent, and requires Southeastern to renew its charter before the termination of its corporate existence in 1953; and a letter which is part of the agreement deprives Southeastern of the right to dispose of any operating rights without giving Atlantic first choice. In consequence of these restrictions, the latter has acquired to no small extent negative control over Southeastern, with respect to the exercise by it of these enumerated corporate functions, with the same effect as if it owned a larger proportion of the outstanding stock. Compare Transport Corporation of Virginia-Purchase-Jones, 40 M. C. C. 257, and the cases cited therein. That these restrictive provisions were inserted to protect the minority interest of Atlantic does not alter in any degree the negative control acquired by it and the resulting power to exercise control.

The power of Atlantic to exercise control and management over the affairs of Southeastern is also rooted in the operating relations between Southeastern and Atlantic and in the latter's large economic resources, aside from those of the Greyhound system. Southeastern has received approximately 4 percent of its operating revenues from Atlantic and 1 percent from Greyhound's Teche division for traffic interlined during 1945 and several preceding years. According to exhibit 1 (X), as stipulated of record, during 1945, Southeastern received interline revenues of $60,457 from Atlantic and $16,724 from Teche division, total $77,181; this amount is approximately 5 percent of its $1,645,060 of operating revenues for that year. Incidentally,

owned by the wives of Shipman and Hughes and were leased to Southeastern and Atlantic effective March 20, 1941, for 10 years at a monthly rental of $150; that terminal was, in turn, immediately leased at the same rental to an individual who acts as a ticket agent for Southeastern and Atlantic for a commission of 15 percent. Before the property was purchased, Engle was consulted, and he agreed to the arrangements. Before Southeastern constructed the terminal in Athens in 1939, Hughes considered preliminary plans with Atlantic's architect and Engle; the latter expressed a willingness "to operate as we are at the present time out of the Athens terminal on a 50-50 basis and we will accept your judgment as to location and type of terminal." In both cities, the terminal facilities of the two carriers were inadequate, necessitating loading and unloading of passengers in the street, and the municipal officials were pressing for a solution of this problem. Southeastern and Atlantic use the same terminal in Atlanta, which is owned and operated by Greyhound Bus Depot of Atlanta. Inc., a corporation whose stock is owned as follows: Southeastern 12.5 percent, Atlantic 18.5 percent, Greyhound 11 percent, Southeastern Greyhound 52 percent, and Modern Coach Corporation 6 percent. Southeastern and Atlantic occupy the same terminal in Augusta, which is independently owned but leased to Atlantic. Southeastern uses the latter's terminals in Charleston and Savannah. Each of the terminals named above is also used by one or more carriers other than Southeastern and Atlantic, and upon the same terms and conditions. In small towns served by Southeastern and Atlantic, they are represented by the same commission agencies, which usually control the premises; at two of these points, only the Greyhound sign is dis played, although Southeastern and other carriers use the stations. It is not customary, however, to show more than one sign at these depots. Southeastern and Atlantic have maintained friendly relations for many years, antedating the latter's stock acquisition. Hughes has been on familiar terms with Engle since 1934. The two carriers have usually acted in accord on matters in which both were interested, and their common problems have been amicably adjusted. Thus, on June 6, 1934, Southeastern and Atlantic's predecessor in interest, Atlantic Greyhound Lines, settled their dispute over intrastate rights between Atlanta and Augusta via Athens, as a result of which the latter discontinued litigation in the courts of Georgia and conveyed its claimed rights to the former in consideration for the payment of $6,000, cessation of operations between Charleston and Bowman, S. C., and the delivery "exclusively (of) all passengers points on lines of the party of the second part (Atlantic Greyhound

(at)

Lines) destined to points on or beyond" its routes. The last provision has been recognized as void since the effective date of the Motor Carrier Act, 1935, and the parties do not discriminate against any carrier at points of interchange. In 1939, Southeastern applied for intrastate and interstate operating rights between Washington, Ga., and Columbia via McCormick, S. C., and Atlantic between Columbia and Athens via McCormick, which would have resulted in an invasion of a portion of each other's territory. Since the available traffic was insufficient to support operations of two carriers, Southeastern agreed to exclude from its application the segment east of McCormick and Atlantic did likewise with the one west thereof. They have taken joint or parallel action in proceedings involving third parties when their common interests were affected, such as protesting applications for operating rights.

Southeastern's terminal manager in Athens was formerly junior agent for Atlantic in Greenville, S. C., and was recommended for his present position by the latter's Atlanta division manager. However, Hughes also inquired of Southeastern Greyhound's Georgia manager whether he knew of someone available for that position. Two or three ticket agents of Southeastern attended for about a week, late in 1943, a course on traffic conducted by Atlantic in Charleston, with their expenses paid by the former. Agents of other connecting carriers also were invited but did not attend. In February of 1941, the South Carolina Public Service Commission advised Southeastern that it would have to purchase gasoline in South Carolina based on the mileage operated therein. The latter thereupon arranged to buy the same from Atlantic, in Charleston, its most convenient point, at cost plus 1 cent per gallon. Atlantic similarly accommodates other carriers using its terminals. On August 18, 1939, Hughes asked Engle for "a lead on getting connected with Texaco, whereby we could save some money in buying our gas and oil," and on January 5, 1945, Medlock requested Atlantic to give him the name of the manufacturer from whom it purchased headrest covers. On September 14, 1944, Medlock sought information from Atlantic concerning the basis for depreciation of its revenue equipment, in connection with discussion of this subject with Internal Revenue representatives. Southeastern mailed a copy of its articles of incorporation and bylaws as per Atlantic's request of January 26, 1944. Since the latter's purchase of the stock, Southeastern has been furnishing Engle, as well as the other three directors, with its monthly financial statement which consists of a balance sheet and also shows operating revenues and ex

penses, net income before and after income taxes, miles operated, and revenue and expenses per mile.

While Engle has attended every meeting of Southeastern's board of directors since his election as a member, he has made only one proposal relating to its management or operations, namely the creation of the aforementioned executive committee. Action of the board, which meets once a year, has always been unanimous. Neither Engle nor any other individual connected with Atlantic or any other company of the Greyhound system has ever attempted to influence the policy of Southeastern or interfere or share in the management of its affairs, except to the extent of Engle's action as a director. The changes in the operating and financial practices of Southeastern since the purchase of its 200 shares by Atlantic have been dictated by, or based on, normal conditions. For example, schedules have been increased and spaced to meet the needs of passengers; dividends have been related to net income; Southeastern's net income after provision for income taxes and paid dividends per share of common stock from 1940 to 1946 are as follows: 1940, $46,981 and $100; 1941, $77,813 and $182; 1942, $100,558 and $200; 1943, $193,326 and $100; 1944, $176,419 and $120; 1945, $185,347 and $150; and 1946, $305,531 and $400.

Southeastern's motorbusses are a different type from those used by the Greyhound system, and are painted orange and red, the colors of the National Trailways Bus System; Southeastern ordinarily does not interchange vehicles with, or lease any to or from, Atlantic; the former does not purchase equipment and supplies from the same source as the latter, though it is possible that gasoline may be acquired from the same company for any 1 month because Southeastern buys every month from the lowest bidder; they retain different attorneys and accountants; and they do not use common repair facilities. The officers or directors of Southeastern are not related by blood or marriage to those of Atlantic or Greyhound, and have never been associated in joint ventures or engaged in activities not connected with motorbus transportation, except as indicated in the next paragraph.

Mammy's Corporation is a Georgia corporation whose stock is held in equal proportions by J. Allen Stewart, Lessie Louise Hughes, and Grace P. Brawner, wife of H. Pierce Brawner, vice president in charge of traffic of Atlantic. It owns premises at 1480 Peachtree Street, Atlanta, which are under lease to these individuals who, as partners doing

An association of some 50 independent motorbus operators formed for the purpose of coordinating schedules, facilitating the interchange of passengers, cooperating in adver tising and safety programs, and competing more effectively with the Greyhound system, of which association Southeastern was a member for approximately 17 months ending in 1940.