SES DISPOSED OF BY THE COMMISSION WITHOUT PRINTED REPORT DURING THE TIME COVERED BY THIS VOLUME

DIVISION 4, COMMISSIONERS LEE, MAHAFFIE, and BarnarD IC-F-3674, GEORGE H. AND ELIZABETH MICKOW-CONTROL; WEST SHORE ANSPORT CO., INC.-MERGER-GEORGE H. MICKOW. Decided August 3, 1948. rger into West Shore Transport Co., Inc., of the operating rights and certain perty of George H. Mickow, doing business as Hammond Motor Express, I acquisition of control of the operating rights and property by George H. and zabeth Mickow, through the merger, approved and authorized, subject to ditions. Earl Girard for applicants.

MC-F-3724, W. D. SELLERS, JR.-CONTROL; BAGGETT TRANSPORTATION MPANY-PURCHASE ELLIS C. AND ROYE W. LOWRY. MC-F-3732, W. D. LERS, JR.-Control; BAGGETT TRANSPORTATION COMPANY-PURCHASE ORTION)-BELL TRANSFER Co. Decided August 3, 1948. Purchase by ggett Transportation Company of certain operating rights of Ellis C. Lowry 1 Roye W. Lowry, partners, doing business as Alabama Transfer & Warehouse mpany, and of Lillie Bell, Mrs. Fred Holladay, and John H. Bell, Jr., partners, ing business as Bell Transfer Co., and acquisition by W. D. Sellers, Jr., of conol of the operating rights, through the purchases, approved and authorized, bject to conditions. Ormond Somerville, Fred S. Ball, Jr., Merrell Jenkins, d J. H. Bell, Jr., for applicants. Claude N. Knox and J. H. Anderson for otestants.

MC-F-3732. See MC-F-3724, supra.

MC-F-3736, E. S. DALTON-CONTROL; SOUTHERN MOTOR LINES-PURCHASE ORTION)—RED ARROW FREIGHT LINES, INC. Decided August 4, 1948. Purase by Southern Motor Lines of certain operating rights of Red Arrow Freight nes, Inc., and acquisition of control of the operating rights by E. S. Dalton rough the purchase, approved and authorized, subject to condition. Reagan yers for applicants.

Y DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL MC-F-2162, FRED E. TUCKER ET AL.-CONTROL; EAST TEXAS MOTOR REIGHT LINES-LEASE-A. E. McDONALD MOTOR FREIGHT LINES. Decided eptember 30, 1948. Findings in prior report, 39 M. C. C. 424, supplemented y authorizing the purchase by East Texas Motor Freight Lines, of the operating ghts of A. E. McDonald Motor Freight Lines, and acquisition of control of the perating rights by Fred E. Tucker and O. P. Thornhill, through the purchase, ubject to condition. Appearances shown in prior report.

MC-F-3358, GASPER AMATO-CONTROL-LARAMEE'S TRANSIT, INC. Deided November 3, 1947. Acquisition by Gasper Amato, doing business as Middlesex Trucking Company, of control of Laramee's Transit, Inc., through -wnership of capital stock, approved and authorized, subject to conditions. Commissioner Miller was necessarily absent and did not participate in the disposiion of this proceeding. Benjamin B. Levenson for applicants.

and earned surplus $52,220. Its income statements show: For 1946, a deficit of $13,269 and for 1947 net income of $20,465, before provision for income taxes, and net income of $18,365, after provision for income taxes.

Vendee's balance sheet giving effect to consummation of the purchase shows assets aggregating $440,000, consisting of: Current assets of $155,000, composed of cash $110,000 and materials and supplies $45,000; carrier operating property $272,500; and intangible property $12,500. Liabilities were: Advances payable to stockholders (evidenced by the above-mentioned unsecured notes payable) $235,000; equipment obligations $180,000; and capital stock $25,000.

The tangible property of the Belyea company and the Belyea corporation which vendee would acquire, and its net book value as of December 31, 1947, consists of: Materials and supplies $49,806 and carrier operating property $180,740 (93 trucks and tractors, 156 trailers, and 22 service cars $169,350, shop equipment $1,356, furniture and fixtures $5,242, and miscellaneous equipment $4,792), or an aggregate net book value of $230,546. Vendee estimates the value of the property as follows: Materials and supplies $45,000 and carrier operating property $272,500 (motor vehicles $255,000, shop equipment $2,000, furniture and fixtures $8,000, and miscellaneous equipment $7,500), or an aggregate value of $317,500. The value placed by vendee on the carrier operating property is on the basis of approximately one and one-half times the value reflected on the books of the Belyea company and the Belyea corporation. On that basis, the value assigned by vendee to the tangible property exceeds the net book value thereof by $99,454.

In accordance with our usual practice in such cases, the proposed accounting for the transaction by vendee and Bigge Drayage Co., will not be approved at this time, but will be reserved for consideration following submission of the related journal entries as required by our order herein. Our findings will be conditioned to require that vendee shall amortize over a period of 10 years the amount assigned to its "Other Intangible Property" account as a result of the proposed transaction, and that Bigge Drayage Co., shall similarly amortize the excess recorded in its investment account for the stock of vendee, over its net book value, as of the date of consummation of the transaction. The operating revenue of the Belyea company and the Belyea corporation in 1947 was $1,093,969 and $167,140, respectively, and their combined operating revenue was $1,261,109. The combined net income of the two companies for that year, before provision for income taxes, was $119,358, of which $98,893 was the net income of the Belyea company and $20,465 the net income of the Belyea corporation. Vendee's pro forma income statement shows that, had it conducted the

operations of the two companies during 1947, its operating revenue would have been $1,174,863 and it would have realized a net income, before provision for income taxes, of $204,778. The latter estimate would be an increase of $85,420 over the combined net income of the Belyea company and the Belyea corporation. The increase is predicated principally on a decrease in administrative expenses of approximately $65,000 by a change in the bonus policy now in effect in the two companies.

The aggregate of the book value of the tangible property and the appraised value of the real estate to be acquired by the Belyea-Pacific Corporation and the book value of the tangible property to be acquired by vendee is $906,748. In addition, vendee would secure the benefit of prepaid motor-vehicle license fees of $32,838. On this basis, the total purchase price for the Belyea properties is not unreasonable.

It is expected that vendee's loan from the Bank of America would be paid in full in the latter part of 1952. The installment payments on that loan would amount to $45,000 annually, with interest expense amounting to approximately $7,200 the first year and decreasing approximately $2,000 each succeeding year. In addition, interest expense in connection with the advances from stockholders, amounting to $9,400 annually, would be incurred until 1952. Beginning August 15, 1952, the installment payments on the loans from its stockholders would amount to $58,750 annually with interest expense amounting to $9,400 the first year and decreasing by $2,350 each succeeding year. Based on the estimated net income for 1947, vendee would have funds adequate to meet its obligations. The increase in its fixed charges resulting from the transaction would not be contrary to the public interest.

The Belyea company has been engaged for many years in unusual and hazardous transportation jobs, such as the transportation of the giant mirror recently installed at the Palomar Observatory in California, the transportation of oil refinery equipment of unusual size and design, the transportation of contractors' heavy equipment, and all types of service foreign to the usual transportation company. A number of shippers of heavy commodities have urged that its service be continued. The Belyea corporation has operated for many years as a general commodity carrier between the commercial zones of Los Angeles and Los Angeles Harbor. As previously indicated, Harry Coon and Robert D. Belyea have been associated with the two companies for many years in executive capacities and would be in charge of vendee's operations. Employees of the two companies would not be adversely affected by the transaction. Continuance by vendee of

the operations formerly conducted by the two companies would be in the public interest.

It does not appear necessary at this time that Highland Builders, Inc., be subjected to the provisions of sections 204, 214, and 220 of the act, which we may require by our order herein as provided in section 5 (3). Should the necessity therefore arise in the future, the extent to which it will be subjected to those provisions will be determined by supplemental order herein as provided in section 5 (9). We find that purchase by B-P Corporation, doing business as Belyea Truck Company, of the operating rights and property of B. W. Belyea (Citizens National Trust & Savings Bank of Los Angeles, executor), doing business as Belyea Truck Company, and of the operating rights and property of Belyea Truck Co., Inc., and acquisition of control of B-P Corporation and of the operating rights and property by Harry Coon, Robert D. Belyea, Henry Bigge, Bigge Drayage Co., and Highland Builders, Inc., 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, B-P Corporation, doing business as Belyea Truck Company, will be entitled to a certificate covering the rights confirmed in Nos. MC-37375, MC-37375 (Sub-No. 3) MC-37375 (Sub-No. 7), MC-37375 (Sub-No. 8), and MC-28895; provided, however, that, if the authority herein granted is exercised, B-P Corporation, doing business as Belyea Truck Company, and Bigge Drayage Co., shall amortize in equal monthly amounts over a maximum period of 10 years, commencing with the date of consummation of the purchase, the amount assigned to the "Other Intangible Property" of B-P Corporation, as a result of the instant transaction, and the amount recorded in the investment account of Bigge Drayage Co., for its shares of stock in B-P Corporation, which is in excess of the net book value of those shares upon consummation of the proposed transaction; or, in lieu of amortization in any month of the 10-year period, B-P Corporation, doing business as Belyea Truck Company, and Bigge Drayage Co., may write off the unamortized balances of the amounts so assigned, such amortization or writeoff 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.

An appropriate order will be entered.

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

CASES DISPOSED OF BY THE COMMISSION WITHOUT PRINTED REPORT DURING THE TIME COVERED BY THIS VOLUME

BY DIVISION 4, COMMISSIONERS LEE, MAHAFFIE, AND Barnard

MC-F-3674, GEORGE H. AND ELIZABETH MICKOW-CONTROL; WEST SHORE TRANSPORT Co., Inc.-MERGger—George H. MICKOW. Decided August 3, 1948. Merger into West Shore Transport Co., Inc., of the operating rights and certain property of George H. Mickow, doing business as Hammond Motor Express, and acquisition of control of the operating rights and property by George H. and Elizabeth Mickow, through the merger, approved and authorized, subject to conditions. Earl Girard for applicants.

MC-F-3724, W. D. SELLERS, Jr.-ConTROL; BAGGETT TRANSPORTATION COMPANY-PURCHASE-ELLIS C. AND ROYE W. LOWRY. MC-F-3732, W. D. SELLERS, JR.-CONTROL; BAGGETT TRANSPORTATION COMPANY-PURCHASE (PORTION)-BELL TRANSFER Co. Decided August 3, 1948. Purchase by Baggett Transportation Company of certain operating rights of Ellis C. Lowry and Roye W. Lowry, partners, doing business as Alabama Transfer & Warehouse Company, and of Lillie Bell, Mrs. Fred Holladay, and John H. Bell, Jr., partners, doing business as Bell Transfer Co., and acquisition by W. D. Sellers, Jr., of control of the operating rights, through the purchases, approved and authorized, subject to conditions. Ormond Somerville, Fred S. Ball, Jr., Merrell Jenkins, and J. H. Bell, Jr., for applicants. Claude N. Knox and J. H. Anderson for protestants.

MC-F-3732. See MC-F-3724, supra.

MC-F-3736, E. S. DALTON-CONTROL; SOUTHERN MOTOR LINES-PURCHASE (PORTION)-RED ARROW FREIGHT LINES, INC. Decided August 4, 1948. Purchase by Southern Motor Lines of certain operating rights of Red Arrow Freight Lines, Inc., and acquisition of control of the operating rights by E. S. Dalton through the purchase, approved and authorized, subject to condition. Reagan Sayers for applicants.

BY DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL

MC-F-2162, FRED E. TUCKER ET AL.-CONTROL; EAST TEXAS MOTOR FREIGHT LINES-LEASE-A. E. McDONALD MOTOR FREIGHT LINES. Decided September 30, 1948. Findings in prior report, 39 M. C. C. 424, supplemented by authorizing the purchase by East Texas Motor Freight Lines, of the operating rights of A. E. McDonald Motor Freight Lines, and acquisition of control of the operating rights by Fred E. Tucker and O. P. Thornhill, through the purchase, subject to condition. Appearances shown in prior report.

MC-F-3358, GASPER AMATO-CONTROL-LARAMEE'S TRANSIT, INC. Decided November 3, 1947. Acquisition by Gasper Amato, doing business as Middlesex Trucking Company, of control of Laramee's Transit, Inc., through ownership of capital stock, approved and authorized, subject to conditions. Commissioner Miller was necessarily absent and did not participate in the disposition of this proceeding. Benjamin B. Levenson for applicants.