the Interstate Commerce Act and our rules and regulations thereunder; that appropriate certificates should be granted; and that the applications, except to the extent granted herein, should be denied.

An appropriate order will be entered.

APPENDIX

Authority sought by each applicant

No. MC-110098 (Sub-No. 31), Zero Refrigerated Lines, of San Antonio, Tex., filed April 2, 1962:

Authority sought: Bananas, from Galveston, to points in Arizona, Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, Texas, and Wisconsin.

Recommendation: That the application be denied.

No. MC-117888 (Sub-No. 3) J. M. Goldberg, Inc., of Houston, Tex., filed March 18, 1962:

Authority sought: Bananas, from Houston to points in New Mexico, Arizona, California, Colorado, Utah, Washington, Oregon, and Idaho.

Recommendation: That the authority be granted commoditywise and territorially as sought, but restricted against the joinder of, or tacking with, any authority held by applicant to transport bananas from New Orleans, La., and subject to the conditions, (1) that such operations shall be conducted separately from applicant's other business activities, (2) that separate accounts and records be maintained, and (3) that applicant shall not transport property both as a for-hire carrier and as a private carrier at the same time in the same vehicle.

No. MC-117888 (Sub-No. 4) the same applicant as immediately above, filed March 28, 1962:

Authority sought: Bananas, (1) from Galveston to points in the same States as named in MC-117888 (Sub-No. 3) plus Texas; and (2) from Houston to points in Texas.

Recommendation: Bananas from Houston to points in Texas and that the application be otherwise denied.

No. MC-117954 (Sub-No. 8) H. L. Herrin, Jr., of Metairie, La., filed November 6, 1961, and

No. MC-118159 (Sub-No. 8) Everett Lowrance, of New Orleans, La., filed November 6, 1961:

Authority sought: Bananas from Houston to points in Texas, New Mexico, Arizona, California, Colorado, Oklahoma, Missouri, Nebraska, Kansas, Minnesota, Utah, North Dakota, South Dakota, Wyoming, Iowa, Alabama, Arkansas, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Montana, Ohio, Oregon, Tennessee, Washington, West Virginia, and Wisconsin.

Recommendation: That the authority be granted as requested with the further recommendation that the grant to Lowrance be subject to the conditions, (1) that such operations be. conducted separately from Lowrance's other business activities, (2) that separate accounts and records therefor shall be

maintained, and (3) that Lowrance shall not transport property both as a forhire carrier and as a private carrier at the same time in the same vehicle. No. MC-30844 (Sub-No. 60), Kroblin Refrigerated Xpress, Inc., of Sumner, Iowa, filed January 29, 1962:

Authority sought: Bananas from Houston to points in Minnesota, Wisconsin, Illinois, Nebraska, Kansas, Colorado, and Missouri.

Recommendation: That the authority be granted as requested.

No. MC-118130 (Sub-No. 5), Benjamin M. Hamrick, doing business as Ben Hamrick, of Fort Worth, Tex., filed February 5, 1962:

Authority sought: Bananas, on stalks, in bags, and in boxes, from Houston to points in the same 32 States as embraced in the applications of Herrin and Lowrance, plus Nevada, and exempt commodities and rejected shipments on return.

Recommendation: That applicant be authorized to transport bananas without limitations from Houston to the entire destination territory applied for. No. MC-117686 (Sub-No. 10), Raymond C. Hirschbach, doing business as Hirschbach Motor Lines, of Sioux City, Iowa, filed February 15, 1962:

Authority sought: Bananas from Galveston and Houston to points in Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and to Rock Island and Peoria, Ill.

Recommendation: That the authority be granted as requested.

95 M.C.C.

No. MC-78786 (SUB-NO. 238)

PACIFIC MOTOR TRUCKING COMPANY EXTENSION-ALTERNATE ROUTE

Decided April 23, 1964

Upon reconsideration, findings in the prior report, 92 M.C.C. 774, reversed. Public convenience and necessity found not shown to require operation by applicant, in interstate or foreign commerce, as a common carrier by motor vehicle, of general commodities, with certain exceptions, between Klamath Falls and Ashland, Oreg., over a described regular route. Application denied.

Appearances as shown in the prior report and in addition: Robert R. Hollis for a protestant.

Peter T. Beardsley, Richard R. Sigmon, and Harry J. Jordan for intervener in opposition to the application.

REPORT OF THE COMMISSION ON RECONSIDERATION

TUCKER, Commissioner:

In the prior report herein, 92 M.C.C. 774, decided May 22, 1963, a majority of division 1 granted applicant, Pacific Motor Trucking Company, of San Francisco, Calif., a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle of general commodities, with the usual exceptions, between Klamath Falls and Ashland, Oreg., from Klamath Falls over U. S. Highway 97 to junction Oregon Highway 66, thence over Oregon Highway 66 to Ashland, and return over the same route, serving no intermediate points, and subject to conditions limiting the service authorized to that which is auxiliary to and supplemental of the rail service of the Southern Pacific Company. The proceeding was designated as one involving issues of general transportation importance. Petitions for reconsideration have been filed by all but one of the protestants and by the American Trucking Associations, Inc., hereinafter called ATA, which also seeks leave to intervene. By order of January 9, 1964, we allowed ATA to intervene and reopened the proceeding for reconsideration on the present record.

This proceeding presents important questions regarding the granting of authority to rail carriers or their subsidiaries to perform motor carrier service to be used in conjunction with rail trailer-on-flatcar (TOFC) operations. These issues, as developed in the present context, can be properly understood only if the underlying geographical situation is made clear. The Southern Pacific Company, applicant's parent corporation, performs rail service between Portland, Oreg., and San Francisco. For more than one-third of the distance between these points, between Eugene, Oreg., and Black Butte, Calif., it operates over two, roughly parallel routes. The older, or Siskiyou line, is the nearer to the Pacific coast and passes over mountainous country, while the newer, or Cascade line, runs to the east through more level terrain. Applicant holds motor common carrier authority to transport general commodities, with exceptions, between San Francisco and Portland over regular routes following the Southern Pacific's tracks on the Siskiyou line. This authority is not restricted to service which is auxiliary to or supplemental of rail service. It also holds authority, which is restricted in this way, to operate between Eugene and Klamath Falls. The Southern Pacific, in conjunction with applicant, provides TOFC service at Grants Pass, Medford, and Ashland, Oreg., which are rail points on the Siskiyou line, through the use of piggyback loading and unloading facilities located at Eugene. The instant application arises because it now wishes to perform such service from ramps at Klamath Falls. There is no direct rail line between Klamath Falls and Ashland corresponding to the motor route which applicant seeks authority to use.

It was found in the prior report that the Southern Pacific was already, through the use of applicant's substituted service, providing less-than-carload service at Siskiyou points; that the application, although purportedly seeking alternate-route motor carrier authority, was actually designed to permit the substitution of one TOFC loading facility for another less efficient such facility; that the proposed operation therefore constitutes bona fide substituted service, citing Black Diamond Transport Co. Ext.-WilkesBarre, Pa., Area, 84 M.C.C. 205; that authorizing applicant to perform this new service would allow the railroad to enjoy operating economies without having a materially adverse effect upon the operations of existing independent motor carriers; and that the application should be granted.

Petitions for reconsideration were filed jointly by Los AngelesSeattle Motor Express, Inc., Consolidated Freightways Corporation of Delaware, Oregon-Nevada-California Fast Freight, Inc., and Southern California Freight Lines, Inc., hereinafter called LASME, Consolidated, ONC, and Southern California, and ATA, and individually by Valley Motor Lines, Inc., which subsequent to the hearing acquired the assets of protestant Pierce Freight Lines, Inc. Petitioners contend that the proposal does not constitute true substituted motor-for-rail service because it would replace a service now being performed not by rail but by motor vehicle; and because the service rendered by applicant between Eugene and Siskiyou points has involved the transportation not of less-than-carload rail traffic, but of truckload volumes on an on-call basis, whereas grants of authority to perform substituted service have historically been based upon the elimination of unprofitable, scheduled, merchandise-car operations. They also argue that the substitution by a railroad of a direct motor service for a circuitous rail movement should be allowed only within some fixed maximum limits as to the percentage of permissible mileage saving, comparable to those the Commission imposed on a motor carrier wishing to substitute more direct rail TOFC service for circuitous highway operations in Gordons Transports, Inc. v. Strickland Transp. Co., 318 I.C.C. 395; that existing independent motor carriers are able and willing to perform the service desired by the Southern Pacific; that a grant of the authority sought would have a materially adverse effect upon such carriers; and that the division erred in treating the operation proposed as substituted service because the application as filed and published in the Federal Register states that only alternate-route authority is sought. Applicant replies specifically to each of these arguments, contending that the prior report correctly stated the applicable law and reached the proper conclusion.

Basic to several issues raised by the pleadings is whether the motor service under consideration may properly be considered as a "substituted motor-for-rail" operation, or whether it involves service over an alternate route. Applicant apparently visualized it as both because it sought alternate-route authority but asked that it be limited to service auxiliary to and supplemental of rail service-a restriction descriptive of substituted service. We think, however, that if applicant intended, by requesting alternate-route authority, to seek authority to perform a service not functionally related to its parent's rail operations,