considering the "inherent advantages" of both, it is not an answer to his application to say that contract services are being provided by the licensed common carriers, for, says the plaintiff, the public must not be "denied the service of a contract carrier, and forced to accept the substituted [charter] service of a common carrier."

The Commission and the five intervening common carriers who oppose the application contend that the common carriers operating in the area do in fact provide adequate charter service of the type which the applicant proffers; that the service the applicant proposes to offer the public is not essentially different from the charter service which the common carriers are already providing; and that there is no basis in law for any distinction between the charter services presently available and those the plaintiff seeks authority to provide. The defendants say that when the statute speaks of "recognizing and preserving the inherent advantages" of the respective modes of transportation, it refers to something other than the mere incidental question of whether the charter service is being provided by licensed common carrier or by one who engages in contract carriage exclusively.

The case of Schaffer Transportation Co. v. United States, 355 U. S. 83, relied upon by the plaintiff, does not support his argument. What the court there decided was that the existing rail service for shipments of granite did not excuse the Commission from comparing and considering the "inherent advantages" of shipments by motor service. We need not go so far as to adopt the defendants' view that the "modes of transportation" refer only to transportation by water, highway and rail, and to no other bases of comparison. "Modes of transportation" may possibly pertain to other differences. However, we do not agree that the National Transportation Policy adopted by Congress legislated, as the plaintiff contends, that, even though a particular type of charter service is made adequately available by common carriers, the Commission must nevertheless authorize duplicate service, whenever the same is tendered, by contract carriers who are not common carriers. In other words, we do not believe that Congress, in laying down its national policy, meant that, notwithstanding the existence of adequate contract charter service by common carriers, the Commission is still compelled to allow duplicate facilities by one who offers contract service exclusively.

We hold that when an application is made for a permit to furnish contract service in an area already served in that fashion by common carriers, the Commission has the duty to determine whether the existing contract service is adequate and whether the additional proposed service will be inconsistent with the public interests and the national transportation policy.

II.

The further contention made by the plaintiff is based upon Title 49 USCA, Section 303(b) (1). This Section, it is true, exempts from regulation by the Interstate Commerce Commission (except as to certain safety measures) motor vehicles employed solely in transporting children and teachers to and from school. We agree that, if the plaintiff limited himself to the transportation of children and teachers to and from school within the State of Virginia, the Interstate Commerce Commission could not regulate him, but we do not agree that he comes within the exempting provision of Section 303(b) (9) for the reason that he is not, in the language of that provision, a "person not engaged in transportation by motor vehicle as a regular occupation or business."

The purpose of Section 303 (b) (9) is to exempt casual or occasional transportation of passengers or property by motor vehicle in interstate commerce by a person not engaged in transportation by motor vehicle as a regular occupation or business. It is clear beyond question, however, that the plaintiff is regularly engaged in that occupation or business.

While administrative interpretation cannot change a clear provision of the law, it may, in a doubtful case, assist in its interpretation. We do not think that the point is doubtful, but even if it were, it would be set at rest by the consistent administrative rulings of the Commission during the past twenty years that a person engaged in transporting in intrastate commerce by motor vehicle as a regular occupation is not exempt from regulation if he undertakes also even casual or occasional transportation of passengers in interstate commerce. Interstate Commerce Commission Ruling No. 49, April 15, 1937, and Interstate Commerce Commission Ruling No. 80, May 23, 1939. While the instances in which this view was formally declared by the Commission are not numerous, no instance has been cited to us wherein the Commission has departed therefrom. Although the facts are not precisely like ours, Webster Common Carrier Application, 72 М. С. С. 708 (1957) is analogous and is in accord with these rulings.

The Commission found and concluded that the proposed service is not essentially different from the charter service afforded by the opposing motor common carriers; that the applicant has failed to show a real need for the proposed service which cannot be met by the existing carriers, and that he failed to establish that the proposed operation would be consistent with the public interest and the National Transportation Policy. The rejection of the plaintiff's application necessarily followed.

Rail Transportation

BY JOHN F. DONELAN, Editor

FORMAL MATTERS

Utah Intrastate Rates

Railroads parties to litigation concerning the Section 13 order issued by the Interstate Commerce Commission directing increases in certain intrastate freight rates in Utah, have petitioned the District Court to withhold an injunction which that Court was directed to issue by the Supreme Court on the latter's finding that the Commission's report and order originally upheld by the District Court should be set aside and the proceeding remanded to the Commission for further action in view of the Commission's failure to support its findings with evidence not attaining the "high standard of certainty" required by the Supreme Court's earlier decisions.

The petitioning railroads directed the Court's attention to the fact that Public Law 85-625, "The Transportation Act of 1958,1 includes amendments to Section 13 (4) of the Interstate Commerce Act designed to "nullify" the consequences of the Supreme Court's decisions in the Utah case and the Milwaukee Commuter Fare case. Specifically, the railroads asked that the District Court remand the proceeding to the Commission without enjoining its order so that further proceedings may be conducted by the Commission in the light of the new legislation. In the interim the carriers agreed to the maintenance of separate accounts to record the collection of the 15 percent increases authorized. Such funds would be refunded to shippers if on final review such action was required by the courts.

L.C.L. Rates in Official Territory

In the proposed report of Examiner Oren G. Barber, in No. 32290, made public by the Commission on August 1, it is recommended that the Commission should find that the proposed increases in rates on less-thancarload shipments weighing less than 5,000 pounds between points in official territory, by the imposition of arbitraries without regard to distance, have not been shown to be reasonable and just or nonprejudicial and nonpreferential. He recommended that the petition be denied and the proceeding dismissed.

Joint Rates on Wheat from Montana Origins

By an order dated July 14 and made public July 23, in No. 32015— Preston-Shaffer Milling Company v. Great Northern Railway Company,

1 Please see "Smathers-Harris Bill S. 3778 Providing Relief to Rails and Other Carriers Becomes Public Law 85-625" published in this issue.

division 2 of the I. C. C. has found that the failure of the Great Northern (and in connection therewith the UP, Santa Fe, Milwaukee, NP and SP) to establish joint rates on wheat and wheat products from origins in Montana to destinations in Oregon south of Portland and in California, over routes through Milton-Freewater, Oregon, with transit at that point, is unduly prejudicial to the complainant's mill there located and unduly preferential of competitors located on routes over which joint rates now apply, and that the public interest requires the establishment of such joint rates and transit privileges.

Eastern Railroad Mail Pay Increases

On June 27 the I. C. C. released its report and order dated June 23 in Railway Mail Pay Application of Eastern Railroads 1956, No. 9200, approving a new schedule of mail pay rates, effective September 1, 1958, together with the same regulations as had been previously approved for the southern and western railroads. The average increase for the future is estimated to be about 30 per cent. The Commission also authorized a retroactive increase in the eastern railroads' mail pay of 30 per cent for the period November 1, 1957 to August 31, 1958, 25 per cent from November 1, 1956 to October 31, 1957 and 20 per cent from July 3, 1956 to October 31, 1956.

By order made public on August 6th the I. C. C. denied a petition filed by the Postmaster General for reconsideration and rehearing of the order authorizing the increase in mail pay rates for certain Eastern railroads. The Commission, however, provided that the effective date of its order was being postponed from September 1 to October 1, 1958.

Reciprocal Switching-Richmond, Va.

In its report and order in I & S 6736, served July 11, 1958, division 2 of the I. C. C. has found (Commissioner Murphy dissenting in part) that schedules originally filed to become effective on March 8, 1957 by the Southern Railway Company, which proposed to discontinue reciprocal switching at Richmond, Va., on competitive traffic to or from certain paper manufacturing companies and the Virginia Electric and Power Company, are not shown to be just and reasonable.

In finding that the Southern had failed to prove (as required by section 15(3)) that the proposed cancellation was consistent with the public interest, the majority of division 2 found that the schedules would in part cancel the joint rates for the movement of coal which has been moving to Richmond by way of the N&W, thence the Seaboard or Coast Line. Noting that the joint rates would continue to apply by way of the N&W and thence the Southern, the Commission found that this route being shorter was capable of providing service superior to that over the other routes. To this extent it was convinced that adequate provision had been made for the needs of the shipping public. In all other respects it found that the Southern's proposal would result in a substantial diminution of service to the public.

In the course of his dissent Commissioner Murphy stated that he would find the proposed schedules unlawful because of unjust discrimination.

Terminal Switching Services

By its further report issued under date of June 4, the I. C. C. has found, upon further hearing, that modification is required of its prior findings that certain switching services performed by the Rio Grande and the Union Pacific at the Midvale, Utah, plant of the United States Smelting, Refining and Mining Company without charges in addition to the line-haul rates were in violation of section 6 (7) of the Interstate Commerce Act.

In summary, the Commission now finds that the switching services proposed by the industry in receiving and delivering interstate carload traffic, as described in some detail in the report, are services which the respondent carriers, except as noted in the report, are obligated to perform under the line-haul rates. It also finds that on in-bound carload shipments of crude ores, concentrates and residues, the common-carrier services under the line-haul rates end upon delivery by the carriers at the thaw houses of cars moved directly to such houses, or at the sampling points of cars moved directly to the latter points; and that the performance of carrier services beyond the designated points without reasonable compensation therefor would be a violation of section 6(7).

ABANDONMENTS

NYC and Erie Ferry Service

The New York Central and the Erie last week filed notices with the Interstate Commerce Commission of their respective intentions to discontinue passenger ferry operations across the Hudson River. In pleadings to the Commission each of the railroads drew attention to the fact that the Commission had in August of 1957 authorized such abandonments, but that a permanent injunction issued by a U. S. District Court in New Jersey restrained discontinuance of service and that appeals of such decision had been filed with the U. S. Supreme Court.

The Erie drew attention to the fact that "The Transportation Act of 1958" authorized the Commission to approve such abandonments even though they represented simply a curtailment of rail operations.

PROCEDURE

I. C. C. Instructions for Preparation of Abandonment Applications

By order served through statutory channels on August 15, the Commission noting that the provisions of section 13a of the Interstate Commerce Act, as amended, became effective immediately upon signature by the President on August 12 of S. 3778, has issued revised rules with respect to the preparation of notices and petitions to be filed with respect to the proposed discontinuance or change of the operation or service of any train or ferry pursuant to the newly enacted sections of the Act.