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Section 206. [Sec. 307 (a) U.S. Code.] Certificate of convenience and necessity-(a) Necessity for; motor carriers in bona fide operation on June 1, 1935.-1 Except as otherwise provided in this section and in section 210a, no common carrier by motor vehicle subject to the provisions of this chapter shall engage in any interstate or foreign operation on any public highway, or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such carrier a certificate of public convenience and necessity issued by the commission authorizing such operations: Provided, however, That, subject to section 210, if any such carrier or predecessor in interest was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time, or if engaged in furnishing seasonal service only, was in bona fide operation on June 1, 1935, during the season ordinarily covered by its operation, except in either instance as to interruptions of service over which the applicant or its predecessor in interest had no control, the commission shall issue such certificate without requiring further proof that public convenience and necessity will be served by such operation, and without further proceedings, if application for such certificate is made to the commission as provided in paragraph (b) of this section and within one hundred and twenty days after this section shall take effect, and if such carrier was registered on June 1, 1935, under any code of fair competition requiring registration, the fact of registration shall be evidence of bona fide operation to be considered in connection with the issuance of such certificate. Otherwise the application for such certificate shall be decided in accordance with the procedure provided for in section 207 (a) of this 2 chapter and such certificate shall be issued or denied accordingly. Pending the determination of any such application the continuance of such operation shall be lawful: And provided further, That this paragraph shall not be so construed as to require any such carrier lawfully engaged in operation solely within any State to obtain from the commission a certificate authorizing the transportation by such carrier of passengers or property in interstate or foreign commerce between places within such State if there be a board in such State having authority to grant or approve such certificates and if such carrier has obtained such certificate from such board. Such transportation shall, however, be otherwise subject to the jurisdiction of

"Except as otherwise provided in this section and in section 210a,” June 29, 1938 amendment.

"part" as enacted; changed to "chapter" by Code, Sup. I to 1934 edition.


the commission under this chapter. (Part II, sec. 206, Aug. 9, 1935, c. 498, sec. 1, 49 Stat. 551; June 29, 1938, c. 811, sec. 8, 52 Stat. 1238.)



Notes of Decisions

Construction and interpretation.

of public and private interest that are When railroads subject to provisions of implicit in an application for a certifithis paragraph.

25. Injunctions; operation without certificate based on public convenience and

Intrastate certificate.

"Grandfather" clause; bona fide operation.

Operation by other than applicant.
Intention or attempt to operate.
Interruption of service.
Intrastate operation; State










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Irregular routes.

In foreign commerce.

necessity when applicant himself only seeks the favor of the "grandfather clause" and makes no claim to have the commission act outside thereof.-Id.

In differentiating between operations over the "route or routes" for which an require-application under "grandfather clause"

is made as against operations "within the territory", Congress plainly adopted

Only established service covered by the familiar distinction between "any


Off-route points.

Seasonal operation.
Express service.

Operation in connection with other business.

2. Construction and interpretation.Second proviso of this section, see n. 26, infra.

Applications when service not begun in 1935, or rendered continuously, see sec. 207 (a).

Evidence, sec. 206 (b).

By sec. 206 (a) Congress responded to the felt need for regulating interstate motor transportation through familiar administrative devices, while at the same time it satisfied the dictates of fairness by affording sanction for enterprises theretofore established.-United States v. Maher, 307 U. S. 148 (153) *. Whether an applicant seeking exemption under sec. 206 (a) had in fact been in operation within the immunizing period of the statute was bound to raise controverted matters of fact. Their determination Congress entrusted to the commission.-Id., p. 153.

Provision for decision in accordance with procedure provided by sec. 207 (a) and certificate issued or denied accordingly does not lay a compulsion upon the commission to canvass all the questions

where-for-hire" operations over irregular routes and regular route operations between fixed termini.—Id., p. 155.

Any interstate transportation is subject to the commerce power of Congress, whether the motive be to evade the orders of a State commission or not. But for plaintiff to avail itself of the benefits of the "grandfather" clause, its engagement in interstate commerce must have been bona fide within the purview of the statute.-Eastern Carrier Corp. V. United States, 31 Fed. Supp. 232*.

The intention of Congress in conferring rights under the "grandfather" clause to carriers who had been engaged in bona fide interstate operations was predicated on the idea that the existence of bona fide operations across State lines served to raise a presumption that such operations alded convenience and were therefore a public necessity.-Id.

If certificate under the “grandfather" clause could only be granted to applicants who have complied with the State laws, the commission would be required to exercise judicial functions in respect of State laws; the act imposes no such responsibility upon it.-Slagle, 2 M. C. C. 127 (139); Love, 2 M. C. C. 467 (469); Houston Inland Forwarding Co., 21 M. C. C. 669 (674)*.

See also n. 26, 53, this paragraph. Mere ability to serve, as well as the holding out to the public to carry for hire, is not sufficient to satisfy requirement of the statute that a carrier must be in bona fide operation on and prior to June 1, 1935.-Loving v. United States, 32 Fed. Supp. 464*.

The purpose of the act is regulatory, and the "grandfather" clause was included for the benefit of carriers who had been in bona fide operation on and prior to the "grandfather" date, rather than for the serving of public convenience. Nor should the purpose of the act be defeated by granting under the "grandfather" clause of numerous authorizations where there have been mere offers to perform service without in fact actual performance thereof.-Id.

The word "operation" is not to be too narrowly construed; the holding out of the carrier must be considered. The commission does not require proof, in granting certificate to haul general commodities, that each and every commodity within that description has actually been carried. The question is whether there has been operation within the "grandfather" period consistent with the holding out in the natural and normal course of business.-Fisher, M. C. C. 655 (658).


"Holds itself out" as applied to a common carrier means that the carrier in some way makes known to its prospective patrons the fact that its services are available. This may be done in various ways, advertising, solicitation, establishment of a known place of business where requests for service will be received. The essential thing is that there shall be a public offering of the service.-Northeastern Lines, Inc., 11 M. C. C. 179; Beard-Laney Hauling Co., 16 M. C. C. 281.

With one tractor, one semitrailer, and four trucks, it was impossible for a carrier to "hold itself out" to serve the public in transporting general commodities between all points in 11 States.-Northeastern Lines, Inc., 11 M. C. C. 179 (182).

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It is sufficient to prove that throughout the statutory period there has been a holding out of service consistent with applicant's undertaking as a common carrier of general commodities, and operation consistent with such holding out.-Jack Cole Co., Inc., 17 M. C. C. 723.

A continuance of operations is granted until the application is decided and a continuance of operations is an incident of the "grandfather" application. Section 207 (a) confers no such right. Under it operations cannot begin until certificate is granted.-A. E. McDonald Motor Freight Lines, Inc., v. United States, Fed. Supp. Keele v. United States, Fed. Supp. -*.

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"Since that time" means "from a past time, mentioned or referred to, up to the present"; past time mentioned in sec. 206 (a) is June 1, 1935. The matter to be determined is whether the operation was bona fide on June 1, 1935, and whether it has been so conducted from that time "up to the present."-Atlantic Motor Exp., Inc., 12 M. C. C. 576.

The term "within a territory" as used in this section does not necessarily mean an entire State if the bona fide operations of applicant prior to June 1, 1935, which were continuously performed after that date, were actually confined to a particular portion of that State.Newlin, 6 M. C. C. 677 (679).

The words "within the territory" apply to those carriers which have been operating over irregular routes within a territory limited by definite boundaries, rather than to carriers which have been engaged in regular-route operations.— English, 11 M. C. C. 293.

The commission does not feel constrained to deny an applicant a certificate sought as a successor in interest solely because or a delay in securing approval of the acquisition.-Id., p. 298.

Although "route" is not defined in the act, in its certificates the commission describes routes in terms of particular highways. The act contemplates that where specified points are to be served, the "routes over which"

the service is to be rendered shall also be named, meaning highways.-Consolidated Freight Lines, Inc., 11 M. C. C. 131 (133).

a certificate under sec. 206 (a), provisions of which require in substance that authority granted shall permit a carrier to conduct the bona fide operations it was conducting on June 1, 1935.-Fleming, 8 M. C. C. 469.

As defendant filed application for a permit, certificate, brokerage license, and no action had been taken by the Allowance must bc made for frequent commission prior to defendant's con- changes in points served with respect to tract with the shipper, both types of any carrier that depends for its traffic operation in which the carrier was en- entirely upon one industry. This pringaged might be lawfully continued ciple should obtain especially where the pending determination by the commis- traffic in question is available only sion of the application.-Thomas v. Na-through the distribution and sales of tional Delivery Assn., Inc., 24 Fed. such commodities as automotive veSupp. 171 (172). hicles. Id., p. 473.

The "grandfather" clause of secs. 206 (a) and 208 (a) are linked in subject matter and must be read together. The commission cannot comply with the command of sec. 208 (a) that the certificate "shall specify the service to be rendered" unless such service is identical with service described in sec. 206 (a) as a condition to the issuance of any certificate whatever.-Gable Transport Co., Inc., 11 M. C. C. 247 (249).

When the carrier on the statutory date was definitely the carrier of only a specific class of property, it would do violence to the definition to consider him a carrier in general.-Id., p. 250.

The word "operation" imports something concrete and definite as regards both the commodities transported and the routes or territory over or in which the transportation takes place. Widely differing operations of applicant cannot be brought within the terms of the "grandfather" clause.-Id., p. 249-50.

The "grandfather" clause applies only to a carrier or predecessor in interest, in bona fide operation on June 1, 1935, as a common carrier by motor vehicle. Applicant, or its predecessor, an electric line, whose rail operations in 1935 were ordered discontinued at a certain point, does not come within this limitation. Kansas City & L. Transp. Co., 3 M. C. C. 307 (308).

The commission must take into consideration the nature or characteristics of a transportation service when issuing

Carriers of household goods are authorized to transport to all points in all States served. Operations to transport automobiles by driveaway or caravan method in many respects do not reflect the characteristics of transportation by carriers of househoid goods; the latter seldom transport a series of shipments between two specific points.—Id., p. 472. Classification of carriers, see § 204 (c) and notes.

The commission's jurisdiction extends to motor-carrier operation in foreign commerce only so far as such operation takes place in the United States. Authority granted under application under this section must be limited to specific routes or a definite territory within the United States.-Winters, 3 M. C. C. 395 (396).

See also n. 55, infra, In foreign commerce.

About 10 percent of automobiles manufactured are moved by caravan. Interstate or foreign transportation by the caravan method, for compensation, is transportation subject to the act.-D. L. Wartena, Inc., 4 M. C. C. 619 (620); Carava is, Inc., 9 M C. C. 659 (660).

Local cartage operations within cities are in intrastate commerce or are exempt under provisions covering comnercial zones, not requiring certificate.— Haeckl's Exp., Inc.. 11 M. C. C. 73; Pacific Transfer Co., 8 M. C. C. 21.

Commercial zones, sec. 203 (b), n. 60. The commission cannot lawfully, under the act, grant a certificate which

will cover operations other than by motor vehicle.-Acme Fast Freight, Inc., 8 M. C. C. 211 (215)*; Consolidated Shippers, Inc., 11 M. C. C. 428.

Stipulation between applicant and a competitor wherein applicant agreed to limit its operation in certain points is inconsistent with the duties of applicant. If granted certificate applicant must serve all shippers indiscriminately.-Canny Trucking Co., Inc., 17 M. C. C. 559.

See also sec. 213 (a) (1), n. 1, Agree

See also n. 50a, this heading. Forwarders, sec. 203 (a) (14), n. 1a. In defining territorial limits of a service involving but four specific commodities, a broader grant of authority is appropriate than in the case of serv-ments between vendor and vendee. ices involving transportation of numerous commodities moving regularly to all points.-Coast Line Exp., Inc., 9 M. C. C. 427 (429).

When transport sought to be continued under the "grandfather" clause was not commenced before the statutory date, public convenience and necessity must be shown, under sec. 207 (a).-Barhite, 9 M. C. C. 248 (249). [Followed in cases too numerous to cite.]

An applicant's fitness is not an issue when a certificate is sought under the "grandfather" clause.-Eastern Carrier Corp., 14 M. C. C. 430*.

Fitness, in general, sec. 207 (a), n. 25. There is no reason why certificate should not be issued to husband and wife jointly, the two having participated in the operation, despite the fact that State does not confer right of partnership on husband and wife, or that under common law such a partnership may not be formed.-Loving, 12 M. C. C. 571 (575)*.

Separate authorization to continue pick-up and delivery service is not necessary when applicant is entitled to authority to operate between all points on its routes and this authorization includes the right to pick up and deliver freight at these points.-Red Ball Motor Freight Lines, 8 M. C. C. 60.

Removal of conditional exemption of operations between Los Angeles zone and the harbor zone Dec. 20, 1937, does not change effective "grandfather" date thereto, for such operation.-President Tank Lines, Inc., 11 M. C. C. 413; Id., Extension, 22 M. C. C. 515 (516).

15. When railroads subject to provisions of this paragraph.-Service by motor vehicle, as common carriers, sec. 203 (a) (14), n. 3.

Railroads authorized to conduct motor operations, sec. 207 (a), n. 35; sec. 213 (a) (1), n. 25.

Injunction to restrain the commission's order permitting railroads to file rate schedules for pick-up and delivery service, denied to truckmen's membership corporation. Certificate is not necessary for such railroad operation; and it may well be doubted whether any party other than the commission may complain. Merchant Truckmen's Bu

The commission is required to determine applicant's status as it existed on June 1, 1935, and not in the light of its subsequent acts, some in pursuance to commission requirements promulgated since that time.-Interstate Truck Serv-reau of New York v. United States, 16 ice, Inc., 21 M. C. C. 645 (650).

Contention that the commission is without authority to consider matters which occurred subsequently to the filing of the application in determining rights under the "grandfather" clause is not well founded.-Thompson and Bookshins Extension, 22 M. C. C. 503 (508), following Gregg Cartage & Storage Co., 21 M. C. C. 17*.

Fed. Supp. 998 (1000) *.

The commission has jurisdiction to make effective proposed tariffs of railroads covering pick-up and delivery without precedent issuance by it of certificates of convenience and necessity. Neither sec. 206 (a) nor sec. 203 (a) (14) of Part II is applicable to railroads in relation to this character of service.-American Trucking Assns.,

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