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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.- 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 ? 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.)

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54. 55. 56.





Interruption of service.

53. Intrastate operation; State require application under "grandfather clause"


Irregular routes.

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

In foreign commerce.

Only established service covered by the familiar distinction between "any


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

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Notes of Decisions

Operation by other than applicant.
Intention or attempt to operate.

Off-route points.
Seasonal operation.
Express service.

of public and private interest that are implicit in an application for a certificate based on public convenience and 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




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*.

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

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 aided 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)*.

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See also n. 26, 53, this paragraph. It is sufficient to prove that through

Mere ability to serve, as well as the out the statutory period there has been holding out to the public to carry for a holding out of service consistent with hire, is not sufficient to satisfy require applicant's undertaking as a common ment of the statute that a carrier must carrier of general commodities, and opbe in bona fide operation on and prior eration consistent with such holding to June 1, 1935.-Loving v. United out.-Jack Cole Co., Inc., 17 M. C. C. States, 32 Fed. Supp. 464*.

723. The purpose of the act is regulatory, A continuance of operations is granted and the "grandfather" clause was in- until the application is decided and a cluded for the benefit of carriers who continuance of operations is an incident had been in bona fide operation on and of the "grandfather" application. Secprior to the "grandfather" date, rather tion 207 (a) confers no such right. Unthad for the serving of public conven- der it operations cannot begin until cerience. Nor should the purpose of the act tificate is granted.-A. E. McDonald be defeated by granting under the Motor Freight Lines, Inc., United "grandfather" clause of numerous au- States, Fed. Supp. —*; Keele v. thorizations where there have been mere United States, Fed. Supp. —*. offers to perform service without in "Since that time" means “from a past fact actual performance thereof.-Id. time, mentioned or referred to, up to the

The word “operation" is not to be too present”; past time mentioned in sec. narrowly construed; the holding out of 206 (a) is June 1, 1935. The matter the carrier must be considered. The to be determined is whether the operacommission does not require proof, in tion was bona fide on June 1, 1935, and granting certificate to haul general whether it has been so conducted from commodities, that each and every com- that time "up to the present.”—Atlantic modity within that description has actu- Motor Exp., Inc., 12 M. C. C. 576. ally been carried. The question is The term "within a territory” as used whether there has been operation within in this section does not necessarily mean the "grandfather” period consistent with an entire State if the bona fide operathe holding out in the natural and nor- tions of applicant prior to June 1, 1935, mal course of business.-Fisher, 14 which were continuously performed M. C. C. 655 (658).

after that date, were actually confined "Holds itself out” as applied to a to a particular portion of that State.common carrier means that the carrier Newlin, 6 M. C. C. 677 (679). in some way makes known to its prog- The words "within the territory" pective patrons the fact that its serv-apply to those carriers which have been ices are available. This may be done operating over irregular routes within a in various ways, advertising, solicita- territory limited by definite boundaries, tion, establishment of a known place of rather than to carriers which have been business where requests for service will engaged in regular-route operations.he received. The essential thing is that English, 11 M. C. C. 293. there shall be a public offering of the The commission does not feel conservice.—Northeastern Lines, Inc., 11 strained to deny an applicant a certifiM. C. C. 179; Beard-Laney Hauling Co., cate sought as a successor in interest 16 M. C. C. 281.

solely because oi a delay in securing With one tractor, one semitrailer, and approval of the acquisition.-Id., p. 298. four trucks, it was impossible for a car- Although "route" is not defined in rier to "hold itself out" to serve the pub- the act, in its certificates the commislic in transporting general commodities sion describes routes in terms of parbetween all points in 11 States.--North-ticular highways. The act contemeastern Lines, Inc., 11 M. C. C. 179 plates that where specified points are (182).

to be served, the "routes over which" 237167°-40


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 commission prior to defendant's contract with the shipper, both types of operation in which the carrier was engaged might be lawfully continued 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.

Allowance must be made for frequent changes in points served with respect to any carrier that depends for its traffic entirely upon one industry. This principle should obtain especially where the

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

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.

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

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 as, 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 mo- Stipulation between applicant and a tor vehicle.-Acme Fast Freight, Inc., competitor wherein applicant agreed to 8 M. C. C. 211 (215)*; Consolidated limit its operation in certain points is Shippers, Inc., 11 M. C. C. 428.

inconsistent with the duties of appli. See also n. 50a, this heading.

cant. If granted certificate applicant Forwarders, sec. 203 (a) (14), n. la. must serve all shippers indiscrimi

In defining territorial limits of a serv- nately.-Canny Trucking Co., Inc., 17 ice involving but four specific commod. M. C. C. 559. ities, a broader grant of authority is See also sec. 213 (a) (1), n. 1, Agreeappropriate than in the case of serv- ments between vendor and vendee. ices involving transportation of numer- Separate authorization to continue ous commodities moving regularly to all pick-up and delivery service is not necespoints.-Coast Line Exp., Inc., 9 M. C. C. sary when applicant is entitled to au427 (429).

thority to operate between all points When transport sought to be con- on its routes and this authorization intinued under the "grandfather” clause cludes the right to pick up and deliver was not commenced before the statu- freight at these points.- Red Ball Motor tory date, public convenience and neces- Freight Lines, 8 M. C. C. 60. sity must be shown, under sec. 207 Removal of conditional exemption of (a).-Barhite, 9 M. C. C. 248 (249). operations between Los Angeles zone (Followed in cases too numerous to and the harbor zone Dec. 20, 1937, does cite.)

not change effective "grandfather" date An applicant's fitness is not an issue thereto, for such operation.-President when a certificate is sought under the Tank Lines, Inc., 11 M. C. C. 413; Id., "grandfather" clause.--Eastern Carrier Extension, 22 M. C. C. 515 (516). Corp., 14 M. C. C. 430*.

15. When railroads subject provi. Fitness, in general, sec. 207 (a), n. 25. sions of this paragraph.-Service by

There is no reason why certificate motor vehicle, as common carriers, sec. should not be issued to husband and 203 (a) (14), n. 3. wife jointly, the two having participated Railroads authorized to conduct notor in the operation, despite the fact that operations, sec. 207 (a), n. 35; sec. 213 State does not confer right of partner. (a) (1), n. 25. ship on husband and wife, or that under Injunction to restrain the commiscommon law such a partnership may sion's order permitting railroads to file not be formed.--Loving, 12 M. C. C. rate schedules for pick-up and delivery 571 (575)

service, denied to truckmen's memberThe commission is required to deter- ship corporation. Certificate is not nec. mine applicant's status as it existed on essary for such railroad operation; and June 1, 1935, and not in the light of its it may well be doubted whether any subsequent acts, some in pursuance to party other than the commission may commission requirements promulgated complain.-Merchant Truckmen's Busince that time.-Interstate Truck Serv-reau of New York v. United States, 16 ice, Inc., 21 M. C. C. 645 (650).

Fed. Supp. 998 (1000)*. Contention that the commission is The commission has jurisdiction to without authority to consider matters make effective proposed tariffs of railwhich occurred subsequently to the file roads covering pick-up and delivery ing of the application in determining without precedent issuance by it of cerrights under the “grandfather" clause tificates of convenience and necessitg. is not well founded.-Thompson and Neither sec. 206 (a) nor sec. 203 (a) Bookshins Extension, 22 M. C. C. 503 (14) of Part II is applicable to rail. (508), following Gregg Cartage & Stor- roads in relation to this character of age Co., 21 M. C. C. 17*.

service.-American Trucking Assns.,

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