crossing, line crossing, conflict, or inductive exposure, shall give written notice of such plans to all other parties who are known to be now or likely to be later concerned, so that due consideration will, if it appears necessary to any of the parties involved, be given to any specific cooperative measures which may be advisable.

In cases (except at railroad wire crossings) where only local distribution systems are involved, this rule will be considered as having been complied with when the parties concerned shall arrange occasional conferences at which satisfactory agreement is reached regarding any cooperative measures which may be advisable.

(b) Any party planning the construction of a new steam or electrified railroad or planning reconstruction of, additions to (including extensions) or changes in the tracks, lines or other property of an existing steam or electrified railroad, at crossings or other points where supply or communication lines may become involved, shall give written notice of such plans to all other parties known to be concerned, so that due consideration will, if it appears necessary to any of the parties involved, be given to any specific cooperative measures which may be advisable.

In the case of existing railroad property, this rule will be considered to have been complied with when the parties concerned shall arrange occasional conferences at which satisfactory agreement is reached regarding any cooperative measures which may be advisable.

(c) In case of difficulty encountered in finding the owners of any facilities then a reasonable effort to locate such owners and notification through the public press in general circulation in the locality affected, shall be considered to be in compliance with this rule.

6. Notice of Filing Application; Notice of Hearing. Written notice of the filing of an application for a Railroad Wire Crossing Permit and notice of the time and place for any hearing of such application as may be set by the Commission, shall be given by the applicant to all other parties known to be concerned. Such notice shall state the location and general nature of the proposed construction

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and a complete copy of the descriptive information furnished to the Commission shall also be furnished to the

railroad company.

NOTE: The law requires that notices of hearings shall be served at least ten days before the time of hearing, but notices of hearings will not be required in case the party or parties entitled to receive notice shall expressly waive the same as described in Rule 3 - (d).

7. Permits; Beginning Work. The party planning new construction shall obtain all necessary permits and shall, except in cases of emergency, notify the other parties at least seven days in advance of its intention to start work in the field in which the other parties are concerned. January 8, 1924.

In re APPLICATION OF THE DOWAGIAC TELEPHONE COMPANY FOR AUTHORITY TO DISCONTINUE ITS TELEPHONE ExCHANGE IN VOLINIA TOWNSHIP.

T-391.

Decided March 4, 1924.

Zoning of Rural Districts Held Not Within Statute Prohibiting Discrimination Classification of Subscribers Based on Distance from Exchange Approved - Discontinuance of NonProfitable Exchange Authorized.

OPINION AND ORDER.

The petition herein was filed January 24, 1924, by the Dowagiac Telephone Company, asking for an order permitting and directing the closing and discontinuance of its exchange at Volinia, Michigan.

Volinia exchange is about equally distant from Decatur, Dowagiac, Cassopolis and Marcellus. It had about 60 subscribers when it belonged to the Cass County Telephone Company, which telephone company was unable to pay expenses, went into the hands of a receiver and was sold at receiver's sale and afterwards consolidated with the

Dowagiac property of the Michigan State Telephone Company.

When new rates were prescribed by this Commission for the territory, free interchange service between exchanges was abolished, largely because the telephone company had not been able to pay expenses, and no one is entitled to service free.

The exchange has dwindled to 15 subscribers. There is no claim that the exchange at Volinia was paying, but it seemed to be the claim of those who opposed the discontinuance of this exchange that if the exchange was discontinued, they, being beyond the 6-mile limit from the central exchange by which their calls were switched, would be charged a higher rate than those within the 6-mile limit and that this would result in a violation of Section 5 of Act No. 206 of the Public Acts of 1913, being Section 6693 of the Compiled Laws of 1915, which provides:

"It shall be unlawful for any telephone corporation doing business within this State to make or give any preference or advantage to any person, copartnership, corporation or locality, or subject any person. copartnership, corporation or locality to any prejudice or disadvantage in any respect whatever."

This general clause relating to discrimination between persons and localities does not prevent a classification of persons served by telephone service, provided such classification is reasonable, and a classification based upon the distance of the telephone subscribers from the central office exchange is not unreasonable. It amounts to zoning subscribers, and zoning is the basis, not only of many municipal ordinances, but of the parcel post system of charges established by the United States Government. So long as the classification is one for which legitimate reasons can be given, it is not within the prohibition against discrimination.

The question in this case, however, goes farther. It is conceded that the Volinia exchange does not pay. If it is continued in operation, someone must pay for that operation and that would be the company, and, indirectly, the

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subscribers of the telephone company other than those at Volinia exchange, who would be compelled to pay more than the service costs the company, in order that the subscribers served at and through the Volinia exchange should have telephone service at less than the service costs the company.

The Constitution of this State and the Constitution of the United States both provide that private property shall not be taken for public use without just compensation and that no one shall be deprived of his property without due process of law.

In Brooks-Scanlon Company v. Railroad Commission of Louisiana, 251 U. S. 396, it is said:

"A carrier cannot be compelled to carry on even a branch of business at a loss, much less the whole business of carriage."

In Bullock et al. v. State of Florida, ex rel. Railroad Commission et al., 254 U. S. 513, it is said:

"Apart from statute or express contract, people who have put their money into a railroad are not bound to go on with it at a loss if there is no reasonable prospect of profitable operation in the future."

Under the circumstances of this case and under the well settled law, we think the petitioner is entitled to an order permitting it to discontinue its Volinia exchange; and it appearing that due notice of its application to discontinue said exchange was given to all persons interested, and that a hearing was had before the Commission, at which time said applicant appeared by its manager and the township of Volinia appeared by its supervisor, Wilbur Brown, and the Commission having given the matter due consideration,

It is, therefore, ordered, That said Dowagiac Telephone Company be, and it is hereby, authorized and empowered to close and discontinue its exchange at Volinia, Michigan. March 4, 1924.

In re APPLICATION OF THE IDA TELEPHONE COMPANY FOR AUTHORITY TO INCREASE ITS CAPITAL STOCK AND TO SELL STOCK.

D-1937.

Decided March 20, 1924.

Increase in Capital Stock Approved-Issue and Sale of Stock Authorized.

ORDER,

Application having been filed on March 10, 1924, by the Ida Telephone Company, a corporation organized and existing under the laws of the State of Michigan, for leave to increase its capital stock from $15,000 to $20,000, and to issue and sell $5,000, par value, of its common capital stock; and the same having been brought on to be heard, and the testimony having been duly taken upon said hearing, and it appearing from said application, the documents accompanying the same, and the testimony taken upon said hearing, that the increase of the capital stock by said Ida Telephone Company from $15,000 to $20,000, and the issuance and sale of $5,000, par value, of the common capital stock, is reasonably required for and necessary to the proper capital purposes of said corporation;

And it further appearing that application was heretofore made by said Ida Telephone Company and the Scofield Telephone Company for authority for the Ida Telephone Company to purchase the property of the Scofield Telephone Company, upon which said application a hearing was had on December 4, 1923, whereby said Ida Telephone Company was to issue and deliver to the stockholders of the Scofield Telephone Company 180 shares of stock in said Ida Telephone Company in full payment for all of the interests of said stockholders in said Scofield Telephone Company; and that the sum of $3,200 is reasonably required and necessary to be expended for the proper capital purposes of said Ida Telephone Company in mak

* See infra, page 1014.