United States v. Lowden
308 U.S. 225 (1939)

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U.S. Supreme Court

United States v. Lowden, 308 U.S. 225 (1939)

United States v. Lowden

No. 343

Argued November 6, 1939

Decided December 4, 1939

308 U.S. 225

Syllabus

Section 5(4)(b) of the Interstate Commerce Act provides that the Commission may authorize carriers to consolidate or lease their properties where it finds that that action, subject to such conditions and modifications as it shall find to be just and reasonable, will be in harmony with and in furtherance of the plan of consolidation of railway properties established pursuant to paragraph (3) of that section, and will promote the public interest. Upon an application to the Interstate Commerce Commission for authority to lease the road and properties of one railroad to another, with consequent large savings in the operating costs of the road, the Commission found that the proposed lease would promote the public interest, and authorized it upon conditions which it found to be just and reasonable -- viz., that the employees of the leased road be compensated for a limited time for any reduction of salary, that dismissed employees be paid partial compensation for the loss of their employment, and that transferred employees be paid moving and traveling expenses, including losses incurred through their being forced to sell their houses.

Held:

1. The term "public interest," as used in the statute, may be understood for the purposes of this case as relating not to public interest in general, but to public interest in the maintenance of an adequate and efficient transportation service. P. 308 U. S. 230.

2. The policy of consolidating the railways is so intimately related to the maintenance of an adequate and efficient rail transportation system that the "public interest" in the one cannot be dissociated from that in the other. P. 308 U. S. 232.

3. In determining whether conditions attached to an order authorizing a lease will promote the public interest under § 5(4)(b), the Commission may consider their effect upon the national policy of consolidation, as well as their more immediate effect upon the adequacy and efficiency of the transportation system. P. 308 U. S. 232.

Page 308 U. S. 226

4. Interpreting the term "public interest" not in a general sense, but as meaning public interest in maintaining an adequate and efficient transportation system, an order of the Commission authorizing a lease under § 5(4)(b) may affix reasonable conditions for the compensation of railway employees who will be seriously affected. Pp. 308 U. S. 228, 308 U. S. 238.

5. It cannot be said as a matter of law that the prescribed conditions whose justice and reasonableness are not challenged will not advance the public interest in the statutory sense by facilitating the national policy of railroad consolidation and by promoting the adequacy and efficiency of the railroad transportation system by preventing interruption of interstate commerce through labor disputes and by their effect on employee morale. P. 308 U. S. 238.

6. The Act as so applied is within the commerce power. P. 308 U. S. 239.

7. The carrier is not deprived of property without due process of law in being required to devote part of the savings resulting from the exercise of the leasing privilege to compensate employees for losses resulting from it. P. 308 U. S. 240.

29 F.Supp. 9 reversed.

Appeal from a decree of the District Court of three judges which set aside conditions attached by the Interstate Commerce Commission to an order permitting one carrier to lease its railroad to another.

Page 308 U. S. 227

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