An order of the Interstate Commerce Commission, made in
consequence of assumption of powers not possessed by it, is void,
and its enforcement should be restrained by the courts.
The powers of the Interstate Commerce Commission do not extend
to regulating and controlling the policy of the owners of railroads
in fixing rates, and it cannot substitute for a just and reasonable
rate, a lower rate either on the ground of policy or on the ground
that the railroad was by its former conduct estopped from charging
a reasonable rate.
Where the shippers do not complain of a new and higher rate
because it is intrinsically an unreasonable one, but because,
although reasonable, the railroads are estopped to advance it on
account of having maintained the lower rate for a considerable
period, it is beyond the power of the Commission to direct a
restoration of the old rate, and so
held in regard to the
Willamette Valley lumber rates.
Where the Commission makes an order restoring a rate that shows
on its face it was made on the ground that the railroad was
estopped to increase it, the order will not be presumed to have
been made for the purpose of establishing a reasonable rate if it
excludes a section from the benefit of the restored rate which
amounts to a discrimination against that section.
Questions arising on the validity of an order of the Interstate
Commerce Commission fixing a rate do not become moot merely because
the period for which the rate is prescribed has expired where an
element of liability for reparation remains.
See Southern
Pacific Terminal Co. v. Interstate Commerce Commission, post,
p.
219 U. S. 498.
Page 219 U. S. 434
The facts, which involve the validity of an order of the
Interstate Commerce Commission in regard to appellants' rates on
lumber, are stated in the opinion.
Page 219 U. S. 437
MR. CHIEF JUSTICE WHITE delivered the opinion of the Court.
Whether the court below was right in refusing to enjoin at the
suit of the railway companies who are appellants the enforcement of
an order of the Interstate Commerce Commission is the general
subject for consideration on this record.
When that which is superfluous is put out of view, it will come
to pass that every substantial controversy which the case presents
will be disposed of by determining what was the character of the
order made by the Commission -- that is to say, what was the power
which that body exerted in making the order in question. We state
at once the pertinent facts.
The Willamette Valley, about 150 miles long, lies in the western
part of the State of Oregon, south of the Columbia River, and
through it there flows in a northerly direction the Willamette
River, which empties into the Columbia River. Portland is on the
Willamette River at or near where that river empties into the
Columbia River. From
Page 219 U. S. 438
Cornwallis, on the Willamette River, a point about 97 miles
south of Portland -- that is, about that distance from where the
Willamette empties into the Columbia -- the Willamette is
navigable, and there is navigation from Portland to the sea by
means of the Willamette and the Columbia Rivers. The rails of the
Oregon & California Railroad from Portland pass through the
Willamette Valley, paralleling the Willamette River at various
distances, and extend to the Oregon and California state line,
where that road connects with the Southern Pacific Company. The
latter has for a number of years operated the Oregon &
California as part of its system.
In November, 1907, a complaint was filed with the Interstate
Commerce Commission on behalf of the Western Oregon Lumber
Manufacturers' Association and others, concerning a rate of $5 per
ton, in carload lots, on "green common rough fir lath and lumber
and forest products" from Willamette Valley points to San Francisco
and bay points, fixed in a tariff filed by the Southern Pacific
Company with the Commission, and which became operative in April,
1907. It was charged that the rate complained of was unreasonable
in and of itself, and discriminatory. It was averred that, from
about 1898, there had existed a rate of $3.10 for carrying the same
character of lumber between the points named; that, upon the faith
of this rate and the belief that it would not be changed, large
amounts of capital had been invested in lumber mills in the
Willamette Valley; that the people in that valley were dependent
upon the lumber industry, and that such industry would be destroyed
and the population be detrimentally affected if the new rate of $5
per ton was continued to be charged. It was alleged that the $3.10
rate was reasonable in and of itself, and that the rate had been
increased without just cause, upon the theory that the lumber
interest in the Willamette Valley was prosperous, and that hence
the traffic could stand the increase. The
Page 219 U. S. 439
railroad companies answered, setting up the reasonableness of
the $5 rate. They in effect averred that the $3.10 rate, which had
previously prevailed, was unreasonably low, and that it had been
fixed solely for the purpose of enabling lumber from the Willamette
Valley to reach a market in San Francisco and bay points, which it
could not have done if a just and reasonable rate had been exacted.
This condition, it was alleged, had arisen from the fact that, from
Portland and other points on the Columbia River and Puget Sound,
there was a highly developed lumber industry accessible to San
Francisco and bay points by water at rates so low as to have
absolutely excluded the shipping of any lumber from the Willamette
Valley by rail to such points, unless a very low rate had been
fixed by the railroad companies to meet the water-borne lumber
traffic, and that there was no market which was commercially
available for the Willamette Valley lumber other than that of San
Francisco and bay points when the $3.10 rate was fixed. The
complaint and the answer which we thus state are not in the record,
but we have summarized their contents from a statement made
concerning the same by the Interstate Commerce Commission in its
answer in this suit, filed in the circuit court.
It is certain that, for a number of years, the $3.10 rate was
applied both to shipments of lumber not only from the Willamette
Valley, but also from Portland. Several years, however, before the
going into effect of the $5 rate fixed in the tariff of April,
1907, a tariff fixing that rate had been made applicable to
Portland. During the hearing before the Commission, the Portland
lumber interests intervened and asked that, if the $3.10 rate was
restored to Willamette Valley, it should also be restored to
Portland, so as to prevent discrimination against Portland.
After a hearing, the Commission, in June, 1908, filed its report
and made an order adverse to the railway companies, Commissioners
Knapp and Harlan dissenting. 14
Page 219 U. S. 440
I.C.C. 61. It suffices to say that the order entered directed
the railroad to cease from charging the $5 rate complained of from
Willamette Valley points, and fixed as a proper rate from certain
points in the valley the sum of $3.40 a ton, and from the remaining
points in the valley the sum of $3.65. Although some of the points
embraced by the order were within a few miles of Portland, that
city was not given the benefit of the reduction, and therefore
remained subject to the $5 rate.
The railroad companies, refusing to yield obedience to the
order, commenced this suit in equity in the Circuit Court of the
United States for the Northern District of California to have the
order set aside and to enjoin its enforcement. After a demurrer was
sustained, an amended bill was filed. By this bill, it was averred
that the rate of $5, fixed by the tariff which the Commission had
set aside, was a just and reasonable rate
per se, and that
the rate fixed by the Commission was so unreasonably low as to be
unjust and unreasonable. This was alleged to be the case not only
in view of the great increase in the cost of the operation of the
road since the time when the $3.10 rate was put in force, but also
because of the normally excessive cost of maintenance and operation
resulting from the mountainous country which the road traversed,
subjecting to an unusual expense for repairing damage done by
floods and freshets, the high grades requiring the application of
increased motive power, and permitting even with such power the
movement of only unusually short trains, thereby causing a much
greater average expense. Referring to the rate of $3.10 which had
previously prevailed, the circumstances connected with its
established rate were detailed. It was alleged that the rate was
unreasonably low when fixed, and was so fixed by the railroad
solely with the object of encouraging the lumber industry in the
Willamette Valley, and to enable it to reach a market -- a result
which otherwise could not have been attained.
Page 219 U. S. 441
The averments on this subject reiterated the statements made in
the answer before the Commission. It was alleged that, having
maintained the unreasonably low rate for the reasons stated, the
railroad companies had finally changed the same, and fixed a just
and reasonable rate for the services rendered, because of changes
in the situation of the lumber interest in the Willamette Valley.
Those changes, it was said, arose from the opening of markets for
lumber from the Willamette Valley by means of new railroad routes
via Portland as a gateway to the East, by means of which a large
percentage of lumber produced in the Willamette Valley was moved to
other markets. It was alleged that the Commission, in setting aside
the increased tariff rate of $5 and fixing substantially the old
rate, had exceeded the powers conferred upon it by law, because it
did not act in the exercise of the authority conferred upon it to
determine whether a rate was just and reasonable in and of itself
with regard to the service rendered, but had proceeded upon the
assumption that power was conferred upon it to fix an unreasonable
rate because of its belief as to the equities of the situation, or
upon the basis of principles of estoppel, or upon its conception of
public policy and its right to enforce what was deemed best, under
the circumstances, for the interest of shippers.
There was a demurrer to the amended bill, and the court
certified the case to this Court. The certificate was dismissed.
215 U. S. 215 U.S.
226. On the receipt of the mandate, the demurrer was withdrawn and
a new demurrer, as also an answer to the bill, were filed. In the
answer, the lumber conditions in the Willamette Valley were
recited, as also what were alleged to be the circumstances
connected with the establishment of the $3.10 rate, and the
proceedings had before the Commission in the controversy referred
to were detailed. The regularity of the proceedings before the
commission was averred, and the legality and finality of the
findings and conclusions of that body were asserted.
Page 219 U. S. 442
It was declared that the rates fixed from the points in the
Willamette Valley, excluding Portland, were just and reasonable in
and of themselves. Traversing the allegations of the complaint, it
was averred that the Commission found the $5 rate to be
unreasonable and unjust, admitted that it found the $3.10 rate to
be a low rate, but denied that it found such rate to be
unreasonably low, and denied that the $3.40 and $3.65 rates were
substantially the same as the $3.10 rate.
The cause was heard upon the amended bill, the answer, the
replication of the plaintiffs, and the evidence introduced before
the Commission. The circuit court, as we have said, entered a
decree dismissing the bill. This was done upon the theory that, as
the Commission found that the rate fixed by it gave some
remuneration above the cost of operation, and was not therefore
confiscatory, there was no power to interfere. This appeal was then
taken.
In the argument at bar, the railroad companies do not question
that, if a complaint is made to the Interstate Commerce Commission
concerning the unreasonableness of a rate, that body has the
authority to examine the subject, and, if it finds the rate
complained of is, in and of itself, unreasonable having regard to
the service rendered, to order the desisting from charging such
rate and to fix a new and reasonable rate, to be operative for a
period of two years. The companies further do not deny that, where
the Commission exercises such authority, its finding is not subject
to be reviewed by the court.
Interstate Commerce Commission v.
Illinois Central R. Co., 215 U. S. 452. In
other words, the argument on behalf of the railroads fully concedes
that an order of the Commission is not open to attack in the courts
so long as that body has kept within the powers conferred by the
statute. Making these concessions, the proposition relied upon to
secure reversal is that the court below should have set aside the
order of the Commission because that order was in excess of the
Page 219 U. S. 443
power conferred upon the Commission, and this, it is insisted,
is to be determined by substance, and not mere form. In other
words, the contention is, that, although the order made by the
Commission may have been couched in a form which would cause it,
superficially considered, to appear to be but the exercise of an
authority to correct an unreasonable rate, yet if it plainly
results from the record that the order of the Commission was not
the exercise of such an authority, but was based upon the
assumption by that body of the possession of a power not conferred
by law, the mere form given by the Commission to its action does
not relieve the courts from the duty of reviewing and correcting an
abuse of power. Applying these propositions, the insistence is
that, both in form and in substance, the order of the Commission is
void because it manifests that that body did not merely exert the
power conferred by law to correct an unjust and unreasonable rate,
but that it made the order which is complained of upon the theory
that the power was possessed to set aside a just and reasonable
rate lawfully fixed by a railroad whenever the Commission deemed
that it would be equitable to shippers in a particular district to
put in force a reduced rate. That is to say, the contention is that
the order entered by the Commission shows on its face that that
body assumed that it had power not merely to prevent the charging
of unjust and unreasonable rates, but also to regulate and control
the general policy of the owners of railroads as to fixing rates,
and consequently that there was authority to substitute for a just
and reasonable rate one which, in and of itself, in a legal sense,
might be unjust and unreasonable if the Commission was satisfied
that it was a wise policy to do so, or because a railroad had so
conducted itself as to be estopped in the future from being
entitled to receive a just and reasonable compensation for the
service rendered. On the other hand, the Commission, in the
argument at bar, does not contend that it possessed the indeed
Page 219 U. S. 444
abnormal and extraordinary power which the railroads thus say
was exerted in rendering the order complained of -- a power which,
if it obtained, would open a vast field for the exercise of
discretion, to the destruction of rights of private property in
railroads, and would in effect assert public ownership without any
of the responsibilities which ownership would imply. While it is
not denied on behalf of the Commission that that body may have
considered the prior rate prevailing in the Willamette Valley, the
period during which it had been in force, and the effect upon the
business situation in the valley of a change to a higher charge,
all these things, it is insisted, were not made the basis of the
power exerted, but were simply taken into consideration as some of
the elements proper to be considered in the ultimate exertion of
the lawful power to forbid an unjust and unreasonable rate and fix
a reasonable one.
It is clear, therefore, as we have said at the outset, that the
result of the contentions and concessions of the respective parties
is to reduce the controversy to a single issue, which is what was
the nature and character of the order made by the Commission? That
is, what, in substance, was the power which the Commission exerted
in making the order?
Coming to the consideration of that subject, we are of opinion
that the court below erred in not restraining the enforcement of
the order complained of, because we see no escape from the
conclusion that the order was void because it was made in
consequence of the assumption by the Commission that it possessed
the extreme powers which the railroad companies insist the order
plainly manifests. We proceed very briefly to state the reasons
which compel us to this conclusion. In the first place, when the
complaint which was made to the Commission and the answer of the
railroad companies to that complaint are considered, they give rise
to the inference that, in substance,
Page 219 U. S. 445
the subject complained of was not the intrinsic unreasonableness
of the new rate which the railroad companies substituted for the
former rate, but the injury it was thought would be suffered from
not continuing the old rate in force -- an injury arising from
circumstances extrinsic to the new rate -- that is, a loss which
would be suffered by substituting the higher rate even if that rate
was, in and of itself, reasonable and just. That such was the view
entertained by the complainants when the hearing began before the
Commission is too clear to require anything but statement. Thus,
during the opening made on behalf of the complainants by their
counsel, Mr. Teal, after he had made statements concerning the
origin of the $3.10 rate, the following took place:
"Commissioner COCKRELL: How much was that, $3.10 a ton?"
"Mr. TEAL: $3.10 a ton; yes, 15 1/2 cents a hundred, and I will
state that we do not claim that that is not a low rate. It is a low
rate. In fact, I may say that it is one of the lowest rates on
lumber in the United States, and it is a rate put in, as I state,
maintained for the purposes I state, and the railroad company is
entitled to full credit for having done it."
"Commissioner PROUTY: Let me ask you, Mr. Teal, this question.
Suppose that rate had never been lower than 25 cents a hundred
pounds, which is $5 a ton, would you claim that this Commission
today ought to reduce that rate?"
"Mr. TEAL: No; I don't think I would."
"Commissioner PROUTY: That is to say, you do not claim the rate
is unreasonable in itself?"
"Mr. TEAL: No; I do not."
"Commissioner PROUTY: You put your case entirely on the ground
that these people represented to your clients and to other mill men
in the Willamette Valley that they would establish this lower rate
for the purpose of building up the industry in that valley, and
that the industry cannot
Page 219 U. S. 446
exist there in competition with other ยงยง unless that rate is
maintained in effect?"
"Mr. TEAL: Yes, sir."
"Commissioner PROUTY: And therefore the railroad in obliged to
maintain it in effect?"
"Mr. TEAL: It has been maintained for eight or nine years. You
have my position exactly, Mr. Commissioner."
"Commissioner PROUTY: That simply shows that it has been
maintained and industries have grown up; that the railroad company
has, during that period, elected to maintain it, and found it
profitable, probably?"
"Mr. TEAL: You have stated my position exactly. I am not here
complaining about the rates being high or low, because it is a low
rate."
Thereafter, as Mr. Teal concluded his opening statement, the
following occurred:
"Commissioner PROUTY: That seems to be your case, Mr. Teal. If
they can, there is no reason from your statement why the rates
should be reduced, because you say the rate is low enough, unless
those men have been induced to build their mills there, and ought
to be protected."
"Mr. TEAL: That is correct. I want you to understand, Mr.
Commissioner, that I do not claim the Commission has a right to
compel the railroad, under ordinary circumstances, to meet water
rates or any other competition."
It is true that, subsequently, when counsel for the railroad
companies was about to make his opening statement, Mr. Teal, after
reiterating "that the $3.10 rate is a low rate," observed:
"I do not say it should necessarily pay a $5 rate. That is, I do
not want to be understood as saying that this rate of $5, in and of
itself, would be reasonable."
Answering the query of one of the commissioners as to whether,
if the railroads had maintained in effect for the last ten years
"this rate of 25 cents a hundred pounds," it would be claimed "that
that was so unreasonable that the Commission ought to reduce it."
Mr.
Page 219 U. S. 447
Teal answered: "Yes; I would claim that that would not be a
reasonable rate to all these points." These remarks, however, can
properly only be regarded as a declaration of an unwillingness to
concede more than that the $3.10 rate was a low rate, and the
attempt to engraft a qualification or limitation upon the prior
declarations of counsel cannot be treated as having any efficacy,
since no proof whatever bearing upon an issue as to the
reasonableness of the $5 rate for the service to be rendered was
introduced by the complainants. In fact, no attempt was even made
to cross-examine Mr. Miller, the general traffic manager of the
defendant, who testified on that subject. That the complainants
intended to confine their evidence to the issue of whether the
$3.10 rate should be maintained in order to enable the lumber mills
to continue to prosper is evidenced by the following:
"Commissioner PROUTY: . . . Mr. Teal, there does not seem to be
much dispute about the questions in this case. The mills have a
rate to the south, and one question is to what extent they are
dependent upon that rate for their continued existence. They have a
rate to the east. For what reason is not that rate as valuable to
them as it is to Portland and other mills, and to what extent is it
necessary that this rate should be maintained to San Francisco in
order to fairly continue the prosperity of these
establishments?"
"Mr. TEAL: That is where I intend to confine my testimony."
The order of the Commission, as we have said, applied the rate
which it fixed substantially to the very doors of Portland, but did
not make the reduction applicable to that city. While we shall have
occasion in a moment to refer to this aspect of the order as
conclusively showing on its face that the power exerted in making
it was not the power to condemn an unreasonable and fix a
reasonable rate, an excerpt from the examination by Mr. Cotton
for
Page 219 U. S. 448
the railroad companies and Mr. Abel for the interveners, of two
witnesses -- J. Poulsen for the Portland interests and Dixon for
the Willamette Valley interests -- will make perfectly clear how
really immaterial the question of the reasonableness of the $5 rate
was considered to be.
On cross-examination, of Mr. Poulsen the following
transpired:
"Mr. COTTON: In saying that you think Portland ought to have a
lower rate, do you mean they should have a lower rate than a $3.10
rate?"
"Mr. POULSEN: I mean they should have a lower rate than the
inland people, on account of having water competition."
"Mr. COTTON: But you do not express your opinion about the
reasonableness of the rate?"
"Mr. POULSEN: No, sir."
"Mr. ABEL: He was not asked that."
"Mr. COTTON: That is what I understood, but I just wanted to
make it clear."
"Mr. POULSEN: No."
On the examination of Mr. Dixon the following ensued:
"Mr. COTTON: It would follow, as a matter of fact, that, if the
$3.10 rate, or any lower rate than the barge rate, was established,
that it ought to be extended all the way up to Portland; would it
not?"
"Mr. DIXON: Personally I have no objection to that, but I do not
see that it would necessarily follow."
"Mr. COTTON: I am not considering your standpoint. I merely want
your best opinion with reference to the industry in western
Oregon."
"Mr. DIXON: I think, Mr. Cotton, that the arrangement in effect
prior to April 18th was, from the standpoint of the lumber
shippers, a fair arrangement."
"Commissioner PROUTY: How can you justify leaving Portland out
of the San Francisco rate and taking you into the Eastern
rate?"
"Mr. DIXON: The Portland mills have so much the advantage
Page 219 U. S. 449
of us in almost every other branch of the business that I do not
see how it is unfair to them to give us what might appear to be a
slight advantage in one particular. In other words, they have a
better grade of logs, they have a better market and more markets,
they have a place to dispose of their refuse, and, what counts for
more than anything else, and is absolutely necessary to the
successful conduct of the lumber business, they can get rid of
their output, while we cannot, up to date."
Although we find the record replete with statements made during
the course of the hearing by counsel for both parties, and
certainly by one or more of the commissioners who were present at
the hearing, which we think leave no doubt as to the nature and
character of the power exerted, we do not pursue the subject
further, since we are of opinion that the face of the opinion and
the order so additionally serve to make manifest the situation as
to render it unnecessary to do more than briefly advert to those
subjects. While it is true that the opinion of the Commission may
contain some sentences which, when segregated from their context,
may give some support to the contention that the order was based
upon a consideration merely of the intrinsic unreasonableness of
the rate which was condemned, we think, when the opinion is
considered as a whole, in the light of the condition of the record
to which we have referred, it clearly results that it was based
upon the belief by the Commission that it had the right, under the
law, to protect the lumber interests of the Willamette Valley from
the consequences which it was deemed would arise from a change of
the rate, even if that change was from an unreasonably low rate,
which had prevailed for some time, to a just and reasonable charge
for the service rendered for the future. Manifestly this was deemed
by the Commission to be the power which was being exerted, since
Mr. Commissioner Harlan, joined by the Chairman of the Commission,
dissented on the ground that the order
Page 219 U. S. 450
was an exertion of a power not possessed, to give effect to a
supposed equitable estoppel, and no language was inserted in the
opinion to indicate to the contrary. The obvious impression as to
the nature and character of the power exerted, given by the very
face of the opinion of the Commission is shown by the syllabi to
the official report of the opinion, which we copy in the margin.
*
Finally, the express exclusion of Portland from the benefit of
the reduced rate, and the reasons given for the exclusion,
indubitably establish the character of the power exerted so as to
exclude the possibility of holding that it was merely the exercise
of the right to correct an unjust and unreasonable rate. We say
this because, if the assumption be indulged in that the order was
but the manifestation of the authority to correct an unreasonable
rate, the traffic of Portland, in the absence of some lawful reason
for excluding it, would be discriminated against by the order
excluding Portland from the benefit of the reduced rate. We cannot,
therefore, assume that the order was legal because it rests upon
the power to correct an unreasonable rate and to substitute a
reasonable rate, since to indulge in that assumption would at once
beget the inevitable inference that the order was repugnant to the
statute because of its discriminatory
Page 219 U. S. 451
character. And the reasons given for the exclusion of Portland
from the benefit of the reduction which the order made likewise
leave no room for the conclusion that the reduction was based
merely upon the finding that the tariff rate which was reduced was,
considering the service rendered, in and of itself unreasonable.
The reasons for not applying the reduced rate to Portland were thus
explained in the report of the Commission:
"The considerations which induce us to apply this lower rate to
mills in the Willamette Valley do not obtain in case of Portland.
These manufacturers have the benefit of the water rate, and are not
therefore dependent at all upon the defendants for reaching the San
Francisco market. The low rate was only applied to Portland for a
comparatively short time, and has not been in force there for the
last four years. It is of no special importance to the manufacturer
at that point, and no injustice is done by withdrawing it. The
distance from Portland is considerably greater than the average
distance from Willamette Valley mills, and, on the whole, we think
the defendants should be left to their option in meeting or
declining to meet water rates at Portland. The claim of the
interveners is therefore denied."
Treating the order as having been based upon the assumed
possession of the extraordinary power which it is insisted was
exercised in making the order, the force of the reasoning thus
advanced to sustain the order cannot be successfully gainsaid. But,
upon the theory that the order was made merely as the result of the
exercise of the statutory power to prevent the charging of an
unreasonable and unjust rate, having regard to the service
rendered, the inconsequence of the reasoning stated becomes at once
patent. This must be the case; because Portland had been deprived
by the railroads of a just and reasonable rate for a longer time
than the Willamette Valley points certainly afforded no ground for
concluding that Portland was not
Page 219 U. S. 452
entitled to relief, and it is equally certain that the fact that
there was competition by water from Portland can in no way justify
the permitting the railroads to continue to charge against traffic
from Portland a high and unreasonable rate. Indeed, if the order be
assumed to have been made merely as the result of the power to
correct an unjust and unreasonable rate, then the reasoning by
which the order, insofar as it dealt with Portland was concerned,
was sustained comes to this: that the greater the wrong, the lesser
the right to redress, and the greater the reason for the low and
competitive rate, the stronger the reason for refusing to fix such
a rate.
The considerations just stated dispose of the entire controversy
except in one particular. It is claimed at bar that the questions
arising for decision are moot, since, in consequence of the lapse
of more than two years since the order of Commission became
effective, by operation, of law the order of the Commission has
spent its force, and therefore the question for decision is moot.
The contention is disposed of by
Southern Pacific Terminal Co.
v. Interstate Commerce Commission,this day decided,
post, p.
219 U. S. 498. In
addition to the considerations expressed in that case, it is to be
observed that clearly the suggestion is without merit in view of
the possible liability for reparation to which the railroads might
be subjected if the legality of the order were not determined, and
the influence and effect which the existence of the rate fixed for
two years, if it were legal, would have upon the exercise by the
railroads of their authority to fix just and reasonable rates in
the future, clearly causes the case to involve not merely a moot
controversy.
The decree of the Circuit Court is reversed, and the case
remanded to that court, with directions to enter a decree declaring
the order of the Interstate Commerce Commission to be void, and
otherwise granting the relief prayed in the bill.
*
"1. Where a rate has been established and maintained for a
considerable period, for the purpose of developing a particular
industry and with full knowledge that the industry could not be
developed without it, and where, under the influence of such rate,
large amounts of money have been invested in property the value of
which must be seriously impaired by an advance of the rate, that
fact is an important consideration in passing upon the
reasonableness of such advance."
"2. The Southern Pacific Company established a rate of $3.10 per
ton upon rough green fir lumber and lath from points in the
Willamette Valley to San Francisco for the purpose of developing
the lumber industry in that section, and maintained the rate in
effect, with a brief interval, for six years, and on the strength
of this rate that industry attained considerable proportions. In
April, 1907, this rate was advanced to $5 per ton:
Held,
that the advance was unreasonable, and that the rate ought not for
the future to exceed $3.40 per ton."