1. In view of the policy and provisions of the Transportation
Act, establishment of a new union station for several interstate
carriers, involving the abandonment of their separate stations,
extensive changes and relocations of their main tracks, and very
great expense, cannot be brought about by voluntary action of the
carriers or order of a state commission in the absence of a
certificate of the Interstate Commerce Commission, under pars.
18-21 of § 402 of the act. P.
264 U. S.
342.
2. The provisions of the Transportation Act, § 402, pars. 121,
that no interstate carrier shall extend its line of railroad unless
and until the Interstate Commerce Commission shall certify that
public convenience requires it, and forbidding the Commission to
authorize such extension unless it finds it reasonably required in
the interest of public convenience or necessity or that the
expense
Page 264 U. S. 332
will not impair the carrier's ability to perform its duty to the
public,
construed as not confined to extensions with a
purpose to include new territory to be served by a carrier, but as
including proposed extensions of main tracks within a city to a
proposed new union station, involving changes in the intramural
destinations of carriers and in the handling of interstate traffic,
and necessitating great expense. P.
264 U. S.
344.
190 Cal. 214 affirmed.
Certiorari to a judgment of the Supreme Court of California
annulling, upon review, an order of the state Railroad Commission
which sought to require the above-named railroads to eliminate
certain grade crossings and establish a new union terminal depot in
the City of Los Angeles.
Page 264 U. S. 338
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
The question in this case is whether the State Railroad
Commission of California has power to require the Southern Pacific
Company, the Atchison, Topeka & Santa Fe Railway Company, and
the Los Angeles & Salt Lake Railroad Company to build an
interstate union depot in the City of Los Angeles.
The proceedings were begun in 1916 before the Railroad
Commission by complaints of civic associations and others against
the railway companies. Before the hearing and the decision were
had, the Transportation Act of Congress of 1920 was enacted. In
December, 1921, after two hearings, an amended order against the
railways was made by which they were required to remove certain
grade crossings and to build a union terminal within a certain
defined area in the city.
The railway companies sought review of this order in the supreme
court of the state, and their three writs were heard and disposed
of as one case. The supreme court of the state held that the order
was beyond the power of the State Railroad Commission because the
subject matter was committed to the Interstate Commerce Commission
by the Transportation Act of 1920. The court further held that, if
the order had effected the elimination of grade crossings alone, it
would have been valid, but that, associated as it was with the
establishment of the union station, it must be annulled. We have
brought the case of the Commission against each of the railways
here by certiorari.
Lines of the three railways approach Los Angeles from the north
and come together in the city near the North Broadway viaduct, as
it crosses the Los Angeles River. Thence the Salt Lake and Santa Fe
lines follow the bed of the Los Angeles River, one on its east and
the other on its west bank. The Salt Lake passenger station is at
First
Page 264 U. S. 339
Street. Its main line from Pasadena and Glendale comes from the
north, but its line from Salt Lake comes in from the south. From
north to south in Los Angeles, its line hugs the east bank of the
river for three miles. The Santa Fe station is opposite that of the
Salt Lake Railway on the west bank. The Santa Fe hugs the west bank
for three miles in the city. One of its lines leaves Los Angeles by
the north for Chicago. Another leaves the city by the south,
through Riverside, for Chicago. The Southern Pacific does not
follow the river bed after passing under the Broadway Viaduct, but
extends in a southwesterly direction until it reaches the north end
of Alameda Street. From that point, it runs south through the city
at grade on that street. Its station is at Fifth Street, and lies
southwesterly from the Salt Lake and Santa Fe stations and a
quarter of a mile distant from them. The eastern main line of the
Southern Pacific crosses the river at Alhambra Avenue, joins the
San Francisco main line, and reaches the station from there by the
same tracks on Alameda street. The Southern Pacific occupies
Alameda Street on grade and longitudinally in both directions from
its station for three miles. Its lines toward the south go to San
Pedro and Santa Ana.
The order of the Railroad Commission requires the abandonment of
the passenger stations of the three railways. The Southern Pacific
station is a comparatively modern depot, and would be adequate for
many years. Those of the other two companies are not adequate, but
they have ample ground upon which to construct suitable stations.
The order required the removal from Alameda Street of the main line
of the Southern Pacific for three miles, permitting the use of its
tracks in that street for switching during a few hours at night.
The order also required that, by viaducts over the river and over
the Salt Lake and Santa Fe tracks on the river banks, grade
crossings should be eliminated. The order further required
Page 264 U. S. 340
that the three railways should purchase jointly land enough in
an area reaching from Alameda Street to the river and from Aliso
Street to Alhambra Street to erect a suitable union station, to be
situated somewhere near a square called the Plaza. The railways are
directed to make such additions to, extensions of, improvements and
changes in, the existing railroad facilities of said companies as
may be reasonably necessary and incidental to the use of said union
passenger station. This would require the removal of the present
station of the Southern Pacific from Fifth Street toward the Plaza
at least half a mile, and the stations of the Santa Fe and the Salt
Lake from First Street on the river to the Plaza, more than a
quarter of a mile. The changes to be effected under the order will
require, in the abandonment of the Southern Pacific main track on
Alameda Street for three miles, a joint use by the Southern Pacific
of main tracks on the river bank with either the Salt Lake or the
Santa Fe, or the construction of its own main tracks on one side or
the other along the river bank. The main tracks of the Salt Lake
must be extended across the Los Angeles River on a viaduct to the
area selected for the union station. The main track of the Santa Fe
runs along the river side of the selected area, but an extension of
its main tracks will have to be made to bring it into the new
station.
The order requires the joint use of land, tracks, and terminal
facilities valued at $28,050,691, the abandonment of three existing
passenger stations of the railways as such, and the ultimate
capital expenditure for all recommendations of from $25,000,000 to
$45,000,000.
The Railroad Commission, in the supreme court of the state,
pressed the argument that, in view of its finding that the union
station was an indispensable element in getting rid of the grade
crossings, it had the incidental right to order its building. The
court rejected the argument. It said:
Page 264 U. S. 341
"That, notwithstanding the views expressed by the Railroad
Commission in its findings and conclusions in the proceeding herein
presented for review, we can perceive no indispensable relation
between the elimination of grade crossings and the establishment of
union depot facilities, nor can we see an unsurmountable difficulty
why jurisdiction over the matter of eliminating grade crossings may
not be exercised in a proper case consistently, and it may be
concurrently, with the exercise of the authority which is vested by
the act of Congress of 1920 in the Interstate Commerce Commission
over the subject of union terminal depot facilities."
The state supreme court thus modifies the findings of the
Railroad Commission insofar as they sought to tie the validity of
its order establishing a union station to its unquestioned police
power to regulate grade crossings in the interest of the public
safety. We avoid any inquiry how far, if at all, the principle laid
down in
Erie R. Co. v. Board of Public Utility,
254 U. S. 394, is
qualified by the provisions of the Transportation Act. Our only
question here is whether the power to direct a new union station,
with its essential incidents, is committed exclusively to the
Interstate Commerce Commission under the Act of 1920.
In
Dayton-Goose Creek Ry. Co. v. United States,
263 U. S. 456,
this Court said of the Transportation Act:
"The new act seeks affirmatively to build up a system of
railways prepared to handle promptly all the interstate traffic of
the country. It aims to give the owners of the railways an
opportunity to earn enough to maintain their properties and
equipment in such a state of efficiency that they can carry well
this burden. To achieve this great purpose, it puts the railroad
systems of the country more completely than ever under the
fostering guardianship and control of the [Interstate Commerce]
Commission, which is to supervise their issue of
Page 264 U. S. 342
securities, their car supply and distribution, their joint use
of terminals, their construction of new lines, their abandonment of
old lines, and by a proper division of joint rates, and by fixing
adequate rates for interstate commerce, and, in case of
discrimination, for intrastate commerce to secure a fair return
upon the properties of the carriers engaged."
New England land Divisions Case, 261 U.
S. 184;
Railroad Commission v. C., B. & Q.
Ry., 257 U. S. 563.
On the one hand, it is urged that, with the purposes thus
declared, the act commits to the supervision and control of the
Interstate Commerce Commission such an undertaking as is here in
question, involving a new capital investment of from $25,000,000 to
$45,000,000 in the terminals of three great interstate railway
systems in the largest city of our western coast. On the other
hand, it is earnestly contended that, since no specific provision
is made for the supervision of interstate union stations by the
Interstate Commerce Commission, the whole subject remains in the
control of the State Railroad Commissions. We must examine the
sections of the act in some detail to determine the force of these
counter contentions.
The term "railroad" is defined in the act, par. 3, § 400, to
include all switches, spurs, tracks, terminals, and terminal
facilities of every kind used or necessary in the transportation of
persons or property including freight depots, yards, and grounds
used therein. Section 402, after defining the term "car service"
under the act as including use, control, distribution, and exchange
of locomotives, cars, and other vehicles used in interstate
transportation, provides for just regulation of it by the
Commission, and gives that body power in case of shortage of
equipment or other emergency, to suspend the regulations, to give
just directions, without regard to ownership, to promote the
service and to adjust proper compensation
Page 264 U. S. 343
for its use, and "to require such joint or common use of
terminals, including main track or tracks for a reasonable distance
outside of such terminals," as in the opinion of the Commission
will meet the emergency and the public interest and, upon hearing,
determine just compensation for use of same. Paragraph 16
authorizes the Commission to provide transportation by other
carriers if one carrier is unable to handle its traffic upon terms
fixed by the Commission.
By § 405, amended § 3 of the Interstate Commerce Act provides in
its third paragraph that all carriers shall afford all reasonable
facilities for the interchange of traffic between their respective
lines and for forwarding and delivering passengers. Paragraph 4
provides that the Commission may, in the public interest and
without impairment of a carrier's power to handle its own business
with its terminal facilities, require the use of its terminal
facilities, including its main line track or tracks for a
reasonable distance outside of its terminal for another carrier or
carriers, upon such terms as may be agreed upon by the parties,
fixed by the Commission or determined by suit as in condemnation
proceedings.
It is obvious from the foregoing that Congress intended to place
under the superintending and fostering direction of the Interstate
Commerce Commission all increased facilities in the matter of
distribution of cars and equipment and in joint terminals, in the
exchange of interstate traffic and passengers between railways so
as to make it prompt and continuous. It not only provides for the
temporary expropriation of terminals and main track of one railway
to the common use of one or more other railways in an emergency,
but it also contemplates the compulsory sharing of one company's
terminals with one or more companies as a permanent arrangement.
This is a drastic limitation of a carrier's control and use of its
own property in order to secure convenience and dispatch
Page 264 U. S. 344
for the whole shipping and traveling public in interstate
commerce. It gives to the Interstate Commerce Commission the power
and duty, where the public interest requires, to make out of what
is the passenger and freight station of one interstate carrier a
union station or depot.
But it is insisted that the supervisory power thus conferred
does not include the installation of an interstate union station,
where its terminals and main tracks are newly built and the
interstate carriers are compelled to expropriate not the terminal
property of another interstate carrier, but property of others than
carriers not theretofore used for terminals. This would be giving
power to the Interstate Commerce Commission to provide for a small
and contracted union station of interstate carriers, limited to the
terminals of one carrier, and would leave the larger and more
important union stations of interstate carriers to the control of
state commissions. We think, however, that means of control over
installation of such new union stations for interstate carriers is
given to the Interstate Commerce Commission in amended paragraphs
(18 to 21) of § 402. They provide that no interstate carrier shall
undertake the extension of its line of railroad or the construction
of a new line of railroad, or shall acquire or operate any line of
railroad, or extension thereof, or shall engage in transportation
over such additional or extended line of railroad unless and until
the Commission shall certify that public convenience present or
future requires it, and that no carrier shall abandon all or any
portion of its line or the operation of it without a similar
certificate of approval. Such a certificate is, we think, necessary
in the construction of a new interstate union station, which
involves a substantial and expensive extension of the main tracks
or lines of interstate carriers who theretofore have maintained
separate terminals.
It is argued that paragraphs 18 to 21 of § 402 refer only to
extensions of a line of railroad having the
Page 264 U. S. 345
purpose to include new territory to be served by the interstate
carrier, and do not refer to an extension of new main track for the
mere purpose of rearranging terminals within the same city. We do
not think the language of paragraphs 18 to 21 can be properly so
limited. We are confirmed in this by paragraph No. 22, which
immediately follows:
"The authority of the Commission conferred by paragraphs (18) to
(21), both inclusive, shall not extend to the construction or
abandonment of spur, industrial, team, switching or side tracks
located or to be located wholly within one state, or of street,
suburban, or interurban electric railways which are not operated as
a part or parts of a general steam railroad system of
transportation."
This is a palpable distinction between the main tracks of an
interstate carrier and its spur, industrial, switching, or side
tracks, and shows the legislative intention to retain any
substantial change in the main tracks within the control of the
Interstate Commerce Commission. It may well be that a mere
relocation of a main track of an interstate carrier which does not
involve a real addition to or abandonment of main tracks and
terminals or a substantial change in destination does not come
within the paragraphs 18 to 21. One might, too, readily conceive of
railroad crossings or connections of interstate carriers in which
the exercise by a state commission of the power to direct the
construction of merely local union stations or terminals without
extensions of main tracks and substantial capital outlay should be
regarded as an ordinary exercise of the police power of the state
for the public convenience, and would not trench upon the power and
supervision of the Interstate Commerce Commission in securing
proper regulation of an interchange of interstate traffic or
passengers. Only a lawful order of the Interstate Commerce
Commission would raise a question of the power of
Page 264 U. S. 346
a state commission the such cases, as the proviso of paragraph
17, § 402, of the Transportation Act shows:
"That nothing in this Act shall impair or affect the right of a
state, in the exercise of its police power, to require just and
reasonable freight and passenger service for intrastate business
except insofar as such requirement is inconsistent with any lawful
order of the Commission made under the provisions of this Act."
But there is a great difference between such relocation of
tracks or local union stations and what is proposed here. The
differences are more than that of mere degree; they and their
consequences are so marked as to constitute a change in kind. They
come within paragraphs 18 to 21 of § 402, and require a certificate
of the Interstate Commerce Commission as a condition precedent to
the validity of any action by the carriers or of any order by the
state commission.
The proviso of paragraph 21 of § 402 is significant of the
distinction we are pointing out. It forbids the Commission to
authorize or order the extension of its lines
"unless the Commission finds, as to such extension, that it is
reasonably required in the interest of public convenience and
necessity, or as to such extension . . . that the expense involved
therein will not impair the ability of the carrier to perform its
duty to the public."
The extensions of the lines and main tracks of these railways
under the plan which the state commission has ordered are not great
in distance, but they involve a new intramural destination for each
railway, with important changes in the handling of interstate
traffic and passengers. Great expense attends such changes of the
main tracks in a crowded city, and they here carry with them as
necessarily incident thereto, the abandonment of available sites
and of valuable existing passenger and freight stations and the
construction of a new union station elsewhere, imposing on the
three railways a cost in making
Page 264 U. S. 347
the changes of from $25,000,000 to $45,000,000. We think it
clear that, in such an extension of main lines with their
terminals, the Interstate Commerce Commission is required by the
act to make a finding that the expense involved will not impair the
ability of the carriers concerned to perform their duty to the
public.
The purpose of Congress to prevent interstate carriers from
incurring expense which will lessen their ability to perform well
their interstate functions is further shown in § 439 of the
Transportation Act, whereby the Interstate Commerce Act is amended
by insertion of § 20a. This new section subjects to the approval or
rejection of the Interstate Commerce Commission the issue by an
interstate carrier of all future shares of stock, bonds, or other
evidence of indebtedness, and forbids approval unless the
Commission shall find that their issue is for a lawful purpose, is
compatible with the public interest, is appropriate and necessary
to the discharge of its public duty as a common carrier, and will
not impair its ability to perform that service. This is, of course,
in pari materia with the restriction of paragraph 21 of §
402 to prevent a possible impairment of the financial ability of
interstate carriers to discharge their interstate commerce duties.
Such a heavy burden as that involved in this new union station and
the main track changes and extensions and other accessories would
in all probability require the three railways to issue new capital
securities, and this could not be done without the approval of the
Interstate Commerce Commission. To be sure, this provision only
becomes operative when securities have to be issued, and would not,
of itself, prevent action by a state commission until such
securities are seen to be necessary; but the provision indicates
the general congressional plan.
We were advised by statements at the bar that, after the
California Supreme Court handed down its decision in this case, the
City of Los Angeles filed a petition with
Page 264 U. S. 348
the Interstate Commerce Commission, asking for an order to
provide, maintain, and use a union station, that a hearing
followed, and that, pending the decision in this Court, the matter
is held under consideration.
For the reasons given, we think the course taken by the City of
Los Angeles was the correct one. Until the Interstate Commerce
Commission shall have acted under paragraphs 18 to 21 of § 402 of
the Transportation Act. the respondent railways cannot be required
to provide a new interstate union station and to extend their main
tracks thereto as ordered by the State Railroad Commission.
The judgment of the Supreme Court of California is
Affirmed.