1. Under the Transportation Act of 1940, the Interstate Commerce
Commission has authority, in connection with through rail-water
routes, to require a railroad to interchange its cars with a water
carrier and to abrogate a rule of an association of railroads
prohibiting such interchange. Pp.
323 U. S. 615,
323 U. S.
619.
2. The authority of the Interstate Commerce Commission to
require a railroad to interchange its cars with a water carrier
extends to interstate movements over routes which are partly
outside the territorial waters of the United States. Pp.
323 U. S. 620,
323 U. S.
622.
3. An order of the Interstate Commerce Commission fixing, as
reasonable compensation for the use by a water carrier of cars of
connecting railroads, $1.00 per car per day for such period as the
cars are in the water carrier's actual possession was supported by
substantial evidence, and is sustained. P.
323 U. S.
623.
55 F.
Supp. 473 reversed in part.
Cross appeals from a judgment of a district court of three
judges setting aside in part an order of the Interstate Commerce
Commission.
Page 323 U. S. 613
MR. JUSTICE BLACK delivered the opinion of the Court.
Seatrain Lines, Inc., is a common carrier of goods by water. In
1929, its predecessor began to carry goods from Belle Chasse,
Louisiana, to Havana, Cuba. Each of the vessels used was so
constructed that it could carry a number of railroad cars, and
special equipment was provided to hoist these cars from adjacent
tracks on the docks and move them bodily into the vessels. It was
thereby rendered unnecessary for goods carried to the ports in
railroad cars to be unloaded from the cars and carried piecemeal
into the vessels. This new method of transportation, so the
Interstate Commerce Commission has found, was a great improvement
over the old practice, less destructive to the goods, more
economical, and more efficient. 226 I.C.C. 7, 20, 21. In 1932,
Seatrain decided to initiate a new interstate service between
Hoboken, N.J., and Belle Chasse, Louisiana, via Havana, Cuba, and
thus entered into direct competition with the interstate
transportation of freight by railroads. During the time Seatrain
had limited its business to foreign transportation --
i.e., Louisiana to Cuba -- the noncompeting railroads
freely permitted it the use of their cars. Shortly after it began
its interstate service, however, the following rule was promulgated
by the American Railway Association: [
Footnote 1]
"Cars
Page 323 U. S. 614
of railway ownership must not be delivered to a steamship,
ferry, or barge line for water transportation without permission of
the owner filed with the Car Service Division."
Thereafter, some railroads continued to permit Seatrain to use
their cars, but others, including the parties to this proceeding,
refused to do so. No railroads
"refused to permit delivery of their cars to any of the other 11
water lines listed in a circular of the Association as coming
within the intendment of the rule."
206 I.C.C. 328, 337.
A complaint was filed with the Interstate Commerce Commission.
Appropriate hearings were conducted, and a series of findings and
opinions were entered. The findings were that the sole object of
the Association of Railroads' rule was to prevent diversion of
traffic from the railroads to Seatrain; that Seatrain, as an
interstate water carrier, was subject to the Commission's
jurisdiction; that its interstate operations were in the public
interest, and of advantage to the convenience and commerce of the
public; that the Commission had jurisdiction to require through
rail-water interstate routes, and, where such through routes were
established, to require railroads to interchange cars with water
carriers, 195 I.C.C. 215; 206 I.C.C. 328. An initial order of the
Commission required the railroads to establish certain through
joint rail-water routes with Seatrain. Such through interstate
routes, together with joint rates, were established. 226 I.C.C. 7;
243 I.C.C.199. The Commission then heard evidence and found that a
payment of $1.00 per day would be a reasonable amount for Seatrain
to pay the railroads for their cars while they were in Seatrain's
possession. 237 I.C.C. 97; 248 I.C.C. 109. Based on its findings,
the Commission ordered the railroads to abstain from observing and
enforcing rules and practices which prohibited the interchange of
their freight cars for transportation by Seatrain in interstate
commerce.
Page 323 U. S. 615
The railroads promptly brought this action under 28 U.S.C. §§
41(28), 47, to set aside the Commission's order. The District Court
set aside the order insofar as it required railroads to interchange
cars destined for carriage by Seatrain outside the territorial
waters of the United States, but sustained it in all other
respects.
55 F.
Supp. 473. Both sides appealed directly to this Court, as
authorized by the Urgent Deficiencies Act of October 22, 1913, 28
U.S.C. §§ 47, 47a, and Section 238 of the Judicial Code, 28 U.S.C.
§ 345, par.(4).
First. It is contended that the railroads are under no
duty to deliver their cars to Seatrain, and that the Interstate
Commerce Commission is without authority to require them to do so.
It has long been held, and it is not denied here, that, since the
passage of the Interstate Commerce Act, railroads may be compelled
to establish through routes [
Footnote 2] and to interchange their cars with each other,
[
Footnote 3] both subject to
reasonable terms. Nor is it denied that the railroads are under a
legal duty, enforceable by proper Commission orders, to establish
through routes with connecting water carriers. [
Footnote 4] The narrow contention is that the
power granted the Commission to require establishment and operation
of through rail-water routes does not empower it to require a
railroad to interchange its cars with a water carrier. Since the
Commission's order was entered after passage of the 1940
Transportation Act,
Page 323 U. S. 616
54 Stat. 898, the question must be decided under that Act.
Ziffrin, Inc. v. United States, 318 U. S.
73,
318 U. S.
78.
There is no language in the present Act which specifically
commands that railroads must interchange their cars with connecting
water lines. We cannot agree with the contention that the absence
of specific language indicates a purpose of Congress not to require
such an interchange. True, Congress has specified with precise
language some obligations which railroads must assume. But all
legislation dealing with this problem since the first Act in 1887,
24 Stat. 379, has contained broad language to indicate the scope of
the law. The very complexities of the subject have necessarily
caused Congress to cast its regulatory provisions in general terms.
Congress has, in general, left the contents of these terms to be
spelled out in particular cases by administrative and judicial
action, and in the light of the congressional purpose to foster an
efficient and fair national transportation system.
Cf. Chicago,
R.I. & P. R. Co. v. United States, 274 U. S.
29,
274 U. S. 36;
ICC v. Railway Labor Executives Assn., 315 U.
S. 373,
315 U. S.
376-377.
The 1940 Transportation Act is divided into three parts -- the
first relating to railroads, the second to motor vehicles, and the
third to water carriers. That Act, as had each previous amendment
of the original 1887 Act, expanded the scope of regulation in this
field and correlatively broadened the Commission's powers. The
interrelationship of the three parts of the Act was made manifest
by its declaration of a
"national transportation policy of the Congress to provide for
fair and impartial regulation of all modes of transportation
subject to the provisions of this Act, so administered as to
recognize and preserve the inherent advantages of each."
The declared objective was that of
"developing, coordinating, and preserving a national
transportation system by water, highway, and rail, . . . adequate
to meet the needs of the commerce of the
Page 323 U. S. 617
United States. . . ."
Congress further admonished that "all of the provisions of this
Act shall be administered and enforced with a view to carrying out
the above declaration of policy." 54 Stat. 899.
This policy cannot be carried out as to Seatrain's interstate
carriage unless railroads interchange their cars with it. The
particular type of service introduced by Seatrain, and found by the
Commission to be qualitatively superior, cannot be rendered without
the privilege of carrying the very railroad cars which carry
freight to its ports. The "inherent advantages of this service"
would be lost to the public without railroad car interchange.
Furthermore, the Act calls for "fair and impartial regulation."
The railroad Association's rule, however, is constructed on the
premise that the railroads can, at their discretion, determine
which water carrier may, and which may not, transport their cars.
Seatrain alone, of all the water carriers, according to the
Commission's findings, has been refused car interchange. This means
that the Association's rule, if valid, enables the railroads to
decline to deal with Seatrain as it does with other carriers. As
early as 1914, the Commission had declared that the Interstate
Commerce Act, as then in effect, prohibited railroad practices
which lent themselves to such purpose. The Commission said at that
time:
"If rail carriers are permitted to choose the particular boat
lines with which they will establish through routes and joint
rates, they will be able to dictate who shall operate on the water
and who shall not, for a boat line which is accorded a monopoly of
the through rail-and-water traffic will soon be able to drive its
competitors out of business."
Pacific Navigation Co. v. Southern Pacific Co., 31
I.C.C. 472, 479.
We cannot agree with the contention that the Commission has less
power now to protect water carriers than it
Page 323 U. S. 618
had in 1914. [
Footnote 5]
The 1940 Act was intended, together with the old law, to provide a
completely integrated interstate
Page 323 U. S. 619
regulatory system over motor, railroad, and water carriers. In
the light of its declared policy, and because of its provisions
hereafter noted, we think railroads are under a duty to provide
interchange of cars with water carriers to the end that interstate
commerce may move without interruption or delay.
Cf. Flour City
S.S. Co. v. Lehigh Valley R. Co., 24 I.C.C. 179, 184.
Sec. 1(4) of Part I of the Act imposes a duty on railroads to
establish reasonable through routes with other carriers, including
water carriers, and to "provide reasonable facilities for operating
such routes" [
Footnote 6] under
"reasonable rules and regulations."
Sec. 3(4) makes it the duty of railroads to
"afford all reasonable, proper, and equal facilities for the
interchange of traffic between their . . . lines and connecting
lines, and for the . . . forwarding . . . of . . . property to and
from connecting lines,"
and a "connecting line" is defined to include a water
carrier.
Section 15(3) supplements these sections by providing that the
Commission may hold hearings, and "shall" if it deems it
"necessary or desirable in the public interest, . . . establish
through routes . . . and the terms and conditions under which such
through routes shall be operated."
These sections provide sufficient authorization for the
Commission's order. It was from its power to require through routes
that the Commission originally derived its power to require
interchange of railroad cars among connecting railroads. [
Footnote 7] Since a rail-water through
route with Seatrain cannot function without an interchange of cars,
the unquestioned power of the Commission to require establishment
of such routes would be wholly fruitless without the correlative
power to abrogate the Association's rule which prohibits the
interchange.
Page 323 U. S. 620
Second. It is contended, and the court below held,
that, if the Commission has power to require railroads to
interchange cars with through route connecting water carriers, it
is without power to do so if a route traverses, in part, foreign
waters, as Seatrain's does. This contention basically rests on
paragraphs (1) and (2) of Section 1 of the Interstate Commerce Act,
as amended by Sec. 400 of the 1920 Act, 41 Stat. 474, left
unchanged by Part I of the 1940 Act. The language relied upon in
these paragraphs declares that the provisions of Part I, relating
to railroads and their transportation, shall apply "only insofar as
such transportation . . . takes place within the United States."
Limiting language to the same effect is contained in the water
carrier regulatory provisions of Part III of the 1940 Act.
[
Footnote 8]
This Court has stated that the 1920 Act, containing this
limiting clause, "applies to international commerce only insofar as
the transportation takes place in the United States."
Lewis-Simas-Jones Co. v. Southern Pac. Co., 283 U.
S. 654,
283 U. S. 660.
The question in that case was as to joint through railroad rates
over a railroad route partly in the United States and partly in
Mexico. The Court further said as to this situation that "[t]he Act
does not empower the Commission to prescribe or regulate such
rates." [
Footnote 9] In
St.
Louis, etc., R. Co. v. Brownsville Nav. District, 304 U.
S. 295, this Court was called upon to consider
Page 323 U. S. 621
whether, under the 1920 Act, there was a duty on the part of
American railroads to furnish cars for transportation on a Mexican
railroad. It was there held that, in the absence of a
discrimination against shippers, places, or classes of traffic
within the United States, American railroads were "not bound by any
law, regulation, or tariff to furnish cars for transportation in
Mexico." These decisions simply meant that whatever power Congress
might have to regulate the conduct of its domestic companies doing
business abroad, [
Footnote
10] it had, by the limiting provisions of the 1920 Act,
expressed its purpose not to empower the Commission with general
authority to regulate rail transportation in foreign countries.
But these interpretations of the 1920 Act concerning rail
transportation outside the United States are of dubious relevance
to the instant case. For Congress has, in Sec. 15(3) of the 1940
Act, unequivocally granted to the Commission the power to establish
through joint rail-water routes, and Sec. 302(i)(2) makes this
power applicable to such routes "from a place in the United States
to another place in the United States." [
Footnote 11]
Cf. Cornell Steamboat Co. v. United
States, 321 U. S. 634. The
reason for this grant of authority to the Commission is apparent.
It is well known that a substantial part of intercoastal and lake
transportation among the states in which American companies engage
traverses waters outside of the territorial limits of the United
States. Foreign countries have not the same interest in this purely
domestic carriage of goods as they have in controlling the movement
of rail
Page 323 U. S. 622
roads in their territory. [
Footnote 12] Such transportation must be regulated by
this country if it is to be effectively regulated. Congress
recognized this fact when it made special provision in Section
15(3) for the Commission to regulate water transportation from one
to another place in the United States, even though that
transportation took place "partly outside" the United States. It is
this particular provision, made especially applicable to interstate
rail-water transportation, by which the Commission's authority over
such movements must be measured, rather than by the limiting clause
of Section 1, which is applicable to the Commission's power over
railroad transportation. There is therefore nothing in the Act to
deny the Commission the same power over interstate water-rail
transportation which passes through foreign waters, as we have just
held it enjoys where the transit is wholly within the territorial
limits of the United States. We therefore hold that the order of
the Commission requiring car interchanges was within its authority
as to interstate movements which take place within or without the
territorial waters of the United States. [
Footnote 13]
Page 323 U. S. 623
Third. The Commission found that $1.00 per car per day,
to be paid to the car owners while Seatrain actually had cars in
its possession, was a reasonable compensation. Although, in
practice, cars brought to the ports must sometimes wait several
days for Seatrain's sailing, the Commission did not require
Seatrain to make
per diem payments during this waiting
period. It is contended that the Commission should require Seatrain
to pay for the cars from the time they are made available to it;
that the rate of compensation was too low, and that, in both
respects, the result is to require railroads to afford Seatrain the
"free use" of their property, thereby imposing a burden upon the
railroads which Congress neither did nor could have authorized.
Chicago R.I. & P. R. Co. v. United States,
284 U. S. 80,
284 U. S.
97.
The questions thus raised depend upon a determination of facts.
The findings of the Commission, discussed at length in its
opinions, illustrate the complex nature of the facts involved.
Hoboken Manufacturers' R. Co. v. Abilene & S. R. Co.,
237 I.C.C. 97, 101, 102; 248 I.C.C. 109. Those facts need not be
repeated here. The Commission not only had the benefit of the
testimony offered in these proceedings, but was possessed of wide
experience with the general problem of car hire.
See e.g.,
Rules for Car-Hire Settlement, 160 I.C.C. 369. We have carefully
examined the record, and find substantial evidentiary support for
the Commission's finding
"that the current code of
per diem rules governing the
interchange of freight cars between the defendants above referred
to and other rail carriers, including the current rate of $1 per
day payable by Seatrain for such period as the cars are in its
actual
Page 323 U. S. 624
possession, would be reasonable for application to the
interchange of cars between defendants and complainants for use by
Seatrain."
Hoboken Manufacturers' R. Co. v. Abilene & S. R.
Co., 248 I.C.C. at 119. This being true, we sustain the
Commission's order in this respect. [
Footnote 14]
We find no merit in any of the other contentions raised against
the order of the Commission.
The judgment in No. 47 is reversed, and the judgment in No. 48
is affirmed.
It is so ordered.
MR. JUSTICE ROBERTS dissents.
* Together with No. 48,
Pennsylvania Railroad Co. et al. v.
United States et al., also on appeal from the District Court
of the United States for the District of New Jersey.
[
Footnote 1]
Later, the American Railway Association and other railroad
organizations consolidated their activities under the name of the
Association of American Railroads. The new Association adopted the
same rule.
[
Footnote 2]
St. Louis S.W. R. Co. v. United States, 245 U.
S. 136,
245 U. S.
142-144.
[
Footnote 3]
Missouri & Illinois Coal Co. v. Illinois Central R.
Co., 22 I.C.C. 39, 44;
Chicago, R.I. & P. R. Co. v.
United States, 284 U. S. 80,
284 U. S. 91,
284 U. S.
101-102;
cf. St. Louis S.W. R. Co. v. Arkansas,
217 U. S. 136,
217 U. S.
145-146.
[
Footnote 4]
Such has long been the ruling of the Interstate Commerce
Commission.
Chattanooga Packet Co. v. Illinois C. R. Co.,
33 I.C.C. 384, 391, 392;
Flour City S.S. Co. v. Lehigh Valley
R. Co., 24 I.C.C. 179;
Decatur Navigation Co. v.
Louisville & N. R. Co., 31 I.C.C. 281, 288;
Pacific
Navigation Co. v. Southern Pac. Co., 31 I.C.C. 472, 479.
[
Footnote 5]
This argument rests on a historical analysis of provisions in
the original Act and later amendments which impose specific duties
as to car interchanges. A detailed and clear narrative of the
history appears in the opinion of the District Court. 55 F. Supp.
479-483,
supra. In summary, the argument is this. The
original 1887 Act, applying only to railroads, 24 Stat. 379,
required, in Section 3, an "interchange of traffic," but did not
specifically provide for an interchange of cars. The Hepburn
Amendment of 1906, 34 Stat. 584, subjected water carriers to the
Act so far as they connected with railroads in interstate commerce,
defined transportation to include "cars" and "facilities," and made
it the duty of railroads to establish through routes. The
Mann-Elkins Amendment of 1910, 36 Stat. 539, 545, required carriers
to make reasonable rules and regulations to provide for "exchange,
interchange, and return of cars" used on through routes. The Esch
Car Service Act of 1917, 40 Stat. 101, again required interchange
of cars, and specifically gave the Commission power to establish
rules to enforce the requirement. The Transportation Act of 1920,
41 Stat. 456, 476, omitted the exact language of the car
interchange requirement which had appeared in the 1910 Mann-Elkins
Amendment, but substituted for it Sections 1(10)(11)(13) and (14),
which contained more elaborate language imposing still more
specific duties in this respect. These "car service" provisions
were not changed by the 1940 Transportation Act. The Mann-Elkins
and the Esch Car Service Amendments, however, had made the car
interchange provisions applicable to every "carrier subject to the
provisions of this Act." The 1920 Act made the car service
provisions applicable to "carriers by railroad subject to this
Act;" the 1940 Act made them applicable to a "carrier by railroad
subject to this part." The argument is that these changes, made in
the 1920 and carried into the 1940 Act, show a continuing purpose
of Congress to deprive the Commission of the power to require
interchange of cars with water carriers -- to detract from its
authority. But we have already had occasion to say that the 1920
Act
"materially extends the jurisdiction of the Commission in
respect of land and water transportation and the carriers engaged
in it whenever property may be or is transported . . . by rail and
water by a common carrier or carriers. . . ."
Chicago, R.I & P. R. Co. v. United States,
274 U. S. 29,
274 U. S. 35.
This conclusion as to the scope of the 1920 Act is fully justified
by its history, 206 I.C.C. 339-343,
supra. Consequently,
the 1920 changes in the language of the car service requirements do
not justify the narrow interpretation of the 1940 Act which is here
urged.
[
Footnote 6]
As to cars' being "facilities,"
see Sec. 1(3)(a) of the
Act and
Assigned Car Cases, 274 U.
S. 564,
274 U. S. 575,
274 U. S. 580;
General American Tank Car Corp. v. El Dorado Terminal Co.,
308 U. S. 422,
308 U. S.
428.
[
Footnote 7]
See note 3
[
Footnote 8]
Sec. 302(i)(2) of the Act provides that the transportation
subject to regulation is that,
". . . partly by water and partly by railroad or motor vehicle,
from a place in a State to a place in any other State, except that,
with respect to such transportation taking place partly in the
United States and partly outside thereof, such terms shall include
transportation by railroad or motor vehicle only insofar as it
takes place within the United States. . . ."
[
Footnote 9]
Notwithstanding this, however, the Court held that, where such
joint rates were voluntarily fixed and charged by an American
railroad, the Commission could, under the power given it by the
1920 Act, pass upon the reasonableness of the joint international
rate.
[
Footnote 10]
See Knott v. Botany Worsted Mills, 179 U. S.
69;
Cunard S.S. Co. v. Mellon, 262 U.
S. 100,
262 U. S.
129.
[
Footnote 11]
The Commission denied Seatrain's petition insofar as it asked an
order requiring railroads to interchange their cars for the purpose
of handling freight to Cuba.
Investigation of Seatrain Lines,
Inc., 206 I.C.C. 337,
supra; Hoboken Manufacturers' R. Co.
v. Abilene & S. R. Co., 248 I.C.C. 118, 119,
supra.
[
Footnote 12]
Section 1(1)(c) of Part I of the Act, which contains the general
clause limiting the Act's application to railroad transportation
within the United States, also declares its application to
transportation "from any place in the United States through a
foreign country to any other place in the United States." This
latter clause, as the District Court recognized, 55 F. Supp. 487,
supra, would have little meaning, if the limiting clause
were given the interpretation for which the railroads here
contend.
[
Footnote 13]
We have not overlooked the argument that Congress intended to
take away part of the Commission's power over car interchanges by
repealing subdivision (b) of Sec. 6(13) of the Act to Regulate
Commerce as amended, 37 Stat. 560, which reads as follows:
"To establish through routes and maximum joint rates between and
over such rail and water lines, and to determine all the terms and
conditions under which such lines shall be operated in the handling
of the traffic embraced."
This repealed provision was substantially embodied in 15(3) of
the 1940 Act. We think Commissioner Eastman, then Chairman of the
Legislative Bureau, made an accurate statement when, in writing the
Senate-House Conference Committee considering the 1940 Act, he
stated that he did not object to the repeal of 13(b), since
"[o]ther provisions of the bill adequately cover this matter."
Omnibus Transportation Legislation, House Committee Print, 76th
Congress, 3d Session, p. 23.
[
Footnote 14]
It is to be noted that the Commission has not foreclosed future
consideration of the car hire compensation problem, insofar as it
may be involved in determining railroad rates or a proper division
of through rail water rates between Seatrain and the railroads. 248
I.C.C. 117;
cf. Chicago R.I. & P. R. Co. v. United
States, 284 U. S. 80,
284 U. S. 109,
supra, note 11