Application was made to the Interstate Commerce Commission under
§ 309(c) of Part III of the Interstate Commerce Act for a
certificate of convenience and necessity to operate as common
carriers of motor vehicles by water on the Great Lakes. It was
opposed by appellees, who had been engaged in such service before
the war. The Government had requisitioned many vessels of the
appellees, leaving two of them with no automobile carriers and the
third with only nine vessels, five of which were owned by and
operated for the Government. Applicants owned, free of encumbrance,
three vessels which had been used extensively before the war as
automobile carriers, mostly under charter to one of the appellees.
They had been converted for carrying bulk traffic, but could
readily be reconverted to handle automobile traffic. The Commission
found that, before the war, there were insufficient facilities for
this purpose during peak periods, that there had been a definite
need for the carrying capacity of applicants' vessels, that there
was a reasonable certainty that a like need would arise when
production of automobiles for civilians was resumed, that there was
considerable uncertainty as to the time it would take for appellees
to procure additional vessels and place them in operation, and that
the public interest would be adversely affected if appellees were
delayed in acquiring the additional facilities needed. It held that
the proposed service would be required by future public convenience
and necessity, and granted the certificate. Its action was
challenged by appellees.
Held:
1. The Commission acted within its statutory authority and
administrative discretion in granting the certificate. P.
326 U. S.
241.
2. A positive finding by the Commission of an actual inability
of existing carriers to acquire the necessary facilities to meet
future transportation needs is not a prerequisite to the granting
of such a certificate. P.
326 U. S.
240.
3. The Commission has been entrusted with a wide range of
discretionary authority in determining whether to grant such
certificates. P.
326 U. S.
241.
Page 326 U. S. 237
4. Its function is not only to appraise the facts and draw
inferences from them, but also to exercise an expert judgment and
to determine from its analysis of the total situation on which side
of the controversy the public interest lies. P.
326 U. S.
241.
5. It is entitled to consider the margin of safety which the
public interest requires for the resumption of a interrupted
service, and it has discretion to conclude that future shipping
needs should be assured, rather than left uncertain. Pp.
326 U. S.
240-241.
57 F. Supp. 81 reversed.
Appeal from a decree of a district court of three judges setting
aside an order of the Interstate Commerce Commission granting a
certificate of convenience and necessity to operate as common
carriers of motor vehicles by water on the Great Lakes.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
The Interstate Commerce Commission pursuant to § 309(c) of Part
III of the Interstate Commerce Act, 54 Stat. 941, 49 U.S.C. §
909(c), granted to T. J. McCarthy Steamship Co. and Automotive
Trades Steamship Co. (whom we will call the applicants) a
certificate of convenience and necessity to operate as common
carriers in the transportation by water of motor vehicles from
Detroit, Michigan to ports on Lake Erie and Lake
Page 326 U. S. 238
Superior. [
Footnote 1] 260
I.C.C. 175. The appellees, who were protestants in the proceeding
before the Commission and who are common carriers of motor vehicles
by vessels on the Great Lakes, challenged that order before a
district court of three judges. That court set aside the
Commission's order. 57 F. Supp. 81. The case is here on appeal.
[
Footnote 2]
World War II caused the cessation of the production of motor
vehicles for civilian use. Prior to that time, appellees, as common
carriers, had transported motor vehicles by vessels from Detroit to
various ports on the Great Lakes. The applicants owned three
vessels equipped as automobile carriers. These vessels were used
extensively prior to the war in transporting automobiles from
Detroit to Lake Erie ports. They were, for the most part, under
charter to one of the appellees from 1936 through 1941. With the
advent of the war, the United States requisitioned many of the
vessels of the appellees, using some of them for carrying bulk
commodities on the Great Lakes and removing others to the salt
water. As a result, two of the appellees, at the time of the
hearing [
Footnote 3] in June,
1943, had no automobile carriers, and were not operating; the third
was operating nine vessels, of which five were owned by and
operated for the United States. In contrast, the applicants owned
their three vessels free and clear of any encumbrance, and, while
those vessels had been converted for carrying bulk traffic, all of
the equipment necessary for reconversion into automobile carriers
had been preserved. The Commission found that, prior to the war,
there were insufficient facilities for the movement of automobiles
on
Page 326 U. S. 239
the Great Lakes during certain peak periods, even with the
carrying capacity of applicant's vessels included. There was
testimony of automobile manufacturers and of motor common carriers
that the carrying capacity of applicants' vessels would be needed
when the manufacture of automobiles was resumed. The Commission
found that, prior to the war, there was a definite need for the
carrying capacity of applicants' vessels in this transportation,
and that there was a reasonable certainty that a like need for that
capacity would arise when the production of automobiles for
civilian use was resumed. It found that, while the applicants could
readily reconvert their vessels to handle automobile traffic, there
was considerable uncertainty as to the length of time it would take
the appellees to procure and place in operation the additional
vessels which would be needed when production of automobiles for
civilian use was resumed. It concluded that the public interest
would be adversely affected if, after production was resumed,
appellees were delayed in acquiring the additional facilities
needed to meet the transportation demands. On that basis, it held
that the proposed service would be required by future public
convenience and necessity.
The District Court held that the Commission's order could not be
sustained in absence of evidence that applicants' vessels were the
only vessels available to appellees to meet the prospective
transportation demands beyond that furnished by their own vessels.
It concluded that not only was there no finding that, if
applicants' vessels were not chartered, there was no other carrying
capacity which could have been acquired, but that the record
established the contrary.
The case, however, is not one where there is a service presently
being rendered and a newcomer seeks entry into the field. Whether,
in that event, the ruling of the District Court would be correct is
a question we do not reach.
Page 326 U. S. 240
While the authority of appellees to serve as carriers has not
been terminated, the service formerly rendered by them has been
interrupted by the war. The applications concern a proposed
additional service to be rendered in the future. Sec. 309(c)
authorizes the Commission to permit the proposed service to be
rendered if it "is or will be required by the present or future
public convenience and necessity." That entails a prophecy so far
as future requirements are concerned. The Commission made that
prophecy on the basis of (1) the earlier service which had been
discontinued during the war, (2) the likely requirements for the
future, and (3) the ability of the existing carriers to effect an
expeditious resumption of service at the war's end. The ability of
the applicants promptly to render the service at that time is
adequately established. Whether the appellees could or would move
with like dispatch is less certain. Many of the vessels which they
previously owned had been taken by the United States. And the
Commission had doubt as to whether they would or could obtain the
necessary additional transportation facilities in time to meet the
foreseeable future demands which would arise when automobile
manufacture was resumed. We do not have here a case where there was
a surplus of facilities in the prior service which the war
interrupted. The Commission, indeed, found that the prior service
had not been adequate, a finding which we think is supported by
evidence. It took that fact into consideration in determining the
margin of safety which the public interest required for the
resumption of the interrupted service. We think the inadequacy of
the prior service was relevant to that determination. It not only
bore upon the future shipping needs which were likely, but also
underscored the danger of delays in resuming the service if the
field were left exclusively to existing carriers.
If the Commission were required to deny these applications
unless it found an actual inability on the part of
Page 326 U. S. 241
existing carriers to acquire the facilities necessary for future
transportation needs, a limitation would be imposed on the power of
the Commission which is not found in the Act. The Commission is the
guardian of the public interest in determining whether certificates
of convenience and necessity shall be granted. For the performance
of that function, the Commission has been entrusted with a wide
range of discretionary authority.
Interstate Commerce
Commission v. Parker, 326 U. S. 60. Its
function is not only to appraise the facts and to draw inferences
from them, but also to bring to bear upon the problem an expert
judgment and to determine from its analysis of the total situation
on which side of the controversy the public interest lies. Its
doubt that the public interest will be adequately served if
resumption of service is left to existing carriers is entitled to
the same respect as its expert judgment on other complicated
transportation problems.
See Chesapeake & O. R. Co. v.
United States, 283 U. S. 35,
283 U. S. 42;
Alton R. Co. v. United States, 315 U. S.
15,
315 U. S. 23.
Forecasts as to the future are necessary to the decision. But
neither uncertainties as to the future nor the inability or failure
of existing carriers to show the sufficiency of their plans to meet
future traffic demands need paralyze the Commission into inaction.
It may be that the public interest requires that future shipping
needs be assured, rather than left uncertain. The Commission has
the discretion so to decide. It went no further here.
Reversed.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
[
Footnote 1]
The companies are both controlled by T. J. McCarthy. The
certificate runs to T. J. McCarthy Steamship Co., for itself and as
managing agent of Automotive Trades Steamship Co.
[
Footnote 2]
Jud.Code, § 210, 28 U.S.C. § 47a, and § 238 of the Judicial Code
as amended, 28 U.S.C. § 345.
[
Footnote 3]
The Commission rendered its decision on March 7, 1944.
