1. An order of the Interstate Commerce Commission authorizing,
on the "Chicago to the east" leg of grain shipments originating
west of Chicago, a proportional rate 3 cents per hundred pounds
higher on ex-barge than on ex-lake or ex-rail shipments,
held not based on adequate findings and evidence, and
therefore unlawful under the Interstate Commerce Act as amended by
the Transportation Act of 1940. Pp.
330 U. S.
572-573,
330 U. S.
583.
(a) The policy and provisions of the Transportation Act of 1940
forbid approval by the Commission of barge rates or barge-rail
rates which do not preserve the inherent advantages of cheaper
water transportation, but which discriminate against water carriers
and the goods they transport. Pp.
330 U. S.
574-577.
(b) "Chicago to the east" railroads cannot lawfully charge more
for carrying ex-barge than for carrying ex-lake or ex-rail grains
to and from the same localities, unless the eastern haul of the
ex-barge grain costs the eastern railroads more to haul than does
ex-rail or ex-lake grain. P.
330 U. S.
577.
(c) Section 307(d) of Part III of the Interstate Commerce Act,
authorizing the Commission to fix differentials as between through
water-rail and through all-rail rates, does not authorize the
Commission to neutralize the effective prohibitions of other
provisions
Page 330 U. S. 568
which were strengthened in 1940 expressly to prevent
discrimination against water carriers. P.
330 U. S.
577.
(d) The Commission, no more than it could require the barge
carriers to raise rates inbound to Chicago which it accepted as
reasonable, cannot lawfully bring about the same prohibited result
by raising the railroad rates charged by eastern roads for ex-barge
grain shipments east from Chicago. Pp.
330 U. S.
577-578.
(e) The Commission's order is not supported by its conclusion
that it is "inequitable" for the barges to charge a much lower rate
for the inbound grain haul than the competitive western railroads
can afford to charge for the same haul. P.
330 U. S.
578.
(f) It is not within the province of the Commission to so adjust
rates as to equalize the transportation cost of barge shippers with
that of shippers who do not have access to barge service or to
protect the traffic of railroads from barge competition. P.
330 U. S.
579.
(g) Congress has not granted the Commission discretionary power
to approve any type of rates which would reduce the "inherent
advantage" of barge transportation in whole or in part. P.
330 U. S.
579.
(h) Partial compensation of eastern roads for additional transit
costs cannot be made in a manner which singles out ex-barge grain
for discriminatory treatment in violation of the Interstate
Commerce Act. P.
330 U. S.
583.
2. To justify the higher proportional rates on ex-barge grain,
the Commission would have to make findings supported by evidence to
show how much greater is the cost to the eastern roads of
reshipping ex-barge grain than of reshipping ex-lake or ex-rail
grain moving from the same localities and requiring the same
service as does the ex-barge grain. The "unsifted averages" put
forward by the Commission in this case do not measure the allegedly
greater costs, nor show that they exist. P.
330 U. S.
583.
3. Since, in this case, the United States was a necessary party
to the proceedings in the district court, the order of that court
requiring the Commission to serve notice of appeal on the United
States was not prejudicial error. P. 573,
n 6.
Affirmed.
In 1939, the eastern railroads filed with the Interstate
Commerce Commission schedules which imposed on ex-barge grain the
local rate from Chicago east, but allowed ex-rail and ex-lake grain
the benefit of 8-cent lower "reshipping" rates on the eastern haul.
The Commission,
Page 330 U. S. 569
after a hearing, made an order which left the railroad-proposed
higher rates in effect, but stated that,
"in a proper proceeding, we might prescribe proportional rates
on the ex-barge traffic lower than local, or joint barge-rail rates
lower than the combinations."
248 I.C.C. 307. A District Court set aside t he Commission's
order on the ground that fixing higher rates for ex-barge grain
than for ex-rail and ex-lake grain "discriminates against water
competition by the users of barges." 44 F. Supp. 368. On appeal,
this Court reversed, but with "no implication of approval of any
rates here involved."
ICC v. Inland Waterways Corp.,
319 U. S. 671. In
further proceedings, the Commission authorized ex-barge grain rates
east from Chicago 3 cents per hundred pounds higher than rates for
ex-rail and ex-lake grain. 262 I.C.C. 7. The appellees then brought
this suit in the District Court to set aside the order of the
Commission insofar as it permitted the railroads to put the higher
ex-barge grain rates into effect. The District Court set aside and
enjoined enforcement of the order. The Commission appealed to this
Court.
Affirmed, p.
330 U. S.
583.
Page 330 U. S. 570
MR. JUSTICE BLACK delivered the opinion of the Court.
A District Court of three judges enjoined in part an order of
the Interstate Commerce Commission, and the case is here on appeal
under 28 U.S.C. §§ 47, 47a, and 345. The Commission order
specifically relates to the railroad rate for grain transported
from Chicago, Illinois, to New York and other eastern points,
[
Footnote 1] after that grain
has been transported to Chicago from the west by connecting rail or
water carriers on through bills of lading. In such through
shipments, the through rate is a combination of distinctly separate
rates charged respectively for shipments from the west to Chicago
and from Chicago to the east. The charge fixed for the last leg of
the shipment is called, in railroad parlance, a "reshipping" or
"proportional" rate. It is lower from Chicago to the east than a
"local" rate charged for a shipment from Chicago to the east which
originates in Chicago.
See Atchison, T. & S.F. R. Co. v.
United States, 279 U. S. 768,
279 U. S.
771.
For many years, eastern railroads have carried grain east from
Chicago at reshipping rates 8 1/2 cents per hundred pounds lower
than local rates. Up to 1939, this "Chicago to the east" reshipping
rate had been identical for grain, whether brought to Chicago by a
connecting railroad, connecting lake steamer, or connecting barge.
Although barge lines were much slower than railroads, they were
less expensive to operate, and therefore could afford to transport
freight much more cheaply than railroads. The result was that the
barge-rail rate from a point in the west to eastern destinations
was considerably cheaper
Page 330 U. S. 571
than the all-rail rate from that point -- the difference being
measured by the relative cheapness of shipping over the barge leg
of the through route. Because of the cheaper barge rates, much of
the railroads' grain freight business from localities which could
be served by either barge or rail shifted to the barges [
Footnote 2] after 1933, when barge
service from western grain localities to Chicago was resumed.
[
Footnote 3] This was the barge
versus rail competitive situation which existed when, in 1939, the
eastern railroads filed schedules with the Commission which imposed
on ex-barge grain the local rate from Chicago east, but allowed
ex-rail and ex-lake grain the benefit of the 8 1/2 cent lower
"reshipping" rates on the eastern haul. The result of this rate
schedule would have been that, although barge lines could still
have carried grain from the west to Chicago much more cheaply than
the railroads could, by the time the grain had been reshipped to
New York or other eastern points, the barge-rail carriage would
have been more expensive to the shipper than all-rail carriage.
This would have put the barge lines at a competitive disadvantage
with railroads in barge-served localities. At the Commission
hearing to test the validity of the higher ex-barge grain rates, a
railroad representative candidly stated that the purpose of the
proposal was to "drive this business off the water and back onto
the rails, where it belongs." 248 I.C.C. 307, 321. This purpose
would most probably have been accomplished had the high ex-barge
reshipping rates gone into effect.
The Commission, after a hearing, made an order which left the
railroad-proposed higher rates in effect, but stated that,
"in a proper proceeding, we might prescribe proportional rates
on the ex-barge traffic lower than local rates
Page 330 U. S. 572
or joint barge-rail rates lower than the combinations."
248 I.C.C. 307, 311. A District Court set aside the Commission's
order on the ground that fixing higher rates for ex-barge grain
than for ex-rail and ex-lake grain rates "discriminates against
water competition by the users of barges."
Cargill, Inc. v.
United States, 44 F. Supp. 368, 375. On appeal, this Court
reversed, saying that its decision carried "no implication of
approval of any rates here involved."
Interstate Commerce
Commission v. Inland Waterways Corp., 319 U.
S. 671,
319 U. S. 691.
It reserved for future consideration in a proceeding before the
Commission the amount, if any, which the eastern railroads could
increase "reshipping" rates for ex-barge over those for ex-lake and
ex-rail grain.
Id. at
319 U. S.
687-688,
319 U. S.
691.
The Commission has now considered and decided that question in a
proper proceeding. 262 I.C.C. 7. It found the originally proposed 8
1/2 cent higher rates for ex-barge grain to be unlawful, and
required the eastern roads to cancel the schedules fixing those
increased reshipping rates. This part of the Commission's order has
not been challenged. But it also concluded that ex-barge grain
rates east from Chicago would be reasonable and lawful even though
they were 3 cents per hundred pounds higher than rates for ex-rail
and ex-lake grain. Consequently, the Commission provided that its
order cancelling the scheduled reshipping rate increase was
"without prejudice to the filing of new schedules in conformity
with the findings herein." Thus, the effect of the whole order was
to permit, if not require, the railroads to charge higher
reshipment rates for ex-barge than for ex-lake and ex-rail grain.
Under these rates, barge-rail grain shipments would be a trifle
less expensive than all rail transportation between the same
points. [
Footnote 4] But the
through barge-rail transportation
Page 330 U. S. 573
would cost more than it would have if the through rates had
accurately reflected the cheaper inbound barge rates. The
Commission considered these higher rates for ex-barge grain, which
resulted in higher through rates, justified so long as there
remained to ex-barge grain "a fair opportunity to move in
competition with lake-rail and all-rail traffic."
Appellees [
Footnote 5] then
filed this action in the District Court against the Commission and
the United States to cancel, annul, and enjoin enforcement of the
order insofar as it permitted the railroads to put these new higher
ex-barge grain rates into effect. The complaints charged that the
order was in violation of the Interstate Commerce Act, as amended
by the Transportation Act of 1940, 54 Stat. 898. It was contended
that the order was void because it approved railroad rates which
penalized ex-barge grain to the extent of 3 cents per hundred
pounds, solely because the grain had been transported to Chicago in
barges, and without evidence or adequate findings that it cost the
railroads 3 cents more to transport ex-barge than it cost to
transport ex-rail or ex-lake grain. The United States, represented
by the Department of Justice, appearing as a defendant, admitted
these allegations. The Interstate Commerce Commission intervened
and defended the order. After a hearing, the District Court found
that the allegations were sustained. Accordingly, it set aside and
enjoined enforcement of the order to the extent that it permitted
the 3 cent extra charge. [
Footnote
6] The result of the
Page 330 U. S. 574
District Court's judgment was to leave in effect the long
existing eastern railroad rates which provide the same rates for
carrying ex-barge, ex-lake, and ex-rail grain east from
Chicago.
Judicial review of the findings of fact and the expert judgments
of the Interstate Commerce Commission where the Commission acts
within its statutory authority is extremely limited. And § 307(d)
of the 1940 Act [
Footnote 7]
authorizes the Commission, "in the case of a through route," to
"prescribe such reasonable differentials as it may find to be
justified between all-rail rates and the joint rates in connection
with such common carrier by water."
Cf. United States v. Chicago Heights Trucking Co.,
310 U. S. 344,
310 U. S.
352-353;
Board of Trade of Kansas City v. United
States, 314 U. S. 534,
314 U. S. 546.
But the congressional debates and committee reports on the 1940 Act
and the statutory provisions which emerged from this legislative
background show that Congress enunciated positive policies and
specific limiting standards which it expected the Commission to
follow in fixing rates, including "differentials" between all-rail
and water-rail rates. The provisions of the Transportation
Page 330 U. S. 575
Act of 1940 which brought water carriers under Interstate
Commerce Commission jurisdiction were vigorously opposed in
Congress by those who feared that the Commission might raise barge
rates in order to enable railroads better to compete with
inherently cheaper water transportation. These opponents were
repeatedly assured by sponsors of the 1940 Act who advocated
Commission regulation of water transportation that the questioned
legislation unequivocally required the Commission to fix rates
which would preserve for shippers the inherent advantages of barge
transportation: lower cost of equipment, operation, and therefore
service. [
Footnote 8] As
Senator Wheeler, spokesman
Page 330 U. S. 576
of the Interstate Commerce Committee of which he was chairman,
pointed out on the floor of the Senate, the 1940 Act contains at
least three separate provisions, a prime purpose of which is to
protect the water carrier's natural advantages. [
Footnote 9] The Act's declaration of policy
emphasizes that the Act must be "so administered as to recognize
and preserve the inherent advantages" of "all modes of
transportation subject to the provisions of this Act." 54 Stat.
898, 899, 49 U.S.C. notes preceding §§ 1, 301, 901. In order that
the inherent advantages might be preserved, § 305(c), 54 Stat. 898,
935, 49 U.S.C. § 905(c), provided that
"Differences in . . . rates . . . and practices of a water
carrier in respect of water transportation from those in effect by
a rail carrier with respect to rail transportation shall not be
deemed to constitute unjust discrimination . . . or an unfair or
destructive competitive practice. . . ."
And § 307(f), 54 Stat. 898, 938, 49 U.S. § 907(f), requiring the
Commission, in fixing rates, to consider "the effect of rates upon
the movement of traffic by the . . . carriers for which the rates
are prescribed," emphasized that the Commission must consider, in
fixing rates, " . . . the need, in the public interest, of adequate
and efficient water transportation service at the lowest cost
consistent with the furnishing of such service." In addition, §
3(4) of the preexisting Act, which forbade carriers "to . . .
discriminate in their rates, fares, and charges between connecting
lines," 41 Stat. 479, was amended by the 1940 Act specifically to
include water carriers, such as these barge lines, within the
definition of connecting carriers. 54 Stat. 898, 903, 904, 49
U.S.C. § 3(4). Finally, § 2 of the preexisting Act has long
forbidden the Commission to authorize railroads to charge one
person more than another for "a like and contemporaneous service in
the transportation of a like kind of traffic under
substantially
Page 330 U. S. 577
similar circumstances and conditions." 24 Stat. 379, 380, 49
U.S.C. § 2.
The foregoing provisions flatly forbid the Commission to approve
barge rates or barge-rail rates which do not preserve intact the
inherent advantages of cheaper water transportation, but
discriminate against water carriers and the goods they transport.
Concretely, the provisions mean in this case that "Chicago to the
east" railroads cannot lawfully charge more for carrying ex-barge
than for carrying ex-lake or ex-rail grains to and from the same
localities unless the eastern haul of the ex-barge grain costs the
eastern railroads more to haul than does ex-rail or ex-lake grain.
And § 307(d) authorizing the Commission to fix differentials as
between through water-rail and through all-rail rates, does not
authorize the Commission to neutralize the effective prohibitions
of the other provisions which were strengthened in 1940 expressly
to prevent a discrimination against water carriers.
The basic error of the Commission here is that it seemed to act
on the assumption that the congressional prohibitions of railroad
rate discriminations against water carriers were not applicable to
such discriminations if accomplished by through rates. But this
assumption would permit the destruction or curtailment of the
advantages to shippers of cheap barge transportation whenever the
transported goods were carried beyond the end of the barge line.
This case proves that. For, while Chicago is a great grain center,
it cannot consume all barge-transported grain. That grain, like
other grain coming to Chicago for marketing or processing, is
reshipped to distant destinations. To penalize its transportation
in barges by charging discriminatory rates from Chicago to its
final destination has precisely the same consequence as would
follow from raising barge rates inbound to Chicago. Recognizing
that it could not require these barge carriers
Page 330 U. S. 578
to raise these inbound rates which it accepted as reasonable,
[
Footnote 10] the Commission
has here approved an order which would bring about the same
prohibited result by raising the railroad rates charged by eastern
roads for ex-barge grain shipments east from Chicago. Congress has
forbidden this.
The Commission did not approve increases in these reshipping
rates on the ground that the eastern roads were not receiving a
fair return for carrying ex-barge grain. And the grounds on which
the Commission rested its order do not support the rates approved.
Most of the argument of the Commission in support of its
conclusions and order treated matters which had no relation to what
the reshipping rates from Chicago should be. The length of the
total barge-rail haul emphasized by the Commission, however
significant it might be under other circumstances, has no relevance
here. For the lower rates allowed ex-rail and ex-lake grains
include carriage for distances identical with the ex-barge hauls.
Nor is the Commission's order supported by its conclusion that it
is "inequitable" for the barges to charge a much lower rate for the
inbound grain haul than the competitive western railroads can
afford to charge for the same haul, resulting in barge-rail rates
lower than all-rail rates from the same localities. [
Footnote 11] For this is no reason for
authorizing
Page 330 U. S. 579
a higher rate to eastern railroads which do not compete with the
barges at all. If the western railroads need relief from the
competition of barges, that is a question wholly unrelated to the
rates of eastern roads. Furthermore, Congress has decided this
question of equitable rates as between railroads and barges. It has
declared in unmistakable terms that the "inherent advantage" of the
lower cost of barge carriage as compared with that of railroads
must be passed on to those who ship by barge. It is therefore not
within the province of the Commission to adjust rates, either to
equalize the transportation cost of barge shippers with that of
shippers who do not have access to barge service or to protect the
traffic of railroads from barge competition. For Congress left the
Commission no discretionary power to approve any type of rates
which would reduce the "inherent advantage" of barge transportation
in whole or in part.
Cf. Mitchell v. United States,
313 U. S. 80,
313 U. S.
97.
Related to the question just discussed is the Commission's
contention here that permitting reshipping rates for ex-barge grain
to remain equal to the rates for
Page 330 U. S. 580
ex-rail and ex-lake grain will cause "incurable chaos" in and
disrupt the national rail rate structure, which reflects many
interrelated conditions governing the transportation of grain from
west of Chicago to eastern markets. The Commission does not show
how any possible disruption of railroad rates structure arises from
giving shippers the full inherent advantage of cheaper barge rates,
other than that competing railroads have lost traffic to the barge
lines. As we have pointed out, Congress knew that barge line rates
were cheaper than rail rates, wanted the shippers to get full
benefit of them, and left the Commission no power to take that
benefit away from shippers by adjusting rail-barge traffic
competition or rates. But we note incidentally that these rates had
been equal prior to 1939 without any apparent disruption of the
total structure. The possibility of such a disruption does not
remotely justify discriminations against barge traffic which
actually deprive shippers and the barge companies of the inherent
advantages of water transportation guaranteed to them by Congress.
See United States v. Chicago, M. & St.P. R. Co.,
294 U. S. 499,
294 U. S.
506-510. Nor is the fact that barge-rail rates, from
certain places in the west through Chicago to the east, are less
than local rail rates from Chicago east, and adequate reason for
increasing the east-of-Chicago part of the through barge-rail rate.
The initiation of new rates with such a disparity in through rail
rates as compared with local rail rates would, of course, be
forbidden by § 4 of the Act as amended in the absence of Commission
approval. [
Footnote 12] But,
insofar as the inherent cheapness of the barge leg of the through
route produces a disparity between barge-rail rates and local rail
rates, Congress has said that the Act must be so administered as to
preserve, not eliminate or reduce, the disparity.
Page 330 U. S. 581
Carriage of ex-barge grain by eastern roads may conceivably
entail more service, and therefore greater costs, than are involved
in carrying ex-rail or ex-lake grain. If so, the eastern roads may,
in certain circumstances, be justified in receiving an extra charge
for that extra service wherever it is rendered. But the extra
service must fit the extra charge, and cannot justify lump sum rate
increases which cut into the inherent advantages of cheaper barge
transportation which Congress intended to guarantee to shippers.
Here, the Commission found in broad general terms, without
limitation to the localities where barge and rail compete, that,
"on the average," ex-rail grain from all the west requires less
terminal and transit service east of Chicago than does grain moving
by barge from the relatively few barge terminals. [
Footnote 13] As to terminal service, it
noted that some rail grain traffic going through Chicago without
stopping receives no terminal service at all, whereas all barge
grain shipments must be unloaded in Chicago and reloaded on freight
cars. But all ex-lake grain reshipped from Chicago and an
unspecified amount of ex-rail grain stopped in Chicago for
processing requires exactly the same terminal service as is
rendered there for ex-barge grain. [
Footnote 14] Yet there is no greater rate charged for
ex-barge and ex-rail grain which receives this same
Page 330 U. S. 582
terminal service. The formula used here which lumps all through
rail grain rates, irrespective of the services rendered, to give
rail-carried grain a preferred rate over barge-carried grain, is
indistinguishable in cause and consequence from an order which
directly raises barge rates to relieve the railroads from barge
competition. In any event, there has been no showing by the
Commission as to how much, if any, of the 3 cent reshipping rate
increase is attributable to the fact that ex-barge grain requires
more terminal service on the average than does ex-rail grain.
The Commission also pointed out in its decision that rail rates
from the west to Chicago (which we must assume on this record are
fair and reasonable for the services performed) permit three
transit stops west of Chicago without extra charge. Thus, some
ex-rail grain, unlike ex-barge and ex-lake grain, has already been
processed en route to or in Chicago before it ever reaches the
eastern lines, reducing the likelihood that it will require further
transit service on the route from Chicago to the east. [
Footnote 15] But ex-lake grain which
enjoys the proportional rates with the approval of the Commission
apparently is not processed before arriving at Chicago, or before
reshipment on the eastern lines, and consequently requires the same
transit service on the eastern haul as is required by ex-barge
grain. Similar transit service is required for the unspecified
amounts of ex-rail grain not processed east of Chicago. But the
Commission made no finding that the eastern reshipping rates permit
transit service east of Chicago without extra charge. Probably the
reason that it did not make such a finding is that carriers usually
make
Page 330 U. S. 583
a specific extra charge for transit service.
See Central R.
Co. of N.J. v. United States, 257 U.
S. 247;
Atchison, T. & S.F. R. Co. v. United
States, supra, 279 U. S. 777,
279 U. S. 780.
And the record here shows that eastern railroads make extra charges
for transit service rendered ex-barge grain east of Chicago. The
Commission makes no showing why, if the existing railroad charges
for each individual transit operation is insufficient to cover that
operation's costs, those charges cannot be adjusted alike for the
ex-rail, ex-lake, and ex-barge shipments which require this
service. In any event, partial compensation of eastern roads for
additional transit costs cannot be made in a manner which singles
out ex-barge grain for discriminatory treatment in violation of the
Interstate Commerce Act. [
Footnote 16]
To justify increasing the reshipping rates of ex-barge grain,
the Commission would have to make findings supported by evidence to
show how much greater is the cost to the eastern roads of
reshipping ex-barge grain than of ex-lake or ex-rail grain moving
from the same localities and requiring the same service as does the
ex-barge grain.
Cf. Florida v. United States, 282 U.
S. 194,
282 U. S. 212;
North Carolina v. United States, 325 U.
S. 507,
325 U. S. 520.
The unsifted averages put forward by the Commission do not measure
the allegedly greater costs nor indeed show that they exist.
Affirmed.
MR. JUSTICE FRANKFURTER would sustain the order of the
Interstate Commerce Commission because he deems it amply supported
by adequate findings of the Commission differentiating the average
circumstances and conditions
Page 330 U. S. 584
surrounding all-rail and lake-rail transportation from those
affecting barge-rail transportation, 262 I.C.C. 27-28, and these
findings are not without support in evidence.
[
Footnote 1]
The eastern points are in New York and adjacent states and in
New England. It is around shipments from Chicago to this territory
that this rate controversy chiefly revolves. The proposed new rate
increases also related to grain shipments from Chicago to the
so-called central territory. The reasons supporting the conclusion
we reach apply equally to the central territory increases, and
consequently we need not treat them separately.
[
Footnote 2]
See 246 I.C.C. 353, 361, 364, 383; 262 I.C.C. 7,
41.
[
Footnote 3]
There was barge service from the grain section west of Chicago
to that city from 1886 to 1907, when it was discontinued. Such
barge service was resumed in 1933.
See 262 I.C.C. 7,
20.
[
Footnote 4]
The ex-barge proportionals fixed by the Commission were
uniformly 5.5 cents lower than local rates from Chicago to the east
and 3 cents higher than ex-barge and ex-lake proportionals.
[
Footnote 5]
Appellees are (1) A. L. Mechling, a barge water carrier between
Chicago and points in Illinois, Missouri, and Iowa; (2) Inland
Waterways corporation which transports grain by barges between,
among other points, Kansas City and Chicago; (3) the Secretary of
Agriculture, who is authorized by statute to make complaints to the
Interstate Commerce Commission, and to seek judicial relief with
respect to rates and charges for the transportation of farm
products.
[
Footnote 6]
Two procedural points are raised by the Commission which need
not be discussed at length. The first is that the District Court's
preliminary injunction was too broad because it enjoined the
Commission from permitting the controversial rates to become
effective. This question is now moot,
but see Inland Steel Co.
v. United States, 306 U. S. 153,
306 U. S.
159-160. The second procedural point urged relates to
the District Court's order requiring the Commission to serve notice
of appeal on the United States. We see no error in this, and even
if there were, it could not be prejudicial in connection with the
Commission's rights on this appeal. Since the United States was
necessarily a party in the District Court, 28 U.S.C. 46,
Lambert Run Coal Co. v. Baltimore & O. R. Co.,
258 U. S. 377,
258 U. S. 382,
we think the District Court cannot be held in error for requiring
service of the notice of the Commission's appeal.
[
Footnote 7]
54 Stat. 899, 937, 49 U.S.C. § 907(d). In the original
proceedings before the Commission, the last evidence was heard and
the record was closed before the 1940 Transportation Act became a
law.
Interstate Commerce Commission v. Inland Waterway
Corp., 319 U. S. 671,
319 U. S. 678.
The present proceedings are fully governed by the 1940 Act.
[
Footnote 8]
Illustrative of the attitude of Congress is this exchange
between Senator Lucas and Senator Wheeler, Chairman of the
Interstate Commerce Committee:
"MR LUCAS. . . . The town in which I live is a focal point for
the transportation of wheat and corn down the Illinois. The price
of wheat and corn at the elevator there is always 2 or 3 cents
higher than it is at elevators some 25 or 30 miles farther inland
because of the difference between the rates by rail and those by
water."
"Under the bill, as I understand it, the Interstate Commerce
Commission would have the power, and it would be its duty, to fix
rates on the Illinois River with respect to the transportation of
that wheat and corn. Would it be possible for the Interstate
Commerce Commission to fix the rate the same as the railroad rate
from that point to St. Louis?"
"MR. WHEELER. Not if the Commission does its duty, because the
bill specifically provides that it must take into consideration the
inherent advantages of the water carrier. Everyone agrees that
goods can be shipped more cheaply by water than by rail."
84 Cong.Rec. 5879 (1940).
Chairman Lea of the House Committee on Interstate Commerce
stated in debate that:
"The bill very plainly, about as plainly as language can be
written, provides for the protection of the inherent advantages of
water transportation as contrasted with other means of
transportation. In fixing rates, the water carrier is assured the
advantages of the cheaper rate at which he can transport
property."
84 Cong.Rec. 9862 (1940).
See also 84 Cong.Rec. 5883, 6126-6128, 6131, 6149
(1940), and Conference Report, 86 Cong.Rec. 10172 (1940).
[
Footnote 9]
84 Cong.Rec. 5873-5876, 5883, 6131 (1940).
[
Footnote 10]
The Commission stated that "The barge rates yield fair returns
to the barge carriers, and for the purpose of this proceeding, may
be accepted as reasonable." 262 I.C.C. 7, 19.
[
Footnote 11]
The Commission expressed concern that
"the barge-rail rates are far below the all-rail rates from the
same and other Illinois origins. This is an inequitable situation
giving rise to requests for reductions in the all-rail rates from
the Illinois and central territory origins and it is difficult to
see, with such extreme disparities, how such requests could
properly be denied. . . . [T]here is a substantial production of
corn in the central territory. While the farmers therein did not
appear at the hearing to show that they were hurt by this
situation, such evidence was adduced by others in the same relative
position. . . . This is what is meant by the statement . . . that
the present ex-barge proportionals from Chicago jeopardize the
all-rail rate structure."
In
United States v. Chicago, M. & St.P. R. Co.,
294 U. S. 499,
294 U. S. 509,
this Court said of an earlier Commission rate decision made on the
basis of preserving the over-all rate structure from
disruption:
"We are warned . . . that a change, once permitted, has a
tendency to spread. The acceptance of the new schedule for
Milwaukee will lead, it is said, to requests for proportionate
reductions by other lines in Indiana . . . , in Illinois, and even
in Kentucky, the outcome being characterized in the argument of
counsel, though not in the report, as a rate war between the roads.
. . . The point of the decision is not that present rates are
sound, but that they must be maintained, even if unsound, for fear
of a rate war which might spread beyond control. The danger is
illusory. The whole situation is subject to the power of the
commission, which may keep the changes within bounds."
[
Footnote 12]
See § 6, Transportation Act of 1940, 54 Stat. 898, 904,
49 U.S.C. § 4.
[
Footnote 13]
The Commission stated that,
"on the average, as compared with the ex-barge grain, the
movement under the ex-rail proportionals . . . requires less
terminal service at the gateway . . . , less transit service at
intermediate points in official territory, and less line haul
service to the southern points."
[
Footnote 14]
The Commission's statement was that,
"Like the lake-rail traffic, the barge-rail traffic requires
transfer of lading and a full origin terminal service at the
interchange port. . . . [I]t never moves in continuous through
transportation."
262 I.C.C. 7, 21.
A similar precise statement does not appear in the Commission's
decision with reference to terminal services rendered ex-rail
grain. It assumed throughout its discussion, however, as shown by
its reliance on averages, that a large but unspecified amount of
all-rail grain shipments receive the same terminal services as does
ex-barge grain.
[
Footnote 15]
There is apparently no processing of barge carried grain in
Chicago. The railroads there charge 3.25-4.5 cents per hundred lbs.
to switch barge grain at Chicago from riverside elevators to
processing plants. 262 I.C.C. 7, 24.
[
Footnote 16]
It is noteworthy that, in its previous consideration of these
same ex-barge grain reshipment rates, the Commission was satisfied
that "the physical carriage beyond the reshipping point is
substantially the same" in ex-rail, ex-lake, and ex-barge
shipments, 248 I.C.C. 307, 311.
MR. JUSTICE JACKSON, dissenting.
It appears to me that the Court in this case not only ignores
findings of fact by the Interstate Commerce Commission contrary to
our own oft-repeated pronouncements about the finality of
administrative findings, but it also legislates out of the
Transportation Act of 1940 at least two specific provisions which
Congress put in, and departs from the policy laid down in § 1 of
the Act. Whether the Congressional law or the Court's amendments
are the better for the country is a complicated problem of policy
which, in my conception of our judicial function, I am not
privileged to decide.
In the Transportation Act of 1940, 54 Stat. 937
et
seq., Congress authorized the Commission to establish through
rates by water and rail carriers. It also said,
"In the case of a through route, where one of the carriers is a
common carrier by water, the Commission shall prescribe such
reasonable differentials as it may find to be justified between
all-rail rates and the joint rates in connection with such common
carrier by water."
§ 307(d). The Court reads this discretionary power out of the
statute, and holds that the Commission may not establish any
differential other than that created by the carriers themselves --
that is to say, the only permissible differential is the difference
between barge rates and rail rates for the water leg of the through
journey.
The statute also says that, in the exercise of its ratemaking
power,
"the Commission shall give due consideration, among other
factors, to the effect of rates upon the movement of traffic by the
carrier or carriers for which the rates are prescribed."
§ 307(f). The Commission
Page 330 U. S. 585
has done so, and finds that a greater differential than that
prescribed would create unjust advantages and diversions of
traffic. But the Court ignores the effect of what it orders on
existing rate structures and on grain producing regions and
shippers other than barge users. It simply writes in "shall not
consider" where Congress said "shall consider."
Because this decision seems to me to deprive the Commission of
these discretionary powers to adjust through rates to general
shipping conditions and rate structures, I dissent.
MR. JUSTICE FRANKFURTER joins in this opinion.