1. Section 418 of the Transportation Act, 1920, authorizes the
Interstate Commerce Commission, when establishing divisions of
joint rates, to consider not only what is just, reasonable, and
equitable as between all the carriers participating, but also the
financial needs of particular carriers which should be supplied, in
the public interest, in order to maintain them in effective
operation as part of an adequate transportation system. P.
261 U. S.
189.
2. Where joint rates among a group of carriers were increased by
the Commission with special reference to the financial necessities
of a part of them, a division, subsequently ordered, which gave the
needy carriers a relatively greater share to meet those
necessities, but left the share of the others adequate to avoid a
confiscatory
Page 261 U. S. 185
result, did not deprive them of their property without due
process of law. P.
261 U. S.
195.
3. In fixing divisions of numerous joint rates of numerous
carriers, the Commission is not required by either the
Transportation Act or the Constitution to take specific evidence
and make separate adjudication as to each division of each rate of
each carrier, but may order a general increase of divisions to the
carriers in a specified territory, basing this on evidence which
the Commission deems typical in character and ample in quantity to
justify it in respect of each division of rate involved. P.
261 U. S.
196.
4. An order of the Commission for a general increase of
divisions to some of many carriers, made after opportunity for a
full hearing had been afforded to all, did not exceed the authority
conferred by § 418 of the Transportation Act or deprive the other
carriers of revenues without due process merely because the
Commission recognized that the results would not all be accurate,
and that changes must be made upon future investigation. P.
261 U. S.
199.
5. An order of the Commission fixing divisions of joint rates
among a group of carriers by awarding a horizontal 15% increase to
those west of a certain river and leaving the others to divide
their proportions according to existing or future agreements or
through further applications to the Commission
held proper
and sufficient. P.
261 U. S.
201.
6. The order here involved was supported by the evidence before
the Commission. P.
261 U. S.
203.
7. The Court cannot consider the weight of evidence before the
Commission, or the wisdom of its order.
Id.
282 F. 306 affirmed.
Appeal from a decree of the district court refusing an
interlocutory injunction in a suit to set aside an order of Except
the Boston & Albany, which is leased to the New York Central,
one of the trunk lines which was a respondent before the
Commission, and branches of two Canadian systems, the Grand Trunk
and the Canadian Pacific.
Page 261 U. S. 186
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
Transportation Act 1920, c. 91, § 418, 41 Stat. 456, 486,
amending Interstate Commerce Act, § 15(6), authorizes the
Commission, upon complaint or upon its own initiative, to
prescribe, after full hearing, the divisions of joint rates among
carriers parties to the rate. In determining the divisions, the
Commission is directed to give due consideration, among other
things, to the importance to the public of the transportation
service rendered by the several carriers; to their revenues, taxes,
and operating expenses; to the efficiency with which the carriers
concerned are operated; to the amount required to pay a fair return
on their railway property; to the fact whether a particular carrier
is an original, intermediate, or delivering line, and to any other
fact which would, ordinarily, without regard to the mileage haul,
entitle one carrier to a greater or less proportion than another of
the joint rate.
Invoking this power of the Commission, the railroads of New
England [
Footnote 1]
instituted, in August, 1920, proceedings to
Page 261 U. S. 187
secure for themselves larger divisions from the freight moving
between that section and the rest of the United States, the joint
rates on which had just been increased pursuant to the order
entered in Ex parte 74, Increased Rates, 1920, 58 I.C.C. 220. More
than 600 carriers of the United States, mostly railroads, were made
respondents. The case was submitted on voluminous evidence. On July
6, 1921, a report was filed. The relief sought was not then
granted; but no order was entered. Instead, the parties were
directed by the report to proceed individually to readjust their
divisional arrangements, and the record was held open for
submission of the readjustment. New England Divisions, 62 I.C.C.
513. This direction was not acted on. Five months later, the case
was reargued upon the same evidence. On January 30, 1922, the
Commission modified its findings and made an order (amended March
28, 1922) which directed, in substance, that the divisions, or
shares, of the several New England railroads [
Footnote 2] in the joint through freight rates be
increased 15 percent. New England Divisions, 66 I.C.C.196. Since it
did not increase any rate, it necessarily reduced the aggregate
amounts receivable from each rate by carriers operating west of
Hudson River. The order was limited to joint class rates and those
joint commodity rates which are divided on the same basis as the
class rates. [
Footnote 3] It
related only to transportation wholly within the United States. It
was to continue in force only until further order of the
Commission, and it left the door open for correction upon
application of any carrier in respect to any rate.
Page 261 U. S. 188
Prior to the effective date of that order, there was in force
between each of the New England carriers and substantially each of
the railroads operating west of the Hudson a series of contracts
providing for the division of all joint class rates upon the basis
of stated percentages. [
Footnote
4] These agreements were in the form of express contracts.
Section 208(b) of Transportation act of 1920 provided that all
divisions of joint rates in effect at the time of its passage
should continue in force until thereafter changed either by mutual
agreement between the interested carriers or by state or federal
authorities. The second report enjoined upon all parties the
necessity for proceeding, as expeditiously as possible, with a
revision of divisions upon a more logical and systematic basis,
made specific suggestions as to the character of the study to be
pursued, and invited carriers to present to the Commission any
cases of inability to agree upon such revision. No further
application was, however, made to the Commission.
In March, 1922, this suit was commenced in the Federal Court for
the Southern District of New York to enjoin enforcement of the
order and to have it set aside as void. The Akron, Canton &
Youngstown Railway and 43 other carriers [
Footnote 5] joined as plaintiffs, suing on behalf of
themselves and others similarly situated. The United States alone
was named as defendant. But the Interstate Commerce Commission and
ten New England carriers intervened as such and filed answers. The
case was then heard, on application for an interlocutory
injunction, by
Page 261 U. S. 189
three judges, under the provisions of Urgent Deficiencies Act
Oct. 22, 1913, c. 32, 38 Stat. 208, 219. The full record of the
proceedings before the Commission, including all the evidence, was
introduced. The injunction was denied, 282 F. 306, and the case is
here by direct appeal. Plaintiffs urge six reasons why the order of
the Commission should be held void.
First. It is contended that the order is void because
its purpose was not to establish divisions just, reasonable, and
equitable as between connecting carriers, but, in the public
interest, to relieve the financial needs of the New England lines
so as to keep them in effective operation. The argument is that
Congress did not authorize the Commission to exercise its power to
accomplish that purpose. An order, regular on its face, may, of
course, be set aside if made to accomplish a purpose not
authorized.
Compare Southern Pacific Co. v. Interstate Commerce
Commission, 219 U. S. 433,
219 U. S. 443.
But the order here assailed is not subject to that infirmity.
Transportation Act 1920, introduced into the federal legislation
a new railroad policy.
Railroad Commission of Wisconsin v.
Chicago, Burlington & Quincy R. Co., 257 U.
S. 563,
257 U. S. 585.
Theretofore, the effort of Congress had been directed mainly to the
prevention of abuses, particularly those arising from excessive or
discriminatory rates. The 1920 Act sought to insure also adequate
transportation service. That such was its purpose Congress did not
leave to inference. The new purpose was expressed in unequivocal
language. [
Footnote 6] And, to
attain it, new
Page 261 U. S. 190
rights, new obligations, new machinery were created. The new
provisions took a wide range. [
Footnote 7] Prominent among them are those specially
designed to secure a fair return on capital devoted to the
transportation service. [
Footnote
8] Upon the Commission new powers were conferred, and new
duties were imposed.
The credit of the carriers, as a whole, had been seriously
impaired. To preserve for the nation substantially the whole
transportation system was deemed important. By many railroads,
funds were needed not only for improvement and expansion of
facilities, but for adequate maintenance. On some, continued
operation would be impossible unless additional revenues were
procured. A general rate increase alone would not meet the
situation.
Page 261 U. S. 191
There was a limit to what the traffic would bear. A five percent
increase had been granted in 1914, The Five Per Cent. case, 31
I.C.C. 351, 32 I.C.C. 325; fifteen percent in 1917, The Fifteen Per
Cent. Case, 45 I.C.C. 303; twenty-five percent in 1918, General
Order of Director General, No. 28. Moreover, it was not clear that
the people would tolerate greatly increased rates (although no
higher than necessary to produce the required revenues of weak
lines) if thereby prosperous competitors earned an unreasonably
large return upon the value of their properties. The existence of
the varying needs of the several lines and of their widely varying
earning power was fully realized. It was necessary to avoid unduly
burdensome rate increases, and yet secure revenues adequate to
satisfy the needs of the weak carriers. To accomplish this, two new
devices were adopted: the group system of ratemaking and the
division of joint rates in the public interest. Through the former,
weak roads were to be helped by recapture from prosperous
competitors of surplus revenues. Through the latter, the weak were
to be helped by preventing needed revenue from passing to
prosperous connections. Thus, by marshaling the revenues, partly
through capital account, it was planned to distribute augmented
earnings largely in proportion to the carrier's needs. This, it was
hoped, would enable the whole transportation system to be
maintained without raising unduly any rate on any line. The
provision concerning divisions was therefore an integral part of
the machinery for distributing the funds expected to be raised by
the new rate-fixing sections. It was, indeed, indispensable.
Raising joint rates for the benefit of the weak carriers might
be the only feasible method of obtaining currently the needed
revenues. Local rates might already be so high that a further
increase would kill the local traffic. The through joint rates
might be so low that they could be raised without proving
burdensome. On the other
Page 261 U. S. 192
hand, the revenues of connecting carriers might be ample, so
that any increase of their earnings from joint rates would be
unjustifiable. Where the through traffic would, under those
circumstances, bear an increase of the joint rates, it might be
proper to raise them, and give to the weak line the whole of the
resulting increase in revenue. That, to some extent, may have been
the situation in New England when, in 1920, the Commission was
confronted with the duty, under the new § 15a, of raising rates so
as to yield a return of substantially 6 percent on the value of the
property used in the transportation service. Ex parte 74, Increased
Rates, 1920, 58 I.C.C. 220. [
Footnote 9]
The deficiency in income of the New England lines in 1920 was so
great that (even before the raise in wages ordered by the Railroad
Labor Board) an increase in freight revenues of 47.40 percent was
estimated to be necessary to secure to them a fair return. On a
like estimate, the increased revenues required to give the same
return to carriers in Trunk Line Territory was only 29.76 percent,
and to carriers in Central Freight Association Territory 24.31
percent. [
Footnote 10] To
have raised the additional revenues needed by the New England lines
wholly by raising the rates within New England -- particularly when
rates west of the Hudson were raised much less -- might have killed
New England traffic. Rates there had already been subjected
(besides the three general increases mentioned above) to a special
increase, applicable only to New England, of about ten percent in
1918. Proposed
Page 261 U. S. 193
Increases in New England, 49 I.C.C. 421. A further large
increase in rates local to New England would doubtless have
provoked more serious competition from auto trucks and water
carriers. For hauls are short, and the ocean is near. Instead of
erecting New England into a separate rate group, the Commission
placed it, with the other two subdivisions of Official
Classification Territory, into the Eastern Group, and ordered that
freight rates in that group be raised 40 percent. At that rate
level, the revenues of the carriers in Trunk Line and Central
Freight Association territories would, it was asserted, exceed by
1.48 percent what they would have received if they had been a
separate group. It was estimated that the excess would be about
$25,000,000. [
Footnote 11]
Substantially that amount (besides the additional revenue to be
raised otherwise) was said to be necessary to meet the needs of the
New England lines.
Plaintiffs insist that Transportation Act, 1920, did not, by its
amendment of § 15(6) change or add to the factors to be considered
by the Commission in passing upon divisions; that it had
theretofore been the Commission's practice to consider all the
factors enumerated in § 15(6); [
Footnote 12] that this enumeration merely put into
statutory form the interpretation theretofore adopted; that the
only new feature was the grant of authority to enter upon the
inquiry into divisions on the Commission's initiative; that this
authority was conferred in order to
Page 261 U. S. 194
protect the short lines, which, because of their weakness, might
refrain from making complaint, for fear of giving offense;
[
Footnote 13] and that the
power conferred upon the Commission is coextensive only with the
duty imposed on the carriers by § 400 of Transportation Act 1920,
which declares that they shall establish
"in case of joint rates . . . , just, reasonable, and equitable
divisions thereof as between the carriers subject to this Act
participating therein which shall not unduly prefer or prejudice
any of such participating carriers."
It is true that § 12 of the Act of June 18, 1910, c. 309, 36
Stat. 539, 551, 552, which first conferred upon the Commission
authority to establish or adjust divisions, [
Footnote 14] did not, in terms, confer upon the
Commission power to act on its own initiative. The language of the
act seemed to indicate that the authority was to be exercised only
when the parties failed to agree among themselves, and only in
supplement to some order fixing the rates. [
Footnote 15] The extent of the Commission's
power was a subject of doubt, and Transportation Act 1920 undertook
by § 15(6) to remove doubts which had arisen. But Congress had also
the broad purpose explained above. This is indicated, among other
things, by expressions used in dealing with joint rates. By new §
15(6), p. 486, the Commission is directed to give due
consideration, in determining divisions, to "the importance to the
public of the transportation services of
Page 261 U. S. 195
such carriers," [
Footnote
16] just as by new § 15(3), p. 45, the Commission is authorized
upon its own initiative when "desirable in the public interest" to
establish joint rates and "the divisions of such rates."
Second. It is contended that, if the act be construed
as authorizing such apportionment of a joint rate on the basis of
the greater needs of particular carriers, it is unconstitutional.
There is no claim that the apportionment results in confiscatory
rates, nor is there in this record any basis for such a contention.
The argument is that the division of a joint rate is essentially a
partition of property; that the rate must be divided on the basis
of the services rendered by the several carriers; that there is no
difference between taking part of one's just share of a joint rate
and taking from a carrier part of the cash in its treasury; and,
thus, that apportionment according to needs is a taking of property
without due process. But the argument begs the question. What is
its just share? It is the amount properly apportioned out of the
joint rate. That amount is to be determined not by an agreement of
the parties or by mileage. It is to be fixed by the Commission;
fixed at what that board finds to be just, reasonable, and
equitable. Cost of the service is one of the elements in
ratemaking. It may be just to give the prosperous carrier a smaller
proportion of the increased rate than of the original rate. Whether
the rate is reasonable may depend largely upon the disposition
which is to be made of the revenues derived therefrom.
Page 261 U. S. 196
What the Commission did was to raise the additional revenues
needed by the New England lines, in part, directly, through
increase of all rates 40 percent and, in part, indirectly, through
increasing their divisions on joint rates. In other words, the
additional revenues needed were raised partly by a direct, partly
by an indirect, tax. It is not true, as argued, that the order
compels the strong railroads to support the weak. No part of the
revenues needed by the New England lines is paid by the western
carriers. All is paid by the community pursuant to the single rate
increase ordered in Ex parte 74. If, by a single order, the
Commission had raised joint rates throughout the Eastern group 40
percent, and, in the same order, had declared that 90 percent of
the whole increase in the joint rates should go to the New England
lines (in addition to what they would receive under existing
divisions), clearly nothing would have been taken from the Trunk
Line and Central Freight Association carriers in so ordering. The
order entered in Ex parte 74 was at all times subject to change.
The special needs of the New England lines were at all times before
the Commission. That these needs were met by two orders, instead of
one, is not of legal significance. The order here in question may
properly be deemed a supplement to, or modification of, that
entered in Ex parte 74.
Third. It is asserted that the order is necessarily
based upon the theory that, under § 15(6), the Commission has
authority to fix divisions as between groups of carriers without
considering the carriers individually, that Congress did not confer
such authority, and that, hence the order is void. Whether Congress
did confer that authority we have no occasion to consider, for it
is clear that the Commission did not base its order upon any such
theory. The order directs a 15 percent increase in the divisions to
the several New England lines. It is comprehensive. But it is based
upon evidence which the
Page 261 U. S. 197
Commission assumed was typical in character and ample in
quantity to justify the finding made in respect to each division of
each rate of every carrier. Whether the assumption was well founded
will be discussed later. Here, we are to consider merely whether
Congress authorized the method of proof and of adjudication
pursued, and whether it could authorize it consistently with the
Constitution.
Obviously, Congress intended that a method should be pursued by
which the task which it imposed upon the Commission could be
performed. The number of carriers which might be affected by an
order of the Commission, if the power granted were to be exercised
fully, might far exceed 600; the number of rates involved, many
millions. The weak roads were many. The need to be met was urgent.
To require specific evidence, and separate adjudication, in respect
to each division of each rate of each carrier would be tantamount
to denying the possibility of granting relief. We must assume that
Congress knew this, and that it knew also that the Commission had
been confronted with similar situations in the past, and how it had
dealt with them.
For many years before the enactment of Transportation Act, 1920,
it had been necessary, from time to time, to adjudicate
comprehensively upon substantially all rates in a large territory.
When such rate changes were applied for, the Commission made them
by a single order, and in large part on evidence deemed typical of
the whole rate structure. [
Footnote 17] This remained a common practice after the
burden of proof to show that a proposed increase of any rate was
reasonable had been declared, by Act of June 18, 1910, c. 309, §
12, 36 Stat. 539, 551, 552, to be upon
Page 261 U. S. 198
the carrier. [
Footnote
18] Thus, the practice did not have its origin in the group
system of ratemaking provided for in 1920 by the new § 15(6). It
was the actual necessities of procedure and administration which
had led to the adoption of that method in passing upon the
reasonableness of proposed rate increases. The necessity of
adopting a similar course when multitudes of divisions were to be
passed upon was obvious. The method was equally appropriate in such
inquiries, [
Footnote 19] and
we must assume that
Page 261 U. S. 199
Congress intended to confer upon the Commission power to pursue
it. [
Footnote 20]
That there is no constitutional obstacle to the adoption of the
method pursued is clear. Congress may, consistently with the due
process clause, create rebuttable presumptions.
Mobile, Jackson
& Kansas City R. Co. v. Turnipseed, 219 U. S.
35;
Lindsley v. Natural Carbonic Gas. Co.,
220 U. S. 61, and
shift the burden of proof,
Minneapolis & St. Louis R. Co.
v. Railroad & Warehouse Commission, 193 U. S.
53. It might therefore have declared in terms that, if
the Commission finds that evidence introduced is typical of traffic
and operating conditions, and of the joint rates and divisions, of
the carriers of a group, it may be accepted as
prima facie
evidence bearing upon the proper divisions of each joint rate of
every carrier in that group. Congress did so provide, in effect,
when it imposed upon the Commission the duty of determining the
divisions. For only in that way could the task be performed. As
pointed out in
Railroad Commission of Wisconsin v. Chicago,
Burlington & Quincy R. Co., 257 U.
S. 563,
257 U. S. 579,
serious injustice to any carrier could be avoided, by availing of
the saving clause which allows anyone to except itself from the
order, in whole or in part, on proper showing.
Fourth. It is asserted that the order directs a
transfer of revenues of the Western carriers to the New England
Page 261 U. S. 200
carriers, pending a decision in the matter of divisions; that
Congress has not granted authority to take such provisional action,
and that hence the order is void. The argument is, that, under §
15(6), the Commission may prescribe divisions only when, upon full
hearing, it is of opinion that those existing are, or will be,
unjust, unreasonable, or inequitable; that, in such event, it shall
prescribe divisions which are just, reasonable, and equitable, and
that the provisional character of the order demonstrates that the
hearing has not been a full one. Whether a hearing was full must be
determined by the character of the hearing, not by that of the
order entered thereon. A full hearing is one in which ample
opportunity is afforded to all parties to make, by evidence and
argument, a showing fairly adequate to establish the propriety or
impropriety, from the standpoint of justice and law, of the step
asked to be taken. The Commission recognized and observed these
essentials of a full hearing.
The complaint before it was filed in August, 1920. The hearings
did not begin until December 15, 1920. The parties had, therefore,
ample time to prepare to present their evidence and arguments. The
case was not submitted until April 23, 1921. There was thus ample
time for, and every carrier was in fact afforded the opportunity
of, introducing any and all evidence it desired. The record made is
voluminous. That the evidence left in the minds of the Commission
many doubts is true. But it had brought conviction that the New
England lines were entitled to relief; that the divisional
arrangements of the carriers required a thorough revision to put
them upon a more logical and systematic basis; that a horizontal
increase of the New England lines' divisions, made before such
revision, would leave some divisions too high and others too low;
that the comprehensive revision proposed would necessarily take a
long time, and that, meanwhile, the New England lines should be
accorded "a
Page 261 U. S. 201
portion of the relief to which . . . they are entitled and which
the public interest clearly requires." The Commission further
concluded that, on the evidence before it, no substantial injustice
would be done to the carriers west of the Hudson by an order which
increased by 15 percent the existing divisions of the New England
lines, and reduced, by the amount required for this purpose, the
divisions of the several carriers west of the Hudson, in the
proportions in which they then shared the balance of each joint
rate, or as otherwise might be agreed between them or determined by
the Commission upon application.
A hearing may be a full one although the evidence introduced
does not enable the tribunal to dispose of the issues completely or
permanently and although the tribunal is convinced, when entering
the order thereon, that, upon further investigation, some changes
in it will have to be made. To grant under such circumstances
immediate relief, subject to later readjustments, was no more a
transfer of revenues pending a decision than was the like action,
in cases involving general increases in rates, a transfer of
revenues from the pockets of the shippers to the treasury of the
carriers. That the order is not obnoxious to the due process
clause, because provisional, is clear. If this were not so, most
temporary injunctions would violate the Constitution.
Fifth. It is contended that the order is void because
it confines itself to dealing with the main, or primary, divisions
of the joint rates at the Hudson River, and fails to prescribe the
subdivisions of that part of the rate which goes to the several
carriers. The argument is that, if the Commission acts at all in
apportioning the joint rate, its action is invalid unless it
prescribes the proportion to be received by each of the connecting
carriers. For this contention there is no warrant either in the
language of the act, in the practice of carriers, or in reason. The
duty imposed upon the Commission does not extend beyond
Page 261 U. S. 202
the need for its action. If the real controversy is merely how
much of the joint rate shall go to carriers east of Hudson River
and how much to carriers west, there is nothing in the law which
prevents the Commission from letting the parties east of the river,
and likewise those west of it, apportion their respective shares
among themselves. It is obviously of no interest to the Western
carriers how those of New England decide to apportion their share,
nor is it of interest to the Eastern carriers how those west of the
Hudson divide the share apportioned to that territory. If on these
matters the carriers interested can reach an agreement and no
public interest is prejudiced, clearly there is no occasion for the
Commission to act.
But there is a further answer to this contention. The Commission
has fixed the subdivisions east and also those west of the river.
The divisions of the several New England lines are definitely
fixed; for the amount receivable by each carrier from each joint
rate is ordered increased 15 percent. What remains of each joint
rate goes to the Western lines. This balance, the order recites,
shall be divided among them
"in the same proportions as at present, or otherwise as they may
agree, or, failing such agreement, as may be determined by the
Commission upon application therefor."
That fixes the divisions by reference. The fact that they are
fixed provisionally and by reference does not invalidate the order.
It is urged that this disposition demonstrates failure by the
Commission to consider the several factors which the statute
declares shall be taken into consideration in determining
divisions. But this is not true. This feature in the order
indicates rather that the Commission has considered the question,
concluded that the apportionment by the Western lines of their
share on existing proportions was not inconsistent with the public
interest, and that, in the absence of complaint, it might be
assumed to be satisfactory to all parties. This objection presents,
in a different form, largely
Page 261 U. S. 203
what has been more fully discussed above. There was, thus, on
the part of the Commission neither usurpation of power nor neglect
of duty in limiting its definite decision to the primary divisions
at the Hudson River gateways and leaving the interested parties to
deal, in the first instance, with the subdivisions among the
carriers in their respective territories. [
Footnote 21]
Sixth. It is contended that the order is void because
it is unsupported by evidence. An order of the Commission fixing
rates, if unsupported by evidence, is clearly invalid.
Interstate Commerce Commission v. Union Pacific R. Co.,
222 U. S. 541,
222 U. S. 547.
Florida East Coast Ry. Co. v. United States, 234 U.
S. 167. The rule must, of course, be the same in respect
to an order fixing divisions. The contention that the order is
unsupported by the evidence rests largely upon arguments which
assume a construction of the statute which we hold to be erroneous,
or upon expressions in the first report of the Commission which, in
view of the second report and order thereon, must be deemed to have
been withdrawn. That the evidence was
Page 261 U. S. 204
ample to support the order made is shown in the opinion of the
lower court, 282 F. 306, 308, 309, and in the reports of the
Commission. To consider the weight of the evidence or the wisdom of
the order entered is beyond our province.
Manufacturers'
Railway Co. v. United States, 246 U.
S. 457;
Skinner & Eddy Corp. v. United
States, 249 U. S. 557,
249 U. S. 562;
Seaboard Air Line Ry. Co. v. United States, 254 U. S.
57,
254 U. S. 62.
But the way is still open to any carrier to apply to the Commission
for modification of the order if it is believed to operate unjustly
in any respect.
Affirmed.
* The docket title of this case is
Akron, Canton &
Youngstown Railway Co. v. United States, Interstate Commerce
Commission, Boston & Maine Railroad, et al.
[
Footnote 1]
Except the Boston & Albany, which is leased to the New York
Central, one of the trunk lines which was a respondent before the
Commission, and branches of two Canadian systems, the Grand Trunk
and the Canadian Pacific.
[
Footnote 2]
Other than the Bangor & Aroostook, which had been a
complainant before the Commission, and the Boston & Albany,
which had not.
[
Footnote 3]
Thus, the order does not include traffic passing through Canada.
Nor does it apply to rates on coal (which constitutes about
two-fifths of the total interchanged tonnage), nor to those on
certain other commodities.
[
Footnote 4]
Compare St. Louis Southwestern Ry. Co. v. United
States, 245 U. S. 136,
245 U. S. 139,
note 2;
Central R. Co. of New Jersey v. United States,
257 U. S. 247.
[
Footnote 5]
The number of carriers named as respondents in the order entered
by the Commission is 617. Only 44 of these originally joined as
plaintiffs in this suit. One of these, the Illinois Central,
withdrew; 39 intervened later as plaintiffs. Leading trunk lines --
the New York Central, the Pennsylvania, and the Baltimore &
Ohio -- by which a large part of all traffic interchanged with the
New England railroads was carried, acquiesced in the Commission's
order.
[
Footnote 6]
Thus: to enable the carriers "properly to meet the
transportation needs of the public," § 422, p. 491; to give due
consideration to "the transportation needs of the country, and the
necessity . . . of enlarging [transportation] facilities," § 422,
p. 488; to "best meet the emergency and serve the public interest "
§ 402, p. 477; to "best promote the service in the interest of the
public and the commerce of the people," § 402, pp. 476, 477; "that
the public interest will be promoted," § 407, p. 482.
[
Footnote 7]
Among them are the establishment of the Railroad Labor and the
Adjustment Boards. Title III, pp. 469-474.
See Pennsylvania R.
Co. v. United States Railroad Labor Board, ante, 261 U. S. 72,. The
provisions for raising capital by new government loans, § 210, pp.
468, 469; by loans from the railroad contingent fund (the recapture
provision), § 15a (10, 16), pp. 490, 491; those placing the issue
of new securities under the control of the Commission, unaffected
by the laws of the several states, § 439, pp. 494-496; the
provision for consolidation of railways into a limited number of
systems, § 407, pp. 480-482; provisions for securing adequate car
service,
Lambert Run Coal Co. v. Baltimore & Ohio R.
Co., 258 U. S. 377; for
joint use of terminals; for routing; for interchange of traffic
between railroads, and between a railroad and water carrier, § 402,
pp. 476-478; § 405, p. 479; §§ 412, 413, p. 483.
[
Footnote 8]
Section 422, pp. 488, 489. To this end also the Commission was
empowered, among other things, to permit pooling of traffic or
earnings, § 407, pp. 480, 481; to authorize abandonment of
unprofitable and unnecessary lines, § 402, p. 477;
Texas v.
Eastern Texas R. Co., 258 U. S. 204; to
fix minimum, as well as maximum, rates, and thus prevent cut-throat
competition and the taking away of traffic from weaker competitors,
§ 418, p. 485; to prevent the depletion of interstate revenues by
discriminating intrastate rates,
Railroad Commission of
Wisconsin v. Chicago, Burlington & Quincy R. Co.,
257 U. S. 563;
New York v. United States, 257 U.
S. 591, and to determine the division of joint
rates.
[
Footnote 9]
There is evidence that the rate per ton per mile received by the
New Haven from freight local to its lines was four times as high as
the rate per ton per mile, under existing divisions, on freight
interchanged by it with carriers west of Hudson River.
[
Footnote 10]
What is known as Official Classification Territory comprises the
three subdivisions, New England Freight Association Territory,
Trunk Line Association Territory, and Central Freight Association
Territory.
See map, The Five Per Cent. case, 31 I.C.C.
350.
[
Footnote 11]
Estimated on the volume of traffic moving in 1919.
[
Footnote 12]
Citing Star Grain & Lumber Co. v. Atchison, Topeka &
Santa Fe Ry. Co., 14 I.C.C. 364, 370; Manufacturers' Railway Co. v.
St. Louis, Iron Mt., & Southern Ry. Co., 21 I.C.C. 304, 313;
Investigation of Alleged Unreasonable Rates on Meats, 23 I.C.C.
656, 661; Class Rates from Chestnut Ridge Railway Stations, 41
I.C.C. 62; Western Pacific Co. v. Southern Pacific Co., 55 I.C.C.
71, 84.
See Low Moor Iron Co. v. Chesapeake & Ohio R.
Co., 42 I.C.C. 221.
[
Footnote 13]
Citing H.R. No. 456, pp. 9, 10, 66th Congress, 1st Session;
Conference Report No. 650, 66th Congress, 2d Session; Mr. Esch, 59
Cong.Rec. part 4, p. 3268; Senator Robinson, 59 Cong.Rec. pt. 4, p.
3331.
[
Footnote 14]
Power to establish through routes and joint rates had been
conferred by § 4 of the Hepburn Act, June 29, 1906, c. 3591, 34
Stat. 584, 589.
[
Footnote 15]
Compare Morgantown & Kingwood Divisions, 49 I.C.C.
540. The section was involved in
Tap Line Cases,
234 U. S. 1,
234 U. S. 28;
O'Keefe, Receiver v. United States, 240 U.
S. 294,
240 U. S. 300;
Manufacturers' Railway Co. v. United States, 246 U.
S. 457,
246 U. S. 480,
246 U. S. 483;
Louisiana & Pine Bluff Railway Co. v. United States,
257 U. S. 114,
257 U. S. 118.
[
Footnote 16]
In thus making clear that, in fixing divisions as well as rates,
the public interest should be considered, Congress doubtless had in
mind expression to the contrary in opinions of the Commission.
See Germain Co. v. New Orleans & Northeastern R. Co.,
17 I.C.C. 22, 24; Board of Trade of Chicago v. Atlantic City R.
Co., 20 I.C.C. 504, 508; In re Divisions of Joint Rates on Coal, 22
I.C.C. 51, 53; Morgantown & Kingwood Divisions, 49 I.C.C. 540,
550.
[
Footnote 17]
Compare Burnham, Hanna, Munger Co. v. Chicago, Rock
Island & Pacific Ry. Co., 14 I.C.C. 299; City of Spokane v.
Northern Pacific Ry. Co., 15 I.C.C. 376.
[
Footnote 18]
Advances in Rates-Eastern case, 20 I.C.C. 243, 248; Railroad
Commission of Texas v. Atchison, Topeka & Santa Fe Ry. Co., 20
I.C.C. 463, 484; Five Per Cent. cases, 31 I.C.C. 351, 402, 403,
448, 449; 1915 Western Rate Advance case, 35 I.C.C. 497; Western
Passenger Fares, 37 I.C.C. 1; The Fifteen Per Cent. case, 45 I.C.C.
303.
See also the successive orders issued in the
Shreveport controversy, 23 I.C.C. 31; 34 I.C.C. 472; 41 I.C.C. 83;
43 I.C.C. 45; 48 I.C.C. 312.
Compare Houston & Texas Ry.
Co. v. United States, 234 U. S. 342,
234 U. S. 349;
Eastern Texas R. Co. v. Railroad Commission, 242 F. 300;
Looney v. Eastern Texas R. Co., 247 U.
S. 214; also
Illinois Central R. Co. v. Public
Utilities Commission, 245 U. S. 493,
with Business Men's League of St. Louis v. Atchison,
Topeka & Santa Fe Ry. Co., 41 I.C.C. 13, 503, and 49 I.C.C.
713. The Commission has, since 1920, also reduced rates in broad
group proceedings upon consideration of typical conditions
throughout the entire region involved in the reduction. Reduced
Rates, 1922, 68 I.C.C. 676; Rates on Grain, etc., 64 I.C.C. 85.
Referring to the latter case, the Commission said in their second
report in this case (66 I.C.C. 203):
"In all such general rate cases, we have realized and have held
that, if we were required to consider the justness and
reasonableness of each individual rate, the law would in effect be
nullified and the Commission reduced to a state of administrative
paralysis."
[
Footnote 19]
Plaintiffs argue that there is a difference, because all
interstate rates are required to be filed with the Commission and
published, and hence appear specifically in the record, whereas
divisions are not required to be filed or published. The difference
is without legal significance. Papers on the Commission files are
not a part of the record in a case unless they are introduced as
evidence. It is the nature of the inquiry, not the accident whether
papers are on file or published, which determines whether facts can
be proved by evidence which is typical. The Commission could, of
course, require carriers to introduce all their division sheets. To
a proceeding of this character, the rule acted on in
Florida
East Coast Line v. United States, 234 U.
S. 167, is not applicable.
Compare United States v.
L. & N. R. Co., 235 U. S. 314.
[
Footnote 20]
Since Transportation Act 1920, the Commission has on several
occasions modified the divisions of a carrier without considering
each individual joint rate. Pittsburgh & West Virginia Ry. Co.
v. Pittsburgh & Lake Erie R. Co., 61 I.C.C. 272; East Jersey R.
Co. & Terminal Co. v. Central R. Co. of New Jersey, 63 I.C.C.
80; Division of Joint Rates and Fares of Missouri & North
Arkansas R. Co., 68 I.C.C. 47.
[
Footnote 21]
The junction points on which are based the divisions between the
New England lines and the lines operating west of the Hudson River
were fully set forth in the report of the Commission. To fix
divisions on the percentage basis with a basic dividing line was
what had been commonly done in the agreements of carriers through
their freight associations. In leaving to the respondent carriers,
in the first instance, the apportionment among themselves of that
part of the joint rate receivable by the carriers operating west of
the Hudson River, the Commission followed a long established
practice. Brownsville Texas Class and Commodity Rates, 30 I.C.C.
479, 484; Pacific Fruit Exchange v. Southern Pacific Co., 31 I.C.C.
159, 161, 162, 163; Grain Rates from Milwaukee, 33 I.C.C. 417, 420,
421; Sloss-Sheffield Steel & Iron Co. v. Louisville &
Nashville R. Co., 35 I.C.C. 460, 465, 466; St. Louis,
Missouri-Illinois Passenger Fares, 41 I.C.C. 584, 598, 599. And the
practice had at least the tacit approval of this Court.
Compare
Intermountain Rate Case, 234 U. S. 476,
234 U. S.
485-486,
234 U. S. 494;
O'Keefe v. United States, 240 U.
S. 294;
Manufacturers' Ry. Co. v. United
States, 246 U. S. 457.