1. By § 13(4) of the Interstate Commerce Act, the Interstate
Commerce Commission is empowered to increase intrastate rates under
which the intrastate traffic fails to contribute its fair share to
the revenue of the interstate carrier, and which thus cause an
unjust discrimination against interstate commerce. P.
292 U. S. 4.
2. This power was not withdrawn or diminished by the changes
made in § 15a of that Act by the Emergency Railroad Transportation
Act of 1933. P
292 U. S. 5.
3. Findings of the Commission preliminary to an order increasing
intrastate rates on logs in Florida to remove unjust discrimination
against interstate commerce with respect to the carrier's revenue,
held sufficient and in conformity with the principles laid
down in
Florida v. United States, 282 U.
S. 194. P.
292 U. S. 8.
4. The evidence supported the findings. P.
292 U. S. 13.
5. The authority of the Commission with respect to the removal
of discrimination against interstate commerce caused by inadequacy
of the intrastate rates of an interstate carrier rests upon the
constitutional power of Congress, extending to such carriers as
instruments of interstate commerce, to require that these agencies
shall not be used in such manner as to cripple, retard, or destroy
that commerce, and provide for the execution of that power through
a subordinate body. P.
292 U. S. 12.
6. In relation to such discrimination, as in other matters, when
the Commission exercises its authority upon due hearing, as
prescribed,
Page 292 U. S. 2
and without error in the application of rules of law, its
findings of fact supported by substantial evidence are not subject
to review. It is not the province of the courts to substitute their
judgment for that of the Commission. P.
292 U. S. 12.
4 F. Supp. 477 affirmed.
Appeals from a decree of the District Court, of three judges,
sustaining an order of the Interstate Commerce Commission. There
were originally three suits against the United States and the
Interstate Commerce Commission --
viz., a bill by the
Florida and the Florida Railroad Commission, another by Wilson
Cypress Co. and Wilson Lumber Co., and the third by F. S. Buffum
& Co., Inc. The Atlantic Coast Line R. Co. intervened as a
defendant. The several suits were consolidated below, and were
heard and decided as one case.
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
This appeal presents the question of the validity of an order
made by the Interstate Commerce Commission on July 5, 1932,
requiring to Atlantic Coast Line Railroad Company to desist from an
unjust discrimination
Page 292 U. S. 3
found to exist in the relation of intrastate and interstate
rates and to maintain certain rates for the intrastate
transportation of logs, as described, within and throughout the
State of Florida for distances of 170 miles or less. 186 I.C.C.
157; 190 I.C.C. 588. The order was sustained by the District Court,
three judges sitting. 4 F. Supp. 477.
By an order of August 2, 1928, the Commission prescribed
interstate rates on logs on the lines of the Atlantic Coast Line
Railroad Company from points in northern Florida to destinations in
Georgia for distances not exceeding 170 miles. Finding that the
Florida intrastate rates on similar logs for similar hauls,
generally described as the Cummer scale, resulted in unjust
discrimination, the Commission also established rates for
intrastate application within Florida which would correspond with
the rates fixed for interstate transportation. 146 I.C.C. 717. The
order in the latter respect was assailed, and the decree of the
District Court sustaining it was reversed by this Court.
Florida v. United States, 282 U.
S. 194. We decided that the order could not be upheld on
the ground of undue prejudice against persons and localities in
interstate commerce, and that it could not be sustained on the
ground of unjust discrimination against interstate commerce from
the standpoint of revenue losses due to intrastate rates, as the
order in that aspect was not supported by appropriate findings.
Meanwhile, in February, 1929, both the interstate rates and
intrastate rates, as prescribed, had been put into effect. After
the mandate of this Court, the Cummer scale of intrastate rates was
restored, and became effective on April 10, 1931. The Interstate
Commerce Commission reopened the proceedings, and, after hearing,
found that the Cummer scale of intrastate rates caused unjust
discrimination against interstate commerce from a revenue
standpoint. The Commission made no finding with respect to undue
prejudice against persons and localities
Page 292 U. S. 4
in interstate commerce. The Commission accordingly entered the
order of July 5, 1932, now under review. While bills were pending
in the District Court to enjoin this order, the Commission granted
a further hearing in view of the representation that a number of
southern railroads had reduced their log rates, and, on January 9,
1933, the Commission made an additional report which affirmed the
findings previously made and restored the order of July 5, 1932, to
be effective February 25, 1933. 190 I.C.C. 600. Supplemental bills
were filed in the District Court, and, on February 24, 1933, the
decree was entered upholding the Commission's action.
The order of the Commission is attacked upon the grounds: (1)
that under Emergency Railroad Transportation Act, 1933 (c. 91, 48
Stat. 211), the Commission was without power to make the order; (2)
that the findings of the Commission are inadequate to sustain the
order, and (3) that, if the findings can be deemed to be adequate,
they are not supported by the evidence.
First. The power of the Commission. By Transportation
Act, 1920 (41 Stat. 484), the Congress granted specific authority
to the Commission to remove discriminations against interstate
commerce caused by intrastate rates. The Congress amended § 13 of
the Act to Regulate Commerce so as to empower the Commission to
confer with state authorities "with respect to the relationship
between rate structures and practices of carriers subject to the
jurisdiction of such State bodies and of the commission." Section
13(3). And whenever, in the course of its authorized
investigations, the Commission, after full hearing, finds that any
rate, regulation, or practice "made or imposed by authority of any
State" causes
"any undue or unreasonable advantage, preference, or prejudice
as between persons or localities in intrastate commerce, on the one
hand, and interstate or foreign commerce, on the other hand, or any
undue, unreasonable, or unjust discrimination
Page 292 U. S. 5
against interstate or foreign commerce,"
the Commission is required to prescribe the rate thereafter to
be charged, or the regulation or practice thereafter to be
observed, in such manner as in its judgment will remove the
discrimination. The order of the Commission is to bind the
carriers, parties to the proceeding, "the law of any State or the
decision or order of any State authority to the contrary
notwithstanding." § 13(4).
In
Railroad Commission of Wisconsin v. Chicago, B. & Q.
R. Co., 257 U. S. 563,
257 U. S.
585-587, we reached the conclusion that the provision of
§ 13(4) for the removal of "any undue, unreasonable, or unjust
discrimination against interstate . . . commerce" was not to be
regarded as referring only to discrimination as between persons and
localities. We held that Transportation Act 1920 imposed an
affirmative duty on the Commission "to fix rates and to take other
important steps to maintain an adequate railway service for the
people of the United States." Intrastate rates, we said, must play
a most important part in maintaining such an adequate system. If
there was interference with the achievement of that purpose because
of a disparity of intrastate rates as compared with interstate
rates, the Commission was authorized to end that disparity. It was
to be ended because it constituted an "unjust discrimination
against interstate . . . commerce." We concluded that these words
in § 13(4) were not tautological, but had the necessary effect of
conferring authority upon the Commission to raise intrastate rates
so that the intrastate traffic may produce its fair share of the
earnings required to meet maintenance and operating costs and to
yield a fair return on the value of property devoted to the
transportation service, both interstate and intrastate.
United
States v. Louisiana, 290 U. S. 70,
290 U. S.
75.
Appellants insist that this result was reached because of what
was described as the "dovetail relation" between
Page 292 U. S. 6
§ 13(4) and § 15a, and that the amendment of the latter section
by Emergency Railroad Transportation Act, 1933, has effected a
radical change. They contend that the Commission no longer has
authority to remove an unjust discrimination against interstate
commerce caused by a disparity of intrastate rates viewed from a
revenue standpoint. We are unable to accept that view. Section
13(4) was not amended by Emergency Railroad Transportation Act,
1933. The authority conferred by § 13(4) to prescribe intrastate
rates for the purpose of removing an unjust discrimination against
interstate commerce was not withdrawn. The Congress had knowledge
of the construction given to § 13(4) by this Court, and of the
important effect of that construction in relation to intrastate
rates found to be inadequate. The conclusion is not lightly to be
reached that the Congress would have undertaken to change a policy
of such great importance without explicit language indicating that
purpose.
The purpose of the changes in § 15a is not left in doubt. They
were made with the manifest object of eliminating the provisions
for the recapture of excess income of carriers and of revising the
rule as to ratemaking. [
Footnote
1] The requirement imposed by Transportation Act 1920 for the
adjustment of rates according to rate groups was abolished, and, in
substitution, the Commission was directed to give due consideration
to the factors which are specified in the section as amended.
[
Footnote 2] Thus, the
Commission is to consider,
Page 292 U. S. 7
among other factors, "the effect of rates on the movement of
traffic," "the need, in the public interest, of adequate and
efficient railway transportation service at the lowest cost
consistent with the furnishing of such service," and "the need of
revenues sufficient to enable the carriers, under honest,
economical, and efficient management, to provide such service."
[
Footnote 3]
Neither the elimination of the group method of ratemaking nor
the substituted rule suggests an intention to impair the
Commission's authority over intrastate rates for the appropriate
protection of interstate commerce. On the contrary, the substituted
rule of ratemaking, by
Page 292 U. S. 8
its express terms, emphasizes the carriers' need of adequate
revenues. The Congress had provided authority to meet that need
where inadequate intrastate rates caused unjust discrimination
against interstate commerce. The Commission had exercised that
authority. The Commission had not proposed the diminution of that
authority. The new Act discloses no intention to weaken national
control for essential national purposes over the railway system of
the country. It was, rather, designed to aid that control in the
light of the depressed economic condition of the railways. We
conclude that the new rule of ratemaking left the power of the
Commission under § 13(4) intact.
Second. The Commission's findings. On the former
appeal, we pointed out that, if the action of the Commission was
not simply for the removal of undue prejudice against interstate
commerce as between persons or localities, and the Commission
undertook to prescribe a statewide level of intrastate rates in
order to avoid an undue burden, from a revenue standpoint, upon the
interstate carrier, there should be appropriate findings upon
evidence to support an order directed to that end. We observed
that, in dealing with unjust discrimination as between persons and
localities, the question was one of the relation of rates to each
other; but that, in considering the authority of the Commission to
enter the state field and to change a scale of intrastate rates in
the interest of the carrier's revenue, the question was that of the
relation of rates to income. But, to support the order then under
review, the Commission had made no findings as to the revenue which
had been derived by the carrier from the traffic in question, or
which could reasonably be expected under the increased rates, or
that the alteration of the intrastate rates would produce, or was
likely to produce, additional income necessary to prevent an undue
burden upon the carrier's interstate revenues, and to maintain
an
Page 292 U. S. 9
adequate transportation service.
Florida v. United States,
supra, pp.
282 U. S. 212,
282 U. S.
214-215.
On the new hearing, the Commission made comprehensive findings
to supply what had thus been found to be lacking. The findings set
forth at length transportation conditions, traffic, and revenues.
186 I.C.C. 160-189. Appellants' criticisms proceed upon an
unwarranted assumption. The requirement of essential findings as to
revenues did not demand an impracticable exactness. Losses through
inadequate rates could be shown satisfactorily, even though proof
of the precise extent of such losses was not available. Reasonable
determinations were required, and these were made.
Reviewing the history of the Cummer scale of intrastate rates on
logs, and considering comparable interstate and intrastate rates,
the Commission found that the Cummer scale was abnormally low, and
less than reasonably compensatory; that the defendants' revenue
under the Cummer scale was "insufficient under all the
circumstances and conditions to cover the full cost of the
service."
Id., pp. 165, 187. The Commission was able to go
further. In considering the effect of the Cummer scale upon
interstate commerce, the Commission was aided by evidence of actual
operations during the period from February 8, 1929, to January 31,
1931, when the increased intrastate rates prescribed by the former
order were in effect. The Commission, in its summary, found
(
id., pp. 188-189):
"The record shows that, during the period of approximately two
years following the increase in the rates, the total movement
amounted to 18,602 cars. This total included 3,740 cars transported
to Eastport, Lacoochee, and Otter Creek in trainload movements that
have ceased, and will not be resumed. Under normal economic
conditions, it seems probable that the annual volume of the Florida
log movement under rates the same as those previously
Page 292 U. S. 10
prescribed will not be less than the average of this 2-year
period minus the number of cars included in the discontinued
trainload movements. This average is 7,431 cars. That the movement
will not be less than this under normal conditions is confirmed by
the fact, during the five months immediately preceding the last
hearing in this case, February to June, 1931, when conditions were
abnormal, there were shipped over defendant's lines in Florida a
total of 2,765 cars of logs. This movement was at the rate of 6,636
cars a year. We believe that the movement of logs intrastate in
Florida over defendant's lines will not be materially curtailed
under the rates which we here prescribe, which are the same or
substantially the same as the rates generally in effect and under
which logs freely move throughout the South."
"The freight charges collected on the 18,602 cars above referred
to aggregated $571,508.94, and, if the Cummer scale had applied,
the charges would have been $281,225.75. The freight charges
collected on the 3,740 cars referred to were $100,439.06, and, if
the Cummer scale had applied, they would have been $48,286.75. On
the 14,862 cars remaining after deducting the 3,740 cars from the
total movement of 18,602, the freight charges collected were
$471,069.88 ($571,508.94 minus $100,439.06), and, if the Cummer
scale had been applicable, they would have been $232,939
($281,225.75 minus $48,286.75), or $238,130.88 less than those
actually collected. Accordingly, on the basis of an average of
7,431 cars a year under normal economic conditions, which basis we
believe conservative, the gross revenues under the rates prescribed
by the previous order herein would be more than $100,000 a year
greater than under the Cummer scale, now in effect. The application
of the Cummer scale therefore places a substantial burden upon
defendant's interstate revenues. If the revenues yielded by the
Cummer scale are not sufficient to cover the cost of the service,
as the cost evidence
Page 292 U. S. 11
indicates, it would follow that part of the above-stated amount
would constitute a dead loss in net revenue."
"We find that the circumstances and conditions surrounding the
transportation of these logs intrastate in Florida are not, on the
whole, as favorable as the circumstances and conditions surrounding
the interstate movement of logs over defendant's lines. . . ."
"We further find that the intrastate rates on logs over 6 feet
in length, except walnut, cherry, and cedar, applicable between
points on the Atlantic Coast Line in Florida for distances of 170
miles and less are, and for the future will be, unjustly
discriminatory against interstate commerce, and that such unjust
discrimination can be and should be removed by the establishment
between all points on the Atlantic Coast Line in Florida for
distances of 170 miles or less of rates not less than the rates
shown for such distances in Appendix F hereto, which are the rates
found reasonable for interstate application from northern Florida
to Georgia."
On the second rehearing, with respect to changes made by
southern rail carriers in their log rates -- which appeared to have
been made largely for the purpose of meeting truck competition --
the Commission found that, in Florida, the movement of logs had
"not been shown to have gone to the trucks to any substantial
extent where the hauls are over 25 miles," that "truck-competitive
rates for distances under 25 miles would regain little, if any,
traffic," and that the maintenance of the Cummer scale to meet what
little truck competition could be met in that way would greatly
decrease the revenues of the Atlantic Coast Line Railroad Company,
and would not be warranted. 190 I.C.C. 599.
We perceive no ground for the contention that the Commission has
failed to make the basic findings necessary to support its ultimate
conclusion.
Page 292 U. S. 12
Third. The evidence before the Commission. The question
of the weight of the evidence was for the Commission, and not for
the court. The authority conferred upon the Commission by § 13(4)
of the Interstate Commerce Act with respect to intrastate rates is
not different in its quality or effect from that given to the
Commission to prevent other sorts of unjust discrimination against
interstate commerce. That authority rests upon the constitutional
power of the Congress, extending to interstate carriers as
instruments of interstate commerce, to require that these agencies
shall not be used in such manner as to cripple, retard, or destroy
that commerce, and to provide for the execution of that power
through a subordinate body.
The Shreveport Case,
234 U. S. 342,
234 U. S. 351,
234 U. S.
354-355;
Railroad Commission of Wisconsin v.
Chicago, B. & Q. R. Co., supra. The purpose for which the
Commission was created was to bring into existence a body which,
from its special character, would be best fitted to determine,
among other things, whether, upon the facts in a given case, there
is an unjust discrimination against interstate commerce.
United
States v. Louisville & Nashville R. Co., 235 U.
S. 314,
235 U. S. 320.
That purpose unquestionably extended to the prohibited
discrimination produced by intrastate rates. In relation to such a
discrimination, as in other matters, when the Commission exercises
its authority upon due hearing, as prescribed and without error in
the application of rules of law, its findings of fact supported by
substantial evidence are not subject to review. It is not the
province of the courts to substitute their judgment for that of the
Commission.
Interstate Commerce Comm'n v. Louisville &
Nashville R. Co., 227 U. S. 88,
227 U. S. 100;
Western Chemical Co. v. United States, 271 U.
S. 268,
271 U. S. 271;
Virginian Railway Co. v. United States, 272 U.
S. 658,
272 U. S. 663;
Assigned Car Cases, 274 U. S. 564,
274 U. S. 580;
Merchants' Warehouse Co. v. United States, 283 U.
S. 501,
283 U. S. 508;
Crowell v. Benson, 285 U. S. 22,
285 U. S.
50-51.
Page 292 U. S. 13
We agree with the conclusion of the District Court that there
was no lack of substantial evidence to support the Commission's
findings.
The Commission's determinations were
"without prejudice to the right of the authorities of the
Florida or of any other interested party to apply in the proper
manner for a modification of its [our] findings and order as to any
specified intrastate rate on the ground that it is not related to
interstate rates in such a way as to contravene the provisions of
the interstate commerce act."
190 I.C.C. p. 600.
Decree affirmed.
[
Footnote 1]
See report of the Committee on Interstate and Foreign
Commerce of the House of Representatives, H.R. No.193, 73rd Cong.,
1st sess., pp. 28-30.
[
Footnote 2]
Section 15a in its amended form is as follows:
"Section 15a. (1) When used in this section, the term 'rates'
means rates, fares, and charges, and all classifications,
regulations, and practices relating thereto."
"(2) In the exercise of its power to prescribe just and
reasonable rates, the Commission shall give due consideration,
among other factors, to the effect of rates on the movement of
traffic, to the need, in the public interest, of adequate and
efficient railway transportation service at the lowest cost
consistent with the furnishing of such service, and to the need of
revenues sufficient to enable the carriers, under honest,
economical, and efficient management, to provide such service."
[
Footnote 3]
As to the substituted rule of ratemaking, the House Committee
said in its report:
"The rule of ratemaking, as rewritten in the proposed paragraph
(2), found in § 205 of the bill, directed the Commission to give
due consideration, among other factors, to the effect of rates on
the movement of traffic; to the need, in the public interest, of
adequate and efficient railway transportation service at the lowest
cost consistent with the furnishing of such service, and to the
need of revenues sufficient to enable the carriers, under honest,
economical, and efficient management, to provide such service. It
is difficult to conceive of a reasonable rate which would ignore
any one of these considerations. The Commission, as a fair and
impartial body acting for the Congress, will continue to give
consideration to these factors. In the case of the power given to
the Commission to prescribe just and reasonable rates, the
committee does not believe that it is necessary to encumber the
statutes with further language which might be mandatory in terms,
but which could add nothing further to the plain duty of the
Commission under the law, and which might be interpreted to imply a
distrust of the Commission in prescribing just and reasonable
rates. The Commission will and must give consideration to all facts
developed on the record, and see to it that the record is
enlightening as to such factors as are mentioned in the first
section of this bill."
H.R. No.193, 73d Cong., 1st sess., p. 30.