Document: 344 U.S. 254 73 S.Ct. 259 97 L.Ed. 301 KING et al.v.UNITED STATES al. No. 9. Argued Oct. 15, 1952. Decided Dec. 22, Rehearing Denied Feb. 9, 1953. See 936, 503. Mr. Lewis W. Petteway, Tallahassee, Fla., for appellants. Charles H. Weston, Washington, D.C., appellees United States and Interstate Commerce Commission. Frank Gwathmey, Atlantic Coast Line R. Co., others. Justice BURTON delivered the opinion of Court. 1 The questions here are: (1) whether Commission, in prescribing intrastate freight rates railroads under § 13(4) Act,1 may give weight to deficits passenger revenue; (2) findings Commission which are involved this proceeding sufficient sustain it has prescribed. Our answer each question is affirmative. 2 This an action against brought District Court Northern Florida, 28 U.S.C. (Supp. V) 1336, U.S.C.A. by appellants 'as Constituting Florida Railroad Public Utilities Commission.' They ask court enjoin, set aside annul order requiring establish will reflect same increases as have been authorized comparable interstate traffic. 3 underlying proceedings originated 1940. then undertook a nationwide investigation railroad rates, §§ 13(2) 15a(2) Act, conformity with National Transportation Policy stated Act 1940.2 dealt past future operations, well interstate. A Committee Cooperating State Commissioners sat took part its deliberations. Mounting operating costs declining revenue led 1946, authorize increase 20% basic rates. Ex Parte 162, Increased Railway Rates, Fares, Charges, 264 I.C.C. 695, 266 537.3 4 In 1947, found such further decreases that additional interim 10% Soon raised 20%. third report varied percentage different areas, result southern territory, including was 25%. 1948 final confirmed 25% increase. 166, Freight 269 33, 270 81, 93, 403. Commission's estimates contemplated application increased intrastate, interstate, transportation.4 concludes statement 'Committee * us state they concur foregoing report.' 403, 463. 5 Upon publication these reports, asked their respective authorities approved most but declined approve from 25%.5 6 On petition railroads, own 13(3) (4) 41 Stat. 484, 49 (4), 13(3, 4). full hearing had before Commissioner examiner, followed upon exceptions examiner's report.6 recommended be established 'between points are, be, maintained respondents (railroads) on like traffic within our authorizations 162 166 *.' Finding 8, 278 41, 73. 7 gave opportunity permit applied transportation. latter's failure act, ordered 'thereafter maintain apply transportation charges shall no lower than charges, or rate bases, provided said report.'7 8 Before effect, filed. three-judge convened. 2325, 2325. Two short line numerous shippers intervened plaintiffs. all Class I defendants. entire record 13(4), introduced. sustained dismissed complaint. 101 F.Supp. 941. That judgment appeal. 1253, 2101(b), 2101(b). 9 I. revenue. 10 168, 1948, 272 276 reviewed changing attitudes adopted concerning role cases Five Per Cent Case, 31 351, 1914 concluded class service should completely independently provide proportionate share expenses profits.8 1949 says: 11 'However, because changed theories Congress 1920, practical matter increasing degree unprofitableness menaced continuity adequate national system transportation, we were forced more comprehensive view question. We observe, also, at time those decisions enjoyed monopoly supplying situation longer exists.' 34. 12 Citing approval similar views 103, Fifteen 1931, 178 539, 123, 1937—1938, 226 summarizes present position follows: 13 'These typical recent holdings While regard 'trite say particular service, coach, sleeper, parlor car, head end, nearly pay way return profit' (Eastern Passenger Fares Coaches, 227 17, 25), accepted contention there not burdened shortage (Livestock, Western 190 611, 629), yet, if inevitably inescapably cannot bear direct joint indirect costs, felt compelled general case take deficit into account adjustment charges. Both services essential, losses one necessarily must compensated earnings other carriers continue operations. subjected reasonable produce fair aggregate return, even though thereby higher exacted other. (Property Owners' v. Chesapeake & O. Ry. 237 549, 565.)' Id., 35. 87, Revenues District, 113 3, 23. 14 change policy inevitable consequence steadily together growth vigorous competition automobiles forms made futile compensate abandon mileage, reduce improve facilities, while fixing level permitted.9 15 years, obvious except during peak wartime ratio between expense areas uniformly unfavorable railroads.10 16 Section 194011 broad concept unity Nation's system. consider, among things, need, public interest, efficient railway need revenues service. It permeates Nos. supra. leaves ground claim meet over-all needs. Louisiana, 290 70, 54 28, 78 181. 17 remains (either intrastate) when 13(4). conceivable some considerations properly given might applicable equally state. 18 instant case, however, showing character conditions differs substantially operations territory generally. contrary, observes that— 19 'Increased deficits, reason continuing rise growing use froms condition bearing alike There do East Coast, operates entirely would appear indicate contrary. 20 'The affords justification difference treatment respect (passenger deficits) traffic, hand, hand. serious both shippers, become burden imposed them (rather being shared basis lines).' 67—68. below, page 944. 21 appears 40, that, 127.3% ratios three principal year 120%, 127% 128%. moreover, discontinuance high speed tracks equipment fast schedules transport perishable fruits vegetables Florida. properties roads whole determining Nothing demonstrated demand relation activities. 22 also finds 'the (without 5% increase) abnormally low contributing required (Florida railroads) enable render operate profitably, accomplish purpose 5, 72. 23 evidence require treat differently territory. Instead, cause unjust discrimination commerce so note 13, infra. 24 applies 15a(2). Whichever section used, economic underlie intrastate. considered throughout said: 25 'This consistently held (§ 13(4)) construed light supplementing it, forbidden includes disparity latter thwart 15a enabling earn return. So construed, confers power raise maintenance yield value property devoted intrastate.' pages 74—75, 31. 26 States, 292 1, 6, 603, 605, 1077. 27 conclude why does territory.12 Several lend support printed margin.13 Its authority prescribe now rests provision, causes 'any undue, unreasonable, foreign *' as, judgment, remove discrimination. Note finding meets requirement. existing 'on bases herein cause, instances, If supported subsidiary findings, ultimate thus sustains validity order.14 North Carolina 325 507, 514, 65 1260, 1264, 89 1760; 1077; 282 194, 51 119, 75 291; below adds 'clear (the rate) did unreasonable 941, 945. 29 nature adequacy necessary 'unjust commerce' state-wide 1.65 cents per mile 2.2 mile, although prescribed minimum lines trains. primarily needed, lacking, contribute directed 30 mere enough se requisite Confronted above show Such finding, lacking supplied states 'intrastate exceed just level.' inadequate. fact, ample indicated extraordinarily large volume available profits. contrast, 'Florida (proposed) authorized, cast undue extent less approved.' id., 72—73, see 45—59. loss estimated sought $915,325 year.' 65. 32 Whereas favorable profitable passengers Nation large, expressly incident peninsula somewhat points.' 72, 63—67. 33 Supporting conclusion proposed drive away business prove reasonable, says establishment sufficiently equal respondents' (railroads') therefrom, constitute proportion total income 34 cover needs emphasized case. go far beyond bare substantial uniformity rate. These demonstrate zone reasonableness and, earnings. 35 reached distributed along estimating absence any becomes natural order. 36 'findings without prejudice right interested party, modification thereof specific related contravene provisions Act.' 74. Certain original already modified removed 946. 37 No based. Although point urged, supporting 'full hearing' introduced below. Much factual material reports cases, proceedings. To contrary complementary sections. 38 decision first proceeding, hope commissions bring harmony. When failed so, reaffirmed new burden. plain inquiry level, classes raised, whole. Where move factors rate, two shown intimately bound together, occasion deal specifically, separate revenues. Compare American Express Co. South Dakota ex rel. Caldwell, 244 617, 656, 61 1352; supra (290 181); (292 1077).' Illinois 474, 483—484, 783, 786—787, 1371. See, Montana 106 778, 783. 39 out mentioned findings. Those, needed case.15 40 For example, mentions cent confiscatory. competent evidence, constitutional enjoining Norfolk Attorney General Conley West Virginia, 236 437, 59 745; Pacific Dakota, 585, 429, 735. jurisdiction over limited where event, directs raising reasonableness. supra, 31, 181; 211, Wisconsin Chicago, B. Q.R. 257 563, 585—586, 42 232, 236, 66 371. Similarly, mentions, make indispensable, dollars absent there. Reference what contribution railroad's income' 'finding amount efficiently.' 516, 1265, 1760. reliance existence fixed Carolina.' Ibid. rely 'are Also, 'will More needed. necessary, purposes, item fully developed '(T)he administrative arm (would be) paralyzed, instead adjudicating deemed structure, obliged consider individual carrying effect schedule.' 75—76, 78—79, 32—33, 483, 786, 1371; 606, Georgia P.S. 283 765, 774, 619, 622, 1397; 588, 237, seeks generally area whole, proceed territory.16 At leave open, here, modifications situations justly applicable. 518, 535, 1266, 1274, 43 reasons, accordingly affirmed. 44 Affirmed. 45 BLACK facts 46 DOUGLAS, whom Chief VINSON concurs, dissenting. 47 taken unprecedented my view, unwarranted step enlarging upholds favor commerce, fail carriers' revenue, losing money. 48 regulate stems promote protect commerce. Shreveport Rate Case (Houston Texas U.S.), 234 342, 833, 58 1341.1 By empowered discriminatory. key regulatory presupposes somehow interfere principle explicit 13(4)2 Court, after enactment 13(4).3 rational fright neither hampers nor obstructs free flow affect quantity flow. is, therefore, 50 course, revenue.4 But If, determined reference cost investment business, discriminated against. Intrastate amply carry load. nevertheless saddled business. local shipper. surmises find carriers. either fact deficits. Moreover, assume know amount. 1760, indicates me cut taking enlarge limits. '(4) Whenever (where issue) commission, hearing, fare, charge, classification, regulation, practice advantage, preference, persons localities hand hereby declared unlawful, maximum minimum, thereafter charged, observed, manner prejudice, fares, classifications, regulations, practices observed parties affected thereby, law notwithstanding.' (Italics supplied.) 13(2), 550, amended, Stat 13(2); 15a(2), 912, 15a(2); 1940, inserting preamble 899, preceding 1. earlier 148, 1942, 248 545. several referred length many commodity besides controlled opinion. variations important significant adjusting situations, consideration determination issues us. percentages used illustrative purposes. 943—944. 421, tabulations overall include table relates covers assumes similarly time.' referring 'constructive,' normal year, estimate assumption timely adjustments traffic.' 428. As values adds: 'They presuppose permitted effective otherwise.' 437. 39, 94—95, 440. response requests based granted allow logs moving mills, wet phosphate washer drying plant, waste wood retort recovery plant sugar cane mills. pulpwood 9%. conform certain commodities. concerned denying increase, confine discussion item. conclusions differ Increases Alabama Rates 274 439; 273 749; Tennessee 625. Arizona 105. decision, 284 167. 786; Judgment vacated remanded 343 905, s.ct. 329. 'We provision justified exclusively much care incurred branch proper operation public.' 392. involves only people mail, express, baggage, milk 'headend' 1936 through 1948. 38. '* Between end 1923 beginning (1948), miles operated decreased 224,762 159,373 29.1 percent years. addition abandonments, curtailment occurred, impossible portray statistically. From 1933 number carried fares uninterruptedly. Passengers slightly billion half figure, 433 millions, round numbers, later year. fell $1,148 millions $329 decline years 70 percent. development accompanied, uninterrupted 81.29 101.22 1930, 1920—30 Since annual war 1942—45. "Passenger net specified districts regions region Operating Net Eastern district. 120.8 $216,450,000 Pocahontas region. 177.8 35,725,000 Southern 127.3 72,982,000 District.__132.2 __234,625,000 Total..... 127.4. 559,782,000" 36, 40; pp. 14—31 data value, expenses, efficiency, etc., 32—40 Moulton, Problem, c. V (1933); 63d, 64th 65th Annual Reports respectively. 'In exercise due consideration, factors, movement carrier prescribed; lowest consistent furnishing service; carriers, honest, economical, management service.' 'It impartial regulation modes subject administered recognize preserve inherent advantages each; safe, adequate, foster sound carriers; encourage services, discriminations, preferences advantages, unfair destructive competitive practices; cooperate duly officials thereof; wages equitable working conditions;—all developing, coordinating, preserving water, highway, rail, means, Postal Service, defense. All enforced declaration policy.' 735, W.R. Conley, 745, favor, rather oppose, position. enjoined attempting restrict confiscatorily action, implication States' relief threatened confiscation. Congress, override state-prescribed unjustly discriminate II. '2. points. '3. weights level. '5. weights, forth develop postal defense; approved. '6. *. '7. causes, preference advantage commerce; '8. establishing commission herein: (5) charge corresponding contemporaneously period August 21, to, including, January 11, 1949; 72—74. An alternative whenever charged discrimination.' 371; Houston, E. W.T.R. 1341. restricted doubt expressed ability ground, place here. supra; Louisiana N.O.R. 125, 52 74, 76 201; 776, 623, 1406; New York 591, 239, 385; 'where, moves conditions, handling inextricably woven attempt impossible, namely segregated valuation property, serve useful purpose.' 287 66. Hughes speaking said, 836: 'Congress regulate,—that government enact 'all appropriate legislation' 'protection advancement' (The Daniel Ball, Wall. 557, 564, 999, 1001); adopt measures 'to insure safety' (County Mobile Kimball, 102 691, 696, 697, 238—240); foster, protect, control, restrain' (Second Employers' Liability Cases (Mondou York, N.H. H.R. Co.), 223 47, 53, 54, 169, 56 327, 345, 347, 348, L.R.A.,N.S., 44). authority, extending instruments embraces control matters having close essential security efficiency conducted terms molestation hindrance.' relevant portions read: 'Whenever reads pertinent part: initiate, modify, adjust will, economical expenditures way, structures equipment, equal,

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