Source: https://supreme.justia.com/cases/federal/us/282/311/
Timestamp: 2019-04-26 05:45:49+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 282 › United States v. Chicago, M., St.P. & P. R. Co.
"that the applicant . . . (b) shall impound in a separate fund the money received from the payment by holders of preferred and common stock in an amount equal to $4 a share, which shall not be paid out unless and until so authorized by order of the court in respect to payments subject to the court's jurisdiction or by this Commission."
The present suit was brought to have the foregoing clause (b) of the order declared void, and to enjoin its enforcement.
1. The terms of the proviso embrace, and were meant to embrace, the entire fund of $4 per share, including the special fund of $1.50. P. 282 U. S. 323.
2. The Commission was without power to impose the condition of clause (b) of the proviso, insofar as the $1.50 fund was concerned, and its action in respect thereto was an interference with private property and rights lying outside the field of federal jurisdiction. The contract in respect of that fund was not one in respect of commerce, but involved a transaction distinct and complete in itself, without regard to its results, and, whether succeeded by commerce or not. was no part of it. Pp. 282 U. S. 324, 282 U. S. 326.
3. The power of the federal government to regulate commerce is not absolute, but is subject to the limitations and guarantees of the Constitution, among which are those providing that private property shall not be taken for public use without just compensation, and that no person shall be deprived of life, liberty or property without due process of law. P. 282 U. S. 327.
is applicable to the order of the Commission here involved. The order in itself, being complete and self-sustaining and resting upon grounds found to be sufficient to support it, cannot be made to depend upon submission to a collateral condition which is beyond the statutory and constitutional power of the Commission to impose. Pp. 282 U. S. 328-329.
5. The condition in respect of the special fund of $1.50 per share was properly set aside, and its enforcement enjoined by the court below. P. 282 U. S. 331.
Appeal from a decree of the district court setting aside and enjoining enforcement of part of an order of the Interstate Commerce Commission, 131 I.C.C. 673.
passed into the hands of receivers appointed by the Federal District Court for the Northern District of Illinois and subsequently by other federal district courts. Thereupon, and pending a decree of foreclosure of outstanding mortgages, committees were formed by and for the various classes of security holders for the purpose of protecting their several interests in the receivership proceedings and in the ultimate disposition of the railway property. Reorganization managers were appointed by the committees for the purpose of preparing and submitting a plan of reorganization. Thereafter, a plan was submitted to, and adopted and approved by, the committees, with an exception not material here, and, after some modification, was approved by the court below. There was a final decree of foreclosure under which the properties of the railway company, in November, 1926, were sold, subject to certain existing liens, to persons acting as agents for the managers and for the benefit of the security holders. This sale was confirmed and the plan held valid by the court with a proviso that conveyances should not be delivered to appellee, the new company formed in pursuance of the reorganization plan, until after the Interstate Commerce Commission, pursuant to law, had authorized such company to issue the securities provided for in the plan.
and the committees . . . and the fees and disbursements of their counsel and all depositaries and subdepositaries, any balance of said sum to be paid over to the new company as additional working capital or, if the reorganization managers in their discretion shall so determine, to be returned pro rata to the holders of certificates of deposit for stock."
The discretion so to be exercised by the managers was declared to be absolute and uncontrolled. The amount to be paid as compensation to the managers was definitely fixed by agreement contained in the plan, and compensation for the services of the committees was to be fixed by the managers unless the plan should be abandoned, in which event none was to receive any compensation. Payment to other persons for services was to be made whether the plan should be carried through or abandoned. In respect of the remainder of the $4 fund -- namely $2.50 per share -- the effect of the plan was to require that, after satisfying such expenses as costs of foreclosure, court allowances, engraving of securities for the new company, charges of corporate trustees, etc., any balance remaining should be paid over to the new company.
though permitted by the authority creating the carrier corporation, unless and until, and then only to the extent that, upon application by the carrier, and after investigation by the Commission of the purposes and uses of the proposed issue and the proceeds thereof, or of the proposed assumption of obligation or liability in respect of the securities of any other person, natural or artificial, the Commission by order authorizes such issue or assumption. The Commission shall make such order only if it finds that such issue or assumption: (a) is for some lawful object within its corporate purposes, and compatible with the public interest, which is necessary or appropriate for or consistent with the proper performance by the carrier of service to the public as a common carrier, and which will not impair its ability to perform that service, and (b) is reasonably necessary and appropriate for such purpose."
"(3) The Commission shall have power by its order to grant or deny the application as made, or to grant it in part and deny it in part, or to grant it with such modifications and upon such terms and conditions as the Commission may deem necessary or appropriate in the premises, and may from time to time, for good cause shown, make such supplemental orders in the premises as it may deem necessary or appropriate, and may by any such supplemental order modify the provisions of any previous order as to the particular purposes, uses, and extent to which, or the conditions under which, any securities so theretofore authorized or the proceeds thereof may be applied, subject always to the requirements of the foregoing paragraph (2)."
shall be void, if issued or assumed without such authorization therefor having first been obtained, or if issued or assumed contrary to any term or condition of such order of authorization as modified by any order supplemental thereto entered prior to such issuance or assumption. . . ."
"Provided, however, . . . that the applicant . . .(b) shall impound in a separate fund the money received from the payment by holders of preferred and common stock in an amount equal to $4 a share, which shall not be paid out unless and until so authorized by order of the court in respect to payments subject to the court's jurisdiction or by this Commission."
argument the court below entered a decree denying the motions to dismiss and perpetually setting aside, suspending, and annulling, and perpetually enjoining the enforcement of, or attempt to enforce, the condition (b) imposed by the proviso, so far as it here is in question -- that is to say, such part thereof as required appellee to obtain the special fund of $1.50 per share and impound the same, and which prohibited the making of any payment out of that fund without a prior determination by the Commission in respect thereof.
The court below was of opinion that the proviso should be so construed as to include only the $2.50 part of the fund, and exclude the special fund of $1.50 per share from its operation, otherwise, that the condition in respect of the latter was void. The court further held that the case made by the petition was within the jurisdiction transferred to the district courts from the Commerce Court by chapter 32, 38 Stat. 219 -- namely, jurisdiction over "[c]ases brought to enjoin, set aside, annul, or suspend in whole or in part any order of the Interstate Commerce Commission." C. 309, 36 Stat. 539, 33 F.2d 582.
We do not stop to discuss the holding of the court below in respect of the construction of the proviso further than to say that, contrary to the view of that court though plausibly stated, we have reached the conclusion that the terms of the proviso embrace, and were meant to embrace, the entire fund of $4 per share, including the special fund of $1.50. Thus construed, two questions remain for consideration: (1) Was it within the power of the Commission to impose the condition so far as it included the special fund? (2) Was that condition such a part of the Commission's order as to cause it to fall within the jurisdiction conferred by the language last quoted above?
requisite certificate of public convenience and necessity was issued by the Commission. The order of the Commission authorizing the new company to issue securities was made after a finding of all the facts required by the Act as a necessary basis therefor. By subdivision (3) of § 20a, the Commission is empowered to make its grant of authority to issue securities upon such conditions as the Commission may deem necessary or appropriate in the premises. The power to impose such conditions, however, is not unlimited, and may not be exercised arbitrarily or (since Congress cannot delegate any part of its legislative power except under the limitation of a prescribed standard, Union Bridge Co. v. United States, 204 U. S. 364, 204 U. S. 384-385), unless there be found substantial warrant for the conditions in the applicable standards established by the provisions of the Act relating to such securities. The powers possessed by the Commission are delegated by Congress under, and are to be exercised in conformity with, the constitutional grant of authority to regulate interstate and foreign commerce. Proceeding under that grant, as applied to the present matter, neither the Commission nor Congress itself may take any action which lies outside the realm of interstate commerce. Hammer v. Dagenhart, 247 U. S. 251. It follows that, if the condition in question relates not to such commerce, or to the rights or duties of the carrier engaged in such commerce, but exclusively to extrinsic matters, it is imposed without authority of law.
"which, as provided in the reorganization plan, is to be set aside to provide for the compensation of the managers and the committees, fixed as therein provided, and the fees and disbursements of their counsel and of all depositaries and subdepositaries."
And, correlatively, the new company agreed to pay all other expenses incurred by the managers except such as were to be paid out of this special fund. These agreements of the interested parties lend emphasis to the conclusion that the services to be rendered and expenses to be incurred in formulating and bringing about an approval of the plan were to be paid for out of the special fund as matters in which the private parties alone were concerned.
Commission lawfully could impose upon the issue of the securities the condition that the new company should take control of this money, or that it should be paid out under the direction of the Commission. But, in principle, how does the case under review differ from the case supposed? The agreement in respect of the special fund, though contained in the body of the plan, is, in effect, as distinct as though it had been made by separate contract. It seems plain enough that the Commission, by the condition here in question, has undertaken to lay its hands upon and control the disposition of a fund created by contract between private persons to which the carrier was not a party, in which the carrier had no enforceable interest, and which was not within the purview of the regulating power of the Commission. The most that can be said is that the creation of the special fund -- like production or manufacture of commodities, United States v. E. C. Knight Co., 156 U. S. 1, 156 U. S. 12 -- "may [or may not] result in bringing the operation of commerce into play." The contract was not one in respect of commerce, but involved a transaction distinct and complete, in itself, without regard to its results; and, whether succeeded by commerce or not, was no part of it. Diamond Glue Co. v. United States Glue Co., 187 U. S. 611, 187 U. S. 616.
legislative standards controlling the action of the Commission in respect of the issue of securities had a direct bearing; was proximately related to, and might substantially affect, the commercial activities of the carrier; and, accordingly, was a subject in respect of which the condition properly could be imposed by the Commission. In the case of the special fund of $1.50 per share, however, the carrier had no such interest. That fund was owned by and subject to the sole control of private persons. Whether the carrier would receive any part of it in the future was a matter of speculation, being wholly dependent upon the unrestricted will of its custodians. It results that the condition, insofar as it affects the special fund of $1.50 per share, was an interference with private property and rights lying outside the field of federal jurisdiction.
or administrative edict which purports to empower the carrier to take the property without compensation and dispose of it not as the contract provides, but as the governmental body may direct, must fail as a futile attempt to accomplish what the Constitution does not permit.
prescribed by the state which is hostile to the provisions of the federal Constitution. Western Union Tel. Co. v. Kansas, 216 U. S. 1, 216 U. S. 47-48; Western Union Tel. Co. v. Foster, 247 U. S. 105, 247 U. S. 114.
Without attempting to determine how far this principle may be carried in its application to orders of the Interstate Commerce Commission, or attempting to formulate any general rule in respect thereof, we are of opinion that the principle does apply to the order now under review, and, for present purposes, that is enough.
"Upon consideration of all the facts we are of opinion that the public interest will be served by an approval of the application, even though we should believe that a stronger financial structure might have been erected by the adoption of some other plan of reorganization."
"for the purpose of taking further testimony as to the expenses of the reorganization, the nature and scope of the services performed for the compensation and fees claimed, and any other matters appropriate in the premises, and for the entering of pertinent orders in connection therewith."
"I am in accord with the conclusions authorizing issuance and assumption of liability in respect of securities and granting certificate of public convenience and necessity. I do not conceive that, as a Commission, we have anything to do with the application which may be made of the $4 per share paid in to the reorganization managers by existing stockholders. What those stockholders do with their money is their affair unless and until some part of that money is paid over to the applicant."
The order, in itself, being complete and self-sustaining and resting upon grounds found to be sufficient to support it, cannot be made to depend upon submission to a collateral condition which, as we have shown, is beyond the statutory and constitutional power of the Commission to impose. Whatever may be the general rule, we have no difficulty in concluding that, under the circumstances above recited, the principle in respect of the separability of unconstitutional conditions imposed upon a privilege granted by a state is applicable to the present order of the Commission -- and for a stronger reason, since that body, unlike a state in the class of cases referred to, does not possess the power arbitrarily to deny the authority here sought by the carrier. From the foregoing, it results that the condition in respect of the special fund of $1.50 per share was properly set aside, and its enforcement enjoined by the court below.
"In the instant case, the testimony is that the value of the properties proposed to be acquired ranges from $640,000,000 to $900,000,000. For purposes of argument, the Jameson committee took $700,000,000. The book value on May 31, 1927, in round numbers was $707,000,000. Against these values or this investment there will be outstanding after the proposed reorganization the following: undisturbed bonds, excluding $22,129,000 of bonds assumed pursuant to the lease of Terre Haute, $160,001,960; 50-year 5 percent mortgage gold bonds, $106,395,096; adjustment-mortgage bonds $182,873,693; preferred stock $119,845,800; total $569,116,549. Using the lowest figure, $640,000,000, and deducting from that amount the total par value of the securities enumerated, or approximately $569,100,000, would leave $70,900,000 as representing the value of the 1,174,060 shares of common stock without nominal or par value. In the hypothetical balance sheet as of May 31, 1927, the applicant shows $174,342,841.64 for the book value of the common stock. Without expressing any opinion as to the value of the no-par-value common stock, it would appear that, upon applying the test suggested, there will remain an unmortgaged equity in the properties sufficient to permit the bondholders to assign to the stockholders an interest therein and to support the issue of stock in the amounts proposed."
that the condition attached to the order was an improper one, it would seem that the respondent is now estopped to challenge it. In any case, I think the Court should not permit the order to stand as an unqualified approval of the proposed issue of securities, after striking from it the condition upon which the Commission's approval was given.
"after investigation . . . of the purposes and uses of the proposed issue and the proceeds thereof, . . . finds that such issue . . . is . . . compatible with the public interest, . . . and . . . reasonably necessary and appropriate"
for the corporate purposes of the carrier. I suppose no one would doubt, and the opinion of the Court seems to concede, that, if the assessments which, under the reorganization plan, were to be levied upon the stockholders of the old company, were all to paid into the new one in exchange for the new securities, it would have been the duty of the Commission to investigate the purposes and uses of the new issue and its proceeds, and, if it found that the issue to raise a fund for the payment of extravagant reorganization expenses was not compatible with the public interest, or reasonably necessary and appropriate for the corporate purposes of the new company, the Commission could have refused to approve it. Under subsection (3), [Footnote 1] the Commission could have provided against improper expenditures by annexing to its order the very condition which it added in the present case.
But it is said that, because no part of the $1.50 fund provided by the stockholders to pay for the reorganization would necessarily ever come into the possession or control of the new company, and, since its disposition was a mere matter of private contract between the stockholders and the reorganization managers, the condition was beyond the power of the Commission. The question is thus presented whether the salutary provisions of § 20(a) can be avoided, and an issue of securities, so far as it is made to raise a fund to defray excessive reorganization expenses, withdrawn from the control of the Commission by the simple expedient of so arranging the reorganization plan that reorganization managers may retain and disburse, from the moneys paid by the old stockholders to procure stock in the reorganized company, such amounts as may be required for reorganization expenses.
"For months prior to the receivership they [the railroad's directors] were impotent. It was an ideal situation for the bankers to control. This they promptly did, arranged all the details, framed up the committees favorably to themselves, put themselves on the bondholders' protective committee and constituted themselves reorganization managers."
and the committees. In every practical sense, the reorganization managers controlled the foreclosure proceedings resulting in the sale of the property of the old company. Their representatives were the purchasers at the foreclosure sale. They created and controlled the new company, which is the appellee here. The reorganization plan gave them full power to modify it as a whole or in detail, with the approval of the committee representing the securities affected. They were authorized to carry out the plan, and, in doing so, they were empowered to act for, and as intermediaries between, the committees, the stockholders, and the new company. Both preferred and common stockholders of the old company were required by the plan to surrender their stock in that company, and to pay $32 for each share of their common stock, and $28 for each of their preferred, in order to procure the securities of the new company. The alternative was loss of their rights as stockholders, which were still of substantial value. The plan called for the use of these sums to pay certain obligations of the old company, and such miscellaneous fiscal requirements of the new as were not supplied by the proceeds of its funded debt, and to create the $1.50 fund, from which were to be paid, in the uncontrolled discretion of the managers, the reorganization expenses incurred in launching the new company and securing the transfer to it of the business and property of the old.
creature and alter ego, the appellee. See United Fuel Gas Co. v. Railroad Commission of Kentucky, 278 U. S. 300, 278 U. S. 308; Chicago, Milwaukee & St. Paul Ry. Co. v. Minneapolis Civic Assn., 247 U. S. 490; United States v. Delaware, Lackawanna & Western R. Co., 238 U. S. 516; United States v. Lehigh Valley R. Co., 220 U. S. 257.
But even if we disregard this identity of interest, and whatever the form of the transaction, whether the reorganization expenses were to be paid out by the new company directly or merely for its account by the reorganization managers, its creators, in order to enable it to acquire the railroad property for the benefit of its stockholders, the source of the expense fund was the assessments paid by the old stockholders, in reality and legal effect part consideration for, and proceeds of, the issue of the new stock. To say that so much of the reorganization agreement as related to the creation and expenditure of the $1.50 fund for the payment of these expenses was a mere private agreement, unrelated to the issue of securities, with which the Commission is vitally concerned, is to ignore its plain terms and disregard its practical operation.
Commission was directed by the statute to investigate in determining, as it was bound to do, [Footnote 2] whether the issue was in the public interest and reasonably necessary and appropriate for the corporate purposes of appellee. The considerations affecting the judgment of the Commission in passing upon the reasonable necessity for the issue, its effect upon the public interest and upon the carrier's performance of its public service, are the same whether the expense fund was to be paid directly to the new company for disbursement by it or short-circuited, through the managers, from stockholders of the old to the various claimants for services rendered in creating the new.
Neither the public interest nor the duty imposed on the Interstate Commerce Commission is limited to insuring the payment of debts by any particular railroad, or procuring for it an adequate amount of money or property for the securities which it issues. An important purpose of the Transportation Act of 1920 was to preserve for the nation the transportation system as a whole, and, to that end, to secure a fair return on capital devoted to the transportation service. See New England Divisions Case, 261 U. S. 184, 261 U. S. 189; Railroad Commission v. C., B. & Q.
R. Co., 257 U. S. 563, 257 U. S. 585; Dayton-Goose Creek Ry. Co. v. United States, 263 U. S. 456, 263 U. S. 478. The preservation of the transportation system and the stability of its credit essential to its preservation depend not alone upon the ability of individual carriers to meet their obligations, but upon the ability of all to attract the investment of funds in their securities. If such investments are impaired by receiverships of the carriers, followed by reorganizations of excessive cost, and if railroad shareholders, compelled by the necessities of their situation, must contribute to the rehabilitation of their properties excessive amounts upon which the reorganized carrier may not earn an adequate return, railroad credit in a broad sense is affected, the permanency and stability of the transportation system as a whole is impaired, and the public interest suffers. No one familiar with the financial and corporate history of this country could say, I think, that railroad credit and the marketability of railroad securities have not been profoundly affected, for long periods of time, if not continuously, by the numerous railroad reorganizations, in the course of which junior security holders have found it impossible to save more than a remnant of their investment, and that only by the assumption of a heavy burden of expense, too often the result of wasteful and extravagant methods of reorganization.
Railways v. West, 280 U. S. 234, a substantial amount was included in the rate base to cover "Cost of Financing." The mere fact that going concern value is supplied from sources other than the treasury of the carrier -- here, the stockholders of the old company who became stockholders of the new -- is not material. See United Railways v. West, supra. The Commission is specially charged with public duties with respect to rates, valuation, and the administration of the recapture provisions. In all these respects, the public interest may be adversely affected if railroad securities may be issued to effect, either directly or indirectly, the payment of excessive costs of reorganization.
If example were needed of the nature and extent of the public interest which may be involved, it is afforded by the present case. In passing upon the present issue of securities, the Commission had before it the results of its elaborate Investigation of the Chicago, Milwaukee & St. Paul Ry. Co., supra, entered into after the receivership, in the course of which it commented on the excessive fees and Commissions paid in the past by the railway company to its bankers, the present reorganization managers. It had before it tentative estimates of the total cost of reorganization running as high as $6,494,900. The $4 fund set apart for expenses approximated $9,330,000, of which the $1.50 fund was a part aggregating about $3,500,000, out of which were to be paid the reorganization managers, various protective committees, counsel, and depositaries. The estimated expenses to be paid from this fund ranged from $2,636,000 to $3,381,000, of which the compensation to be paid to the reorganization managers was $1,044,000.
to make further inquiry as to the expenses of reorganization, and the nature and scope of the services performed for the compensation fees claimed; but in order that the reorganization might proceed and the railroad property be released from the receivership, the authority for the issue of the new securities was granted upon the condition that the appellee impound the entire $4 fund, which was to be paid out only upon order of court or the Commission.
Since the Commission had concluded that the expenses might be excessive and that there was no adequate safeguard against improper payments, it could, under the express terms of the statute, [Footnote 3] have rejected the application. But it is said that, even though the Commission might rightly have refused its permission to issue the securities, still, having granted permission, it could not annex this condition to the order, and that, as it could not compel the reorganization managers to impound the expense fund paid over to them, or to submit the reasonableness of the expenses which they had incurred to the Commission or the court, it was an arbitrary and unwarranted exercise of power to make the Commission's approval of the stock issue conditional upon such action.
intended, and that, consequently, only such terms and conditions may be annexed to the order as tend in some measure to remove objections to the issue, which legitimately might be the basis of withholding favorable action.
If the Commission, as I think it might, could have refused to approve the present issue of securities on the ground that they were to be issued to procure payment of reorganization expenses which were or might be excessive, then, plainly, under the provisions of subsection (3) and within the purview of subsection (2), it could have made its consent to the issue conditional upon the modification of the plan, in such manner as to preclude the payment of unreasonable expenses. Appellee was not obliged to comply with the condition, since it was not compelled to proceed with the plan, although compliance with it, through the exercise of the power of the managers to modify the plan, would not, so far as appears, have been impossible or even difficult. But, as the condition was one which the Commission had power to impose, appellee, having accepted the plan, cannot repudiate the condition.
2. Even if it be held that the condition which the Commission attached to its order was beyond its authority, I should still have thought the present case not a proper one for a court of equity to lend its aid to the appellee, and, in any event, that the decree below should have been so framed as to leave no doubt that the Commission was free to treat the whole order as though it had not been made.
"The applicant will make such further application or applications, if any, with respect to matters dealt with in the Commission's order and not covered hereby as from time to time may be necessary or proper."
The order of the district court having jurisdiction of the foreclosure directed that deeds of the property should not pass to the appellee until it should have been authorized by the Commission to issue the securities. The appellee, without disclosing any purpose not to comply with the Commission's order, petitioned the district court for an order directing the delivery of the deeds, exhibiting, the court below found, the order and certificate of the Commission. Upon consideration of this application, the court ordered the delivery of the deeds, and appellee then issued the new securities. Only after the reorganization had thus become an accomplished fact by appellee taking the benefit of so much of the order as suited its purposes, did it elect to repudiate the condition upon which the order was founded. Of the appellee's application to the district court, the court below rightly said, "The petition was a representation to the court that plaintiff [appellee here] had accepted the order and expected to comply with the condition. . . ."
duties. Instead, appellee adopted a course of conduct consistent throughout only with its apparent purpose to comply with the order, and now, without tendering any excuse for the belated disclosure of its real purpose, it asks relief from the condition only after it has enjoyed benefits which it cannot be said would have been granted without the condition. Neither this Court nor the court below is acting any the less as a court of equity because its powers are invoked to deal with an order of the Interstate Commerce Commission. The failure to conform to those elementary standards of fairness and good conscience which equity may always demand as a condition of its relief to those who seek its aid seems to require that such aid be withheld from this appellee. See Davis v. Wakelee, 156 U. S. 680.
3. By the opinion of the Court, the order of the Commission, so far as it approves the issue of the securities, is treated as effective without the condition. But, even if we assume that the condition which the Commission attached to the order is beyond its power, we should not attempt to substitute our judgment for that of the Commission, since the statute requires its consent, not ours, and we should not allow the order to stand without the condition, since that is not the order which the Commission made. By the Transportation Act, the giving or withholding of consent to the issue of securities is an administrative power, conferred not upon the courts, but upon the Interstate Commerce Commission. Courts may determine whether the Commission lacks the power to impose a particular condition, but they may not strike from an order the condition upon which it was granted, and thus declare that it shall stand although the condition is not complied with. See United States v. Louisville & Nashville R. Co., 235 U. S. 314, 235 U. S. 320; Proctor & Gamble Co. v. United States, 225 U. S. 282; Assigned Car Cases, 274 U. S. 564.
Whether or not the Commission has in fact consented does not turn on whether the condition is good or bad, but on whether it can fairly be said that the Commission would have given its unqualified consent independently of the condition. As the report of the Commission discloses, consent to the issue was given only with reluctance, to release the properties from the receivership at the earliest possible moment, but with the undoubted assumption on its part, as a moving cause for its consent, that, by annexing the condition, it would exercise control over the reorganization expenses, with respect to the amount of which it had expressed grave concern. With four of the Commissioners voting unconditionally against the issue, I see no sufficient warrant for assuming that any would have voted for it without the condition and without the further investigation which it thought necessary, and which it was authorized to make before unconditionally approving the issue. Both the report and order of the Commission state that the authority granted was upon the "express condition" which is now the subject of this controversy. If, in the face of this language, there can be any doubt as to the intention of the Commission, we need not speculate upon what it might have done had it thought it was without power to impose the condition, since it is able to speak for itself if this Court permits it to do so by setting aside the entire order without prejudice to further action by the Commission, under the statute, upon the application for approval of the issue of the securities.
to do business within a state. In those cases, the judgment of this Court in no way restricts the further exercise of the legislative power of the state in any constitutional manner. Here, the Commission is ousted from the exercise of power which Congress has given it, and an order is sanctioned authorizing an issue of securities which it cannot be said the Commission has approved, and which this Court does not purport to say is appropriate under the statute.
"(3) The Commission shall have power by its order to grant or deny the application as made, or to grant it in part and deny it in part, or to grant it with such modifications and upon such terms and conditions as the Commission may deem necessary or appropriate. . . ."
"It shall be unlawful for any carrier to issue any share of capital stock or any bond or other evidence of interest in or indebtedness of the carrier . . . unless and until, and then only to the extent that, upon application by the carrier, and after investigation by the Commission of the purposes and uses of the proposed issue and the proceeds thereof, . . . the Commission by order authorizes such issue. . . . The Commission shall make such order only if it finds that such issue . . . (a) is for some lawful object within its corporate purposes, and compatible with the public interest, which is necessary or appropriate for or consistent with the proper performance by the carrier of service to the public as a common carrier, and which will not impair its ability to perform that service, and (b) is reasonably necessary and appropriate for such purpose."

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