Opinion ID: 423893
Heading Depth: 3
Heading Rank: 3

Heading: Early ICC Interpretation of the Panama Canal Act

Text: 60 The Interstate Commerce Commission, during the 1920s and 1930s, gave the Panama Canal Act a liberal interpretation that the 1912 Congress may not have contemplated. The ICC's interpretation is important because it was endorsed by a later Congress. 61 In Southern Pacific Company's Ownership of Atlantic Steamship Lines, 77 I.C.C. 124 (1923), the ICC found that Southern Pacific's proposed new water service would compete with Southern Pacific's rail lines, id. at 137, but nevertheless approved the new service. The Commission construed the Canal Act to permit new service under the same standard that governed continuance of existing service--whether the new service would be in the public interest and would not reduce water competition. Id. at 128-29. The Commission explained: 62 The purpose of the Panama Canal amendment ... was not to forbid railroad ownership, operation, or control of steamship lines, but to forbid the use of such ownership [230 U.S.App.D.C. 115] or control in such a manner as to restrict movement of interstate commerce.... 63 Id. at 137. 64 Investigation of Seatrain Lines, Inc., 206 I.C.C. 328 (1935), extended the Southern Pacific holding to railroad investment in new water carriers as well as new service by existing rail-owned water carriers. Seatrain, 15% owned by two railroads, was formed in 1932 to carry railcars by boat up and down the Eastern seaboard. At roughly the same time, the railroads applied to the Commission to determine whether their stock holding violated the Panama Canal Act. The Commission found that the railroads' minority ownership of Seatrain fell within the Canal Act's prohibition of any interest whatsoever and that the new company competed with the two railroads. Id. at 333, 335. Nevertheless, the Commission approved continued stock ownership by the railroads because Seatrain's service was in the public interest and would not reduce water competition. Id. at 335-36. Significantly, the Commission did not suggest that it was improper for the railroads to acquire an interest in a competing water carrier first and ask the Commission's approval later.