Document: 340 U.S. 216 71 S.Ct. 264 95 L.Ed. 225 ALABAMA GREAT SOUTHERN R. CO. et al.v.UNITED STATES al. GALVESTON CHAMBER OF COMMERCE v. UNITED RAILROAD COMMISSION TEXAS SAVANNAH SUGAR REFINING CORP. Nos. 45 to 48. Argued Nov. 8, 9, 1950. Decided Jan. 2, 1951. As Amended on Denial of Rehearing Feb. 26, [Syllabus from pages 216-217 intentionally omitted] Mr. Harold E. Spencer, Chicago, Ill., for Alabama Great So. co. William A. Disque, Washington, D.C., Galveston Chamber Commerce. Price Daniel, Liberty, Tex., Charles Crenshaw, Houston, Railroad Commission Texas. S. Hillyer, Savannah Sugar Refining Corp. Philip Elman, appellees Interstate Commerce Commission. Nuel D. Belnap, appellees, American Barge Line Co. and others. Justice MINTON delivered the opinion Court. 1 In No. appellant common carriers by railroad brought this suit against United States in District Court Northern Illinois enjoin an order issued June 13, 1949, a proceeding instituted entitled Rail Joint Rates, 26712 Commission's docket. Appellee intervened as party defendant before Court, did appellee water, Company (American), Inland Waterways Corporation, doing business Federal Lines (Federal), Mississippi Valley (Valley). A statutory three-judge court heard case and, upon findings fact made conclusions law stated, denied injunction dismissed complaint. 88 F.Supp. 982. This direct appeal under 28 U.S.C. § 1253, U.S.C.A. 1253 followed. 2 The Rates was 1934 investigation ancillary certain formal complaints 3(e) Corporation Act amended Denison Act, Stat. 980,1 other proceedings involving same subject matter complaints. concerned reasonableness lawfulness existing through routes joint rates, rules, regulations practices application water operating Warrior Rivers their tributaries; minimum differentials between all-rail rates corresponding rail-barge, barge-rail rail-barge-rail rates; necessity, if any, establishment additional practices; fixing reasonable rail barge rates. Consolidated disposition with general were questions. 3 Hearings held pursuant over period eight years resulted record some 16,000 1,500 exhibits. An examiner submitted report, which exceptions replies filed. After argument full Commission, it rendered its written report dated July 7, 1948, 270 I.C.C. 591, supplemented 274 229, promulgated attack. order, 307(d) Transportation 1940,2 required railroad. establish transportation property prescribed reports, thereafter maintain apply based found reports be justified. 4 Appellant represent railroads enter into differential rail-barge while are principal lines affected order. is corporation created act Congress, supervised Department It operates St. Paul, Omaha, Louis, New Orleans, Port Birmingham, Alabama, intermediate ports via waterways connecting ports. Pittsburgh, points Monongahela River, Cincinnati, Louis Orleans. principally Pittsburgh privately owned operations have been financially profitable, has incurred average net deficit water-line $240,000 per year during 1925 1947 inclusive. 5 Much evidence introduced early both costs transportation. cost section study relative 1933-38 concluded that greater than costs, due largely added terminal handling operations. stated no useful purpose would served making finding covered study, because since there had radical changes conditions affecting service well rail. And after reviewing factors bearing operation, concluded: 6 'In face these facts we cannot find at present time demonstratable economies River tributaries, including Warrior, standpoint justify differentials.' 606. 7 Appellants' primary contention could not prescribe connection without proof lower service. Since valid services, appellants insist arbitrary capricious 'justified reasonable' 'necessary desirable public interest' supported substantial essential findings. This, contended appellants, apparent so necessary us examine 8 will perhaps better stood illustration how operates. Assume 9 Central local rate Orleans Cairo, Ill.. $1.00 10 Big Four rate, Cairo Cleveland, Ohio. 1.00 11 Central-Big 12 Cleveland....................... 1.60 13 $1.60 divided follows: 14 Illinois-Central, Cairo. .80 Four, Cleveland.......... 15 of..... .20 16 Deduct $.20 17 is. 1.40 18 $1.40 19 Cleveland........ 20 Barge, Orleans......... .60 situation, then, is: On Central: Local rate................ Division rate. line: port-to-port rate............. rate... 21 All-rail disturbed question being compensatory raised. fixed applied presently-existing compute If should modified, automatically attach new rate; remain now (subject independent modification, course).3 line absorbs all differential. carrier allways gets amount leg, e.g., Cleveland (see illustration, above), movement, whether movement or rail-barge. is, admit, never hurt. 'It connect object unjustified differentials. compete,' say appellants. short, complain competition. 22 First. attack ground gives competitive advantage, justified lesser service, persuasive. Admittedly, worth less slower, requires more entails risk. shipper pay only what him. shippers' evidence, found, indicated fairly unanimous view them shipping saving expense offered. bound require high inferior superior To do certainly destroy send freight railroads; practically, competition different modes 23 Neither nor may fix charge, division differential.4 hand, considerations just discussed rightly taken account We must lose sight interests shippers consumers safeguard those carriers. Ayrshire States, 335 573, 592, 69 278, 288, 93 243. accommodation entering structures, competition, task peculiarly Id., 593, 289, Pierce Auto Lines, 327 515, 535—536, 66 687, 697—698, 90 821. 24 may, deems advantageous, voluntarily accept yielding low return. Baltimore & O.R. 298 349, 379, 56 797, 812, 85 1209. permit satisfied compensatory, fair reasonable, interest. 358, 802. Appellants intimate respect lines, knew they compensatory. disagree. instant represented proposed, thoroughly examined considered light railroads' criticisms, From appears substantially adopted proposals lines. any event, exceeded recommended warranted adopting them. conclude 612, 613—617. obtained applying deemed relevant hearing proper rectify prejudice flowing therefrom. 25 Here protect sole advantage public, willing receive Competition adjudged preserving. That judgment legitimately rested There provision statute controlling consideration establishing Indeed, makes mention such all. when properly considered, but absence factor fatal. 26 With appellants' given superior, note further even follow great too high. arguments, eliminate differentials, thus, reducing increasing observation Judge Lindley pertinent: 'Of course, petitioning reduction might warrant reduction, difficult see railroads, satisfactorily proven, increase competitor.' 982, 987. 27 Second. support basis determination accordance expressions congressional policy. gave careful numerous See particularly, 609—613. duty do. But also apparent, already indicated, factors—factors tremendous loss traffic interchange traffic; inferiority service; testimony effect use unless cheaper so; character adopted; willingness returns; elimination curtail negate support, financial otherwise, Congress pioneered field Third. contend prescription deprives inherent advantages contrary National Policy.5 They point Mechling, 330 567, 67 894, 91 1102, having established principle involved discretion approve structure reduce advantage. argue 'fair impartial regulation' called Policy demands rule Mechling impartially 'inherent advantage' here. 29 case, wheat east Chicago higher arrived lake. plain discrimination. provided equal showing charge. charge render. unlawful discrimination here case. providing constitute 'unjust discrimination' express proviso 305(c) Act. 54 935, 49 905(c), 905(c). 30 neither ignore traffic. shown superiority fail reflect reason man who wishes ride quickly comfortably buys Pullman ticket fast train instead coach seat 'milk run' train. No one price fails preserve accommodations offered space. Each mode satisfies needs wants customers. customer decide his circumstances. 31 Fourth. fact, 14(1) 14(1), does make detailed except where damages awarded. Manufacturers 246 457, 487, 489—490, 38 383, 391, 392, 62 831. file stating conclusions, together decision did, sufficiently disclosed report. Of course relieve 'basic' 'quasijurisdictional' validity State Florida 282 194, 215, 51 119, 125, 75 291; Co., 293 454, 464—465, 55 268, 272 273, 79 587. basic vary authority invoked context situation presented. E.g., 821; North Carolina 325 507, 65 1260, 89 1760; City Yonkers 320 685, 64 327, 400; Carriers Corp., 315 475, 722, 86 971. conformity invoked, supra interest.' 'the read whole, expresses conclusion supporting data * *.' Louisiana, 290 70, 80, 28, 33, 78 181. Enough 'put enable perform limited ours.' Eastern-Central Ass'n 321 212, 499, 508, 668. 32 46, 47, 48 permitted intervene parties plaintiff. various commercial allegedly adversely urged answered preference port Georgia Texas, violation Art. I, cl. Constitution. 33 constitutional argument, Louisiana Public Service Texas N.O.R. 284 131, 52 74, 76, 76 201, stated: 'The clause Constitution 'No Preference shall Regulation Revenue Ports another: Nor Vessels to, from, State, obliged enter, clear, Duties another.' specified limitations power set prevent entry clearance vessels. forbid discriminations acting commerce clause, causes many things done greatly benefit particular incidently result disadvantage neighboring States.' 34 clear whatever geography action attempt equalize fortune, opportunities abilities.' Diffenbaugh, 222 42, 22, 24, 83. 35 Affirmed. 36 DOUGLAS, dissenting. 37 I agree need measured difference compared are, however, 307(f)1 determines reasonable. When proceeds knowing my mind experimenting legislative body do, performing infinitely exacting expert. practically concedes adopts standard one. admitted can adequate costs. earlier (1933—1938) shows routing all-rail-routing. refused pursue later years. apparent. One Lines. federal corporation, 43 360, 151, subsidized Congress. program seeking promote important desirable. standards guide still 307(f). Costs relevance problem 307(f) clear. disregard completely. think Repealed 1940, 898, 950, 153 note. '(d) whenever interest, complaint own initiative complaint, routes, classifications, fares, charges, applicable passengers railroad, maxima minima, charged, divisions charges hereinafter provided, terms operated. route, water. *' 937, 907(d), 907(d). Counsel interpreted Finding reads: 'We amounts appendix B deducted first-class (Emphasis supplied.) 619. incorporates reference, said justified.' maintenance prescribed, be, therefore interpretation counsel appellees. Both consistently rejected thought making. York 331 284, 331, 1207, 1232, 1492; 359, 803, 80 1209; 132, 201; Charges Protective Perishable Freight, 241 503, 510—511; Proposed Lake Erie-Ohio Canal, 235 753, 761; Lighterage Cases, 203 481, 510; West Coast Lumbermen's Assn. Akron, C. Y.R. 183 191, 198—199; Ann Arbor 159 691, 696—697. hereby declared national policy provide regulation provisions administered recognize each; safe, adequate, economical, efficient foster sound economic among several carriers; encourage unjust discriminations, undue preferences advantages, unfair destructive cooperate duly authorized officials thereof; wages equitable working conditions;—all end developing, coordinating, preserving system highway, rail, means, meet Postal Service, defense. All enforced carrying out above declaration policy.' 899, (1946 ed.), p. 5443, preceding 1. exercise regulations, relating thereto, give consideration, factors, prescribed; need, lowest consistent furnishing revenues sufficient carriers, honest, management, service.' 938, 907(f).

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