Court Opinion

ID: 9419382
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:49:11.169172+00
Date Added: 2024-06-11T17:19:24.951359
License: Public Domain

Mr. Justice Black,
dissenting:
The issue in this case is whether the farmers and shippers of the middle west can be compelled by the Interstate Commerce Commission and the railroads to use high-priced rail instead of low-priced barge transportation for the shipment of grain to the east. I agree that, in the words of Division 2 of the Commission, “this record is replete with complexities and technicalities” which have almost, but I think not quite, successfully obscured that simple issue. The District Court, which held that the Interstate Commerce Commission’s order “discriminates against water competition by the users of barges,” understood the issue.1 The railroads, which proposed the increase in the cost to barge shippers, also understood the issue as is shown by the frank statement of their representative at the' Commission hearing: “We made this proposal, as I have stated several times, and filed these tariffs with the hope that we could drive this business off of the water and back onto the rails where it belongs. . . . We are not in love with water transportation . . . and we believe that we are entitled to that grain business.” From behind a verbal camouflage of “complexities and technicalities” there emerges one single easily understandable question: Railroads pick up grain in Chicago which may be brought there by rail, lake transport, or inland waterway barge. Is it lawful for a railroad to deprive midwestern grain farmers and shippers of the benefits of cheap barge transportation by charging a higher tariff for re-shipment of grain originally transported to Chicago by barge than *693the same railroad charges for re-shipment of the same grain from Chicago to the same places when the grain is brought to the re-shipping point by rail or by lake?
The record shows, and it was admitted at the bar, that barges can by reason of their inherent advantages carry grain more cheaply than railroads. The Commission found that inbound grain barge rates to Chicago ranged from 2.75 to 4.5 cents per hundred pounds for hauls of distances of 57 to 200 miles as contrasted with rail rates for the same distances ranging from 9.5 to 13 cents. Grain can thus be brought to Chicago far more cheaply by barge than by rail. However, only a small proportion of the grain which is sent to Chicago stays in that city, and the new tariff approved by the Commission and by this Court will charge so much more for the shipment of grain to the east when the grain is brought to Chicago by barge than is charged for shipment of grain brought in by rail that this natural advantage of barge transportation will be destroyed. Hereafter it will cost 8.5 cents more to ship ex-barge than ex-rail grain to the east.2 Under the existing rates, a farmer can ship his grain from Kansas City to New York by barge to Chicago and rail from Chicago to New York for 4.625 cents less than if he uses rail transport all the way from Kansas City to New York. Under the new schedule approved today, that differential is wiped out, and he will hereafter pay 3.875 more to ship by barge and rail than if he ships rail all the way. This order in substance gives ex-barge traffic a 4-cent disadvantage where it previously had a 4-cent advantage. Similar penalties are imposed upon shippers who use barge lines in Missouri, Iowa, and Illinois. The Commission, as its sole finding on the impact of the rates on the barge lines, found that the new rates would not “prohibit” barge shipments. *694Such a finding is irrelevant. A rate need not be prohibitive to be discriminatory. The new rate is manifestly intended to and will have the effect of transferring most of the barge traffic to the railroads, since shippers will not customarily pay 10% more to ship by barge-rail than by rail alone.3
Certain questions may be put to one side without elaborate discussion. The new rates cannot be justified on a theory of distinction between long and short hauls since the distances covered are substantially the same whether barge-rail or all-rail transportation is used. The Court asserts that the existing all-rail rates are lawful under the long and short haul clauses, while the existing barge-rail rates are unlawful. But there is nothing in the long and short haul clause which requires that shippers by rail to Chicago from points in Illinois, Iowa, Kansas, and Missouri must be granted a low rate for shipment beyond Chicago which is denied to those who ship into Chicago by barge. Nor is the fact that the rates directly affected by the new tariff are “proportional” of any significance.4 *695A through rate may be invalid because of one factor only of the combination of rates which make it up, “and that factor may be a proportional rate.”5 The only issue to be decided is whether the barge shipper shipping from a given point to Chicago should be given any different proportional rate than rail shippers shipping from the same point to Chicago for equal service out of Chicago, and, for reasons to be set forth below, I find no justification for such a discrimination.6
There is no factual issue here on which we are bound to accept the Commission’s judgment as we were in United States v. Chicago Heights Trucking Co., 310 U. S. 344. Here we have a rate revision which can serve no conceivable purpose except to force shippers to use railroads instead of barge lines. Reasonable persons may differ as to the wisdom of such a policy, but not as to the certainty of its result; and, as will be shown, Congress has made the policy judgment and has flatly forbidden the Commission to do what it has done. The situation is similar to Mitchell v. United States, 313 U. S. 80, 97, in which the Commission sought to shelter a flatly forbidden discrimination behind the shield of expertise. There, too, we were cited to the Chicago Heights case and our many other *696decisions upholding the right of administrative agencies to make factual judgments. We replied that “On the facts here presented, there is no room, as the Government properly says, for administrative or expert judgment with respect to practical difficulties. It is enough that the discrimination shown was palpably unjust and forbidden by the Act.” Such I think should be our answer here.
This tariff is an unjust discrimination within the meaning of § 2 of the Interstate Commerce Act, 49 U. S. C. § 2, which prohibits a carrier from demanding a charge either higher or lower than is charged by any other person for doing for him “a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions.” Many decisions make clear that this section does in fact require a real equality. Interstate Commerce Commission v. Baltimore & Ohio R. Co., 225 U. S. 326; Atchison, T. & S. F. Ry. Co. v. United States, 279 U. S. 768. The Commission counters with a contention that here there is “a dissimilarity of conditions prior to the rendering of the transportation service for which the charge in issue is assessed.” True there is a difference, if only one, in the conditions prior to the rendering of the service from Chicago to the east. The difference is solely that one class of grain moves in to Chicago by barge and another moves in by other means; and this is a ground not of legitimate distinction, but of unfair discrimination. The discrimination would be no worse if the benefits of the cheap through rates were given only to shippers on a favored railroad coming into Chicago, and not to other shippers by rail. Atchison, T. & S. F. Ry. Co. v. United States, supra, 773. Here all circumstances and conditions are substantially similar, and the Court ought to require the Commission to obey the law by following its own previously announced rule in Chattanooga Packet Co. v. Illinois Central R. Co., 33 I. C. C. 384, 392, 393, in which the Commission said: “If *697carriers are permitted to apply higher rates for the same service on traffic routed over connecting water lines than on traffic via their all-rail connections, they will be in a position to destroy all water competition and to deprive shippers of the advantage of their location upon navigable waters. . . . We are of the opinion and find that, by restricting their proportional rates to traffic routed over their southern rail connections, defendants are unjustly discriminating against complainant and against shippers who desire to route their goods over complainant’s boat line.”
The decision of the Commission also violates § 3 (4) of the Interstate Commerce Act, 49 U. S. C. § 3 (4), which under the 1940 amendment to the Interstate Commerce Act is applicable to the appellees, and which forbids carriers to “discriminate in their rates, fares, and charges between connecting lines.” This section became applicable to the appellees in the course of the Commission’s disposition of this case, but before its opinion was filed. This circumstance is not, as the Commission seems to have supposed, a reason for ignoring the section. No more obvious “discrimination in their rates, fares, and charges” can be imagined, particularly in the light of the general policy of the Transportation Act of 1940.
I think that approval of this tariff is a defiance of the Transportation Act of 1940. 54 Stat. 899. This Act declared it to be “the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each.” Title I, § 1. The Act commands the Interstate Commerce Commission that “all of the provisions of this Act shall be administered and enforced with a view of carrying out the above declaration of policy.” Congress, fearful, in the words of several members, that the Commission was “essentially a railroad *698minded body,” 7 took every precaution to prevent discrimination against water carriers.8
*699Senators, particularly those from the midwestern states where the barge lines involved here were operating, were especially fearful that the Commission would do substantially what it has done in this case. They required repeated assurance by the Chairman of the Interstate Commerce Committee of the Senate that the bill was written in such manner that the Commission could not if it desired permit discrimination against water carriers. At great length the Chairman of that Committee explained to apprehensive Senators that the bill contained provisions in three different places which imposed upon the Commission the imperative duty of standing in constant opposition to discrimination against shippers by water.9
House members shared the same fears. The first conference report was defeated in the House because it was believed that the bill did not offer adequate protection for water carriers against hostile Interstate Commerce Commission action.10 A proponent of the bill told the House that “It is not fair to suggest, in my opinion, that the Commission and the courts will not look to this declaration of policy whenever they are called upon to make such construction of the statute and application of it . . . The specific provisions of the bill carry out the declaration of policy. The courts and commissions will recognize that. . . .”11 Defending the policy provisions as a complete protection against Commission action antagonistic to barge transportation, another sponsor of the bill, opposing a safeguarding amendment, declared that to consider it necessary “You will have to further assume that the Interstate Commerce Commission will not enforce it. You will *700have to assume that if a case goes to the courts, the courts will neither construe nor enforce the provisions of this policy.”12 As I see it, the Commission in this case has declined to enforce Congress’ policy and the Court has failed to construe and enforce the Act as Congress clearly intended it should.
, This is not all. The first conference report having been defeated, the second conference report brought in changes intended to offer more protection to water carriers. The conferees reported that: “This measure will place upon the Interstate Commerce Commission, not only the power, but the duty, to protect and foster water transportation and preserve its inherent advantages.”13 As a closing, clinching argument intended to persuade the House that the Commission would be fair to water carriers, the statement of Commissioner Eastman (who dissented from the order of the Commission here) was quoted. Eastman assured the Congressmen interested in water transportation that certain provisions of the bill “coupled with the admonition in the declaration of policy in section 1 that the provisions of the act be so administered as to recognize and preserve the inherent advantages of each mode of transportation, will afford adequate protection in this respect. If experience should show that further protection is needed, contrary to our expectation, Congress” can amend the act, but such a restriction as is now proposed is, we believe, both unnecessary and undesirable.” 14
*701The final statement of the last proponent of the 1940 Act, spoken just before the vote was taken on the second conference report, were these: “There is nothing whatever in the pending measure which could by any fair interpretation be regarded as unjust to water transportation or to any other kind of transportation.” The speaker then read the policy provisions of § 1 and asked: “How much plainer could language be than that is? It is crystal clear that there is no basis in the bill for the apprehension expressed by those opposed to the measure.”15
Although these proceedings were not initiated under the 1940 Act,16 the Commission should have felt itself bound by that Congressional expression of policy. Yet the legislative history just recited makes it clear that the Commission has flagrantly flouted the express mandate of Congress. It is said, however, that the Commission reserves the right to take further action in a “proper proceeding” in which it “might prescribe proportional rates [dn the ex-barge traffic] or joint barge-rail rates lower than the combinations.” At some future day the Commission may correct this discrimination. But the day for Commission action was the day this case was decided, and the day for action by this Court is now. The Commission is not bound by the technical procedures of the common law, and it should not strain to avoid the enforcement of Congressional will because of the formal fashion in which questions are presented to it. In this proceeding it was the Commission’s duty “to protect and maintain a transportation *702system free from partiality to particular shippers. The Commission acted in its capacity as a public agency” and was obligated to carry out “duties imposed upon it by Congress in the interest of shippers generally, the national transportation system and the public interest.” United States v. Chicago Heights Trucking Co., supra, 354. The fact that this was not a formal proceeding to fix proportional rates under §6 (11) (b) did not detract from the Commission’s powers. Chicago, R. I. & P. Ry. Co. v. United States, 274 U. S. 29, 36; United States v. New York Central R. Co., 272 U. S. 457, 462. The Commission itself in cases where the command of Congress was far less emphatic than here, has stated that an investigation and suspension proceeding such as this one “opens for consideration the lawfulness of the suspended rates under all provisions of the act.” Sugar From Gulf Coast Port Groups To Northern Points, 2341. C. C. 247, 251. “The reproach of dealing with the matter piecemeal” is incurred by the Commission here as it was in United States v. Chicago, M., St. P. & P. R. Co., 294 U. S. 499, 510. It cannot, with due regard to its duty, shift responsibility “from the shoulders of the present to the shoulders of the days to come.” Here as in that case, postponement serves to leave “this particular carrier helpless in the interval.”17
Congressman Bland, who opposed the 1940 Act on the ground that it lacked sufficient safeguards to prevent action by the Commission hostile to water transportation called *703attention to the procedural delays in rate cases before that body, delays which he declared would be used to strangle financially weak water carriers, forcing them to “yield or transfer their operation to other streams.” He pointed out this “would mean the death of water carriers”; that the railroads knew how to obtain delay and knew the disastrous consequences that would follow to their competitors; that railroads “seek to profit” by procedural delay; and that the diversity of their interests and extent of their revenues was so great that they could survive delays which would be unendurable for competitors.18 The Congressman was a good observer and a sound prophet.
The judgment of the District Court enjoining enforcement of this order was correct and should be affirmed.
Me. Justice Douglas and Mr. Justice Murphy join in this opinion.

 44 F. Supp. 368, 375.

 The figure given is the increase in cost of shipment to the best eastern market. The cost varies, depending on the destination of the grain.

 The new rates for shipment from Chicago to the east of course do not “prohibit” barge shipments to Chicago since the small amount of grain consumed in that city will not be affected by the outgoing rates, and some grain can still be carried to the east by lake transportation for so much of the year as the lakes are open to traffic.
The Court quotes the finding of the Commission that “the proposed schedules are not prohibitive” and that their principal effect will be to reduce the profits of the Chicago elevator operators. If the schedules operate unfairly, as I think they do, it is immaterial whether the farmers or the elevator operators bear the burden of the unfairness; but the Court in relying on this finding pays little regard to the fact that the court below found as a fact that the saving from barge transporation “accrues to the producer” and “does not accrue to the Chicago elevator operator.” Unless the Court is willing, as apparently it is not, to reexamine the evidence and to conclude that the court below is in error, we must take the facts as they are given to us by the District Court. In any case, I think the District Court was correct.

 “A through rate is ordinarily lower than the combination of the local rates. When a through rate is made by combination of rates *695for intermediate distances the rate for the later link in the shipment is, when lower than the local, spoken of as a proportional rate.” Atchison, T. & S. F. Ry. Co. v. United States, 279 U. S. 768, 771.

 Ibid., 776.

 The Commission and the Court refer to the fact that ex-barge rates are now equal to ex-truck rates. This is irrelevant. If there is a discrimination against truck shippers, the remedy is an improvement of their situation, not a destruction of barge shipping. In the words of Chairman Eastman in his dissenting opinion, “My tentative opinion upon it is that where the movement by truck is from territory from which grain can be moved by rail or by water to Chicago subject to the application of the reshipping rates east-bound, the failure to apply such rates to the grain brought in by truck does result in violation of sections 2 and 3, provided adequate provisions for the identification and policing of such shipments are practicable and enforceable.”

 84 Cong. Rec. 5965, 5883, 5880-81. Legislation similar in purpose to the 1940 Act was considered by Congressional committees in the 74th and subsequent Congresses. Opposition to legislation giving the Commission authority over water transportation came from representatives of the water shippers. A typical protest was made by Cleveland A. Newton, General Counsel, Mississippi Valley Association, in the hearings before the Committee on Merchant Marine and Fisheries, House of Representatives, 74th Cong., 2d Sess., on H. R. 5379: “This bill if enacted into law will place water carriers along the coast and upon our inland rivers under the absolute domination and control of the Interstate Commerce Commission. That Commission was created to regulate, conserve, and control railways. It is a railway-regulating agency. It naturally has the railway viewpoint, and past experience convinces us that the Commission, as now constituted, is railway-minded and that it would not be in the public interest to place water services under its domination and control. . . . We have observed the performance of the Commission in the past, under a comprehensive declaration of policy enacted by Congress, and that experience, we regret to say, has not inspired confidence.” Hearings, p. 471.

 “Mr. Lucas: . . . Under the bill, as I understand it, the Interstate Commerce Commission would have the power, and it would be its duty, to fix rates on the Illinois River with respect to the transportation of that wheat and corn. Would it be possible for the Interstate Commerce Commission to fix the rate the same as the railroad rate from that point to St. Louis ?
“Mr. Wheeler: Not if the Commission does its duty, because the bill specifically provides that it must take into consideration the inherent advantages of the water carrier. Everyone agrees that goods can be shipped more cheaply by water than by rail.” 84 Cong. Rec. 5879.
The following Senators and Representatives, among others, either required assurance that the Commission would not discriminate against water carriers or expressed the conviction that under the statement of policy, the Commission would be unable to discriminate against water carriers: Senators Austin, Clark of Missouri, Connally, Ellender, Lucas, Miller, McNary, Norris, Pepper, Shipstead, Truman, and Wheeler; Representatives Bland, Bulwinkle, Crosser, Culkin, Halleck, Lea, Pierce of Oregon, Sparkman, and Wadsworth.

 84 Cong. Rec. 6125-6128.

 The first conference report was rejected by the House on May 9, 1940, 86 Cong. Rec. 5886. The second report was accepted on Aug. 12,1940, 86 Cong. Rec. 10193.

 84 Cong. Rec. 9865.

 84 Cong. Rec. 9863.

 86 Cong. Rec. 10172.

 86 Cong. Rec. 10191. In his dissenting opinion, Chairman Eastman said: “The report states that the 'proposed schedules will not prohibit the movement by barge-rail even to trunk-line territory, their principal commercial effect being to reduce the profit of the Chicago elevator operators.’ I do not so understand the evidence. ... As I understand it, the effect of the proposed schedules, unless the prices paid to the farmers whose grain is barged are reduced, will be to limit the outlet of the ex-barge grain to local consumption in Chicago and to the lake and lake-rail routes to eastern points.”

 86 Cong. Rec. 10192.

 The 1940 Act gave the Commission jurisdiction to regulate water transportation directly. Here the same effect is achieved under the Commission's other powers by a tariff aimed at shippers who have previously used water transportation. For the background and nature of the 1940 Act see Eastman, The Transportation Problem, 30 Amer. Econ. Rev. 124; Stein, Federal Regulation of Water Carriers, 16 Jour. Land and Pub. Util. Econ. 478; Harbeson, The Transportation Act of 1940,17 ibid. 291; Regulation of Water Carriers, 50 Yale L. Jour. 654.

 The Court interprets the Commission’s order as leaving open the right of the shippers affected to bring actions for reparations for injuries suffered under the new rates. This will bring small practical comfort to the barge lines since the shippers will be unlikely to ship by barge when the price of every shipment is dependent on future legal proceedings. The barge lines, “helpless in the interval” pending new legal proceedings, risk serious financial injury, if not bankruptcy. While the shippers can ship by barge now and sue later, they are presumably interested in buying transportation, not lawsuits.

 86 Cong. Rec. 10181.