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terest that it is subject, within constitutional limits, to the governmental power of regulation. This power of regulation may be exercised to control, among other things, the time of the running of cars. It is a power legislative in its character and may be exercised directly by the legislature itself. But the legislature may delegate to an administrative body the execution in detail of the legislative power of regulation. -Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 393, 394, 38 L. Ed. 1014, 14 Sup. Ct. 1047; Interstate Commerce Com. v. Cincinnati, New Orleans & Texas Pacific Railway Company, 167 U. S. 479, 494, 42 L. Ed. 243, 17 Sup. Ct. 896."

What effect the penalties prescribed in the Act may have on its constitutionality in view of the Young case, supra, is a question that the Act itself answers. The danger of incurring ruinous penalties pointed out in the Young case does not exist in the Interstate Commerce Act. In this Act, the rates prescribed by the Commission become effective only after thirty days' notice, during which time the order fixing the rates may "be suspended or set aside by a court of competent jurisdiction," if the rate prescribed be unlawful. The venue of suits "to enjoin, set aside, annul, or suspend any order or requirement of the commission" is fixed; and suits "may be brought at any time after such order is promulgated.''385 It would seem that the carriers have full opportunity to test an order before feeling compelled by the possibility of penalties to obey it.

The validity of the amended fourth section of the Act was sustained in a forceful opinion of the Supreme Court.386

§ 68. Same Subject-Transportation Act, 1920. The 1920 statute materially enlarges the scope of the Commission's power. It confers the right to prescribe minimum as well as maximum rates; but such right is necessary fully to enforce the provision against unjust discrimination, and there is no reason to doubt the constitutionality of the provision.

385 Sees. 15, 16, of Interstate Commerce Act. See, post, 489 and 525.

386 United States v. A. T. & S. F. Ry. Co., 234 U. S. 476, 58 L. Ed. 1408, 34 Sup. Ct. 986, reversing A. T. & S. F. Ry. Co. v. U. S., 191 Fed. 856, Op.

Com. Ct. Nos. 50, 51, p. 229, and sustaining orders of the Commission in Railroad Com. of Nev. v. So. Pac. Co., 21 I. C. C. 329; Spokane City of v. N. P. Ry. Co., 21 I. C. C. 400.

Elaborate provision is made for the adjustment of labor controversies. Many of these provisions are more or less lacking in force to compel obedience thereto. They do prescribe duties which probably are enforcible in courts of equity. These provisions relating to labor have been materially changed since 1920. That wages may be regulated was decided by the Supreme Court in sustaining the Adamson Law.387

The Commission is given jurisdiction over car service; is given the right, under certain circumstances, to prescribe the lines or routes over which traffic shall move, and it may require the joint use of terminals. These powers are analogous to the jurisdiction heretofore existing under which cars could be required to be furnished, under which routing has been controlled, and under which through routes have been prescribed and physical connections required. The fundamental basis for these new enactments is similar to that supporting those powers which the Commission has long exercised, and such enactments are probably valid.

In the provision permitting the consolidation of existing and competing railroads, Congress has sought to permit state corporations to do what the laws of some of the states creating the corporations prohibit. As to the few railroads chartered under federal laws, Congress is no doubt competent to permit or require a consolidation. The competency of Congress "To authorize such consolidations in defiance of state legislation," has been expressly denied in a dictum of the Supreme Court. In Northern Securities Case,388 this dictum is explained, and in discussing the explanation the Supreme Court said: "So far as the Constitution of the United States is concerned, a state may, indeed, create a corporation, define its powers, prescribe the amount of its stock and the mode in which it may be transferred. It may even authorize one of its corporations to engage in commerce of every kind,—domestic, interstate and international." The state creates the instrumentality, but when the instrumentality enters the field of interstate commerce, the powers of Congress may be exercised. The Supreme Court, further discussing the question,

387 Wilson v. New, 243 U. S. 332, 388 Sec. 12, ante, and note thereto. 61 L. Ed. 755, 37 Sup. Ct. 298.

said: "Whilst every instrumentality of domestic commerce is subject to state control, every instrumentality of interstate commerce may be reached and controlled by national authority, so far as to compel it to respect the rules for such commerce lawfully established by Congress." The plenary power of Congress to regulate interstate commerce can only be effective by applying such power to the instrumentalities of such commerce, and notwithstanding the dictum quoted, this provision, it is believed, is within that power.38

The issuance of stocks and bonds is discussed in Section 51, ante, and it is thought this provision, giving power to the Commission to supervise such actions, is valid. The right to operate a railroad with the power of eminent domain is a franchise which the sovereign power may withhold or grant on terms. Therefore, as to roads that have devoted their instrumentalities to the service of interstate commerce, the provisions regulating new construction and the discontinuance of existing facilities are within the constitutional grant to the federal legislature.

The right to regulate rates includes the right to fix the measure of returns on capital. So the Congress or, when authorized, the Commission, may legally say that such returns shall be 5 or 6 per centum. What particular per centum shall be prescribed is a legislative question, and if not made so high as to deprive a shipper of his constitutional property right to a service at a reasonable price, or so low as to amount to a taking of the property of the carriers, courts will not interfere.

The statutory provisions relating to intrastate rates, when there is unjust discrimination aside from some procedural direction, enumerate principles which, in the main, had said already existed;390 and the slight change in the long-andshort-haul provision of Section 4 of the Interstate Commerce Act does not affect the validity thereof.

389 In the Wisconsin case (Railroad Commission of Wisconsin v. C. B. & Q. R. R. Co., 257 U. S. 563, 66 L. Ed. 371, 42 Sup. Ct. 232) the Chief Justice, in rendering the opinion of the court, declared that the railroads

were instrumentalities of interstate commerce doing an intrastate business, although they had been chartered under and by state laws.

390 Secs. 44 and 62, ante.

$ 69. Effect of Section 15a of the Interstate Commerce Act on Earnings of Strong and Weak Carriers.-Section 15a of the Act has still other meanings, purposes and effects than those previously discussed.

For one thing, it places a continuing limitation upon the maximum earnings of a carrier. This is of particular importance to the stronger carriers. Whatever any carrier may earn above 6 per cent., based upon a fair valuation of such carrier's property by the Interstate Commerce Commission, it can only lawfully claim one-half of it, because the other half is required by this section to be held in trust for the United States. This limitation upon earnings is quite novel. A number of carriers contested its validity, claiming, among other things, that it deprived them of their property without due process. of law. But the United States Supreme Court sustained this particular provision.391 It was held by the court that there was no repugnance to the due-process clause of the Constitution in the operation of this provision of the law, because the excess which the government recaptures from the carrier never belonged to the carrier as a matter of right in the first instance. It is specifically declared in the Act that such fund is to be held in trust for the federal government, and, upon that theory, is not property belonging to the carrier.

Another unusual feature of the provisions of this section lies in the fact that it may be employed as a means to increase the earning power of weak carriers by increasing their divisions of through rates in connection with stronger lines. It is quite clear that an increase in the divisions of through rates accruing to a weak carrier would have the effect of correspondingly reducing the earnings of the stronger carrier whose divisions are thus involved. But the United States Supreme Court has also upheld this feature of the Act.392

§ 70. Reasons for the Original Act to Regulate Commerce. -Prior to the Act of February 4, 1887,393 carriers were free to make such rates on interstate transportation as they saw fit,

391 Dayton-Goose Creek Ry. Co. v. U. S., 263 U. S. 456, 68 L. Ed. 388, 44 Sup. Ct. 169.

392 New England Divisions Case,

261 U. S. 184, 67 L. Ed. 605, 43 Sup. Ct. 270.

393 Chapter XI, post.

subject only to the power of the courts under the common law, at the suit of individuals, to prevent irreparable damage or give redress for unreasonable or unjustly discriminatory rates.394

In Tex. & Pac. R. Co. v. Interstate Commerce Commission,395 the Supreme Court, speaking of this Act, said:

"It may be well to advert to the causes which induced its enactment. They chiefly grew out of the use of railroads as the principal modern instrumentality of commerce. While shippers of merchandise are under no legal necessity to use railroads, practically they are. The demand for speedy and prompt movement virtually forbids the employment of slow and old-fashioned methods of transportation, at least in the case of the more valuable articles of traffic. At the same time, the immense outlay of money required to build and maintain railroads, and the necessity of resorting, in securing the rights of way, to the power of eminent domain, in effect prevent individual merchants and shippers from themselves providing such means of carriage. From the very nature of the case, therefore, railroads are monopolies, and the evils that usually accompany monopolies soon began to show themselves, and were the cause of loud complaints. The companies owning the railroads were charged, and sometimes truthfully, with making unjust discriminations between shippers and localities, with making secret agreements with some to the detriment of other patrons, and with making pools or combinations with each other, leading to the oppression of entire communities.

"Some of these mischiefs were partially remedied by special provisions inserted in the charters of the companies and by general enactments by the several states, such as clauses restricting the rates of toll and forbidding railroad companies from becoming concerned in the sale or production of articles carried and from making unjust preferences. Relief, to some

394 Texas & P. R. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 51 L. Ed. 553, 27 Sup. Ct. 350, 9 Ann. Cas. 1075; Tift v. Southern Ry. Co., 123 Fed. 789, 138 Fed. 753; Western Union Tel. Co. v. Call Pub. Co., 181

U. S. 92, 45 L. Ed. 765, 21 Sup. Ct.

561; United States v. Michigan Cent. R. Co., 122 Fed. 544.

395 Texas & P. R. Co. v. Interstate Com. Com., 162 U. S. 197, 210, 211, 40 L. Ed. 940, 944, 945, 16 Sup. Ct. 666, 5 I. C. R. 405.

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