172 N.W. 324 | N.D. | 1919
Lead Opinion
On the application of the above-named plaintiff an alternative writ of mandamus issued out of this court, commanding the defendants to desist from collecting any fares, rates, or charges for carrying passengers, freight, and baggage between points wholly within the state of North Dakota, other than those stated in the schedules on file in the office of the board of railroad commissioners of the state; or that they show cause why they have not done so. The foregoing writ issued in accordance with the prayer of a complaint and petition, alleging, among other things not material to be noticed, that, by virtue of an Act of Congress of August 29, 1916, the President of the United States issued a proclamation on December 26, 1917, following which he assumed possession and control of the railroad systems of the United States, and that he has been in such possession since January 1, 1918; that on May 25, 1918, William G. McAdoo, predecessor in office of the defendant Walker D. Hines, as Director General of Railroads of the United States, issued general order No. 28, whereby he directed the railroads, under his control, to put into force and effect on June 10, 1918, certain passenger fares and baggage charges, and on June 25, 1918, certain freight rates, which fares, charges, and rates were in excess of those previously authorized to be collected on the intrastate commerce of the defendant company within the state of North Dakota.
Separate answers were filed by the railroad company and by the said Hines, as Director General. The answer of the railroad company alleges that from December 28, 1917, until on or about August 1, 1918, the
The answer of the Director General sets forth the legal basis relied 'upon to support general order No. 28, and asks that the alternative writ be quashed.
Counsel for the Director General, at the outset of the argument, expressly state that no question relating to the jurisdiction of the court is raised; that jurisdiction is conceded, and that the question before the court is one of the power of the Director General under the Rail Control Act. Consequently it is unnecessary for us to consider what the authority of the Director General may be outside the act.
There is, then, but a single question involved in this proceeding, and that is the validity of general order No. 28 as applied to rates, fares^ and charges for the intrastate commerce. The effect of the order, if valid, is admitted. It fulfils the intention therein expressed to increase freight rates upon all business, both interstate and intrastate, 25 per cent, and to establish passenger fares on the basis of 3 cents per mile for both interstate and intrastate carriage (except that where the intrastate rate of fare may exceed 3 cents per mile it is not reduced), and changes are also effected in charges for excess baggage, which purport to be applicable to both interstate and intrastate commerce.
The validity of the order depends upon the construction of § 10 of the Act of March 21, 1918, which is entitled “An Act to Provide for the Operation of Transportation Systems While under Federal Control, for the Just Compensation of Their Owners and for Other Purposes.” The section which is relied upon as containing the authority to promulgate the order in question is as follows:
“Section 10. That carriers while under Federal control shall be subject to all laws and liabilities as common carriers, whether arising under state or Federal laws or at common law, except in so far as may be inconsistent with the provisions of this act or any other act applicable to such Federal control or with any order of the President. Actions at law or suits in equity may be brought by and against such carriers and
“That during the period of Federal control, whenever in his opinion the pvMic interest requires, the President may initiate rates, fares, charges, classifications, regulations, and practices by filing the same with the Interstate Commerce Commission, ivhich said rates, fares, charges, classifications, regulations, and practices shall not be suspended by the Commission pending final determination.
“Said rates, fares, charges, classifications, regulations, and practices shall be reasonable and just and shall-take effect at such time and upon -such notice as he may direct, but the Interstate Commerce Commission shall, upon complaint, enter upon a hearing concerning the justness and reasonableness of so much of any order of the President as establishes or changes any rate, fare, charge, classification, regulation, or practice of any carrier under Federal control, and may consider all the facts and circumstances existing at the time of the making of the same. In determining any question concerning any such rates, fares, charges, classifications, regulations, or practices or changes therein, the Interstate Commerce Commission shall give due consideration to the fact that the transportation systems are being operated.under a unified and co-ordinated national control and not in competition.
“After full hearing the Commission may make such findings and orders as are authorized by the act to regulate commerce as amended, and said findings and orders shall be enforced as provided in said act: Provided, however, That when the President shall find and certify to the Interstate Commerce Commission that in order to defray the expenses of Federal control and operation fairly chargeable to railway operating
Before entering upon the discussion of the meaning of the above section, we should note the fact that possession and control of the railroads had been assumed by the President, acting under the authority of an Act of Congress of August 29, 1916, which provided that the President in time of war was “empowered, through the Secretary of War, to take possession and assume control of any system or systems of transportation, or any part thereof, and to utilize the same, to the exclusion as far as may be necessary of all other traffic thereon, for the transfer or transportation of troops, war material and equipment, or for such other purposes connected with the emergency as may be needful or desirable.” [39 Stat. at L. 645, chap. 418, Comp. Stat. § 1974a, 9 Fed. Stat. Anno. 2d ed. p. 1095.] The act, of which § 10 first above quoted is a portion, was adopted after Federal control was an established fact. It should be stated, too, that the finding and certificate referred to in the proviso of §■ 10 above were made and filed with the Interstate Commerce Commission.
The contention of the plaintiff is that the authority to “initiate rates, fares, charges, etc.,” is only applicable to interstate commerce, and in support of this contention, arguments are advanced which are drawn from the history of the Federal regulation of commerce, as well as from other sections of the act in question, considered in connection with the act to regulate interstate and foreign commerce, as amended. It is also argued that the order is void on the ground that it is not apparent that the act giving such plenary power to the President was adopted for the purpose of enabling him to exercise the broad executive functions rendered necessary by the existence of a state of war. And, further, that, if such powers are justified only as war-powers, the justification ceased upon the signing of the armistice. It is recalled that immediately fol
It was not until the Act of June 18, 1910, that the power to prescribe a rate applicable to interstate commerce was vested in the Interstate Commerce Commission. Prior thereto, under § 15 of the Hepburn Act of June 29, 1906, the Interstate Commerce Commission had power to declare given rates unjust or unreasonable; but it was held by the United States Supreme Court, in Interstate Commerce Commission v. Cincinnati, N. O. & T. R. Co. 167 U. S. 479, 42 L. ed. 243, 17 Sup. Ct. Rep. 896, that the power to declare certain rates charged by the carrier to be unreasonable and unjust did not include the power to prescribe or fix rates, and, as this power was legislative in character, it could not be held to be vested in the Interstate Commerce Commission by implication. Later, however, when the Act of 1910 vested in the Commission power to prescribe and fix rates, the court held, in Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185, that the statute which, in reality, delegated the legislative function to the Interstate Commerce Commission, was valid; but it was held to be valid because it provided for due process of law in such matters. The court said: “Put the statute gave the right to a full hearing, and that conferred the privilege of introducing testimony, and at the same time imposed the duty of deciding in accordance with the facts proved. A finding without evidence is arbitrary and baseless. And if the government’s contention is correct, it would mean that the Commission had a power possessed by no other officer, administrative
The above language is, of course, as applicable to any attempt to confer upon the President a power to prescribe, without a hearing, rates which cannot be suspended pending a final determination by another tribunal as to any attempt to vest a similar power in a commission. The fact that Congress originally authorized the possession and control to be taken in the event of war, coupled with the fact that it expressly made applicable a rate-making procedure which would be clearly unconstitutional in times of peace, is satisfactory evidence that the possession and control of the railroads by the President is purely a war measure. As a war measure, the government necessarily assumes its constitutional obligation to make compensation. See United States v. Russell, 13 Wall. 623, 20 L. ed. 474. And the burden of administration was placed where it would be free from possibility of conflict with the constitutional authority to command the armies and Navy, hence it devolved primarily upon the Chief Executive.
The foregoing observations would not be strictly applicable to the fixing of rates for a service that is supplied by the government itself through its own agency or instrumentality. But we do not find in the act in question any evidence that Congress intended to treat the transportation systems as belonging to the government. It rather appears that they are to be utilized primarily for war purposes, while at the same time their ordinary uses are to continue as far as possible. It is provided, for instance, that suits may be maintained against the carriers; that the rates, fares, and charges are to be measured by an existing standard of reasonableness, which is to be finally determined and applied by an authority other than the President, and that the property is to remain subject to the taxing power of the states. These and other provisions sufficiently indicate the intention to continue the pre-existing legal relationship between the carriers on the one hand, and the public on the other, that we ought not to presume, in the absence of some
Neither can we construe the military exigency which gave rise to the necessity for the government taking possession of the transportation facilities to have terminated. The act itself fixes the period of control as one which shall continue during the war “and for a reasonable time thereafter, which shall not exceed one year and nine months first following the date of the proclamation by the President of the exchange of the ratifications of the treaty of peace.” So, even though hostilities may have ceased, it is apparent that the time has not arrived for the mandatory termination of government control under the act of Congress, or for the enforced rescission of orders thereunder, originally justified, as meeting war emergencies. A reading of the legislation upon the subject of transportation in its relation to the national defense discloses that there are many interests affected, both of the government, of the carriers, and of the public, which are sought to be safeguarded through the employment of appropriate means to that end by the executive department. The variety and extent of these interests suggest numerous intricate problems to be solved by the legislative and executive departments. For these reasons it is apparent to us that the termination of Federal control cannot be judicially fixed at any other time than that prescribed by Congress.
The case then resolves to a mere question of statutory construction, and in arriving at the meaning of the act the various provisions must be read so that all may be given effect without inconsistency (New Lamp Chimney Co. v. Ansomia Brass & Copper Co. 91 U. S. 656-661, 23 L. ed. 336-338), and particular words must not be selected or given an ' effect that will “virtually destroy the meaning of the entire context” or “give them a significance which would be clearly repugnant to the statute, looked at as a whole, and destructive as of its obvious intent.” Van Duke v. Cordova Copper Co. 234 U. S. 188-191, 58 L. ed. 1273-1274, 34 Sup. Ct. Rep. 884. It is important that every provision of the act shall be regarded, and that it shall be so construed as to give effect to its spirit and paramount purpose. In so construing the law, it is proper not only to consider the language found within its four corners,
It is true, as asserted by counsel for the petitioner, that Congress, prior to the enactment of the legislation in question, had never undertaken to regulate commerce carried on within a state. Section 1 of the Interstate Commerce Act expressly provides that it “shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property, wholly within one state, and not shipped to or from a foreign country from or to any state or territory as aforesaid.”- [24 Stat. at L. 379, chap. 104, Comp. Stat. § 8563, 4 Fed. Stat. Anno. 2d ed. p. 337.] Since this-act, as amended from time to time, gives to the Interstate Commerce Commission all the regulatory authority it possesses (unless the Federal Control Act enlarges it), it is clear that it has not been authorized to regulate, directly and primarily, intrastate commerce. It will readily be conceded that Congress possesses ample power to regulate intrastate commerce to the extent necessary to make effective its power to regulate interstate commerce. Shreveport Case (Houston, E. & W. T. R. Co. v. United States) 234 U. S. 342, 58 L. ed. 1341, 34 Sup. Ct. Rep. 833; American Exp. Co. v. South Dakota, 244 U. S. 617, 61 L. ed. 1352, P.U.R.1917F, 45, 37 Sup. Ct. Rep. 656; but it is important to keep' in mind the limitations. In the absence of clearly expressed legislative intention it will not be presumed that the power to regulate interstate commerce has been so vested in Federal authorities as to nullify every state regulation that only indirectly or remotely affects interstate business. Reagan v. Mercantile Trust Co. 154 U. S. 413, 38 L. ed. 1028, 4 Inters. Com. Rep. 575, 14 Sup. Ct. Rep. 1060; Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18.
• Neither are we inclined to question the power of Congress’, in providing for Federal control of transportation during a war emergency, to vest in the President the full administrative power necessary to effectuate such a degree of unified control as would be independent in every respect of existing state regulations or of all state regulating authority. We are only concerned here with ascertaining whether or not Congress has vested powers in the President which may properly be
Another expression opposed to the implying of restrictions on the power of the states to regulate intrastate commerce is that of Mr. Justice Hughes, in the Minnesota Rate Cases (Simpson v. Shepard) supra, page 417: “If this authority of the state be restricted, it must be by virtue of the paramount power of Congress over interstate commerce
The argument that the intrastate commerce rates prescribed by the Minnesota statutes were invalid because operating’ prejudicially upon interstate rates was met by the following considerations, page 420: “Having regard to the terms of the Federal statutes, the familiar range of state action at the time it was enacted, the continued exercise of state authority in the same manner and to the same extent after its enactment, and the decisions of this court, recognizing and upholding this authority, we find no foundation for the proposition that the act to regulate commerce contemplated interference therewith.
. “Congress did not undertake to say that the intrastate rates of interstate carriers should be reasonable, or to invest its administrative agency with authority to determine their reasonableness. Neither by the original act nor by its amendment did Congress seek to establish a unified •control over interstate and intrastate rates; it did not set up a standard for interstate rates, or prescribe, or authorize the Commission to prescribe, either maximum or minimum rates for intrastate traffic. It cannot be supposed that Congress sought to accomplish by indirection that which it expressly disclaimed, or attempted to override the accustomed authority of the states without the provision of a substitute. On the contrary, the fixing of reasonable rates for intrastate transportation was left where it had been found; that is, with the states and the agencies created by the states to deal with that subject.”
The terse statement of Mr. Justice Harlan, in delivering the opinion of the court in the case of Reid v. Colorado, 187 U. S. 137-148, 47 L. ed. 108-114, 23 Sup. Ct. Rep. 92, 12 Am. Crim. Rep. 506, supports the .rule of construction for acts of Congress which we deem to be proper when the subject-matter vitally affects the principal power of a state, and one which must give way to the paramount power of the Federal government only when Congress deems it wise to intervene. The statement is: “It should never be held that Congress intends to supersede, or by its legislation suspend the exercise of the police powers of the states, even when it may do so, unless its purpose to effect that result is clearly manifested.”
The same section provides for an appeal to the Interstate Commerce Commission, and authorizes that body to set aside or modify any rate, fare, charge, etc., that may be found to be unjust or unreasonable. In making its findings, the authority of this body must be sought in the act to regulate commerce as amended, since it is expressly remitted to that act for authority to make its findings and enforce its orders. It is clearly the intent of § 10, construed as a whole, to give to the Interstate Commerce Commission an authority to review that is coextensive with the authority of the President to initiate. It is doubtless also intended to require that all rates, fares, charges, etc., initiated under the act shall be just and reasonable in the light of the circumstances, taking into consideration the necessity for increased operating revenue. It follows from this that, if increased powers, extending to existing lawful intrastate rates, are given to the Interstate Commerce Commission, they are given in the Federal Control Act, and it is not at all clear that such was intended. To give to the control act the construction necessary to support the contention made is equivalent to amending by implication the Interstate Commerce Act so as to extend its scope to matters which were never before embraced within it. Indeed, it is tantamount to repealing the express provision that it shall not operate as to transportation wholly within a state. This might well have been the intention as to
That it was not intended to entirely supplant pre-existing regulations of the states seems to us to be even more clearly demonstrated by § 15. The section is as follows:
“Section 15. Nothing in this act shall be construed to amend, x*epeal, impair or affect the existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transportation of txeops, war materials, government sxxpplies, or the issue of stocks and bonds.” [40 Stat. at L. 458, chap. 25, Comp. Stat. § 3115|-o, Fed. Stat. Anno. Supp. 1918, p. 765.]
The foregoing section lays down a rule of construction for the entire act, according to which it shall not be held to amend, repeal, or impair or affect existing lawful police regxxlations of the several states, except wherein such regulations may affect the transportation of troops, war materials, government supplies, or the issue of stocks and bonds. The query arising from this section is, Does the expression “lawful police regulations” include existing regulations with respect to intrastate rates, fares, and charges ? It is contended on behalf of the Director General that such regulations are not included, because, it is stated, the regulation of rates is not an exercise of the police power of the state. In support of this contention, it is argued that the police power, in the exercise of which lawful police regulations are made, is one which exists for the general welfare of society, and is, therefore, one which cannot be bargained away. Attention is called to the fact that the regulation of rates is frequently accomplished, to a degree at least, by the exercise of the power to contract. We fail to perceive the force of the argument that would remove rate regulations from the category of the lawful police regulations of the state on account of the practical necessity which has rendered necessary the recognition of contract obligations originating in franchises. Never since Lord Hale gave expression in his De Portibus Maris, to the principle according to which public callings are subject to regulation, has there been any doubt of the right or the power of the state to regulate charges. In fact, it was the exaction of “arbitrary and excessive duties for cranage, wharfage, etc.,” that led to the exercise of
In the case of Reagan v. Mercantile Trust Co. 154 H. S. 413, 38 L. ed. 1028, 4 Inters. Com. Rep. 575, 14 Sup. Ct. Rep. 1060, supra, it will be noted that the United States Supreme Court expressly char.acterized state regulations of rates as “police regulations” in the following expression: “We are of the opinion that the Texas & Pacific Eailway Company is, as to business done wholly within the state, subject to the control of the state in all matters of taxation, rates, and other police regulations.”
But, it is contended that the term, “police regulations” appearing in the statute is one which may be used either in a limited sense or in a very comprehensive sense, and that in the statute in question it is used in its “ordinary accepted sense” as referring to the exercise of the power to protect the health, lives, and morals' of the people (Manigault v. Springs, 199 H. S. 473-481, 50 L. ed. 274-279, 26 Sup. Ct. Rep. 127), rather than in the broader acceptation, which, in reality, embraces everything essential to “the great public needs.” Noble State Bank v.
The argument that the reservation of “lawful police regulations,” rather than the police power, shows a purpose to limit the scope of the meaning, is well met by a comparison with the reservation of the taxing power in the same section. The section preserves in full, not only the existing laws of the states relative to taxation, but it preserves as well, unimpaired, the power to tax. See Congressional Record, vol. 56, part 4, p. 3313. So, the states may pass such future legislation upon the subject of taxation as would be constitutional if the roads were in private hands; provided, of course, it does not interfere with the transportation of troops, war materials, and government supplies. The roads are not declared to be in public ownership, and the power to tax is as broad as the similar power over roads incorporated by act of Congress (Union P. R. Co. v. Peniston, 18 Wall. 5, 21 L. ed. 787; see also Congressional Record, supra), or as conceded by act of Congress in the case of national banks.' On the other hand, with regard to the police power generally, it is not to be exerted anew, or in a different measure or manner during Federal control from that existing before. The act only continues in force the existing police regulations, and the railroad administration is not bound to respect any additional police regulations. Centralization of administrative authority free from future interruptions was accomplished, but Congress accepted the status quo ante, so far as police regulations were concerned; and it authorized them to be ignored only when necessary to secure military efficiency in the matter of the transportation of troops, war materials, and government supplies.
The suggestion that a rate prescribed by statute, from which a carrier is prohibited from departing under penalty, is not a police regulation > concerning the carriage of intrastate commerce, seems to us also, as hereinabove indicated, to ignore the fundamental considerations that deter
To a similar effect are Covington & L. Turnp. Road Co. v. Sandford, 164 U. S. 578, 41 L. ed. 560, 17 Sup. Ct. Rep. 198, and Lake Shore & M. S. R. Co. v. Smith, 173 U. S. 684, 43 L. ed. 858, 19 Sup. Ct. Rep. 565; German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 58 L. ed. 1011, L.R.A.1915C, 1189, 34 Sup. Ct. Rep. 612. Rates are regulated because the business is affected with a public interest. Every regulation must be measured by the yardstick of reasonableness, and must fall short of prohibition, destruction, or confiscation in order to be valid. Freund, Pol. Power, § 63. Nothing, it seems to us, falls more properly within the domain of police regulations than rules prescribed as a means of preventing economic oppression and securing equality' of right to the service in a public calling. See Freund, Pol. Power, § 378.
A strong indication that the term “police regulations” was used in a much broader sense than that contended for is the fact that, in making exceptions to the regulations that should continue in force, Congress saw fit to expressly except regulations affecting the issuance of stock and bonds. It will be noted that § 7 gives to the President, in unambiguous terms, the right to control the issuance of securities during the period of Federal operation. Yet it was thought necessary in § 15 to expressly except from the police regulations of the states which were to continue in force those affecting the issuance of stocks and bonds. Clearly these regulations are of a character that would not directly affect the public health, 'safety, or morals. They are as much designed to protect the economic welfare of society as are those relating to rates, and there would have been no occasion to make the'exception had the term “police regulations” been used in the sense contended for. (A statute of this character was involved in a recent case, — Union P. R. Co. v. Public Service Commission, 248 U. S. 67, 63 L. ed. 131, P.U.R.1919B, 315, 39 Sup. Ct. Rep. 24.)
The Congressional history of the act in question, appended hereto,, in
The foregoing clause, after being tacked on the provision “that nothing in this act shall be construed to amend, repeal, impair, or affect the existing laws or powers of the states in relation to taxation,” as previously contained in the bill, was transferred to the end and became a new section — now § 15. The conference committee later, reporting to the House and Senate, struck from the exceptions to the proviso above those exceptions which are italicized. This is a matter of some significance in determining the sense in which the term “police regulations” is used. If the exception of “'the regulation of rates” previously inserted had been allowed to stand, it is clear that every existing state regulation affecting rates would have been rendered nugatory upon the promulgation of an order by the Director General superseding such rates, whether or not the transportation of troops, war materials, or government supplies was affected, and the power would have existed just as it is contended for in this case. The striking of that clause, however, from the exceptions, indicates an intention to preserve existing state regulations affecting rates, except in so far as the transportation of troops, war materials, and government supplies may be affected. To this must also be added, we believe, the power to prevent existing intrastate rates from operating in such a way as to result in unlawful discriminations on accoimt of such regulations as it may be found necessary to promulgate in operating the roads as a unit.
As hereinbefore stated, the Federal government is supreme in the domain of interstate commerce, and there is nothing in this act to indicate that the regulatory power, as it previously existed, was intended to be modified in the slightest degree by existing state regulations. All the powers possessed by the Interstate Commerce Commission are to continue except the power to suspend rates.
The order in the instant case, as it relates to intrastate commerce, does not purport to have been promulgated for the purpose of obviating discriminations. On the contrary, a portion of the order, at least,— that which relates to intrastate pass.enger fares, — cannot possibly be justified on any such basis, as a simple illustration will suffice to demonstrate. Prima facie, .it creates discriminations by disturbing the balance of pre-existing fares that were just and reasonable. Prior to the order in question intrastate tickets were sold to and from all points within Minnesota at 2 cents per mile; from and to all points within North Dakota at 2-3,- cents per mile; and from and to all points in Montana at 3 cents per mile, and the interstate fares were based upon the local rates. These intrastate fares were all presumptively legal and had been in operation for some time. Such differences as existed were readily accounted for by differences in cost of constructing roads in the various states, density of traffic, etc. Yet the necessity demanding increased revenues from the purely intrastate business was not recognized in the order as being general. The burden is not distributed by percentage increases that will affect all localities alike; but the patrons in one state are required to pay 50 per cent above the previous lawful and reasonable fare, in another, 20 per cent above, and in the other, no additional charge is imposed. This is a sufficient demonstration that a portion of the order at least is not to be justified as a means of preventing diserimi
In considering the character of order No. 28 in its direct effects upon interstate commerce, it is also proper to note that all rates initiated are to be measured upon review by the Interstate Commerce Commission according to the “expenses of Federal control and operation favrly chargeable to railway operating expenses ” and to pay certain fixed charges. This is not a blanket authority to increase rates, but a limitation. Its true character is perhaps best understood by referring to the very substantial appropriation of $500,000,000 to be used as a revolving fund, and to the then recent fact of the denial by the Interstate Commerce Commission of an application for a general increase of 15 per cent in interstate freight rates. Fifteen Per Cent Case, 45 Inters. Com. Pep. 303. These facts, together with the further well-known fact that by far-the larger percentage of earnings is from interstate commerce, do not indicate that a percentage raise on all trafile, or that a mileage raise on a portion of the passenger traffic, was in contemplation.- On the contrary, they rather indicate that, at the time Congress passed the Control Act, there was no immediate necessity for increased revenues, and that, if such necessity should arise, it was contemplated that it could be fully met by applying the remedy which had so recently been sought, and without making possible a general repeal of numerous laws of sovereign states whenever, in the judgment of the Director General, such repeal might seem to be desirable for reasons apart from military efficiency, or even to enable the exercise- of an unhampered control of interstate commerce.
The requirement that the Interstate Commerce Commission shall take into consideration “the fact that the transportation systems are being operated under a unified and co-ordinated national control, and not in competition, “does not, in our opinion, broaden the authority of the Director General or the Interstate Commerce Commission, except where it may be sought to correct conditions incompatible with a unified system, and which were probably due to previous unwholesome competition.
The Congressional debates affirmatively disclose that the propriety of compelling the patrons of the railroads to pay all additional costs incident to Federal control was considered and weighed as against the plan
Another significant fact which is disclosed by a study of the Congressional debates upon the subject of the rate-fixing power is that all of the discussion of § 10, pertaining to the power given the President to initiate rates, concerns only the merits of that proposal as compared with a proposal to vest the power directly in the Interstate Commerce Commission, so that it might continue to exercise, in but slightly modified form, the authority previously vested in it. Nowhere was it suggested that the powers of the Commission should be extended to embrace original regulations of intrastate rates, nor was it ever intimated, so far as our observation goes, that the powers contended for were being vested in the Executive.
Being of the opinion that the rate statutes of this state and the tariffs on file with the state railroad commission, in accordance with statutory requirements, in so far as they pertain to intrastate commerce1, haw> not been lawfully superseded by any competent order made by the Director General under the Bail Control Act, and particularly by general order No. 28, a writ will issue in accordance with the views expressed in the foregoing opinion.
Concurrence Opinion
(concurring specially). This is an action by the state of North Dakota against several railway carriers and those who control and operate the railways, to prevent them from continuing to rob the people by the exaction of excessive passenger and freight rates, contrary
The claim is that the railroads are operated under acts of Congress, by direction of the President, and his appointed Director General, and it is conceded that the' operation is not in accordance with the laws of the state. As it appears, on every railroad and system of railroads in the United States, extending over about 400,000 miles, the passenger fares and freight rates have been advanced from 25 to 50 per cent. The advance was made as a war measure under the plea of military necessity; but now, in this year of peace, it is continued in defiance of the just laws and powers of the several states. The assumed railroad control and the orders of the President are based on acts of Congress. In August, 1916, at the time of some trouble with Mexico, Congress passed an act as follows: “The President, in time of war, is empowered, through the Secretary of War, to take possession and assume control of any system . . . of transportation, . . . and to utilize the same . . . for the . . . transportation of troops, war material, and equipment.” This was a nice rider on the Army Appropriation Act, covering forty-eight pages of the statute. 39 Stat. at L. 645, chap. 418, Comp. Stat. § 1914a, 9 Ped. Stat. Anno. 2d ed. p. 1095. The rider is short and simple. Its manifest purpose was to authorize the President, in time of war, to use the military force to control and operate railroads for the removal of troops and war supplies, —“only that and nothing more.” But, in December, 1911, after Congress had declared war against Germany and Austria, the President magnified his power and issued a fiat or proclamation, assuming the possession and control of all railroads for all purposes, regardless of any military necessity. The fiat decreed that the possession and control should be in his famous son-in-law, as Director General. By the same fiat the President attempted to legislate, and he decreed that, except with the written consent of the Director General, no attachment by a
Section 10 of the act provides the President may initiate rates, fares, and charges by filing the same with the Interstate Commerce Commission, and “that said rates, fáres, and charges must be just and reasonable.” Also, that on complaint the justness and reasonableness of such rates may be determined by the Interstate Commerce Commission in accordance with the Act to Regulate Commerce as amended. But as the act of Commerce gave the Commission no power to regulate rates between any two points or places of a state, it must be that the Federal Control Act refers only to interstate rates. Congress did not contemplate that the President or his Director General should attempt to initiate intrastate rates, contrary to the laws of' any state. Certain it was not within the power or the purpose' of Congress to give the President and his famous son-in-law the right to repeal and undo the rate laws of any state. That is shown to a demonstration by § 15 of the act:' “Section 15. Nothing in this act shall be construed to amend, repeal, impair, or affect the existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transportation of troops, war materials, government supplies, or the issue of stocks and bonds.” [40 Stat. at L. 458, chap. 25, Comp. Stat. § 3115fo, Fed. Stat. Anno. Supp. 1918, p. 165.]
As the Federal Control Bill was first submitted to Congress, it was strictly an administration measure, conforming to the proclamation of the President; but in each House, and in conference, it was carefully considered and finally passed with salutary amendments, and among them the last and most important was § 15. While the act empowered the president to initiate interstate commerce rates, subject to review by .the Commission, it expressly provided that the rates should be just and reasonable. It did not contemplate the addition of a billion dollars a year to the burden of the.wealth producers by a general and uniform advance of 50 per cent in all rates and fares. And this court may well take official notice of that fact that such an advance was not just or reasonable; that it was contrary to a recent and prior ruling of the Interstate Commerce. Commission refusing to permit an advance of 15 per cent.
It was in the spring of 1918, when the food supplies were reduced and when the people were contributing their utmost to the war fund, that Congress gave the carriers half a billion dollars, and then, by
There is no reason for extending the discussion. It is a well-known fact that the rail carriers have always charged excessive rates, and that they are fast amassing the wealth of the country. By skill, prudence, and economy the Director General might well have reduced the cost of operating the railroads, and, indeed, when the Federal Control bill was before Congress, he was called as a witness and gave assurance that the result of Federal control would be to reduce the expenses — and such was the assurances under which the bill was passed. The Director could well have reduced the burden of rates and fares instead of advancing them; but, however that may be, now that the war has ended, there is no longer any reason or excuse for any person on earth to operate railways in disregard and defiance of the lawful police regulations of the several states. It is beyond the constitutional power of Congress and the national government, and, so far as persisted in, it must lead to anarchy, Bolshevism, and endanger the safety of the Eepublic, The writ of mandamus should be awarded.
Dissenting Opinion
(disssenting). An alternative writ of mandamus was issued out of this court. The purpose of such writ is to command and prohibit the defendants from collecting increased fares or rates over and above those stated in certain schedules on file with the board of railroad commissioners of this state for carrying passengers, freight, and baggage between intrastate points, or tó show cause why the rates, fares, and charges specified in said schedules should not he in force, instead of the increased rates initiated by the President of the United States, and which are' now being charged and collected. Walker B. Hines is the direct representative of the President of the United States, and together they represent the United States, so that, in fact, the action is one of the state of North Dakota against the United States to determine the authority of the defendant to initiate and collect the rates complained of.
The construction of certain sections of this act is the task with which we are confronted.' For the purpose of properly construing the Federal Court Act and war powers of the President, it would be well to mentally place ourselves back to the 28th of- December, 1917, and from thence look forward into the future as it then presented itself; instead of looking from the point where we now are retrospectively to the 28th day of December, 1917. If we should do this, we would realize that transportation for war purposes and as a whole under private control had largely become inefficient; that at ■ such time there were millions of soldiers to be transferred to training camps; that millions upon millions of tons of war material were to be transported from the place where produced to the place of manufacture, and the finished product again to be transported; that millions of tons of food stuffs and clothing had to be transported to the various places where the soldiers were in camps, for their use. The magnitude of transportation for war purposes alone was so stupendous that it is almost beyond the comprehension of those not so situated as to have an opportunity to acquaint themselves with the immensity of the task of the transportation of the necessities of war. It must be remembered that all of this was an added burden to the transportation facilities of our country. Again, we think it is a matter of common knowledge that the transportation systems, prior to the declaration of war and prior to the time the almost illimitable amount of war transportation was added to the work of the transportation companies, were finding difficulty in properly handling and transporting the products of trade, production, and manufacture which were tendered them for transportation during times of peace. It is apparent, therefore, that Federal control was taken for the purpose of facilitating
We must also keep in view the fact that when war is once officially declared by the duly constituted authorities of the United States with whom the power is placed, by the Constitution, to declare war, that a state of war continues to exist until a treaty of peace is signed with those against whom war wa.s declared, and until such treaty of peace by the President’s proclamation is duly proclaimed. The President having by due proclamation taken over the transportation companies, each and every official and employee, and all those who entered the employ of the transportation companies after being taken over by the Federal government, were thereafter, by proper authority, duly constituted and made officials and employees of the Federal government, and, as such, were employed and paid by the Federal government. With these preliminary observations, we may proceed to examine some of the real issues presented in this case. The paramount issue presented is that which relates to
A Conflict of Power.
The conflict of power arises between certain tribunals, as state railroad commissions, possibly the Interstate Commerce Commission, and the powers conferred upon the President under the Federal Control Act, or possibly other war powers possessed by the President, as to which has the lawful authority to fix passenger and freight rates and other charges during the time of the war, on intrastate commerce. We think, in this discussion, it will not be necessary to advert to other war powers possessed by the President than those conferred upon him by the Federal Control Act. In time of peace, it may be conceded that certain state tribunals, as the state railroad commission, have the exclusive power to fix all intrastate rates of transportation, likewise the Interstate Commerce Commission, in time of peace, has exclusive power to determine the reasonableness and justness of rates affecting interstate commerce, and, since the Act of the Interstate Commerce was amended, the power to prescribe rates and the power to prescribe an intrastate rate where that rate is such as to cause a discrimination in an interstate rate between a point or points within the state to a point or
The power conferred upon the President by the Federal Control Act, with reference to rates, was intended to be a power with which there could be no interference, with the exception of that of the Interstate Commerce Commission as to the reasonableness' and. justness thereof. The power was intended by Congress to be one which would enable the President, by use thereof, to accomplish without delay or interference the objects intended to be accomplished by the Federal Control Act. If this be true, then the rate-making powers of all other tribunals must be suspended during the time of war, including that of the Interstate Commerce Commission, except as it is preserved in the Federal Control Act. If, as is contended by plaintiff, the power to initiate and prescribe rates as to intrastate remained the same in time of war as in time of peace,, then it would be within the power of the state or states, through the
It must also be remembered, in construing the Federal Control Act and the President’s right to initiate an increase of 25 per cent in the freight rate, that certain conditions existed of which the following may be mentioned: The large increase in the wages of thousands upon thousands of employees who were operating the transportation systems while under Federal control, the millions of dollars that must be expended to rehabilitate the transportation systems to make them more efficient in transportation, the accumulation of a reserve fund to insure a
The most important remaining point to be discussed is the meaning of § 15, which is to the effect that nothing in the act shall be construed to amend, repeal, impair, or affect the existing laws or powers of the state in relation to taxation, or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transportation of troops, war materials, government supplies, or the issue of stocks and bonds. It is claimed by the state that the power to prescribe or initiate a rate or charge for transportation is a
There is a well-settled rule of statutory construction, which is, that the intention of the whole act will control the interpretation of the parts. Sutherland, Stat. Constr. 319. The intention of the Federal Control Act is easily discerned. It plainly appears from it that it was the intent of Congress to place the control and operation of all transportation systems with the President, and that he had full authority to initiate all rates, fares, and charges for transportation. This was the
The powers enumerated and granted in the Federal Control Act to the President are wholly and exclusively war powers. When the war shall have been terminated, and treaties of peace shall have been signed with those with whom we are at war, and when such treaties of peace have been duly proclaimed by the'President, we shall then have returned to a state of peace, and after the expiration of not more than twenty-one months thereafter, the war powers conferred upon the President in the Federal Control Act will not further be effective so long as a state of peace continues. At the expiration of twenty-one months after a treaty of peace has been signed, and by the President proclaimed, and in the absence of further Federal legislation retaining for a longer period of time control of the transportation systems of the United States, or unless the President has theretofore relinquished such Federal control, such transportation systems will be returned to their owners, and will again become, at that time, subject to the same rates, fares, and charges for transportation as existed at the time the President, by proclamation, took Federal control of such transportation systems; and the power to initiate and prescribe fares, rates, and charges will again be the same in the states and the Interstate Commerce Commission as existed at the time of the talcing of Federal control.of such systems, which powers were, as we have seen, suspended in the manner.above stated during the time of war. At such time when such transportation systems are returned to their owners, if they be so returned, all state regulations and powers will be again revived, and be of the same force and effect as they were at the time of the taking of Federal control. The power of the state, at the time of taking of Federal control, to prescribe fares, rates, and charges, was not repealed, but merely suspended during the Federal control, and, upon the termination of that, will again have the same force and effect as at the time of taking Federal control.
The Federal Control Act is one that conferred upon the President certain rights, authority, and power with reference to initiating rates and charges for transportation. If anyone had a just complaint with
It is conceded the rates and charges fixed by order No. 28 have not been scheduled nor filed with the state railroad commission before they were put into effect, as § 4725 of the Compiled Laws of North Dakota of 1913 provides; that the schedule of fares, rates, and charges under order 28 were only filed as a matter of courtesy for the use and information of the board of railroad commissioners of North Dakota, and not in compliance wjth § 4725.
The main contention of plaintiff is that there is no authority for the President, under the Federal Control Act, to increase rates, fares, and charges on transportation which is wholly intrastate. In finally disposing of this matter, as we view it, it must be presumed that the President, and every subordinate officer or Federal employee acting under his authority, in executing the powers conferred upon him by the Federal Control Act, were, at all times, in the execution of such powers, acting in the highest good faith. It must also, be presumed that the President did not initiate a higher fare, rate, or charge than was necessary to maintain the efficiency of the transportation systems taken under Federal control, and that it was necessary to fix such rates and charges as he did, for the purpose of transporting troops and war material, and for the further purpose of maintaining the efficiency of the transportation systems, so that all transportation immediately connected with war purposes might be promptly carried on as well, as' all other transportation.
It seems clear that the act in question is one conferring upon the President war powers. The language of the act is clear, and it confers upon the President the exclusive power to initiate all rates upon the transportation systems of the continental United States during the time of Federal control, and, during that time, his right to do so cannot be limited by the state. It is clear that such power included the right to initiate all rates, both on interstate and intrastate commerce, during Federal control of the transportation systems; and that all such rates should become effective by filing the same with the Interstate Commerce Commission upon one day’s noticee. If the conclusion at which we have arrived is correct, and we think it is, the contentions of the plaintiff cannot be upheld, the writ of mandamus issued by this court should be quashed.
Dissenting Opinion
I dissent. In my opinion the majority opinions wholly ignore the fundamental considerations of law involved in this action. If mandamus is awarded and maintained now, it ought to have been awarded and made effective when the order was first promulgated. During the crucial period of the great war, now ended, this order was in effect and in force without complaint, and with the acquiescence of this state.
The opinion of Judge Birdzell is based upon the broad proposition that the regulatory powers of the state over intrastate rates were not suspended by the Act of Congress of March 21, 1918, by reason, particularly, of the provisions of § 15 thereof.
Upon a priori reasoning, as I view it, Justice Birdzell holds that the intent of Congress in the act was to prescribe a method of initiating common-law reasonable rates, by the President instead of by the railroads themselves, based upon the old theory that the charge made to the public must be reasonable, and not discriminatory. It is necessary, through this technically narrow construction, to virtually read in the act, §• 10, thereof, the following: “The President may initiate interstate rates, fares, charges, etc.,” and also to virtually read into such act, -§ 15 thereof: “That nothing in this act shall be construed to amend, repeal, impair, or affect the existing laws or powers of the state in relation to taxation, regulation of rates, or the lawful police regulation, etc.” Congress might have so legislated; but it did not so legislate. It gave to the President direct authority to initiate rates,— the term used is broader than interstate rates. See Employers Liability Cases (Howard v. Illinois C. R. Co) 207 U. S. 463, 500, 52 L. ed. 297, 310, 28 Sup. Ct. Rep. 141.. From the very force of the circumstances then existing with this nation involved in a mighty struggle, in war time, it would seem perfectly obvious that the President, if he were to initiate any rates at all, must initiate rates that applied to both interstate and intrastate commerce. Otherwise the power might as well not have been conferred.
At the time the Act of March 21, 1918, was enacted, Congress recognized that certain transportation systems then were being operated as Federal instrumentalities, under the terras of a proclamation of the President by which state regulatory powers might be or were subordinated. It knew then that the President, through the Director General, was exercising the power to route freight, and that this necessarily included the power to change the rate to shippers. This regulatory power, if exercised, applied to both interstate and intrastate ship-
It is also worthy of consideration to note that under the state law (Comp. Laws 1913, art. 21, chap. 14) the railroad commissioners of the state simply review, investigate, or determine a rate theretofore established by the common carriers. Even under the state law the common carriers initiate a rate, except statutory prescribed maximum rates. The whole act looks to an -exercise of jurisdiction over a private corporation operating a railroad as a common carrier. Nor, either under the state act, or under the present Federal' act, can such private corporation, for instance, the defendant railroad herein, initiate a rate, or file a schedule ? How, further, under the state law, is any jurisdiction of any kind conferred over or concerning the President in the exercise of his power to prescribe rates ? Are we to understand from the majority opinion that it is now the duty of the private corporation owning the railroad, but not having the control or operation of the same, to initiate intrastate rates within the state, and the duty of the President to initiate' rates over the same railroad within the state upon interstate commerce ?
The opinion of Justice Robinson, by reason of which only the sanction of this court is given for a writ of mandamus herein, needs little comment. It contains no legal discussion. It gives no consideration to the war power of Congress or of the President, or of the necessities of this nation in a time of war to utilize, under the war power, every resource of man and property in the nation. It is merely a diatribe attempting to ridicule our Federal government for its action taken, and for its alleged lack of economy concerning the operation of railroads under Federal control in times of stress and of war necessity. It is rather unfortunate that it happens in this action, the court being so divided, that a writ of mandamus is awarded against our Federal government, based upon an opinion (which under the circumstances is the controlling
My views upon this matter are expressed in the following opinion prepared in advance of the majority opinions of the court now presented, and, to the view therein expressed, I still adhere. They are therefore hereinafter set forth:
This is an original proceeding instituted upon the relation of William Danger, the Attorney General, against the Northern Pacific Railway Company, and the Director General of Railroads, seeking a writ of mandamus from this court to enjoin the defendants from collecting or enforcing the schedule of freight rates, and passenger fares and charges promulgated, and put in force and operation by the Director General pursuant to general order No. 28, issued May 25, 1918, so far as the same applies to intrastate traffic in the state of North Dakota.
The petition of the relator in substance alleges:— That the President of the United States assumed control of the Railroad in question, under the Act of Congress, August 28, 1916.
That, pursuant thereto', on December 26, 1917, the President issued his proclamation for Federal control, and created the office of Director General to operate the railroads, and that they have been so operated through the Director General since January 1, 1918.
That on March 21, 1918, Congress'enacted the Federal Control Act, providing for the compensation, operation, and rehabilitation of transportation lines.
That on May 25, 1918, the Director General issued general order No. 28, whereby on June 10, 1918, certain increased passenger fares and •baggage charges, and on June 25, 1918, certain increased freight rates, were promulgated and put in force upon transportation lines, including the defendant railway company.
That, by reason thereof, freight rates in the state of North Dakota were increased 25 per cent and passenger rates from 2-J cents per mile to 3 cents per mile. That the Constitution of this state, § 82, provides for the election of a board of railway commissioners, and that such board always, in this state, has exercised supervision and control over transportation systems operating in and through the state as to intrastate rates •and service. That § 4725 Comp. Daws 1913, provides that no railway
The answer and return of the Director General admits that the railway company owns the transportation line involved, and that it is an instrumentality both of state and intrastate commerce; it specifically denies that the company has operated its system since December 25, 1917. It specifically alleges that the Director General has exercised possession and control over the transportation line involved pursuant to the acts of Congress’ and of the' President of the United States.. It specifically alleges that the Director General, pursuant to general order No. 28, put into full force and effect and applied the said schedule of rates and charges, and specifically denies that the railway company did put the same in force and effect to apply to intrastate business in North Dakota; it specifically alleges that on April 6, 1917, the Federal Congress declared a state of war to exist between the United States and the Imperial German Government; that pursuant to general order No. 28, the Director General, having duly filed the same with the intrastate Commerce Commission, made effective the increased rates, fares, and charges, provided in said order, between points in North Dakota as well as between other points along its line; and that the same are still in effect and force, and the transportation line in question has been and is now conducted, and the collection of such rates, fares, and charges has been made, by and in the name of the Director General of Railroads.
The railroad company interposed a separate answer, or return, alleg
Upon these pleadings of the parties, the only issues presented to this court are the questions of law that arise upon such pleadings. There is no question presented to this court for its determination as to whether the schedules in force are in fact excessive or unreasonable; nor is there any question presented of discriminatory acts by the Director General, or the railway company, in. operating the transportation line under general order No. 28. There is likewise no question presented to this court concerning its jurisdiction to grant the relief sought, so far as it might be contended that the acts in question are those of the Director General, and not those of the carrier, for the reason that the Director General expressly waive this question. The proceeding, therefore, is before this court upon its merits upon the sole question of law, to wit, the legal authority of the Director General of Railroads to maintain in force and effect the schedule of increased rates, charges, and fares promulgated upon and affecting intrastate traffic in the state, contrary to the law of the state, without the supervising control or direction of the board of railroad commissioners.
The century old controversy of the rights of Federal government and of the state in the exercising of their respective sovereign functions is again involved.
In determining the exercise of the power complained against herein, the following questions present themselves for consideration:—
(1) The power of Congress to authorize the Federal control and operation of the railway transportation lines as assumed.
(2) The authority of Congress to prescribe or regulate rates on such transportation systems so taken.
(3) Whether the power granted to the President to initiate rates is a delegation of legislative power.
(4:) Whether Congress, if it did possess such powers, expressly exercised the same to create a Federal agency for purposes of operation and rate making.
(6) Whether the emergency for which the Congressional acts were enacted has passed, and the powers conferred thereunder are now ineffective.
The legal consideration of these questions is determinative of the issue presented in this proceeding. They will therefore be considered separately.
1. The authority of Congress to assume control of transportation lines. — It will scarcely now be denied that Congress has the power to enact legislation to effect a governmental control over the transportation line involved. The state rather so-concedes the power. This power may be drawn from its powers, to declare war, raise and support armies and to make all laws necessary and proper therefor, or from the power to regulate interstate commerce, or even to establish post roads. Const, art. 1, § 8.
Concerning these war powers, in Stewart v. Kahn, 11 Wall. 493, 20 L. ed. 176, the court said:— “The Constitution gives to Congress the power to declare war; to grant letters of marque and reprisal, and to make rules concerning qaptures on land and water; to raise and support armies, to provide and maintain a navy, and to provide for calling forth the Militia to execute the laws of the Union, suppress insurrections, and repel invasions. The President is the Commander-in-Chief of the Army and Navy, and of the Militia of the several states, when called into the service of the United States; and it is made his duty to take care that the laws are faithfully executed. Congress is authorized to make all laws necessary and proper to carry into effect the granted powers. The measures to be taken in carrying on war and to suppress insurrection are not defined. The decision of all such questions rests wholly in the discretion of those to whom the substantial powers involved are confided by the Constitution.”
In Pappens v. United States, 164 C. C. A. 167, 252 Fed. 55, the court said: “The execution of these powers assigned to the national government came within the obligation or duties of Congress, and its control over the subject is plenary. Tarble’s Case, 13 Wall. 397, 20 L. ed.
Under tbe power to regulate interstate commerce or to establish post roads, Congress has undoubtedly the poAver to construct," maintain, or operate a transportation line.
In Wilson v. Shaw, 204 U. S. 24, 51 L. ed. 351, 27 Sup. Ct. Rep. 233, an action brought to restrain tbe Secretary of the Treasury from paying out money in tbe purchase of property for tbe construction of tbe Panama Canal, etc., tbe plaintiff contended that tbe government bad no authority to engage anywhere in tbe AA’ork of constructing a railway or canal. Justice Brewer, in bolding that tbe decisions of tbe court were to tbe contrary, quoted from California v. Central P. R. Co. 127 U. S. 1, 39, 32 L. ed. 150, 157, 2 Inters. Com. Rep. 153, 8 Sup. Ct. Rep. 1073, as follows: "It cannot at tbe present day be doubted that Congress, under tbe power to regulate commerce among tbe several states, as well as to provide for postal accommodations and military exigencies, bad authority to pass these laws. Tbe power to construct, or to authorize individuals or corporations to construct, national highways and bridges from state to state, is essential to tbe complete control and regulation of interstate commerce. Without authority in Congress to establish and maintain such highways and
So, in Luxton v. North River Bridge Co. 153 U. S. 525, 33 L. ed. 808, 14 Sup. Ct. Rep. 891, Justice Gray stated as follows: “Congress, therefore, may create corporations as appropriate means of executing the powers of government, as, for instance, a bank for the purpose of carrying on the fiscal operations of the United States, or a railroad corporation for the purpose of promoting commerce among the states. M’Culloch v. Maryland, 4 Wheat. 316, 411, 422, 4 L. ed. 579, 602, 605 ; Osborn v. Bank of United States, 9 Wheat. 738, 861, 873, 6 L. ed. 204, 233, 236; Pacific R. Removal Cases, 115 U. S. 1, 18, 29 L. ed. 319, 325, 5 Sup. Ct. Rep. 1113; California v. Central P. R. Co. 127 U. S. 1, 39, 32 L. ed. 150, 157, 2 Inters. Com. Rep. 153, 8 Sup. Ct. Rep. 1073. Congress has likewise the power, exercised early in this century by successive acts in the case of the Cumberland or National Road, from the Potomac across the Alleghenies to the Ohio, to authorize the construction of a public highway connecting several states. See Indiana v. United States, 148 U. S. 148, 37 L. ed. 401, 13 Sup. Ct. Rep. 564.”
Justiee Brewer, with reference to the contentions of the plaintiff that these decisions were obiter dicta, stated that plainly they were not; that they announced distinctly the opinion of the Supreme Court on the
Concerning the war powers, it is stated in Stewart v. Kahn, 11 Wall. 493, 20 L. ed. 176, as follows: “The Constitution gives to Congress the power to declare war; to grant letters of marque and reprisal; and to make rules concerning captures on land and water; to raise and support armies, to provide and maintain a navy, and to provide for calling forth the Militia to execute the laws of the Union, suppress insurrections, and repel invasions. The President is the commander in chief of the Army and Navy, and of the Militia of the several states, when called into the service of the United States, and it is made his duty to take care that the laws are faithfully executed. Congress is authorized to make all laws necessary and proper to carry into effect the granted powers. The measures to be taken in carrying on war and to suppress insurrections are not defined. The decision of all such questions rests wholly in the discretion of those to whom the substantial powers involved are confided by the Constitution.”
Concerning the authority of Congress to make all laws which will be necessary and proper to carry into execution the express powers granted, Chief Justice Marshall, in M’Culloch v. Maryland, 4 Wheat. 421, 4 L. ed. 605, stated: “But we think the sound construction of the Constitution must allow to the national legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.”
The United States district attorney for this state, of counsel for the Director General, contends that the President could have taken over the railroads, as a war measure, without any acts of Congress, and that the state cannot interefere with his management or use of the road.
Congress having ample constitutional powers concerning the subject-matter, it is unnecessary to consider the war power of the President to take such property without the authority of Congress. This question
2. The authority of Congress to prescribe or regulate rates on transportation systems. — Does Congress possess the constitutional power to fix or prescribe rates of Federal making which may supersede or subordinate intrastate rate regulations? A distinction may be drawn between the powers of rate making and of operation; they may be classed, in many respects, as separate and distinct functions. The power to operate, however, with respect to the efficiency of operation and the prompt movement of traffic, may depend largely upon the rate prescribed; the rate prescribed may facilitate, deter, or even prohibit the movement of certain traffic. Revenues, when dependent upon rate, may vitally affect the operation of transportation systems. If Congress possesses the power to control or operate a railroad transportation system, it must necessarily be conceded that it possesses, likewise, the power to prescribe or to fix a method of fixing rates to be charged for the service rendered in operating a governmental instrumentality. Whether this power flows from the exercise of- the constitutional war power, or from the exercise of the constitutional power to establish post roads, or regulate interstate commerce, in any case, the authority necessarily exists as essentially implied in the execution of the power. It exists, coneededly so, in the Federal operation of postoffices, and of the parcel post (Re Jackson, 96 U. S. 727, 24 L. ed. 877), in the control and management of the Panama canal (32 Stat. at L. 481, chap. 1302, 34 Stat. at L. 5, chap. 3, Comp. Stat. § 6827, 8 Fed. Stat. Anno. 2d ed. p. 416), and in various other Federal instrumentalities.
The question involved is not the power of regulation, but the power concerned with operation. The com-mpn-law obligation is imposed upon the common carrier to make charges reasonable and just. This obligation is subject to regulation by the sovereign power; the legislative sovereign will may prescribe this common-law obligation, a rule of conduct, and fix a rate. (Munn v. Illinois, 94 U. S. 113, 125, 24 L. ed. 77, 87). In the above case Justice Waite stated: “This brings us to inquire as to the principles upon which this power of regulation rests, in order that
When, however, the public itself, through its government, assumes management, or exercises a proprietary control over such property as an instrumentality or agency of the government, the very reason for the regulation disappears; there then exists a merger of the interests of the owner and his patrons. Then, in theory of law, the property, theretofore privately owned and operated but affected with a public interest, subject to regulation for the common good, is now operated and maintained as a governmental agency for the common good. The legislative will may then prescribe a rate for the governmental service to be rendered regardless of the common-law obligations of a common carrier; the exercise of such power becomes similar to the power to tax; the Federal Constitution does provide that duties, imposts, and excises shall be uniform; it contains no inhibition against discriminatory rates; the equality clause of the 14th Amendment applies to states only. It is therefore readily appreciated that the power of the states to prescribe or regulate the rates intrastate, of a common carrier privately owned and operated, is entirely different power than the power of the state to prescribe or regulate rates, upon or over a Federally owned or operated common carriel*. In observing the distinction, ^no one will contend that this state, under its right to regulate-rates, possesses any authority to regulate or review the charges-
In the Minnesota Rate Case (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18, the right of the state to exercise its regulatory powers over intrastate rates was expressly based upon the principle that Congress had not taken from the state this power. In the Shreveport Case (Houston, E. & W. T. R. Co. v. United States) 234 U. S. 342, 58 L. ed. 1341, 34 Sup. Ct. Rep. 833, the principle was recognized that Congress had paramount power with reference to interstate commerce and the regulation thereof, but that this did not mean that Congress possessed any authority to regulate .the internal affairs of a state.
Likewise, in the Keokuk Case (Illinois C. R. Co. v. Public Utilities Commission), 245 U. S. 493, 62 L. ed. 425, P.U.R.1918C, 1279, 38 Sup. Ct. Rep. 170, and in American Exp. Co. v. South Dakota, 244 U. S. 617, 61 L. ed. 1352, P.U.R.1917F, 45, 37 Sup. Ct. Rep. 656, the power of the Interstate Commerce Commission was restricted within the limits which require a definite showing of interference with the interstate rate prescribed.
Likewise, in the Union Pacific Cases, 9.Wall. 579, 19 L. ed. 792; 18 Wall. 5, 21 L. ed. 787, 3 Fed. 106; 29 Fed. 728, the right of the state to tax the property of the Union Pacific Railway Company, to subject its property to the right of eminent domain of the state, or to affect a physical connection with another railroad, was conceded upon the basic holding that such railway was a private corporation, with property of its own; and that it was not a Federal instrumentality, except as Congress had made it so for special purposes; and it not being shown that
It clearly follows, therefore, that under the Federal Constitution, and the interpretation made concerning the powers granted to Congress by the courts, Congress does possess the authority to prescribe the rate to be charged for services rendered by a common carrier as a Federal instrumentality.
3. The authority of Congress to delegate the raie-malcing power to the President. — It would seem to be obvious that if Congress had the power to prescribe a rate for service rendered by a government instrumentality, it possesses the right to prescribe the means by which it shall be determined. Heretofore it has constituted the Interstate Commerce Commission, as a body, to consider the reasonableness of service charges of common carriers in interstate commerce. This body has the power to determine whether a given or proposed rate is reasonable or discriminatory. Under the Act of August 10, 1917, Congress has imposed directly additional powers upon such Commission to grant preference on priority in transportation of traffic, and to fix just and reasonable rates for persons or property in carrying out the directions and orders of the President. This power, so given to the Commerce Commission, is, of course, not a delegation of legislative powei*. This power, of course, the Congress could impose upon the President or the Director General, as well as upon the Commission (Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co. 167 U. S. 479, 42 L. ed. 243, 17 Sup. Ct. Rep. 896). In United States v. Grimaud, 220 U. S. 506, 55 L. ed. 563, 31 Sup. Ct. Rep. 480, the court said, concerning the delegation of legislative power as follows:—
“From the beginning of the government, various acts have been passed conferring upon executive officers power to- make rules and regulations —not for tho government of their departments, but for administering the laws which did govern. None of these statutes could confer legislative power. But when Congress had legislated and indicated its will, it could give to those who were to act under such general provisions ‘power to fill up the details’ by the establishment of administrative rules and regulations, the violation of which could be punished by fine or imprisonment fixed by Congress, or by penalties fixed by Congress, or measured by the injury done
As heretofore discussed, the power to prescribe a service charge for a government instrumentality is not the common-law power of determining a reasonable charge; it is the sovereign power to prescribe the charge, or to fix the means of accomplishing the same. It is similar to the power to impose tariff duties; the right of the President to impose a tariff on wheat; it is analogous to the authority granted the President to fix the price of wheat under the food control acts. In fact, under present war measures many similar duties have been imposed or conferred upon the President, viz., freight rates on vessels. Act, July 18, 1918.
4. Whether Congress, if it did possess such powers, expressly exercised the same to create a Federal agency for purposes of operation and rate making. — The Act of August 29, 1916 (39 Stat. at L. 645, chap. 418, Comp. Stat. § 1974a, 9 Fed. Stat. Anno. 2d ed. p. 1095) provides: “The President, in time of war, is empowered, through the Secretary of War, to take possession and assume control of any system or systems of transportation, or any part thereof, and to utilize the same, to the exclusion as far as may be necessary of all other traffic thereon, for the trans? fer or transportation of troops, war material and equipment, or for such other purposes connected with the emergency as may be needful or desirable.”
It is apparent that Congress by this act intended to exercise and did exercise its war power. The paragraph in question was incorporated into the Army Appropriation Act; evidently the enactment was intended to provide for our troops in Mexico, and to provide full authority in the President in case of any difficulties with Mexico. Unquestionably, it gave to the President the direct authority in time of war, to take possession and assume control of the transportation lines involved.
On April 6, 1917, a state of war was formally declared to exist by Congress, between the United States and the Imperial German Government. On December 7, 1917, Congress authorized and directed the President to employ the entire naval and military resources of the United States, and the other resources of the United States, to carry on the war, and to bring the conflict to a successful determination. On December 28, 1917, the President of the United States, pursuant to the Act of August 29, 1916, and the resolutions of Congress declaring war on Germany and the Austro-Hungarian government, did take possession and assume control of transportation lines, including the transportation line involved herein; and he expressly directed that the possession, control, operation, and utilization of such systems of transportation should be exercised through the Director General. His proclamation further provided that such systems should be utilized for the transferring and trans
Under this proclamation and the authority theretofore conferred, the possession and control of railways, as outlined in the proclamation, was taken. It can scarcely be contended that the President did not properly determine an urgency and immediate necessity for so doing. By this act of the President the private property of the carriers became subject to the public use required to meet the public necessities then existing. Under this assumption of power the transportation systems passed under governmental operation. There can be little question that then and there they became Federal instrumentalities to the extent of the purpose for which control and possession of the same were taken. As such, in operation in the manner in which the trains should be operated, traffic should be handled, passengers carried, merchandise transported, they became subject to the orders of the Director General, and, in so far as any statute of any state or of any order of any railroad commission of any state served to prescribe otherwise, or was in contravention thereof, the same was subordinated or suspended. These principles obtain not only from the nature of the power conferred upon the Federal government to carry on war, but also from the reciprocal duty of the states to aid and assist the Federal government, in times of war, by subordinating every state agency which may serve to interfere with the successful prosecution of the war, and of the enforcement of the war powers. Under this act, providing the assumption of control, there was no attempt to legislate or exercise the rate-making power. - —
“Said rates, fares, charges, classifications, regulations, and practices shall be reasonable and just and shall take effect at such time and upon such notice as he may direct, but the Interstate Commerce Commission shall, upon complaint, enter upon a hearing concerning the justness and reasonableness of so much of any order of the President as establishes or changes any rate, fare, charge, classification, regulation, or practice of any carrier under Federal control, and may consider all the facts and circumstances existing at the time of the making of the same. In determining any question concerning any such rates, fares, charges,
“After full hearing the Commission may make such findings and orders as are authorized by the Act to Regulate Commerce as amended, and said findings and orders shall be enforced as provided in said act: Provided, however, that when the President shall find and certify to the Interstate Commerce Commission that in order to defray the expenses of Federal control and operation fairly chargeable to railway operating expenses, and also to pay railway tax accruals other than war taxes, net rents for joint facilities and equipment, and compensation to the carriers, operating as a unit, it is necessary to increase the railway operating revenues, the Interstate Commerce Commission in determining the justness and reasonableness of any rate, fare, charge, classification, regulation, or practice shall take into consideration said finding and certificate by the President, together with such recommendations as he may make.” [40 Stat. at L. 456, chap. 25, Comp. Stat. § 3115# j, Fed. Stat. Anno. Supp. 1918, p. 763.]
The act also provides the sum of $500,000,000 of Federal moneys, which, together with the funds available from operating income, shall, be used as a revolving fund for the purpose of paying the expenses of Federal control, and compensation to carriers, and providing equipment, etc., and further that moneys and other properties derived from the operation of the carriers during the Federal control are declared to be Federal property. The act further provides that this Federal control shall continue for and during the period of the war, and for a reasonable time thereafter, not exceeding one year and nine months after the date of the proclamation by the President of the exchange of ratifications of the Treaty of Peace. It grants, however, to the President the right to relinquish Federal control at any time he should deem such action needful, or desirable. This act is-expressly declared to be an emergency declaration enacted to meet conditions growing out of the war.
It is at once seen that this act directly authorizes the exercise of the rate-making power by the President over transportation lines under Federal control. There can be no question of the intent and purpose of Congress to do so from the very express words of the act. A means and
It may perhaps be contended that the act granting the power to initiate rates, and providing that they shall be just and reasonable and subject to review or consideration by the Interstate Commerce Commission, is drafted analogously to the Interstate Commerce Act, creating and defining the powers of the Interstate Commerce Commission in the investigation and determination of the reasonableness of rates in interstate commerce. That such act simply incorporated the common-law obligation imposed upon common carriers to make all rates reasonable and just, and that the power of the Commission has been confined by the act and by the decisions of the courts to a determination of the reasonableness and the equality of a given rate. That the power to prescribe a rate is a legislative function; the power to determine its reasonableness, a judicial function; that under the Commerce Act the railways were authorized to initiate rates in interstate commerce, Congress not attempting to prescribe a rate, but providing a method for investigating and determining the reasonableness or discriminatory character of the same through the Commission; that, in the act in question, Congress has not attempted to prescribe a rate, but has simply transferred from the railways to the President the power to initiate a rate, and has left with the Commerce Commission the power therefore possessed to determine its reasonableness; that.this displays an intent and understanding to apply the same to interstate commerce, alone over which the Commerce Commission alone has jurisdiction. This contention, somewhat plausible from the analogous means used in the Commerce Act and the Act of March 21, 1918, to initiate and determine rate over common carriers, is to be answered not by a comparison alone of similar language used, but through the intent and purpose of the act in connection with the emergency war situation existing and the public needs and demands occasioned thereby.
It does not follow that Congress simply intended to prescribe legislation for initiating rates, applicable only as interstate, upon a Federal instrumentality, because it constituted as board of review, to act with the President, the Commerce Commission, whose powers theretofore were confined to a determination of the common-law obligation of common carriers.
The Act of March 21, 1918, specifically provides for a method of
The intent and purpose of the Director General in this regard is well shown in the preamble to general order No. 28, which reads as follows:
“General Order No. 28.”
“Whereas it has been found and is hereby certified to the Interstate Commerce Commission that, in order to defray expenses of Federal control and operation fairly chargeable to railway operating expenses, and also to pay railway tax accruals other than war taxes, net rents for joint facilities and equipment, and compensation to the carriers, operating as a unit, it is necessary to increase the railway operating revenues, and
“Whereas the public interest requires that a general advance in all
“Now, therefore, under and by virtue of the provisions of the said Act of March 21, 1918, it is ordered that all existing freight rates, passenger fares, and baggage charges, including changes heretofore published but not yet effective, on all traffic carried by all said railroads and steamship lines, under Federal control, whether the same be carried entirely by railroad, entirely by water, or partly by railroad and partly by water, except traffic carried entirely by water to and from foreign countries, be increased or modified, effective June 25, 1918, as to freight rates and effective June 10, 1918, as to passenger fares and baggage charges, to the extent and in the manner indicated and set forth in the exhibits hereto attached and made a part thereof, by filing schedules with the Interstate Commerce Commission, effective on not less than one day’s notice.
“Given under my hand this 25th day of May, 1918.
. “W. G. McAdoo,
j ■ “Director General of Railroads.”
Furthermore, during the continuance of the war, under the Act of August 10, 1917, heretofore mentioned, powers and duties have been imposed upon the Interstate Commerce Commission, in connection with these war powers of the President, apparently beyond their ordinary powers of determining the reasonableness or equality of rates of common carriers privately owned and operated.
It is apparent that this act directly authorizes the exercise of the rate-making power by the President over transportation lines under Federal control. A means and a method is prescribed for fixing rates to be charged through the agency of the President and the already established Interstate Commerce Commission.
In either case, the considerations that obtain concerning the common-law obligation of carriers to maintain a just and reasonable rate do not apply.
It is also evident that the President through the Director General, pursuant to general order No. 28, has exercised this specific power granted to him, and for the purposes, in part at least, as above stated. The order has been made applicable to all interstate and intrastate traffic under Federal control. There is no difficulty in understanding the meaning and intent of the order.
In our opinion, for the purposes of war, and the legislation enacted to enable the President to perform the high duties of his office, to carry the war to a successful determination,, he possessed the specific power and authority to prescribe and make effective the rates promulgated in such general order.
5. The power of the state to exercise the rate-malcing power over intranstate traffic upon railways under Federal control. — Sec. 15 of the Act of Congress of March 21, 1918, provides as follows: “That nothing in this act shall be construed to amend, repeal, impair or affect the existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transportation of troops, war materials, government supplies, or the issue of stocks and bonds.” [40 Stat. at L. 458, chap. 25, Comp. Stat. § 3115f o, Fed. Stat. Anno. Supp. 1918, p. 765.]
It is inconceivable that at a time when every resource and energy of the nation was absolutely necessary to be devoted to our Federal government in order to enable it to marshal every resource of man and property to carry on the war successfully, that the state, in the exercise of a so-termed police regulation, had the power or the authority to prescribe a rate that might obtain over a governmental controlled railway between two points in the state, or to assert, under its existing laws, what merchandise should be carried and when it should be transported, or that it should compel, under its existing laws, a particular service to passengers or to property that might be detrimental or contrary to the Federal demands. If this authority or power of the state did not exist at times when the war was at its height, it does not exist now, unless the emergency situation created by the act of Congress has, in fact, passed.
Even though, as contended, it be conceded that the exercise of the rate-making power of the state is a lawful police regulation of the state, and as such applicable under § 15 of said act, to intrastate traffic, nevertheless, such police regulations may well be considered, in view of his proclamation and the terms of the general order issued, disclosing and determining an emergency in war times to exist, to affect the transportation of troops, war materials, government supplies, or the issue of stocks and bonds.
"Well might the regulatory power of the state concerning rates apply on intrastate traffic, if the President, pursuant to the powers granted to him, had deemed it unnecessary to initiate or prescribe a rate to apply to railroads under such Federal control.
6. Whether the emergency for which the Congressional acts were enacted has passed and the powers conferred thereunder are now ineffective. —The state contends that what Congress delegated as a war-time necessity has quite another aspect when that emergency has passed. That the war emergency has passed; that President Wilson in an official address on November 11, 1918, told Congress that the war was in fact concluded; that he then said: “The war thus comes to an end; for having accepted these terms of armistice, it will be impossible for the German command to renew it.” That the war has in fact ended; that the armistice accepted by the central powers amounted to an unconditional surrender, and the necessity for government rail control as a war measure has passed away.
Upon the legal issues presented to this court and the showing made therefrom, we are convinced that this contention cannot be upheld; there is no showing made to this court that governmental operation is not still urgently needed in the demobilization of troops, the maintenance of the armistice terms, the transportation of government materials and supplies, and in the governmental problems involved in the establishment of peace and normal conditions following the actual cessation of hostilities.
In Stewart v. Kahn, 11 Wall. 493, 20 L. ed. 116, the court said: “The measures to be taken in carrying on war and to suppress insurrections are not defined. The decision of all such questions rests wholly in the discretion of those to whom the substantial powers involved are confided by the Constitution. In the latter case the power is not limited to victories in the field and the dispersion of the insurgent forces. It carries with it inherently the power to guard against' the immediate renewal of the conflict and to remedy the evils which have arisen from its rise and progress.”
It therefore follows that the petition of the relator herein should in all thing's be dismissed.
