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The complaint in this case was that the defendants charged lower rates from American ports to interior points of destination, on traffic originating in Europe, than were charged at the same time on similar traffic originating at the same American ports and carried by the same routes to the same destinations. The question, therefore, was whether the fact of foreign origin constituted a dissimilar circumstance or condition, in the contemplation of the Act to regulate commerce, and thus justified the difference in charges. The Commission held, in substance, that while the law confers authority over import traffic that authority does not extend to the regulation of the rates charged from the foreign port to the American port, but attaches solely to the inland carriage and that, as to the inland carriage, the law does not recognize any dissimilarity of conditions growing out of the foreign origin of the traffic. In other words both imported and domestic traffic, regardless of whether the former is or is not carried on a through bill-of-lading from the foreign port of origin to the American interior point of destination, must be carried from American ports to inland points at equal rates. As it appeared from the record that several of the carriers who were parties defendant before the Commission, had ceased, prior to the Commission's decision, to charge less for import traffic, the case was dismissed as to all such carriers and the final order was directed against only The Texas & Pacific, Southern Pacific, Northern Pacific, Lehigh Valley, Canadian Pacific, and a few other railways. Subsequently proceedings were begun by the Interstate Commerce Commission to enforce its order against the Texas and Pacific Railway. A decree requiring obedience to the Commission's order was issued by the Circuit Court and affirmed, on appeal, by the Circuit Court of Appeals, although the latter apparently doubted the validity of the Commission's conclusion that
foreign and home merchandise, under the operation of the statute, when handled and transported by interstate carriers, engaged in carriage in the United States, stand exactly upon the same basis of equality as to tolls, rates, charges, and treatment for similar services rendered."
Upon this point Judge Shipman, in rendering the opinion of the Circuit Court of Appeals, said:
“This rule, having been founded upon a construction of the statute, is a very broad one. It is applicable to all the foreign circumstances and conditions which affect rates, and the question whether it must be universally applied without regard to any circumstances which may exist in a foreign country, and whether dissimilarities which have a foreign origin are to be excluded from consideration under the operation of the statue, is an exceedingly important one, whose ultimate decision may have a wider influence upon the interstate commerce of the country than we can foresee. This legal question was not discussed in the export rate case, which was treated as one of practical policy.' this ques
We are not disposed to pass authoritatively upon tion, except in a case which demands it, and in which the effect of this construction of the statute is naturally the subject of discussion. This petition presents a question of narrow limits, which relates only to the validity of the order so far forth as it concerns the conduct of the defendant in its joint rates for transportation of imported traffic from New Orleans to San Francisco, and is whether these rates subject domestic traffic between the same points to an undue disadvantage.”
The Supreme Court reversed the action of the lower Federal courts and remanded the case to the Circuit Court with directions to dismiss the Commission's petition. The opinion of the Supreme Court was prepared by Judge Shiras. The conclusions of the Commission are criticised on the ground that:
“The Commission justified its action wholly upon the construction put by it on the Act to regulate commerce, as forbidding the Commission to consider the circumstances and conditions' attendant upon the foreign traffic as such 'circumstances and conditions' as they are directed in the Act to consider. The Commission
The Commission thought it was constrained by the Act to regard foreign and domestic traffic as like kinds of traffic under substantially similar circumstances and conditions, and that the action of the defendant company in procuring through traffic that would, except for the through rates, not reach the port of New Orleans, and in taking its pro rata share of such rates, was an act of ‘unjust discrimination,' within the meaning of the Act.”
Continuing, the Court said that in construing the Act as indicated by the foregoing the Commission erred and, in another place, it said that “it would be difficult to use language more unmistakably signifying" the precise opposite of the construction followed by the Commission. In one paragraph the court characterized the order of the Commission as an effort to deprive inland consumers of the advantage of through rates, saying:
“The effort of the Commission, by a rigid general order, to deprive the inland consumers of the advantage of through rates, and to thus give an advantage to the traders and manufacturers of the large seaboard cities, seems to create the very mischief which it was one of the objects of the Act to remedy.”
The broad view of the Supreme Court, throughout this decision, is in striking contrast to the narrow and rigid interpretation of the law adopted by the Commission. Witness the following from the Court:
“As we have already said, it could not be supposed that Congress, in regulating commerce, would intend to forbid or destroy an existing branch of commerce, of value to the common carriers and to the consumers within the United States. Clearly, express language must be used in the Act to justify such a supposition.
'So far from finding such language, we read the Act in question to direct the Commission, when asked to find a common carrier guilty of a disregard of the Act, to take into consideration all the facts of the given case—among which are to be considered the welfare and advantage of the common carrier, and of the great body of the citizens of the United States who constitute the consumers and recipients of the merchandise carried; and that the attention of the Commission is not to be confined to the advantage of shippers and merchants who deal at or near the ports of the United States, in articles of domestic production. Undoubtedly the latter are likewise entitled to be considered; but we cannot concede that the Commission is shut up by the terms of this Act to solely regard the complaints of one class of the community. We think that Congress has here pointed out that, in considering questions of this sort, the Commission is not only to consider the wishes and interests of the shippers and merchants of large cities, but to consider also the desire and advantage of the carriers in securing special forms of traffic, and the interest of the public that the carriers should secure that traffic, rather than abandon it, or not attempt to secure it. It is self-evident that many cases may and do arise where, although the object of the carriers is to secure the traffic for their own purposes and upon their own lines, yet, nevertheless, the very fact that they seek, by the charges they make, to secure it, operates in the interests of the public.”