boundaries of the Standard Time Zones. The investigations into the financial management of the Pere Marquette, the Louisville & Nashville and the New Haven were also made in conformity with resolutions of Congress. The disclosure of these investigations and the recommendations outlined in the Commission's reports have frequently been used by Congress as a basis for further legislation.

The proceeding of greatest financial magnitude which has been concluded by the Commission in recent years was the proceeding known as Increased Rates, 1920, "Ex Parte 74," 1 in which the Commission authorized, among other things, the increase in interstate passenger fares throughout the country of 20 per cent with increases in freight rates varying from 25 to 40 per cent in different parts of the United States. The hearing on this matter was conducted in Washington before the full membership of the Commission, and all parties interested were given an opportunity to present their evidence, submit briefs and be heard upon oral argument. During the hearing the Commission was assisted by a staff of experts who compiled material and analyzed the data as presented. The hearing began on May 24, 1920, and ended on July 2, 1920. The taking of the testimony covered 27 full days. The record was, therefore, a voluminous one, consisting of 42 bound volumes, aggregating five thousand typewritten pages. Evidence was presented by the railroad companies which sought to increase their rates, by interested shippers and shippers' organizations, by state commissions and other public authorities. Over two hundred appearances of counsel for interested parties are set forth in the Commission's report. At the conclusion of the evidence many parties availed themselves of the opportunity of filing printed briefs and of being heard orally before the Commission, four days being set aside for oral presentation. Thereafter the commissioners met in conference to discuss the evidence and arguments. Commissioner Hall, in testimony before the Senate Committee on Interstate and Foreign Commerce, stated that 13 full days were thus devoted by all the commissioners to conference upon the evidence. These conferences continued until July 29, 1920, by which time a report had been drafted and sent to the public printer. The report was released for publica158 I. C. C. 220.

tion on July 31, 1920.1 This illustrates the nature of the proceedings by the Commission in conducting general investigations.

The special proceedings are frequently of an ex parte nature. They concern such matters as carriers' requests for authority to build new railroads or to abandon others, to issue securities, and to do other acts of a similar nature which are subject to public supervision. They are generally conducted before bureaus of the Commission. The Commission has promulgated a variety of forms upon which these applications must be submitted, together with an outline of the detailed facts which it requires in passing upon the matter. These instructions, issued by the Commission, must be complied with, but otherwise each of the matters of this character is dealt with largely as a matter of office routine, unless the state authorities or interested persons or localities oppose the granting of the applications. Where it appears that a certain portion of the public represented by regularly constituted authorities is interested, notice is given to them extending the right to be heard. Proceedings of this nature do not in general adopt the formal character of the formal complaints or general investigations. In the formal complaint cases and general investigations, however, when the Commission acts in its quasi-judicial. capacity, compliance with rules of evidence is important. In a special proceeding it is generally acting as an administrative agency of the government. The essence of the difference lies here. In addition to its functions in determining matters of the character outlined, the Commission also has certain duties in respect to the enforcement of criminal statutes. These also are administrative responsibilities. In such cases the actions are not brought by the Interstate Commerce Commission, but by the Attorney General of the United States, or his representative, in the name of the United States. The duty of the Commission in respect to them is to investigate, to report apparent violations to the Attorney General or his subordinates, and to assist in the prosecution.

Thus it is disclosed that practice before regulatory commissions covers a wide range of subjects, in its fullest implications, the whole field of railroad management, service and rate making.

'Hearings, Senate Committee on Interstate and Foreign Commerce, on Senate Bills 1150 and 2510, 67th Cong., 1st Sess., p. 675.

The practice is technical because of the nature of the subject matter and in spite of the fundamental desire for informality and the happy avoidance of the restricted rules of traditional procedure. Successful practice before regulatory commissions, therefore, requires not merely a knowledge of the statutes under which the commissions function, but also a comprehensive knowledge of the prior decisions and adjudications of these regulatory bodies. An ability to deal with statistical matter, to analyze it, and to supervise its preparation, is required, together with an understanding of the development of railroad growth and operation in the United States, in relation to the problems of regulation. He is best able to present a successful argument in a particular controversy who is best acquainted with the present and past operations and financial management of railroad companies in this country.

CHAPTER IV

THE COMMISSIONS AND THE COURTS

Section 1. The Function of the Court in Regulation, 41-Sec. 2. Defined Powers of Commissions, 42-Sec. 3. The Abilene Case, 44-Sec. 4. Constitutionality of State Laws, 45-Sec. 5. The Confiscation Doctrine, 46 -Sec. 6. State and Federal Powers, 47-Sec. 7. The Review of Orders, 51-Sec. 8. The Enforcement of Orders, 52-Sec. 9. Reparation under the Interstate Commerce Act, 52.

§ 1. The commission form of railroad regulation has not developed without interference from the courts. But, from the outset, the interference has been limited in scope. The courts have refused to substitute their judgment on questions of fact for that of the administrative tribunals set up by the states and the nation to deal particularly with railroad matters. The reason is not hard to find. Decisions of these commissions possess "the strength due to the judgments of a tribunal appointed by law and informed by experience." As a practical matter, this attitude means that the conclusions of a commission on questions of fact, such as the reasonableness of rates or the existence of unjust discrimination, are accepted as final when supported by evidence and when not made under a mistake of law. The courts consistently refuse to re-examine the facts further than to determine whether or not there was substantial evidence in the record to sustain the order. The Supreme Court recently reaffirmed this attitude in graphic language: "A tribunal such as the Interstate Commerce Commission, expert in matters of rate regulation, may be presumed to be able to draw inferences that are not obvious to others." 3

But, while leaving to the special administrative tribunals exclusive jurisdiction over the technical matters of railroad regula

1 Illinois Central R. R. Co. v. I. C. C., 206 U. S. 441, 454.

3

I. C. C. v. U. P. R. R. Co., 222 U. S. 541, 547.

O'Keefe v. United States, 240 U. S. 294, 303. In Seaboard Air Line Ry. Co. v. U. S., 254 U. S. 57, the Supreme Court said: "Moreover the

tion, the courts have still had much important work to perform in relation to the general subject matter of railroad regulation. This work falls into four groups:

1. The interpretation of legislative acts creating the commissions and defining their powers;

2. The decision of issues of constitutional law in which the legality of the legislation whether state or national is questioned, or in which the respective powers of the state and Federal governments require definition;

3. The review of commission orders attacked as in violation of the Constitution, as beyond the commissions' statutory power, or as made arbitrarily without substantial evidence to support them;

4. The enforcement of valid orders of a commission, including, in the case of the national government, enforcement of reparation awards, against recalcitrant carriers.

The function of the courts in determining the scope and meaning of regulatory statutes is based upon the principle that a regulatory commission is a creature of statute and that the extent of its authority is to be determined by a strict construction of that statute. No powers will be implied unless clearly necessary to effectuate the expressed intention of the legislators as declared in the statute. The powers and duties of a commission are only those defined by law, and, when questions of definition arise, they must finally be determined by the courts.

§ 2. Few legislative acts are so clear and unambiguous as to preclude controversy over their interpretation. Neither the Interstate Commerce Act, nor any of the acts creating the state commissions, are exceptions to this rule. The use of such general terms as "reasonableness," "undue preference," and "unjust discrimination" has thrown open for discussion all sorts of questions of interpretation. Many of the prohibitions of these regulatory acts are couched in language which provides anything but a definite yardstick. In addition to this, it could not be expected that any set of draftsmen could prepare legislation of so novel and determination of questions of fact is by law imposed upon the Commission, a body created by statute for the consideration of this and like matters. The findings of fact by the Commission upon such questions can be disturbed by judicial decree only in cases where their action is arbitrary or transcends the legitimate bounds of their authority."