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the United States and of the national defense. * * * * The Congress went further and, in formulating a ratemaking role for motor carriers, instructed the Commission in the exercise of its power to fix just and reasonable rates, to give due consideration, a-bag other factors to the inherent advantages of transpor tation by surb carriers to the effect of rates upon the movement of tra.De dy suck carriers. * *** Aud fiaa.ly the Congress added the fożlowing proviso to the antipreference section in the Motor Carrier Att.
"Prorided, houerer, Tłat this paragraph shall not be construed to apply to discriminations, prejudice, or disadvantage to the trate of any other crrier of whatever description.***
Five years later came the Transportation Act of 1940, and the opponents of water-carrier regulation employed the same argument. They were convinced that, with railroad support, the ICC would be inclined to overlook the inherent adrantages of water
transportation and regulate the water carriers in the interest of the railroads. There was some sympathy for this point of view in the Congress W.at u ese Members of Congress insisted upon was assurance that rates of water carriers would not be controlied—under the guise of developing, coordinatiog, and preserving a national transportation system” in accordance with the national transportation policy—in the interest of the railroads, and they de manded specifi, provisions which would require the Commission to forget about other forus ví transportation when passing on rates for water carriage and to guard the interent advantages of that form of transportation.
But not only did the Members of Congress demand such assurances, they received them in the form of specific statutory provisions."
At the time the Transportation Act of 1940 was in conference, there was added to the ratemaking rule in each of the three parts of the act the italicized phrase quoted below:
1 Sec. 202 (a), Motor Carrier Act of 1935.
* Sec. 216 . Motor Carrier Aet of 1935. Emphasis ours. At that time, the ratemaking rule which governed the railroads (see. 15a) provided that in the exercise of the Colciss.on's power to prescribe just and reasonable rates it shall give due consideration, among other factors, to the effect of rates on the movement of traffic. The addition of the phrase by the carrier or carriers for which the rates are preseribed" came later with the Transportation Act of 1940.
* See. 216 id). Motor Carrier Act of 1935. A similar proriso was added to see. 3 (1) which is the antipreference governing the railroads in the Transportation Act of 1940.
* The bill that ultimates became the Transportation Act of 1940 was S. 2009, which was first passed in differing versions by toth Houses in 1939, but not passed in its final form until 1910.
$ The following appears as footnote 7 to the dissenting opinion of Mr. Justice Black in Interstate Commerce Commission . Inland Waterways Corp., 319 T. S. 671 (1943), at p. EPS;
"Legislation similar in purpose to the 1910 act was considered by congressional committees in the 74th and subsequent Congresses. Opposition to legislation giving the Commission authority orer water transportation came from representatives of the water shiplers. A typical protest was made by Cleveland A. Newton, general counsel, Mississippi Valley Association, in the bearings before the Committee on Merchant Marine and Fisheries, House of Representatives, 74th Cong., 2d sess., on H. R. 5379: This bill if enacted into law will place water carriers along the coast and upon our inland rivers under the absolute domination and control of the Interstate Commerce Commission. That Commission was created to regulate, conserve, and control railways. It is a railway-regulating agency. It naturaly has the railway viewpoint, and past experience convinces us that the Commis sion, as now constituted, is railway-minded and that it would not be in the public interest to place water services under its domination and control. *** We have observed the performance of the Commission in the past, under a comprehensive declaration of policy enacted by Congress, and that experience, we regret to say, has not inspired confidence." Hearings, p. 471.
«Se for example, the minority views of two members of the House Committee on Interstate and Foreign Commerce as accompanying the majority report No. 1217, Transportation Act of 1939. 76th Cong., 1st sess., at pp. 29-31.
7 "Mr. LUCAS. Under the bill, as I understand it, the Interstate Commerce Commission would have the power, and it would be its duty, to fix rates on the Illinois River with respect to the transportation of that wheat and corn, Would it be possible for the Interstate Commerce Commission to fix the rate the same as the railroad rate from that point to St. Louis?
"Mr. WHEELER. Not if the Commission does its duty, because the bill specifically provides that it must take into consideration the inherent adrantages of the water carrier. Everyone agrees that goods can be shipped more cheaply by water than by rail." 84 Congressional Record 5579,
The following Senators and Representatives, among others, either required assurance that the Commission would not discriminate against water carriers or expressed the eonviction that under the statement of policy, the Commission would be unable to discriminate against water carriers : Senators Austin, Clark of Missouri, Connally, Ellender, Lucas, Miller, MeNary, Norris. Pepser. Shipstead, Truman, and Wheeler ; Representatives Bland, Bulwinkle, Crosser, Culkin,
Halleck, Lea, Pierce of Oregon, Sparkman, and Wadsworth. Pt. I, sec. 15 (2): pt. II, see. 216 (i): and pt. III, sec. 307 (f). See S. Rept. 133, 76th Cong., 1st sess., May 16, 1939, at pp. 2-3.
“In the exercise of its power to prescribe just and reasonable rates * * * the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic by the carrier or carriers for which the rates are prescribed. * * *” The addition of this qualifying phrase was regarded as having real significance. As explained in the report of the Senate Committee on Interstate Commerce: “The ratemaking rule has been amended to expressly provide adequate safeguards for the public, and at the same time the Commission is directed in prescribing a rate to consider its effect on the movement of traffic only by the particular type of carrier for which the rate is prescribed. That is, in preScribing a rate for water carriers the Commission will not consider the effect of that rate on the movement of traffic by either rail or motor carriers.” " And as stated in the conference report concerning the same legislation: “This rule of ratemaking for water transportation is wholly inconsistent with the theory that the Commission might prescribe an unreasonable rate for a water carrier for the purpose of forcing its traffic to a competing carrier.”” Moreover in connection with the same legislation, the Congress adopted the same proviso (excepting discrimination to the traffic “of any other carrier of whatever discrimination”) as it had previously enacted for motor carriers and made it equally applicable to the antipreference provisions governing water carriers (and railroad).” Professor Oppenheim in his book, The National Transportation Policy and Inter-Carrier Competitive Rates (1945), states, at p. 51: “Both amendments grew out of the insistent demands of the water carriers for safeguards against nullification of their inherent advantages by forcing their rates to the level of competing rail rates. Fear was expressed that, by reason of its background of railroad regulation, the Commission might administer the act in a manner that would permit the railroads to achieve their purported aim of preventing differential lower rates for competing forms of transport.” To summarize the regulatory pattern thus established : When the motor carriers came under regulation in 1935 it was affirmatively provided that this would be performed in the light of motor carrier conditions—not railroad conditions. Twice were the motor carriers protected in the exercise of their inherent advantages—once in a separate policy declaration and again in a special ratemaking rule—and it was specified that they could not be guilty of discrimination against “the traffic of any other carrier of whatever description.” Later, when the water carriers came under regulation, essentially the same safeguards were employed, and in addition the water carriers got the benefit of a special lule to protect them when competing with railroads. The pertinent part of section 305 (c) reads: “Differences in the classifications, rates, fares, charges, rules, regulations, and practices of a water carrier in respect of water transportation from those in effect by a rail carrier with respect to rail transportation shall not be deemed to constitute unjust discrimination, prejudice, or disadvantage, or an unfair or destructive competitive practice, within the meaning of any proVision of this act.” So much for the legislative intent that neither the rates of motor carriers nor the rates of water carriers should be regulated in the interest of the railroads. We come next to the point, how did the Congress intend that railroad rates should be regulated? Did it intend that they should be regulated in the interest of either the water carriers or the motor carriers, or did it intend that they should be treated in exactly the same way as it had provided for the rates of these competing forms of transportation? The answer is clear.
9 Rept. No. 433, Senate Committee on Interstate Commerce, Transportation Act of 1939, 76th Cong., 1st sess., at p. 2.
10 IRept. No. 2016, House of Representatives, Transportation Act of 1940, 76th Cong., 3d sess... at p. 82.
11 Proviso reading :
“Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.” 30." ome proviso is found in pt. I, sec. 3 (1) ; pt. II, sec. 216 (d) ; and pt. III, sec.
In 1910 the same national transportation policy was made applicable to the regulation of the railroads as to the regulation of the motor carriers and the water carriers, and the Congress, in providing “for fair and impartial regulation of all modes of transportation subject to the provisions” of the Interstate Commerce Act, called upon the Commission so to administer it "an to recognize and preserve the inherent advantages of each ; * * *.” Moreover, in 1940 the same proviso as had originally been made to the antipreference provisions of the Motor Carrier Act of 1935 was added to the comparable provision for railroads (sec. 3 (1)). And finally, the ratermaking rule for railroad rates (sec. 15a) was made subject to the same qualification as added to the rate-making rules governing motor and water carriers, and the Commission was instructed, in the exercise of its power to prescribe just and reasonable railroad rates, to consider, among other factors, “the effect of rates on the movement of traffic” but only “by the carrier or carriers for which the rates are prescribed.” That railroad rates were not to be regulated in the interest of motor or water carriers—any more than motor or water carrier rates were to be regulated in the interest of railroads—becomes evident when statements made during the vourse of the debate in the Congress are recalled. In its report on S. 2009 (which later became the Transportation Act of 1940) the Senate committee said (S. Rept. 433, 76th Cong. 1st sess., May 16, 1939, at \p, 2-8), l “The ratemaking rule has been amended to expressly provide adequate safeguards for the public, and at the same time the Commission is directed in prescribing a rate to consider its effect on the movement of traffic only by the particular type of carrier for which the rate is prescribed. That is, in prescribing a rate for water carriers the Commission will not consider the effect of that rate on the movement of traffic by either rail or motor carriers * * *. “For many years it has been the view of keen students of the transportation problem that there has been no consistent national policy with respect thereto. One reason urged in support of that view is that while the principal haulers of traffic and passengers, the railroads, have long been strictly regulated—as have, since 1935, motortrucks and buses engaged in interstate transportation— other forms of transportation are developed at public expense and without supervisory regulation. The net result of such a policy is inequality between various forms of transportation. As has been so often said, in 1887, when the original act to regulate commerce was passed, directed to correct abuses by railroads, the railroads had a monopoly on transportation. In later years competing forms of transportation have developed with such rapidity that no one now urges that there is any such monopoly. The railroads at first refused to treat these competing forms of transportation, particularly by motor, seriously, and it was not until after much of their traffic and many of their passengers had been lured away that the railroads took drastic steps to recover the lost business, The sum and substance of the matter is that at the present time there is a plethora of transportation facilities, and under these circumstances it becomes apparent that some tribunal must be empowered with the authority to determine into what particular niche each form of transportation is best fitted, and to discourage other forms of transportation from entering therein. M, Q000 weeks to do this. It has also been urged, and it seems sound, that there is no equality in treatment when the railroads, and lately the motor vehicles, are strictly regulated, and other forms of transportation are regulated, if at all, to a much lesser extent.” The report continues: "The alternative is to greatly lessen the regulation with respect to railroads and motor vehicles or to increase regulation on other forms of transportation. It way be safely said that neither the strictly regulated railroads nor the motorwarrier operators favor the elimination of all regulation. Consequently the venuaining remedy is to so extend regulation to competing forms of transportatlow, other than air, which only recently was placed under the Civil Aeronautics Authority, and retaining to each such lawful advantages as are inherent therein, ow as to, as nearly as possible, equalize them and put them on a common footlug, at least from a regulation standpoint. This is not for the purpose of favoring ouw form of transportation over another or seeking to put any form of transportation out of business; it is, as stated, simply to put them all on a volumon basis or common starting point in their sharp struggle for business. S. 2009 seeks to do this also. If one or more forms of transportation cannot so wee under equality of regulation, they are not entitled to survive. This
is not railroad philosophy; it is transportation philosophy. The problem is not a railroad problem, but is, as the Interstate Commerce Commission has said, a transportation problem.” [Italics supplied.] And the report points out: “And the position taken by water carriers that railroads must be regulated, nad they should not, though they compete on rights-of-way improved and largely maintained by public funds, is wholly inconsistent and completely untenable.” The report of the House Committee on Interstate and Foreign Commerce was equally conclusive. It said in part: “The manifest difference in the economic advantages of transportation by water, highway, and rail makes the question of rate adjustment as between these carriers a practical question. The bill is so drawn as to make it plain that there is no purpose to so adjust rates as to deprive any type of carrier of the inherent advantage of his cheaper cost of carriage.” ” In the course of the Senate debate, the following colloquy took place between Senator Austin and Senator Wheeler, chairman of the Senate Committee on Interstate Commerce and manager of the bill. “Mr. AUSTIN. So, if there is one type of common carrier which has a natural facility or a natural advantage over another, the bill does not require, indeed, I understand it not to permit, the extinguishment of the natural advantage in competition for the benefit of the competitor which has not the advantage. Am I correct in that interpretation? “Mr. WHEELER. The Senator is entirely correct, and I thank him for his statement. In the ratemaking provision, and in three different places in the bill, we wrote in such a provision specifically so as to protect them.” (84 Congressional Record, p. 5883.) The following further statements made during the course of the debate in the Senate are enlightening: “Mr. TRUMAN. Mr. President, the reason the discussion always gets back to the railroads is that the railroads handle about 67 percent of all the traffic. In 1926 they handled 75 percent of all the traffic. The present condition of the railroads is due to a great many things which are not necessary to be considered at this time. The railroads are absolutely essential to the welfare of the country, and they should not be discriminated against any more than any other method of transportation should be discriminated against. The object of the pending bill is to try to put all methods of transportation on an equal basis, If it will not do that we shall have failed in our effort. “Mr. PEPPER. Mr. President, I really meant to say when I spoke a moment ago, if the Senator will further yield, that when the Senator referred to the various means of transportation being equal— “Mr. Tru MAN. Equal before the law. “Mr. PEPPER. If that is what the Senator meant by the expression he used, very well. o TBUMAN. Yes; that is exactly what it means.” (84 Congressional Record, p. 5958.)
“Mr. WHEELER. I say to the Senator, as I said a moment ago, when this legislation is enacted it will be found to be beneficial because we are stating that it is the policy of the Congress of the United States that the Interstate Commerce Commission shall treat each and every one of these forms of transportation upon an equal basis; and no language could be written into law that more clearly directs that that should be done than we have done in the Interstate Commerce' Committee (84 Congressional Record 6073).
“Mr. WHEELER. * * * it is not a question of helping the railroads; and I think it ought to be clear that the bill is not introduced primarily with the idea that it will help the railroads. The statement has been made repeatedly that the object of the bill is to help the railroads. The object of the bill is to help the railroads insofar as we can correct some undesirable practices and speed up the work of the Interstate Commerce Commission. The bill seeks to give equality to the railroads in the same respect in which we give equality to everybody else. I do not think the Senator from North Carolina, who is noted for his fairness, can
1. Report No. 1217, House of Representatives, Transportation Act of 1939, 76th Cong., 1st sess., at p. 3.
say to the American people that we want the railroads in a straitjacket with reference to their rates, but that the water carriers, their competitors, should be free, 1s the Senator takes that position, then I say there is only one thing we ought to do. If we are not to regulate the water carriers, if we are to let them resort to any practice they wish to follow, including rebates and everything else, then let us say to the railroads of the country, “We will repeal the law regarding the regulation of your rates.” Let us turn them loose; let us go back to the law of the jungle and let the best man win. Who would suffer in the long run ? It would be the shippers of the country, the farmers, and the miners, about whom the Senator is now speaking” (84 Congressional Record 6135). In introducing the bill to the House, Congressman Wolverton, one of the bill's unauagers, declared: “The one and only thought that dominated the committee was to formulate legislation that would be helpful to all forms of transportation and in the public interest, * * * Nothing could more clearly set forth the fundamental purpose of this legislation and the desire to preserve the inherent advantages of every form of transportation than the declaration of this committee in the bill as to what should be our national policy in this important matter. Permit me to read from the bill, I ("ongressman Wolverton here read the declaration of policy.] "I'hat declaration of policy is the foundation upon which this bill has been drawn. In no particular does any provision of this bill deviate from it in the alightest degree, Each provision and all of them taken together do nothing uther than unake that declaration effective as a national policy. With the administ ration of the act in accordance with the spirit and intent of the act no unfair or unlust advantage can be gained by one means of transportation over another” (84 (longressional Record 97.69). Finally, the conference committee agreed to a bill in the form in which it was enacted. And in reporting it, the committee said (86 CoNGRESSIONAL REcoRD 10 l (2) : “I've conferees are unanimously in harmony in the Viewpoint that the inherent advantages of each type of carrier should be preserved for the benefit of the Nation, legitimate regulation must look to the protection of the economic adVautoga of euch type of carrier against destructive competition of the other. No warriers should be required to charge unreasonable rates for the benefit or purpose of compelling diversion of traffic to a competitor." [Emphasis ours.] "I hus slid the ('ongress make transparently clear its intention that railroad rates should reflect railroad operating conditions—just as motor and water carviur rates should reflect their respective operating conditions. At no point in illu long legislative history, which resulted in the Transportation Act of 1940, With its slowlavation of a national transportation policy, was there the slightest indication that, for the protection of a competing form of transportation, another form would be denied the right to establish reasonably vuuuunsatory and nondiscriminatory rates and thus, in effect, be forced to hold a rule unlovella, According to the Congress, the public was just as much entitled to volupetitive railroad rates as to competitive motor and water carrier rates. At titat, this congressional intent was apparent in decisions of the Interstate ("ununui vo' ('oumission, An early and authoritative decision was Seatrain Lines, Inc. v. Akron, C. & Y. Nu, to 1: 1 (" (), 100 (1940)). There, break-bulk water carriers, as well as certalu all rail routes, sought to prevent a lower level of rates on the part of Seatumn on the ground that, with its superior service, Seatrain would take all of the hu luwo. "I'lu, ("ouvulosion, however, allowed the lower Seatrain rates. It pointed out that the opposition care from “fear that their own interests [those of the lu, to tug water and rail carriers] may suffer through a diversion of traffic town wouletus carriers to Seatrain in the event the latter secures the basis \t onto, it have seeks,” and it emphasized that higher rates “would * * * require \ll mun to what we homewhat more than the traffic will bear.” (243 I. C. C. u ou on one A further reason for upholding lower Seatrain rates was the th ot, ". 1910, the ratemaking rules of the Interstate Commerce Act had * * molluo . . . . as to require us, in the exercise of our authority to prescribe just , , , , ou ble rates, to give due consideration, among other factors, to the , , , , , , , upon the movement of traffic by the carrier or carriers for which - , , , , , wobot" (24!? I, C. C. at p. 214).