Interstate Commerce Commission v. Mechling
Interstate Commerce Commission v. Mechling
Opinion of the Court
delivered the opinion of the Court.
A District Court of three judges enjoined in part an order of the Interstate Commerce Commission, and the case is here on appeal under 28 U. S. C. §§ 47, 47a, and 345. The Commission order specifically relates to the railroad rate for grain transported from Chicago, Illinois, to New York and other eastern points,
For many years eastern railroads have carried grain east from Chicago at reshipping rates 8% cents per hundred pounds lower than local rates. Up to 1939 this Chicago-to-the-east reshipping rate had been identical for grain, whether brought to Chicago by a connecting railroad, connecting lake steamer, or connecting barge. Although barge lines were much slower than railroads, they were less expensive to operate and therefore could afford to transport freight much more cheaply than railroads. The result was that the barge-rail rate from a point in the west to eastern destinations was considerably cheaper
The Commission, after a hearing, made an order which left the railroad-proposed higher rates in effect, but stated that “in a proper proceeding we might prescribe proportional rates on the ex-barge traffic lower than local rates
The Commission has now considered and decided that question in a proper proceeding. 262 I. C. C. 7. It found the originally proposed 8% cent higher rates for ex-barge grain to be unlawful and required the eastern roads to cancel the schedules fixing those increased reshipping rates. This part of the Commission’s order has not been challenged. But it also concluded that ex-barge grain rates east from Chicago would be reasonable and lawful even though they were 3 cents per hundred pounds higher than rates for ex-rail and ex-lake grain. Consequently, the Commission provided that its order cancelling the scheduled reshipping rate increase was “without prejudice to the filing of new schedules in conformity with the findings herein.” Thus, the effect of the whole order was to permit, if not require, the railroads to charge higher reshipment rates for ex-barge than for ex-lake and ex-rail grain. Under these rates, barge-rail grain shipments would be a trifle less expensive than all-rail transportation between the same points.
Appellees
Judicial review of the findings of fact and the expert judgments of the Interstate Commerce Commission where the Commission acts within its statutory authority is extremely limited. And § 307 (d) of the 1940 Act
The foregoing provisions flatly forbid the Commission to approve barge rates or barge-rail rates which do not preserve intact the inherent advantages of cheaper water transportation, but discriminate against water carriers and the goods they transport. Concretely, the provisions mean in this case that Chicago-to-the-east railroads cannot lawfully charge more for carrying ex-barge than for carrying ex-lake or ex-rail grains to and from the same localities, unless the eastern haul of the ex-barge grain costs the eastern railroads more to haul than does ex-rail or ex-lake grain. And § 307 (d), authorizing the Commission to fix differentials as between through water-rail and through all-rail rates, does not authorize the Commission to neutralize the effective prohibitions of the other provisions which were strengthened in 1940 expressly to prevent a discrimination against water carriers.
The basic error of the Commission here is that it seemed to act on the assumption that the congressional prohibitions of railroad rate discriminations against water carriers were not applicable to such discriminations if accomplished by through rates. But this assumption would permit the destruction or curtailment of the advantages to shippers of cheap barge transportation whenever the transported goods were carried beyond the end of the barge line. This case proves that. For while Chicago is a great grain center, it cannot consume all barge-transported grain. That grain, like other grain coming to Chicago for marketing or processing, is reshipped to distant destinations. To penalize its transportation in barges by charging discriminatory rates from Chicago to its final destination has precisely the same consequence as would follow from raising barge rates inbound to Chicago. Recognizing that it could not require these barge carriers
The Commission did not approve increases in these reshipping rates on the ground that the eastern roads were not receiving a fair return for carrying ex-barge grain. And the grounds on which the Commission rested its order do not support the rates approved. Most of the argument of the Commission in support of its conclusions and order treated matters which had no relation to what the reshipping rates from Chicago should be. The length of the total barge-rail haul emphasized by the Commission, however significant it might be under other circumstances, has no relevance here. For the lower rates allowed ex-rail and ex-lake grains include carriage for distances identical with the ex-barge hauls. Nor is the Commission’s order supported by its conclusion that it is “inequitable” for the barges to charge a much lower rate for the inbound grain haul than the competitive western railroads can afford to charge for the same haul, resulting in barge-rail rates lower than all-rail rates from the same localities.
Related to the question just discussed, is the Commission’s contention here that permitting reshipping rates for ex-barge grain to remain equal to the rates for
The Commission also pointed out in its decision that rail rates from the west to Chicago (which we must assume on this record are fair and reasonable for the services performed) permit three transit stops west of Chicago without extra charge. Thus some ex-rail grain, unlike ex-barge and ex-lake grain, has already been processed en route to or in Chicago before it ever reaches the eastern lines, reducing the likelihood that it will require further transit service on the route from Chicago to the east.
To justify increasing the reshipping rates of ex-barge grain the Commission would have to make findings supported by evidence to show how much greater is the cost to the eastern roads of reshipping ex-barge grain than of reshipping ex-lake or ex-rail grain moving from the same localities and requiring the same service as does the ex-barge grain. Cf. Florida v. United States, 282 U. S. 194, 212; North Carolina v. United States, 325 U. S. 507, 520. The unsifted averages put forward by the Commission do not measure the allegedly greater costs nor indeed show that they exist.
Affirmed.
Mr. Justice Frankfurter would sustain the order of the Interstate Commerce Commission, because he deems it amply supported by adequate findings of the Commission differentiating the average circumstances and condi
The eastern points are in New York and adjacent states and in New England. It is around shipments from Chicago to this territory that this rate controversy chiéfly revolves. The proposed new rate increases also related to grain shipments from Chicago to the so-called central territory. The reasons supporting the conclusion we reach apply equally to the central territory increases, and consequently we need not treat them separately.
See 246 I. C. C. 353, 361, 364, 383; 262 I. C. C. 7, 41.
There was barge service from the grain section west of Chicago to that city from 1886 to 1907 when it was discontinued. Such barge service was resumed in 1933. See 262 I. C. C. 7, 20.
The ex-barge proportionals fixed by the Commission were uniformly 5.5 cents lower than local rates from Chicago to the east and 3 cents higher than ex-barge and ex-lake proportionals.
Appellees are (1) A. L. Mechling, a barge water carrier between Chicago and points in Illinois, Missouri, and Iowa; (2) Inland Waterways Corporation which transports grain by barges between, among other points, Kansas City and Chicago; (3) the Secretary of Agriculture, who is authorized by statute to make complaints to the Interstate Commerce Commission, and to seek judicial relief with respect to rates and charges for the transportation of farm products.
Two procedural points are raised by the Commission which need not be discussed at length. The first is that the District Court’s
54 Stat. 898, 937 ; 49 U. S. C. § 907d. In the original proceedings before the Commission, the last evidence was heard and the record was closed before the 1940 Transportation Act became a law. Interstate Commerce Commission v. Inland Waterways Cory., 319 U. S. 671, 678. The present proceedings are fully governed by the 1940 Act.
Illustrative of the attitude of Congress is this exchange between Senator Lucas and Senator Wheeler, Chairman of the Interstate Commerce Committee :
“Mr. Lucas. . . . The town in which I live is a focal point for the transportation of wheat and corn down the Illinois. The price of wheat and corn at the elevator there is always 2 or 3 cents higher than it is at elevators some 25 or 30 miles farther inland because of the difference between the rates by rail and those by water.
“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 advantages of the water carrier. Everyone agrees that goods can be shipped more cheaply by water than by rail.” 84 Cong. Rec. 5879 (1939).
Chairman Lea of the House Committee on Interstate Commerce stated in debate that:
“The bill very plainly, about as plainly as language can be written, provides for the protection of the inherent advantages of water transportation as contrasted with other means of transportation. In fixing rates the water carrier is assured the advantages of the cheaper rate at which he can transport property.” 84 Cong. Rec. 9862 (1939).
See also 84 Cong. Rec. 5883, 6125-6128, 6131, 6149 (1939), and Conference Report, 86 Cong. Rec. 10172 (1940).
84 Cong. Rec. 5873-5876, 5883, 6131 (1939).
The Commission stated that “The barge rates yield fair returns to the barge carriers, and, for the purpose of this proceeding, may be accepted as reasonable.” 262 I. C. C. 7, 19.
The Commission expressed concern that “the barge-rail rates are far below the all-rail rates from the same and other Illinois origins. This is an inequitable situation giving rise to requests for reductions in the all-rail rates from the Illinois and central territory origins, and it is difficult to see, with such extreme disparities, how such requests could properly be denied. . . . there is a substantial production of corn in central territory. While the farmers therein did not appear at the hearing to show that they were hurt by this situation, such evidence was adduced by others in the same relative position . . .
See § 6, Transportation Act of 1940, 54 Stat. 898, 904, 49 U. S. C. § 4.
The Commission stated that “on the average, as compared with the ex-barge grain, the movement under the ex-rail proportionals . . . requires less terminal service at the gateway . . . less transit service at intermediate points in official territory, and less line-haul service to the southern portion." 262 I. C. C. at 28.
The Commission’s statement was that, “Like the lake-rail traffic, the barge-rail traffic requires transfer of lading and a full origin terminal service at the interchange port. ... it never moves in continuous through transportation.” 262 I. C. C. 7, 21.
A similar precise statement does not appear in the Commission’s decision with reference to terminal services rendered ex-rail grain. It assumed throughout its discussion, however, as shown by its reliance on averages, that a large but unspecified amount of all-rail grain shipments receive the same terminal services as does ex-barge grain.
There is apparently no processing of barge-carried grain in Chicago. The railroads there charge 3.25-4.5 cents per hundred lbs. to switch barge grain at Chicago from riverside elevators to processing plants. 262 I. C. C. 7, 24.
It is noteworthy that in its previous consideration of these same ex-barge grain reshipment rates, the Commission was satisfied that “the physical carriage beyond the reshipping point is substantially the same” in ex-rail, ex-lake, and ex-barge shipments. 248 I. C. C. 307, 311.
Dissenting Opinion
dissenting.
It appears to me that the Court in this case not only ignores findings of fact by the Interstate Commerce Commission contrary to our own oft-repeated pronouncements about the finality of administrative findings, but it also legislates out of the Transportation Act of 1940 at least two specific provisions which Congress put in and departs from the policy laid down in § 1 of the Act. Whether the Congressional law or the Court’s amendments are the better for the country is a complicated problem of policy which, in my conception of our judicial function, I am not privileged to decide.
In the Transportation Act of 1940, 54 Stat. 937, et seq., Congress authorized the Commission to establish through rates by water and rail carriers. It also said, “In the case of a through route, where one of the carriers is a common carrier by water, the Commission shall prescribe such reasonable differentials as it may find to be justified between all-rail rates and the joint rates in connection with such common carrier by water.” § 307 (d). The Court reads this discretionary power out of the statute and holds that the Commission may not establish any differential other than that created by the carriers themselves; that is to say, the only permissible differential is the difference between barge rates and rail rates for the water leg of the through journey.
The statute also says that in the exercise of its rate-making power “the Commission shall give due consideration, among other factors, to the effect of rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed . . . .” § 307 (f). The Com
Because this decision seems to me to deprive the Commission of these discretionary powers to adjust through rates to general shipping conditions and rate structures, I dissent.
Reference
- Full Case Name
- INTERSTATE COMMERCE COMMISSION v. MECHLING, Doing Business as A. L. MECHLING BARGE LINE, Et Al.
- Cited By
- 84 cases
- Status
- Published