MR. JUSTICE STONE delivered the opinion of the Court.
This is an appeal under the Urgent Deficiencies Act of October 22, 1913, 38 Stat. 208, 219, 220, Judicial Code, § 238, from a final decree of a District Court, of three judges, for Eastern Louisiana, which made permanent an interlocutory decree staying an order of the Interstate Commerce Commission. The order directed the removal of unjust discrimination against interstate commerce resulting from intrastate rates maintained by rail carriers
In the Fifteen Per Cent Case the Commission, acting under § 15a (2) of the Interstate Commerce Act, after an extensive hearing, granted permission to the carriers of the country to add a surcharge to established rates in amounts varying with different commodities but not exceeding in any case 10% of the basic rate. Thereupon the railroads of the country, including those operating in Louisiana, added the permitted surcharges to their interstate rates and most states authorized like increases in their intrastate rates. Others failed to increase the intrastate rates, and the State of Louisiana by its Public Service Commission refused to allow the increase on some thirty-seven commodities and on all less-than-carload lots. The carriers filed petitions invoking the exercise of the power of the Commission under § 13 (3) and (4) of the Interstate Commerce Act to remove undue discrimination by those intrastate rates against interstate commerce. This proceeding, after an extended investigation and hearings by the Commission, resulted in the order challenged here. Increase in Intrastate Rates, 186 I.C.C. 615. It requires the carriers to charge, upon specified commodities and all less-than-carload lots in intrastate commerce in Louisiana, "rates which shall be not lower than the rates now in force and applicable to the intrastate transportation of said traffic within the State of Louisiana, plus the surcharge authorized by the findings in the Fifteen Per Cent Case . . . on corresponding interstate traffic, so long as such surcharges are maintained. . . ."
In setting aside the order, the court below rested its decision upon the inadequacy of the Commission's findings.
1. The Transportation Act of 1920, by § 416, 41 Stat. 484, § 15a (2) Interstate Commerce Act,
. . . so that carriers as a whole (or as a whole in each of such rate groups or territories as the Commission may from time to time designate) will, under honest, efficient and economical management and reasonable expenditures for maintenance of way, structures and equipment, earn an aggregate annual net railway operating income equal,
Under earlier acts the Commission had been given power to remove unjust discrimination in rates or service between shippers or localities, § 2 Act of February 4, 1887; 24 Stat. 379, 380; § 3 Interstate Commerce Act; and rates in interstate commerce were required to be reasonable "in the sense of furnishing compensation for the particular service rendered and the abolition of rebates." Wisconsin Railroad Comm'n v. C., B. & Q.R. Co., supra, 585; § 1 Act of 1887; § 4 Act of 1906; 34 Stat. 589; § 15 Interstate Commerce Act. Under these acts the Commission had the power to order the carriers to desist from discrimination against interstate shippers by intrastate rates, The Shreveport Case, 234 U.S. 342, but until the Transportation Act it was without authority to prescribe intrastate rates.
By § 416 of the Transportation Act, § 13 (4) Interstate Commerce Act, directly involved here, the Commission was given power to remove unjust discrimination by intrastate rates against interstate commerce, by prescribing minimum intrastate rates.
As pointed out in the reports of the Commission in this case and others (see Increased Rates, 1920, 58 I.C.C. 220; New York Passenger Fares, 59 I.C.C. 290), § 15a, by its terms, commands the Commission, in providing the required revenue by increasing rates, to deal with the carriers of the nation as a whole or in broad classes, and as this Court recognized in the New England Divisions Case, supra, 197, 198, this requirement would be nullified and the administrative arm of the Commission paralyzed, if
It cannot be supposed that Congress, in placing this duty on the Commission, intended, in the absence of some express provision compelling it, that the Commission should follow a procedure which would preclude its acting effectively, if at all. That such was not its intention appears from the words of the statute. It does not, in terms, command the Commission to find that each rate prescribed under § 15a is just and reasonable, as prerequisite to a general increase in rates. It provides only that the action of the Commission in raising rates so that they may yield a fair return is to be "in the exercise of its power to prescribe just and reasonable rates," with the qualification, in the proviso to the granted authority to increase rates, "that the Commission shall have reasonable latitude to modify or adjust any particular rate which it may find to be unjust or unreasonable. .. ." When read in the light of the subject matter to which the section is to be applied, the production of increased revenue by a nation-wide or group increase of rates, it is apparent that these provisions cannot rightly be construed to require the Commission as a condition of any action by it to find the reasonableness of each individual rate. If the Commission were required to do that, there would be no occasion for the granted latitude to modify those rates found to be unjust or unreasonable.
The natural construction of the section, one consistent with its language, and making possible its practical operation, is that which has uniformly been given to it by the Commission. Section 15a (2) does not relieve the Commission from the responsibility of seeing to it that the rates as increased are to be reasonable. But in performing
In the Fifteen Per Cent Case, 1931, the Commission, after a careful survey, found itself faced with an acute emergency calling for prompt action to give temporary financial relief to the transportation system. The Commission's report amply discloses that the reasonableness of the rates as generally applied was a controlling consideration in fixing the varying amounts of the surcharges and in selecting the particular items to bear them. This is manifested in its conclusion that "the freight articles selected by us in this connection were those for the transportation of which we believed the rates could be somewhat increased without causing the traffic to be transferred to other agencies of transportation and without bringing about an undue disturbance in business conditions or transgressing the bounds of maximum reasonable
In proceeding under § 13 (3) and (4) to make the order, challenged here, the Commission made no express finding that the increased intrastate rates would be reasonable, but incorporated the findings bearing on the reasonableness of the increased interstate rates made in the Fifteen Per Cent Case, 1931. Although § 13 (4) does not in terms require the Commission to find that the intrastate rates which it prescribes are reasonable, it is not questioned that the section confers no authority on the Commission to require intrastate rates to be raised above a reasonable level, see Georgia Pub. Serv. Comm'n v. United States, supra, 770; Florida v. United States, supra, and the appellees insist that the order is defective because, in conforming the intrastate rates to the reasonable level of interstate rates, the Commission did not find specifically that in each case the rate as increased would be just and reasonable. But we think that the relationship of the section to § 15a (2), already described, is such that the standard of reasonableness prescribed by the latter is that necessarily set up for § 13 (4) which supplements it. The considerations already detailed which define that standard for § 15a necessarily define it for § 13 (3) and (4), which creates a duty in "dovetail" relationship to that imposed on the Commission by § 15a. Wisconsin Railroad Comm'n v. C., B. & Q.R. Co., supra, 386. The administrative difficulties which would preclude performance of the duty imposed by § 15a if the Commission were required to find that each individual rate prescribed is just and reasonable,
The case of the Louisiana rates was not alone before the Commission, and it should not be treated as though it were. A number of other states, contesting in the aggregate a wide range of rates, were heard at the same time. Had the Commission been required to go into the circumstances of each item with particularity the purpose of its original order would have been defeated. It sufficed that the Commission found that Louisiana showed nothing in the circumstances of its agriculture and industry or its traffic conditions so different from the rest of the country as to lead to the conclusion that the intrastate rates, raised to the reasonable general interstate level, would not themselves be reasonable; and that it saved the rights of interested parties to test the reasonableness of any individual rate.
A question different from that before us was presented in Florida v. United States, supra. There the discrimination was essentially one of undue prejudice against shippers, confined by the evidence to rates prevailing in northern Florida. It involved only one railroad and one commodity. It was not the general revenue proceeding authorized by § 15a. The Court was careful to point out that the Commission had undertaken to establish a state-wide level of intrastate rates without any findings with respect to the corresponding interstate traffic which would tend to support the conclusion that a state-wide alteration of intrastate rates was necessary to protect the interstate commerce involved.
In the Fifteen Per Cent Case, 1931, the Commission had said: "The plan outlined in the appendix we estimate will produce between one hundred million and one hundred and twenty-five million dollars' increased revenue on the basis of present traffic, if applied both state and intrastate." And in the proceeding resulting in the present order it said: "We find that in view of the surcharges which have become effective interstate, in the freight rates on the classes and commodities here in question, under our findings in Fifteen Per Cent Case,
Like findings were held sufficient to support similar orders, which had been entered in this same proceeding,
3. The fact that the order of the Commission for the increase of interstate rates was permissive only does not affect the validity of its order prescribing minimum intrastate rates. The interstate rates after the addition of the authorized surcharges were lawful rates in interstate commerce, which was discriminated against by the failure to make corresponding increases in intrastate rates. This discrimination the Commission removed in the manner authorized by § 13 (4), by prescribing minimum intrastate rates at the same level as the interstate rates. The order precluded any unauthorized interference with state regulatory power by providing that it should be effective only so long as the surcharges upon interstate rates should be maintained by the carriers.