JOHN R. BROWN, Circuit Judge.
Involving the vacating of an Order suspending proposed rates, this case
The Railroads, to regain a competitive position lost to interstate Water and Motor Carriers largely as the result, they claimed, of voluntary ex parte increases (Ex Parte 162, 166, 168, 175) in railroad rates, on September 19, 1955, published (to become effective October 26, 1955) drastic reductions in their rates for the movement of steel and wroughtiron pipe, in carloads, moving from the mills in the industrial areas East of the Mississippi River to destinations in the States of Arkansas, Louisiana, Oklahoma and Texas. Concealed in the lexicography of the complex tariff papers is the battle for transportation revenues running annually, it is asserted, from $6,000,000 to $9,000,000 and constituting
This case does not involve the question of the extent of the right, so often asserted by the Railroads, as a part of management responsibility, to publish reduced rates to meet competition, see Atlanta & St. Andrews Bay Ry. Co. v. United States, D.C.M.D.Ala., 104 F.Supp. 193, 198, and which would, subject only to the possibility of suspension for a seven months period under 49 U.S.C.A. § 15(7), make them effective until determined by hearing to be unlawful. For here, by the choice of the Railroads, the proposed rates were less for the longer distance from the steel mill areas to rail-head delivery points in the Southwest than rates for the movement of the same commodity for shorter distances within both origin and destination territories. They were thus confessedly in violation of the Act
Consequently, as permitted by the Act, the Railroads simultaneously filed (September 19, 1955) Fourth Section Application No. 31120 for approval of the rates. But until the Fourth Section Application was granted, the rates could not go into effect. Conversely, so long as they were suspended, they could not be effective and approval under Fourth Section would be a sterile, useless academic decision.
Water and Motor Carriers then filed Protests against Fourth Section approval and Petitions for Suspension, each of which normally are administratively handled by separate Boards
The Railroads, presumably accepting the findings, note 4, supra, as an adequate, articulate "statement in writing of [the Commission's] reasons for such suspension"
Through Commission administrative channels the Petition for Reconsideration of the Suspension Order came before Division 2 acting as an appellate division. On December 7, 1955, by an Order
The Water and Motor Carriers then filed separate Petitions for Reconsideration of the Orders of December 7 and 9 requesting in those Petitions the Stay granted by the Act
Thus the matter stood when, on February 16, 1956, this verified complaint was filed. And on that record, we are of the clear opinion that the Order of December 7, vacating the prior suspension, is invalid. The simple phrase "and good cause appearing therefor" is inadequate to upset prior positive findings, and for the reasons
Nor, do we think, does the matter stand differently because of subsequent
The order of December 7, 1955, vacating the suspension must therefore be set aside, and the matter remanded to the Commission for further and not inconsistent proceedings. The question is not the simple one of a suspension beyond the statutory maximum of seven months (expired May 25, 1956) for this is all intertwined
That leads us to the plaintiffs' further contention that under these circumstances the Order of December 9, 1955, approving the Fourth Section Application is invalid. In this they contend that temporary approval (i. e., pending a hearing) is not authorized by the statute and is hence ineffective. But this is a point we need not decide.
As in the case of suspensions, we are not at this time claiming or exercising the existence of a power to determine whether the proposed rates were a "special" case meriting approval. We are concerned with the narrower, but still important, question of whether the procedures thus far followed by the Commission are in accordance with law.
Assuming, arguendo, that temporary relief may be granted and that the "investigation" required by Section 4 to permit that temporary relief need not be the full dress adversary hearing required before final determination of the lawfulness of the proposed rates, we think there must be some determination and disclosure of the basic reasons why temporary relief is granted. Unless this is done, there is no way for those immediately affected — e. g., "short haul" shippers who pay higher rates, intermediate communities, or competing carriers
Nor is there any way for a Court on petition of any such interested and aggrieved parties to test its legality. So-called temporary approval is that in name only for, unlike suspensions which carry a statutory maximum, the Fourth Section approval may continue for many months or years until the investigation
This is in harmony with the philosophy of Section 4 that variations from its sweeping prohibitions are permitted, Intermountain Rate Cases, United States v. Atchison, T. & S. F. R. Co., 234 U.S. 476, 34 S.Ct. 986, 58 L.Ed. 1408, only in special cases, and then only after investigation affords the basis for a conclusion that it is "special." Before the Commission can permit that which the statute forbids, at least two things must be reflected: (1) that it is a "special" case, and this means something more than a label as such; and (2) that its classification as a special case has been determined by "an investigation" — a very important condition since, "The requirement of section 4 that such authorization shall be made, if at all, `after investigation' clearly implies that the question shall be determined upon testimony and after a hearing", Louisville & N. R. Co. v. United States, D.C. W.D.Ky., 225 F. 571, 580, (three-Judge), affirmed 245 U.S. 463, 38 S.Ct. 141, 62 L.Ed. 400; and see note 12(c), supra. For administrative action permissible only under limited circumstances after satisfying statutory conditions, it is plain that this is the type of situation which Congress had in mind in requiring that "all decisions (including initial, recommended, or tentative decisions) shall become part of the record and include a statement of (1) findings and conclusions, as well as the reasons or basis therefor, upon all the material issues of fact, law, or discretion presented on the record; * * *", Section 8, Administrative Procedure Act, 5 U.S. C.A. § 1007.
This is particularly so where, as here, by strong emphatic language condemning the rates for specific reasons (note 4, supra) and generally as violative of the criteria of Transcontinental Cases of 1922, note 16, supra, relief is first denied but, without any other or further showing, is then granted. Courts and administrative agencies have, and must have, power to change their minds. But if it is the rule of law which controls, there must be some basis to indicate that it is reason and judgment that has brought about the change.
All of this is aggravated by the fact that this serious question of whether competing water and motor carriers are to be exposed to what they describe as "suicidal" rates for the indefinite period of investigation, has been treated too much as a matter of pure paper form. When the verified complaint and supporting memorandum brief filed here pointed out that these protestants were entitled, 42 U.S.C.A. § 17(8), note 9, supra to a stay of the order of December 9, 1955, (stated to have been issued by the Fourth Section Board, note 8, supra) until decision by Division 2, the Commission on March 2, 1956, "corrected" that to make it appear that this was by Division 2 acting as an appellate division. But since Division 2 could act only as an appellate division on a matter appealed to it for reconsideration, the Commission then entered, on April 27, 1956, a still further corrected order of December 16 stating, contrary to available record facts (note 6, supra) that
The action of Division 2 was not appellate. It was initial. Pending decision on the petition for reconsideration of that action of December 9, the protestants were entitled to a stay. An order entered months after the judicial review has been set in motion and based on recitations not borne out by the available record does not change it. On the contrary, it dramatizes again the danger, under our system, of circumventing judicial review by claiming to find and then belatedly record that which was known in fact but imperfectly reflected in the official papers.
The orders appealed from are, therefore, invalid and for the reasons set forth are set aside and the matter remanded to the Commission for further and not inconsistent proceedings.
Reversed and remanded to the Commission.
"And it further appearing, That upon consideration of the said schedules and protests thereto there is reason to believe that they would, if permitted to become effective, result in rates and charges, rules, regulations or practices which would be  unjust and unreasonable in violation of the Interstate Commerce Act and  constitute unfair and destructive competitive practices in contravention of the National Transportation Policy and  be in contravention of the provisions of section 4 of the Interstate Commerce Act, without appropriate authority * * *."
In two "corrected" orders later entered but bearing the same date occasioned by technical errors in tariff descriptions, the phrase "in contravention of the National Transportation Policy" was inadvertently omitted from finding  so that  read, "and constitute unfair and destructive competitive practices in contravention of the provisions of section 4 * * *."
The Railroads (see their brief pages 31, 32, footnote 1) find significance in this omission, but the last "corrected" order of December 7, 1955, entered March 2, 1956, note 13, infra, restating the negative of findings , , and  completely dispels this.
The Railroads' Petition FSA 31120 itself reflects this: "As the Suspension Board suspended the involved rates, the question of issuing Fourth Section authority at this time became moot and the Fourth Section board has neither granted nor denied the Railroads' application. However, as a petition for vacation of the order of suspension is filed concurrently, the question is revived and this petition is therefore filed * * *" [Emphasis supplied]
The Prayer stated: "Wherefor these applicants pray that this Commission issue appropriate Fourth Section authority sought by Fourth Section Application No. ICC 31120."; and compare this with the document filed simultaneously in I & S 6491, denominated a "Petition * * * for Reconsideration" and opens, "Come now the railroads in * * * I & S 6491 and petition this Honorable Commission for reconsideration of the Order of the Suspension Board * * *." [Emphasis supplied]
A corrective order dated December 9, 1955, was entered March 2, 1956, after this case had been assigned to this Three-Judge Court. It deleted reference to the Fourth Section Board and substituted: "By the Commission, Division 2, acting as an Appellate Division."
By a still later order purporting to be entered December 16, 1955, but actually entered April 27, 1956, this was again changed by reciting that the order of December 9, 1955, was by Division 2 "acting as an Appellate Division, upon consideration of a petition by respondents requesting that the action of the Fourth Section Board in voting to withhold relief in Fourth Section application No. 31120, * * * be reversed * * *."
The notice, December 16, and formal order of the same date likewise refer solely to I & S 6491 and the order, December 7, 1955, vacating the prior order, October 20, 1955, suspending the rates.
"But these findings, decisive and significant in nature, made in scrupulous regard for statutory mandate were, by the order of vacation, swept away without the slightest indication of the existence of facts, an adequate description of them, or even the barest statement of reasons underlying the Commission's change of heart. The propriety of its action, on the external record, must be tested under the simple, brief phrase, `and good cause appearing therefor.'
"If the cryptic phrase `good cause appearing' is a sufficient indication of action, it will be a self-generating bar to any review since, `the grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based', Securities and Exchange Comm. v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 459, 87 L.Ed. 626. It is precisely because the scope of judicial review is so narrowly limited, that administrative agencies must, in terms beyond the statutory rubric, reveal the basis for their action by which to judge whether it has met the elemental standards of our system and statutory requirements. A threshold decision by reviewing court therefore is whether there is a `lack of the basic or essential findings required to support the Commission's order', State of Florida v. United States, 282 U.S. 194, 215, 51 S.Ct. 119, 125, 75 L.Ed. 291; United States v. Baltimore & Ohio R. Co., 293 U.S. 454, 465, 55 S.Ct. 268, 79 L.Ed. 587; Alabama Great Southern R. Co. v. United States, 340 U.S. 216, 224, 71 S.Ct. 264, 95 L.Ed. 225; Cantlay & Tanzola, Inc., v. United States, D.C.S.D.Cal., 115 F.Supp. 72, (three-Judge); State of North Carolina v. United States, 325 U.S. 507, 65 S.Ct. 1260, 89 L.Ed. 1760; Atlanta & St. Andrews Bay Ry. Co. v. United States, D.C., 104 F.Supp. 193; Pacific Island Tariff Bureau v. United States, D.C., 129 F.Supp. 472. * * *
"What we have said is certainly correct if it is assumed that the Commission intended its cryptic phrase `good cause appearing' to wipe away all of its prior fact conclusions. It is all the more so if, as seems likely, the Commission intended that the balance of its order of September 23 calling for investigation of the rates to determine their lawfulness should remain in effect. In expressed terms the only change made by the subsequent order was to vacate the former so far as concerned suspension alone. It literally left in force the findings of unlawfulness, destructive competition, and then, without more than the magic phrase `good cause appearing', determined that what on September 23 led them to suspend now led them to unsuspend. The Commission may, as any other body, have the right to change its mind, but its action must demonstrate the `reasons or basis therefor.'"
(a) Competitors immediately, adversely and financially affected have standing to sue as parties for a review: note 9, Amarillo-Borger and Scripps-Howard Radio v. Federal Communications Commission, 316 U.S. 4, 14, 15, 62 S.Ct. 875, 86 L.Ed. 1229, 1236, 1237; National Coal Association v. Federal Power Commission, 89 U.S.App.D.C. 135, 191 F.2d 462, 464-466; Associated Industries of New York State v. Ickes, 2 Cir., 134 F.2d 694, 699-704; Cia Mexicana de Gas v. Federal Power Commission, 5 Cir., 167 F.2d 804, 805.
(b) An Order vacating suspension has adequate finality for review: see, Amarillo-Borger, 138 F.Supp. at page 420, syllabus 10, 11; Atlantic Seaboard Corp. v. Federal Power Commission, 4 Cir., 201 F.2d 568; Phillips Petroleum Co. v. Federal Power Commission, 10 Cir., 227 F.2d 470; for reviewability is determined by the intrinsic nature of the order and its practical impact upon the business under regulation and not by the mere tag or label affixed to it; Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563; Frozen Food Express v. United States, 351 U.S. 40, 76 S.Ct. 569; United States v. Storer Broadcasting Co., 351 U.S. 192, 76 S.Ct. 763.
(c) Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., applies to I.C.C. proceedings: Amarillo-Borger, supra, 138 F.Supp. at page 417; Coyle Lines v. United States, D.C.E.D.La., 115 F.Supp. 272, 275; Atlanta & Saint Andrews Bay Railway Co. v. United States, D.C., 104 F.Supp. 193, at page 200; Chicago & E. I. R. Co. v. United States, D.C. S.D.Ind., 107 F.Supp. 118, 124. Section 8, 5 U.S.C.A. § 1007 applies for suspensions and temporary approval of Fourth Section applications are integral parts of investigations on the lawfulness of rates which must, of course, be determined upon hearings, see e. g., 49 U.S. C.A. § 15(1) "whenever, after full hearing * * *"; 15(7) "* * * the commission shall have * * * authority * * * to enter upon a hearing concerning the lawfulness * * *"; so that, while prescribing rates is so-called "rule making" under Section 1, 5 U.S.C.A. § 1001, the substantive statutes requiring the hearing thereby invoke Section 4, 5 U.S.C.A. § 1003(b) and Section 7, 5 U.S.C.A. § 1006. The Transportation Act likewise requires full adequate statement of Commission action, 49 U.S.C.A. §§ 14(1, 2), 17(5).
(d) That the granting or denial of suspensions requires the Commission to exercise sound judgment and discretion does not under Section 10, Administrative Procedure Act, 5 U.S.C.A. § 1009, class suspension orders as nonreviewable: Amarillo-Borger, supra, 138 F.Supp. at page 418, note 13; commenting on the legislative history (summarized note 13, Amarillo-Borger), the Supreme Court stated, Heikkila v. Barber, 345 U.S. 229, 231, 73 S.Ct. 603, 605, 97 L.Ed. 972, 976: "The spirit of these statements together with the broadly remedial purposes of the Act counsel a judicial attitude of hospitality towards the claim that § 10 greatly expanded the availability of judicial review * * *". The Court's purpose to apply the Administrative Procedure Act to reinvest in Courts the full power and responsibility of the Judiciary, Universal Camera Corporation v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456, is reflected in Shaughnessy v. Pedreiro, 349 U.S. 48, 51, 52, 75 S.Ct. 591, 594, 99 L.Ed. 868, 873, declining to forbid judicial review under the 1952 Immigration Act, 8 U.S.C.A. § 1101 et seq.: "Such a restrictive construction * * * would run counter to § 10 and § 12 of the Administrative Procedure Act. Their purpose was to remove obstacles to judicial review of agency action * * *. It is more in harmony with the generous review provisions of the Administrative Procedure Act * * *." "Exemptions from the terms of the Administrative Procedure Act are not lightly to be presumed * *", Marcello v. Bonds, 349 U.S. 302, 310, 75 S.Ct. 757, 762, 99 L.Ed. 1107, 1116; Air Line Dispatchers Association v. National Mediation Board, 89 U.S.App.D.C. 24, 189 F.2d 685, 688, 689; Ford v. United States, 5 Cir., 230 F.2d 533, 534.
"It further appearing, That consideration has been given to a petition by respondents, filed October 26, 1955, requesting vacation of the order of suspension, and of replies by [lists 5 protestants] thereto, and upon reconsideration of the previous action taken in this proceeding, we are reasonably satisfied that the said schedules if permitted to become effective would not  result in rates and charges, rules, regulations or practices which would be unjust and unreasonable, in violation of the Interstate Commerce Act or  constitute unfair and destructive competitive practices in contravention of the National Transportation Policy or  be in contravention of the provisions of section 4 of the Interstate Commerce Act; * *."