Chicago St Ry Co v. Public Utilities Commission of Idaho, 242

• Decision Date: 16 May 1927
• Docket Number: No. 242,242
• Citation: 71 L.Ed. 1085,274 U.S. 344,47 S.Ct. 604
• Parties: CHICAGO, M. & ST. P. RY. CO. et al. v. PUBLIC UTILITIES COMMISSION OF IDAHO
• Court: U.S. Supreme Court

274 U.S. 344

47 S.Ct. 604

71 L.Ed. 1085

CHICAGO, M. & ST. P. RY. CO. et al.

v PUBLIC UTILITIES COMMISSION OF IDAHO.

No. 242.

Argued March 17, 1927.

Decided May 16, 1927.

Messrs. F. M. Dudley and Thomas Balmer, both of Seattle, Wash., and F. G. Dorety, of St. Paul, Minn., for petitioners.

Mr. C. E. Elmquist, of St. Paul, Minn., for respondent.

Mr. Justice BUTLER delivered the opinion of the Court.

August 20, 1923, respondent made an order reducing the Idaho intrastate rates for the transportation of sawlogs by railroad. Petitioners appealed to the Supreme Court of the State, and there the order was affirmed. 41 Idaho, 181, 238 P. 970.

The Director General of Railroads by Order No. 28, effective June 25, 1918, advanced all rates. An addition of 25 per cent. was made to the interstate an intrastate rates on sawlogs. In 1920 the Interstate Commerce Commission authorized the carriers further to increase rates. Ex parte 74, 58 I. C. C. 220, 246. The addition to freight rates in the Mountain-Pacific group that includes Idaho was 25 per cent. The respondent authorized additions of 25 per cent. to rates on intrastate freight including sawlogs. In 1922 the Interstate Commerce Commission found the freight rates unreasonable, on and after July 1, 1922, to the extent that the rates in effect immediately before the increases authorized in Ex parte 74 were exceeded by more than specified percentages; and that stated for the Mountain-Pacific group was 12 1/2 per cent. The carriers were authorized to reduce rates in accordance with these findings. Reduced Rates, 1922, 68 I. C. C. 676, 734. As applied to interstate traffic in sawlogs, such reduction was 10 per cent. Respondent authorized corresponding reductions on Idaho intrastate freight. While the reductions were generally made by the railroads throughout the country and in Idaho, the petitioners did not make any reduction of interstate or intrastate rates on logs. And no reduction of the interstate rate has been ordered by the Interstate Commerce Commission.

September 28, 1922, the respondent ordered petitioners, by answer filed within a specified time, to show 'compliance or noncompliance in the matter of reduction of rates on sawlogs and other forest products intrastate within the state of Idaho in accordance with the findings of the Interstate Commerce Commission,' and that they show cause why such reduction should not be made. The Chicago, Milwaukee & St. Paul, the Great Northern, and the Northern Pacific answered. Each stated that it had put in effect the reduced rates on intrastate freight except sawlogs, and that it had not reduced interstate or intrastate rates on sawlogs because the existing rates were unreasonably low and confiscatory and should be increased. At the hearing the carriers offered evidence that the existing rates were unreasonably low and confiscatory. The Western Pine Manufacturers' Association intervened to support the proposed reduction. It has about 59 members who manufacture annually about 1,500,000,000 feet of lumber in the inland empire-eastern Washington and Oregon, Idaho, and Western Montana. The logs hauled intrastate in Idaho constitute a very small part of those sawed by the members of the association. The Chicago, Milwaukee & St. Paul analyzed its Idaho intrastate log traffic in the first 10 days of each month in 1921. It hauled 3,876 carloads an average distance of 36.2 miles for $68,174.17. It introduced evidence to show that taxes, operating expenses, rentals, and interest on investment chargeable to that traffic amounted to $94,658.13, and that taxes and operating expenses alone amounted to $62,622.88. The Great Northern in 1921 hauled 2,620 carloads an average distance of 26.2 miles for $46,130.87, and offered evidence that operating expenses chargeable to that traffic exceeded revenue. The Northern Pacific in the year ending October 1, 1922, hauled 240 carloads. There was no evidence indicating revenue received from or operating expenses chargeable to that traffic. But the company called as a witness its special traffic representative, a man of long experience in its operating and traffic departments, who testified that in his opinion the rates were confiscatory. The Spokane & International in 1921 hauled 1,250 carloads for about $22,800. The witnesses called by petitioners made comparisons of rates and testified that those on logs were relatively low. The Western Pine Manufacturers' Association, by cross-examination of carrier witnesses and by the testimony of its traffic manager, showed that in the Northwest the Northern Pacific originally established the rates on logs, and made them very low in order to move the logs to the mills for the manufacture of lumber to be shipped long distances to Eastern markets; that carriers later building into that territory pursued the same policy and that the rates in Idaho were so made; that these rates remained until federal control; that some of the tariffs state that the rates are established to furnish logs to manufacturers who are to forward equivalent products over the carrier's railroad; and that, if the condition is not complied with, higher rates will be charged. It was not shown to what extent, if any, such higher rates were collected. The traffic manager of the association testified that practically all of the lumber moved long distances in interstate commerce; that freight on logs is a part of the manufacturer's operating cost, while freight on lumber is borne by the consumer. By way of illustration, it was estimated that the logs hauled intrastate in Idaho by the Chicago, Milwaukee & St. Paul in 1921 would produce lumber sufficient to yield freight revenue of $1,279,080, and that those hauled by the Great Northern would make lumber enough to produce $288,123.

The respondent found the existing rates on sawlogs unreasonable and discriminatory and ordered the carriers to file tariffs 'in compliance with the reductions in the findings of the Interstate Commerce Commission * * * applicable to shipments on sawlogs intrastate. * * *' Respondent's opinion gives the following reasons: The existing relation between...