Interstate Commerce Commission v. Inland Waterways Corporation
Decision Date | 14 June 1943 |
Docket Number | No. 175,175 |
Parties | INTERSTATE COMMERCE COMMISSION et al. v. INLAND WATERWAYS CORPORATION et al |
Court | U.S. Supreme Court |
On Appeal from the District Court of the United States for the Northern District of Illinois.
Mr. Daniel H. Kunkel, of Washington, D.C., for appellant I.C.C.
Mr. Frank H. Cole, Jr., of Cincinnati, Ohio, for appellants Baltimore & O.R. Co. and others.
Messrs. Bryce L. Hamilton and A. B. Enoch, both of Chicago, Ill., for appellants Alton R. Co. and other western carriers.
[Argument of Counsel from page 672 intentionally omitted] Mr. Nuel D. Belnap, of Chicago, Ill., for appellees Inland Waterways Corporation and others.
Mr. Edward B. Hayes, of Chicago, Ill., for appellee A. L. Meckling.
Mr. W. Carroll Hunter, of Washington, D.C., for appellee Secretary of Agriculture.
By schedules filed with the Interstate Commerce Commission to become effective October 15, 1939, the appellant eastern railroads1 sought to deny grain arriving at Chicago by barge over the Illinois Waterways the privilege of moving out of Chicago by rail on 'proportional' rates applicable to competing grain arriving at Chicago by lake steamer or rail. The only other rates on which the ex-barge grain could move eastward by rail from Chicago were 'local' rates, which were in all cases higher than the existing 'proportional' rates. The proposed schedules were protested by barge lines and others desirous of maintaining the existing proportionals as to ex-barge grain.
Understanding of the controversy thus precipitated and the consequent litigation which has brought it to this Court requires a statement of the rather complicated rate structure to which the proposed schedules related.
The proposed schedules applied to grain, grain products and grain by-products, but for convenience we refer to them all as 'grain.' They dealt not only with grain com- ing by barge via the Illinois Waterways to Chicago, but also with grain so arriving at Peoria, Illinois, St. Louis, Missouri, and other related rate-break points. Chicago is illustrative of all, and for convenience we shall follow the practice employed by the parties in briefs and argument, and confine our discussion to it.
Grain originating at Chicago, grain brought there by truck, or by rail under intrastate rates, and grain which had forfeited its transit privileges, moved eastward by rail from Chicago on local rates. Their validity as such has not been questioned in this case.
Grain originating at certain places distant from Chicago had the privilege, however, of moving eastward from Chicago by rail on the lower proportional rates, although it came to rest at Chicago for marketing or processing. These 'proportionals' varied according to the region of origin or the region of destination; and, in some instances, according to both.
'Official Territory' lies east of Chicago and is divided into 'Central Territory,' 'Trunk-line Territory,' and 'New England Territory.' Central Territory lies west of a line drawn through Pittsburgh and Buffalo. To this territory there were three different sets of proportionals, set with reference to the territory of origin.
Grain originating at certain points in Illinois moved out of Chicago by rail to Central Territory on 'Illinois Re-Shipping' proportionals, which, however, did not apply to ex-barge grain and were not affected by the proposed schedules.
Grain originating in 'Northwest Territory' moved out of Chicago by rail to Central Territory on 'Northwest' proportionals, which were in some instances higher, and in others lower, than the Illinois Re,-Shipping proportionals. As first published, these proportionals applied only to grain originating in Northwest Territory, which comprises generally North Dakota, South Dakota, Minne- sota, Wisconsin, the upper peninsula of Michigan, Montana, Wyoming, Idaho, Oregon, Washington, and certain Canadian provinces. The Northwest proportionals were originally and have continued to be applicable on grain arriving at Chicago by lake. In 1932 the Northwest proportionals were amended to make them apply to shipments which 'arrived by boat line at Chicago * * *.' At the time this wording was put into the tariffs the only water-borne grain to which they applied was that arriving from the Northwest by boat over the Great Lakes. The Commission has decided that the effect of this amendment was to make the Northwest proportionals apply to grain arriving by barge over the Illinois Waterways, which were opened in the following year, 1933; and we accept its determination of this issue. While shipping points along the Waterways vary from 57.5 to 200.9 miles in distance from Chicago, some grain arriving there by barge originated at points as far beyond as Kansas City and St. Louis. The Northwest proportionals were the only ones which applied to ex-barge grain moving out of Chicago by rail to Central Territory, and the proposed schedules cancelled them as to such grain.
Grain brought by rail from 'Trans-Mississippi Territory', which included, among other places, Kansas City and St. Louis, moved out of Chicago to Central Territory on 'Trans-Mississippi' proportionals, which had been set by the Commission 3 cents lower than the Northwest proportionals, in order to equalize the Twin Cities with Kansas City. The Trans-Mississippi proportionals did not apply to grain coming from these points by barge, and therefore such grain had to pay a higher rate for the outbound haul than was required of grain coming from them by rail. No complaint has been made, however, of this; and the appellees have been content to assert that they are entitled to the Northwest proportionals as to such grain.
'Trunk-line Territory' lies between Central Territory and New England Territory, which comprises the New England States. To Trunk-Line and New England Territories the proportionals did not vary with the point of origin of the grain. These proportionals applied to grain coming to Chicago by barge over the Illinois Waterways, and the proposed schedules cancelled them as to such grain. The existing schedules provided that 'in no case shall the combination through rate to and from the re-shipping point via rail be less than the local rate from the re-shipping point to destination, the difference necessary to protect the local rate from the reshipping point to be added to the re-shipping rate therefrom.' No such provision was made with respect to the barge-rail traffic, and the Commission found accordingly that 'the barge-rail rates are far below the local rates from the re-shipping points in contravention of the fourth-section rule,2 while the all-rail rates are in strict conformity with that rule.'
When the proposed schedules were filed with the Commission, that body, acting pursuant to its authority under § 15(7) of the Act,3 suspended them for the allowable period of seven months and entered upon a hearing of their lawfulness. The last testimony was heard, and the record in the case closed, on January 26, 1940. On September 18, 1940, the President approved the Transportation Act of 1940.4 Thereafter the appellee Inland Waterways Corporation requested the Commission to dispose of the proceeding in the light of the new Act. On July 31, 1941, Division 2 of the Commission found that 'the proportional rates here in issue have never been applicable on this barge traffic moving on unfiled rates,' and that 'the schedules under suspension are not shown to be unlawful.' It announced that an order would be entered vacating the already expired order of suspension and discontinuing the proceedings.5 When the period of compulsory suspension ended, the carriers had voluntarily continued the suspension.
In its petition for rehearing and reconsideration of this report the Inland Waterways Corporation asserted that the Commission had permitted discrimination against a connecting line forbidden by § 3(4) of the Interstate Commerce Act as amended by the Transportation Act of 1940.6 It suggested that the Commission fix the existing proportional rates as the proper ones, stating that: 7
The decision of the whole Commission on reconsideration was announced on December 1, 1941.8 In it the Commission took official notice that certain of the protestant barge carriers had attained common carrier status under the Act, and stated that 'no useful purpose would be served by further hearing or reargument.'9 The Commission reviewed the existing rate structure and the probable effects of the proposed changes in operation as contrasted to the effects of denying them, and said:
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