Plantiffs Brief — CHICAGO & C. RY. CO. v. Pub. Utilities Comm.

Supreme Court brief1917

Ask Donna

What actually matters in this document.

Text

FiILHD

OCT 30 1916

JAMES D. MAHER

Cle

fe}

IN THE

Supreme Court of the United States

Ocvoper Term, A. D. 1915.

No. ha 148

CHICAGO, MILWAUKEE & ST. PAUL RAILWAY

COMPANY,

Plaintiff in Error,

vs.

STATE PUBLIC UTILITLES COMMISSION OF

ILLINOIS,

Defendant wm Error.

IN ERROK TO THE SUPREME COURT OF THE STATE OF ILLINOIS,

BRIEF AND ARGUMENT ON BEHALF OF

PLAINTIFF IN ERROR.

Burron Hanson,

O. W. Dynes,

Attorneys for Plaintiff in Error.

GUNTHORP. WARREN PRINTING COMPANY, CHICAGO,

SUBJECT INDEX.

Argument . . - ceeeees steerer seeeeeeaee hia Nik selek hele hues he Rew

Brief of ATEUMENE . . Leese eee eee eee eect ee teen eee ence eee eeecees 11

Burden of proof... ..---++++- pee wale Nowab Maine wea sinisine oe csrece's 21

Conflict of state authority with interstate authority in regulation of

rate in Question . . 2... cee ese e cece cece eee n cece eee eneereneees 22-30

Diagram illustrating rate relationships...........-.-.+e++eeeeeeees 4

Discrimination against interstate commerce..............+-..eee0- 31

Discrimination against persons and localities.................064- 36

Effect of complying with order.............. sc cee cece eee e eee eeee 34

Brrovs relied UPOD.....ccccccecsccsccccccccsccccccces eee 7-10

Failure of proof to justify order of reduction in rate............... 35-36

Interstate Commerce Commission's decision cited and quoted from.. 23

Interstate Commerce Commission passed on record contained in this

MELLO OE RE OR COL EEE CC OT ee CO ET ee 4-5

Local and proportional rates involved in the through rate.......... 3

Seiiien CITE GI ik kh nok acca cased dcisnwcese seuns 36

Means of remedy exhausted in state tribunals....................- 20

Northern Pacific versus State of Washington Case a precedent...... 27-28

Order appealed from in contravention of Section 15 of Act to Reg-

Be COUIIE os, Lanes HOERN daca hire cee Onceee Kev nwen eben 38

Oiies Carriers mot Giected Me GRU eo. ines ic ccicicdsnes keneedecewicws 2

Preferential advantages to Illinois coal producers.................. 36

Present rate one hundred per cent. higher than rate ordered........ 4

Relationship of intrastate and interstate rates illustrated.......... 4

Section 13 of the Act to Regulate Commerce contravened........... 37

Section 6 of Act to Regulate Commerce contravene! by order........ 39

Peete ENE oi. & conpicdanas cde ese emkwos kucasaNalKaeaems 41

Specification of errors relied upon.............ceceeeeeee peomucek 7-10

State Public Utilities Commission of Illinois, successor of Railroad

& Warehouse Commission of the State of Ilinois................ 2

ND RII I a 06h 3 Nag os bh Wace a Sea etaeeh oh: c RRS 1

Violation of Section 3 of Act to Regulate Commerce............... 36

When this court will review findings of facts..................205- 26

Last oF AUTHORITIES CITED.

tees

Cee ececone

Gulf, Colorado & Santa Fe Ry. Co. v. Hefley, 158 U. S., 98, 103, 104 12

nL Ws SOE, Oe I. 05,5 BOO BOB ais. 0'5.0 0 bens codie ovo ¥55.66560% veedeny 19

Houston East & West Texas Ry. Co. v. U. S. and Texas Pacific Ry.

Co. v. U. S., 234 U. S., 342, 350, 351, 354, 355, 358...............,

SR MieaNse Reh WOE Nb bS OS'S WSs MG Rates 13, 15, 16, 17, 18, 29, 30, 38, 39, 41

Illinois Central R. R. Co. v. Behrens, 233 U. S., 478..............., lq

PE SE SUNG 3 15 5s 69 a das Pee ho Sw she EN Cade he's oko cnS ee lv

Interstate Commerce Commission vy. I. C. R. R. Co., 215 U. S., 452.. 26

Interstate Commerce Commission v. L. & N. R. R. Co., 227 U. S., 88,

EE Oe NS COL EOE EE EES TY TORE Pe ny ee 20, 35

Kansas City Southern Ry. v. Albers Commission Co., 223 U. S., 573,

PC iiacs Shaws ke eA Wa biW OR RaOg Se ecuay eases sebbounabas en ucuaee 19, 26

Louisville & Nashville R. R. Co. v. Eubank, 184 U. S., 27.......... 13, 19

pepe @: Sb; RP BOP UW Bi, GAB is ini aviviie secs ccdbecesciacanes 19

Minnesota Rate Cases, 230 U. S., 352, 399, 400, 401.......... 12, 13, 18, 41

Mississippi R. R. Commission v. I. C. R. R. Co., 203 U. S., 385...... 19

' Mondou v. N. Y. N. H. & H. R. R. Co., 223 U. S., 1, 47, 54, 55........ 2

Northern Pacific Ry. v. North Dakota, 236 U. S., 585, 593.......... 19, 26

Northern Pacific Ry. Co. v. Washington, 222 U. S., 370, 378...... 11, 12, 27

Poehlmann Bros. Company v. C. M. & St. P. Ry. Co. 30 1. 0. C,

89, 92. FS ee Pe Te rere eee 5, 11, 12, 21, 22, 23, 27, 29, 30, 35

Railroad Chaatndee of Ohio v. Worthington, 225 U. S., 101....... , xs

iii

gecond gmployers’ Liability Cases, 223 U. S., 1, 47, 48, 51, 58, 54...18,17

shreveport Case, 234 U. S., $42....- 13, 15, 16, 17, 18, 29, 30, 33, 39, 41

th v. Alabama, 124 U. S., 465, ES cuhnvesad cxveseasen seer rene 13

gouther® Pacific Co. V- 1.6. C., 219 U. 8., MBB. cin cccccccsncasonsss® 36

gouthern Ry. Co. v. U. S., 222 VU. &., 20, 26, 2T.--eeeecccrncrerrrre® 17

gouthern Ry. Co. v- Reid, 09D U. S., 424, 486. --eeeeeecrererentr ets 12

southwestern Telegraph & Telephone Company V. Danaher, 238 U. S.,

cg one” SaaS 18

st. Louis gs, W. Ry. ©. ¥- Arkansas, 217 U. @., IDB... csccccccrerors 18

mexas & N. oO. R. R. v. Sabine Tram Co., 227 U. S., AS acca tenes e% 18

Texas & Pacific Ry. Co. v. U. 8. 284 U. S., 342, BB1..--+--eeee°"*

Teh Fe ok sqanowancnnnks nae tae 15, 16, 17, 18, 29, 30, 33, 39, 41

Wabash Ry. Co. V sien: 4 TH, OOF, WF. «wo s0r esas ere nee” 19

Welton V. Missouri, 91 U. S., BE GOD, snevcnesnseseessesesersene*” 12

Wood v. Chesborough, 228 Ty. B., GIB, CUB. 200000 rscerccersrereee* 19, 26

Yazoo & Miss. Valley R. Co. v. Greenwood Grocery Co., 227 U. S., 2 3

IN THE

Supreme Court of the United States

Ocroser Term, A. D. 1915.

No. 495

CHICAGO, MILWAUKEE & ST. PAUL RAILWAY

COMPANY,

Plaintiff in Error,

vs.

STATE PUBLIC UTILITIES COMMISSION OF

ILLINOIS,

Defendant in Error.

IN ERROR TO THE SUPREME COURT OF THE STATE OF ILLINOIS,

BRIEF AND ARGUMENT ON BEHALF OF PLAIN-

TIFF IN ERROR.

STATEMENT OF THE CASE.

May IT PLEASE THE CouRT:

On complaint of Poehlmann Bros. Company the IIli-

nois Railroad and Warehouse Commission, through the

order complained of, reduced by 50 per cent, a factor of

a through rate common to interstate and intrastate traf.

fic on a record which was passed upon by the Interstate

Commerce Commission and held insufficient to warrant

any reduction in that factor. On appeal the Supreme

Court of Illinois sustained and affirmed the order of the

Illinois Commission. The case is brought to this court

on writ of error.

The order appealed from relates to transportation

charges on coal and on manure consumed in connection

with the production of flowers at the plant of Poehlmann

Bros. Company, Morton Grove, Illinois. The portion of

the order relating to charges on manure does not involve

interstate traffic and is not before this court. Several

carriers were joined with plaintiff in error as defend-

ants in the proceeding before the Railroad and Ware.

house Commission ( Trans., 2; Rec., 6), but the order wag

entered against the plaintiff in error alone. (Trans., 12;

Rec., 35.) Since the order was entered the Railroad and

Warehouse Commission of the State of Illinois has been

superseded by the State Public Utilities Commission of

Illinois. (Trans., 20; Ree., 92.)

The rate ordered reduced applies to that portion of

through hauls which lies between Chicago, Illinois, and

Morton Grove, Illinois, for which transportation the

plaintiff in error makes a charge of forty cents per ton

on carload shipments of coal which are moved as far as

Chicago on proportional rates applicable from points of

origin in Illinois, Indiana, Ohio and certain other States.

The Chicago, Milwaukee & St. Paul Railway Company

has its eastern terminus at Chicago. It, therefore, does

not reach the coal fields to the east and south of that

CRIES PETE A pray

terminus from which Chicago and its environs obtain

coal. Morton Grove is a suburban town northwest of

Chicago, where Poehlmann Bros. Company operates ex-

tensive greenhouses that are heated by coal.

Quite a large number of railroads carry coal from

southern points in Illinois and Indiana to Chicago. Also

from points farther east, in Ohio, Pennsylvania and West

Virginia. Those roads publish two kinds of rates, namely:

(a) <A local rate, applicable from point of origin

to destinations on their own rails in Chicago, and

(b) A proportional rate, applicable as a propor-

tion of a through rate when the coal passes through

Chicago to points beyond on the rails of a connecting

carrier, such as the Chicago, Milwaukee & St. Paul

Railway Company.

When the coal moves under the through rate to destina-

tions beyond Chicago, the charge of the originating car-

rier is ten cents a ton less than its local rate to Chicago.

This proportional rate, combined with the local rate of the

Chicago, Milwaukee & St. Paul Railway Company as a

connecting carrier, makes up the through rate from point

of origin, via Chicago, to destinations beyond Chicago,

such as Morton Grove, (Trans., 2; Rec., 8) the destina-

tion involved in this proceeding. The earnings of the

Milwaukee Road out of the through rate on such coal

movements are its full local rates, as published in its

tariffs. Forty cents per ton is its local rate on carload

shipments of coal from Chicago to Morton Grove.

(Trans., 13; Ree., 48.) The earnings of the inbound car-

riers vary with the distances from Chicago of the points

of origin. For the shorter hauls, which are from Indiana

points of origin and Illinois points of origin, their earn-

ings are the lowest.

To further illustrate this rate structure in its gi

aspects we submit the diagram on the adjoining

The distance from Pana, Illinois, to Morton Grove, Tj.

nois, is 217 miles. The through rate on coal, $1.29, From

Sullivan, Indiana, to Morton Grove, the distance is 216

miles and the through rate, $1.27. The effect of the Ti.

nois Commission’s order here involved, is to reduce the

rate on coal between Pana, Illinois, and Morton Grove,

Illinois, to $1.02, which is 25 cents a ton less than the

current rate from the Indiana point equally distant. The

portion of the route marked in red on the diagram jg

over the rails of the Milwaukee Road and is common to

all movements of coal to Morton Grove, whether they

originate in Illinois, Indiana, Ohio, Pennsylvania or West

Virginia, and whether they originate on the lines of the

Chicago & Eastern Illinois Road, shown on the diagram,

or on the lines of any of the many other roads that haul

coal to Chicago from points in the States named.

It is the portion of the route between Chicago and

Morton Grove, shown in red, on which the Illinois Com.

mission ordered the fifty per cent. reduction in rate and

on which the Interstate Commerce Commission held, on

the same record, that the rate is not shown to be unrea-

sonable and may not properly be regulated apart from

the through rate as a whole.

The question passed upon in the order appealed from

in this case was decided by the Interstate Commerce

Commission on a complaint brought against the Chicago,

Milwaukee & St. Paul Railway Company by Poehlmann

Bros. Company, the same complainant that brought the

complaint before the Illinois Railroad & Warehouse Com-

mission which resulted in the order that is here being re-

viewed.

At the time the Interstate Commerce Commission took

jurisdiction of this question, that Commission had before

ILLUSTRATIVE DIAGRAM

PANA

SULLIVAN Va

c RATE

. DISTANCE DER TON

Pana to Morton Grove 2!17 Miles €1.2e2

Sullivan to Morton Grove 21G Miles $127

it the same evidence and in fact the same record that

was before the Illinois Commission when it subsequently

heard the case and entered the order appealed from.

How the two Commissions happened to pass upon the

same record is explained by the fact that the record

made before the Interstate Commerce Commission, in so

far as facts and evidence are concerned, was, by agree-

ment and stipulation between the parties, made the rec-

ord before the Railroad & Warehouse Commission of the

State of Illinois at the hearing before that body. (Trans.,

19; Ree., 69-89.)

There were added to the record before the Illinois Rail-

road & Warehouse Commission a few questions and an-

swers not contained in the record before the Interstate

Commerce Commission (Trans., 14 to 19; Ree., 49-68),

but those questions and answers in no way changed or

modified any fact here involved and are in no part ma-

terial to the issues before this court. The Interstate Com-

merce Commission held that the evidence was not suf-

ficient to warrant a reduction in the rate that was re-

duced by the Illinois Commission acting on the same

record. The Interstate Commerce Commission’s de-

cision is reported in Poehlmann Bros. Company v. C. M.

¢ St. P. Ry. Co., 30 1. C. C., 89.

The Interstate Commerce Commission, in taking juris-

diction of the question involving the rate subsequently

regulated by the Illinois Commission, found the rates

from points of origin to destination, as published in the

carriers’ tariffs, to be ‘‘through rates,’’ and held that the

factor of the through rates which the Illinois Commission

regulated, could not be regulated independent of or apart

from a regulation of the through rate as a whole. Id., 92.

The tariffs on which the State Commission passed

were constructed the same as those on which the Inter-

be regulated as a whole and not by the regulation of g

single factor thereof. (Trans., 2, 3, 11, 13, 14; Ree,

6-10, 32-34, 45-57.)

The Illinois Commission specifically found, as did the

Interstate Commerce Commission, that the Tecord con.

tained no evidence attacking the through rate as a Whole,

(Trans., 11; Rece., 33) and specifically held that the eyj.

dence did not justify it in entering upon a regulation of

the through rate. (Trans., 11; Ree., 34.)

in Illinois, (Trans., 15; Ree., 59.) Prior to the time

the Interstate Commerce Commission dismissed the com-

Plaint against the factor of the through rates, which the

Illinois Commission reduced, Poehlmann Bros. Com.

pany received two-thirds of its coal over interstate routes

from points east of Illinois, (Trans., 25, Ree., 105.)

SPECIFICATION OF ERRORS RELIED UPON

(1) The order of the Railroad and Warehouse Com-

mission of the State of Illinois appealed from is in viola-

tion of paragraph three of Section 8 of Article I. of the

Constitution of the United States in that said order regu-

lates, or assumes to regulate, a feature of commerce in

which interstate commerce and intrastate commerce are

commingled and said order was entered after federal

jurisdiction of said feature of commerce had been

taken by the Interstate Commerce Commission and

said order of the Railroad and Warehouse Com-

mission of Lllinois regulates, or attempts to regu-

late, said feature of commerce differently from

and inconsistently with its regulation by the Inter-

state Commerce Commission, thus constituting a burden

upon and an interference with interstate commerce. The

Supreme Court of Illinois, therefore, erred in sustaining

and affirming said order of the Railroad and Warehouse

Commission of Illinois.

(2) The order of the Railroad and Warehouse Com-

mission of the State of Illinois appealed from is in viola-

tion of paragraph three of Section 8 of Article I. of the

Constitution of the United States in that said order re-

quires plaintiff in error to discriminate against localities

outside the State of Illinois and grant preferences to

localities within the State of Illinois in the charges which

_ it makes for identically the same service in transporting

over its rails carloads of coal. The Supreme Court of

Illinois, therefore, erred in sustaining and affirming said

order of the Railroad and Warehouse Commission of

Illinois.

(3) The order of the Railroad and Warehouse Com-

mission of the State of Illinois appealed from contravenes

Pie

we OTe

8 ee

Section 3 of the Act to Regulate Commerce ag amended

in that said order requires plaintiff in error to give

and unreasonable preference and advantage to pe

companies, firms and corporations who are Producers

and shippers of coal and who are located within the State

of Illinois, in that said order requires Plaintiff jp

error to subject persons, companies, firms and corpora.

tions who are producers of coal outside the State of Illi.

state shipments of coal. The Supreme Court of Tlinois,

therefore, erred in sustaining and affirming said order of

the Railroad and Warehouse Commission of Illinois,

(4) The order of the Railroad and Warehouse Com.

venes Section 6 of the Act to

amended in that said order requ

charge different and less compensation for transportation

of property, to wit: carloads of coal, and for services in

mission of any state and obtain such relief as the com-

plaint might merit and in lieu thereof attempted to sub-

stitute power and assumed authority of its own to investi-

gate and regulate a feature of commerce in which inter-

state and intrastate commerce are commingled and over

which the Federal Congress, by action of the Interstate

Commerce Commission, had already assumed jurisdic -

tion. The Supreme Court of Illinois, therefore, erred in

sustaining and affirming said order of the Railroad and

Warehouse Commission of Illinois.

(6) The order of the Railroad and Warehouse Com-

mission of the State of Illinois appealed from contravenes

Section 15 of the Act to Regulate Commerce as amended

in that said section delegates to the Interstate Commerce

Commission power and authority over through rates and

joint rates and power and authority to prescribe just and

reasonable individual or joint charge or charges for

through transportation participated in by two or more |

carriers and the Railroad and Warehouse Commission of

the State of Illinois, by its order in this case, regulates,

or assumes to regulate, one factor of a through rate with-

out regard to the through rate as a whole, which factor is

applicable alike on interstate and intrastate traffic and

which factor the Interstate Commerce Commission, acting

within its lawful functions, held to be a factor not sub-

ject to independent regulation apart from the through

rate. The Supreme Court of Illinois, therefore, erred in

sustaining and affirming said order of the Railroad and

Wareliouse Commission of Illinois.

(7) The order of the Railroad and Warehouse Com-

mission of the State of Illinois appealed from is unrea-

sonable and unlawful in that said commission, without

finding the through rate excessive or discriminatory and

without facts before it on which to make such finding,

entered said order to reduce, solely for the benefit of Ili-

nois shippers and producers of coal, the transportation

charges for a factor of the transportation servic jp.

volved that is common to interstate and Illinois moyp.

ments of coal and over which factor the Interstate Com.

merce Commission had previously assumed jurisdiction

and held, on the same record, said factor wag not

shown to be subject to separate regulation apart from

the through rate as a whole. The Supreme Court of ]]jj.

nois, therefore, erred in sustaining and affirming gaiq

order of the Railroad and Warehouse Commission of

Illinois.

(8) The Interstate Commerce Commission having

held, on the same evidence that was presented to the

Railroad and Warehouse Commission of the State of Ili.

nois in this case, that the Chicago, Milwaukee & St. Pay]

Railway Company was not obliged to reduce its charges

for that part of the through service involved in both

interstate and Illinois transportation of coal unless and

until the through rate was shown to be unreasonable or

discriminatory, the order of the Railroad and Warehouse

Commission of the State of Illinois appealed from, being

in conflict with the opinion of the Interstate Commerce

Commission entered on the same state of facts, is void,

because of being in contravention of the Act to Regulate

Commerce as amended and of paragraph three of Section

8 of Article I. of the Constitution of the United States.

The Supreme Court of Illinois, therefore, erred in affirm.

ing and giving effect to said order of said Railroad and

Warehouse Commission.

(9) There is insufficient evidence in the record to

justify the order of rate reduction entered by the Rail-

road and Warehouse Commission of Illinois. This ques-

tion of fact having been so determined on the same ree-

ord by the Interstate Commerce Commission, the Sn-

preme Court of Illinois erred in sustaining and affirm.

ing said order of the Railroad and Warehouse Commis-

sion of Illinois.

—————

BRIEF OF ARGUMENT. |

—_—_——

The order of the Railroad and Warehouse Commission

of the State of Illinois, the validity of which this court is

asked to pass upon, is unlawful for the following rea-

sons:

The order is unlawful in that it is an attempt by the

Illinois Commission to exercise assumed jurisdiction of a

rate question over which the Interstate Commerce Com-

mission had previously assumed jurisdiction and has in-

dicated the manner in which said rate question might be

regulated and the manner in which it might not be regu-

lated.

Northern Pacific Ry. Co. v. State of Washing-

ton, 222 U. S., 370.

Poehlmann Bros. Company V. C. M. & St. P. Ry.

Co., 30 1. C. C., 89, 92.

The Illinois Commission assumes, by the order, to

regulate the question in the manner which the Interstate

Commerce Commission has held it should not be regu-

lated, namely : by regulating one factor, to wit: the factor

common to interstate and intrastate shipments alike,

without regulating the through rate as a whole. (See

Opinion of Illinois Commission, Trans., pp. 11, 12.)

The two Commissions acted on identically the same

record. The record on which the Interstate Commerce

Commission acted was, by stipulation, made the record

upon which the Illinois Commission acted. (Trans., 14;

Rec., 49.) The action of the Interstate Commerce Com-

mission on this question, and its report of its conclusions,

will be found in Poehlmann Bros. Company vy. C. M. ¢

St. P. Ry. Co., 30 I. C. C., 89, 92.

‘There is no room in our scheme of Government

for the assertion of State power in hostility to the

authorized exercise of Federal power. The author.

ity of Congress extends to every part of interstate

commerce, and to every instrumentality or agen

by which it is carried on; and the full control by

Congress of the subjects committed to its regulation

is not to be denied or thwarted by the commingling

of interstate and intrastate operations.’’

Minnesota Rate Cases, 230 U. S., 352, 399,

See also:

Mondouv. N. Y.,N. H. & H.R. R. Co., 223 U. 8,

1, 47, 54, 55.

aa.

‘‘In matters, admitting of diversity of treatment

according to the special requirements of local condi-

tions, the States may act within their respective

jurisdictions until Congress sees fit to act; and, when

Congress does act, the exercise of its authority over.

rides all conflicting State legislation.’’

Minnesota Rate Cases, 230 U.S., 352, 399, 400.

See also:

So. Ry. Co. v. Reid, 222 U.S., 424, 436.

Northern Pac. Ry. Co. v. Washington, 222 U.S,

370, 378.

Gulf, Colorado € Santa Fe Ry. Co. v. Hefley, 158

U. S., 98, 103, 104.

Bowman v. C. & N. W. Ry. Co., 125 U. S., 465,

481, 485.

Gloucester Ferry Co. v. Pennsylvania, 114 U.S.,

196, 204.

County of Mobile v. Kimball, 102 U. S., 691, 697.

Welton v. Missouri, 91 U.S., 275, 280.

Ex parte McNiel, 13 Wall., 236, 240.

Cooley v, Board of Wardens, 12 How., 299, 319.

Ill.

The Interstate Commerce Commission is clothed with

power, granted by Congress through the Act to Regu-

jate Commerce, adequate to meet the varying exigencies

that arise and to protect the national interests by secur-

ing the freedom of interstate commercial intercourse

from local control.

Houston, East & West Texas Ry. Co. v. U. S.,

and Texas & Pacific Ry. Co. v. U. S. (Shreve-

port Case), 934 U. S., 342, 350, 351.

See also:

Minnesota Rate Cases, 930 U. S., 352, 398, 399.

Second Employers’ Liability Cases, 223 U.S,

1, 47, 53, 54.

Smith v. Alabama, 124 U. S., 465, 473.

County of Mobile v. Kimball, 102 U. S., 691, 696,

697.

Brown v. Maryland, 12 Wheat., 419, 446.

Gibbons v. Ogden, 9 Wheat., 1, 196, 224.

iv.

“The power to deal with the relation between two

kinds of rates, aS 4 relation, lies exclusively with

Congress. It is manifest that the State cannot

the relation of the earrier’s interstate and intra-

state charges without directly interfering with the

former, unless it simply follows the standard set by

Federal authority.”’

Houston & Texas Ry. V. U. S., 234 U. S., 342,

354.

See also:

L.&N.R. R. v. Eubank, 184 U. S., 27.

¥.

On the question of whether the order appealed from

is in fact injurious and whether it does actually involve

substantial property rights, we direct attention to the

undisputed evidence that it reduces the gross earnings

of the plaintiff in error on the coal in questi st fifty

per cent. That the original complainant, Poehlmann

Bros. Company, shipped two-thirds of its coal interstate

from points of origin outside the State of Illinois prior

to the decision of the Interstate Commerce Commission

(Trans., 25; Rec., 105) is undisputed; that when the In-

terstate Commerce Commission failed to reduce the

rate and after Poehlmann Bros. Company instituted

proceedings before the Illinois Commission that shipper

changed its patronage from Eastern mines to Illinois

mines and receives now ninety-five per cent. of its coal

from Illinois points of origin (Trans., 15; Rec., 59) is ad-

mitted; that it ships approximately 30,000 tons of coal

per annum to its plant at Morton Grove (Trans., 24;

Rec., 105. Trans., 15; Ree., 58, 59) is undisputed; that

the plaintiff in error’s rate of 40 cents per net ton was

reduced by order of the State Commission to not ex-

ceed 20 cents per net ton on the coal in question (Trans,

12; Ree., 35) is also undisputed; that plaintiff in error

would lose $6,000 per year on Poehlmann Bros. Com-

pany’s coal, alone, by the enforcement of the order ap-

pealed from is obvious; that producers of coal in other

states than Illinois, who were formerly patronized, will

be discriminated against and will lose business to the

Illinois competitor, is already an established fact.

‘‘That an unjust discrimination in the rates of a

common carrier, by which one person or locality is

unduly favored as against another under substan-

tially similar conditions of traffic, constitutes an evil

is undeniable; and where this evil consists in the

action of an interstate carrier in unreasonably dis-

criminating against interstate traffic over its line,

the authority of Congress to prevent it is equally

clear. It is immater.*' so far as the protecting

ower of Congress is concerned, that the discrim-

ination arises from intrastate rates as compared

with interstate rates. The use of the instrument of

interstate commerce in a discriminatory manner so

as to inflict injury upon that commerce, or some

art thereof, furnishes abundant ground for Federal

intervention. Nor can the attempted exercise of

state authority alter the matter, where Congress has

acted, for a State may not authorize the carrier to

do that which Congress is entitled to forbid and has

forbidden.’’

Houston & Texas Ry. v. U. S., 234 U. S., 342,

354.

‘Tt is also clear that, in removing the injurious

discriminations against interstate traffic arising

from the relation of intrastate to interstate rates,

Congress is not bound to reduce the latter below

what it may deem to be a proper standard fair to

the carrier and to the public. Otherwise, it could

prevent the injury to interstate commerce only by

the sacrifice of its judgment as to interstate rates.

Congress is entitled to maintain its own standard

as to these rates and to forbid any discriminatory

action by interstate carriers which will obstruct the

freedom of movement of interstate traffic over their

lines in accordance with the terms it establishes.”’

Houston & Texas Ry. v. U. S., 234 U. S., 342,

355.

When the carrier is charging a rate for transportation

which the Interstate Commerce Commission holds is not

shown to be excessive or discriminatory, and is ordered

by a State Commission to reduce that charge fifty per

cent. in favor of the intrastate business, an obvious dis-

crimination must result from an obedience of such order.

The carrier, in such case, has the legal right to choose

whether it will eliminate the discrimination by reduej

both the intrastate rate and the interstate rate or by

disregarding the State Commission’s order to reduce the

intrastate rate, and continuing to maintain both rates on

the interstate rate basis.

Great Northern Railway Company v. State of

Minnesota, 238 U. S., 340.

The order appealed from commands and directs the

plaintiff in error to perform transportation Services for

intrastate shippers of coal at the rate of 20 cents per ton,

or one-half the transportation charge it is lawfully col-

lecting from interstate shippers for identically the same

service. Said order of the Illinois Commission was af-

firmed by the Supreme Court of Illinois after the Inter.

state Commerce Commission, considering the complaint

of the same complaining party, on the same evidence as

was before the Illinois Commission, had sustained and

upheld as lawful the charge of 40 cents per ton for trans-

porting the coal in question over the same rails and be-

tween the same points involved in the Illinois Commis-

sion’s decision and order.

‘“Wherever the interstate and intrastate transac.

tions of carriers are so related that the government

of the one involves the control of the other, it is

Congress, and not the State, that is entitled to pre-

scribe the final and dominant rule, for otherwise

Congress would be denied the exercise of its consti-

tutional authority and the State, and not the Nation,

would be supreme within the national field.”

Houston & Texas Ry. v. U. S., 234 U. S., 342,

351, 352.

See also:

Illinois Central R. R. Co. v. Behrens, 233 U. §.,

473.

Interstate Commerce Commission v. Goodrich

Transit Company, 224 U. S., 194, 205, 213.

Second Employers’ Liability Cases, 223 U. S.,

1, 48, 51.

Southern Railway Co. v. U. S., 222 U. S., 20, 26,

27.

B. & O. R. R. Co. v. Interstate Commerce Com-

mission, 221 U. S., 612, 618.

VIiil.

“The fact that carriers are instruments of intra-

state commerce, as well as of interstate commerce,

does not derogate from the complete and paramount

authority of Congress over the latter or preclude

the Federal power from being exerted to prevent the

intrastate operations of such earriers from being

made a means of injury to that which has been con-

fided to the Federal care.”’

Houston & Texas Ry. v. U. S., 234 U. S., 342,

351.

IX.

The authority of Congress, exercised through the In-

terstate Commerce Commission, extends to intrastate

common carriers that are instruments of inter-

state commerce in such way as necessarily em,

braces the right to control their operations in

all matters having such a close and substantial

relation to interstate traffic that the control is

essential or appropriate to the security of that traffic,

to the efficiency of interstate service, and to the main-

tenance of conditions under which interstate commerce

may be conducted upon fair terms and without molestg.

tion or hindrance.

Texas & Pacific Ry. Co. v. U. S., 234 U. S., 349,

351.

xX.

This court is not asked to revise the construction

placed upon a State Statute by the State Court, but is

asked to determine whether the application made of a

State Statute is in this instance in contravention of the

Commerce Clause of the Constitution and the provisions

of the Act to Regulate Commerce. Questions of this

character are for the determination of this court.

Southwestern Telegraph & Telephone Company

v. Danaher, 238 U. S., 482, 489.

A State exceeds its lawful authority when it attempts

to regulate rates applicable on interstate commerce or

to subject the operation of carriers in the course of such

transportation to requirements that are unreasonable or

pass beyond the bounds of suitable local protection.

Minnesota Rate Cases, 230 U.S., 352, 401.

See also:

Yazoo € Miss. Valley R. Co. v. Greenwood Gro-

cery Co., 227 U.S., 1.

Texas € N. O. R. R. vy. Sabine Tram Co., 227 U.

S., 111.

R. R. Commission of Ohio v. Worthington, 225

U.S., 101.

Herndon v.C. R. 1. dé P. R. R. Co., 218 U. S., 135,

St. Louis S. W. Ry. Co. v. Arkansas, 217 U. S,,

136.

Houston € T. C. R. R. Co. v. Mayes, 210 U. S.,

321.

Atlantic Coast Line v. Wharton, 207 U. S., 328.

—

Miss. R. R. Commission v. I. C. R. R. Co., 2038

U. S., 335.

McNeill v. So. Ry. Co., 202 U. S., 543.

Hanley v. K. C. So. Ry. Co., 187 U. S., 617.

Louisville & Nashville R. R. Co. v. Eubank, 184

U. S., 27.

c. Cc. C. & St. L. Ry. Co. v. Illinois, 177 U. S.,

514.

Covington Bridge Co. v. Kentucky, 154 U. 8.,

204.

Wabash Ry. Co. v. Illinois, 118 U.S., 557, 577.

Hall v. Decuir, 95 U. S., 489, 488.

XI.

“This court will review the finding of facts by a

state court (1) where a Federal right has been de-

nied as the result of a finding shown by the record

to be without evidence to support it, and (2) where

a conclusion of law as to a Federal right and find-

ings of fact are so intermingled as to make it neces-

sary, in order to pass upon the Federal question,

to analyze the facts. Kansas City Southern Ry. v.

Albers Commission Co., 223 U. S., 573, 591; Cres-

will vy. Knights of Pythias, 225 U. S., 246, 261; Wood

v. Chesborough, 228 U. S., 672, 678.”’

Northern Pacific Railway v. North Dakota, 236

U. S., 585, 593.

The Interstate Commerce Commission, having ex-

amined the record in this case and entered its conclu-

sions thereon that said record contained insufficient facts

to warrant a reduction of the rate in question, it follows

that the finding of the Ilinois Commission is without sus-

taining evidence, is arbitrary, amounts to administrative

fiat and comes under the Constitution’s condemnation of

all arbitrary exercise of power.

20 Biss

This court said, in Interstate Commerce Commission y.

L. é N. R. R. Co., 227 U. &., 88, 91:

“The statute gave the right to a full hearing, and

that conferred the privilege of introducing testimony,

and at the same time imposed the duty of decidi

in accordance with the facts proved. A finding with.

out evidence is arbitrary and baseless. * * ©

would mean that where rights depended upon facts,

the Commission could disregard all rules of evidence,

and capriciously make findings by administrative

fiat. Such authority, however beneficently exercised

in one ease, could be injuriously exerted in another;

is inconsistent with rational justice, and comes un-

der the Constitution’s condemnation of al] arbitrary

exercise of power.”’

XII.

The order of the Illinois Commission, entered on the

petition of a shipper, is not a regulation of the through

rate as such, but is, in effect, the fixing of divisions as

between carriers participating in the through rate when

the carriers have not failed to agree on divisions and

have not asked the Commission to fix divisions, and since

the traffic involved is intermingled state and interstate

traffic, the State Commission exceeded its powers and

invaded the function of the Interstate Commerce Com.

mission, delegated by Section 15 of the Act to Regulate

Commerce as amended.

XIII.

Plaintiff in error exhausted its means of remedy in the

State tribunals without gaining relief.

C. M. & St. P. Ry. Co. v. Public Utilities Com-

mission, 268 TIl., 49.

. ;

XIV.

The rate of 40 cents per ton, not having been shown to

have been increased since January 1, 1910, is presumed

to be a reasonable rate. The burden of proving its un-

reasonableness rested upon the complainant.

Section 15 of the Act to Regulate Commerce.

That complainant failed to sustain the burden of proof

was specifically found by the Interstate Commerce Com-

mission in passing upon the evidence in this record, which

evidence was made the basis of the order entered by the

Illinois Commission.

Poehlmann Bros. Company v. C. M. & St. P. Ry.

Co., 30 I. C. C., 89, 92.

ARGUMENT.

THE CONFLICT OF STATE AUTHORITY WITH INTERSTATE ap.

THORITY IN THE REGULATION OF THE RATE IN QUESTION,

Let it be borne in mind from the beginning that the

record before the Illinois Commission, on which the order

appealed from was entered, is the same record that was

previously considered by the Interstate Commerce Com.

mission. (Trans., 19; Rec., 69-89.) Let it also be borne

in mind that identically the same transportation service

and identically the same questions of compensation

therefor, by said record presented, were passed upon by

the two Commissions.

The Interstate Commerce Commission had the ques-

tions here involved submitted to it and assumed juris-

diction over same on October 26, 1912. (See Poehlmam

Bros. Company v. C. M. & St. P. Ry. Co., 30 I. C. C., 89.)

The petitioner asked the Interstate Commerce Commis-

sion then, as it subsequently did the Illinois Commission,

to reduce the rate on coal between Chicago and Morton

Grove.

The Interstate Commerce Commission, in denying the

petition, held:

(1) That the evidence was insufficient to warrant a

reduction in the rate complained of.

(2) That the factor of the rate under attack should

not be regulated apart from the through rate as a whole,

and

(3) That there was a delicate rate relationship or rate

adjustment involved which should not be changed on the

evidence introduced in this record.

penne

The following is quoted from the Interstate Commerce

Commission’s opinion in Poehlmann Bros. Company V.-

cM. & St. P. Ry. Co., 30 I. C. C., 89, 92:

«While, as stated, only the delivering line is made

a party defendant, the comparisons made by com-

Jainant are nearly all with respect to through rates,

or factors of through rates, from points of origin ta

destinations within, or just beyond, the Chicago

switching district. The adjustment of rates within

this general district is an exceedingly complex one.

Ordinary prudence dictates that we should not pre-

scribe a change in this adjustment, or require a re-

duction in any specific rate therein, except after

careful examination of all the facts, both with re-

spect to the rate itself and also its relation to the

general adjustment.

Upon the record it clearly appears that complain-

ant is not discriminated against by defendant.

The traffic in question is through traffic. The rate

specifically attacked, although a separately estab-

lished rate of the delivering line, cannot be consid-

ered entirely apart from its relationship to the

through rate for the through haul from interstate

points of origin. Some regard must be had to the

measure of the through rate aS an entirety, and

neither the through rate nor the carriers responsible

for it and participating in it are before us in this

proceeding.

Considering the absence of evidence as to the rea-

sonableness of the through rate, and the unsatisfac-

tory evidence as to the separately established rate

under attack, we must refrain from expressing any

conclusion upon the reasonableness of either rate.

The complaint must be dismissed, and it will be so

ordered.”’

The Illinois Commission reached almost diametrically

opposite conclusions, and took action directly conflicting

with that taken by the Interstate Commerce Commission.

The Illinois Commission, while agreeing with the Inter-

state Commerce Commission that there was no eVi-

dence in the record on which the through rate could be

changed or regulated, differed with the Interstate Com.

merce Commission as to the necessity of regulating the

through rate as a whole and held that there was no ques.

tion of propriety of rates that should prevent the case

being disposed of by regulating that factor of the

through rate involved in the haul from Chicago'to Mor.

ton Grove, and differed: with the Interstate Commerce

Commission in concluding that the proof in this record

satisfactorily showed the rate of forty ceuts per ton to

be one hundred per cent. higher than the rate it deter.

mined to be the proper one in the order appealed from,

The following is quoted from the opinion of the Mlinois

Commission, which constitutes a part of the record in

this case:

‘While the complaint herein asked for the estab-

lishment of through rates via the several defendants’

roads herein from points in Illinois to Morton Grove,

the record also shows that the only rate attacked by

the complainant is the charge of forty cents per net

ton made by the Chicago, Milwaukee & St. Paul Rail-

way Company from Galewood to Morton Grove and

all of the evidence before the Commission in this

case is directed against the unreasonableness of this

rate.

The reasonableness of the charge of the other de-

fendant roads for the line haul was not attacked in

any manner in this proceeding, and no evidence of-

fered upon that subject. Hence we assume that the

line haul charge is considered reasonable, and with-

out going into detail upon that branch of the case, it

is sufficient to say that the Commission does not feel

it necessary at this time to enter into the question

of discrimination as charged in the complaint, nor

does it feel that it is necessary or that it will be jus-

tified in entering into the question of through rates

between the other defendant roads and the defend-

ant, Chicago, Milwaukee & St. Paul Railway Com-

pany, from the coal producing district of Illinois to

Morton Grove, believing that the matter can be

properly disposed of without entering into that ques-

tion.

This leaves for consideration then the one ques-

tion of the reasonableness or the unreasonableness

of the charge of forty cents per net ton by the de-

fendant, Chicago, Milwaukee & St. Paul Railway

Company, between Galewood and Morton Grove on

distance, when compared with the charge made by

the defendant, Chicago, Milwaukee & St. Paul Rail-

way Company, from Galewood to Morton Grove, the

Commission believes said charge of forty cents per

net ton to be an unreasonable charge.

* * * * *

It is therefore ordered, adjudged and decreed by

the Commission that the said rate of forty cents per

net ton on coal from Galewood to Morton Grove be,

and the same is hereby reduced and fixed at a charge

of not to exceed twenty cents per net ton on coal.

* * *

Commission finding that the charge herein made

and specified is a reasonable charge therefor.

By order of the Commission this 25th day of Oc-

tober, 1913, dated at Springfield, Illinois.’”’? (Trans.,

11, 12; Ree., 33-35.)

It will be noted in the opinions of the respective Com-

missions that the two petitions were also essentially the

same. Each petition attacked the rate on coal, in car-

loads, from Chicago to Morton Grove. Each petition

asked that the through rate be regulated. The petition

before the Interstate Commerce Commission, as is shown

in that Commission’s opinion, sntroduced no defendant

in the case other than the Chicago, Milwaukee & St. Paul

Railway Company. The petition before the Illinois Com-

mission differed in that it made certain line haul carriers

parties defendant. No evidence was introduced at the

hearing, however, relative to the charges of other car,

riers or relative to the through rate. (Trans., 11; Ree,,

33.)

Without qualification it may be said the two petitions

were identical, in so far as the issues on which proof was

introduced, are concerned.

‘

‘‘This court will review the finding of facts by a

state court (1) where a Federal right has been de.

nied as the result of a finding shown by the record

to be without evidence to support it, and (2) where

a conclusion of law as to a Federal right and find.

ings of fact are so intermingled as to make it neces-

sary, in order to pass upon the Federal question,

to analyze the facts. Kansas City Southern Ry. y,

Albers Commission Co., 223 U. S., 573, 591; Cres.

will v. Knights of Pythias, 225 U.S., 246, 261; Wood

v. Chesborough, 228 U. S., 672, 678.’’

Northern Pacific Railway v. North Dakota, 236

U. S., 585, 593.

The points of conflict as between the State and Federal

authority, which have developed out of the same plead-

ings and same evidence, may be briefly summarized as

follows:

One.

The Federal Commission held that the evidence

introduced did not justify a reduction in the forty-

cent factor of the through rate, this forty-cent charge

being for that portion of the through haul between

Chicago and Morton Grove.

The Illinois Commission held that the same evi-

dence showed the forty-cent factor to be one hundred

per cent. too high and justified the reduction to

twenty cents.

Two.

The Federal Commission held that the forty-cent

rate was a factor of a through rate which ought not

to be regulated independent of, and apart from, the

through rate aS a whole. ’

The Illinois Commission held that it was not ueces-

sary to regulate the through rate as a whole and that

the forty-cent factor might properly be regulated en-

tirely independent of and without regard to the regu-

- Jation of the through rate.

Three.

The Federal Commission considered the propriety

of ordering a reduction in the forty-cent rate factor

and announced this conclusion:

«The adjustment of rates within this general

district is an exceedingly complex one. Ordi-

nary prudence dictates that we should not pre-

scribe a change in this adjustment, or require a

reduction in any specific rate therein, except

after careful examination of all the facts, both

with respect to the rate itself and also its rela-

tion to the general adjustment.’’ (Poehlmann

Bros. Co. v. C. M. & St. P. Ry. Co., 30 I. C. C.,

89, 92.)

The Illinois Commission disregarded questions of

the propriety of disturbing the important rate rela-

tionships and announced that it believed ‘‘the mat-

ter can be properly disposed of without entering into

that question.”’ (Trans., 12; Ree., 34.)

A similar condition in principle arose in Northern

Pacific Railway Company Vv. State of Washington, 222

U. S., 370. In that case the Federal Congress had taken

jurisdiction of hours of service of certain employees of

carriers engaged in interstate commerce and, incidental

to regulating the hours of service, provided that the

regulation should not become effective until after a

specific future date. The State of Washington, subse-

quent to the passage of the act but before the date on

which it was to become effective, attempted to regulate

the hours of service of employees engaged in com-

mingled interstate and intrastate commerce. This court

held that Congress, in allowing the carriers an additional

Period in which to adjust themselves to the requirements

of the new law, had barred the State from interfering

during such period in the way of State regulation of

such hours of service.

Mr. Justice White, in delivering the opinion of the

court, said in part as follows:

‘We are of opinion that it becomes manifest that

it would cause the statute to destroy itself to give

to the clause postponing its operation for one year

the meaning which must be affixed to it in order to

hold that during the year of postponement state

police laws applied. * * * The purpose of Con.

gress in giving time was to enable the necessary ad-

justments to be made by the railroads to meet the

new conditions created by the act, a purpose which

would of course be frustrated by giving to the pro.

vision as to postponement the significance which

would destroy the very reason which caused it to be

enacted.’’

In the case at bar Congress, speaking through the in.

terstate Commerce Commission, provided that the forty-

cent per ton rate on coal from Chicago to Morton Grove

should be exempt from reduction or other regulation

unless and until evidence was presented as to the rea-

sonableness and lawfulness of the through rate of which

the forty-cent rate is a part. Illinois has attempted, by

the order appealed from, to interpose State regulation

during the exempted period just as did the State of

Washington in the case quoted from above.

The following portion of the opinion in the Washing.

ton case, supra, is also pertinent:

“‘It is elementary, and such is the doctrine an-

nounced by the eases to which the court below re-

ferred, that the right of a State to apply its police

power for the purpose of regulating interstate com-

merce, in a case like this, exists only from the silence

of Congress on the subject, and ceases when Con-

gress acts on the subject or manifests its purpose

to call into play its exclusive power. This being the

conceded premise upon which alone the state law

could have. been made applicable, it results that as

the enactment by Congress of the law in question

was an assertion of its power, by the fact alone of

such manifestation that subject was at once re-

moved from the sphere of the operation of the au-

thority of the State. To admit the fundamental

principle and yet to reason that because Congress

chose to make its prohibitions take effect only after

a year, the matter with which Congress dealt re-

mained subject to state power, is to cause the act

of Congress to destroy itself; that is, to give effect

to the will of Congress as embodied in the postpon-

ing provision for the purpose of overriding and ren-

dering ineffective the expression of the will of Con-

gress to bring the subject within its control—a man-

‘festation arising from the mere fact of the enact-

ment of the statute.’’

While abstractly considered, the rate from Chicago to

Morton Grove is a local state rate, yet, as applied to the

traffic that moves under it, it is part of a through rate

for the through haul of traffic that is interstate. The In-

terstate Commerce Commission so held in Poehlmann

Bros. v. Railway Co., swpra, where this rate and its rela-

tions to other rates were directly involved. The question

presented, therefore, is not simply one of transportation

that is ‘‘wholly within one state,’’? but embraces trans-

portation that is interstate in character. The phrase in

Section 1 of the Interstate Commerce Act, ‘‘wholly

within one state,’? has ‘‘appropriate reference to exclu- '

sively intrastate traffic separately considered; to the

regulation of domestic commerce as such.”’ Houston &

Texas Ry. v. U. S., supra, 358.

This language of Section 1 does not control where in-

terstate commerce is directly involved. Interstate com-

merce is directly involved here, for the Interstate

Commerce Commission in dealing with this precise rate

re. Ni

has found it to be a part of a through interstate rate, ang

that its reasonableness could not be considered or deter.

mined ‘‘entirely apart from its relationship to the

through rate for the through haul from interstate points

of origin.’’ Poehlmann Bros. v. Ry. Co., supra, 92,

This finding precludes the exercise of the state's

power, through its Commission, to deal with this rate

Separately as a local rate. If this were not

so, the State Commission would have power to Override

the Federal Commission, and to nullify its findings and

orders. The fact that the rate in question is related to,

and used in connection with, a rate that is wholly local to

the state, does not derogate from the complete and para-

mount authority of the Federal Commission, when, ag

here, the rate in controversy has .cen found by that Com.

mission to be part of a throug) interstate rate. For, as

said by Mr. Justice Hughes, in Houston & Texas Ry. v.

U. S., supra, 351:

‘‘wherever the interstate and intrastate transactions

of carriers are so related that the government of the

one involves a control of the other, it is Congress,

and not the states, that is entitled to prescribe the

final and dominant rule, for otherwise Congress

would be denied the exercise of its constitutional au-

thority and the State, and not the Nation, would be

supreme within the national field.’’

The Illinois Commission has attempted to do here pre-

cisely what the Texas Commission sought to accomplish

in the Shreveport case, Houston &: Texas Ry. Co. v. U.8.,

supra, viz: to compel the carrier to either reduce the in-

terstate rates, or discriminate in favor of intrastate ship-

pers.

IL.

THE DISCRIMINATION AGAINST INTERSTATE COMMERCE WHICH

THE ORDER APPEALED FROM ENTAILS.

The complainant, Poehlmann Bros. Company, proved

by admissions of record, that to give effect to the Illinois

Commission’s order is to burden interstate commerce, to

discriminate against localities and shippers in other

states, to give undue preference to localities and shippers

in Illinois and to deprive the interstate carrier of inter-

state commerce that it has enjoyed and will continue to

enjoy if the ruling of the Interstate Commerce Commis-

sion stands as controlling and conclusive, unimpaired by

the conflicting ruling of the State Commission.

At the hearing before the Interstate Commerce Com-

mission, June 14th, 1912, Mr. Poehlmann testified that

Pochlmann Bros. Company consumed approximately 30,-

000 tons of coal a year at its Morton Grove plant and that

two-thirds of that quantity of coal came from points of

origin outside of the State of Illinois. (Trans., 24, 25;

Rec., 105, 106.) The same witness, testifying before tho

Illinois Commission in 1914, testified as follows:

“(), About how many tons of coal a year do you

consume in your business?

A. Approximately 30,000.

. What portion of your coal comes from mines

in the State of Illinois?

A. At the present time almost all of it.”’ (Trans.,

15; Ree., 58, 59.)

The foregoing is undisputed evidence that came from

the petitioner.

It will be noted that Mr. Poehlmann testified before the

Illinois Commission about two years after he testified

before the Interstate Commerce Commission. It is ob-

vious that in that period of time Mr. Poehlmann had

reached the conclusion that there was a prospect of the

complaint succeeding before the Illinois Commission and

failing before the Interstate Commerce Commission, [f

the Illinois Commission granted reparation, the repara.

tion thus allowed could be collected only on Illinois coal, .

Poehlmann Bros. Company, consequently, began purchas.

ing substantially all of its coal in Illinois, whereas pre.

viously it had purchased two-thirds of it from points of

production outside the State of Illinois.

If the Illinois Commission’s order is to be given effect,

plaintiff in error will receive twenty cents per ton

less for transporting the 30,000 tons per annum of ¢oa]

consumed by Poehlmann Bros. Company. This means

that it will receive $6,000 per annum less than previously

for the same service, unless a part of the coal comes from

interstate points of origin. Mr. Poehlmann’s testimony

shows that exigency is guarded against. The 20,000 tons

of coal that previously moved from interstate destina-

tions, if it continued to move from interstate destinations

would net the carrier $4,000 per annum more than the

carrier will receive on the same quantity of coal moving

intrastate from Illinois points of origin, if the Illinois

Commission’s order is obeyed.

The foregoing is merely an illustration drawn from the

admissions of the complainant and by no means indicates

the full extent to which the order appealed from burdens

and discriminates against interstate commerce. The

plaintiff in error will discriminate against interstate coal

if it reduces its forty-cent rate from Chicago to Morton

Grove on Illinois coal without making corresponding re-

ductions on interstate coal on which it would perform pre-

cisely the same transportation service. Such discrimina-

tion would be a violation of Sections 2 and 3 of the Act to

Regulate Commerce. The only way to avoid such dis-

crimination and still comply with the Illinois Commis-

gion’s order appealed from would be to reduce also the

rate on interstate coal from forty cents to twenty cents

per ton.

The Interstate Commerce Commission, in passing upon

plaintiff in error’s rights in this connection, held that on

this record plaintiff in error could not be required to ac-

cept less than its present rate of forty cents per ton on

interstate movements. Here then is a situation where

the carrier cannot avail itself of the lawful rate the In-

terstate Commerce Commission has sanctioned without

being guilty of the unlawful discrimination which a

compliance with the order of the Illinois Commission

entails.

Considering separately, for the moment, the plaintiff

‘n error’s lawful rights in the premises, can it be doubted

that it is legally entitled to collect its full rate of forty

cents per ton, on interstate coal in accordance with its

tariff passed upon and sustained by the Interstate Com-

merce Commission? Can there be any doubt that an or-

der of the Illinois Commission must be invalid that pre-

scribes a preferential rate under these circumstances for

the transportation of intrastate coal, a compliance with

which will result in actual discrimination against inter-

state commerce?

This court has answered this question in the following

- language:

“The power to deal with the relation between two

kinds of rates, as a relation, lies exclusively with

Congress. It is manifest that the State cannot fix

the relation of the carrier’s interstate and intrastate

charges without directly interfering with the former,

unless it simply follows the standard set by Federal

authority.’? (Houston & Texas Ry. Co. v. U. S., 234

U. S., 342, 354.)

The order appealed from does not follow the standard

set by Federal authority but is in direct conflict there.

with.

The effect of complying with the Illinois Commission’,

order would by no means be confined to the Poehlmann

case, nor to the coal consumed at the Town of Morton

Grove. It would necessarily extend to many other sta-

tions. Under the Fourth Section of the Act to Regulate

Commerce and under Section 25 of the Illinois Act to

Establish a Board of Railroad and Warehouse Commis.

Sioners as amended June 10, 1911, a carrier may not

charge more for a short haul than for a long haul over the

same line of railway and in the same direction when the

shorter is included within the longer. If the rate froni

Chicago to Morton Grove is cut from forty cents to

twenty cents, the rates to intermediate points must be

reduced to the twenty-cent basis. Moreover, the rate to

the station beyond Morton Grove cannot be one hundred

per cent. higher than the rate to the station of Morton

Grove. If the forty-cent rate is reduced to a twenty-cent

rate to Morton Grove, corresponding reductions must be

made to stations beyond in order that the general level

of rates and relation of rates as between those adjacent

stations may be fair and reasonable.

But the effect of a compliance with the Illinois Com- .

mission’s order would extend far beyond all of this, If

the rate is reduced to Morton Grove and stations in its

vicinity on that branch of plaintiff in error’s line, which

runs from Chicago to Milwaukee, corresponding reduc-

tions must be made on its other branches running north

and west from Chicago, namely: the branch from Chicago

to Evanston, Illinois, and the branch from Chicago to

Elgin, Illinois, and points beyond.

IIL.

FAILURE OF PROOF TO JUSTIFY THE ORDER OF %EDUCTION IN

RATE.

The Interstate Commerce Commission, in the exercise

of its sound judgment and discretion within the field

where it is supreme, declared that there was insufficient

evidence in the present record to warrant a reduction or

other regulation of the rate which the State Commission

reduced. Poehlmann Bros Co. v. C. M. & St. P. Ry. Co.,

30 I. C. C., 89, 92. When the Interstate Commerce Com-

mission found the evidence was insufficient to warrant a

reduction in the rate, it was powerless, under the Act, to

reduce it.

This court said, in Interstate Commerce Commission

y. L. &N. RB. R. Co., 227 U. S., 88, 91:

“The statute gave the right to a full hearing, and

that conferred the privilege of introducing testimony,

and at the same time imposed the duty of deciding

‘n aceordance with the facts proved. A finding with-

out evidence is arbitrary and baseless. * * * It

would mean that where rights depended upon facts,

the Commission could disregard all rules of evi-

dence, and capriciously make findings by adminis-

trative fiat. Such authority, however beneficently

exercised in one ease, could be injuriously exerted in

another; is inconsistent with rational justice, and

comes under the Constitution’s condemnation of all

arbitrary exercise of power.”’

The Interstate Commerce Commission, in passing upon

the facts in this case, was governed by the law outlined

in the foregoing quotation. It declined to disregard all

rules of evidence and capriciously make findings by ad-

ministrative fiat. Under these circumstances, we are ap-

parently forced to the conclusion that the Illinois Com-

mission’s order is merely administrative fiat. To reason

otherwise is to argue that the Interstate Commerce (ym.

mission’s judgment is wrong within the very proving

where its judgment is conclusive.

This court has several times recognized in its opinions

that the work of solving the details and intricacies of

rate regulation has been delegated by Congress to the

Interstate Commerce Commission, and this court hag

held that acting within that field the Interstate Com.

merce Commission is supreme and its acts are not review.

able here except where the Commission exceeds itg au.

thority or otherwise fails to conform to the requirements

or the limitations of the Act to Regulate Commerce,

Interstate Commerce Commission vy, I. C. R. R,

Co., 215 U. S., 452.

B. € O. R. R. Co. v. Pitcairn Coal Co., 215 U. S.,

481.

Southern Pacific Co. v. I. C. C., 219 U. S., 433,

> F

THE ORDER APPEALED FROM, IF COMPLIED WITH, WOULD CAUSE

DISCRIMINATION AGAINST PERSONS AND LOCALITIES IN VIO0-

LATION OF SECTION 3 OF THE ACT TO REGULATE COMMERCE,

Section 3 of the Act to Regulate Commerce contains the

following provision:

‘‘That it shall be unlawful for any common carrier

subject to the provisions of this act to make or give

any undue or unreasonable preference or advantage

to any particular person, company, firm, corporation,

or locality, or any particular description of traffic,

in any respect whatsoever, or to subject any particu-

lar person, company, firm, corporation, or locality, or

any particular description of traffic, to any undue or

unreasonable prejudice or disadvantage in any re

spect whatsoever.’’

——

It is obvious that charging twenty cents for hauling the

intrastate coal from Chicago to Morton Grove and charg-

ing one hundred per cent. more for the same service on

interstate coal, would violate the foregoing provision of

Section 3, since it would necessarily give substantial ad-

vantage to coal producing localities in Illinois over coal

producing localities across the state line in Indiana.

Moreover, the persons, companies, firms and corporations

engaged in the producing and merchandising of coal on

the west side of the Illinois-Indiana state line would have

an advantage over those on the east side of that line. The

tendency of this advantage would be to build up the lo-

ealities and industries in Illinois, that have to do with the

producing and merchandising of coal, and retard the

growth and development of those to the east of the state

line.

THE ORDER APPEALED FROM IS IN CONTRAVENTION OF SEC-

TIoN 13 OF THE ACT TO REGULATE COMMERCE.

It is, of course, conceded that a State Commission

may have the right, and even the duty, to guard state

interests where intrastate and interstate commerce are

commingled and interdependent, as in the case at bar.

That such interests represented by a State Commis-

sion may be preserved and complaints involving same

may be orderly disposed of without a conflict between

State and Federal authority, Congress has provided, in

Section 13 of the Act to Regulate Commerce, as follows:

‘‘Said Commission (the Interstate Commerce

Commission) shall, in like manner and with the

same authority and powers, investigate any com-

plaint forwarded by the Railroad Commissioner or

Railroad Commission of any state or territory at

the request of such Commissioner or Commission.”’

In the case at bar the Illinois Commission did jot |

see fit to avail itself of the means thus provided of pro.

curing a harmonious adjustment of the questions jp.

volving commingled and interdependent state and inter.

state commerce. On the contrary, the Illinois Com.

mission, disregarding the foregoing provision, and dig.

regarding the fact that the Interstate Commerce (Com.

mission had already assumed jurisdiction of these queg.

tions, entered upon an individual investigation of its

own which has resulted in an opinion by that Commis.

sion directly in conflict with the opinion of the Inter.

state Commerce Commission.

We submit this action of the Illinois Commission jg

in contravention of Section 13 of the Act to Regulate

Commerce.

VI.

THE ORDER APPEALED FROM IS IN CONTRAVENTION OF SEC-

TION 15 OF THE ACT TO REGULATE COMMERCE,

Congress, by Section 15 of the Act to Regulate Com.

merce, specifically delegated to the Interstate Commerca

Commission jurisdiction over joint through rates and

authority ‘‘to determine and prescribe what will be the

just and reasonable individual or joint rate or rates,

charge or charges, to be thereafter observed in such

case as the maximum to be charged, and what individual

or joint classification, regulation, or practice is just, fair

and reasonable to be thereafter followed.”’

The Interstate Commerce Commission, in the case

at bar, determined that the practice to be followed in

respect of the joint rate in question should be that of

regulating the through rate as a whole; that it was not

proper to regulate one factor only of this joint rate,

and that the charge complained of was not shown to

be unreasonable.

We submit the Illinois Commission’s opinion and or-

der contravene Section 15 of the Act to Regulate Com-

merce to the extent that the Illinois Commission has

thereby arrogated to itself jurisdiction to regulate a joint

through rate which involves commingled and interde-

ndent interstate and intrastate shipments. The order

of the State Commission does not follow or conform to

the finding of the Interstate Commerce Commie*'on but

directly conflicts and interferes with that finding. This

court, in Houston é Texas Ry. v. U. S., 934 U. S., 342,

354, said:

“The power to deal with the relation between two

kinds of rates, aS a relation, lies exclusively with

Congress. It is manifest that the State cannot

the relation of the carrier’s interstate and intra-

state charges without directly interfering with the

former, unless it simply follows the standard set by

Federal authority.”’

VIL.

THE ORDER APPEALED FROM IS IN CONTRAVENTION OF SECTION

6 OF THE ACT TO REGULATE COMMERCE.

Section 6 of the Act to Regulate Commerce reads in

‘part as follows:

‘‘Nor shall any carrier charge or demand or col-

lect or receive a greater or less or different com-

pensation for such transportation of passengers or

property or for any service in connection therewith

between points named in such tariffs than the rates,

fares and charges which are specified in the tariff

filed and in effect at the time.’’

The published tariff of plaintiff in error, lawfully in

effect, prescribes a rate of forty cents per ton as its

charge for transporting coal from Chicago to Morton

Grove. The Illinois Commission, by the order appealeg

from, requires the plaintiff in error to accept the legg

rate of twenty cents per ton for that service whenever

the coal originates at points in Illinois.

The Interstate Commerce Commission has expressly

held that this factor of transportation is an inseparable

part of the through haul and has held in substance that

on account of its relation to various rates, including, of

course, the interstate rates and intrastate rates of which

it forms an unvarying factor, the charge should remain

relatively constant or unvarying. It may not, under the

Interstate Commerce Commission’s rule, be less when in

combination with one set of rates than when in combina-

tion with another set of rates. It is in this connection

that most clearly is revealed the wisdom of giving to the

Interstate Commerce Commission exclusive authority

over rates that are partly interstate and partly intra-

state in their character.

The Interstate Commerce Commission, having taken

this jurisdiction, the carrier can no longer say that on

transportation that originates in Illinois a lower and

different rate will be charged than is published in its

interstate tariffs to be applied on interstate and com-

mingled interstate and intrastate traffic. Plaintiff in er-

ror will have to do this, however, if it complies with the

order appealed from.

We submit the order of the Illinois Commission is thus

shown to be in contravention of Section 6 of the Act to

Regulate Commerce.

SUES RECO LNE RN TONE —

—

VIIl.

THE SHREVEPORT PRINCIPLE.

We present to this court a question of unusual gravity

and importance that has arisen under the Act to Regu-

late Commerce as amended. The question is somewhat

analogous to the central questions involved in the Minne-

sota Rate Case, 930 U. S., 352, and in the so-called

Shreveport Case, T. & P. Ry. Co. v. U. S., 234 U. S.,

342.

This court is asked to say whether the general prin-

ciple of law declared in the Shreveport Case should

control in cases involving facts and conditions such as

are presented by this record.

The amendment to the Act to Regulate Commerce, un-

der which the central question here presented has arisen,

is relatively new. Sufficient time has not elapsed since

its adoption to bring before this court many of the

academic questions of broad and general application

that must, in the course of time, be finally dealt with

here.

This court has not yet declared whether a common car-

rier, subject to the Act to Regulate Commerce, must sub-

mit to having its rates and earnings reduced by state au-

thority for a service applicable alike to interstate and

intrastate transportation when the Interstate Commerce

Commission has already passed on the same state of facts

sn the same record and held the facts insufficient to sup-

port an order reducing the rates.

This court has not yet said whether, under the condi-

tions referred to in the preceding paragraph, the carrier

ean be forced by the action of a State Commission to re-

duce its charges for interstate carriage that the Inter-

Bee ee ee

55 OLAS OE OMI RNID

TRAIT IA SIR TENAP OM Wea

state Commerce Commission has held not to have heen

shown unreasonable or to be forced to the alternative of

charging 100 per cent. more to the interstate shipper than

the State Commission allows it to charge the intrastate

shipper for that part of the service that is common to

both.

This court has not yet said that the action of the Ip.

terstate Commerce Commission must be regarded as eon.

clusive and preclude contrary action by a State Commis.

sion when the former holds that a through rate, one fac.

tor of which is common to interstate as well as intrastate

traffic, must be regulated as a whole instead of merely by

regulating the one factor thereof which is common to in-

terstate and intrastate traffic.

These are all questions entailing the construction of

the Federal Act to Regulate Commerce that can only be

finally determined by this court.

Plaintiff in error contends that the principle of the

so-called Shreveport Case governs and that a just dispo-

sition of this case requires the application of that prin-

ciple to the state of facts presep#ed by this record.

— WwAubmitted

Vp a

’ lx ba

AL, EL...

Attorneys for Plainifff in Error.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.