Amicus Curiae Brief — Dakota Central Telephone Co. v. South Dakota Ex Rel. Payne
Supreme Court brief1919
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STATEMENT OF THE POINTS OF LAW
I. The suits for injunction by various states are not
actions against the United States, and it is not
II. No question of war power involved, because im-
perative necessity in extreme case only justifi-
cation for taking private property even by mili-
tary officer without due process
III. There is nothing in the language of the resolution
or in the purpose to be served warranting the
inference that Congress intended to interfere
with state regulation of intrastate rates, but,
on the contrary, it affirmatively appears that
it did not intend such interference
1. Clear and explicit language required to take power
of regulation from state government
(a) In delegation to municipalities
(b) In assumption by federal government------- ‘
2. No language used clearly manifesting intention to
divest state of rate making power
(a) President sole judge of necessity of taking, but
. not of method of operation. Cannot exer-
cise arbitrary power
(b) Question whether given manner of operation is
needful or desirable is question for court---
3. Terms, ‘‘supervision,’’ ‘‘possession,’’ ‘‘control,’’
and ee connote function of recetver-
4. — to the powers of the alien property cus-
sad shes
5. Power to fix rates granted in express terms in other
I cicaiccceeimcicennbaiidininiatangtninnmbatvanninte 33-36
6. Provigo specially reserves rate making power to the
GED dehiieeentndinidivabaudiaticiigeinn 36-41
i I TN i Gn daientnpeiiencnwiriinie 36-37
(b) Purpose to insure constitutionality.........- 37
(ce) Regulation of telephone rates included in
“ees TE” ccctccccneneeusinenen 38
(d) The use of the phrase, ‘‘the issue of stocks
and bonds,’’ indicating preservation of po-
lice power to fullest extent.............-.- 38-41
7 Language being ambiguous, we have the right to
consult debates in Congress, to ascertain evil to
Oe: CURING etcditditntindnsarucniceudeancs 41-51
(a) Authorities permitting examination of debates 42
(b) History of wire control act__............--- 42-51
a. Debates disclose that evil to be remedied
was not regulation by state commis-
SUED Gncuiociectnnatncceesateees 44451
8. Argument based on the analogy to control exercised
COI PEGE eevddiancdinmedadinnbaninibiieie 51-73
(a) Act for wire control is in pari materia with
UII CE elsiksatratibarindicedsneeaeletetataine §1-52
(b). Rule stated, permitting examination of statutes
in pari materia or on merely cognate subjects 52-58
(c) Railroad legislation summarized... ........... 58-61
(d) Interpretation of railroad act..............-. 61-62
(e) Evil to be remedied as disclosed by testimony
I CIID cp centdendeaiseneannens 63-66
(f) Discussion on bill in congress ..............- 66-68
(g) Proposed amendment, inserting in proviso
words, ‘‘the regulation of rates’’........-- 68-72
(h) Demonstrates that congress used police regula-
tion to include rate regulations. ........... 72-73
(i) Right to consult amendment in construing act 73
— ae
. Provisions giving Interstate Commeree Commisgion
power to fix telephone rates not repealed ; con-
sequently it still retains power, and Postmaster
General does not posseas it, either as to inter-
state or intrastate rates_
. Repeals by implication not favored
. Commerce act gives power to regulate rates; makes
unreasonable rates unlawful
. Commerce act and resolution in pari materia; must
. Commerce commission retains power to fiz rates.
V. The joint resolution and presidential proclamation
cannot be construed as contended by the gov-
ernment and telephone companies, because such
construction would render the resolution void,
by reason of conflict with the fifth amendment
and the tenth amendment of the federal con-
stitution, and would violate the rule against the
delegation of legislative power
2. As contrary to tenth amendment
(a) The nature of the right to the use of a public
(c) Right to receive service of public utility at rea-
sonable rates as within due process clause---
8. As contrary to tenth amendment
(a) Police power reserved to the states
(b) Especially as to regulation of intrastate rates
(c) Only limitation must not impair efficient exer-
cise of federal function
(d) The question of when it does trench on federal
function is a judicial one
Does regulation ‘‘in truth’’ impair power to
eerve government!
Page
113-118
118-120
Page
(e) Federal function in question defined efficient
‘‘transmission of government communica-
| gat SERRE PRIS Seam aneare a 131-132
(f) Regulation of rates does not, in truth or in fact,
hinder or retard the discharge of federal
IE ntekinitbcinas wibniiantinmiaduie 132-134
3. The President cannot arrogate, congress cannot
delegate legislative or arbitrary power_..~--- 134-147
(a) As to legislative power per se_...-...------- 134-144
1. Congress could not delegate to President power to
decide between three separate capacities in
which he might deal with the telephone and
GEE inctisctedentenbbiesntadinboine 135-141
2. The power to fix rates could net be delegated___-_- 141-144
(b) A delegation such as claimed would also be void
as an attempt to delegate arbitrary power. 144-147
VI. Assuming that the President was given the rate
making power by the act in question, it was not
delegated by him to the Postmaster General... 147-150
VII. Rate making power, if granted by joint resolution,
vested in President personally, and cannot be
GREE sccinininsdbanntietiieniconindees 151-158
VIII. Does attempt by President to delegate all, or as
in this case, more than the discretion vested in
him entirely invalidate proclamation, so as to
confer no authority on Postmaster General at
GRD sciacnsidincindictinicieuaetiitnindinainnee nails 158-172
(a) The language of the Presidential proclamation
confers all the discretion confided in him... 159-165
(b) The proclamation, construed as a legislative
enactment, undertakes to confer greater dis-
cretion than the President himself received. 165-167
(ec) Rule of law that clauses giving the Postmaster
General power evidently a material induce-
ment to valid parts of proclamation, and
therefore whole proclamation void ------ 168-170
Page
(d) Nor can the Presidential proclamation be saved
by resort to the preamble-_-_-.------------- 170-172
1X. Practical construction of the law by the Postmaster
General and the telephone companies, as illus-
trated by compensation agreement.--------- 173-179
1. In compensation agreement with telephone com-
ponies ....------------------------------- 173-178
(a) As to suits against company---------------- 174-176
(b) In doing things necessary to preserve franchise
a 176-178
2. Construction by failure to assert power of regula
tion during the war...--------------------- 178-179
INDEX OF CASES
Chesapeake & Potomac Tel. Co. v. Manning, 186 U. S.
Page
Aldnutt v. Inglis, 12 East 527 ....-....------------- 99
American Net & Twine Co. v. Worthington, 141 U. 8.
CE Se cid ccitnsedereibedaieinenmnninrs 42
American School of Megnetic Healing v. McAnnulty,
BOT T. & 06, FAR, WED cecantwretedoweooncncecens 7, 27, 109
Aquino v. Riegelman, 171 N. Y. S. 716, 718 ~-.------- 107
Arkansas Rate Cases, In re, 187 Fed. 290, 297 -...---- 119
Arnold v. Pawtucket, 41 Atl. 576, 578 _......--.----- 155
Austin v. United States, 155 U. S. 417, 431 .....------ 37
Ayres, In re, 123 U. S. 443, 504, 506 ...------------- 7
Bailey v. P. W. B. R. R. Co., 44 Am. Dee. 602 -.------ 102
Beer Co. v. Massachusetts, 97 U. S. 25, 33 -.---------- 156
Belknap v. Schild, 161 U. S. 10 ---.....-.---------- 2,8
Bennett v. Twin Falls North Side Land & Water Co.,
I I aa siiss ciciisilinhicinhipbibentnetrmmernnens 103
Birdsall v. Clark, 29 Am. Rep. 105, 106-107 .._-..----. 157
Board of Liquidation v. McComb, 92 U. S. 531, 541 ~--- 7
Boske v. Comingore, 177 U. S. 459 -.....--..-------- 84
Buttfield v. Stranahan, 192 U. S. 470 ~.----.-------- 7,27
Central Pac. R. R. Co. v. California, 162 U. S. 91, 123,
gl tcenillipiaibeiieniees 124
+ eee ©, Baw, FE BL WBS ccnemetedanccsmesenes 57
wz
antl cia
Cincinnati, W. & Z. R. R. Co. v. Coms. of Clinton Co.,
So a ceaiemienativar 135
Citzens’ St. Ry. v. Detroit Ry. Co., 171 U. 3. 48 ~----- 21
Civil Rights Cases, 109 U. S. 3, 10 ------------------ 114
Clark v. Washington, 12 Wheat. 40, 52 _.------------ 153
Commonwealth v. Ross, 122 S, W. 161 -.------------ 53
Converse v. United States, 62 How. 463 ___----------- 55
Cook v. Marshall Co., 196 U. S. 261 ~--------------- 117
Corbin v. Marsh, 63 Ky., II Duvall, 193...----------- 17
Covington & Cincinnati Bridge Co. v. Kentucky, 154
Oe nas ania eemenembennibadinemines 118
Covington & Lexington T. R. Co. v. Sandford, 164 U.
Sf = | Seer eres 101
Cumberland Tel. & Tel. Co. v. City of Memphis, 183
I ia daa ndaptepes ibiplntdetlibe 133
Cummings v. Everett, 19 Atl. 456 _..-.---------_--- 56
Dartmouth College v. Woodward, 4 Wheat. 518 ---- 112
Degge v. Hitchcock, 229 U. S. 162, 171 ------------.- 27
Egan, In re, 5 Blatchf. 319 ......-.--....-.-..----- ll
Ekern v. McGovern, 154 Wis. 157, 254-255 -_____---- 103
Employers Liability Cases, 207 U. S. 463, 496, 498,
a ada al a el a sali eal las hiatal 130, 131
Engelhard, In re, 231 U. S. 646, 651 __.--_-_-__--__- 92
Fairfield Floral Co. v. Bradbury, 87 Fed. 415, 417 _-_- 111
Field v. Clark, 143 U. S, 649, 693 -_..-____ hisses 7, 27, 136
Flint v. Stone Tracy Co., 220 U. S, 107, 176 --.----- 84
Freeport Water Co. v. Freeport City, 180 U. S. 587,
SRE aCe ECON Ea IRATE Oe 20
Friesen v. C. R, I. & P. Ry. Co., 254 Fed. 875 -------- 8
Gardner, In re, 33 L. R. A. (N. S.) 956, 958, 959, 960 _15, 16, 95
Gas & Electric Securities Co. vy. Manhattan & Queens
Traction Corporation, 253 Fed, 453_.........-_- 30
Gegiow v. Uhl, 239 U. 8. 3, 9 -.....-..--...-.....-- 27
Gerdau, In re, 54 Fed. 143, 145_-..--.---__---_-__ 42
Greenbush Cemetery Ass’n v. Van Natta, (Ind. ) 94 N.
iy SI soci cbbecsihaiaceicansinntetste s caicniamatinaaaiibiaauationdaticts 55
— viii —
Page
Hagood v. Southern, 117 U. 8. 52, 70.---.---_---.--- 7
Hammer v. Dagenhart, 247 U. S. 251, 274, 276 __..-. 118, 131
Helm v. City of Grayville, 79 N. E. 689, 691 _..._.-__- ot
Hibernia Savings & Loan Society v. San Francisco, 200
ly AE “ED epcnantiitpenainabocieneeeinahiniiiabiaineartyariamaisigee 122, 129
Hitchcock v. Galveston, 96 U. S. 341, 348 -------._. 157
Ho Ah Kow v. Nunan, Fed. Cas. No. 6, 546 -...._---- 42
Home Tel. Co. v. Carthage, Ann. Cas. 1912D 308 _-_- 38
Home Tel. Co. v. Los Angeles, 211 U. S. 265, 273 _._. 20,177
Hoover v. McChesney, 81 Fed. 472, 480, 481, 485 -_111, 112, 113
House v. Mayes, 219 U. S. 270 -------.----------.. 117
Illinois Cent. R. R. Co. v. Ill. Publie Utilities Com., 245
a I TO aac aii caer item 23
Indianapolis Northern Traction Co. v. Ramer, 76 N. E.
ee FI iteiieecetietinhsesiiedigehcisctaspeciaaictnpnaincigcetialiliniuibeianalnes 54
International Postal Supply Co. v. Bruce, 194 U. S. 601,
AGEPC SACRE Mt APE, RSI OO ree Sere LONE SRE OI 2,8
Interstate Commerce Commission v. Louisville & Nash-
vine BR. BR. Co., S87 0. &. 66, 91 .... ............. 7, 26
Jacksonville v. Ledwith, (Fla.) 7 So. 885, 891_.__-__- 155
Jennison v. Kirk, 98 U. S. 453, 459 _-__--_--___--_- 42
Johnson v. Jones, 92 Am. Dec. 159, 170, 179__-_..---- 14
Jones v. Seward, 40 Barbour 563, 573 _-_.__-_..---- 17
Joplin v. Light Co., 191 U. 8. 150, 156 __--_---__---- 21
Kansas v. Colorado, 206 U. S. 46, 88._..-.------------ 84
Keller v. United States, 213 U. S. 138, 144-145, 146__ 116, 118
Kemp, In re, 16 Wis. 359, 368, 376, 377.-_----------- 10, 11
i fe i & See 118
Kinney v. Howard, 133 Ia. 94, 105 _.._..---------- 154
Knights Templars Indemnity Co. v. Jarman, 187 U. S.
seinen 83
Kohl v. Beach, 107 Wis. 409, 415-416__.-...--------- 156
Lackland v. Walker, 52 S. W. 414 --------..-------- 170
Lake Shore & Michigan Ry. Co. v. Ohio, 173 U. S. 285_- 119
Land Commissioners of Kaskaskia v. Kaskaskia, 94
I a a any sq animubteehieangeipiien 107
ee
Legal Tender Case, 110 U. S. 421, 441 __-----___..__
Legal Tender Cases, 12 Wall. 457, 539 _.____....___- 83
Lewis v. Frick, 233 U. S. 291, 297 --....-_..-..-.__- 27
Little v. Barreme, 2 Cranch. 170_.-----...-.--.-_-_- 6
Little Chute v. Van Camp, 136 Wis. 526.........___- 145, 168
Logan v. United States, 144 U. S. 263 __--_-_._-__.. 84
Lord v. City of Oconto, 47 Wis. 386, 388 __..._...___ 151, 152
Louisiania v. Garfield, 211 U. S. 70, 77 ---_..-------- 8
McClellan v. Chipman, 164 U. 8, 347 _----_..-----_-- 122
McCray v. United States, 195 U. S. 27, 61 _--_._____ 88
McCulloch v. Maryland, 4 Wheat. 316 __.._-....-__- 83
McGahey v. Virginia, 135 U. S. 662, 684 __.._..-___- 7
McLaughlin v. Green, 50 Miss. 453, 467 _..-----___- 13
Manitowoc v. Manitowoc & Northern T. Co., 145 Wis.
ERSTE nee a Onn NT I aE aR 19
Meade v. Dane County, 155 Wis. 632, 639 __._.______ 167
Miller v. United States, 11 Wall. 268, 304, 306, 307, 309,
ED. swiniteies cd snkenteaiaiiiaianatacniapeiiainiiaiy aecuiilda Masai tie aid 14, 85, 86
Milligan, Ex parte, 4 Wall. 2, 120-121, 141-142______ 9,18
Milwaukee v. Ruplinger, 155 Wis. 391, 397_...______ 146
Minneapolis, St. P. & S.S. M. R. Co. v. Railroad Com-
mission, 136 Wis. 146, 163, 164_____________- 136, 142, 143
Missouri, K. & T. Ry. Co. v. Harris, 234 U. S. 412,
NEE Metiacibeens eciibcintihinkiiahataéinleeriinieaae 23
Mitchell v. Harmony, 13 How. 115_----------------- 13
Muir v. Louisville & N. R. Co., 247 Fed. 888, 894, 895__ 152, 163
Munger v. Lenroot, 32 Wis. 541_-_-------_---_----- 53
Munn v. Illinois, 94 U. S. 113, 128, 133, 1384______ 99, 100, 105
Naganab v. Hitcheock, 202 U. S. 473__-------------- 8
National Bank v. Commonwealth, 9 Wall. 353, 361,
OO a bisceiciascatetcielltedadeeiek teciclnligtibieaheniahadlbaickaltga 120, 122, 123
Nelson v. City of Murfreesboro, 179 Fed. 905____---- 21
New England Telegraph Co. v. Town of Essex, 206
Piel FR Bi cinckcintcciinmcnaciitiiiccnee 123
New York City v. Miln, 11 Pet. (12 U. S. 357) 139___- 116
Ohio & M. R. Co. v. Russell, (Ill.) 3 N. E. 561_-_----- 30
Oliver, In re, 17 Wis. 681, 685
—sz—
Page
Oregon v. Hitchcock, 202 U. S. 60_----...------..-- ~
Owensboro v. Owensboro Waterworks Co., 191 U. 8. 358 21
Pacific Railway Commission, In re, 32 Fed. 241, 245___- 117
People v. England, 91 Hun 152, 155_.------.------- 57
People v. Klinck Packing Co., 214 N. Y. 121, 138-139__ 161, 167
Philadelphia Co. v. Stimson, 233 U. S. 605, 620__.-_- 27
Plumley v. Massachusetts, 155 U. 8. 461_-.---------- 117
Poindexter v. Greenhow, 114 U. S, 270, 288, 304___-_- 7, 169
Postal Telegraph Cable Co. v. Adams, 155 U. S. 688_- 124
Prather v. Jeffersonville, Madison and Indianapolis R.,
eo eethootras 57
Price v. Forrest, 173 U. S. 410, 427_----------------- 171
Railroad Commission Cases, 116 U. 8. 307, 325_.__---- 19
Railroad Company v. Peniston, 18 Wall. 5, 29, 30, 36,
Ce ARS Ey Skee ee 121, 122, 123, 128
Raymond v. Thomas, 91 U. 8. 712, 716_------------- 13
Reagan v. Mercantile Trust Co., 154 U. S. 413, 416,
a eebenete 22, 73, 122, 123
Rector v. United States, 148 U. S. 467__-.---------- 42
Reid v. Colorado, 187 U. 8. 137, 148.--.------------- 22
Rhodes v. Tatum, 206 8. W. 114_------------------- 153
Roberts v. Southern Pac. Co., 186 Fed. 934, 938_._--.- 42
Rochester Water Commissioners, In re, 66 N. Y. 413,
© URES RR eer Seat SS 57
Rossmiller v. State, 114 Wis. 169, 187-188_.._------- 105, 106
Runkle v. United States, 122 U. S. 548, 557_-.------ 158
Rutherford v. Union Pac. R. Co., 254 Fed. 880, 881_--- 30
Ryan’s Estate, In re, (Mo. App.) 156 8. W. 759_----- 55
Sabre v. Rutland R. Co., 85 Atl. 693, 701_..---.----- 137
Salamandra Ins. Co. v. N. Y. L. Ins. T. Co., 264 Fed. 852 86
Savage v. Jones, 225 U. S. 501, 533__--------------- 23
School of Magnetic Healing v. McAnnulty, 187 U. S.
94, 106, 109 ......-....--.--.--- isis ipininnaseineney 7, 27, 109
Schmidt v. Raymond, 148 Wis. 271, 274_------------~ 55
Seott v. Donald, 165 U. 8. 107, 112.....------------- 7
Shallus v. United States, 162 Fed. 654......--------- 42
=
Page
Sheldon v. Hoyne, 103 N. E. 1021, 1022__-------- 144, 166,170 |
Smith v. Black, 115 U. 8. 308, 319__---.------------ 152
Smith v. People, 47 N. Y. 330, 339___..---.--------- 53, 56
Smyth v. Amés, 169 U. S. 466, 547_.._-------------- 100, 123
Soo Railroad Co. v. Railroad Commission, 136 Wis.
. 5 9 —RR 136, 142, 143
South Carolina v. United States, 199 U. S. 437, 448___ 127
Spring Valley Water Co. v. City and County of San
Frariciseo, 165 Fed. 667, 676___...------------- 104
Standard Oil Co. v. United States, 221 U. 8. 1, 50__-- 42
Stanislaus County v. San Joaquin, 192 U. 8. 201, 210-
RO ETRE PR aes oe AN a 20
Stanley v. Schwalby, 162 U. 8. 255_...-------------- 174
State ex rel. Caldwell et al. v. American Ry. Express
Co. et al., (S. D.) 170 N. W. 570_-.------------ 8
State ex rel. Carey v. Ballard, 148 N. W. 1090_------- 156
3S S & FO 8) 6 55
State ex rel. Mays v. Brown, 45 L. R. A. (N. 8.) 996 16
State v. Budge, (N. D.) 105 N. W. 824, 727--_------- 138
State v. Butler, (Me.) 18 Am. & Eng. Ann. Cas. 487_- 166
State ex rel. Payne v. Dakota Central Telephone Co.,
8 36 ' 8 Sf 8 82, 83
State ex rel. Garrabad v. Dering, 84 Wis. 585, 595___- 146
State ex rel. Walsh v. Dousman, 28 Wis. 541, 547_.__ 168, 169
State v. Duval County, 79 So. 692, 696___.---------- 137
State v. Eggers, (Nev.) 1386 Pac. 100 -...----------- 55
State v. Esser, (Nev.) 129 Pac. 557 ___.------------- 55
State ex rel. Buell v. Frear, 146 Wis. 291.......----- 136, 137
State ex rel. Nehrbass v. Harper, 162 Wis. 589, 593_- 156
State v. Parker, 26 Vt. 357_..--------------------- 143
State v. Patterson, 105 8. W. 1048__.-.....-------.-- 57
State v. Rogers, 73 N. E. 461, 463._.-.-----------.- 137
State v. Summers, 44 S. W. 797_...-----------.---- ' 686
State ex rel. Miller v. Taylor, 145 N. W. 425__-...---- 138
State v. Wiggins Ferry Co., 106 8. W. 1006__.-_----- 57
State v. Woodson, 31 8. W. 105_..--.----.---.--.--
— vm
Page
Stewart v. Kahn, 11 Wall. 493 84
Stout v. Board of Coms., 107 Ind. 343, 348_...______ 57
Tap Line Cases, 234 U. S. 1, 27 ‘eit on 42
Telegraph Company v. Texas, 105 U. S. 460_..._.____ 125
Thompson v. Pacific Railroad, 9 Wall. 579__._.._____ 120, 123
Thompson v. Schermerhorn, 55 Am. Dec. 385_......___ 157
Tindal v. Wesley, 167 U. S. 204___--.--_______-__-___- 6
Union Bridge Co. v. United States, 204 U. S. 364______ 7,27
Union Dry Goods Co. v. Georgia P. S. Corp., 248 U. S.
ERE SET ee - COV Seo Dee en 73, 107
United States, Ex parte, 226 U. S. 420 _....._________ 75
United States v. Barnes, 222 U. S. 513, 520 _.._..____ 75
United States v. Board of Commissioners of Osage Co.
Okla. et al., 193 Fed. 485, 486 _........_._______ 42
United States v. Casey, 247 Fed. 362 _._....________ 84
United States v. Chicago & N. W. Ry. Co., 157 Fed. 616,
SEER OTC Fe aCe Ie eS aR 42
United States v. Delaware & Hudson Co., 213 U. S. 366,
RUE ae ea nee ee 83
United States v. Diekelman, 92 U. S. 520, 526 ________ 11
United States v. Hoke, 187 Fed. 992, 994 ___...______ 84
United States v. Lee, 106 U. S. 196 _--.--.____-______ 6
United States v. Levois, 17 How. 85 _......_._______ 75
United States v. Russell, 13 Wall. 623, 627-629 ________ 13
United States Railroad Administration v. Burch, 254
RRR CRD EN be Gee ER 7,27
Vane v. Newcomb, 132 U. 8S. 220, 236 ___.__._.________ 57
Wadsworth v. Boysen, 148 Fed. 771, 778, 779 __----_- 6, 42
Wainwright v. Pennsylvania R. Co., 253 Fed. 459, 465 134
Waite v. Dowley, 94 U. S. 527, 583 -.--.--.__---_--_- 122
Warren v. Mayor and Aldermen of Charleston, 2 Gray
ID WI SR UD ei cthsine © encdciiceiidinensieninmure waaieene 169
Washington v. Miller, 235 U. S. 422, 428 _.______.___ 74
Wells v. Roper, 246 U. S. 535 ....-------...------.. 2
Western Union Telegraph Co. v. Massachusetts, 125
RISER RATE EIS TES Ser Soa eA 123
Western Union Telegraph Co. v. Pendleton, 122 U. S.
ER a RRS AES SS ee ee Be
Westport Stone Co. v. Thomas, (Ind.) 94 N. E. 406___-
. ER Se roe Rene seman
White v. United States, 191 U. S. 551 __-_--____..__
Wilcox v. Jackson, 13 Pet. 497 ___-.--_--..____..__
Williams v. Talladega, 226 U. S. 404____-___________
Williams v. United States, 1 How. 290 ..___________-
Yazoo Railroad Co. v. Thomas, 132 U. S. 174, 188_____-
Yick Wo v. Hopkins, 118 U. S. 356, 369, 370 ________
Young, Ex parte, 209 U. S. 123, 159 _-.-___..-.--.-..
IN THE
SUPREME COURT OF THE UNITED STATES.
October Term, 1918.
No. 967.
DAKOTA CENTRAL TELEPHONE COMPANY,
A CORPORATION, NORTHWESTERN TELE-
PHONE EXCHANGE COMPANY, A CORPOR-
TION, NEBRASKA TELEPHONE COMPANY,
A CORPORATION, AND SOUTH DAKOTA
STATE TELEPHONE COMPANY, A COR-
PORATION,PLAINTIFFS IN ERROR,
vs
STATE OF SOUTH DAKOTA, EX REL. BYRON
S. PAYNE, AS ATTORNEY GENERAL, AND
JOHN J. MURPHY AND P. W. DOUGHERTY,
AS AND CONSTITUTING THE BOARD OF
RAILROAD COMMISSIONERS OF THE
STATE OF SOUTH DAKOTA.
IN ERROR TO THE SUPREME COURT OF SOUTH DAKOTA
The State of Wisconsin, upon the relation of its
Attorney General, has heretofore brought an action
in the original jurisdiction of the supreme court of
that state, for the purpose of restraining and enjoin-
ing the Wisconsin Telephone Company, a corporation
of Wisconsin, and the agencies under its direction and
a ‘
control, from charging rates for telephone messages
in excess of those fixed by the provisions of its statutes
and the order and determination of the Railroad
Commission of Wisconsin. The supreme court of
Wisconsin, on the 29th day of April, 1919, rendered
a decision in said matter by a divided court, denying
the application for injunction and dismissing the
complaint, the ground of its decision being in sub-
stance that the police regulations referred to in the
proviso of the joint resolution are ‘“‘undoubtedly such
regulations intended to insure the lives, health, moral
and physical welfare and good order of the public and
of the employees, as the state may see fit to pre-
scribe.” The court further holds that the suit was
in effect a suit against the government, upon the
authority of Belknap v. Schild, 161 U. S. 10; Inter-
national P. S. Co. v. Bruce, 194 U. S. 601, and Wells
v. Roper, 246 U. S. 535. Said decision was rendered
too late to enable the state to bring the same to this
court by writ of error in the regular course, in time
to permit consolidation with the actions involving
the determination of the same questions, now pend-
ing herein, and it is assumed that, if brought here for
review in due course, additional briefs will not be
desired. In lieu thereof, by virtue of said facts, and
by reason of the interest of the State of Wisconsin
and its citizens in the decision of these actions, the
undersigned, representing the State of Wisconsin,
with the consent of the Attorney General of South
Dakota, do hereby pray leave of this court to file
this, their brief, as amici curiae, in support of the
power, authority, and duty of this court and the
appropriate courts of the various states to grant
relief by injunction, restraining the various telephone
companies acting under the direction of the Post-
master General from putting into effect rates in
excess of those determined to be reasonable and law-
ful by the properly constituted tribunals of the
various states.
It being assumed that the briefs already filed con-
tain a statement of the case, the questions involved,
and the manner in which they are raised and a
specification of the errors relied upon, this argument
will be confined to a discussion of the following points
of law which it is believed are decisive of the present
controversy.
STATEMENT OF THE POINTS OF LAW
I. The suits for injunction by the various states
are not actions against the United States, and it is
not a necessary party.
Il. No question of war power involved, because
imperative necessity in extreme case only justifica-
tion for taking private property even by military
officer without due process.
III. There is nothing in the language of the reso-
lution or in the purpose to be served warranting the
inference that Congress intended to interfere with
state regulation of intrastate rates, but, on the con-
trary, it affirmatively appears that it did not intend
such interference.
IV. Provisions giving Interstate Commerce Com-
mission power to fix telephone rates not repealed;
consequently it still retains power, and Postmaster
entine
General does not possess it either as to interstate or
intrastate rates.
V. The joint resolution and presidential procla-
mation cannot be construed as contended by the
government and telephone companies, because such
construction would render the resolution void, by
reason of conflict with the fifth amendment and the
tenth amendment of the federal constitution, and
would violate the rule against the delegation of
legislative power.
VI. Assuming that the President was given the
rate making power by the act in question, it was not
delegated by him to the Postmaster General.
VII. Rate making power, if granted by joint reso-
lution, vested in President personally, and cannot be
delegated.
VIII. Does altempt by President to delegate all,
or as in this case, more than the discretion vested in
him entirely invalidate proclamation, so as to con-
fer no authority on Postmaster General at all?
IX. Practical construction of the law by the
Postmaster General and the telephone companies, as
illustrated by compensation agreement.
ARGUMENT
I
THE SUITS FOR INJUNCTION BY THE VARIOUS
STATES ARE NOT ACTIONS AGAINST THE UNITED
STATES, AND IT IS NOT A NECESSARY PARTY.
The conception that the United States is in any
way interested in the present controversy and that
the court can dispose of the issues without considera-
tion or interpretation of the Joint Resolution of
Congress and the Proclamation of the President pur-
suant thereto presents a curious inversion of logic
which in effect begs the whole question. This, it
seems to us, is what the learned court of Massa-
chusetts has done.
We submit that if the postmaster general has the
power to fix intrastate telephone rates, then his act
is that of the United States; if he has no such power,
then his attempt to fix such rates is a mere personal
assumption of authority, which affords him no pro-
tection, and which affords no protection to those
acting or pretending to act by his direction. The
court cannot escape the determination of the extent
of the authority of the postmaster general. That is
a necessary preliminary to any decision.
Supposing that the postmaster general underwent
a like misconception as to his powers in postal
matters and sought to collect a ten cent postage
where the law permitted only three cents. Would it
then be contended that, if suit were brought in a state
eile
court to restrain such extortion, the United States
Government was being sued without its consent, or
that we were attempting to interfere with the
revenues of the United States? Obviously not. The
seven cents of excessive postage would not be revenue,
and the action of the postmaster general would not
be the action of the United States, but merely
his individual assumption of arbitrary power, whose
exercise a court of equity would promptly restrain.
There is no controversy between the state and
federal government here, in any sense whatever. The
sole question is that of proper construction of a
federal law, with a view of determining whether
Albert S. Burleson has issued legal instructions as
postmaster general within the scope of properly
delegated power, to the defendant companies or
whether the order is his mere personal pronuncia-
mento, obedience to which affords the defendants no
protection.
That these actions are not suits against the United
States and in no way involve the government of the
United States unless they question or seek to chal-
lenge a valid exercise of authority under a valid law,
has in our judgment been so conclusively and satis-
factorily established by the brief of Mr. Hughes and
his associate counsel, in the recently argued case of
the Commercial Cable Company v Albert S. Burleson
and Newcomb Carlton, that we shall only refer to the
cases there cited, to-wit, Little. v Barreme, 2 Cranch.
170; U. S. v. Lee, 106 U. S. 196; Lindal v. Wesley,
167 U. S. 204, to which we would add these additional
citations:
— v. Boysen, 148 Fed. 771, at page
a
Board sienna v. McComb, 92 U. S. 531,
at p. ‘
In re Ayres, 123 U. S. 443, at p. 504 and p. 506.
McGahey v. Virginia, 135 U. S. 662, at p. 684.
en v. Greenhow, 114 U. S. 270, at p.
“The ratio decidendi in this class of cases is very
plain. A defendant sued as a wrong-doer, who
seeks to substitute the State in his place, or to
justify by the authority of the State, or to defend
on the ground that the State has adopted his act
and exonerated him, cannot rest on the bare asser-
tion of his defence. He is bound to establish it.”
Hagood v. Southern, 117 U. S. 52, at p. 70.
Scott v. Donald, 165 U. S. 107, at p. 112.
Ex parte Young 209 U. S. 123 p. 159.
Their argument (p. 26) is equally decisive on the
proposition of the power and the duty of the court to
inquire as to the scope of the authority asserted.
Field v. Clark, 143 U. S. 649.
Buttfield v. Stranahan, 192 U. S. 470.
Union Bridge Co. v. U. S., 204 U. S. 364.
American School of Magnetic Healing v. Mc-
Anulty, 187 U. S. 94.
Interstate Commerce Commission v. L. & N. R.
Co., 227 U. S. 88, 91.
And we cite these additional cases:
U. S. Railroad Administration v. Burch, 254 Fed.
140, passing upon the extent of the power of the
director general of railroads under the cognate
statute for the control of railroads, contains this
language:
“All acts done and all property taken possession
of within the adjudicated extent of the powers
allowed might be a ministerial question: but as to
iiidiin
the extent of those powers, and whether the powers
were given, must always, under the Constitution
of the United States, remain a judicial question,
and one to be decided by the courts of the land.”
State ex rel. Caldwell, 170 N. W. 570 (S. Dak.)
(Advance Sheets, Februrary 21, 1919):
Head Note 1: “The jurisdiction and power of
civil courts may extend to ministerial acts which
an executive officer of state, such as the President,
or those acting under him, may assume to do by
virtue of his office, but which may be found to have
been in excess, beyond the scope, or a misuse of his
authority.”
Friesen v. Chicago, R. I. & P. Ry. Co., 254 Fed. 875.
The court in construing the railroad administration
act says of the powers of the President thereunder—
“*he may not take action contrary to the provisions
of this act of Congress.”
The cases relied upon by the supreme court of
Massachusetts:
Belknap v. Schild, 161 U. S. 10, 16 Sup. Ct.
443, 40 L. Ed. 599;
Louisiana v. Garfield, 211 U.S. 70, 77, 29 Sup.
Ct. 31, 53 L. Ed. 92;
Oregon v. Hitchcock, 202 U. S. 60, 26 Sup. Ct.
568, 50 L. Ed. 935;
Naganab v. Hitchcock, 202 U. S. 473, 26 Sup.
Ct. 667, 50 L. Ed. 1113;
International Postal Supply Co. v. Bruce, 194
U. S. 601, 606, 24 Sup. Ct. 820, 821 (48 L.
Ed. 1134);
as demonstrated in the brief of Messrs. Cook and
Hughes (pp. 35-5) are quite beside the point.. The
paliead
present actions are brought, not to interfere with the
possession or use of property by the United States,
but are brought to prevent the infringement of indi-
vidual right under the guise or pretext that authority
to do so is conferred by federal statute, and the very
question to be answered is: Does the statute con-
fer such authority?
II
NO QUESTION OF WAR POWER INVOLVED,
BECAUSE IMPERATIVE NECESSITY IN EXTREME
CASE ONLY JUSTIFICATION FOR TAKING PRI-
VATE PROPERTY EVEN BY MILITARY OFFICER
WITHOUT DUE PROCESS.
Neither is the issue to be confused by any misty
conception of supposed war power on the part of the
President. The war power and the peace power of
the President, outside of the three kinds of military
jurisdiction under the constitution set forth by Chief
Justice Chase in Ex Parte Milligan, 4 Wall. 2, at
pages 141-42, are one and the same thing. We have
nothing to do here with the class of military rule
covering the conduct of military forces in the govern-
ment of occupied territory, nor are we dealing with
that other class of military government concerned
with the government of the Army and Navy proper.
Congress, had it seen fit to do so, might no doubt
have passed an enactment as it did during the Civil
War (Vol. 12, U. S. Stats. at Large, p. 334, ch. 15,
37th Congress):
“to place under military control all the officers,
aw 19 ..-
agents, and employes belonging to the telegraph
and railroad lines thus taken possession of by the
President, so that they shall be considered as a
post road and a part of the military establishment
of the United States, subject to all the restrictions
imposed by the rules and articles of war.”
There is sufficient similarity to the Civil War act
in the resolution under consideration to lead to the
belief that Congress consciously rejected this alter-
native of making the telephone business a part of the
military organization of the United States. This
being true, both the first and second classes of
military rule do not obtain. The only possible
theory, there could be then, is that a species of
stratified martial law must have been projected
across and athwart the existing subdivisions of
government, and have completely enveloped and
controlled the conduct of this business.
This is an impossible conception, because, we sub-
mit, the government of no state and no portion
thereof can be part martial and part civil. It must
either be all one or all the other. As phrased Jn re
Kemp, 16 Wis 359, 376:
“‘When martial law exists, it must be supreme
in order to be effectual. It cannot co-exist with
the civil power; if it does, the latter must be in
entire subordination to it.”
The implication of the language in the pleadings
leads to a definition quite as strong as that stated by
the Duke of Wellington:
‘**Martial law is neither more nor less than the
will of the general who commands the army.”
ow jj...
And as stated In re Egan, 5 Blatchford 319 (Federal
Cases, No 4303), at p..321:
“The entire population of the country, within
the confines of its power, is subjected to the mere
will or caprice of the commander. He holds the
— liberty and property of all in the palm of his.
and.”
U. S. v. Diekelman, 92 U. S. 520, at p 526:
*“Martial law is the law of military meena J in
the actual presence of war. It is administered by
the general of the army, and is in fact his will.”
Is it not a sufficient answer to this proposition, that
the court, in common with every citizen of the nation,
knows that martial law and nothing approximating
it has either been declared or attempted to be
declared?
In the absence of such declaration of martial law,
the rule governing even the military department of
government, from the commander-in-chief down
through all of his subordinates, as to the violation of
the individual right to life, liberty, and property, has
repeatedly been declared. Chief Justice Dixon said:
In Re Kemp supra 368.
“The powers of the president as commander-in-
chief of the army and navy in time of war, are
strictly constitutional powers.”
And Justice Cole phrased it, at p. 377:
““‘Wherever war exists there martial law may be
declared. But it must be confined to fields of strife
and actual conflict, and cannot be extended to
states not the theater of military operations.”
As it appeals to us, this confusion has arisen—
because the telephone and telegraph properties hav-
en
ing been taken under the war power of Congress and
their operation entrusted to the President, he being
the commander-in-chief of the army and navy, it
has been assumed that in the exercise of the power
delegated—the operation of the business—the mili-
tary commander is discharging military functions.
Sight has been lost, apparently, of the proposition
that so far as this exercise of authority is concerned,
both the President and postmaster general, and any-
one acting under them or either of them, are acting
solely and entirely as the agents of Congress. We
insist most earnestly that, except as the President
asserts his power through one of the three appropriate
channels of military government in the strict sense,
he has no other or different power in time of war than
he has always had. We insist that Conress did not
and could not confer any addition or enlargement to
his power in that respect, because it in turn is bounded
and limited and hedged about by the constitution. It
can confer no power to violate the constitution,
because it possesses none itself. It cannot delegate
either to the President or the postmaster general, in
their purely civil capacity, absolutely unrestricted
authority to disregard constitutional restraints, be-
cause Congress itself does not possess that power.
Neither can Congress enlarge his military powers,
because within their sphere they are already absolute
and supreme. Congress cannot, we insist, engraft a
military power, a “‘war power,” so-called, upon the
discharge of a purely civil function, nor invest with
military attributes a purely civil power.
When we find how jealously the courts have
viewed the exercise of purely military functions them-
— po
selves, where they transgressed civil rights, we should
naturally expect this to be the rule. We find the
supreme court of the United States, speaking through
its Chief Justice, in Mitchell v. Harmony, 13 Howard
115. This case contains a discussion of the right of
even a military officer to take private property of a
citizen without due process of law.
The holding of this case was likewise discussed in
detail in the brief in the Commercial Cable case
(pp. 17, 18, 19, 20), and we shall not repeat the
language because the court has recently had the
reasoning thereof thus fully presented. Further
support of this position, however, is found in Ray-
mond v. Thomas, 91 U. S. 712, at p. 716:
“It is an unbending rule of law that the exercise
of military power, where the rights of the citizen
are concerned, shall never be pushed beyond what
the exigency requires.”
McLaughlin v. Green, 50 Miss. 453, at p. 467:
“In flagrant war, power does not belong to a
military officer, merely as such, to take or to
destroy the property of the citizen, unless a neces-
sity exists to apply it to military purposes, or to
prevent its capture by the enemy.”
United States v. Russell, 13 Wall. 623, 627-629:
“Taking of private property by the government>
when the emergency of the public service in time of
war or impending public danger is too urgent to
admit of delay, is everywhere regarded as justified,
if the necessity for the use of the property is im-
perative and immediate, and the danger, as hereto-
fore described, is impending, and it is equally clear
that the taking of such property under such cir-
—i14-.
cumstances creates an obligation on the part of the
government to reimburse the owner to the full value
of the service. Private rights, under such extreme
and imperious circumstances, must give way for the
time to the public good, but the government must
make full restitution for the sacrifice.”
Miller vs. United States, 11 Wall. 268, at p. 310:
_ “It may be conceded that the laws of war do not
justify the seizure and confiscation of any private
property except that of enemies.”
Willoughby on the Constitution, Vol. II, p. 1235:
“‘Whatever interference there may be with his
(the citizen’s) personal freedom or property rights
must be justified, as in the case of the police power,
by necessity, actual or reasonably presumed.”
We are not surprised at the firmness with which
the arrogation of military power in the discharge of
civil duties has been unanimously rebuked by courts,
even when their judgment seemed to draw in question
the martyred Lincoln’s acts.
The supreme court of Illinois, speaking in Johnson
v. Jones, 44 Ill. 142, 92 Am. Dec. 159, at p. 170, said:
“The doctrine that a state of war of itself sus-
pends, at once and everywhere, the constitutional
guaranties for liberty and property, finds no sup-
port in the constitution, and is inconsistent with
every principle of civil liberty and free govern-
ment.”
And in the concurring opinion, at p. 179, Justice
Breese said:
“The constitution of the United States was de-
signed by its framers, and has been hitherto so
— 15 —
understood by the people, to be the same protecting
instrument in war as in peace; that a state of war
does not enlarge the powers of any one department
of the government established by it, nor has any
one of these defendants any right to urge ‘neces-
sity,’ or ‘extraordinary emergencies,’ as a plea for
the usurpation of powers not granted.”
A case arose in Kansas where a law had been
enacted providing that members of the national
guard should, while in the performance of military
duty, be transported on all railroads of the state at
the rate of one cent per mile, a situation quite closely
analogous to a similar enactment by Congress, or an
enactment purporting to confer power to have
governmental messages transmitted at one-half or
one-third their cost, or at such amount as Congress
might have seen fit to fix, the only difference being
that in the supposed case Congress acted directly,
while in this case the postmaster general is seeking to
act in the exercise of some supposed delegation of
power.
As the Kansas court said In re Gardner, 84 Kans.
264, 113 Pac. 1054, 33 L. R. A. (N. S.) 956, at 958:
“Without any ground, therefore, for the classi-
fication, and without any regard to the reasonable-
ness or unreasonableness of the regulation, the
state simply demands that its troops be trans-
ported by rail at the purely arbitrary rate, which,
so far as the principle involved is concerned, might
be 1 cent per hundred miles, or nothing at all.”
And at p. 959:
“An effort is made to justify the statute as an
exercise of the military power of the state to pre-
a tem
serve peace, to suppress riots and insurrections,
and to repel invasion. These are ends which every
sovereignty must have the power to attain, and
every citizen holds his property upon the implied
condition that it must be surrendered when needed
for the preservation of the government. Fields
and farms may be traversed and occupied, sub-
sistence, stores, and other movables may be ap-
propriated, and transportation lines may be seized
and operated, under the stress of due occasion, just
as city blocks may be demolished to arrest the
progress of a fire. Doubtless, in cases where
neither the power of taxation nor the credit of the
government would avail, a forced loan could be
effected by the seizure of money itself. The power
exercised in such cases is lawful, although not de-
rived from constitutions or statutes. It rests upon
the principle that every sovereignty may in time
of peril adopt such extreme measures as may be
necessary for existence and perpetuity. But it is
limited to emergencies which cannot wait upon due
process of law. The law governing military im-
pressment of private property was well stated by
Chief Justice Tenn in the case of Mitchell v. Har-
mony, 13 How. 115, 14 L. ed. 75,” as quoted above.
And on page 960:
“When, however, the government is in no ex-
tremity in fact which requires the suspension, in
whole or in part, of the civil laws, contributions to
its support cannot be levied upon private persons
or corporations, except pursuant to laws which
prescribe the occasion, modes, conditions, and
agencies for the appropriation, and which bear
equally upon all those who are similarly situated.”
State ex rel. Mays v. Brown, 45 L. R. A. 996
(N. S.) 77 S. E. 243 (W. Va.)
oe
Willoughby on the Constitution, p. 1243:
“Private property may be seized and appropri-
ated to a public use without the consent of the
owner, when the public necessity demands. This
taking of private property is, however, the courts
have declared, not an exercise of military power
which gives to the owner no claim for compensa-
tion, but a taking for the public use which, under
the provision of the Fifth Amendment, demands
that compensation be made. The manner of taking
may, however, be that of the or power, in that
the urgency may not permit the ordinary proceed-
ings for valuation and condemnation.”
Jones v. Seward, 40 Barbour 563, at p. 573:
“In sudden emergencies, caused by invasion or
insurrection, the power expressly given by the con-
stitution and the acts of congress, to repel the one
and suppress the other, are ample and effective;
and it requires no exercise of arbitrary power over
the sacred rights of personal liberty to accomplish
this purpose. It is as manifest as the day, it is be-
yond all controversy, that these rights, in war or in
peace, during invasion or domestic violence, even
during the hideous rebellion which now confronts
us, are, except in the cases which | have stated,
inviolable. The president, therefore, whether in
his civil capacity or as commander in chief of the
army and navy of the United States has, unques-
tionably, no power to authorize the act of which
the plaintiff complains.”
Corbin v. Marsh, 63 Ky., I] Duvall, 193:
“* * * We premise that the constitution of the
United States, in its declared and necessary su-
premacy, is the same fundamental, paramount,
and inviolable /aw of the sovereign people, at all
times and under all circumstances--that it is
supreme over all—-the cilizens, the States, and the
ou 18 ao
national government in all its departments and
operations, military as well as civil--and that it is
as supreme in war as in peace.”
And finally, the fallacy of this proposition would
have seemed forever set at rest by this court in its
classic statement of the law in Ex parte Milligan,
4 Wall. 2, at pp. 120-121, which is likewise quoted in
the brief of Mr. Hughes (p. 32).
Ill
THERE IS NOTHING IN THE LANGUAGE OF
THE RESOLUTION OR IN THE PURPOSE TO BE
SERVED WARRANTING THE INFERENCE THAT
CONGRESS INTENDED TO INTERFERE WITH
STATE REGULATION OF INTRASTATE RATES, BUT
ON THE CONTRARY, IT AFFIRMATIVELY AP-
PEARS THAT IT DID NOT INTEND SUCH INTER-
FERENCE.
1. The rule that clear and explicit language is
required to take the power of regulation
from the state government.
Assuming that Congress might by appropriate
action invade the exclusive domain of state regula-
tion of intrastate matters, we contend that such
invasion is never to be presumed and is never to be
held consummated, except and unless the act of
Congress employs such phraseology, as to leave the
intention to divest the states of their sovereign
power, an absolutely unescapable conclusion from
the words employed. Cases will be submitted below,
eee
— |
arising necessarily and naturally under phraseology
where it was contended that the state had volun-
tarily divested itself of the power of regulation.
And if, as we shall see, a very strict rule is laid down
to guard against such result, unless an absolute
necessity from the language of the act construed,
how much more rigid must the rule be where the
court is asked to find that such power is being taken
from a sovereign state, not by its voluntary act, but
involuntarily over its protest, and from a domain or
sphere that has always been jealously protected and
guarded as peculiarly and exclusively within the
scope of state regulation, and state regulation alone.
(a) In delegation to municipalities.
The supreme court of Wisconsin has ruled upon this
proposition.
Manitowoc v. Manitowoc & Northern T.Co., 145
Wis. 13, at p. 28:
“It is only where the right is very clearly con-
ferred that the state will be held to have relin-
quished its power to enact laws regulating tolls.’
The supreme court of the United States has ruled
upon the proposition in repeated instances with
decisive language. Illustrations follow:
rat Commission Cases, 116 U. S. 307, at
p. ;
“This power of regulation is a power of govern-
ment, continuing in its nature, and if it can be bar-
gained away ai all it can only be by words of posi-
tive grant, or something which is in law equivalent.
If there is reasonable doubt, it must be resolved in
favor of the existence of the power.”
mag
— 20 —
Home Telephone Co. v. Los Angeles, 211 U. S.
265, at p. 273:
“The surrender, by contract, of a power of gov-
ernment, though in certain well-defined cases it
may be made -' legislative authority, is a very
grave act, and the surrender itself, as well as the
authority to make it must be closely scrutinized.
No other body than the supreme legislature (in
this case, the legislature of the State) has the
authority to make such a surrender, unless the
authority is clearly delegated to it by the supreme
legislature. The general powers of a municipality
or of any other political subdivision of the State
are not sufficient. Specific authority for Sol el
pose is required. This proposition is sustained by
all the decisions of this court, which will be referred
to hereafter, and we need not delay further upon
this point. * * * But for the very reason that
such a contract has the effect of extinguishing pro
tanto an undoubted power of government, both its
existence and the authority to make it must clearly
and unmistakably appear, and all doubts must be
resolved in favor of the continuance of the power.”’
Stanislaus County v. San Joaquin, 192 U. S. 201,
at 210-211:
“To regulate or establish rates for which water
will be supplied is in its nature the execution of one
of the powers of the State, and the right of the
State so to do should not be regarded as parted with
any sooner than the right of taxation should be so
regarded, and the language of the alleged contract
should in both cases be equally plain.”
Freeport Water Co. v. Freeport City, 180 U. S.
587, 599. The court said:
“The statutes are certainly ambiguous, and in
resolving the ambiguity in favor of the public the
court applied the rule declared in many cases,”
quoting the language of Railroad Commission Cases
— pe
above, and adding: “The fullness of sovereignty
can be taken for granted, and naturally would be
and should be taken for granted.”
Owensboro v. Owensboro Waterworks Co., 191 U. S.
358. Same rule, citing Railroad Commission Cases,
and others.
Joplin v. Light Company, 191 U. S. 150, 156:
“The limitation contended for is upon a govern-
mental agency, and restraints upon that must not
be readily implied.”
Nelson v. City of Murfreesboro, 179 Fed. 905,
stating the strict rule to be applied in determining
whether a state has been divested of sovereign or
governmental power, adopts the language of other
cases, and says, at 911, that it must be ‘‘in language
explicit and express or necessarily to be implied
from other powers,’ and that “if inferred from
other powers, it is not enough that the authority is
tag to them, but it must be indispensable
to them.”
Citizens’ St. Ry. v. Detroit Ry. Co., 171 U. S. 48,
lays down this test for determining whether the
sovereign state has been divested of governmental
power:
“The power, therefore, must be granted in ex-
press words or necessarily to be implied. What
does the latter mean? Mr. Justice Jackson, in
Grand Rapids &c. Power Co. v. Grand Rapids &c.
Co., supra, says: . . . ‘that municipal corpora-
tions possess and can exercise only such powers as
are ‘granted in express words, or those necessarily
or fairly implied, in or incident to the powers ex-
pressly conferred, or those essential to the declared
objects and purposes of the corporation, not simply
convenient, but indispensable.’’ The italics are his.
This would make ‘necessarily implied’ mean inev-
itably implied. The Court of Appeals of the Sixth
— 22 —
Circuit, by Circuit Judge Lurton, adopts Lord
Hardwicke’s explanation, quoted by Lord Eldon in
Wilkinson v. Adam, 1 Ves. & B. 422, 466, that ‘a
necessary implication means not natural necessity,
but so strong a probability of intention, that an in-
tention contrary to that, which is imputed to the
testator, cannot be supposed.’ ”’
(b) In assumption by federal government.
We find that the supreme court of the United
States has not been silent upon the proposition sug-
gested as to its attitude when an effort was made to
pare away any of the inherent police power of the
state by congressional action, but sustains with
equal emphasis the doctrine that such jurisdiction
and control is never deemed to have been divested
by mere implication.
In Reagan v. Mercantile Trust Co., 154 U. S. 413,
speaking of the rule to be applied to its creature and
agency when engaged in purely intrastate business,
the court said:
“It must have been known that, in the nature of
things, the control of that business would be exer-
cised by the State, and if it deemed that the inter-
ests of the nation and the discharge of the duties
required on behalf of the nation from this corpora-
tion demanded exemption in all things from state
control, it would unquestionably have expressed
— intention in language whose meaning would be
clear.”
In Reid v. Colorado, 187 U. S. 137, 148, the court,
speaking by Mr. Justice Harlan, said:
“It should never be held that Congress intends
to supersede or by its legislation suspend the exer-
cise of the police powers of the States, even when
iil ie
it may do so, unless its purpose to effect that result
is clearly manifested.”
In Savage v. Jones, 225 U. S. 501, 533, the court said:
“But the intent to supersede the exercise by the
State of its police power as to matters not covered
by the Federal legislation is not to be inferred from
the mere fact that Congress has seen fit to circum-
scribe its regulation and to occupy a limited field.
In other words, such intent is not to be implied
unless the act of Congress fairly interpreted is in
actual conflict with the law of the State.” (Citing
many cases.)
M. K. & T. Ry. Co. v. Harris, 234 U. S. 412, at pp.
418-419:
‘A state law enacted under any of the reserved
powers—-especially if under the police power——is
not to be set aside as inconsistent with an act of
Congress, unless there is actual repugnancy, or un-
less Congress has, at least, manifested a purpose
to exercise its paramount authority over the sub-
ject.”
Ill. Cent. R. R. Co. v. Public Utilities Comm. 245
U. S. 493 at 510.
“In construing federal statutes enacted under
the power conferred by the commerce clause of
the Constitution the rule is that it should never
be held that congress intends to supersede or
suspend the exercise of the reserved powers of a
State, even where that may be done unless, and
—- so far as its purpose to do so is clearly mani+
ested.”
ay
a ee
2. No language used clearly manifesting inten-
tion to divest state of rate making power.
What, then, is the language ‘“‘whose meaning is
clear,’ which “fairly interpreted is in actual conflict
with the law of the state,”’ whose purpose to effect
that result is clearly manifested, under which the
states are to be held divested of the rate making
power? Where is “the actual repugnancy”’ found?
The language of the act is before the court. The
solicitor for the Postoffice Department has said:
“It would seem that language could not add
anything to the sweeping power to possess, to con-
trol, and to operate in such manner as the President
should deem needful or desirable.”
But the law does not say that. It says, “‘as may be
needful or desirable,’ not ‘‘as the President may
think needful or desirable.”” And of course the last
words quoted are clearly modified by the prior
language of the act, relating to the national security
or defense.
The proclamation of the President, in express
terms, states: “It is deemed necessary for the
national security and defense * * * to operate the
same in such manner as may be needful or desirable.”
This phrase, ‘‘needful or desirable,’ we think, must
necessarily and naturally be construed as referring to
and stating such quality of necessity or desirability
as is required for the national security and defense.
It does not, of course, refer to a need or desirability
from the standpoint of the telephone companies
themselves, but is solely the necessity or desirability
of furthering the national security or defense that is
to be considered. In other words, the postmaster
general and the President are to operate the telephone
system in such manner as may be needful or desirable
to secure or to bring about the national security and
defense.
(a) President sole judge of necessity of taking, but
not of method of operation— Cannot exercise
arbitrary power.
A distinction, we think, is here recognized. The
President is the sole judge of whether or not it is
necessary to take possession, assume control, and
operate the telephone systems, but unlimited dis-
cretion and power is not conferred upon him as to
the manner of such operation. He and the post-
master general, we think, are expressly limited in
their jurisdiction to operation in such manner as
may be needful or desirable for the national security
or defense, and they are not the sole judges of what
manner is needful or desirable for the national security
or defense.
(b) Question whether given manner of operation is
needful or desirable is for the court.
Assuming that the words employed were broad
enough to confer the power to regulate rates—and we
think they are not—the court is free to inquire as to
whether any act to be done has any necessary or
proper relation to the national security or defense,
and as a necessary preliminary to sustaining the
exercise of power, has a right to determine whether
ae
= van
or not any proposed action has, in any reasonable
view of the matter, any relation at all to the “national
security or defense.”
The act does not in express terms invest the Presi-
dent with the determination of what is ‘‘needful and
desirable.”” And consequently, having exercised the
power to take over the lines in their operation, he is
limited by what is actually needful or desirable in
the interest of the national security and defense. In
other words, it is for the court and not for the Presi-
dent or postmaster general to determine whether it
was either needful or desirable to intrude into the
domain of state regulation and arrogate the power of
regulating purely local rates. And if there is, in fact,
no basis for saying the abolition of state regulation is
either needful or desirable in the promotion of the
national security, then the court will say that the
postmaster general has not the power to make the
encroachment. Such, we think, is the clear effect of
the case of Interstate Commerce Commission v. Louis-
ville & Nashville R. R. Co., 227 U. S. 88, 91, where
the court said:
“*A finding without evidence is arbitrary and |
baseless. And if the Government’s contention is |
correct, it would mean that the Commission had a
power possessed by no other officer, administrative
body, or tribunal under our Government. It 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 exer-
cised in one case, could be injurously exerted in
another; is inconsistent with rational justice, and
comes under the Constitution’s condemnation of
all arbitrary exercise of power.”
_ eae
_— om
This case is cited in the brief of Mr. Hughes with
many others, to the proposition “that Congress could
not constitutionally delegate and by the joint resolu-
tion did not attempt to delegate to the President
arbitrary power.”” Among other cases cited are:
Yick Wo v. Hopkins, 118 U. S. 356, 369, 370;
Field v. Clark, 143 U. S. 649;
Buttfield v. Stranahan, 192 U. S. 470;
Union Bridge Co. v. U. S., 204 U. S. 364;
Lewis v. Frick, 233 U.S. 291, 297;
Gegiow v. Uhl, 239 U. S. 3, 9;
American School of Magnetic Healing v. McAn-
nulty, 187 U. S. 94;
Philadelphia Co. v. Stimson, 233 U. S. 605, 620;
Degge v. Hitchcock, 229 U. S. 162, 171.
Apparently that was just exactly the theory enter-
tained by the court, in the case of United States Rail-
road Administration v. Burch, 254 Fed. 140, decided
November 30, 1918, reported February 6, 1919,
where it was said: :
“Under this statute, the President could author-
ize the Secretary of War only to take possession of
such property as he himself is authorized to take
possession of under the statute. The extent of his
powers, and the definition of what property he was
authorized to take possession of under the statute,
would be necessarily a judicial question.”
The circumstances under which the power is
attempted to be exercised in the present case clearly
negative any relation whatever to the national
security and defense, because the step was not under-
taken until a full month after the armistice was
signed; and when the national security and defense
were no longer subject to any actual or even potential
challenge. This would clearly be sufficient to nega-
tive and overthrow the validity of the exercise of the
power in the instant case.
Consequently, it is our position and belief that the
act, without the proviso, does not clearly indicate a
purpose to take the rate making power from the
states.
The natural and ordinary meaning of the language
employed is that aptly used in the creation of a
receivership. This, we think, is the terminology
employed. By reference to general language on the
subject, we are struck at once with the practical
identity of the phrasing.
3. Use of terms, “‘supervision,’’ ‘‘possession,”’
*“‘control,”’ and “‘operation,”’ as found in the
law of receivership.
23 Am. & Eng. Encyc. 1000. ‘‘A receiver is an
officer of the court through whom the court takes
possession of property. * * * (1086) When
appointed he is entitled to take possession and con-
trol of the property or funds involved and to man-
age and dispose of the same under the direction of
the appointing court.”
24. Am. & Eng. Encyc. 4. ‘‘Areceiver of a rail-
road is merely such a functionary appointed for the
purpose of taking possession and generally operat-
ing and managing for a time a railroad under the
orders and control of the court.”
34 Cyc. 16 refers to a receiver as an indifferent per-
son appointed by the court “to hold possession and
control of property which is the subject matter of liti-
gation.”
tas
And it is said at page 284 that while the court “will
not usually appoint a receiver to permanently con-
tinue such operations,” it may do so, in the exercise
of a wide discretion. While it is ,of course, a common-
place of the law of receivership that the functions of
the receiver are exercised under the supervision of
the court (as appears from the subtitles, 34 Cyc. 246,
Supervision, Orders, and Instruction of Court; 248,
Exercise of Supervision), we find, therefore, that all
of the terminology employed in this act is such as is
customarily found in the law of receiverships and the
provisions for their appointment.
A receiver might have been appointed by a court
in a proper case to take possession and assume control
of any individual telephone and telegraph system and
to operate the same in the discretion of the court,
such possession, control, and operation all being exer-
cised under the supervision of the court, and it is
submitted that the only difference between such
receivership and what was intended by the present
act was that, instead of one receiver appointed for
one system, and another receiver for another system,
what was done by Congress was, in effect to sub-
ject the entire telegraph, telephone, cable, and radio
systems of the United States to a receivership, and
to invest the President, if he saw fit to exercise
the same, with jurisdiction to supervise the operations
of such systems, as a court of equity would supervise
them, and to take possession and assume control and
operate the same as a court of equity would do
through its receiver. This, we think, is the natural
and ordinary meaning of the language that Congress
used, and that the president employed in his delega-
~~
tion of power. As a receiver is appointed in an ordi-
nary case to conserve the property and prevent the
dissipation of assets on behalf of the creditors and
stockholders, so in this case, in the language of the
act as originally introduced, possession, control,
supervision, and operatioon were to be exercised,
“to insure the continuous operation of electrical.
communicating systems.”
Such has been recognized to be the status of the
Director General of Railroads. In Rutherford v
Union Pac. R. Co., 254 Fed. 880, it is said, at p. 881:
“‘Under these acts of Congress and the proclama-
tion of the President the Director General is a
carrier. He conducts the business of receiving and
transporting goods and passengers for hire. A re-
ceiver of a railway company is a carrier as to the
goods and passengers transported, (United States
v. Nixon, 235 U. S. 231, 234, 35 Sup. Ct. 49, 59 L.
Ed. 207; United States v. Ramsey, 197 Fed. 144, 146,
116 C. C. A. 568, 42 L. R. A. (N.S.) 1031), and the
office of the Director General is analogous to that
of a receiver of the railway companies.”
Gas & Electric Securities Co. v. Manhattan &
Queens Traction Corporation, 253 Fed. 453 (Ad-
vance Sheets):
Head Note: “A court cannot authorize its re-
ceivers for a street railroad company to charge a
higher rate of fare than that fixed as a maximum by
the company’s franchise.”
Ohio & M. R. Co. v. Russell (ill.), 3 N. E. 561, was
was an action that had to do with enforcing o. a
police regulation in the narrower sense of requiring
the construction of a fence on the railroad right of
way. The railroad sought to escape liability, on the
ground that it was “in the hands of a receiver” under
saitinds
an appointment of a court of competent jurisdiction
with full power to operate such road to the exclusion
of its employes. The court says:
“The action is against defendant for the nonper-
formance of a duty ey by statute, against
which, it is apprehended, no order of a court can
avail to relieve it. It is a police regulation to which
the corporation is subjected by the sovereignty of
the state, and it is not within the rightful jurisdic-
tion of the court, either state or federal, to arrest
its operation. Notwithstanding the appointment
of the receiver, the corporation is clothed with its
franchises, and such corporation still exists. The
effect of the appointment of the receiver is simply
to give him the temporary management of the
railroad, under the direction of the court, instead
of the manager appointed by the directors of the
corporation. Itis that, and nothing more. * * *
It is a principle well understood that all railroad or
other corporations transacting business in its nature
public are subject to all reasonable police —
tions deemed necessary for the common welfare.
The mere fact its property may be temporarily in
the hands of a receiver does not relieve a corpora-
tion from the operation of such regulations, any
more than a private citizen is released from the
duty to observe the law because his property may
be sequestered by the order of a court for the
benefit of his creditors.”
4. Analogy to the powers of the alien property
custodian.
Section 12 of the trading with the enemy act of
Congress, approved October 6, 1917, defines the
powers of the Alien Property Custodian, as follows
(See Clark on Receivers, p. 1219):
teat ccs
“The alien property custodian shall be vested
with all of the powers of a common-law trustee in
respect of all property, other than money, which
shall come into his possession in pursuance of the
provisions of this Act, and, acting under the super-
vision and direction of the President, and under
such rules and regulations as the President shall
prescribe, may manage such property and do any
act or things in respect thereof or make any dispo-
sition thereof or of any part thereof, by sale or
otherwise, and exercise any rights which may be or
become appurtenant thereto or to the ownership
thereof, if and when necessary to prevent waste and
protect such property and to the end that interests
of the United States in such property and rights
or of such person as may ultimately become en-
titled thereto, or to the proceeds thereof, may be
preserved and safeguarded.”’
The language used in this act is just as general and
just as broad in its results, in our opinion, as the
socalled wire control bill, except that it specifically
states that the custodian is to have the powers of a
common law trustee. It also provides, however, that
he is to act under the supervision and direction of the
President and under such rules and regulations as the
President shall prescribe. Assuming that the cus-
todian had come into possession of a telephone sys-
tem by virtue of this act, could it be successfully
argued that either he or the President had the power
to fix the rates, by virtue of the language, “‘super-
vision and direction of the President” and ‘‘rules and
regulations as the President shall prescribe?” Here
we have the use of the apt term “‘regulalions,’”’ and
yet, to our mind, it could not be said that this gave
the power to fix rates. The property, in either case,
has come into the government custody in the exercise
a...
of exactly the same so-called “war power,” but there is
no relation in either act between the necessities and
the requirements of the real situation and the regu-
lation of rates, and we think that such power was no
more conferred in the one case than in the other.
5. Power to fix rates granted in express terms in
other cases.
We find that section 582 (U. S. Comp. St. 1918,
Compact Edition), prescribing the duties of the post-
master general, provides:
, It shall be the duty of the Postmaster General:
aa
“Ninth. To superintend generally the business
of the department.”
Superintend and supervise, we take it, are absolutely
identical in meaning, and supervision is the act of
either superintending or supervising. But under the
use of this phrase, which is identical with the one
employed in the present case, the postmaster general
does not have the power to fix the rates of postage.
We find that he does have that power with refer-
ence to telegraph rates. Title LXV of the Revised
Statutes relates to telegraphs. This act in its original
form (see sec. 10076, R. S. 5267) was entitled, “An
act to aid in the construction of telegraph lines, and
to secure to the Government the use of the same for
postal, military, and other purposes.” Sec. 10075
(R. S. 5266) provides that—
‘Telegrams between the several Departments of
the Government and their officers and agents, in
their transmission over the lines of any telegraph
company to which has been given the right of way,
timber, or station lands from the public domain
shall have priority over all other business, at such
rates as the Postmaster General shall annually fiz.
Subsequently, an act was passed August 7, 1888, and
Congress again industriously wrote into the statute
the proviso:
‘“‘Nothing herein contained shall be held to deny,
exclude, or impair any right or remedy in the prem-
ises now existing in the United States, or any au-
thority that the Postmaster General now has under
title sixty-five of the Revised Statutes to fix rates,
or, of the Government, to purchase lines as provided
under said title, or to have its messages given pre-
cedence in transmission.”
Congress made use of abundant phraseology,
employing the terms, ‘‘supervision,”’ ‘‘possession,”
“control,”” and “operation.” Had it intended to
include the rate making function, it would have used
the simple expression, “‘to fix the rates.” That the
act of fixing rates is an act of regulation is, of course,
commonplace. We find that the Interstate Com-
merce Commission is created by ‘‘The act to regulate
commerce.”
U. S. Compiled Statutes, 1918 Edition—
Sec. 7707. Regulation of Commerce and Navi-
gation.
Sec. 8057. Regulation of Vessels in Domestic
Commerce.
Sec. 8151. Regulation of Steam Vessels.
Sec. 8277. Regulation of Motor Boats.
Sec. 8563. Regulation of Common Carriers of
Interstate and Foreign Commerce.
—
Sec. 3115-kk. Giving the President power
to fix price of wheat. Specifically confers
that power.
Sec. 3115-Y%q. “President * * * author-
ized to fix the price of coal and coke.”
Possibly no more significant illustration of the
practice of Congress could be given than in the “Act
to confer on the President power to prescribe charter
rates and freight rates and to requisition vessels, and
for other purposes,” approved July 18, 1918, two
days after the passage of this act, in which it is pro-
vided by sec. 6:
“That the President shall have power to deter-
mine, prescribe, and enforce reasonable freight
rates and the terms and conditions of affreightment
which shall govern the transportation of goods on
vessels of the United States, which shall be filed
with the United States Shipping Board and open
to public inspection. It shall be unlawful to charge
or collect any compensation for the transportation
of goods on any such vessel, or to enforce or at-
tempt to enforce any terms or conditions of af-
freightment, or to make or receive any payment
or do any act with respect to such transportation,
not in accordance with the rates, terms, and condi-
tions so Prescribed, anything in any contract,
whether heretofore or hereafter made, to the con.
trary notwithstanding.”
Section 7431aa, which relates to the transportation
of mail matter by urban and interurban electric rail-
‘way common carriers, was enacted July 2, 1918.
This would seem a matter peculiarly appropriate to
leave to the postmaster general, and yet we find
Congress providing:
“The Interstate Commerce Commission is here-
by empowered and directed as soon as practicable
to fix and determine from time to time the fair and
reasonable rates and compensation for the trans-
portation of mail matter.” ,
So that Congress was perfectly familiar with the
term and had frequently employed it with definite
significance, and had rate regulation been intended,
that purpose would have been naturally and ordi-
narily accomplished by using those two words in the
portion of the act conferring powers upon the
President.
6. Proviso specially reserves rate making power
to the states.
But we are not left to the necessity of judicial
determination in any given case as to whether the
intrusion into the domain of state regulation of
intrastate rates is “‘needful or desirable’ for the
‘“‘national security or defense.”” Congress has indus-
triously, and as we think, in a spirit of abundant
caution to insure the resolution from attack as
unconstitutional because in conflict with the tenth
amendment, indicated that it did not intend to
interfere in general with the police power, or police
regulation, or rate regulation of the states. The
resolution concludes with this proviso:
(a) Language used. .
_. “That nothing in this act shall be construed to
amend, repeal, impair, or affect existing laws or
owers of the states in relation to taxation or the
awful police regulations of the several states, ex-
cept wherein such laws, powers or regulations may
= on
affect the transmission of government communica-
tions, or the issue of stocks and bonds by such sys-
tem or systems.”’
(b) Purpose to insure constitutionality.
It is our judgment that probably this was unneces-
sary, and a mere confirmation of what the court
would have held the law to be, in the absence of any
proviso at all, and as we suggest, its primary office
was to insure the constitutionality of the resolution.
Chesapeake & Potomac Tel. Co. v. Manning, 186
U. S. 238, at p 242:
“As said by Mr. Justice Story, in Minis v. United
States, 15 Pet. 423, 445:
“*The office of a proviso, generally, is either to
except something from the enacting clause, or to
qualify or restrain its generalities, or to exclude
some possible ground of misinterpretation of it,
as extending to cases not intended by the legislature
to be brought within its purview.’ ”
This case is cited with approval in Austin v.
United States, 155 U. S. 417, 431, and in White v.
U. S., 191 U. S. 551.
“Ann. Cas. 1912C, 1088. Note: “The word ‘pro-
vided,’ as used in a statute generally implies a limi-
tation or restriction upon what has preceded in the
context.”
Such, we think, is the effect of the proviso here, “‘to
exclude some possible ground of misinterpretation of
it, as extending to cases not intended by the legisla-
ture to be brought within its purview.”
ie,
win Ws
(c) Regulation of telephone rates included in
‘‘police regulation.”’
Regulation of telephone rates is an exercise of the
police power of the state, consequently a police regu-
lation, and therefore excepted by the proviso.
Note, Ann. Cas. 1912D, p. 308:
*“A telephone company is engaged in a ‘business
affected with a public interest,’ and the state in the
exercise of its police power may regulate the rates
and charges of such company, and provide a maxi-
mum rate which the charge shall not exceed, pro-
vided that the rate prescribed is reasonable. Chesa-
peake, etc. Telephone Co. v. Manning, 186 U. S.
238, 22 S. Ct. 881, 46 U. S. (L. Ed.) 1144; Cumber-
land Telephone, etc. Co. v. Louisville, 187 Fed. 637;
Hockett v. State, 105 Ind. 259, 5 N. E. 178, 55 Am.
Rep. 201; Central Union Telephone Co. v. Brad-
bury, 106 Ind. 1, 5 N. E. 721; Johnson v. State,
113 Ind. 143, 15 N. E. 215; Central Union Tele-
Phone Co. v. State, 118 Ind. 194, 19 N. E. 604, 10
Am. St. Rep. 114; Pioneer Telephone, etc. Co. v.
Westenhaver, 29 Okla. 429, 118 Pac. 354; State v.
Superior Ct., 67 Wash. 37, 120 Pac. 861. See also
Munn v. Illinois, 94 U. S. 113, 24 U. S. (L. Ed.)
77; Nebraska Telephone Co. v. State, 55 Neb. 627,
76 N. W. 171, 45 : R. A. 113.”
(d) The use of the phrase, ‘“‘the issue of stocks and
bonds by such system or systems.”’
The argument has been made that the term
“police power’ has two meanings: (1) The ordinary
narrow, restricted meaning which has to do with
matters concerning the public health, public morals,
and public safety; (2) the broad police power which
has been sometimes characterized as coextensive with
the power of government itself. While conceding
that police regulations are to be treated as synony-
mous with the expression of police power, it is insisted
that, in this act, the term was used in its ordinary
or narrower sense, and that the proviso reserved to
the states only the exercise of such lawful police regu-
lations as might affect the health, safety, and morals.
It is elementary, of course, that meaning must be
given to ever yphrase and sentence in the act, and
when we find that Congress has industriously writ-
ten into the act the proviso that lawful police regu-
lations are reserved to the states, except wherein they
“may affect * * * the issue of stocks and bonds
by such system or systems,” we are confronted at
once by the proposition that whatever power of
police regulation was intended to be preserved to
the state by the proviso was one which, in legislative
contemplation, necessitated an exception so as to
make it inapplicable to the “issue of stocks and
bonds by such system or systems.”
The issue of stocks and bonds, of course, cannot in
any way be affected by regulations that have to
do ‘with the public health or the public safety or
the public morals, unless, of course, argument should
be made that such restraint as might exist to pre-
vent the exercise of fraud—that is, the criminal
jurisdiction of the state—was to be suspended in
behalf of the postmaster general. It will not be
seriously contended, we think, that Congress had
any such idea in mind. Obviously, what it had
in mind was the provisions found in public utility
statutes quite generally, and which are embodied
in sections 1753—1 to 1753—22, Wis. Stats., which
provide for application to the railroad commission
and the issue of a certificate of authority stating the
amount of such stocks, purposes for which they are
issued, etc., and provide for the ascertainment of the
value of the property of the utility, preliminary to
the issuance of such certificate. This, we submit,
most obviously was the character of police regula-
tions that Congress had in mind, and it requires no
argument, of course, to establish that this matter of
regulation and supervision of the issue of corporate
securities stands upon exactly the same footing and is
referable to that broad form of the police power
under which the power to regulate rates is derived.
The preliminary investigation preceding the fixing
of a rate, and that preceding the authorization of
stocks and bonds, are substantially the same. In the
one case (1753—9, subsec. 2 to 1753—9, subsec. 8),
it may make a true valuation of the property pre-
liminary to authorizing the issue of stocks and
bonds, while 1797m—5 provides for such valuation
as a basis for the determination of reasonable and
just rates. So that if the power to regulate the issue
of stocks and bonds had remained unimpaired up to
the insertion of this exception in the proviso, it must
unquestionably follow that the power to regulate
rates had been preserved up to that point, because
the two species of regulation are absolutely referable
to the same classification of power. The power
reserved could not have been broad enough to
authorize the valuation of property with a view of
determining the amount of stocks and bonds that
might be legitimately issued, without, as a necessary
corollary, having been broad enough to preserve
exactly the same species of power predicated upon an
—
shall Sn
almost identical procedure under which the state
regulated the rate of return upon the utility.
We have therefore, in this concluding sentence of
the resolution, an express declaration that, in the
contemplation of the framers of the law, up to the
point where this exception was inserted in the reso-
lution, the fundamental residuum of police power in
its very broadest sense, under which it is agreed the
power to regulate rates arises, had been left unim-
paired and undisturbed in the inherent possessors of
that power—the states.
7. The debates in Congress disclose that the
evil against which both the telephone and
telegraph and the railroad acts were di-
rected was not the evil of diverse state
regulation.
We are entirely disposed to agree with the Solicitor
for the Post Office Department that ‘“‘The circum-
stances in which it was enacted and the ends and
aims it was to subserve are all-important factors in
_ determining its meaning.”” What, then, were the
circumstances surrounding the enactment of the
legislation? To ascertain them we have under
elementary rules the right to consult the debates in
Congress to ascertain the evil which the legislation
was designed to correct—the circumstances in which
it was enacted. These debates are not, of course,
controlling as determining “‘the meaning of that
language of a statute passed by that body.”
It has been repeatedly held, however, that such
debates may be consulted for the purpose of ascer-
taining the evil which the legislation was designed to
correct. Declarations of this rule are frequent. .
(a) Authorities permitting examination of debates
Ho Ah Kow v. om. 5 Sawy. 552, Fed. Cas.
No. 6, at
Jenison v. Rinks 98 U. S. 453, 459, 25 L. Ed.
— “4 Southern Pac. Co., 186 Fed. 934, at
p
——— v. Boysen, 148 Fed. 771, at page
American Net & Twine Co. v. Worthington, 141
U. S. 469, 473.
Standard Oil Co. v. U. S., ‘ay U.S. 1, at p. 50.
Tap Line Cases, 234 U. S. p. 27.
In re Gerdau, 54 Fed 143, 145"
ars U. S. 143 U. S. 457, 12 Sup. Ct. 511,
Shallus v. United States, 162 Fed. 654, h. n
United States v. Chicago & N. W. Ry. Co., at
Fed. 616, 618.
United States v. Board of Commissioners of
“a 4 Co. Okl. et al., 193 Fed. 485, 486, h.
Black on Interpretation of Laws, 2d ed., Con-
temporary History, 285.
(b) The history of the wire control act.
This was first introduced as a joint resolution by
Mr. Aswell, June 27, 1918, page 9080, Congressional
Record, referred to the Committee on Interstate and
Foreign Commerce. Page 9368, July 2nd by unani-
mous consent the resolution was transferred to the
Committee on Military Affairs.
9378—Motion was made to reconsider this action
by the chairman of the committee to whom it was
originally referred and after debate, this was agreed
to; and on reconsideration, the matter was left with
the original committee (9380).
On July 4, page 9411, the resolution was reported
with an amendment. The discussion of the measure
commenced July 5th. At page 9465, the original
resolution and the amendment are set out in full.
The same follow:
“Joint resolution (H. J. Res. 309) to insure the
continuous operation of electrical communicating
systems, to guard the secrecy of war dispatches,
and prevent communications between public ene-
mies.
“Resolved, eic., That the President, if in his dis-
cretion it is deemed desirable, in order to insure
their continuous operation, or to guard the secrecy
of military and governmental communications, or
to prevent communication by spies and other pub-
lic enemies thereon, or for other military or public
reasons, shall have power to take possession and
control of any telegraph, telephone, marine cable,
or radio systems, and operate the same subject to
those conditions of law, so far as applicable, which
are in force as to steam railroads while under Fed-
eral control.
ig the following committee amendment was
read:
“Committee amendment: Strike out all after the
enacting clause down to and og the word
‘control,’ in line 4, page 2, and insert in lieu thereof
the re:
“ ‘That the President in time of war is author-
ized and empowered to supervise or to take posses-
sion and assume control of any telegraph, tele-
phone, marine cable, or radio system or systems,
or any part thereof, and to operate the same in such
manner as may be needful or desirable for the dura-
po a
tion of the war, which supervision, possession, con-
trol, or operation shall not extend beyond the date
of the proclamation by the President of the ex-
“= of ratifications of the treaty of peace:
“*Provided, That just compensation shall be
made for such supervision, possession, control, or
operation.’ ”’
(a) Debates disclose that evil to be remedied was not regulated by
state commissions.
During the course of the debate, Mr. Esch offered
the amendment as it now stands, relative to com-
pensation, stating that it was the language in the
bill giving “the power of taking over the ship yards”
(page 9466).
On the same day, July 5, 1918, (See Congressional
Record, page 9473), the last part of the resolution
was introduced by Mr. Montague.
Mr Sims said (Congressional Record, July 5, 1918,
p. 9475):
“But looking at the resolution, which is in the
exact language, word for word, of the act of 1916
under which the railroads were all taken over, and
then considering the great railroad-control bill as we
did for many weeks, in which every question per-
taining in nature and substance to this resolution
was discussed, I thought it would be an assumption
on my part to repeat at great length in a report in-
formation which everybody knows. * *
“I am not prepared to say that it will not become
necessary, but I hope it will not become necessary,
and if it does not it will not be done. Therefore
there was no use in a long program of detailed legis-
lation as to the operation, as to the compensation,
in advance of whether or not it would ever become
necessary to consider such legislation. If it is
found necessary by the President to exercise the
_ power herein conferred, as a matter of course Con-
— will do as it did in the railroad-control matter.
. There will be supplementary legislation to take
care of every question that will arise, and it will not
be railroaded through the House without ample
time for consideration.”
“I do not think there is the remotest possibility
of the Government taking supervision because the
= " supervised by different States.” (P.
At page 9478 the proviso was read again by the
clerk and the following question and answer appear
with reference to it:
“Mr. Escu. Is that language the language of
the railroad act?
Mr. MonraGueE. It is, except that the language
of the railroad act is ‘transportation of troops, war
materials, and Government supplies.’ Of course,
that oy is inapplicable to this bill, and I sim-
ply used the language “Government communica-
tions,’ which would embrace all communications by
’ wire or telephone.”
’ And again it was stated:
“Mr. Montacue. Does the gentleman carry
- in his mind the distinction between regulation and
limitation? Wein this committee have not —
in any measure of a regulatory character. he
amendment that I proposed is simply an amend-
ment of limitation and preservation of existing
powers.”
At 9479, we find the interesting statement in
response to the suggestion which has been urged in
other arguments, that the President already had the
power:
“Mr. Sims: I think I can suggest a fair approach
to an answer to the question whether or not the
President has the power contained in this resolu-
tion, that it was submitted to the Department of
Justice and after a thorough investigation and
study the Depwrtment of Justice reported to the
President that he did not have the authority.”
At page 9481, the title was then amended by
unanimous consent to correspond with the resolution.
The matter came up for consideration in the Senate
in its amended form (July 6, page 9502), and under
its present title was referred to the Committee on
Interstate Commerce. On July 8th, page 9610, it
was reported back with recommendation, after con-
sideration of a little over an hour (9611).
On page 9614, we find the suggestion made as to
the possibility of a strike. It was stated at 9614 by
Mr. Penrose:
**Mr. President, I do not think in the history of
any — body from here to Russia has a
more high-handed proceeding been perpetrated
than that which we have witnessed this afternoon.
I speak coolly and advisedly, although my indigna-
tion runs high. We are pie to be in a battle
for liberty and to be engaged in a tremendous con-
flict to bring about the downfall of autocracy, and
yet here in the Senate of the United States every
principle of orderly constitutional procedure and
of liberty has been outraged and violated.”
And at 9617, it was referred back to the com-
mittee. On July 10th, Congressional Record, page
9685, it was again reported and read by title. At
9729 on July 11th, the matter was again brought up
for consideration. Reference was made by Mr.
— 47 —
Smith to the question of tolls in the following
language and upon possible abuse:
“The question of tolls and rental and hours of
service is very important to the telephone patrons,
and any unnecessary interference with present
plans should have the most careful consideration.”
This discussion was resumed on July llth, page
9732. It was stated at 9733 by Mr. Underwood.
“T will say to the Senator from Ohio that so far
as I know there is no emergency which exists in this
hour for this legislation. That is the reason why
I did not think there were any hearings necessary. :
And again at 9735, a colloquy took place between
Mr. Harding and Mr. Underwood:
‘Mr. HARDING. I want to ask the Senator from
Alabama if he will not admit, however, that the
public-service utilities, which he is proposing to give
authority to take over, are already essentially under
license and control on the part of the various public
utilities commissions throughout the States?
“Mr. UNDERWOOD: ell, I think they are
throughout the States; and that very fact might
hamper the hands of the Federal Government.
“Mr. HARDING: Now, if the Senator will tell the
Senate how it will hamper the Government, we
shall be obliged to him.
‘MIR. UNDERWOOD: I do not know how it
would; I can not answer that question definitely; .
I say that it might; I do not say that it would; but
the fact that those companies are regulated can
not affect the situation.”
And again at 9736 Mr. Underwood said:
“But I do not think there is any probability
whatever of the taking over of the telephones in
this land, except it might be to meet a local situa-
tion in some seaport for the moment or the hour;
but so far as taking over the telephones of the
country is concerned, eee or in any large
class or as a system, I do not think there is any
possibility of it.”
On the same page a communication from Mr.
Burleson is reproduced which says:
“At this moment the paralysis of a large part of
the system of electrical communication is threat-
ened, with possible consequences prejudicial to our
military preparations and other public activities
that might prove serious or disastrous.”
And this danger is characterized by Mr. Reed:
“That the emergency now exists in the threat-
ened strike.”
9746—July 12th, an amendment was introduced
by Mr. Reed. Page 9749, it was stated:
“That the genesis of this proposition is at the
Post Office Department, where they hope, under
the present exigency, to give it force and effect.
I think they are making use of this extraordinary
situation to get control of these great arteries and
avenues of communication.”
At page 9755, letters and telegrams were intro-
duced tending to demonstrate that there was no
danger of a strike among the telegraph employees.
At page 9801 the speech of Mr. Kellogg on July 11th
appears. At 9850 under date of July 13th Mr.
Reed states:
“If then the Government should tomorrow take
over these utilities and there is no clause written
aw 49
into the law which will perpetuate the legal right
of the citizen to this service, any citizen can be re-
fused that service and he is totally and absolutely
without redress, first, because the public use has
been absorbed in the sovereignty itself and, second,
because he can not sue that sovereignty. Nobody
can sue the United States of America except where
Congress has expressly granted that permission.”
To which Mr. Shields, reading the resolution, replied:
‘“‘Now, the question I wish to ask is, Are not the
rights of the citizens of which the Senator speaks
protected by the provision that this measure shall
not be construed to amend, repeal, impair, or affect
existing laws referring to taxation or the local
police regulations of the several States? Is it not
a fact that the right of the general public to be
served by public utilities, such as common carriers,
hotels, telegraph companies, and telephone com-
panies, comes under the police regulation? Are
not all the laws, both common and statutory, SOv-
erning these public utilities police regulations, and
must not the public utility render this service, and
is not that preserved in the bill?”
his proposed amendment:
“But let us assume that the Senator from Ten-
nessee is right, I do nothing in this amendment but
reaffirm and reassert a right and make it clear.
‘When these utilities are taken over the adminis-
tration of their business affairs will be turned over
to a vast multitude of men. It almost always hap-
pens that some men put into public position be-
come more or less arbitrary, and if they are under
no restraints whatever great damage and injury
may be done.”
At 9851, Mr. Reed stated further, with reference to
wien i
At the same page, Mr. Knox stated:
“Tt is only written into the resolution that which
is approved as a matter of course. It is not a right
in ef judgment that rests in the police power. It is
a right that grows out of the nature of the service
that these corporations offer to render to the gen-
eral public, and we are only writing into the resolu-
tion a proposition that in our opinion no operations
of these lines, if they are taken over by the Govern-
ment, will interfere with that natural right. The
amendment contemplates and specifically provides
that in any situation where the private right and
the Government right conflict the private right
must give way.”
The amendment was rejected by a vote of 27—for
and 32 against, 37 not voting. The joint resolution
itself was adopted on July 13th, page 9852.
This detailed history of the resolution and its
passage is presented, not at all upon the theory of
demonstrating what the intention of Congress was,
because we think the reference to the debates lends
peculiar emphasis to the proposition of their untrust-
worthy character as a guide to the intention of the
legislative body. We find that while there was dis-
cussion on the matter in question, Mr. Reed thought
it necessary to pass an amendment to insure the
citizens’ rights; Mr. Shields thought it unnecessary
because they were already provided for by the term
‘police regulation” and Mr. Knox stood for the view
that the amendment would only write into the reso-
lution that which was approved as.a matter of course.
It is, of course, absolutely beyond human power to
determine which view governed the action of Con-
gress, in either house, in adopting the resolution; but
po one
this much does appear: that while a sort of nebulous
military necessity was suggested, the exact nature of
which no one seemed to be able to find and which all
apparently agreed did not exist at the time that the
bill was under consideration as a reason for its
adoption and that the fact that a strike was threat-
ened was touched upon as a reason for adopting the
resolution, throughout the entire debate, discussion
and proceedings that have to do with the resolution,
there is neither phrase, syllable or suggestion in the
remotest possible way indicating that state regulation
of rates was a reason for passing the bill. Mr.
Underwood in a vague way suggested such inter-
ference as a possibility without apparently indicating
in what respect it might arise.
8. Argument based on the analogy to control
exercised over railroads.
(a) Act for wire control is in pari materia with
railroad bill.
It will be admitted that the Federal control of
transportation and the same control of the wire
communicating systems both relate to the same
general subject matter. This, we think, follows from
whichever one of several standpoints the matter may
be considered. The terms of the rail act authorize
the President ‘‘to take possession and assume control
of any system or systems of transportation” in time
of war ‘for the transfer or transportation of troops,
war material and equipment, or for such other pur-
a te
poses connected with the emergency as may be
needful or desirable.” (Vol. 39, Statutes, p. 645.)
As above set forth, the joint resolution for wire
control states that the President, during the con-
tinuance of the present war, is authorized, ‘‘whenever
he shall deem it necessary for the national security
or defense, to supervise or to take possession and
assume control * * * and to operate the same in
such manner as may be needful or desirable for the
duration of the war.”
The Presidential Proclamation, in the case of
assumption of control of the transportation system
recites:
“It has now become necessary in the national de-
fense to take possession and assume control of cer-
tain systems of transportation and to utilize the
same, to the exclusion, as far as may be necessary,
of other than war traffic thereon, for the transporta-
tion of troops, war material, and equipment there-
for, and for other needful and desirable purposes
connected with the prosecution of the war.”
The Proclamation assuming control of the wire
systems uses the language:
“It is deemed necessary for the national security
and defense to a pipe] and to take possession
and assume control of all telegraph and telephone
systems and to operate the same in such manner as
may be needful or desirable.”
(b) Rule stated permitting examination of statutes
in pari materia or on merely cognate sub-
jects.
In other words, it very clearly appears that the two
acts and the proceedings thereunder are related to the
general subject of the national security and defense.
In another aspect, they are likewise in pari materia,
as having to do with the general subject of the
Federal operation and control of public utilities.
They are upon the same general subject, in the sense
that they deal with the question of interstate com-
merce, and its regulation with reference to the
powers of the states over intrastate commerce.
But even though the court should conclude that they
are not strictly in pari materia, it is very clear that
they relate to cognate matters; and whether they are
strictly in pari materia or merely cognate, under
authorities that govern construction established by
this jurisdiction and by the supreme court of the
United States, they may be referred to.
Smith v. People, 47 N. Y. 330, p. 339:
“Statutes in pari materia relate to the same sub-
ject, the same person or thing, or the same class of
persons or things, and are to be read together, for
the reason that it is to be implied that a code of
statutes relating to one subject is governed by the
same spirit, and are intended to be harmonious and
consistent. They are to be taken together as if
they were one in law, as one statute.”
Munger v. Lenroot, 32 Wis. 541. Two statutes
giving liens on logs although enacted at different
sessions and relating to two different sets of counties
were characterized by the court as follows:
*‘These statutes relating to laborers’ liens are in
pari materia and we may look at one to discover the
true interpretation of another.”
Com. v. Ross, 122 S. W. 161, 135 Ky. 315.
by the following cases:
_
Endlich on the Interpretation of Statutes, 43, 51.
36 Cyc. 1147:
“Statutes in pari materia are those which relate
to the same person or thing, or to the same class of
persons or things.”’
Helm v. City of Grayville, 79 N. E. 691:
“In arriving at the proper construction to be
given a statute, other statutes relating to the same
subject should be considered. ‘Statutes are in pair
materia which relate to the same person or thing or
to the same class of persons or things, and the
ang is applicable to public statutes or general
aws made at different times and reference to the
same subject.” 26 Am. & Eng. Encyc. of Law (2d
Ed.) 621; South Park Comrs. v. First Nat. Bank,
177 Ill. 234, 52 N. E. 365; Stribling v. Prettyman,
57 Ill. 371.”
Indianapolis Northern Traction Co. v. Ramer,
76 N. E. 808, 810:
“The rule of construction by the aid of statutes
in pari materia does not restrict the court to the
consideration of other legislation enacted on the
same day or at the same session. The use of the
rule, like all other methods of construction, is to as-
_ certain the intention of the legislature by reference
to other enactments relating to the same matter or
subject—-to the same person or thing, or to the
same class of persons or things.”
The application of the rule and the classification of
legislative acts, no more closely related than here, as
appertaining to the same general subject matter
within the meaning of this rule, are further illustrated
—————
—' —
a! Ryan’s Estate, (Mo. App.) 156 Ss. W.
Converse v. The U. S., 62 How. 463;
State v. Esser, (Nev.) 129 Pac. 557;
—— Stone Co. v. Thomas, (Ind.) 94 N. E.
Greenbush Cemetery Ass’n v. Van Natta, (Ind.)
94 N. E. 899;
State v. Eggers, (Nev.) 136 Pac. 100.
Sutherland Statutory Const.: “Statutes upon cog-
nate subjects may be referred to, though not strictly
in pari materia.”
State v. Summers, 44 S. W. 797:
“Even cognate statutes, though not strictly in
pari materia, may be invoked and referred to in
order to elucidate the legislative intent. Suth. St.
Const. 283, 284; Ex parte Marmaduke, 91 Mo. 257,
4S. W. 91.”
Schmidt v. Raymond, 148 Wis. 271, 274, construing
the effect of the statutory provision for curtesy to a
husband in a deceased wife’s estate, provisions on
| the cognate subject of dower were considered: “Tt is
| quite significant that, while sec. 3885, Stats. (1898)
provides for the admeasurement of dower, in the
event of it being necessary to sell the lands of a
| deceased husband to pay debts, no such provision is
| found in regard to curtesy. If the legislature had
considered that the rights of the husband by curtesy
took precedence over the claims of the creditors, no
doubt a provision would have been made for the
admeasurement of curtesy as well as of dower.”
State v. Beck, 21 R. 1. 288, 43 Atl. 366, 45 L. R. A.
269:
wn
“‘A familiar rule in the construction of statutes
is that a statute must be construed with reference
to the whole system of which it forms a part, and
that statutes upon cognate subjects may be referred
to though not strictly in pari materia. Sutherland
Stat. Const. 284.”
Smith v. People, 47 N. Y. 330, 339:
**So in case of doubt or uncertainty, acts in pari
materia, passed before or after, and whether re-
pealed or unrepealed, may be referred to in order
to discern the intent of the legislature in the use
of particular terms; and within the same rule, and
the reason of it, contemporaneous legislation, al-
— not precisely in pari materia, may be re-
ferred to for the same purpose.”
Whitcomb v. Rood, 20 Vt. 49:
**‘But when terms or modes of expression are em-
ployed, in a new statute, which had acquired a
definite meaning and application in a previous stat-
ute, on the same subject, or one analogous to it,
they are generally supposed to be used in th. same
sense; and in — e construction of such stat-
e
ute, regard should had to the known and es-
tablished interpretation of the old.”
State v. Woodson, 31 S. W. 105, 128 Mo. 497:
“Statutes not strictly ‘in pari materia’—statutes
on cognate subjects—may be brought within range
of the construing vision as needed auxiliaries in the
work of interpretation.”
Cummings v. Everett, 19 Atl. 456:
“The whole body of previous and contemporan-
eous legislation should be considered in interpreting
any statute.”
— §7 —
Endlich Interpretation of Statutes, Sec. 52, p. 65:
“The construction which has been put upon acts
on similar subjects, even though the language
should be different, should for a similar reason be
referred to.”
26 Am. & Eng. Encyc. 623:
““Contemporaneous legislation, not precisely in
ag materia with the statute to be construed may
e referred to on the question of intent.”
Vane v. Newcomb, 132 U. S. 220, quotes this lan-
guage at 236 from Stout v. Board of Coms., 107 Ind.
343, 348, which makes use of it and in turn refers to
the earlier case of Prather v. The Jeffersonville, Madi-
son and Indianapolis R., 52 Ind. 16, where it originally
appeared. Chase v. Lord, 77 N. Y. 1, 18, employs
almost the same words. Matter of Rochester Water
Coms., 66 N. Y. 422, as does People v. England, 91 Hun
152, 155: “Where other acts of the legislature,
passed at or about the same time, corroborate the
evidence of intent, as gathered from the statutes
under review, the duty of the courts is to give effect
to the intent rather than to the literal terms of the
act.”
State v. Wiggins Ferry Co., 106 S. W. 1005, quotes
with approval from Sutherland that “statutes on
cognate subjects may be referred to,”’ as does State v.
Patterson, 105 S. W. 1048.
Under elementary rules where a statute or part
thereof, adopted from another state or re-enacted in
a subsequent statute in the same state, has received
a prior construction, such construction is binding
upon the court in its interpretation of the statute so
adopted from a foreign state or re-enacted from the
body of statutes previously existing. We contend
that the reason of this rule sustains this proposition
—that where the language of a statute having to do
with the same general subject matter is subse-
quently taken over in substance and in form in
another enactment, in case the first enactment has
not received definitive interpretation by legislative
construction or by the court, in interpreting the
second or subsequent enactment, the court will have
the right to examine into the facts and circum-
stances and the general situation surrounding the
enactment of the first provision with a view of
ascertaining what the particular evil was that the
legislative body sought to remedy by the insertion of
the particular phrase—and has a right to resort to
all legitimate aids in enabling it to arrive at a correct
interpretation of the meaning and intent of the first
of the two provisions, whether intrinsic in the lan-
guage employed, or extrinsic thereto, in order to
enable it to properly interpret the second enactment
in the light of and with the aid of such assistance as
would have been available and as would have
enabled the court to put a proper construction upon
the language of the statute furnishing the source for
the enactment in question.
(c) Railroad legislation summarized.
The first provision relative to control of the rail-
roads is found at page 645 of Vol. 39 of the Statutes,
the same being the revenue bill passed by the 64th
Congress on August 29, 1916.
“The President, in time of war, is empowered,
through the Secretary of War, to take possession
and assume control of any system or systems of
transportation, or any part thereof, and to utilize
the same, to the exclusion as far as may be neces-
sary of all other traffic thereon, for the transfer or
transportation of troops, war material and equip-
ment, or for such other purposes connected with
the emergency as may be needful or desirable.”
The authority conferred by this proviso was not
exercised until the Presidential proclamation of
December 26, 1917, which provided that—
“* * * The possession, control, operation, and
utilization of such transportation systems, hereby
by me undertaken, shall be exercised by and
through William G. McAdoo, who is hereby ap-
pointed and designated Director General of Rail-
roads. Said director may perform the duties im-
posed upon him, so long and to such extent as he
shall determine, through the boards of directors,
receivers, officers, and employees of said systems of
transportation. Until and except so far as said
director shall from time to time 4 general or
special orders otherwise provide, the boards of di-
rectors, receivers, officers, and snevest of the
various transportation systems shall continue the
= thereof in the usual and ordinary course
of the business of common carriers, in the names
of their respective companies.
“Until and except so far as said director shall
from time to time otherwise by general or special
orders determine, such systems of transportation
shall remain subject to all existing statutes and
orders of the Interstate Commerce Commission and
to all statutes and orders of regulating commissions
of the various States in which said systems or
any part thereof may be situated.. But any
orders, general or special, hereafter made by dais
director shall have paramount authority and be
obeyed as such.”
Following this, and under date of March 21, 1918,
the 65th Congress provided for the ascertainment of
just compensation for the carriers taken, providing a
revolving fund of five hundred million dollars for the
purpose of paying the expenses of the federal control,
and, so far as necessary, the amount of just compen-
sation. Section 10 expressly provides:
‘“*That carriers while under Federal control shall
be subject to all laws and liabilities as common
carriers, whether arising under State or Federal
laws, or at common law, except in so far as may be
inconsistent with the provisions of this act or any
other act applicable to such Federal control or
with any order of the President. * * *
“That during the period of Federal control,
whenever in his opinion the public interest re-
quires, the President may initiate rates, fares,
charges, classifications, regulations, and practices
by filing the same with the Interstate Commerce
Commission, which said rates, fares, charges, classi-
fications, regulations, and practices shall not be
suspended by the commission pending final deter-
mination.
“Said rates, fares, charges, classifications, regu-
lations, and practices shall be reasonable and just
and shall take effect at such time and upon such
notice as he may direct, but the Interstate Com-
merce Commission shall, upon complaint, enter up-
on a hearing concerning the justness and reason-
ableness of so much of any order of the President
as establishes-or changes any rate, fare, charge,
classification, regulation, or practice of any car-
rier under Federal control, and may consider all
the facts and circumstances existing at the time
— 6] —
of the making of the same. In determining any
uestion concerning any such rates, fares, charges,
classifications, regulations, or practices or changes
therein, the Interstate Commerce Commission shall
give due consideration to the fact that the trans-
portation systems are being 0 erated under a uni-
fied and coordinated national control and not in
competition.”
Section 15 provides:
“That nothing in this act shall be construed to
amend, repeal, impair, or affect the existing laws
or powers of the States in relation to taxation or
the lawful police regulations of the several States,
except wherein such laws, powers or regulations
may affect the transportation of troops, war ma-
terials, Government supplies, or the issue of stocks
and bonds.”’
(d) Interpretation of railroad act.
The foregoing would appear to demonstrate very
clearly that by the terms of the original Presidential
proclamation, the railroads were kept expressly sub-
ject to “all existing statutes and orders of the Inter-
state Commerce Commission and to all statutes and
orders of regulating commissions.” The act of
March 21, 1918, varied this only to the extent of
conferring upon the President the power to initiate
rates, fares, charges, classifications, regulations, and
practices by filing the same with the Interstate Com-
merce Commission, while section 15, which provides
that ‘“‘nothing in the act shall be construed to amend,
repeal, impair or affect the existing laws or powers of
the States in relation to taxation or the Jawful
police regulations of the several States,” is merely
declaratory of the presidential purpose that such
systems of transportation should remain subject to
all statutes and orders or regulating commissions of
the various states, in which said systems or any part
thereof may be situated, with a proviso that the
orders of the Director should “‘have paramount
authority and be obeyed as such.” In other words,
the net effect of the provisions covering the railroad
situation was: first, to leave them expressly subject
to the control of state commi.sions and the Inter-
state Commerce Commission, and, secondly, to give
the President authority to initiate interstate rates;
but in our opinion, by legislative silence on the sub-
ject, to deny him the power to initiate intrastate
rates, and by express declaration to re-affirm the
policy of leaving the roads subject to the police
regulation of the states—clearly used as inclusive
and synonymous with the expression used in the
Presidential Proclamation of “regulatory commis-
sions.”
The foregoing provisions amply demonstrate the
contention that we make, that whatever results that
were sought to be obtained, were to be accomplished
through the medium of speeding up railroad opera-
tions from the standpoint of their internal manage-
ment, and that the status quo, so far as existing laws
and arrangements were concerned, was to be dis-
turbed just as little as possible, and only in the
specific particulars provided by the Presidential
Proclamation and the act of Congress.
_— a
(e) The evil sought to be remedied by Congress, as.
discussed in the hearing before the Interstate
Commerce Committee of the United States
Senate prelimary to the passage of the bill
under which the President received the power
to initiate railroad rates.
Prior to the enactment of the legislation of March
23, 1918, the situation of the railroads under the act
of Congress and under the proclamation of the
President was akin, at least, to the situation of the
telephone companies at the present time, and Con-
gress in enacting this legislation had before it the
committee hearing on the matter.
It appears at page 499 of the hearing on govern-
ment control and operation of railroads, pursuant to
S. Res. 171:
“Commissioner ANDERSON. I think the power
to fix rates, either under the interstate-commerce
act or under any State act, has already been taken
away, so far as the assertion of the war power of
the President under the act of August, 1916, makes
reasonably necessary, and that section 11 carries
forward precisely the status which I think now
exists.”
And at p. 751:
“Senator KELLoGG. While the roads are being
managed by the Government itself, as a Govern-
ment institution, do you think the State commis-
sions should be allowed to fix any parts of the rates
on the Government gh gg ii
“Mr. WALTER. do, Senator, for this reason:
I do not understand that the Government has
taken possession of the railroads as it would take
possession of a piece of property and erect a buildé-
es
ing thereon. My thought is that all the possession
they have is the possession to operate the freight
thereon, and that you leave to the Interstate Com-
merce Commission and to the State commissions
the exercise of all functions not in conflict with the
exercise of the power of movement.”
Again, at p. 752:
“Senator KELtocc. * * * Of course that
possession has been taken through the various
corporations, but if the Government has the con-
structive possession of the railways of the country
and is operating them as a Government institution,
do you think any power except the Federal power
should fix the rates and direct the operation of
lines in the country?
“Mr. WALTER. Viewing the conditions as they
are now, I will say yes, that the State commissions
ought to be preserved, for these reasons, Senator,
if you will permit me a little bit of a long answer.
In the first place, it takes a man with some expe-
rience and judgment to determine what the reason-
able rate is. The State commissions are just as
patriotic, as energetic and as desirous of proper
results as anybody else. I would leave to them the
exercise of their power.”
Mr. McAdoo testified before the committee (pp.
843-844):
‘“‘The President’s proclamation has expressly left
that status unimpaired except to the extent that it
_ may be determined in the public interest to alter it
from time to time. As it stands to-day the State
commissions are exercising precisely their same
functions. The Interstate Commerce Commission
is exercising its same function, and, for my own
part, I think as little disturbance should be made as
possible in those matters; yet, at the same time,
_itis very essential that the President should exercise
his full powers as the public necessity requires.
“It is not only a question of the amount of the
rate, but of the effect of the rate upon different com-
munities. Those rates have relation to the econ-
omic status and the industrial activities of the
country. I think that any man who undertook
lightly to disturb that rate structure would be
doing a very foolish thing, and naturally the Presi-
dent would not undertake to exercise the power he
has under the law to destroy or disturb rates lightly
or unnecessarily.
**As I said to the State commissioners who called
on me the other day, the ordinary procedure will
continue to be observed; that the advice and sug:
estion and assistance of these commissions could
e made of great value in the management of the
railroads; that the purpose of the President was
and is not to exercise any power he possesses to
override the authority of the Interstate Commerce
Commission and various State commissions except
in cases where it is clearly necessary to do so to
meet the war emergencies or to serve the public
interest.”
Mr. Cowan testified at p. 1148:
“I say, therefore, that if a railroad company, or
any other carrier, or Congress, or the State legis-
lature, shall impose a charge above what is rea-
sonable, it is in the nature of a tax. It is unlawful,
it is not the standard that the shipper is rea-
sonably entitled to, it is not the standard which
the public is entitled to, the railroad has no right
> exact more, and the shipper is obliged to pay
that.
“* * * T say, therefore, that the suggestion
that has been made—and I may parenthetically
remark that it is an astonishing proposition to me,
coming from the source that it does—-that under
this bill the President, the Director General, or
whoever executes this law might raise the rates
— va
for the purpose of producing revenue for the Gov-
ernment. In other words, exercise the taxing
power, if they raise it beyond what is reasonable.’
(f) Discussion of bill in Congress.
The bill was presented in the Senate February 11th
(see p. 1939, Congressional Record). At 1944 it was
stated by Mr. Smith, who had charge of the same:
“The bill under consideration was drafted by
the administration and modified by the Interstate-
Commerce committee of the Senate to meet the
situation.”
In presenting his summary of the bill to the house,
Mr. Sims, who apparently had charge of the same for
the administration, stated in the house on February
19, 1918, at page 2337:
“On the other hand, it is manifestly impractic-
able and undesirable for the President or any
- agencies he may create to readjust our present rate
_ fabric. Comparatively little of it ought to be
readjusted, and such necessary adjustment should
come tentatively and only to meet obvious needs.
Our committee was of the opinion that section il
meets the situation in the least objectionable and
in the most practicable way. It provides that,
except as the President may from time to time
otherwise order, rates shall continue to be and to
be determined as hitherto.
“This leaves the Interstate Commerce Commis-
sion and the state commissions to proceed, precisely
as hitherto, in the determination of all rate ques-
tions unless and until the President, in the exer-
cise of the war power, shall order otherwise.”
Vol. 56, Part III, 65th Congress, p. 2360, contains
_
a discussion by Mr. Snook of the clause relative to
the authority to initiate and fix rates. And on that
page appears an excerpt from the testimony of Mr.
McAdoo before the committee, in which he states,
as to intrastate rates, “I think that the state com-
missions ought to continue to consider such ques-
tions as they rise,’”’ and that in a conference he had
told them that they should go ahead and hear cases
and exercise their powers as theretofore, subject to
the power of the President to override their decision
when he thought it necessary to do so in the public
interest, and stated: “It is therefore plain that there
is to be no change in the present method of fixing
rates, except in exceptional cases, and then only
when an emergency arises making such course neces-
sary.”
Senator Underwood, February 20, p. 2377, Con-
gressional Record, contended—
“that the bill should not be passed unless within the
folds of the bill remains the provision to allow the
Interstate Commerce Commission to continue to
functionate and review any rate that is put upon
the people of this country from any source.”
At page 2378, Senator Sherman objected to impair-
ing or invading the power of the Interstate Com-
merce Commission. ;
Mr. Poindexter stated in the Senate (p. 2387):
“It was the avowed purpose of the Directér Gen-
eral not to interfere in general with the rate making
duties and authority either of the Interstate or
state commissions.”
In referring to this section as “11,” Mr. Sims ob-
viously misspoke as the section then, as now was
numbered 10 and is the same as printed above and
practically identical with the section as finally enact-
ed. At that time, however, there was nothing in the
bill in any way corresponding to Section 15 thereof,
quoted as above, as finally enacted, except that Sec-
tion 13 of the act provided: “that nothing in this
act shall be construed to amend, repeal, impair or
affect the existing laws or powers of the states in
relation to taxation.”
In this form the bill passed the Senate on February
21, calendar day, February 22, Congressional Record,
Second Session, 65th Congress, Page 2519.
When the bill went into the House of Representa-
tives it was amended by striking out everything after
the enacting clause, making various changes therein,
but the most significant was to present for the first
time the equivalent of Section 15 as it now appears.
(g) Proposed amendment inserting in proviso the
words “‘the regulation of rates.”’
Section 16 of the bill so amended provided:
“That nothing in this Act shall be construed to
amend, repeal, impair, or affect the existing laws
or powers of the states in relation to taxation, or the
lawful police regulations of the several states, ex-
cept wherein these regulations may affect the
transportation of troops, war materials, or Govern-
ment supplies, the regulation of rates, the expendi-
ture of revenues, the addition to or improvement
of properties, or the issue of stocks and bonds.”
oe
This bill, as so amended passed the House of Rep-
resentatives by a vote of 339 voting “aye,” six voting
“nay,” one voting “present,” and eighty-one not
voting.
Following the passage of the bill as thus amended
in the House, it appears at 2838 and 2839 that the
House insisted upon its amendment, and arrange-
ment was made for further conference upon the bill.
Thereafter, conference committees were duly ap-
pointed, and the bill in its present form reported to
both Houses, with the phrase “regulation of rates”
omitted.
The conference report on the railroad bill was pre-
sented to the Senate, March 13, 1918, debated, and
rejected on a point of order, which appeared to call
for the discussion of the intent and effect of the pro-
viso under consideration here.
The Vice-President stated (p. 3420, Congressional
Record):
“The Senate of the United States passed this
proviso in this bill:
“That nothing in this act shall be construed
to amend, repeal, impair, or affect the existing laws
or powers of the states in relation to taxation.’
“The House of Representatives, in the substi-
tuted bill, included that language exactly, and
added to it:
‘or the lawful police regulations of the several
states, except wherein these regulations may affect
the transportation of troops, war materials, or gov-
ernment rin the regulation of rates, the ex-
penditure of revenues, the addition to or improve-
ment of properties, or the issue of stocks and
bonds.’ ”’
Mr. Pomerene stated:
“It is true that one of the subjects of state con-
trol has been the question of taxation. The Senate
adopted the provision as read. The House adopted
that provision plus something more, namely, a lim-
itation upon the power of the State over the subject
of taxation. But that was not all. The House went
further and said upon the subject of control, we
are going to reserve to the States the power over
the subject of taxation and also the police power of
the states as theretofore.”
At page 3432, Senate Bill 3752 was again sub-
mitted to the Senate by Mr. Smith, of South Caro-
lina. The bill as finally adopted appears in the
Record in full (pp. 3433-3435). From 3436 to 3443,
there is a discussion of the bill, and the record of its
adoption appears on that page, on March 13, 1918;
but nothing in the discussion throws any further
light on the intent and meaning of the proviso here in
question. On the same date (3461-3462), conference
report was presented in the House by Mr. Sims of
the committee. At 3492, it was again called up by
Mr. Sims. At 3495, March 14, there appears a
statement presented to accompany the bill, in which
it was said:
“The conferees agreed to strike out section 16
of the House amendment and substituted therefor
a new section as set out in section 15 of the confer-
ence report. The substitute section provides that
this act shall not be construed to amend, repeal,
impair, or affect existing laws or powers of the states
in relation to the lawful police regulations of the
states, except wherein such laws, powers, or regu-
lations may affect the transportation of troops, war
materials, government supplies, or the issue of
stocks and bonds.”
— oe
At 3496, there is a significant and interesting state-
ment not bearing on the question here, but in a
general way bearing on the scope of the power con-
ferred by Congress, made in the House by the chair-
man of the conference committee, Mr. Sims:
“Mr. Speaker, if the order of the President vio-
lated the provisions of this act or was not author-
ized by it, it would be void, because he would have
no authority to make it, and of course, any order
made by him must be made in accordance with
and in pursuance of the authority given him by
the act of August, 1916, or by this act, and any
order made outside of the authority conferred by
those acts would be absolutely void.”
At 3496, the following exchange of views took
place:
Mr. OsporNE: “I call the attention of the
gentleman from Tennessee to the explanation in
the statement of the managers of section 15, page
11. That explanation is as follows:
“The substitute section also provides that this
act shall not be construed to amend, repeal, im-
pee, or affect existing laws or powers of the states
n relation to the lawful police regulations of the
states——’
“And so forth, leaving out the word ‘taxation,’
which appears in the section. Was that intended?”
Mr. Sims: “The act plainly exempts the states
from any kind of control with reference to taxa-
tion. The other language that the gentleman
refers to simply has reference to the police powers
of the states.”
Mr. Esch, also a member of the conference com-
mittee, speaking at 3499, said, as to the power of
the President generally, and as to this section:
=
“With reference to the provision that was re-
ferred to here as to ‘any order of the President,’ I
think that has been explained. We must interpret
those words in the light of the section in which the
words appear; and if so interpreted they will not
give to the President this broad and unlimited
pated to repeal or suspend any statute of the
nited States or any statute of a state.
“With reference to section 15, relating to the tax-
ing power, we have practically gotten back to the
house provision.”
Thereupon (March 14, p. 3500), the conference report
was agreed to.
(h) Use by Congress of *“‘police regulation” includes
‘rate regulation.”’
We find then that there was the same general
diversity of view of just what the net result of the
various provisions of the bill might be but we think
the phrasing of the amended bill as it first passed the
House, conclusively sets at rest any doubt there may
be as to the sense in which the term “police regula-
tions” was used by Congress in both of the acts in
question. Jt was used in the sense of regulation of
rates; and the inference is that having omitted the
phrase from both the Railroad Control Bill and the
Wire Control Bill, it was expressly intended not to
except the regulation of rates by the states from the
terms of the proviso. We submit, in other words,
that Congress understood and intended to use the
words “police regulation” in these enactments, how-
ever they may have been intended in other enact-
ments, in exactly the same sense as the Supreme
—3—
Court of the United States used those words. In the
sense, for instance, in which they are applied in Reagan
v. Mercantile Trust Co., 154 U. S. at p. 417, where lan-
guage substantially parellel to the proviso is used:
“We are of opinion that the Texas and Pacific Rail-
way Company is, as to business done wholly within
the state, subject to the control of the State, in all
matters of taxation, rates and other police regulations.”
Congress contemplated, to use the language of this
court in the recent case of Union Dry Goods Co. v.
Georgia P. S. Corp., 248 U. S. 372, “rate regulation by
a state in the exercise of its police power.”
(i) Right to consult amendment in construing act.
So that, we think that this consideration alone dis-
poses of all need of inquiry as to the meaning of “po-
lice regulations.” It is a final demonstration that rate
regulation is included within the power of police regu-
lation preserved. That this amendment may be con-
sulted to determine what Congress meant in the Rail-
road Act, and hence in the Wire Act, is, of course,
obvious.
Sutherland, Stat. Const., 470, p. 880.
“Amendments made, or proposed and defeated,
may also throw light on the construction of the act as
finally passed, and may properly be taken into con-
sideration.”
IV
PROVISIONS GIVING INTERSTATE COMMERCE
COMMISSION POWER TO FIX TELEPHONE RATES
NOT REPEALED; CONSEQUENTLY IT STILL RE-
TAINS POWER, AND POSTMASTER GENERAL DOES
NOT POSSESS IT, EITHER AS TO INTERSTATE OR
INTRASTATE RATES.
1. Repeals by implication not favored.
The proper angle of approach to be assumed by the
court in determining whether or not the so-called wire
act has operated to suspend or repeal pro tanto the
provisions of the statutes found under Title LVI A,
entitled, ‘‘Regulation of common carriers of inter-
state and foreign commerce,” is sufficiently illustrated
in Black on Interpreation of Laws, Sec. 107, p. 351:
“‘Repeals by implication are not favored. A
statute will not be construed as repealing prior acts
on the same subject (in the absence of express
words to that effect) unless there is an irreconcilable
repugnancy between them, or unless the new law
is evidently intended to supersede all prior acts
on the matter in hand and to comprise in itself the
_ sole and complete system of legislation on the
subject.”
Numerous decisions of the Supreme Court of the
United States fortify and sustain the rule.
bg oye v. Miller, 235 U. S. 422, at 428:
“In these circumstances we think there was no
implied repeal, and for these reasons: First, such
—
rs
nee en
where there is such an irreconcilable conflict be-
v. Healey, 160 U. S. 136, 146; United States v.
Greathouse, 166 U. S. 601, 605); second, where there
tended to remain in force as an exception to the
— (Townsend v. Little, 109 U. S. 504, 512;
xz parte Crow Dog, Ie 556, 570; Rodgers v. United
S. 83, 87
United States v. Barnes, 222 U. S. 513, at p- oe
odied in
this court that where there is subsequent legisla-
tion upon such a subject it carries with it an im-
lication that the general rules are not superseded,
ut are to be app ied in its enforcement, save aS
the contrary clearly a ears.”
Ex parte U. S., 226 U. S. 420;
U. S. v. Levois, 17 How. 85.
Also see note, Book XX (L. ed.) Sup. Ct. Rep.
“The repeal by implication of a statute is not favored
by the court.”
2. Commerce act gives Interstate Commerce
Commission power to regulate rates; makes
unreasonable rates unlawful.
Turning then to Title LVI A, Secs. 8563-8604, U.
S. Compiled Statutes, Compact Edition, we find that
by express proviso—
“The provisions of this Act shall apply to any
corporation or any person or persons * * * and
to telegraph, telephone, and cable companies (whether
wire or wireless) engaged in sending messages from
one State, Territory, or District of the United
States, to any other State, Territory, or District of
the United States, or to any foreign country, who
shall be considered and held to be common carriers
within the meaning and purpose of this Act. *
* * * Provided, however, That the provisions
of this Act shall not apply, * * * nor shall they
apply to the transmission of messages by telephone,
telegraph, or cable wholly within one State and not
transmitted to or from a foreign country from or
to any State or Territory as aforesaid.
**(3) All charges made for any service rendered
* * * and for the transmission of messages by
telegraph, telephone, or cable, as aforesaid, or in
connection therewith, shall be just and reasonable;
and every unjust and unreasonable charge for such
service or any part thereof is prohibited and de-
clared to be unlawful.”
Section 8574 provides:
“Any common carrier subject to the provisions
of this Act, * * * any director or officer thereof,
or any receiver, trustee, lessee, agent, or person
acting for * * * such corporation, who, . ag
shall willingly suffer or permit to be done, any act,
matter, or thing in this Act prohibited or declared
=<
to be unlawful, or who shall aid or abet therein,
or shall willfully omit or fail to do any act, matter,
or thing * * * shall be deemed guilty of a mis-
demeanor, and shall, upon conviction thereof in
any district court of the United States within the
‘jurisdiction of which such offense was committed,
subject to a fine of not to exceed five thousand
dollars for each offense.”
3. Commerce act and resolution in pari mate-
ria; must be harmonized.
Such was the law as it stood at the time of the
enactment of the joint resolution, now appearing as
sec. 3115 (x, which has already been printed in full.
Reading these two sections together, certainly as a
matter of first impression, there is absolutely nothing
inconsistent between them, nothing whatever in the
latter act even to suggest an implied intention to re-
peal the former. But the rule, as we have seen, is that
if such implication might arise, it will not be favored
under the law, and will not be held effective if there is
any possibility of reconciling the two statutes. They
are clearly in pari materia, and must be construed, if
possible, so as to harmonize.
Black on Interpretation of Laws, 331, sec. 104:
“Statutes in pari materia are to be construed
together; each legislative act is to be interpreted
with reference to other acts relating to the same
matter or subject.”
Black, 345, sec. 105:
“Every statute should receive such a construc-
tion as will make it harmonize with the preexisting
body of law. Antagonism between the act to be
oe
interpreted and the previous laws, whether stat-
utory or unwritten, is to be avoided, unless it was
clearly the intention of the legislature that such
antagonism should arise.”
4. Commerce commission retains power to fix
rates.
Clearly, then, the interstate commerce act is not to
be deemed repealed, and is to be read in connection
with the wire control act, and we find the two acts
existing side by side in the most recent revision of the
federal statutes. We find that it is stated expressly
that the provisions of the act apply to telegraph, tele-
phone, and cable companies doing an interstate busi-
ness; that every unjust and unreasonable charge for
their services is prohibited and declared unlawful, un-
der penalty reaching a possible maximum of five thou-
sand dollars. The conclusion that no change was in-
tended is confirmed by the revision of the act to regu-
late commerce, as published by the Interstate Com-
merce Commission, from which we see that express
provision is made (40 Stat. L. 272, p. 10 of Act in
pamphlet form):
“That during the continuance of the war in
which the United States is now engaged the Presi-
dent is authorized, if he finds it nec for the
national defense and security, to direct that such
traffic or such shipments of commodities as, in his
judgment, may be essential to the national de-
ense and security shall have preference or p> d
in transportation by any common carrier by rail-
road, water, or otherwise.”
ee ee
And as we have seen in another connection, section
10 of the Federal Control Act expressly provides:
“The President may initiate rates, fares, charges,
classifications, regulations, and practices, by filing
the same with the Interstate Commerce Commis-
_ gion.”
So we see that, in the case of the railroad control
act, express provision was made therein for correlat-
ing and adjusting it to the terms of the interstate com-
merce commission act, and that act itself was in turn
modified so as to recognize the right of the President,
during the continuance of the war, to designate cer-
tain priorities. The inference seems irresistible that
Congress, in dealing with two related matters, and
passing an act in July with express reference to the
terms of a similar act passed in March, having ex-
ptessly modified the law in connection with railroads,
and having said nothing with reference to telephones
and telegraphs, intended to leave the jurisdiction of the
Interstate Commerce Commission just exactly where
it found it. If it was contemplated that the Postmas-
ter General should fix rates at all, we would hardly
have a proviso declaring any but a reasonable rate
unlawful, under specific penalty. The claim to the
unrestrained, uncontrollable power to fix all rates
at such point as he sees fit can not be reconciled with
the specific statutory declaration that such charges
“shall be just and reasonable; and every unjust and
unreasonable charge * * * is prohibited and de-
clared to be unlawful.” This is not a mere restraint
on the making of such charges by the employees of
the company, but it prohibits in the broadest terms
the making of such charges at all. Can it be that the
Postmaster General is given the implied power to do
something which is expressly forbidden to be done,
under penalty of $5,000 fine? The statement that we
can spell out of the two statutes—one of which con-
strued most favorably still permits of the construc-
tion that the power claimed is denied, and the other
which specifically forbids its exercise—a power to do
the thing not granted in the one statute and made a
criminal act in the other, is carrying the doctrine of
implied repeal, never favorably regarded, into an
ultrahostile atmosphere. There is no escape, then,
from the proposition that the control of the Interstate
Commerce Commission has not in any way been al-
tered or changed.
Is it not equally apparent that if the Postmaster
General has any power to make rates, he has power to
make all rates; that if it clearly appears that the law
did not contemplate that he should make interstate
rates (as to which it may be observed there would be
far greater reason for conferring the power), then very
clearly he has no power to initiate intrastate rates.
Such power as he has is either all inclusive, or non-
existent; and having found that he is expressly pro-
hibited under penalty from regulating interstate rates,
it naturally follows that he has no power to regulate
rates at all.
Should it be urged, notwithstanding, that he has
such power to fix rates, then, there being nothing in-
consistent in such provision, and the statute being, as
we have seen, in pari materia, the court must hold
that the provision of the Interstate Commerce Act as
a FN
to interstate telephone rates that the same shall “‘be
just and reasonable; and every unjust and unreason-
able charge for such service or any part thereof is pro-
hibited and declared to be unlawful,” remains intact
and unabridged. Very clearly, it was never contem-
plated that interstate rates should be reaonable, and
that intrastate rates may be fixed arbitrarily, and
hence be unreasonable.
There might have been some reason to grant the
power over interstate rates; in fact, if a federal agency
were to exercise such power, that would be the normal ~
sphere for its activity. This will certainly be the first
instance where such agancy had power over the do-
mestic concerns of a state, and none outside. Such
an anomaly is unthinkable.
v
' THE JOINT RESOLUTION AND PRESIDENTIAL
PROCLAMATION CANNOT BE CONSTRUED AS
CONTENDED BY THE GOVERNMENT AND TELE-
PHONE COMPANIES, BECAUSE SUCH CONSTRUC-
TION WOULD RENDER THE RESOLUTION VOID,
BY REASON OF CONFLICT WITH THE FIFTH
AMENDMENT AND THE TENTH AMENDMENT OF
THE FEDERAL CONSTITUTION, AND WOULD VIO-
LATE THE RULE AGAINST THE DELEGATION OF
LEGISLATIVE POWER.
We conclude, then, that the decision of the present
case involves nothing more nor less than an examina-
tion and interpretation of the joint resolution of Con-
gress and the Presidential proclamation thereunder,
;
pee Mee
in the light of settled constitutional principles, and
guided by the ordinary rule of statutory construction.
We believe that the court will be convinced that the
plain reading of the statute, construed in the light of
all the circumstances surrounding its enactment and
the purpose it was intended to serve, together with its
practical construction since, will leave neither shred
nor suggestion of foundation on which to ground the
conclusion that Congress intended to authorize either
the Postmaster General or the President to fix the
rates of the telephone and telegraph.
The Supreme Court of South Dakota, in its opinion
below, well said (171 N. W. 278):
“If by that proviso Congress intended to de-
prive the states of the power to regulate rates for
intrastate messages, then, but not until then, we
would have to consider the power and authority of
. Congress so to do.”
We do not think that this court will need to reach
this question at all.
Merely as one of the considerations confirming that
interpretation, we submit that to construe the act as
written, as one conferring upon the Postmaster Gen-
eral the arbitrary power that he claims, would render
it unconstitutional. Our position is, in other words,
that Congress passed a perfectly valid enactment;
that the Postmaster General is seeking to put upon it
a construction that would render it unconstitutional.
The considerations next submitted, therefore, are pur-
suant to the familiar principle that, if the plain mean-
ing of the language as written permits a construction
which will not run counter to constitutional prohibi-
tion, the court should adopt such construction, and
thus sustain the validity of the enactment.
U. S. v. Delaware & Hudson Co., 213 U. S.
366, 407-408;
~*" hts Templars Indemnity Co. v. Jarman,
187 U. S. 197, 205.
The Supreme Court of South Dakota in its opinion
also said (171 N. W. 277, at 278:
“Much has been said in the brief about the war
powers of Congress and of the President, but we
are of the opinion that those questions are beside
the issues of this case.’
The theory of the defense is that Congress has un-
der the constitution power to make all laws necessary
and proper for carrying into execution the powers by
that instrument vested in the Govrnment. It is ar-
' gued that Congress is given the power to make war;
that this connotes the power to make all laws neces-
sary and proper for carrying into execution the power
of making war. This, of course, is true, subject, how-
ever, to the one fundamental, continuing, undeviat-
ing condition and qualification recognized in McCulloc
v. Maryland, 4 Wheat, 316, and consistently adhered to
in every case construing this clause of the constitution,
down to the present time. Wherever the broad rule
of power to enact all necessary and proper legislation
has been asserted, it has been coupled with the limita-
tion first expressed by Justice Marshall, that the
means must be such as “are not prohibited, but con-
sist with the letter and spirit of the constitution.”
This language is quoted and reaffirmed in the
Legal Tender Cases, 12 Wall. 457, at p. 539, and the
pay Teed
court indicated at the foot of the same page that it
would hold the legal tender acts unconstitutional if
“they were prohibited.”
Legal Tender Cases, 110 U. S. 421. After quoting
from McCulloch v. Maryland, the court said, at page
441:
“The rule of interpretation thus laid down has
been constantly adhered to and acted on by this
court, and was accepted as expressing the true test
by all the eg who took part in the former dis-
cussions of the pag of Congress to make the
treasury notes of the United States a legal tender
in payment of private debts.”
Logan v. United States, 144 U. S. 263, quotes again
and states:
“Congress may use any means * * * consist-
ent with the letter and spirit of the constitution.”
Boske v. Comingore, 177 U. S. 459, reaffirms the
test that the power is to pass laws “‘which are not pro-
hibited, but consist with the letter and spirit of the
Constitution.”
These words are repeated in the following cases:
Flint v. Stone Tracy Co., 220 U. S. 107, at 176.
Kansas v. Colorado, 206 U. S. 46, at 88, and the
court adds: ‘‘a statement which has become the
setlled rule of construction.”
United States v. Hoke, 187 Fed. 992, at 994.
And in Stewart v. Kahn, 11 Wall. 493, much relied
on “the act is within the canons of construction laid
down by Chief Justice Marshall.”
United States v. Casey, 247 Fed. 362, contains at
page 366 the same significant quotation, so that
arco,
ais
from first to last, the war power and its exericse must
“consist with the letter and spirit of the constitution.”
As to the meaning of war power, Miller v. United
States, 11 Wall. 268, contains to our mind a compre-
hensive and exact definition of just what is meant by
“war power.” Construing the so-called confiscation
acts of August 6, 1861 and July 17, 1862 as constitu-
tional, the court used this language in pointing out
the true distinction between what it understood as
the meaning of war power and municipal or sovereign
power. It said at page 304:
“If the statutes were not enacted under the
municipal power of Congress to legislate for the
punishment of crimes against the sovereignty of
the United States, if, on the contrary, they are an
exercise of the war powers of the government, it is
clear they are not affected by the restrictions im-
posed by the fifth and sixth amendments. This
we understand to have been conceded in the argu-
ment. The question, therefore, is, whether the
action of my was a legitimate exercise of the
war power. The Constitution confers upon Con-
gress expressly power to declare war, grant letters
of marque and reprisal, and make rules respectin
captures on land and water. Upon the exercise 0
these powers no restrictions are imposed.”
Now then, as to the character of this war power
upon which no restriction is imposed, we find it
stated, at page 306:
“The whole doctrine of confiscation is built upon
the foundation that it is an instrument of coercion,
which, af depriving an enemy of property within
reach of his power, whether within his territory or
without it, impairs his ability to resist the confis-
cating government, while at the same time it fur-
nishes to that government means for carrying on
the war. Hence any property which the enemy
can use, either by actual appropriation or by the
exercise of control over its owner, or which the
adherents of the enemy have the power of devoting
to the enemy’s use, is a proper subject of confisca-
tion.”
And at p. 307, the court says:
“We come, then, directly to the question whether
the act of 1861, and the fifth, sixth, and seventh
sections of the act of 1862 were an exercise of this
war power, the power of confiscation, or whether
they must be regarded as mere municipal regula-
tions for the punishment of crime.”
And at p. 309:
“The purpose avowed then was legitimate, such
as Congress, in the situation of the country, might
constitutionally entertain, and the provisions made
to carry out the purpose, viz., confiscation, were
legitimate, unless applied to others than enemies.”
And then at p. 310:
“It has been argued, however, that the provisions
of the act for confiscation are not confined in their
operation to the property of enemies, but that they
are applicable to the property of persons not ene-
mies within the laws of nations. If by this is
meant that they direct the seizure and confiscation
of property not confiscable under the laws of war,
we cannot yield to it our assent. Jt may be conceded
that the laws of war do not justify the seizure and
confiscation of any private property except that of
enemies.”
Salamandra Ins. Co. v. New York Life Ins.
Trust Co. 254 Fed. 852.
—87—
These citations seem superfluous, for the constitu-
tion itself declares “this constitution and the laws of
the United States which shall be made in pursuance
thereoy * * * shall be the supreme law of the land.”
Neither in peace nor in war is aught the law of the
land not enacted pursuant to the constitution. It is
indeed a “fighting constitution” and no mere “im-
posing spectacle of impotency.” Truly, “the power
to wage war is the power to wage war successfully.”
But the constitution has determined what power is
necessary in waging war successfully, and the power
to nullify the constitution is not a necessary power in
making war. Counsel and possibly some courts
emphasizing the plenary character of the war power
have failed to bear in mind that it is not what a par-
ticular Congress or a particular court may think is
necessary in waging war successfully or what the
exigencies of a particular lawsuit may require that
determines the scope of the war power. The consti-
tution asserts its scope and sets its limit because it
arises out of and under the constitution. While that
instrument does not contemplate national helpless-
ness, neither does it contemplate its own destruction.
It nowhere authorizes its own violation. Instances
of unpermitted possibilities might be multiplied.
Congress could not constitutionally create the Presi-
dent dictator for the period of the war. No more
could it formally vote to invest him with complete
legislative and judicial power, no matter how de-
sirable some might think it that this be done. Nor
could the President be authorized by Congress purely
in his civil capacity and entirely apart from a declar-
ation of martial law to supersede the existing civil
Ser jae
governments of the states, on the theory that the
necessities of war required that they should be so
displaced, because the continuance of state adminis-
tration was unduly cumbrous and a burden upon the
natural, harmonious, and logical cevelopment of the
national resources in the interest of the national se-
curity and defense. Neither couid Congress as a war
measure divest all the courts of a state of civil jurisdic-
tion and disband the public utility commissions for
the period of the war, upon the theory that jurors,
judges, and commissioners might better spend their
time in the fields with hoe and spade, stimulating
and speeding up production, and upon that exclusive
ground, turn over the performance of their functions
to some national instrumentality designated by Con-
gress or to be designated by the President.
Congress could no more authorize the Postmaster
General to raise revenue with which to carry on a
war by arbitrarily increasing the telephone rates for
that purpose, than it could authorize him to go out
and seize private property of citizens generally, in
order to realize revenue for war purposes. The im-
pairment of property rights would be wholly analog-
ous in either case.
The Constitution has determined by the fifth
amendment the taking of private property by civil
agencies is not necessary to the waging of war suc-
cessfully.
McCray v. United States, 195 U. S. 27, at p. 61:
“Undoubtedly both the fifth and tenth amend-
ments qualify, in so far as they are applicable, all
the provisions of the constitution.”
_ gee
,
. If the federal government has the right to take over
the telephone and give to the Postmaster General the
arbitrary power to fix rates, and inferentially the
power to exclude all users of the telephone other than
governmental employes, and exclude all messages
except government messages, without compensation
to the private user, then on principle there would be
nothing to prevent the government, for instance, in
connection with Camp Grant at Rockford, to com-
mandeer all the public utilities of the city, to the
exclusion of citizens and users. An exact parallel in
principle would exist had the government, by gen-
eral legislation in like terms, authorized the President
or the Secretary of War, when in his judgment it was
necessary, to take existing water works, existing gas
plants, existing light plants, and cause the same to
minister solely to the comfort and the needs of the
army. We would then have the anomclous situation
under which, without legal proceeding of any kind,
without compensation, without notice, and without
hearing, the inhabitants of an entire city could be
left without water, light, or fuel for cooking and yet
neither Congress nor president nor military com-
mander apart from extreme military necessity whose
existence is always a fact for judicial ascertainment
vould commandeer so much as a ton of coal or can
of kerosene from any individual citizen without due
process and without just compensation.
To construe the act as permitting the Postmaster
General to do what he has done and what the plead-
ings claim for him the right to do, would necessitate a
holding that the act was unconstitutional, first, be-
—
cause it would violate the fifth amendment, which
restrains the taking of property without due process
of law and without just compensation; second, it
would violate the tenth amendment, by reason of
trenching or seeking to trench upon those powers
which are reserved to the separate states; third, it
would violate the fundamental rule that Congress
cannot deleg
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