"the court has no means, if it would under any circumstances have the power, of determining that the rate of three cents a mile fixed by the legislature is unreasonable. Still less does it appear that there has been any such confiscation as amounts to a taking of property without due process of law." § 1334. The rule finally established. In Chicago, Milwaukee & St. Paul Railway v. Minnesota the court held for the first time that after a rate is fixed by legislature or commission it is necessarily within the power of the courts to declare the rate illegal if it is unreasonable. "The question of the reasonableness of a rate of charge for transportation by a railroad company, involving, as it does, the element of reasonableness, both as regards the company and as regards the public, is eminently a question for judicial investigation, requiring the process of law for its determination. If the company is deprived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law, and in violation of the Constitution of the United States; and, in so far as it is thus deprived, while other persons are permitted to receive reasonable profits upon their invested capital, the company is deprived of the equal protection of the laws." That this was regarded as new doctrine at the time of the decision by the judges who had decided the Granger and the Railroad Commission Cases is evident from an examination of the dissenting opinion of Mr. Justice Bradley. The opinion of the majority, he said, "practically overrules Munn v. Illinois," and he reiterated the view that the fixing of rates is for the legislature alone, without interference from the courts. The view of the majority has been accepted, and the present doctrine as to 9 134 U. S. 418, 33 L. Ed. 970. 10 Sup. Ct. 462 (1889). the power of the courts over rates fixed by legislature or commission dates from this decision. In Reagan v. Farmers' Loan & Trust Company 10 the court reiterated this doctrine so strongly that it can no longer be regarded as open to question. Mr. Justice Brewer put the whole doctrine clearly and concisely in a single sentence: "The province of the courts is not changed, nor the limit of judicial inquiry altered, because the legislature, instead of the carrier, prescribes the rates." Later in the same opinion he added: "While it is not the province of the courts to enter upon the merely administrative duty of framing a tariff of rates for carriage, it is within the scope of judicial power, and a part of judicial duty, to restrain anything which, in the form of a regulation of rates, operates to deny to the owners of property invested in the business of transportation that equal protection which is the constitutional right of all owners of other property. There is nothing new or strange in this. It has always been a part of the judicial function to determine whether the act of one party (whether that party be a single individual, an organized body, or the public as a whole) operates to divest the other party of any rights of person or property." In Smyth v. Ames 11 the same doctrine was elaborated, and since the decision of that case the rule has never been questioned. What rates are in fact reasonable has been considered at length in an earlier portion of this work. § 1335. Exceptional rates forbidden. In Lake Shore & Michigan Southern Railway v. Smith, 12 Mr. Justice Peckham said: "If the maximum rates are too high in the judgment of the legislature, it may lower them, provided they do not make them unreasonably low, as that term is under 10 154 U. S. 362, 38 L. Ed. 1014, 14 Sup. Ct. 1047 (1894). stood in the law; but it cannot enact a law making maximum rates, and then proceed to make exceptions to it in favor of such persons or classes as in the legislative judgment or caprice may seem proper. What right has the legislature to take from the company the compensation it would otherwise receive for the use of its property in transporting an individual or classes of persons over its road, and compel it to transport them free or for a less sum than is provided for by the general law? Does not such an act, if enforced, take the property of the company without due process of law? We are convinced that the legislature cannot thus interfere with the conduct of the affairs of corporations." The act declared invalid in this decision was an act requiring a railroad to sell mileage books at a reduced rate. The decision was followed in New York;13 but the statute was held valid as to a corporation organized after the passage of the act, since the corporation became bound by its charter to comply with the act.14 TOPIC D- · CONSTITUTIONAL POWER OF CONGRESS OVER INTERSTATE RATES. § 1336. Power to fix rates appears to be given to the Con gress. The power of Congress either directly or through a commission to fix the rates of carriers in interstate carriage has been recently questioned. It would be extraordinary if such power were not granted by the Constitution. We have seen that the power existed at common law, and was exercised in England before the Revolution, as well as in the States. At the time of the adoption of the Constitution the power was lodged in the States. It is a maxim of constitutional law that all power not 13 Beardsley v. New York, L. E. & W. R. R., 162 N. Y. 230, 56 N. E. 488 (1900). 14 Minor v. Erie R. R., 171 N. Y. 566, 64 N. E. 454 (1902). granted to the United States in the Constitution remains in the States; the Constitution of the United States was a powerconferring, not a power-destroying document. But nothing can be clearer than that the right of fixing rates for interstate commerce is no longer in the States; a fixing of rates by legislation or commission would be a regulation of interstate commerce, which Congress alone has power to regulate. It would seem to follow without possibility of doubt that the power which was taken away from the States by the Constitution, because it was a power to regulate commerce, was at the same time conferred, as such power, on the Congress. But as there has been no express decision to that effect, the question may be regarded as to that extent unsettled. § 1337. Power to fix rates is inherent in legislative power to regulate carriage. Legislative power over carriage, such as is given to the Congress by the Constitution in cases of interstate commerce, carries with it the power to fix rates, either directly or through a commission. "This power of regulation," said Mr. Chief Justice Waite, referring to the fixing of maximum railroad rates, "is a power of government, continuing in its nature." 1 And in the case of Munn v. Illinois, the same Judge said:2 "The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge, as one of the means of regulation, is implied." § 1338. Congress allowed to fix maximum rates. Congress, acting under other powers, has fixed rates, and has been sustained in so doing. Thus in Chesapeake and Potomac Telephone Company v. Manning the Supreme Court upheld 1 Railroad Commission Cases, 116 U. S. 307, 325, 29 L. Ed. 636 (1886). 294 U. S. 113, 134, 26 L. Ed. 77 (1876). an act of Congress which fixed telephone rates in the District of Columbia. § 1339. Power of Congress to fix rates for interstate commerce has been assumed. 66 Though the question has never been presented directly to the Court and made the ground of its decision, yet the Supreme Court has in its decisions obiter assumed the existence of the power. Thus in Interstate Commerce Commission v. Cincinnati, New Orleans and Texas Pacific Railway (the Maximum Rate Case) Mr. Justice Brewer said: "There were three obvious and dissimilar courses open for consideration. Congress might itself prescribe the rates; or it might commit to some subordinate tribunal this duty; or it might leave with the companies the right to fix rates, subject to regulations and restrictions." The question debated is whether it vested in the Commission the power and the duty to fix rates; and the fact that this is a debatable question, and has been most strenuously and earnestly debated, is very persuasive that it did not. The grant of such a power is never to be implied. The power itself is so vast and comprehensive, so largely affecting the rights of carrier and shipper, as well as indirectly all commercial transactions, the language by which the power is given had been so often used and was so familiar to the legislative mind and is capable of such definite and exact statement, that no just rule of construction would tolerate a grant of such power by mere implication. Administrative control over railroads through boards or commissions was no new thing." This language appears to recognize as vested in Congress the power which in theory we have found there-the power by itself or its commission to fix railroad rates. 3186 U. S. 238, 46 L. Ed. 1144, 22 Sup. Ct. 881 (1902). 4 167 U. S. 479, 494, 17 Sup. Ct. 896 (1897). |