Opinion of the Court. 344 U.S. Before that order took effect, this action was filed. A three-judge District Court was convened. 28 U. S. C. (Supp. V) § 2325. Two short line railroads and numerous shippers intervened as plaintiffs. The Interstate Commerce Commission and all Class I railroads operating in Florida intervened as defendants. The entire record of the proceeding before the Commission, under § 13 (4), was introduced. The court sustained the Commission and dismissed the complaint. 101 F. Supp. 941. That judgment is here on appeal. 28 U. S. C. (Supp. V) §§ 1253, 2101 (b). I. The Interstate Commerce Commission in prescribing intrastate freight rates for railroads under § 13 (4) of the Interstate Commerce Act may give weight to deficits in passenger revenue. In Ex Parte No. 168, Increased Freight Rates, 1948, 272 I. C. C. 695, 276 I. C. C. 9, the Commission reviewed the changing attitudes it has adopted concerning the role of passenger deficits and freight rates. In such cases as the Five Per Cent Case, 31 I. C. C. 351, the Commission in 1914 concluded that each class of service should completely and independently provide its own proportionate share of expenses and profits. In 1949 the Commission says: 8 "However, because of changed theories adopted by Congress in the Transportation Act, 1920, and 8 The Commission there said: "We know of no provision of law under which we should be justified in increasing freight rates to provide a return upon property used exclusively in the passenger service, much less to take care of losses incurred in such service. In our opinion each branch of the service should contribute its proper share of the cost of operation and of return upon the property devoted to the use of the public." 31 I. C. C. at 392. 254 Opinion of the Court. because as a practical matter the increasing degree of unprofitableness of the passenger traffic menaced the continuity of an adequate national system of transportation, we were forced to a more comprehensive view of this question. We observe, also, that at the time of those decisions the railroads enjoyed a practical monopoly in supplying transportation, but that situation no longer exists." 276 I. C. C. at 34. Citing with approval its similar views in Ex Parte No. 103, Fifteen Per Cent Case, 1931, 178 I. C. C. 539, and Ex Parte No. 123, Fifteen Per Cent Case, 1937-1938, 226 I. C. C. 41, the Commission summarizes its present position as follows: "These cases are typical of our more recent holdings upon this question. While we regard it as 'trite to say that each particular service, coach, sleeper, parlor car, and head end, should as nearly as may be pay its own way and return a profit' (Eastern Passenger Fares in Coaches, 227 I. C. C. 17, 25), and we have accepted the contention that there may be traffic that should not be burdened with a shortage of passenger service return (Livestock, Western District Rates, 190 I. C. C. 611, 629), yet, if passenger service inevitably and inescapably cannot bear its direct costs and its share of joint or indirect costs, we have felt compelled in a general rate case to take the passenger deficit into account in adjustment of freight rates and charges. Both the freight and passenger services are essential, and revenue losses or deficits on the one necessarily must be compensated by earnings on the other if the carriers are to continue operations. Both may be subjected to reasonable rates and charges to produce the fair aggregate return, even though thereby a higher rate of return may be exacted from the one than from the other. (Property Owners' Committee v. Chesa- This change of policy was the inevitable conseq In recent years, a nationwide passenger obvious except during the peak of war: traffic. The ratio between passenger of and revenue has varied in different ar uniformly unfavorable to the railroads. - Lestion of passenger linssi serious carriers and shoppers and would become serious for interstate shippers of this burimposed entirely upon them (rather than hared on a like basis with intrastate shippers same lines]." 278 I. C. C. at 67-68. See on below, 101 F. Supp. at 944. ears from the report in Ex Parte No. 168, 276 at 40, that, in 1948, the passenger service operating for the southern territory was 127.3% while the opratios of the three principal Florida railroads in year were 120%, 127% and 128%. In Florida, "eover, the discontinuance of railroad passenger service uance of high-speed tracks not permit the dise equipment because to transport peris la. The Commissi revenues and pro fast freight, abert 1 vegetables from freight pun Opinion of the Court. 344 U.S. among other things, the need, in the public interest, of adequate and efficient railway transportation service and the need of revenues sufficient to sustain such service. It permeates such general revenue proceedings as Ex Parte Nos. 162 and 166, supra. It leaves no ground for a claim that the Commission may not give weight to passenger revenue deficits in prescribing interstate freight rates to meet over-all revenue needs. See United States v. Louisiana, 290 U. S. 70. The question remains whether that Commission may give weight to deficits in passenger revenue (either interstate or intrastate) when prescribing intrastate freight rates under § 13 (4). It is conceivable that some considerations properly given weight by the Commission in prescribing interstate freight rates in a general revenue proceeding might not be applicable equally to transportation within a particular state. In the instant case, however, there is no showing that the character of operating conditions in Florida intrastate passenger traffic differs substantially from that of inter of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate, economical, and efficient service and foster. sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices; to cooperate with the several States and the duly authorized officials thereof; and to encourage fair wages and equitable working conditions;-all to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense. All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy." 54 Stat. 899, 49 U. S. C., note preceding § 1. |