Houston E. & W. Tex. Ry. Co. v. United States, 234 U.S. 342 (1914)

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Houston East and West Texas Railway Company v. United States

Nos. 567

, 568

Argued October 28, 29, 1913
Decided June 8, 1914
234 U.S. 342

APPEALS FROM THE COMMERCE COURT

Syllabus

The object of the commerce clause was to prevent interstate trade from being destroyed or impeded by the rivalries of local governments, and it is the essence of the complete and paramount power confided to Congress to regulate interstate commerce that, wherever it exists, it dominates.

Wherever the interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other, it is Congress, and not the State, that is entitled to prescribe the final and dominant rule; otherwise the Nation would not be supreme within the National field.

While Congress does not possess authority to regulate the internal commerce of a State, as such, it does possess power to foster and protect interstate commerce, although, in taking necessary measures so to do, it may be necessary to control intrastate transactions of interstate carriers.

The use by the State of an instrument of interstate commerce in a discriminatory manner so as to inflict injury on any part of that commerce is a ground for Federal intervention; nor can a State authorize a carrier to do that which Congress may forbid and has forbidden.

In removing injurious discriminations against interstate traffic arising from the relation of intrastate to interstate rates, Congress is not bound to reduce the latter to the level of the former.

Congress, having the power to control intrastate charges of an interstate carrier to the extent necessary to prevent injurious discrimination against interstate commerce, may provide for its execution through the aid of a subordinate body.

By § 3 of the Act to Regulate Commerce, 24 Stat. 379, 380, Congress has delegated to the Interstate Commerce Commission power to prevent all discriminations against interstate commerce by interstate carriers, subject to the Act, which it is within the power of Congress to condemn.

Where the Interstate Commerce Commission has found after due investigation that unjust discrimination against localities exists under substantially similar conditions of transportation, the Commission has power to correct it, and this notwithstanding the limitations contained in the proviso to § 1 of the Act to Regulate Commerce.

The earlier action of the Interstate Commerce Commission was not of such controlling character as to preclude the Commission from giving effect to the Act to Regulate Commerce, and in this case having, after examination of the question of its authority, decided to make a remedial order to prevent unjust discrimination and the Commerce Court having sustained that authority of the Commission, this court should not reverse unless, as is not the case, the law has been misapplied.

No local rule can nullify the lawful exercise of Federal authority, and after the Interstate Commerce Commission has made an order within its jurisdiction, there is no compulsion on the carrier to comply with any inconsistent local requirement.

Although there is gravity in any question presented when state and Federal news conflict, it has been recognized from the beginning that this Nation could not prosper if interstate and foreign trade were governed by many masters, and where the freedom of such commerce is involved, the judgment of Congress and the agencies it lawfully establishes must control.

An order made by the Interstate Commerce Commission that, in order to correct discrimination found to exist against specified localities, interstate carriers should desist from charging higher rates for transportation between certain specified interstate points than between certain specified intrastate points, held to be within the power delegated by Congress to the Commission; also held that, so far as the carriers’ interstate rates conformed to what was found to be reasonable by the Commission, they were entitled to maintain them, and that they were free to comply with the order by so adjusting their intrastate rates, to which the order related, as to remove the forbidden discrimination.

205 Fed.Rep. 380, affirmed.

The facts, which involve the validity of an order of the Interstate Commerce Commission relating to rates between Shreveport, Louisiana, and points within the State of Texas, and the effect of orders of the Railroad Commission of the State of Texas in regard to rates wholly within that State, are stated in the opinion.