Dakota Central Tel. Co. v. South Dakota, 250 U.S. 163 (1919)

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Dakota Central Telephone Company v. South Dakota

No. 967

Argued May 5, 6, 1919
Decided June 2, 1919
250 U.S. 163

ERROR TO THE SUPREME COURT

OF THE STATE OF SOUTH DAKOTA

Syllabus

The Joint Resolution of July 16, 1918, c. 154, 40 Stat. 904, authorizing the President during the continuance of the present war, whenever he shall deem it necessary for the national security or defense, to take possession and assume control, inter alia, of any telephone line or any part thereof, and operate it as may be needful or desirable for the duration of the war, is within the war power of Congress. P. 183. Northern Pacific Ry. Co. v. North Dakota, ante,135.

Whether the exercise of the power so conferred was justified by the conditions at the time, or was actuated by proper motives, are questions of executive discretion not within the cognizance of the judiciary under the Constitution. Pp. 184, 187.

The Joint Resolution, supra, authorized the complete possession, control, and operation of telephone lines by the United States, including the fixing of rates for local service, as brought about through the President’s Proclamation of July 22, 1918, and the action of the Postmaster General thereunder, whereby the United States, under contracts with the owning companies, took over their entire business and became entitled to the revenues therefrom, and fixed the rates, and this was subsequently recognized by the Act of October 30, 1918, c.197, 40 Stat. 1017. P. 184.

The Joint Resolution, supra, provides that nothing therein "shall be construed to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation" or their

lawful police regulations . . . , except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems.

Held that police power here reserved does not include the authority to make local rates, which the resolution as a whole, by clear implication, transfers to the United States, and that the provision as to stocks and bonds does not justify a contrary construction. P. 185.

There can be no presumption that the state ratemaking power was to continue after the telephone lines and business, including the revenues, were completely taken over by the United States and were being operated as federal instrumentalities under the war power. P. 187. Northern Pacific Ry. Co. v. North Dakota, ante,135.

An erroneous judgment directly affecting the United States, reversed on the merits, see Northern Pacific Ry. Co. v. North Dakota, ante,135.

171 N.W. 277 reversed.

The case is stated in the opinion.