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Texas & Pacific Railway Co. v. United States, 289 U.S. 627 (1933)

Texas & Pacific Railway Co. v. United States

No. 1

Argued October 12, 13, 1931

Reargued October 11, 12, 1932

Decided May 29, 1933

289 U.S. 627


1. Carriers reaching the port of New Orleans with their own rails and reaching Texas ports through connections with which they maintained through routes and joint rates made the same, or substantially the same, rates on export, import, and coastwise traffic between New Orleans and inland points as were charged between those points and the Texas ports, although the rail haul to and from New Orleans was longer. Ocean freights were the same for all of these ports, and the object of the rail carriers in equalizing their rates was to protect their business of the classes named from the competition of other railroads whose lines tapped the Texas ports. The charges were neither unreasonably high nor so

Page 289 U. S. 628

low as to be noncompensatory. The Interstate Commerce Commission, upon findings of undue preference to New Orleans and undue prejudice to the Texas ports, entered orders which prescribed minimum differentials in favor of the latter where the New Orleans haul was by more than 25 percent the longer. Held that the orders should be set aside.

2. The provision of § 3(1) of the Interstate Commerce Act forbidding any carrier to give any undue or unreasonable preference or advantage to any particular "locality" or to subject any particular "locality" to any undue or unreasonable prejudice or disadvantage does not apply to seaports in respect of import, export, and coastwise traffic in relation to which they are in no sense points of origin or destination, but are merely gateways through which the traffic passes from rail to water carrier and vice versa. Pp. 289 U. S. 638, 289 U. S. 644.

3. Carriers in competition for export and import business may, within the zone of reasonableness prescribed by the statute, adjust their rates so as to retain the desired traffic for their own lines, and, in so doing, may transport such shipments although not made on through bills at rates below those charged for domestic traffic between the same points. P. 289 U. S. 636.

4. The Act was passed for the protection of those who pay or bear the rates. The standards it establishes are transportation standards, not criteria of the general welfare. P. 289 U. S. 638.

5. The word "localities," therefore, has its proper office as denoting the origin or destination of traffic and the shipping, producing, and consuming areas affected by rates and practices of carriers. The term was, however, not intended to cover a junction, a way station, a gateway, or a port as respects traffic passing through it. P. 289 U. S. 638.

6. The Interstate Commerce Commission has no authority to readjust rates and prescribe differentials for the purpose of building up one gateway or port to the injury of another. Pp. 289 U. S. 639, 289 U. S. 646.

7. The legislative history of the Act to Regulate Commerce, 1887, and of the Hepburn Act, 1906, shows that it was not the intention of Congress to cover ports, as such, among the "localities" given regulatory protection. Pp. 289 U. S. 639, 289 U. S. 641.

8. Administrative construction of § 3 before and since the passage of the Transportation Act is found not to justify the assertion that Congress, by not amending the section, had acquiesced in adjustment of rates on exports and imports in the interest of ports as such. P. 289 U. S. 641.

Page 289 U. S. 629

9. Where a statutory body such as the Interstate Commerce Commission assumes a power plainly not granted, no amount of such interpretation is binding on the courts. P. 289 U. S. 640.

10. A carrier may not be held responsible for undue prejudice or preference to a locality in respect of rates unless both of the localities affected are upon its lines or it effectively participates in rates to both so that it may have the choice of raising one rate, lowering the other, or altering both. Earlier decisions distinguished. Pp. 289 U. S. 646, 289 U. S. 651.

42 F.2d 281 reversed.

Appeal from a decree of the District Court (three judges) dismissing bills brought by two railroad companies to enjoin enforcement of orders of the Interstate Commerce Commission.

Page 289 U. S. 630

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