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of lading and collects less than such rate is guilty of rebating.214

§ 197. Corporation Punishable for Rebating.-In New York C. & H. R. R. Co. v. United States,215 it was contended that the law could not impute to a corporation the commission of a crime and that the conviction of a corporate common carrier for rebating was illegal. This question is discussed at length, authorities cited and this conclusion arrived at:

"We see no valid objection in law, and every reason in public policy, why the corporation which profits by the transaction, and can only act through its agents and officers, shall be punishable by fine because of the knowledge and intent of its agents to whom it has intrusted authority to act in the subject-matter of making and fixing rates of transportation, and whose knowledge and purposes may well be attributed to the corporation for which the agent acts. While the law should have regard to the rights of all, and to those of corporations no less than to those of individuals, it cannot shut its eyes to the fact that the great majority of business transactions in modern times are conducted through these bodies, and particularly that interstate commerce is almost entirely in their hands, and to give them immunity from all punishment because of the old and exploded doctrine that a corporation cannot commit a crime would virtually take away the only means of effectually controlling the subject-matter and correcting the abuses aimed at.

It

"There can be no question of the power of Congress to regulate interstate commerce, to prevent favoritism and to secure equal rights to all engaged in interstate trade. would be a distinct step backward to hold that Congress cannot control those who are conducting this interstate commerce by holding them responsible for the intent and purposes of the agents to whom they have delegated the power to act in the premises."

This section and the one preceding it are limited to a dis

214 Chicago B. & Q. R. Co. V. United States, 157 Fed. 830. Affirmed 209 U. S. 90, 52 L. Ed. 698, 28 Sup. Ct. 439.

215 New York C. & H. R. R. Co. v. United States, 212 U. S. 481, 53 L. Ed. 613, 29 Sup. Ct. 304.

cussion of the question of discrimination as the result of rebates. The procedure for determining and punishing rebating will be more fully discussed in a subsequent chapter.216

§ 198. Summary. Obviously, many of the facts which must be considered in determining whether a particular rate is reasonable or unreasonable must also be considered in determining whether or not a particular rate is unjustly discriminatory or unduly preferential. Some, therefore, of the principles discussed in Section 136, ante, are applicable here.

A common carrier performs a public function; the Government permits the carrier to do what the Government itself could do. The charges exacted by the carrier are analogous to taxation. The Government taxes in order that it may perform its governmental duties. The Government, it is true, exacts no profit for the service rendered; the common carrier using private capital is permitted to receive, in addition to the actual cost of the service it performs, a fair return on the capital necessarily used to enable it to perform such service. The Government itself would, were it to undertake to perform the service directly, have to obtain capital to supply the necessary facilities. The government probably could furnish the service free to all, obtaining the cost thereof from general taxation, or it could, as with the mails, make all who use the service pay therefor or at least the greater part of the cost of rendering it.

This analogy between taxation and charges by common carriers is sufficient to require that the rule of uniformity applicable to taxation should be observed in fixing the charges which the common carrier may exact.

But uniformity does not mean that every charge must be the same. It means no more than that under the same or similar circumstances the charges exacted shall be gauged alike.

There are different kinds of taxes, but there must be uniformity in the tax on the same or a similar subject-matter.

To get just uniformity, either in taxation or in charges by public-service corporations, there must be classification; classification as to the service rendered considering the cost and

216 Sec. 462, post.

extent thereof, and classification as to the value the service is to him for whom it is performed.

It has been the aim of the author of this chapter to present the principles which have been applied in making this classification of commodities and distinction in rates. That these principles must yield sometimes is true. That the known facts are not sufficiently comprehensive to justify definite generalizations and a fixed standard to be applied to the problem, must be admitted. But the general rules which have been empirically deduced justify the statement of the Commission that "it is not fanciful to say that a schedule of rates may be made which will approach justice as between services."

CONSTRUCTION, ABANDONMENT, CONSOLIDATION, AND

$199. General Statement.

200.

201.

202.

FINANCING.

Extension Not Within the Statute.

A Certificate is Necessary for the Establishment of a New Union Depot.
The Statute as Applied to Intrastate Railways.

203. Interstate Line Owning a State Line.

204.

205.

206.

207.

208.

Abandonment of Part of a Franchise not Authorized.

Spurs, Switches, Etc., Within a State.

Procedure.

Penalties.

Consolidation of Carriers.

209. Interlocking Directorates.

210. Express and Telephone Companies.

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214. Constitutionality of Provision with Relation to Issuance of Securities. 215. Rights of the States not Wholly Excluded.

216.

Procedure of Interstate Commerce Commission with Reference to Issuance of Securities.

§ 199. General Statement.-Transportation Act, 1920, enlarged the powers of the Interstate Commerce Commission with the view of guaranteeing to the public adequate transportation facilities. This purpose is indicated by the increased control over facilities and by the provision relating to a fair return217 to the carriers. In this chapter, the discussion is limited to the provisions relating to facilities. In paragraphs (18) to (22), inclusive, of Section 1 of the Act, there are provisions relating to the extension, construction, and abandonment of facilities. No extension (except an ordinary extension in the usual course of business) is permitted without a certificate from the Commission that such extension is for the present or future public convenience and necessity. Paragraph (22) relates to spurs and switches within a particular state and constitutes a limitation upon the general provisions of paragraph (18). Similar provisions relate to the abandonment of lines. While the consolidation of carriers was once thought to be in violation of the Anti-Trust Laws,

217 See, post, Secs. 503 and 504.

the Transportation Act, by Section 3, paragraphs (2) to (9), inclusive, authorizes consolidations by agreement of railroads, express companies, and telephone companies. Section 20a deals with the question of the issuance of securities, including short-term notes, and makes void such issuance contrary to law, prescribing penalties therefor.218

§ 200. Extensions Not Within the Statute. The mere relocation of a track is not controlled by the provisions of paragraph (18),219 nor do such provisions apply to extensions begun prior to the passage of the Act.220 It not infrequently happens that a carrier is in doubt as to whether or not the statute applies to the particular extension or abandonment under contemplation, and it has been insisted that an application to the Commission estops the carrier from contending that the Commission does not have the power to grant the application. This contention, however, is unfounded, because it is the right of the carrier to secure a determination of the question in order to protect it against the possibility of an erroneous judgment. So, where there is doubt about the question, the carrier may file its petition and, having filed it, may contend that the proposed act of the carrier is not within the provisions of the statute. It is clear that the power of the Commission to determine what is or is not for the public convenience and necessity is an administrative power which must be exercised by the Commission and, when exercised, the judgment of the Commission will not be set aside if supported by substantial evidence. However, the question of what constitutes an extension is a legal question which the court may determine before the Commission acts, or afterwards, as the question may be presented.222

221

218 Acts to Regulate Commerce, U. S. C. A. Title 49, Sec. 1, pars. (18) to (22); post, Sees. 420 to 424; Sec. 5, pars. (2) to (9); post, Secs. 437 to 443; Sec. 20a, pars. (2) to (12); post, Secs. 605 to 614.

219 Chesapeake & Ohio Ry. Co. v. Williams State Co., 129 S. E. 499, 143 Va. 722; writ of error dismissed, 269 U. S. 540, 70 L. Ed. 401, 46 Sup. Ct. 202.

220 Detroit Terminal R. Co. V. Pennsylvania-Detroit R. Co., 4 Fed. (2d) 705; affirmed in 15 Fed. (2d) 507; certiorari denied, 273 U. S. 758, 71 L. Ed. 877, 47 Sup. Ct. 472.

221 Texas & Pacific Ry. Co. v. C., C. & S. F. Ry. Co., 270 U. S. 266, 70 L. Ed. 578, 46 Sup. Ct. 263, reversing 4 Fed. (2d) 904, which reversed 298 Fed. 488.

222 Texas & Pacific Ry. Co. v. G.,.

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