court has at last openly acknowledged the principle that Congress has the power to reach into and touch the internal affairs of a State without resorting to the refinement of designating such action a regulation of interstate commerce.

§ 101. The Intermountain case.

Nothing is more difficult to bring within these requirements than the issues raised in the Intermountain Case which has recently been decided by the Supreme Court. There is long history back of the case which has already been summarized in brief compass.. Under Section 4, as it originally stood, the United States Supreme Court held that competition existing at the distant point while there was no competition at the intermediate point constituted a circumstance so dissimilar as to justify charging more for the short haul than for the long without getting permission from the Commission. As amended in 1910, jurisdiction to pass upon those cases where the carrier was charging more for the short haul than for the longer distance was The unequivocally conferred upon the Commission. Commission thereupon made some general orders as to the relation to be observed between the Intermountain rates and those to the Pacific coast. The railroads then contended that this is going beyond limits of the administrative function into the realm of arbitrary power. Whether this is so or not depends upon whether the Commission may be said to be basing its action upon principles of law applicable to the case. We cannot leave to a commission, any more than to the railroad itself, the power to build up communities or destroy them at its own whim or caprice. We must have here as elsewhere principles of law as to what things in the movement of traffic are of such weight as to determine the reasonableness of the rate charged. However, as to this particular matter it seems to be the opinion of the Supreme Court, 23 that, when competition is found in cases like these, the rate may be reduced suf"United States v. Atchison, T. & S. F. Ry., 234 U. S. 476, 34 Sup. Ct. 986.

ficiently to meet it, has been so incorporated into the law governing this situation that all that is left to the Commission to do is to permit such reductions wherever it finds competition thus acting.

§ 102. The Pipe Line case.

One other constitutional limitation upon the regulating power should be noted. Regulation of this peculiar sort, going to the extent of compulsory service, should be confined to what may properly be considered public callings. Unless the business in question is one which is public in character it is not one which it would be due process of law to regulate to the extent of fixing its rates. And unless in the particular instance the business is being conducted upon a public basis, regulation to that extent of what is still a private affair would be equally improper. The business must be one in which the public has an interest, and at the same time one in which the proprietor has committed himself to serve the public. For the legislature to make a general rule applicable to all concerns in certain businesses, or for a commission acting by its authority, to order that the public should be served by any particular company, unless both requisites are present, would seem to deprive the owners and proprietors of their liberty and property. At all events, we shall know more about all this now that we have got the decision in the Pipe Line Cases, 24 from the Supreme Court. It was of course clear that the operation of pipe lines such as are involved in that case is a business which is affected with a public interest. But when proprietors are independent concerns which have never taken anything but their own oil through these lines, they can hardly be said to have put themselves in public service. However, if the principal dealers in oil are also the proprietors of the only pipe lines, there may be such an interdependence found that it can fairly be said that transportation is going on under 24 234 U. S. 548, 34 Sup. Ct. 956.

such conditions as to subject the whole matter to the regulation of the government for the protection of other shippers. At all events such is the opinion of the Supreme Court, so far as it can be gathered from the principal case.

§ 103. Inherent limitations upon Commission action.

We will not be content in our times with the sort of equity which the Chancellor originally evolved from his inner consciousness to deal with each case as it came before him. Still less will any people with the traditions of our race rest under proceedings of the order of the Star Chamber without being confronted with testimony against them. These decisions mean that as a people we will not be content to have our rights determined by administrative fiat; we demand reasoned judgment based upon ascertained principles generally understood. If the Commission is to be held to its function of administering the law, we must have some basis for determining the meaning of the word reasonable used in the Act. The Commission, as it has been seen, can only set aside a rate if it is unreasonable; in its place it can only fix a rate which is reasonable. But how is it to be determined what rates are unreasonable and what change would make them reasonable, unless we have definite principles universally recognized? The Interstate Commerce Commission itself has made noteworthy progress in the past few years in establishing by its decisions the bases upon which the reasonableness of rates depend as a matter of law. The Supreme Court has also of late years been giving the stamp of its approval to rules for the determination of the reasonableness of rates which seem at last to be practicable. Vague though a phrase in a statute may apparently be, yet it may well have a definite meaning in the law; and by the prevailing rule, when a given phrase has an accepted significance at common law, it should be taken in that sense. We must have some objective standard to go upon, or we have no security from subjective differences. What is reasonable

according to principles of law governing the matter is what we must insist upon in order to confine our commissions to administration. If we have nothing to rely upon except what seems upon the whole to the body in power desirable or impolitic, we can hope for nothing better than benevolent despotism subject to all the corresponding risks of arbitrary power.

CHAPTER III

FEDERAL JURISDICTION

§ 110. Provisions of the Act.

111. Scope of power conferred.

§ 112. Foreign carriers.

113. Ocean carriers.

Topic A. Foreign Commerce

114. Foreign carriers and discriminations.

115. Inland portion of foreign commerce.

116. Requisites of port proportionals.

117. Export and import rates.

118. Import rates may be regulated by competition.

119. Export rates regulated by competition.

120. Foreign competition justifies only necessary differences. 121. Limitations upon export and import rates.

Topic B. Interstate Commerce

§ 122. What are considered States?

123. What constitutes commerce between the States?

124. Traffic in movement between States.

125. Termini within a single State routed through another State. 126. Carriage wholly within a State.

127. Local carriage when through transportation contemplated. 128. Beginning and ending of interstate transit.

129. Precedent and subsequent transportation.

130. Power to fix rates under the Constitution.

131. Extent of the federal jurisdiction.

Topic C. Continuous Carriage under Common Control

132. Existence of common arrangement.

133. Continuity of interstate shipment.

134. Relations with water lines.

135. What constitutes continuous carriage?

136. Local carrier participating in through carriage.

137. Intrastate part of interstate movement.

138. Line of the distinction.

139. Device to break through shipment.

140. Publishing of proportional rates.

141. Transit privileges under through arrangements.