which State regulation of interstate commerce may go in the absence of Federal regulation, there is no doubt as to the fate of State regulation of the conduct of interstate commerce which comes in conflict with Federal regulation. Thus State legislation forbidding the charging of more for a short haul than for a long haul can have no application to interstate rates in view of the express provisions of the interstate commerce act as to this matter.1 So a State statute providing for redress for those charged more than the scheduled rates is certainly without force as to charges for interstate shipments in view of the similar provision of the Interstate Commerce Act.2 But Congress cannot go so far in regulation of the conduct of interstate commerce as to invade the general police jurisdiction of the States as to action within its borders. Thus Congress cannot subject carriers hauling intrastate shipments to peculiar liabilities to their employés, so intermingled are the duties of these employés with both kinds of commerce. And Congress cannot empower a Secretary to fix a quarantine line beyond which cattle shall not be moved by rail, so as to affect intrastate shipments.1

§ 1420. Power of Congress to regulate.

The regulation of interstate and foreign commerce is one of the principal powers confided by the Constitution to the Congress of the nation. That this power carries with it the right to exercise it in all appropriate ways would seem to be unquestionable.5 In one of the first

1 Louisville & N. Ry. Co. v. Eubank, 184 U. S. 27, 46 L. ed. 416, 22 Sup. Ct. 277 (1902).

2 Gulf, C. & S. F. Ry. Co. v. Hefley, 158 U. S. 98, 39 L. ed. 910, 15 Sup. Ct. 802 (1895).

3

The Employers' Liability Cases,

207 U. S. 463, 52 L. ed. 297, 28 Sup. Ct. 141 (1908).

4 Illinois Central R. R. Co. v. McKendree, 203 U. S. 514, 51 L. ed. 298, 27 Sup. Ct. 153 (1906).

5 Chesapeake & P. Telephone Co. v. Manning, 186 U. S. 238, 46 L. ed. 1144, 22 Sup. Ct. 881 (1902).

1

cases under the Interstate Commerce Act Mr. Justice Brewer said of the legislative power of Congress to regulate rates: "There were three obvious and dissimilar courses open for consideration. Congress might itself prescribe the rates; or it might commit to some subordinate tribunal this duty; or it might leave with the companies the right to fix rates subject to regulations and conditions." There would therefore seem to be no doubt that Congress possesses the inherent right which every legislature having power has, either to fix rates itself or give to its commission power in the premises. Thus far it has wisely refused to fix rates itself; and it has with equal wisdom withheld from the commission the power to make schedules of rates. By its persistent policy it has given the commission only power to give relief from unreasonable rates in particular cases where redress is asked. The first grant of power in this regard was held by the courts to go no further than to authorize the commission to declare the rate complained of improper.2 But in the latest legislation the commission is given power in giving relief to designate what the proper rate shall be henceforth.3

Topic D. Impairing Obligation of Contract

§ 1421. Contract character of charter privileges.

A State may be disabled from fixing the rates of a railroad company by reason of some provision in its charter which constitutes a contract with the State. Such a

1 Interstate Comm. Comm. v. Cincinnati, N. O. & T. P. Ry. Co., 167 U. S. 479, 42 L. ed. 243, 17 Sup. Ct. 896 (1897).

2 Cincinnati, N. O. & T. P. Ry. Co. v. Interstate Comm. Comm., 162 U. S. 184, 40 L. ed. 935, 16 Sup. Ct. 700 (1896).

'See Railroad Commission Cases, 116 U. S. 307, 29 L. ed. 636 (1886).

'Stone v. New Orleans & N. E. R. R. Co., 116 U. S. 352. See also Stone v. Yazoo & Miss. R. R. Co., 62 Miss. 607, 52 Am. Rep. 193 (1883).

See, however, Georgia Ry. & Bk.

contract is made by a provision in a charter allowing a certain maximum charge to be made by the railroad. The charter having been accepted, the legislature cannot subsequently reduce the maximum rate.1 So where the charter provided that rates should not be so reduced that the company should earn less than twelve per cent, this constituted a contract.2 Later action impairs the obligation of earlier contracts. But the contract must in reality be impaired by the later action. And, perhaps it is needless to add, the action complained of must be subsequent to the contract pretended.5

4

§ 1422. Express contractual provision necessary.

6

A charter provision will not be construed as limiting the power of the legislature over rates unless there is an express provision to that effect. The presumption is against such limitations. This was said in one case where the charter provided that the charge for transportation should not exceed a certain amount. The court held that this provision did not constitute a contract limiting the power of the legislature to reduce rates. Mr. Justice Field said: "If the charter in this way provides that the charges

Co. v. Smith, 128 U. S. 174, 32 L. ed. 377, 9 Sup. Ct. 47 (1888), and see, contra, Laurel Fork R. R. Co. v. West Va. Transportation Co., 25 W. Va. 324 (1884).

1 Detroit v. Detroit Citizens' St. Ry. Co., 184 U. S. 368, 46 L. ed. 592, 22 Sup. Ct. 410 (1902); Pingree v. Michigan Cent. R. R. Co., 118 Mich. 314, 76 N. W. 635 (1898).

2 Ball v. Rutland R. R. Co., 93 Fed. 513 (1899).

3 Minneapolis v. Minneapolis St. Ry. Co., 215 U. S. 417, 30 Sup. Ct. 118 (1910).

'People's Gaslight & Coke Co.

v. Chicago, 194 U. S. 1, 48 L. ed. 85, 24 Sup. Ct. 520 (1904).

Co.

V.

5 Oshkosh Waterworks Oshkosh, 187 U. S. 437, 47 L. ed. 249, 23 Sup. Ct. 234 (1903).

Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462 (1889).

See also Owensboro v. Owensboro Waterworks Co., 191 U. S. 358, 48 L. ed. 217, 24 Sup. Ct. 82 (1903).

7 Georgia Ry. & B. Co. v. Smith, 128 U. S. 174, 32 L. ed. 377, 9 Sup. Ct. 47 (1888).

See also Helena Waterworks Co. v. Helena, 195 U. S. 383, 49 L. ed. 245, 25 Sup. Ct. 40 (1904).

which the company may make for its service in the transportation of persons and property shall be subject only to its own control up to the limit designated, exemption from legislative interference within that limit will be maintained. But to effect this result, the exemption must appear by such clear and unmistakable language that it cannot be reasonably construed consistently with the reservation of the power by the State. There is so such language in the present case."

§ 1423. Conferring powers does not create contract.

The ordinary clauses in railroad charters do not constitute a contract by the State not to regulate rates. Thus no such contract is created either by the grant of power to carry persons and property, or by the power to make by-laws, rules and regulations, or by the power to fix, regulate and receive the tolls and charges. This is merely conferring on the corporation the powers that an individual carrier would have, and it leaves the corporation, like the individual carrier, subject to the regulation of the State. In Stanislaus County v. San Joaquin and King's River Canal and Irrigation Company, the charter gave the company power to fix rates, subject to regulation by a board of supervisors, who, however, were not to reduce the rates below a certain maximum. It was held that this did not prevent the legislature itself from affecting the rates. "There is no promise made in the act that the legislature would not itself subsequently alter that authority."

§ 1424. Contracts made by municipal ordinance.

A contract limiting the power over rates may be made between a city and a public service company. Before

1 Railroad

Commission Cases,

116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334 (1886).

192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241 (1903).

holding that such a contract exists, a court must first determine whether the city has power to make such a contract. Such power may be conferred on a city. And thus a city ordinance, accepted by a public service company, which defines the duties of the company and names a maximum rate of compensation, constitutes a contract, and the rate named in such an ordinance cannot thereafter be diminished.3 There is, however, a constant tendency to find that the ordinance did not constitute a contract and that the power over rates continues.1

§ 1425. Loss of the privilege.

The contractual exemption from regulation may, it would seem, be lost by a company by long-continued nonuser as evidence of rescission of the contract, or by waiver. In San Joaquin Canal and Irrigation Company v. Stanislaus County, it appeared that by a provision in its charter

5

1 Walla Walla v. Walla Walla Water Co., 172 U. S. 1, 43 L. ed. 341, 19 Sup. Ct. 77 (1898); Los Angeles v. Los Angeles City Water Co., 177 U. S. 558, 44 L. ed. 886, 20 Sup. Ct. 736 (1900); Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. 493 (1901); Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. 493 (1901).

2 Los Angeles v. Los Angeles City Water Co., 177 U. S. 558, 44 L. ed. 886, 20 Sup. Ct. 736 (1900); City of Cleveland v. Cleveland City Ry. Co., 194 U. S. 517, 48 L. ed. 1102, 24 Sup. Ct. 756 (1904); In re Pryor, 55 Kan. 724, 41 Pac. 958 (1895); Louisville Natural Gas Co. v. State, 135 Ind. 49, 34 N. E. 702 (1894).

3 Detroit v. Detroit Citizens' St. Ry. Co., 184 U. S. 368, 46 L. ed. 592, 22 Sup. Ct. 410 (1902); Cleve

land v. Cleveland City Ry. Co., 194 U. S. 517, 48 L. ed. 1102, 24 Sup. Ct. 756, 1904, aff'g 94 Fed. 385; Crosby v. City Council, 108 Ala. 498, 18 So. 723 (1895); State v. Laclede Gaslight Co., 102 Mo. 472, 14 S. W. 974 (1890); Columbus v. Columbus St. Ry. Co., 45 Ohio St. 98, 12 N. E. 651 (1886).

4 Vicksburg Waterworks Co. v. Vicksburg, 185 U. S. 65, 46 L. ed. 808, 22 Sup. Ct. 585 (1902); Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. 493 (1901); Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. 490 (1901).

113 Fed. 930 (1902). On appeal the Supreme Court held that there was no contract. Stanislaus County v. San Joaquin & K. R. C. & I. Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241 (1903).