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Supreme Court — Part 5
Page 29
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led to the enactment ef Transportation Act, 1920, (Title IV, 41
Stat. 474, et seq.). We found that Transportation Act, 1920, in-
troduced into the federal legislation a new railroad policy, seeking
to insure an adequate transportation service. To attain that end,
new rights, new obligations, new machinery, were created. Rail-
road Commission of Wisconsin v. Chicago, Burlington & Quincy
BR. R. Co, 257 U. 8. 563, 585; New England Divisions case, 261
U. S. 164, 189, 190; Dayton-Goose Creek Railway Co. v. United
States, 263 U.S. 456, 478. It is a primary aim of that pelicy to
‘eeure the avoidance of waste. That avoidance, as well as the
maintenance of service, is viewed as a direct concern of the public.
Davis v. Farmers Co-operative Co., 262 U. 8. 312, 317; Pezas &
Pacific Railway Co. v. Gulf, Colorada & Santa Fe Railway Co.,
270 U. 8. 266, 277. The authority given to the Commission to
authorize consolidations, purchases, leases, operating contracts, and
acquisition of control, was given in aid of that policy. New York
Centrat Securities Corporation v. United States, 287 U. 8. 12, 24,
25. The criterion to be applied by the Commission in the exercise
of its authority to approve such transactions—a criterion reaffirmed
by the amendments of Emergency Railroad Transportation Act,
1933—is that of the controlling public interest. And that term
aa. a
cate
is not s earrier to acquire control of two or more carriers through ownership
of their stock; or for a corporation which is not a carrier and which has
control of one or more carriers to acquire contro! of another earrier through
ownersiip of its stock.
‘*(b), Whenever a consolidation, merger, purehage, lease, operating eon-
tract, or acquisition of control is proposed under enhdivision (a), the carrier
or carriers or corporation seeking authority therefor shall present an applica-
tion to the Commission, and thereupon the Commission shall notify the
Governor of each State in which any part of the properties of the catriers
involved in the proposed transaction is situated, and also such carriers and
the applicant or applicants, of the time and place for a public hearing. If
after such hearing the Commiasicu finds that, subject to such terma and con-
ditions and such modifications as it shall find to be just and reasonable, the
Droposed consolidation, merger, purchase, lease, operating eontract, or ac-
quisition of control will be in harmony with and in furtherance of the plan
for the consolidation of railway properties established pursuant to paragraph
(3}, and will promote the public interest, it may enter an order approving
and authorizing such consolidation, merger, purchase, lease, operating con-
tract, or acquisition of control, upon the terms and conditions and with the
modificationg so found to be just and reasonable’’.
Teras et al. vs. The United States e¢ al. 7
as used in the statute is not a mere general reference to public
welfare, but, as shown by the context and purpose of the Act, ‘‘has
direct relation to adequacy of transportation service, to its essen-
tial conditions of economy and efticiency, and to appropriate pro-
vision and best use of transportation facilities’. New Fork Cen-
tral Securities Corporation v. United States, supra.
It is in the light of this eriterion that we must consider the
scope of the Commission’s authority in relation to provisions which
are intended to relieve interstate carriers from burdensome outlays.
The fact that burdensome expenditures may be required by state
regulations is not a barrier to their removal by dominant federal
authority in the protection of interstate commerce. As we said in
Cotorado v. United States, 271 U.S. 153, 163: ‘‘ Prejudice to inter-
state commerce may be effected in many ways. One way is by
excessive expenditures from the common fund in the local interest,
thereby lessening the ability of the carrier properly to serve inter-
state commerce’’, Even explicit charter provisions must yield
to the paramount regulatory power of the Congress. New York v.
United States, 257 U. S. 591, 601. Obligations assumed by the cor-
poration under its charter of providing intrastate service are snb-
ordinate to the performance by it of its federal duty, also assumed,
‘efficiently to render transportation services in interstate com-
merce’’, Colorado v. United States, supra, p. 165. See Transit Com-
mission v. United States, 284 U. S. 360, 367, 368; Transtt Commas-
sion Vv. United States, 289 U. 8.121, 127; Florida v. Unifed States,
decided April 2, 1934. In the present case, the findings of the
Commission, setting forth undisputed facts, leave no doubt that
the provision of the lease permitting the abandonment, or removal
from the State, of general offices and shops of the lessor has direct
relation to economy and efficiency in interstate operations and to
the achievement of the purpose which the Congress had in view in
its grant of authority.
Counsel for the United States and for the Interstate Commerce
Commission eraphasize the limitations of the challenged provision.
They point out that, in addition to the customary ‘‘general offices’’
of railroads, Section 3, of Article X, of the Constitution of Texas
provides that railroad corporations must ‘‘maintain a public office
or place in this State for the transaction of its business, where
transfers of stock shall be made, and where shall be kept for in-
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