$180 ment that this distinction begets a difference giving effect to the rates fixed by the Postin the principles applicable. master General and in refusing to enforce the conflicting intrastate rates made lawful by state law. The proceedings to prevent this wrong, it was held, did not constitute a suit against the United States and the injunction prayed was granted. In January, 1919, the state of South Dakota on the relation of its Attorney General and Railroad Commissioners sued the Dakota Central and other telephone companies doing business within the state to enjoin them from putting in effect a schedule of The appellees do not confine their contenrates as to local business which it was alleg- tion to the question of statutory construction ed had been prepared by the Postmaster Gen- below decided. On the contrary, they press eral and which it was averred the telephone questions of power which the court below ascompanies were about to apply and enforce.sumed and did not pass upon and insist It was charged that such rates were higher upon a construction of the statute contrary than those fixed by state authority and that to that which the court below took for grantthe proposed action of the companies would ed as a prelude to the question of construcbe violative of state law, since the compan- tion upon which is based its conclusion. ies were under the *duty to disregard the action of the Postmaster General and apply only the lawful state rates. The duty of the relators, as state officers, to prevent such wrong was alleged-a duty in which, it was further asserted, the state had a pecuniary interest springing from the expenditure which it was obliged to make for telephone services. We must dispose of the issues thus insisted upon before testing the soundness of the interpretation of the statute upon which the court below acted, and for the purpose of considering them as well as the question of construction which the court below expressly decided, we state the case. On the 16th of July, 1918, Congress adopted a joint resolution (40 Stat. 904, c. 154 [Comp. St. 1918, § 31154x, appendix]), providing: The companies answered, disclaiming all interest in the controversy on the ground that by contract, a copy of which with one of the defendant companies was annexed, their telephone lines and everything appurtenant thereto had passed into the possession and control of the United States and were being operated by it as a governmental agency. The answer also alleged that any connection of the companies through their officials or employés with the business was solely because of employment by the United States. The purpose to enforce the rates fixed by the Postmaster General was admitted and it was averred that the suit was one over which the court had no jurisdiction because it was against the United States. The case was heard on the bill, answer, exhibits, and an admission by all the parties that the contract annexed to the answer was accurate and that a similar one had been made with all the other defendants. "That the President during the continuance of the present war is authorized and empowered, whenever he shall deem it necessary for the national security or defense, to supervise or to take possession and assume control of any telegraph, telephone, marine cable, or radio system or systems, or any part thereof, and to operate the same in such manner as may be needful or desirable for the duration of the war, which supervision, possession, control, or operation shall not extend beyond the date of the proclamation by the President of the exchange of ratifications of the treaty of peace: Provided, that just compensation shall be made for such supervision, possession, control, or operation, to be determined by the President: Provided further, that nothing in this act shall be construed to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation or the lawful police reg * * ulations of the several states, except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems." Assuming that Congress had power to take over the telephone lines, that it had conferred that power upon the President, that the power had by the President been called into play conformably to the authority granted, and that the telephone lines were under the complete control of the United States, the court yet held that the state had the power to fix the local rates. In reaching this conclusion the court, assuming argumentatively "It is deemed necessary for the national sethat the right which the United States pos-curity and defense to supervise and take possessed gave at least the implied authority session and assume control of all telegraph and to fix all rates, nevertheless held that such telephone systems and to operate the same in power did not embrace intrastate rates be- such manner as may be needful or desirable. cause they had been carved out of the grant of power by Congress in conferring authority on the President. It was therefore decided that the President, the Postmaster General, and those operating the telephone service under his authority were mere wrongdoers in Six days thereafter, on the 22d of July, the President exerted the power thus given. Its exercise was manifested by a proclamation, which, after reciting the resolution of Congress, declared: "Now, therefore, I, Woodrow Wilson, President of the United States, under and by virtue of the and by virtue of all other powers thereto me powers vested in me by the foregoing resolution, enabling, do hereby take possession and assume control and supervision of each and every telegraph and telephone system, and every part *184 (39 Sup.Ct.) "It is hereby directed that the supervision, possession, control, and operation of such telegraph and telephone systems hereby by me undertaken shall be exercised by and through the * 19 Postmaster General. thereof, within the jurisdiction of the United [ exercising the power exceeded the authority States, including all equipment thereof and ap- given him is based upon two considerations: purtenances thereto whatsoever and all ma- First, because there was nothing in the conterials and supplies. ditions at the time the power was exercised which justified the calling into play of the authority; indeed, the contention goes further and assails the motives which it is asserted induced the exercise of the power. But as the contention at best concerns not a The proclamation gave to the Postmaster want of power, but a mere excess or abuse of General plenary power to exert his authority discretion in exerting a power given, it is to the extent he might deem desirable clear that it involves considerations which through the existing owners, managers, direc-are beyond the reach of judicial power. This tors or officers of the telegraph or telephone must be since, as this court has often pointed lines, and it was provided that their services out, the judicial may not invade the legisla might continue as permitted by general or tive or executive departments so as to corspecial orders of the Postmaster *General. rect alleged mistakes or wrongs arising from It was declared that-asserted abuse of discretion. [3] The second contention, although it ap "From and after twelve o'clock midnight on the 31st day of July, 1918, all telegraph and tel-parently rests upon the assertion that there ephone systems included in this order and proc- was an absence of power in the President to lamation shall conclusively be deemed within exert the authority to the extent to which the possession and control and under the super- he did exert it, when it is correctly undervision of said Postmaster General without fur- stood amounts only to an asserted limitation ther act or notice." on the power granted based upon a plain misconception of the terms of the resolution Under this authority the Postmaster Gen- of Congress by which the power was given. eral assumed possession and control of the In other words, it assumed that by the restelephone lines and operated the same. On olution only a limited power as to the telethe 31st day of October, 1918, the President phone lines was conferred upon the Presithrough the Postmaster General, in the ex- deht, and hence that the assumption by him ertion of the duty imposed upon him by the of complete possession and control was beresolution of Congress to make compensa-yond the authority possessed. But although tion, concluded a contract with the tele- it may be conceded that there is some ground phone companies of the most comprehensive for contending, in view of the elements of character covering the whole field while the authority enumerated in the resolution of possession, control and operation by the Congress, that there was power given to take United States continued. By its terms stipu- less than the whole if the President deemed lated amounts were to be paid as considera- it best to do so, we are of opinion that aution for the possession, control and operation thority was conferred as to all the enumeratby the United States and the earnings result- ed elements and that there was hence a right ing from such operation became the property in the President to take complete possession of the United States. Although concluded in and control to enable the full operation of October, 1918, by stipulation the contract re- the lines embraced in the authority. The lated back to the time when the President contemporaneous official steps taken to give took over the property. effect to the resolution, the proclamation of the President, the action of the Postmaster General under the authority of the President, the contracts made with the telephone companies in pursuance of authority to fix their compensation, all establish the accuracy of this view, since they all make it clear that it was assumed that power to take full control was conferred and that it was exert [1] That under its war power Congress possessed the right to confer upon the Presi-ed so as to embrace the entire business and dent the authority which it gave him we the right to the entire revenues to arise from think needs nothing here but statement, as the act of the United States in carrying it we have disposed of that subject in the out. Indeed, Congress in subsequently dealNorth Dakota railroad rate case. And the ing with the situation thus produced would completeness of the war power under which seem to have entertained the same concepthe authority was exerted and by which com- tion as to the scope of the power conveyed pleteness its exercise is to be tested suffices, by the resolution and dealt with it from that we think, to dispose of the many other con- point of view. Act Oct. 30, 1918, c. 197, 40 tentions urged as to the want of power in Stat. 1017. Congress to confer upon the President the authority which it gave him. [4] This brings us to the proposition upon which the court based its conclusion, that is, *[2] The proposition that the President in that although complete possession, exclusive Following this, by authority of the President, the Postmaster General fixed a general schedule of rates and it was the order to put this schedule in effect which gave rise to the suit, the trial, and the resulting judgment which we have now under consideration. control, and the right to all the revenues de- [These considerations not only show the misrived from the operation of the business take of the interpretation, but also point were in the United States as the result of the out the confusion and conflict which must resolution, the proclamation, and the con- necessarily arise from giving effect to the tracts, yet as to intrastate earnings, the state mistaken presumption of the continuance of power remained to "incumber" the authority state power to which we have previously re of the United States, because that situation | ferred. necessarily resulted from the terms of the congressional resolution. [5] Inherently the power of a state to fix rates to be charged for intrastate carriage or transmission is in its nature but derivative, since it arises from and depends upon the duty of those engaged in intrastate commerce to charge only reasonable rates for the services by them rendered, and the authority possessed by the state to exact a compliance with that duty. Conceding that it was within the power of Congress, subject to constitutional limitations, to transplant the state power as to intrastate rates into a sphere where it, Congress, had complete control over telephone lines because it had taken possession of them and was operating them as a governmental agency, it must follow that in such sphere there would be nothing upon which the state power could be exerted exIt was conceded that the words "police pow- cept upon the power of the United States; er" were *susceptible of two significations, that is, its authority to fix rates for the serva comprehensive one embracing in substance ices which it was rendering through its govthe whole field of state authority and the ernmental agencies. The anomaly resulting other a narrower one including only state from such conditions adds cogency to the power to deal with the health, safety and reasons by which in the North Dakota case morals of the people. Although it was ad- the error in presuming the continuance of mitted that the reservation, considered in-state power in such a situation was pointed trinsically, was not susceptible of being in- out and makes it certain that such a result terpreted in the broader of the two lights, it could be brought about only by clear expreswas held that it was necessary to so inter- sion or at least from the most convincing impret it because of the clause of the proviso plication. prohibiting the states from legislating concerning the issue of stocks and bonds by the companies during the United States control. The reasoning was this: It was inconceivable, it was said, that the subject, stocks and bonds, should have been withdrawn from state control by an express prohibition unless that subject would have been under state control in the absence of the prohibition, a result which could only exist by giving the saving clause as to police power its widest significance. But the fact that the rule of construction applied had the result of incorporating in the act of Congress unlimited state authority merely as the result of a prohibition by Congress against the exertion of state power in a specific instance, in and offerred, from all of which we have turned itself admonishes of the incorrectness of the aside because the right to consider them was rule. But its want of foundation is estab- wholly beyond the sphere of judicial authorlished by two further considerations: (1) Because it causes the provision as to stocks and bonds, which was plainly enacted to preserve the financial control of the United States over the corporations, to limit if not destroy such control; (2) because by converting the prohibition against state power into an affirmative and comprehensive grant of that power, it so interprets the act as to limit the grant of authority which the act beyond doubt gave to the United States. This disposes of the case, but before leaving it we observe that we have not overlooked in its consideration the references made to proceedings in Congress concerning the resolution at the time of its passage, and further, that we have also considered all the suggestions made in the many and voluminous briefs filed on behalf of various state authorities and individuals having interests in suits pending elsewhere, concerning the construction of the resolution. In saying this, however, we must except suggestions as to want of wisdom or necessity for conferring uncalled for exertion of the power as conthe power given, or as to the precipitate or ity. In view of our conclusion we shall in this case, as we did in the previous one and for the reasons therein stated, content ourselves with reversing the judgment below upon the merits with directions for such further proceedings as may be not inconsistent with this opinion. And it is so ordered. case. This superficially was based on an interpretation of the resolution, but in substance was caused by the application to the clause of the resolution interpreted, of the erroneous presumption as to the continuance of state power dealt with in the North Dakota Let us see if this is not necessarily so. The provision dealt with was the proviso of the resolution which in the first place saved "the lawful police regulations of the several states" and therefore subjected the control of the United States to the operation of such power, and in the second place prohibited the states during the United States control from exerting authority as to the issue of stocks and bonds. Mr. Justice BRANDEIS dissents. *187 #188 *194 (39 Sup. Ct.)' (250 U. S. 191) (250 U. S. 195) BURLESON, Postmaster General, v. DEMP- MACLEOD et al. v. NEW ENGLAND TELE- (Argued May 5 and 6, 1919. Decided June 2, (Argued May 5 and 6, 1919. Decided June 2, 1919.) 1919.) No. 1006. Appeal from the District Court of the United States for the Northern District of Illinois. Suit by Albert S. Burleson, Postmaster General, against Thomas E. Dempcy and others, members of the Public Utilities Commission of Illinois, and Edward J. Brundage, Attorney General of the State of Illinois, who filed a cross-bill. From a decree enjoining the complainant, he appeals. Reversed and remanded, with directions. See, also, 250 U. S., 39 Sup. Ct. 392, 63 L. Ed.-. Messrs. Solicitor General King, of Atlanta, Ga., and Henry S. Robbins, of Chicago, Ill., for appellant. | Mr. Raymond S. Pruitt, of Chicago, Ill., for appellees. No. 957. cial Court of the State of Massachusetts. As there is no difference in legal principle as to the question of power between the Dakota Central Case and this, it follows that the decision in that case is conclusive here and makes certain the error committed below. In this case, therefore, as in that, as a decree of reversal will dispose of every issue in the case, it follows that the decree below must be reversed and the case remanded for further proceedings not inconsistent with this opinion. And it is so ordered. Mr. Justice BRANDEIS dissents. *Mr. Chief Justice WHITE delivered the opin-Mr. Chief Justice WHITE delivered the opinion of the Court. ion of the Court. In a suit commenced by the Postmaster General, the members of the Public Utilities Commission of Illinois and the Attorney General of that state filed a cross-bill to enjoin the Postmaster General from enforcing telegraph rates which he had directed to be charged for services rendered over lines which were in the possession, under the control, and being operated by the United States under authority of the resolution of Congress and the proclamation of the President, considered in the Dakota Central Telephone Case, 250 U. S. 163, 39 Sup. Ct. 507, 63 L. Ed. this day announced. The theory of the cross-bill was that the United States in operating the lines was governed as to intrastate rates by state authority and could not lawfully exact for such services rendered any charges but those which the state sanctioned. The court below upheld this view and fore permanently enjoined the Postmaster General from charging any other than the state rates for the intrastate business. The case is before us on appeal from the decree to that ef fect. Commission of the state of Massachusetts, filed The petitioners, composing the Public Utilities their bill against the respondent to compel it to enforce certain telephone rates for intrastate business established in conformity to the state law and to forbid the putting into effect of conflicting rates fixed by the Postmaster General in a schedule by him established and the enforcement of which he had ordered. served for the consideration of the Supreme JuOn the petition and answers the case was redicial Court where it was finally decided. The Chief Justice Rugg, having after full consideracourt in a lucid opinion, speaking through Mr. General was empowered by the law of the tion reached the conclusion that the Postmaster United States to fix the schedule of rates complained of and that the telephone company was there-authorized by such law to put in effect and enforce such rates even though in doing so the sion of the state was disregarded, held that the rate established by the Public Service Commissuit was virtually one against the United States which the court was without *power to enterof jurisdiction. But the form of the decree thus tain and entered a decree of dismissal for want entered affects in no way the control and decisive result, upon every issue in the case, of Central Telephone Case, 250 U. S. 163, 39 Sup. the ruling this day announced in the Dakota Ct. 507, 63 L. Ed. that in this case our decree must be and is one It follows, therefore, of affirmance. Affirmed. Mr. Justice BRANDEIS dissents *198 (250 U. S. 188) wherein the President, through the Postmaster STATE OF KANSAS v. BURLESON, Post- General, assumed control, possession, and supermaster General, et al. vision of each and every marine cable system, etc., the cable lines of the complainant compa(Argued May 5 and 6, 1919. Decided June 2, nies were turned over to and accepted by them, 1919.) the cases became moot, and appeals from decrees of dismissal must be dismissed, notwithstanding contentions by the companies that an adjudication of their rights was necessary to prevent future encroachments. 2. APPEAL AND ERROR 801(1)-REVIEWMOOT CASE. No. 31, Original. In Equity. Original bill by the State of Kansas against Albert S. Burleson, Postmaster General, and the Southwestern Bell Telephone Company. Bill dismissed. Mr. Fred S. Jackson, of Topeka, Kan., for complainant. Mr. Solicitor General King, of Atlanta, Ga., for respondents. Where bills by the complainant cable companies to enjoin the Postmaster General or his representatives from interfering with their property pursuant to presidential proclamation, whereby the President assumed control, posses * Mr. Chief Justice WHITE delivered the opin- sion, and supervision of marine cable systems, ion of the Court. etc., were dismissed, and pending appeal from the decrees of dismissal the property was returned to the companies, thus making the cases moot and necessitating dismissal of the appeals, the original decrees dismissing the bills ought not to be allowed to stand, but should be reversed, and the causes remanded, with directions to set aside the decrees and substitute decrees dismissing the bills without prejudice. The state of Kansas, invoking the original jurisdiction of this court, filed its bill to enjoin the Postmaster General from enforcing and the defendant corporation from giving effect to a schedule of telephone rates which the Postmaster General had established and which he had directed should be applied for telephone services rendered on lines which were in the control and possession of the United States and were being operated as governmental agencies in virtue of the resolution of Congress and the proclamation of the President referred to and considered in the Dakota Central Telephone Case (just announced) 250 U. S. 163, 39 Sup. Ct. 507, 63 L. Ed. -. The defendants, insisting that the suit was not in substance against an officer to restrain the doing of unauthorized acts, but was really one to prevent an official of the United States from discharging his duty under a law of the United States, both disputed the merits and challenged the jurisdiction. The case was heard coincidentally with the Dakota Central Case this day decided. As the ruling in that case establishes the want of foundation for the contention made in this, as to the illegality of the acts of the officer complained of, it follows also that what was stated in that case as to the form of our decree is likewise here controlling and for the reasons there stated in this as in that case our decree must be and is one of dismissal of the bill. And it is so ordered. Mr. Justice BRANDEIS dissents. (250 U. S. 360) COMMERCIAL CABLE CO. v. BURLESON, Nos. 815 and 816. 1. APPEAL AND ERROR 781(2)-REVIEWMOOT CASE. Appeals from the District Court of the United States for the Southern District of New York. Where, after bills by cable companies to enjoin the Postmaster General or his representatives from interfering with their property under presidential proclamation of November 2, 1918, Bills by the Commercial Cable Company and by the Commercial Pacific Cable Company against Albert S. Burleson and Newcomb Carlton. On motion of defendants, the bills were dismissed (255 Fed. 99), and complainants appeal. Decrees reversed, and causes remanded, with directions to set aside the decrees and substitute decrees dismissing the bills without prejudice. * Mr. Chief Justice WHITE delivered the opinion of the Court. By virtue of the Joint Resolution of July 16, 1918 (40 Stat. 904, c. 154 [Comp. St. 1918, § 3115x, appendix]), considered in the Dakota Central Telephone Case, 250 U. S. 163, 39 Sup. Ct. 507, 63 L. Ed. -, decided June 2, 1919, the President, by proclamation dated November 2, 1918 (Sess. Laws 65th Cong., 2d Sess., part 2, "Proclamations, 1918,” p. 228), As in the case of the telephone lines, the proclamation conferred authority upon the Postmaster General to carry out its provisions. In the name of the President, the Postmaster General then took possession and assumed control of the cable lines owned or For other cases see same topic and Y-NUMBER in all Key-Numbered Digests and Indexes Mr. Charles E. Hughes, of New York City, for appellants. Mr. Solicitor General King, of Atlanta, Ga., for appellees. 198* |
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