§ 201. A Certificate is Necessary for the Establishment of a New Union Depot.-Where a new station to be used by several interstate carriers and involving a substantial outlay of capital is to be built, the question of whether or not the construction of such station is necessary and in the public interest is for determination by the Interstate Commerce Commission. To construct such a station not only involves an expenditure of money for the station itself, but generally requires substantial and expensive extensions of main tracks as well as side-tracks. Construing the statute as a whole, there is a clear showing of a legislative intention to retain control of any substantial change in the main tracks of an interstate carrier, as well as the issuance of securities of such a carrier which the construction of a union depot may sometimes necessitate. This would not give the Commission control over the mere relocation of main tracks not involving real or substantial additions, abandonments or betterments. Under these principles, a state commission may not, as an original proposition, order the construction of a new union station of the character hereinabove mentioned, and the Interstate Commerce Commission must first determine that such a station is necessary and in the public interest, although the latter body may not in the present state of the law, require the construction of such a station.223

§ 202. The Statute as Applied to Intrastate Railways. An intrastate railway, insofar as its business is confined to intrastate transportation which does not burden interstate commerce, is free from control of the Interstate Commerce Commission and subject to the control of such state commissions as exist. If, however, the intrastate line engages in interstate transportation, that transportation is within the control of the Interstate Commerce Commission. It follows that if an intrastate railway seeks to abandon its business,

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. Pittsburgh, etc., R. Co. v.
U. S., 41 Fed. (2d) 806.

223 California R. R. Commission v. So. Pac. Co., 264 U. S. 331, 68 L. Ed.

713, 44 Sup. Ct. 376, affirming 190 Cal. 214, 211 Pac. 460. As to the Interstate Commerce Commission's lack of authority to require the construction of union passenger stations, see I. C. C. v. City of Los Angeles, 280 U. S. 52, 74 L. Ed. 81, 50 Sup. Ct. 53.

and if its business is both interstate and intrastate, permission must be obtained from the Interstate Commerce Commission, and, if there is any law governing the situation in the state where the carrier is located, that law must be complied with by the carrier before it abandons its intrastate operations. Where an interstate carrier owns a line within a state, the abandonment of such line may be authorized by the Interstate Commerce Commission for the reason that the operation of a branch line in a state by an interstate railroad may adversely affect interstate commerce. In a leading case from Texas,224 the Supreme Court, discussing paragraphs (18), (19), and (20) of Section 1, and reciting that the road "lies entirely within a single state," and calling attention to the fact that it was not a part of another road, said: "Interstate and foreign commerce will not be burdened or affected by any shortage in the earnings, nor will any carrier in such commerce have to bear or make good the shortage. It is not as if the road were a branch or extension whose unremunerative operation would or might burden or cripple the main line, and thereby affect its utility or service as an artery of interstate and foreign As a whole, these acts show that what is intended is to regulate interstate and foreign commerce, and to affect intrastate commerce only as that may be incidental to the effective regulation and protection of commerce of the other class. They contain many manifestations of a continuing purpose to refrain from any regulation of intrastate commerce, save such as is involved in the rightful exertion of the power of Congress over interstate and foreign commerce.''225 The further application of the principle was discussed by the Supreme Court in the Colorado case.226

commerce.

* * *

§ 203. Interstate Line Owning a State Line. In the Colo

42

224 Texas v. Eastern Texas R. R. Co., 258 U. S. 204, 66 L. Ed. 566, Sup. Ct. 281.

225 See Simpson v. Shepard, 230 U. S. 352, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, 33 Sup. Ct. 729, Ann. Cas. 1916A, 18; Railroad Commission v. C. B. & Q. R. R. Co., 257 U. S. 563, 66 L. Ed. 371, 22 A. L. R. 1086, 42 Sup. Ct. 232; Brooks-Scanlon Co. v.

Railroad Commission, 251 U. S. 396, 64 L. Ed. 323, P. U. R. 1920C, 579, 40 Sup. Ct. 183; Bullock v. Florida ex rel. Railroad Commission, 254 U. S. 513, 65 L. Ed. 380, P. U. R. 1921B, 507, 41 Sup. Ct. 193.

226 State of Colorado v. U. S., 271 U. S. 153, 70 L. Ed. 878, 46 Sup. Ct. 452.

rado case, the Texas case was distinguished, because in the Colorado case the branch in the state of Colorado was part of an interstate system. In this case, Mr. Justice Brandeis discussed somewhat at length the principles applicable, holding that the Interstate Commerce Commission must in every case before abandonment grant a permit. He said: "As every projected abandonment of any part of a railroad engaged in both interstate and intrastate commerce may conceivably involve a conflict between state and national interests, the consent of the commission must be obtained by the railroad in every case." The principle to be applied was stated by him as follows: "Whatever the precise nature of these conflicting needs, the determination is made upon a balancing of the respective interests-the effort being to decide what fairness to all concerned demands. In that balancing, the fact of demonstrated prejudice to interstate commerce and the absence of earnings adequate to afford reasonable compensation are, of course, relevant and may often be controlling." An interesting note compiled by Mr. Justice Brandeis showing cases decided by the Interstate Commerce Commission granting or denying certificates of public convenience and necessity is appended by him to his decision in Texas & New Orleans Company v. North Side Belt Company.227 Similar legal principles are applicable to the issue of construction as to the issue of abandonment.

§ 204. Abandonment of Part of a Franchise not Authorized. Some portions of a line may be unprofitable although the construction or continuance thereof is in the public interest. The principle has been so clearly stated and buttressed by authority by the Supreme Court that its opinion is copied :228 "The fact that the company must make a large expenditure in relaying its tracks does not render the order void. Nor does the expected deficit from operation affect its validity. A railway may be compelled to continue the service of a branch or part of a line, although the operation involves a loss.-Missouri P. R. Co. v. Kansas, 216 U. S. 262, 54 L. Ed. 472, 479, 30 Sup. Ct. Rep. 330; Chesapeake & O. R.

227 Texas & New Orleans R. R. Co. v. Northside Belt Ry. Co., 276 U. S. 475, 72 L. Ed. 661, 48 Sup. Ct. 361.

228 Ft. Smith Light & Traction Co. v. Bourland, 267 U. S. 330, 69 L. Ed. 631, 45 Sup. Ct. 249.

Co. v. Public Service Commission, 242 U. S. 603, 607, 61 L. Ed. 520, 522, 37 Sup. Ct. Rep. 234. Compare Railroad Commission v. Eastern Texas R. Co., 264 U. S. 79, 85, 68 L. Ed. 569, 572, 44 Sup. Ct. Rep. 247. This is true even where the system as a whole fails to earn a fair return upon the value of the property. So far as appears, this company is at liberty to surrender its franchise and discontinue operations throughout the city. It cannot, in the absence of contract, be compelled to continue to operate its system at a loss.-BrooksScanlon Co. v. Railroad Commission, 251 U. S. 396, 64 L. Ed. 323, P. U. R. 1020C, 579, 40 Sup. Ct. Rep. 183. But the Constitution does not confer upon the company the right to continue to enjoy the franchise or indeterminate permit, and escape from the burdens incident to its use."

§ 205. Spurs, Switches, Etc., Within a State. The statute provides that the authority of the Interstate Commerce Commission with reference to abandonment and construction "shall not extend to the construction or abandonment of spur, industrial, team, switching or side tracks located or to be located wholly within one state or of street, suburban, or interurban electric railways which are not operated as a part or parts of a general steam railroad system." The power of a state commission was discussed in a Georgia case where the carriers sought to discontinue a switching service eighty-five per cent. of which was interstate commerce. A rule of the Georgia commission prohibited the abandonment of a service once undertaken without the consent of that commission. The state commission having refused permission to abandon the service, the question was appealed to the Supreme Court of the United States where the state commission was sustained.229 An extension, however, of 71% miles, costing $500,000.00, though designed wholly to secure carload shipments from large industrial plants, is not an industrial or spur track, and falls within the power of the Interstate Commerce Commission.230 The discussion in the case just referred to shows the distinction made by the Interstate Commerce Commission between spur tracks and tracks that are not within the ex

229 Western & Atlantic R. R. v. Ga. Publ. Serv. Comm., 267 U. S. 493, 69 L. Ed. 753, 45 Sup. Ct. 409.

230 Texas & Pacific Ry. Co. v. G., C. & S. F. Ry. Co., 270 U. S. 266, 70 L. Ed. 578, 46 Sup. Ct. 263.

ception of paragraph (22) of Section 1. The Interstate Commerce Commission publishes what it calls "Finance Reports, formerly numbered consecutively with its general reports, but now published as a separate set of reports. These finance reports show many cases in which the Commission has acted and in which it has decided whether a particular extension or abandonment referred to spurs or other tracks described in paragraph (22) or whether they came within the general provisions of paragraph (18).

§ 206. Procedure. The procedure for applications for certificates from the Interstate Commerce Commission, whether the application is to construct or to abandon, requires notice to the governors of the states in which the present or proposed line is situated, and the publication of such notice for three consecutive weeks in some newspaper of general circulation in each county in or through which said line of railroad is constructed or operates, or is proposed to be constructed. Upon the giving of such notice, interested parties may be heard and the Commission, when protests are filed, conducts an investigation similar to that in formal cases, except that it frequently appoints or designates a state commission to take the evidence. After hearing, the certificate is issued or denied, as the facts may justify. A carrier which would suffer by competition of a newly-constructed line is a party at interest and may appear and oppose the granting of permission to construct.1 Courts may prevent abandonment or construction prior to the granting of permission by the appropriate authorities and may, as in other cases, review the action of the Interstate Commerce Commission and of the state commissions, the extent of such review being to determine whether or not there has been substantial evidence supporting the orders of the respective commissions and whether or not the law has been violated in making such orders. The exercise of judgment by the Commission is similar to that in other cases.232

231 Detroit & M. Ry. Co. v. Boyne City, G. & A. R. Co., 286 Fed. 540.

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