Covington & L. Turnp. Road Co. Sandford, 164 U. S. 578, 597, 41 L. 560, 566, 17 Sup. Ct. Rep. 198.

v. ern P. R. Co. v. North Dakota, 236 U. S. ed. | 585, 59 L. ed. 735, L.R.A.1917F, 1148, P.U.R.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1; Norfolk & W. R. Co. v. Conley, 236 Ú. S. 605, 59 L. ed. 745, P.U.R.1915C, 293, 35 Sup. Ct. Rep. 437.

The recapture clause is founded on precedent.

Noble State Bank v. Haskell, 219 U. S. 104, 112, 55 L. ed. 112, 117, 32 L.R.A. (N.S.) 1062, 31 Sup. Ct. Rep. 186, Ann. Cas. 1912A, 487; Mountain Timber Co. v. Washington, 243 U. S. 219, 237, 244, 245, 61 L. ed. 685, 696, 699, 700, 37 Sup. Ct. Rep. 260, Ann. Cas. 1917D, 642, 13 N. C. C. A. 927; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U. S. 1, 25, 51 L. ed. 933, 944, 27 Sup. Ct. Rep. 585, 11 Ann. Cas. 398.

Mr. P. J. Farrell argued the cause and filed a brief for the Interstate Commerce

Commission:

The matters referred to in subdivision b of paragraph 13 of the petition do not b of paragraph 13 of the petition do not tend to show either that certain provisions of § 15a are unconstitutional, or that the orders of the Commission are invalid.

Procter & G. Co. v. United States, 225 U. S. 282, 297, 298, 56 L. ed. 1091, 1096, 1097, 32 Sup. Ct. Rep. 761.

Income derived by complainant from intrastate traffic may properly be included in the basis upon which its excess net railway operating income is computed.

Railroad Commission v. Chicago, B. &Q. R. Co. 257 U. S. 563, 578, 586, 66 L. ed. 371, 379, 382, 22 A.L.R. 1086, 42 Sup. Ct. Rep. 232.

The provisions of § 15a, relating to excess net railway operating income, are constitutional, and the orders of the Commission are valid.

Wilson v. New, 243 U. S. 332, 347, 61 Led. 755, 773, L.R.A.1917E, 938, 37 Sup. Ct. Rep. 298, Ann. Cas. 1918A, 1024; M'Culloch v. Maryland, 4 Wheat. 316, 420, 4 L. ed. 579, 605; McChord v. Louisville & N. R. Co. 183 U. S. 483, 495, 46 L. ed. 289, 295, 22 Sup. Ct. Rep. 165; Houston E. & W. T. R. Co. v. United States, 234 U. S. 342, 350, 58 L. ed. 1341, 1347, 34 Sup. Ct. Rep. 833.

Mr. Samuel W. Moore filed a brief as amicus curiæ:

The constitutional guaranty extends to the use of property as well as to the property itself.

Buchanan v. Warley, 245 U. S. 60, 62 Led. 149, L.R.A.1918C, 210, 38 Sup. Ct. Rep. 16, Ann. Cas. 1918A, 1201; Brooks-Scanlon Co. v. Railroad Commission, 251 U. S. 396, 64 L. ed. 323, P.U.R. 1920C, 579, 40 Sup. Ct. Rep. 183; North

68 L ed.

The economic value of railroad property bears a relation to the income which it affords.

South Utah Mines & Smelters v. Beaver County, 262 U. S. 325, 67 L. ed. 1004, 43 Sup. Ct. Rep. 577; Branson v. Bush, 251 U. S. 182, 187, 64 L. ed. 215, 219, 40 Sup. Ct. Rep. 113; Cleveland, C. C. & St. L. R. Co. v. Backus, 154 U. S. 439, 38 L. ed. 1041, 4 Inters. Com. Rep. Nav. Co. v. United States, 148 U. S. 312, 677, 14 Sup. Ct. Rep. 1122; Monongahela 328, 37 L. ed. 463, 468, 13 Sup. Ct. Rep. 622; Omnia Commercial Co. v. United States, 261 U. S. 502, 67 L. ed. 773, 43 Sup. Ct. Rep. 437; Adams Exp. Co. v. Ohio State Auditor, 166 U. S. 185, 41 L. ed. 965, 17 Sup. Ct. Rep. 604; St. Louis & E. St. L. Electric R. Co. v. 41 Sup. Ct. Rep. 488; Cudahy Packing Missouri, 256 U. S. 314, 65 L. ed. 946, Co. v. Minnesota, 246 U. S. 450, 62 L. Tank Line Co. v. Wright, 249 U. S. 275, ed. 827, 38 Sup. Ct. Rep. 373; Union 63 L. ed. 602, 39 Sup. Ct. Rep. 276; Louisville & N. R. Co. v. Greene, 244 U. S. 522, 61 L. ed. 1291, 37 Sup. Ct. Rep. 683, Ann. Cas. 1917E, 97.

There is no vicious circle involved in determination of the economic value giving weight to earning power in the of railroad property.

rel. Springfield v. Springfield Gas & E.
State Public Utilities Commission ex
Co. 291 IIl. 219, P.U.R.1920C, 640, 125
564, 61 L. ed. 1317, P.U.R.1917F, 64, 37
N. E. 891; Darnell v. Edwards, 244 U. S.
Sup. Ct. Rep. 701; Cotting v. Kansas
City Stock Yards Co. (Cotting v. God-
ard), 183 U. S. 79, 46 L. ed. 92, 22 Sup.
Ct. Rep. 30; Canada Southern R. Co.
Cas. 731,
v. International Bridge Co. L. R. 8 App.
Illinois C. R. Co. 20 Inters. Com. Rep.
- P. C.; Railroad Comrs. v.

181.

Messrs. Joseph Paxton Blair, Edgar H. Boles, John F. Bowie, Robert J. Cary, Henry W. Clark, Herbert Fitzpatrick, Lawrence Greer, W. S. Horton, William S. Jenney, E. W. Knight, Richard V. Lindabury, Will H. Lyford, Samuel W. Moore, William Church Osborn, Winslow S. Pierce, Henry V. Poor, John H. Agate, and Carl A. de Gersdorff also filed a brief as amici curiæ:

The provisions of the statute appro

priating a part of the net railwoay operating income, and restricting the use of a further part, are not a regulation of interstate commerce, but a direct confiscation of carriers' property and an invasion of their property rights, in violation of the 5th Amendment.

Railroad Commission v. Chicago, B. & Q. R. Co. 257 U. S. 563, 582-584, 66 L. ed. 371, 381, 382, 22 A.L.R. 1086, 42 Sup. Ct. Rep. 232; New England Divisions Case (Akron, C. & Y. R. Co. v. United States), 261 U. S. 184, 67 L. ed. 605, 43 Sup. Ct. Rep. 270; Chicago, M. & St. P. R. Co. v. Tompkins, 176 U. S. 167, 173, 44 L. ed. 417, 420, 20 Sup. Ct. Rep. 336; Lincoln Gas & E. L. Co. v. Lincoln, 250 U. S. 256, 267, 63 L. ed. 968, 976, 39 Sup. Ct. Rep. 454; Bluefield Waterworks & Improv. Co. v. Public Serv. Commission, 262 U. S. 679, 67 L. ed 1176, 43 Sup. Ct. Rep. 675.

Net income realized from operations in interstate commerce is not a part of commerce, and the power to regulate interstate commerce does not include the regulation of such net income.

O. & T. P. R. Co. 167 U. S. 479, 501, 42 L. ed. 243, 253, 17 Sup. Ct. Rep. 896; Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Ex parte 74, Increased Rates, 1920, 58 Inters. Com. Rep. 220; Railroad Commission Cases, 116 U. S. 307, 331, 29 L. ed. 636, 644, 6 Sup. Ct. Rep. 334, 388, 1191; Willcox v. Consolidated Gas Co. 212 U. S. 19, 41, 53 L. ed. 382, 395, 48 L.R.A.(N.S.) 1134, 29 Sup. Ct. Rep. 192, 15 Ann. Cas. 1034; Reagan v. Farmers' Loan & T. Co. 154 U. S. 362, 397, 410, 38 L. ed. 1014, 1023, 1027, 4 Inters. Com. Rep. 560, 14 Sup. Ct. Rep. 1047; Smyth v. Ames, 169 U. S. 466, 546, 42 L. ed. 819, 849, 18 Sup. Ct. Rep. 418.

The statutory declarations that the income to be appropriated is excess income, and that it is held in trust, are not competent to qualify the title of the carriers thereto.

Galveston, H. & S. A. R. Co. v. Texas, 210 U. S. 217, 227, 52 L. ed. 1031, 1037, 28 Sup. Ct. Rep. 638; Chicago, B. & Q. R. Co. v. Illinois, 200 U. S. 561, 593, 50 L. ed. 596, 609, 26 Sup. Ct. Rep. 341, 4 Ann. Cas. 1175; Hammer v. Dagenhart, 247 U. S. 251, 62 L. ed. 1101, 3 A.L.R. 649, 38 Sup. Ct. Rep. 529, Ann. Cas. 1918E, 724; Child Labor Tax Case, 259 U. S. 20, 66 L. ed. 818, 21 A.L.R. 1432, 42 Sup. Ct. Rep. 449; Adair v. United States, 208 U. S. 161, 52 L. ed. 436, 28 Sup. Ct. Rep. 277, 13 Ann. Cas. 764; Norwood v. Baker, 172 U. S. 269, 43 L. ed. 443, 19 Sup. Ct. Rep. 187; Chicago, M. & St. P. R. Co. v. Tompkins, 176 U. S. 167, 44 L. ed. 417, 20 Sup. Ct. Rep. 336; Lincoln Gas E. L. Co. v. Lincoln, 250 U. S. 256, 63 L. ed. 968, 39 Sup. Ct. Rep. 454; Monongahela Nav. Co. v. United States, 148 U. S. 312, 327, 37 L. ed. 463, 468, 13 Sup. Ct. Rep. 622; Seaboard Air Line R. Co. v. United States, 261 U. S. 299, 304, 67 L. ed. 664, 669, 43 Sup. Ct. Rep. 354.

Second Employers' Liability Cases (Mondou v. New York, N. H. & H. R. Co.) 223 U. S. 1, 47, 48, 56 L. ed. 327, 345, 38 L.R.A.(N.S.) 44, 32 Sup. Ct. Rep. 169, 1 N. C. C. A. 875; Employers' Liability Cases (Howard v. Illinois C. R. Co.) 207 U. S. 463, 502, 52 L. ed. 297, 310, 28 Sup. Ct. Rep. 141; Hammer v. Dagenhart, 247 U. S. 251, 272, 62 L. ed. 1101, 1105, 3 A.L.R. 649, 38 Sup. Ct. Rep. 529, Ann. Cas. 1918E, 724; Delaware, L. & W. R. Co. v. Yurkonis, 238 U. S. 439, 59 L. ed. 1397, 35 Sup. Ct. Rep. 902; United Mine Workers v. Coronado Coal Co. 259 U. S. 344, 407, 408, 66 L. ed. 975, 993, 994, 27 A.L.R. 762, 42 Sup. Ct. Rep. 570; Adair v. United States, 208 U. S. 161, 178, 52 L. ed. 436, 444, 28 Sup. Ct. Rep. 277, 13 Ann. Cas. 764; United States Glue Co. v. Oak Creek, 247 U. S. 321, 62 L. ed. 1135, 38 Sup. Ct. Rep. 499, Ann. Cas. 1918E, 748; This attempted appropriation of inPhiladelphia S. Mail S. S. Co. v. Penn- come is not an indirect or consequential sylvania, 122 U. S. 326, 328, 30 L. ed. result of any legitimate exercise of con1200, 1201, 1 Inters. Com. Rep. 308, 7gressional power, but is a direct conSup. Ct. Rep. 1118; William E. Peck & fiscation of property. Co. v. Lowe, 247 U. S. 165, 175, 62 L. ed. 1049, 1052, 38 Sup. Ct. Rep. 432.

Gibson v. United States, 166 U. S. 269, 275, 41 L. ed. 996, 1002, 17 Sup. Ct. The net income is earned from rates Rep. 578; Northern Transp. Co. v. Chiwhich must be presumed to be reason-cago, 99 U. S. 635, 25 L. ed. 336; Union able, and so is absolute property.

Interstate Commerce Commission v. Baltimore & O. R. Co. 145 U. S. 263, 275, 36 L. ed. 699, 703, 4 Inters. Com. Rep. 92, 12 Sup. Ct. Rep. 844; Interstate Commerce Commission v. Cincinnati, N.

Bridge Co. v. United States, 204 U. S.
364, 388, 51 L. ed. 523, 534, 27 Sup. Ct.
Rep. 367; Bedford v. United States, 192
U. S. 217, 225, 48 L. ed. 414, 417, 24
Sup. Ct. Rep. 238; Monongahela Nav.
Co. v. United States, 148 U. S. 312, 336,

37 L. ed. 463, 471, 13 Sup. Ct. Rep. 622;
Chicago, B. & Q. R. Co. v. Illinois, 200
U. S. 561, 593, 50 L. ed. 596, 609, 26
Sup. Ct. Rep. 341, 4 Ann. Cas. 1175.
The value of property results from the
use to which it is put, and depends upon
the profitableness of that use, present
and prospective, actual and anticipated.
Cleveland, C. C. & St. L. R. Co. v.
Backus, 154 U. S. 439, 445, 38 L. ed.
1041, 1046, 4 Inters. Com. Rep. 677, 14
Sup. Ct. Rep. 1122; Branson v. Bush,
251 U. S. 182, 187, 64 L. ed. 215, 219,
40 Sup. Ct. Rep. 113; Buchanan v. War-
ley, 245 U. S. 60, 74, 62 L. ed. 149, 160,
L.R.A.1918C, 210, 38 Sup. Ct. Rep. 16,
Ann. Cas. 1918A, 1201; Holden v. Hardy,
169 U. S. 366, 391, 42 L. ed. 780, 790,
18 Sup. Ct. Rep. 383; Coppage v. Kansas,
236 U. S. 1, 18, 59 L. ed. 441, 447, L.R.A.
1915C, 960, 35 Sup. Ct. Rep. 240; Great
Northern R. Co. v. Minnesota, 238 U. S.
340, 346, 59 L. ed. 1337, 1339, P.U.R.
1915D, 701, 35 Sup. Ct. Rep. 753; West
v. Kansas Natural Gas Co. 221 U. S.
229, 254, 55 L. ed. 716, 726, 35 L.R.A.
(N.S.) 1193, 31 Sup. Ct. Rep. 564.

The income-appropriation provisions cannot be sustained as a regulation of rates.

691, 27 L. ed. 584, 2 Sup. Ct. Rep. 732; Canada Southern R. Co. v. International Bridge Co. L. R. 8 App. Cas. 723-P. C.; Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Truax v. Corrigan, 257 U. S. 312, 322, 66 L. ed. 254, 258, 27 A.L.R. 375, 42 Sup. Ct. Rep. 124; Covington & L. Turnp. Road Co. v. Sandford, 164 U. S. 578, 596, 41 L. ed. 560, 566, 17 Sup. Ct. Rep. 198; Reagan v. Farmers' Loan & T. Co. 154 U. S. 362, 409, 38 L. ed. 1014, 1027, 4 Inters. Com. Rep. 560, 11 Sup. Ct. Rep. 1047; Interstate Commerce Commission v. Union P. R. Co. 222 U. S. 541, 549, 56 L. ed. 308, 312, 32 Sup. Ct. Rep. 108; Hooker v. Interstate Commerce Commission, 188 Fed. 242; Railroad Comrs. v. Illinois C. R. Co. 20 Inters. Com. Rep. 186.

But the income-appropriation provisions do not purport to be, and are not, a regulation of rates.

Re Proposed Advances in Freight Rates, 1903, 9 Inters. Com. Rep. 382; Spokane v. Northern P. R. Co. 15 Inters. Com. Rep. 376; Kindel v. New York, N. H. & H. R. Co. 15 Inters. Com. Rep. 561; Re Advances in Rates, 1911, 20 Inters. Com. Rep. 243.

To construe the income-appropriation provisions as a regulation of rates would do violence to the whole theory upon which rate regulation rests.

Lake Shore & M. S. R. Co. v. Smith, 173 U. S. 684, 698, 43 L. ed. 858, 864, 19 Sup. Ct. Rep. 565; Munn v. Illinois, 94 U. S. 113, 125-130, 133, 24 L. ed. 77, 84-86, 87.

The income-appropriation provisions cannot be sustained as an exercise of the taxing power.

Northern P. R. Co. v. North Dakota, 236 U. S. 585, 595, 596, 59 L. ed. 735, 741, 742, L.R.A.1917F, 1148, P.U.R. | 1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1; Lake Shore & M. S. R. v. Smith, 173 U. S. 684, 43 L. ed. 858, 19 Sup. Ct. Rep. 565; Missouri P. R. Co. V. Nebraska, 217 U. S. 196, 54 L. ed. 727, 30 Sup. Ct. Rep. 461, 18 Ann. Cas. 989; Pennsylvania R. Co. v. Towers, 245 U. S. 6, 62 L. ed. 117, L.R.A.1918C, 475, 38 Sup. Ct. Rep. 2; Atlantic Coast Line Bailey v. Drexel Furniture Co. 259 U. R. Co. v. North Carolina Corp. Commis- S. 20, 66 L. ed. 818, 21 A.L.R. 1432, 42 sion, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Sup. Ct. Rep. 449; Hill v. Wallace, 259 Ct. Rep. 585, 11 Ann. Cas. 398; Norfolk U. S. 44, 66 L. ed. 822, 42 Sup. Ct. Rep. & W. R. Co. v. Conley, 236 Ú. S. 605, 453; M'Culloch v. Maryland, 4 Wheat. 59 L. ed. 745, P.U.R.1915C, 293, 35 Sup. 316, 423, 4 L. ed. 579, 605; Head Money Ct. Rep. 437; Southern P. Co. v. Inter- Cases (Edye v. Robertson), 112 U. S. state Commerce Commission, 219 U. S. 580, 595, 596, 28 L. ed. 798, 802, 803, 5 433, 55 L. ed. 283, 31 Sup. Ct. Rep. 288; Sup. Ct. Rep. 247; Noble State Bank v. Southern R. Co. v. St. Louis Hay & Haskell, 219 U. S. 104, 55 L. ed. 112, 32 Grain Co. 214 U. S. 297, 53 L. ed. 1004, L.R.A.(N.S.) 1062, 31 Sup. Ct. Rep. 186, 29 Sup. Ct. Rep. 678; Chicago, M. & St. Ann. Cas. 1912A, 487; Mountain Timber P. R. Co. v. Wisconsin, 238 U. S. 491, 59 Co. v. Washington, 243 U. S. 219, 245, L. ed. 1423, L.R.A.1916A, 1133, P.U.R. 61 L. ed. 685, 699, 37 Sup. Ct. Rep. 260, 1915D, 706, 35 Sup. Ct. Rep. 869; Inter- Ann. Cas. 1917D, 642, 13 N. C. C. A. 927; state Commerce Commission v. Stickney, Shallenberger v. First State Bank, 219 215 U. S. 98, 109, 54 L. ed. 112, 115, 30 U. S. 114, 55 L. ed. 117, 31 Sup. Ct. Rep. Sup. Ct. Rep. 66; Cotting v. Kansas City 189; Assaria State Bank v. Dolley, 219 Stock Yards Co. (Cotting v. Godard), U. S. 121, 55 L. ed. 123, 31 Sup. Ct. Rep. 183 U. S. 79, 46 L. ed. 92, 22 Sup. Ct. 189; Dayton-Goose Creek R. Co. v. Rep. 30; Parkersburg & O. River United States, 287 Fed. 728. Transp. Co. v. Parkersburg, 107 U. s.

68 L. ed.

Messrs. John G. Milburn and Forney

Johnston filed a brief for the National, certainment of their amount, may be Association of Owners of Railroad Se- determined by the legislature.

curities:

The commerce clause of the Constitution confers plenary power on Congress, subject only to the 5th Amendment, to regulate common carriers engaged in interstate commerce by any means having a fair relation to that end and deemed appropriate by Congress.

Wurts v. Hoagland, 114 U. S. 606, 29 L. ed. 229, 5 Sup. Ct. Rep. 1086; Fallbrook Irrig. Dist. v. Bradley, 164 U. S. 112, 41 L. ed. 369, 17 Sup. Ct. Rep. 56; Noble State Bank v. Haskell, 219 U. S. 104, 55 L. ed. 112, 32 L.R.A. (N.S.) 1062, 31 Sup. Ct. Rep. 186, Ann. Cas. 1912A, 487; Jackman v. Rosenbaum Co. 260 U. S. 22, 67 L. ed. 107, 43 Sup. Ct. Rep. 9; 10 R. C. L. pp. 15, 16; 25 R. C. L. pp. 139, 140; Bauman v. Ross, 167 U. S. 548, 42 L. ed. 270, 17 Sup. Ct. Rep. 966: Spencer v. Merchant, 125 U. S. 345, 31 L. ed. 763, 8 Sup. Ct. Rep. 921; French v. Barber Asphalt Paving Co. 181 U. S. 324, 45 L. ed. 879, 21 Sup. Ct. Rep. 625; St. Louis & K. C. Land Co. v. Kansas City, 241 U. S. 419, 60 L. ed. 1072, 36 Sup. Ct. Rep. 647; Mountain Timber Co. v. Washington, 243 U. S. 219, 243, 61 L. ed. 685, 698, 37 Sup. Ct. Rep. 260, Ann. The power to regulate, conferred by Cas. 1917D, 642, 13 N. C. C. A. 927. the commerce clause, means to foster, A carrier which has devoted its propprotect, conserve; and our Federal sys-erty to public use is entitled to demand tem attaches to every power the neces-no return in excess of a reasonable resary implication of duty where the pub-turn upon the fair value of its carrier lic welfare demands the exertion of the property. power.

Minnesota Rate Cases (Simpson v. Shepard), 230 U. S. 399, 411, 57 L. ed. 1541, 1546, 48 L.R.A. (N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18; Houston, E. & W. T. R. Co. v. United States, 234 U. S. 351, 58 L. ed. 1348, 34 Sup. Ct. Rep. 833; First Nat. Bank v. Fellows, 244 U. S. 416, 61 L. ed. 1233, L.R.A.1918C, 283, 37 Sup. Ct. Rep. 734, Ann. Cas. 1918D, 1169; M'Culloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204.

Second Employers' Liability Cases (Mondou v. New York, N. H. & H. R. Co.) 223 U. S. 1, 47, 56 L. ed. 327, 345, 38 L.R.A.(N.S.) 44, 32 Sup. Ct. Rep. 169, 1 N. C. C. A. 875; The Daniel Ball, 10 Wall. 557, 19 L. ed. 999; Mobile County v. Kimball, 102 U. S. 691, 26 L. ed. 238; Houston E. & W. T. R. Co. v. United States, 234 U. S. 351, 58 L. ed. 1348, 34 Sup. Ct. Rep. 833.

No carrier which engages in interstate commerce has a right superior to the commerce clause to force its competitors out of business by competition in rates, or, as the only alternative, to demand an excessive return upon the fair value of its property, it being clearly within the competency of Congress to avoid by appropriate regulation both alternatives stated.

Interstate Commerce Commission v.

Union P. R. Co. 222 U. S. 541, 56 L. ed. 308, 32 Sup. Ct. Rep. 108; Spokane Case, 15 Inters. Com. Rep. 376; Re Advance Rate Case, 20 Inters. Com. Rep. 273; Kindel Case, 14 Inters. Com. Rep. 555; Re Proposed Advances in Freight Rates, 1903, 9 Inters. Com. Rep. 382.

The recapture of gratuitous benefits conditionally conferred, under a statute providing for their recovery, does not constitute a taking of property; and the fact of benefits, though not the final as

Smyth v. Ames, 169 U. S. 466, 544, 42 L. ed. 819, 848, 18 Sup. Ct. Rep. 418; Covington & L. Turnp. Road Co. v. Sanford, 164 U. S. 578, 41 L. ed. 560, 17 Sup. Ct. Rep. 198; Willcox v. Consolidated Gas Co. 212 Ú. S. 19, 53 L. ed. 382, 48 L.R.A. (N.S.) 1134, 29 Sup. Ct. Rep. 192, 15 Ann. Cas. 1034; Minnesota Rate Cases (Simpson v. Shepard), 230 U. S. 454, 57 L. ed. 1563, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann Cas. 1916A, 18; North P. R. Co. v. North Dakota, 236 U. S. 585, 59 L. ed. 735, L.R.A.1917F, 1148, P.U.R.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1; Galveston Electric Co. v. Galveston, 258 U. S. 388, 66 L. ed. 678, 42 Sup. Ct. Rep. 351; Houston V. Southwestern Bell Teleph. Co. 259 U. S. 318, 66 L. ed. 961, 42 Sup. Ct. Rep. 486.

Messrs. Winslow S. Pierce, Lawrence Greer, and F. C. Nicodemus, Jr., also

filed a brief as amici curiæ.

Mr. Chief Justice Taft delivered the opinion of the court:

The main question in this case is whether the so-called "recapture" paragraphs of the Transportation Act of February 28, 1920 (chap. 91, § 422 [§ 15a] 11 5-17, 41 Stat. at L. 456, 489-491, Comp. Stat. § 8583a, Fed. Stat. Anno. Supp. 1920, p. 111) are constitutional. The Dayton-Goose Creek Railway

[476] By § 422 of the Transportation Act, there was added to the existing Interstate Commerce Act and its amendments, § 15a. The section, in its second

By

Company is a corporation of Texas, en- While the Dayton-Goose Creek Railgaged in intrastate, interstate, and for-way Company was the sole complainant eign commerce. Its volume of intrastate below and is the sole appellant here, traffic exceeds that of its interstate and nineteen other railway companies have, as foreign traffic. In response to orders of amici curiæ, upon leave granted, filed the Interstate Commerce Commission, the briefs in support of its appeal. Their carrier made returns for ten months of names appear in the margin.1 1920, and for the full year of 1921, reporting the value of its railroad property employed in commerce and its net revenue therefrom. It earned $21,666.24, more than 6 per cent on the value of its prop- paragraph, directs the Commission to eserty in the ten months of 1920, and $33,- tablish rates which will enable the car766.98 [475] excess in the twelve riers, as a whole or by rate groups or months of 1921. The Commission re- territories fixed by the Commission, to quested it to report what provision it receive a fair net operating return upon had made for setting up a fund to pre- the property they hold in the aggreserve one half of these excesses, and to gate for use in transportation. remit the other half to the Commission. 3 the Commission is to establish The carrier then filed the present bill, from time to time and make public, setting forth the constitutional invalidity the percentage of the value of the of the recapture provisions of the act, aggregate property it regards as a fair and the orders of the Commission based operating return, but for 1920 and 1921 thereon, averring that it had no adequate such a fair return is to be 5 per cent, remedy at law to save itself from the ir-with discretion in the Commission to add reparable wrong about to be done to it of 1 per cent as a fund for adding by enforcement of the provisions, and betterments on capital account. By ¶ 4, praying that the defendants, the United the Commission is to fix the aggregate States, the Interstate Commerce Commis- value of the property from time to time, sion, and the United States district at- using, in doing so, the results of its valutorney for the eastern district of Texas, ation of the railways, as provided in § be temporarily restrained from prosecut- 19a of the Interstate Commerce Act, so ing any civil or criminal suit to enforce | far as they are available, and all the elethe Commission's orders, and that the ments of value recognized by the law of court, on final hearing, make the injunc- the land for rate-making purposes, intion permanent. The Commission an- cluding, so far as the Commission may swered the bill. The United States and deem it proper, the investment account the district attorney moved to dismiss it of the railways. for want of equity jurisdiction, and for lack of equity. An application for an interlocutory injunction before a court of three judges under the Act of October 22, 1913, chap. 32, 38 Stat. at L. 208, 220, Comp. Stat. § 3279, 2 Fed. Stat. Anno. 2d ed. p. 169, was denied, and the court, proceeding to consider the equities, dismissed the bill.

The question of equity jurisdiction, raised below, has not been discussed here by counsel for the appellees, either upon their briefs or in oral argument. They do not rely on it, but seek without delay a decision on the merits.

Paragraph 5 declares that, because it is impossible to establish uniform rates upon competitive traffic which will adequately sustain all the carriers needed to do the business, without giving some of them a net income in excess of a fair return, any carrier receiving such excess shall hold it in the manner thereafter prescribed as trustee for the United States. Paragraph 6 distributes [477] the excess, one half to a reserve fund to be maintained by the carrier, and the other half to a general railroad revolving fund to be maintained by the Commission. Paragraph 7 specifies the only uses to 1Southern Pacific Company; Lehigh nois Railway Company; Kansas City Valley Railroad Company; Western Pacific Southern Railway Company; El Paso & Railroad Corporation; New York Central Southwestern Railroad Company; St. Louis Railroad Company; Union Pacific Railroad Southwestern Railway Company and WaCompany; Chesapeake & Ohio Railway bash Railway Company; and Pere MarCompany; Western Maryland Railway Company; Illinois Central Railroad Com-quette Railway Company; Assistant Genpany; Delaware, Lackawanna, & Western eral Counsel of the New York, Chicago, Railroad Company; Virginian Railway & St. Louis Railroad Company, and the Company; Duluth, Missabe, & Northern New Orleans, Texas, & Mexico Railway Railway Company; Chicago & Eastern Illi- Company.