Houston, East & West Texas Railway v. United States (The Shreveport Case)

Brief Fact Summary.

The Houston, East&West Texas Railway Company, the Houston & Shreveport Railroad Company, and the Texas&Pacific Railway Company brought suits in the Commerce Court to set aside an order of the Interstate Commerce Commission on the ground that it exceeded the Commission’s authority.

Synopsis of Rule of Law.

Congress has the power to regulate commerce among the several States and interstate trade is not left to be destroyed or impeded by the rivalries of local governments.

Facts.

The carriers made rates out of Dallas and other Texas points into eastern Texas which were much lower than those which extended into Texas from Shreveport. The difference in rates was substantial and injuriously affected the commerce of Shreveport. To correct this discrimination against Shreveport, the Interstate Commerce Commission directed the carriers to refrain from charging higher rates for the transportation of any commodity from Shreveport to Dallas and Houston respectively than were charged for the carriage of such commodity from Dallas and Houston toward Shreveport for equal distances. The appellants complained that the Commission was without authority to compel their reduction to equalize them with the lower intrastate rates.

Issue.

Do carriers must comply with the requirement of the Interstate Commerce Commission that directs the carriers to refrain from charging higher rates for the transportation of any commodity?

Held.

Yes, the Commission did not attempt or intend to require the carriers to reduce their interstate rates out of Shreveport below what was found to be a reasonable charge for that service. Because interstate rates conformed to what was found to be reasonable by the Commission, the carriers are entitled to maintain them and are free to comply with the order by so adjusting the other rates. However, the carriers must follow the requirements of the Commission.

Discussion.

The fact that carriers are instruments of intrastate commerce, as well as of interstate commerce, does not derogate from the complete authority of Congress over the States or preclude the federal power from being exerted to prevent the intrastate operations of such carriers from being made a means of injury to that which has been belonged to the federal care. Wherever the interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other as in this case, it is Congress, not the State, that is entitled to prescribe the final and dominant rule. Otherwise, Congress would be denied the exercise of its constitutional authority and the State, and not the Nation, would be supreme within this country. Congress may prevent the common instrumentalities of interstate and intrastate commercial intercourse – in this case, carriers – from being used in their intrastate operations to the injury of interstate commerce.