This case comes here for the second time. It presents the question of the validity under the Fourteenth Amendment of rates prescribed by the Illinois Commerce Commission for telephone service in the city of Chicago. The commission's order, made on August 16, 1923, to be effective October 1, 1923, reduced rates applicable to a large part of the intrastate service of the appellee, Illinois Bell Telephone Company. In this suit, brought by that company in September, 1923, an interlocutory injunction was granted upon the condition that, if the injunction were dissolved, the company should refund the amounts charged in excess of the challenged rates. We affirmed that order. Smith v. Illinois Bell Tel. Co., 269 U.S. 531, 46 S.Ct. 22, 70 L.Ed. 397. The final hearing was not had until April, 1929, a delay found to be attributable to the city of Chicago. On that hearing, the District Court, composed of three judges, entered a final decree making the injunction permanent. 38 F.(2d) 77. We reversed that decree and remanded the case for further proceedings. Smith v. Illinois Bell Telephone Company, 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255. Further evidence was then taken, and the District Court made new findings and entered a final decree which permanently restrained the enforcement of the commission's order and released the company from obligation to refund the moneys which had been collected pending the suit. Illinois Bell Tel. Co. v. Gilbert, 3 F.Supp. 595. The state authorities and the city bring this direct appeal. Jud. Code § 266 (28 USCA § 380). The company brings a cross-appeal to review the findings below, insisting that its property has been undervalued and that substantial amounts of its operating expenses have been disallowed.
No. 440. The Appeal of the State Officers and the City of Chicago.-On the former appeal, it appeared that no distinction had been made by the commission or by the District Court between the intrastate and the interstate property and business of the company. We found that separation was essential to the appropriate recognition of the competent governmental authority in each field of regulation. Accordingly, we directed that, as to the value of the property employed in the intrastate business in Chicago and as to the amounts of revenue and expenses incident to that business, separately considered, there should be specific findings. And as a rate order which is confiscatory when made may cease to be confiscatory, and one which is valid when made may become confiscatory at a later period, we held that there should be appropriate findings for each of the years since the date of the commission's order. Smith v. Illinois Bell Tel. Co., 282 U.S. 149, 162, 51 S.Ct. 65, 75 L.Ed. 255. On the further hearing, that difficult task was so well performed that no question is now raised as to the allocation of property to the intrastate and interstate services, respectively, in the Chicago area, the allocation being made on the basis of use. Nor is there dispute with respect to the separation of expenses. Appellants object to the separation of revenues, insisting that certain revenues were improperly assigned to the interstate, instead of the intrastate, business.