This is a suit brought in the District Court for the Western District of Missouri by appellants, carriers in southwestern territory, against the United States, to annul and set aside an order of the Interstate Commerce Commission prescribing divisions of joint rates applicable to certain freight traffic between points in that territory and points in western trunk line territory or via western lines to and from points in eastern territory. The Commission and certain western trunk line carriers intervened. The case was tried before a court of three judges. Title 28 U. s. Code, § 47, 28 USCA § 47. It sustained the order and dismissed the petition. 36 F.(2d) 789. The southwestern lines appealed. Title 28, U.S.C.ode, § 345(4), 28 USCA § 345(4). The court stayed the enforcement of the prescribed divisions until determination here. The United States and Interstate Commerce Commission appealed from that order.
The Commission's order complained of was made in proceedings, instituted October 8, 1923, by the Commission on its own motion. Its report defines western trunk line territory to include Iowa, Minnesota, Wisconsin, the Upper Peninsula of Michigan, Illinois, North Dakota, South Dakota, and that part of Missouri on and north of the main line of the Missouri Pacific between Kansas City and St. Louis; it defines the southwestern territory to include Texas, Arkansas, Oklahoma, that part of Louisiana west of the Mississippi river, and so much of Missouri as is south of the above-mentioned line of the Missouri Pacific.
Twelve western trunk lines and thirty-two southwestern lines were parties to this investigation. The former, carriers in that territory having little or no mileage in the southwest, demanded increases, and were by the Commission called complainants; the latter, carriers in the southwest having little or no mileage in the other territory, merely sought to retain the existing divisions, and were called defendants. The Santa Fe and Rock Island, named as defendants, have important lines in both territories. The former regarded itself as a southwestern carrier; the latter remained neutral. The investigation was as to the reasonableness of divisions of joint rates on freight traffic between points on lines of respondents in southwestern territory and points on lines of respondents in western trunk line territory moving through Kansas City or St. Louis in Missouri, East St. Louis, Cairo, Gale, or Thebes in Illinois, and of divisions of the joint rates accruing to respondents on traffic moving through such gateways between such points in southwestern territory and points in eastern territory that lie east of the Illinois-Indiana state line.
The Commission made a report (148 I. C. C. 457) in which, among other things it found (page 477):
Existing divisions were established for the most part about 35 years ago, and conform to no logical or consistent basis. They are considerably more favorable to the western trunk lines in case of oil and lumber than in case of other traffic. Transportation conditions have changed materially since most of the divisions were established, and the changes have benefited the southwestern lines more than they have those in the other group. And the trend is distinctively in favor of the former. In respect of density of traffic, transportation conditions are more favorable in western trunk line territory, but conditions vary in different parts of that territory, and are considerably more favorable in Illinois than in the other states included in that region, and are progressively less favorable from east to west. The difference in transportation conditions is reflected in the level of rates in the two territories. It is not possible from the record to determine just what the average difference is, but it appears to be greater than the difference in average transportation conditions. This is particularly true of the class rates, which are constructed upon somewhat different theories in the two territories and are in process of revision in the western trunk line territory. The cost of operation per ton mile, including all expenses, charges, and a fair return on investment probably does not average as much as 20 per cent. higher in the southwestern territory than in the other group. On the whole, the financial condition of the western trunk lines is not as good as that of the southwestern lines.