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U.S. Supreme Court

Ann Arbor Railroad Co. v. United States, 281 U.S. 658 (1930)

Ann Arbor Railroad Co. v. United States

No. 7

Argued February 25, 1929

Reargued October 21, 22, 1929

Decided June 2, 1930

281 U.S. 658


1. The Joint Resolution of January 20, 1925, known as the Hoch-Smith Resolution, declares it to be the true policy in ratemaking that the conditions which at any given time prevail in the several industries should be considered, insofar as it is legally possible to do so; directs the Interstate Commerce Commission to proceed along stated lines for the purpose of securing prompt observance of existing laws requiring that all rates be just and reasonable and prohibiting all undue preferences and unjust discriminations, whether relating to shippers, commodities, classes of traffic, or localities; declares that, in the adjustment of rates, the factors to be considered shall include (a) the general and comparative levels in market value of the various classes and kinds of commodities as indicated over a reasonable period of years, (b) a natural

Page 281 U. S. 659

and proper development of the country as a whole, and (c) the maintenance of an adequate system of transportation, and directs that, in view of existing depression in agriculture, the Commission shall effect such "lawful changes" in the rate structure of the country as will promote free movement of agricultural products "at the lowest possible lawful rates compatible with the maintenance of adequate transportation service."


(1) That the Resolution introduced no new factor in the fixing and adjustment of rates, and requires no change in rates that are reasonable and lawful under §§ 1(5) and 3(1) of the Interstate Commerce Act. P. 281 U. S. 666.

(2) A construction of the Resolution by the Commission whereby it operates as a change "in the basic law," as placing agricultural products in a "most favored" class, and as justifying a reduction in the rates on deciduous fruits moving from California to eastern points, notwithstanding that the rates are otherwise lawful and reasonable and that most of the carriers affected "have not as yet made the fair return" for which § 15a of the Interstate Commerce Act makes provision as a means of securing the maintenance of an adequate transportation system, is therefore erroneous. P. 281 U. S. 667.

(3) The words "at the lowest possible lawful rates compatible with the maintenance of adequate transportation service" are more in the nature of a hopeful characterization of an object deemed desirable if, and insofar as, it may be attainable than of a rule intended to control ratemaking, and should not lightly be accepted as overturning positive and unambiguous provisions constituting part of a system of laws reflecting a settled legislative policy, such as the Interstate Commerce Act. P. 281 U. S. 668.

2. Where the words of a statute are susceptible of various meanings, that construction should be avoided which would bring into question the constitutionality of the statute. P. 281 U. S. 669.

Reversed. See also 30 F.2d 940.

Appeal from a decree of the district court of three judges under U.S.C. Title 28, § 47, dismissing the bill in a suit to set aside an order of the Interstate Commerce Commission condemning existing rates for the transportation of deciduous fruits from California to eastern destinations. See 129 I.C.C. 25; 132 id. 582.

Page 281 U. S. 662

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