U. S. 544, but in each of them a statute had been passed subsequently to the contract involved and was held to impair it. In such a case this Court accepts the meaning put upon the impairing statute by the state court as authoritative, but it is the statute as enforced by the State through its courts which impairs the contract, not the judgment of the court.

There is another class of cases relied on to maintain this writ of error. They are those in which this Court has held that in determining whether a state law has impaired a contract, it must decide for itself whether there was a contract and whether the law as enforced by the state court impairs it. It often happens that a law of the State · constitutes part of the contract and, to make the constitutional inhibition effective, this Court must exercise an independent judgment in deciding as to the validity and construction of the law and the existence and terms of the contract. Jefferson Branch Bank v. Skelly, 1 Black, 436, 443; Bridge Proprietors v. Hoboken Co., 1 Wall. 116, 145; Wright v. Nagle, 101 U. S. 791, 793; and McGahey v. Virginia, 135 U. S. 662, 667.

Then there are cases like McCullough v. Virginia, 172 U. S. 102; Houston & Texas Central R. R. Co. v. Texas, 177 U. S. 66, 76, 77; Hubert v. New Orleans, 215 U. S. 170, 175; Carondelet Canal Co. v. Louisiana, 233 U. S. 362, 376, and Louisiana Ry. & Nav. Co. v. New Orleans, 235 U. S. 164, 171. In each of them the judgment of the State Supreme Court seemed from its opinion merely to be a reversal of a previous construction by it of a statute upon the faith of which the contract had been made. In fact, however, the judgment merely gave effect to an existing subsequent statute impairing the obligation of the contract which was thus a law passed in violation of Article I, '§ 10.

The difference between all these classes of cases and the present one wherein it is claimed that a state court judg

Opinion of the Court.

263 U.S.'

ment alone, and without any law, impairs the obligation of a contract, has, been carefully pointed out in Central. Land Co. v. Laidley, 159 U. S. 103, 111, 112, in Bacon v. Texas, 163 U. S. 207, 221, 223, and in Ross v. Oregon, 227 U. S. 150, 161. Certain unguarded language in Gelpcke v. Dubuque, 1 Wall. 175, 206; Butz v. Muscatine, 8 Wall. 575, 583, and in Douglass v. Pike County, 101 U. S. 677, 686-687, and in some other cases, has caused confusion, although those cases did not really involve the contract impairment clause of the Constitution.

We come then to the last point made on behalf of plaintiffs in error. It may be best stated in the words of their brief. After referring to Gelpcke v. Dubuque, supra, Douglass v. Pike County, supra, Anderson v. Santa Anna, supra, and German Savings Bank v. Franklin County, supra, counsel say:

"The court has held, however, under the codes prior to the amendment of February 17, 1922, that it had no appellate jurisdiction to review this character of question on writ of error to a state court. This, as we understand it, is the rule announced in the cases cited by defendant in error, such as: Central Land Co. v. Laidley, 159 U. S. 103, Bacon v. Texas, 163 U. S. 207, and Rooker v. Fidelity Trust Co., 261 U. S. 114.

Evidently the amendment of February 17, 1922, to section 237 of the Judicial Code, was for the express purpose of extending the appellate jurisdiction of this court to cover cases involving the impairment of contract obligations by change of judicial decision in the construction of applicable statutes. This is the plain language of the act."

The intention of Congress was not, we think, to add to the general appellate jurisdiction of this Court existing under prior legislation, but rather to permit a review on writ of error in a particular class of cases in which the defeated party claims that his federal constitutional rights

have been violated by the judgment of the state court itself, and further to permit the raising of the objection after the handing down of the opinion. This Court has always held it a prerequisite to the consideration here of a federal question in a case coming from a state court that the question should have been raised in that court before decision, or that it should have been actually entertained and considered upon petition to rehear. A mere denial of the petition by the state court without opinion, is not enough. Godchaux Co. v. Estopinal, 251 U. S. 179, 181; Bilby v. Stewart, 246 U. S. 255; Missouri Pacific Ry. Co. v. Taber, 244 U. S. 200; St. Louis & San Francisco R. R. Co. v. Shepherd, 240 U. S. 240, 241; Consolidated Turnpike Co. v. Norfolk, etc. Ry. Co., 228 U. S. 326, 334; Forbes v. State Council of Virginia, 216 U. S. 396, 399; McCorquodale v. Texas, 211 U. S. 432, 437; Mutual Life Ins. Co. v. McGrew, 188 U. S. 291, 308; Mallett v. North Carolina, 181 U. S. 589, 592; Pim v. St. Louis, 165 U. S. 273.

It was the purpose of the Act of 1922 to change the rule established by this formidable array of authorities as to the class of cases therein described. The question in such cases could not well be raised until the handing down of the opinion indicating that the objectionable judgment was to follow. This act was intended to secure to the defeated party the right to raise the question here if the state court denied the petition for rehearing without opinion.

We.can not assume that Congress attempted to give to this Court appellate jurisdiction beyond the judicial power accorded to the United States by the Constitution. The mere reversal by a state court of its previous decision, as in this case before us, whatever its effect upon contracts, does not, as we have seen, violate any clause of the Federal Constitution. Plaintiff's claim, therefore, does not raise a substantial federal question. This has been

decided in so many cases that it becomes our duty to dismiss the writ of error for want of jurisdiction.

Writ of Error Dismissed.

DAYTON-GOOSE CREEK RAILWAY COMPANY v. UNITED STATES, INTERSTATE COMMERCE COMMISSION, ET AL.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF TEXAS.

No. 330. Argued November 16, 19, 1923.-Decided January 7, 1924. 1. The power of Congress to regulate interstate commerce includes the power to foster, protect and control it, with proper regard for the welfare of those who are immediately concerned as well as of the public at large. P. 478.

2. Section 422 of the Transportation Act 1920, by the new section, 15a, added by it to the Interstate Commerce Act, directs the Interstate Commerce Commision: To establish rates which will enable the carriers, as a whole, or by rate groups or territories fixed by the Commission, to receive a fair net, operating return upon the property they hold in the aggregate for use in transportation (par. 2); to establish from time to time the percentage of the value of the aggregate property constituting a fair operating return, the act, however, fixing it for the years 1920 and 1921, at 51%, with discretion in the Commission to add one-half of 1%, as a fund for adding betterments on capital account, (par. 3); and to fix, from time to time, such aggregate property value. The said § 15a provides further: That, because it is impossible to establish uniform rates on competitive traffic, adequate to sustain all the carriers needed for the business, without giving some an income in excess of a fair return, any carrier receiving such excess shall hold it as trustee for the United States, (par. 5); that such exc ss shall be distributed, one-half to the carrier as a reserve fund, the other half to a general railroad revolving fund, to be maintained by the Commission, (par. 6); that the carrier may use such reserve to pay dividends, interest on securities, or rent for leased roads, to the extent that its net operating income for any year is less than 6%, (par. 7); and whenever such reserve equals 5% of the value of its property, and while it so continues, the carrier's one-half of excess

income may be used for any lawful purpose, (par. 8); that the general revolving fund shall be administered by the Commission in making loans to carriers to meet expenditures on capital account, to refund maturing securities originally issued on capital account, and for buying equipment and facilities and leasing or selling them to carriers, (pars. 10-17).

Held: (a) The provisions for "recapture" and use of excess income are essential to the plan of the act, which aims for an efficient national transportation system, and therein seeks to maintain uniform rates, for all shippers, as a means of distributing traffic and avoiding congestion on the stronger railroads, while keeping the net returns of the railroads, whether strong or weak, to the varying percentages that are fair for them, respectively. P. 479. (b) Rates which, as a body, enable all the railroads necessary to do the business of a rate section, to enjoy not more than a fair net operating income on the aggregate value of their properties therein economically and efficiently operated, are, in their general level, reasonable from the standpoint of the individual shipper in that section. P. 480.

(c) The statute leaves the reasonableness of each particular rate open to inquiry independently of the net return to the carrier from all. Pp. 480, 483.

(d) A railroad, however strong financially, economical in facilities, or favorably situated as to traffic, is not entitled as of constituțional right to more than a fair, net operating income upon the value of its properties devoted to transportation. P. 481.. (e) Decisions holding that the fact that the revenue of a carrier from both local and interstate commerce gave a fair profit was irrelevant to the question whether the intrastate rates were unreasonably high or low, do not make against the use of a fair return of operating profit, as a standard of reasonableness of rates, when the issue respects the general level of all the rates received by the carrier. P. 483.

(f) The net operating profit accruing to a carrier from its whole rate structure is relevant evidence in determining whether the sum of the rates is fair to the carrier; reduction of excessive profit, as provided by the act, is tantamount to reducing the rates proportionately before collection. P. 483.

(g) Under the statute, excess income is taken in trust, and the carrier never has such a title to it as to render its recapture by the Government a taking without due process, in violation of the Fifth Amendment. P. 484.