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(250 U. S. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.)
57 L. ed. 1135, 1137, 33 Sup. Ct. Rep. 639; United States R. Administration v. Burch, 254 Fed. 140.
Regulation of telephone rates is an exercise of the police power of the state, consequently a police regulation, and therefore excepted by the proviso.
Home Teleph. Co. v. Carthage, Ann. Cas. 1912D, 308, note; Chesapeake & P. Teleph. Co. v. Manning, 186 U. S. 238, 46 L. ed. 1144, 22 Sup. Ct. Rep. 881; Cumberland Teleph. & Teleg. Co. v. Louisville, 187 Fed. 637; Hockett v. State, 105 Ind. 259, 55 Am. Rep. 201, 5 N. E. 178; Central U. Teleph. Co. v. Bradbury, 106 Ind. 1, 5 N. E. 721; Johnson v. State, 113 Ind. 143, 15 N. E. 215; Central U. Teleph. Co. v. State, 118 Ind. 194, 10 Am. St. Rep. 114, 19 N. E. 604; Pioneer Teleph. & Teleg. Co. v. Westenhaver, 29 Okla. 429, 38 L.R.A. (N.S.) 1209, 118 Pac. 354; State ex rel. Webster v. Superior Ct. 67 Wash. 37, L.R.A.1915C, 287, 120 Pac. 861, Ann. Cas. 1913D, 78; Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Nebraska Teleph. Co. v. State, 55 Neb. 627, 45 L.R.A. 113, 76 N. W. 171.
Wherever the broad rule of power to enact all necessary and proper legislation has been asserted, it has been coupled with the limitation that the means must be such as are not prohibited, but consist with the letter and spirit of the Constitution.
Legal Tender Cases, 12 Wall. 457, 539, 20 L. ed. 287, 308; Legal Tender Case, 110 U. S. 421, 441, 28 L. ed. 204, 212, 4 Sup. Ct. Rep. 122; M'Culloch v. Maryland, 4 Wheat. 421, 4 L. ed. 605; Logan v. United States, 144 U. S. 263, 36 L. ed. 429, 12 Sup. Ct. Rep. 617; Boske v. Comingore, 177 U. S. 459, 44 L. ed. 846, 20 Sup. Ct. Rep. 701; Flint v. Stone Tracy Co. 220 U. S. 107, 176, 55 L. ed. 389, 423, 31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312; Kansas v. Colorado, 206 U. S. 46, 88, 51 L. ed. 956, 970, 27 Sup. Ct. Rep. 655; United States v. Hoke, 187 Fed. 994; Stewart v. Kahn (Stewart v. Bloom) 11 Wall. 493, 20 L. ed. 176; United States v. Casey, 247 Fed. 362; Miller v. United States (Page v. United States) 11 Wall. 268, 20 L. ed. 135; Salamandra Ins. Co. v. New York L. Ins. & T. Co. 254 Fed. 852.
The taking of private property by civil agencies is not necessary to the waging of war successfully.
McCray v. United States, 195 U. S. 27, 61, 49 L. ed. 78, 97, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561.
If this act confers the rate-making power, it confers an arbitrary power. Chicago, M. & St. P. R. Co. v. Minnesota, 134 U. S. 418, 456, 33 L. ed. 970, 980, 3 Inters. Com. Rep. 209, 10 Sup. Ct. Rep. 462, 702; Re Gardner, 84 Kan. 264, 33 L.R.A. (N.S.) 956, 113 Pac. 1054.
The right, whose existence is or may be abridged by the Postmaster General, is a property right.
16 Cyc. 620, 625; Jones, Teleg. & Teleph. Cos. §§ 249, 258; Munn v. Illinois, 94 U. S. 113, 133, 24 L. ed. 77, 86; Allnutt v. Inglis, 12 East, 527, 104 Eng. Reprint, 206, 11 Revised Rep. 482; Smyth v. Ames, 169 U. S. 466, 547, 42 L. ed. 819, 849, 18 Sup. Ct. Rep. 418; Covington v. L. Turnp. Road Co. v. Sandford, 164 U. S. 578, 596, 597, 41 L. ed. 560, 566, 567, 17 Sup. Ct. Rep. 198.
If to uphold the constitutionality of the resolution requires a construction that the government remains under the continuing duty to render the public adequate service at reasonable rates, then Congress has not the power, under the Constitution, to fix intrastate rates, and therefore could not and did not delegate that power either to the President or to the Postmaster General.
Black, Const. Law, § 154; Civil Rights Cases, 109 U. S. 3, 27 L. ed. 835, 3 Sup. Ct. Rep. 18; Western U. Teleg. Co. v. Pendleton, 122 U. S. 347, 359, 30 L. ed. 1187, 1189, 1 Inters. Com. Rep. 306, 7 Sup. Ct. Rep. 1126; New York v. Miln, 11 Pet. 102, 9 L. ed. 648; Keller v. United States, 213 U. S. 138, 144, 145, 53 L. ed. 737-739, 29 Sup. Ct. Rep. 470, 16 Ann. Cas. 1066; Re Pacific R. Commission, 32 Fed. 241; Cook v. Marshall County, 196 U. S. 261, 49 L. ed. 471, 25 Sup. Ct. Rep. 233; Plumley v. Massachusetts, 155 U. S. 461, 39 L. ed. 223, 5 Inters. Com. Rep. 590, 15 Sup. Ct. Rep. 154; House v. Mayes, 219 Ū. S. 270, 55 L. ed. 213, 31 Sup. Ct. Rep. 234; Covington & C. Bridge Co. v. Kentucky, 154 U. S. 204, 209, 210, 38 L. ed. 962, 965, 966, 4 Inters. Com. Rep. 649, 14 Sup. Ct. Rep. 1087; Kidd v. Pearson, 128 U. S. 1, 32 L. ed. 346, 2 Inters. Com. Rep. 232, 9 Sup. Ct. Rep. 6; Hammer v. Dagenhart, 247 U. S. 251, 274, 62 L. ed. 1101, 1106, 3 A.L.R. 649, 38 Sup. Ct. Rep. 529, Ann. Cas. 1918E, 724.
Especially is the police power preserved as to regulation of intrastate rates.
Chicago, B. & Q. R. Co. v. Illinois,
200 U. S. 561, 592, 50 L. ed. 596, 609, 26 Sup. Ct. Rep. 341, 4 Ann. Cas. 1175; Lake Shore & M. S. R. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465; Arkansas Rate Cases, 187 Fed. 290.
Regulation of rates by the individual states does not in truth or in fact hinder or retard the discharge of the stated Federal purpose.
Cumberland Teleph. & Teleg. Co. v. Memphis, 183 Fed. 875; Wainwright v. Pennsylvania R. Co. 253 Fed. 459.
Congress could not delegate to the President power to decide between three separate capacities in which he might deal with the telephone and telegraph.
Cincinnati, W. & Z. R. Co. v. Clinton County, 1 Ohio St. 88; Re Oliver, 17 Wis. 685; Marshall Field & Co. v. Clark, 143 U. S. 649, 36 L. ed. 294, 12 Sup. Ct. Rep. 495; Minneapolis, St. P. & S. Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 17 L.R.A. (N.S.) 821, 116 N. W. 905; State ex rel. Buell v. Frear, 146 Wis. 291, 34 L.R.A. (N.S.) 480, 131 N. W. 832; State ex rel. Young v. Duval County, Fla. 79 So. 692; State ex rel. Montgomery v. Rogers, 71 Ohio St. 203, 73 N. E. 461; Sabre v. Rutland R. Co. 86 Vt. 347, 85 Atl. 693, Ann. Cas. 1915C, 1269; State ex rel. Rusk v. Budge, 14 N. D. 532, 105 N. W. 724; State ex rel. Miller v. Taylor, 27 N. D. 77, 145 N. W. 425.
The power to fix rates could not be declared.
Minneapolis, St. P. & S. Ste. M. R. Co. v. Railroad Commission, 136 Wis. 164, 17 L.R.A. (N.S.) 821, 116 N. W. 905; State v. Parker, 26 Vt. 357.
Even if the joint resolution be construed as conferring upon the President the power to fix rates, the President has no power to redelegate the discretion confided in him.
Lord v. Oconto, 47 Wis. 386, 2 N. W. 785; Smith v. Black, 115 U. S. 308, 319, 29 L. ed. 398, 402, 6 Sup. Ct. Rep. 50; Muir v. Louisville & N. R. Co. 247 Fed. 894; Rhodes v. Tatum, Tex. Civ. App. 206 S. W. 114; 29 Cyc. 1433; Clark v. Washington, 12 Wheat. 40, 6 L. ed. 544; Kinney v. Howard, 133 Iowa, 94, 110 N. W. 282; Mechem, Pub. Off. § 567; Jacksonville v. Ledwith, 26 Fla. 163, 9 L.R.A. 69, 23 Am. St. Rep. 558, 7 So. 885; Arnold v. Pawtucket, 21 R. I. 15, 41 Atl. 576; Mechem, Agency, § 313; McQuillin, Mun. Corp. § 382; Boston Beer Co. v. Massachusetts, 97 U. S. 25, 24 L. ed. 989; State
ex rel. Mehrbass v. Harper, 162 Wis. 589, 156 N. W. 941; Kohl v. Beach, 107 Wis. 415, 50 L.R.A. 600, 81 Am. St. Rep. 849, 83 N. W. 657; Hitchcock v. Galveston, 96 U. S. 341, 348, 24 L. ed. 659, 661; Thompson v. Schermerhorn, 6 N. Y. 92, 55 Am. Dec. 385; Birdsall v. Clark, 73 N. Y. 73, 29 Am. Rep. 105; Runkle v. United States, 122 U. S. 543, 557, 30 L. ed. 1167, 1171, 7 Sup. Ct. Rep. 1141.
The language of the presidential proclamation confers all the discretion vested in him.
People v. C. Klinck Packing Co. 214 N. Y. 138, 108 N. E. 278, Ann. Cas. 1916D, 1051; Muir v. Louisville & N. R. Co. 247 Fed. 894.
Clauses giving the Postmaster General power are evidently a material inducement to valid parts of the proclamation, and therefore the whole proclamation is void.
Little Chute v. Van Camp, 136 Wis. 526, 128 Am. St. Rep. 1100, 117 N. W. 1012; 36 Cyc. 976, 977; State ex rel. Walsh v. Dousman, 28 Wis. 541; Warren v. Charlestown, 2 Gray, 84; Poindexter v. Greenhow, 114 U. S. 270, 304, 29 L. ed. 185, 197, 5 Sup. Ct. Rep. 903, 962; Sheldon v. Hoyne, 261 III. 222, 103 N. E. 1021.
Messrs. William I. Schaffer, Attor ney General of Pennsylvania, and Bernard J. Meyers, also as amici curiæ:
The Postmaster General has been substituted for the operating heads of the several companies, and is operating the properties in the place and stead of their former corporate officers, and is subject to the same provisions of law except in so far as the Wire Control Act provides otherwise and sets up substitute regulations and procedure.
Muir v. Louisville & N. R. Co. 247 Fed. 888.
To construe the resolution as vesting arbitrary authority in the President to change rates of telephone companies is to hold that Congress repealed pro tanto the provisions of the Interstate Commerce Act. Nothing is better settled in the law, however, than that implied repeals are not favored; and this means that it is the duty of courts to so construe the acts, if possible, that both shall be operative.
1 Lewis's Sutherland, Stat. Constr. 2d ed. p. 465; Union P. R. Co. v. Peniston, 18 Wall. 5, 21 L. ed. 787.
Congress has no power to regulate
(250 U. 8. 163, 63 L. ed. 910, P.U.R.1919D, 717, 59 Sup. Ot. Rep. 507.)
rates for telephone communication or traffic between points within the state of Pennsylvania.
Federalist No. 45; 8 Cyc. 771, 773, 774; United States v. Cruikshank, 92 U. S. 542, 23 L. ed. 588.
There is no regulatory power over intrastate telephone and telegraph rates, and the Postmaster General cannot do that which Congress itself says shall not be done.
Missouri P. R. Co. v. Larabee Flour Mills Co. 211 U. S. 612, 621, 52 L. ed. 352, 360, 29 Sup. Ct. Rep. 214; 1 Roberts, Federal Liabilities of Carriers, pp. 68-71.
The attempt to regulate rates cannot be sustained as a revenue measure.
United States ex rel. Michels v. James, 13 Blatchf. 207, Fed. Cas. No. 15,464; Hubbard v. Lowe, 226 Fed. 135.
The Postmaster General has no power to regulate and fix rates of telegraph and telephone companies under the war powers of the President conferred by the Constitution.
Ex parte Milligan, 4 Wall. 2, 18 L. ed. 281; Edmonson v. Union Bank, 33 Ga. 91; Horn v. Lockhart, 17 Wall. 570, 21 L. ed. 657; Raymond v. Thomas, 91 U. S. 712, 716, 23 L. ed. 434, 435; Mitchell v. Harmony, 13 How. 115, 14 L. ed. 75; Griffin v. Wilcox, 21 Ind. 382; Eifort v. Bevins, 1 Bush. 460; Hammer v. Dagenhart, 247 U. S. 251, 62 L. ed. 1101, 3 A.L.R. 649, 38 Sup. Ct. Rep. 529, Ann. Cas. 1918E, 724.
Federal power to regulate rates or to prescribe rates, whatever its limits may be, is a legislative power exclusively.
Knoxville v. Knoxville Water Co. 212 U. S. 1, 10, 53 L. ed. 371, 378, 29 Sup. Ct. Rep. 148.
Messrs. H. H. Smith, David H. Crowley, and Clarence D. Wilcox, also as amici curiæ:
The regulation of rates of railroads and public carriers is but the logical result of the application of the principle that the state through its police power could regulate public callings.
regulation of rates in the various employments dates back to medieval times. Beale & W. Railroad Rate Regulation, chap. 1.
Nor is it proper to argue that rate regulations are not police regulations because the police power cannot be bartered away, and the power to regulate rates is bartered away, therefore it is not a part of the police power.
New Orleans Gaslight Co. v. Louis
iana Light & H. P. & Mfg. Co. 115 U. S. 650, 668, 29 L. ed. 516, 523, 6 Sup. Ct. Rep. 252.
Messrs. H. Findlay French and Ogle Marbury, also as amici curiæ:
Unless Congress, by the use of the words "police regulations," clearly and unequivocally confined this exemption to penal regulations, it must have meant to exempt the general police power over rates which is inherently possessed by each state through the nature of its sovereignty, for the government has no authority over intrastate rates.
Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77.
The police regulations of the several states are nothing more or less than the police power of the several states translated into terms of action.
Reagan v. Mercantile Trust Co. 154 U. S. 413, 417, 38 L. ed. 1028, 1030, 4 Inters. Com. Rep. 575, 14 Sup. Ct. Rep. 1060; Re 1060; Re Suspension of Increased Charges for Telephone Service (N. J.) P.U.R.1919B, 587.
If doubt exists, decision should favor state control.
Reid v. Colorado, 187 U. S. 137, 148, 47 L. ed. 108, 114, 23 Sup. Ct. Rep. 92, 12 Am. Crim. Rep. 506.
Mr. Albert C. Ritchie, Attorney General of Maryland, also as amicus curiæ:
The President, the Postmaster General, and the telephone companies have not the authority to increase intrastate rates without the submission of the proposed new rates to the various bodies required by the police regulations of the several states to approve the same.
Chicago & N. W. R. Co. v. Fuller, 17 Wall. 560, 21 L. ed. 710; Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Reagan v. Mercantile Trust Co. 154 U. S. 413, 38 L. ed. 1028, 4 Inters. Com. Rep. 560, 14 Sup. Ct. Rep. 1060; Chicago, B. & Q. R. Co. v. Illinois, 200 U. S. 561, 50 L. ed. 596, 26 Sup. Ct. Rep. 341, 4 Ann. Cas. 1175; United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. Rep. 240.
Mr. Chief Justice White delivered the opinion of the court:
Involving, as this case does, the existence of state power to regulate, without the consent of the United States, telephone rates for business done wholly within the state, over lines taken over into the possession
of the United States, and which, by the exercise of its governmental authority, it operates and controls, it does not in principle differ from the North Dakota Case, just announced [250 U. S. 135, 63 L. ed. 897, P.U.R. 1919D, 705, 39 Sup. Ct. Rep. 502], where it was decided that, under like conditions, the state had no such power as to railroad rates. We consider this case, as far as may be necessary, by a separate opinion, however, because the authority under which the control was exerted is distinct, and because of the assumption in argument that this distinction begets a difference in the principles applicable.
In January, 1919, the state of South Dakota, on the relation of its attorney general and Railroad Commissioners, sued the Dakota Central and other telephone companies doing business within the state to enjoin them from putting in effect a schedule of rates as to local business which it was alleged had been prepared by the Postmaster General, and which it was averred the telephone companies were about to apply and enforce. It was charged that such rates were higher than those fixed by state authority, and that the proposed action of the companies would be violative of state law, since the companies were under the duty to disregard the action of the Postmaster General and apply only the lawful state rates. The duty of the relators, as state officers, to prevent such wrong, was alleged, a duty in which, it was further asserted, the state had a pecuniary interest springing from the expenditure which it was obliged to make for telephone services.
The companies answered, disclaiming all interest in the controversy on the ground that, by contract, a copy of which with one of the defendant companies was annexed, their telephone lines and everything appurtenant thereto had passed into the possession and control of the United States, and were being operated by it as a governmental agency. The answer also
alleged that any connection of the companies through their officials or employees with the business was solely because of employment by the United States. The purpose to enforce the rates fixed by the Postmaster General was admitted, and it was averred that the suit was one over which the court had no jurisdiction because it was against the United States.
The case was heard on the bill, answer, exhibits, and an admission by all the parties that the contract annexed to the answer was accurate, and that a similar one had been made with all the other defendants.
Assuming that Congress had power to take over the telephone lines; that it had conferred that power upon the President; that the power had by the President been called into play conformably to the authority granted; and that the telephone lines were under the complete control of the United States,-the court yet held that the state had the power to fix the local rates. In reaching this conclusion the court, assuming argumentatively that the right which the United States possessed gave at least the implied authority to fix all rates, nevertheless held that such power did not embrace intrastate rates because they had been carved out of the grant of power by Congress in conferring authority on the President. It was therefore decided that the President, the Postmaster General, and those operating the telephone service under his authority, were mere wrongdoers in giving effect to the rates fixed by the Postmaster General, and in refusing to enforce the conflicting intrastate rates made lawful by state law. The proceedings to prevent this wrong, it was held, did not constitute a suit against the United States, and the injunction prayed was granted.
The defendants in error do not confine their contention to the question of statutory construction below decided. On the contrary, they press questions of power which the
(250 U. S. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.)
court below assumed and did not pass upon, and insist upon a construction of the statute contrary to that which the court below took for granted as a prelude to the question of construction upon which it based its conclusion.
We must dispose of the issues thus insisted upon before testing the soundness of the interpretation of the statute upon which the court below acted, and for the purpose of considering them, as well as the question of construction which the court below expressly decided, we state the case.
On the 16th of July, 1918, Congress adopted a joint resolution (40 Stat. at L. 904, chap. 154, Comp. Stat. 1918, § 3115 x, Appx.), providing:
"That the President during the continuance of the present war is authorized and empowered, whenever he shall deem it necessary for the national security or defense, to supervise or to take possession and assume control of any telegraph, telephone, marine cable, or radio system or systems, or any part thereof, and to operate the same in such manner as may be needful or desirable for the duration of the war, which supervision, possession, control, or operation shall not extend beyond the date of the proclamation by the President of the exchange of ratifications of the treaty of peace: Provided, That just compensation shall be made for such supervision, possession, control, or operation, to be determined by the President;
Provided further, That nothing in this act shall be construed to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems."
Six days thereafter, on the 22d of July, the President exerted the power thus given. Its exercise was
manifested by a proclamation which, after reciting the resolution of Congress, declared:
"It is deemed necessary for the national security and defense to supervise and take possession and assume control of all telegraph and telephone systems and to operate the same in such manner as may be needful or desirable;
"Now, therefore, I, Woodrow Wilson, President of the United States, under and by virtue of the powers vested in me by the foregoing resolution, and by virtue of all other powers thereto me enabling, do hereby take possession and assume control and supervision of each and every telegraph and telephone system, and every part thereof, within the jurisdiction of the United States, including all equipment thereof and appurtenances thereto whatsoever and all materials and supplies.
"It is hereby directed that the supervision, possession, control, and operation of such telegraph and telephone systems hereby by me undertaken shall be exercised by and through the the Postmaster General.
The proclamation gave to the Postmaster General plenary power to exert his authority to the extent he might deem desirable through the existing owners, managers, directors, or officers of the telegraph or telephone lines, and it was provided that their services might continue as permitted by general or special orders of the Postmaster General. It was declared that "from and after 12 o'clock midnight on the 31st day of July, 1918, all telegraph and telephone systems included in this order and proclamation shall conclusively be deemed within the possession and control and under the supervision of said Postmaster General without further act or notice."
Under this authority the Postmaster General assumed possession and control of the telephone lines and operated the same. On the 31st day of October, 1918, the President,