234 U. S. Argument for Interstate Commerce Commission.

southward over the barren Keys at a cost of $175,000 per mile, and which does not pay operating expenses, for the purpose of securing business from the Panama Canal, not yet opened, or for some other purpose, though confessedly not for the use of those shippers. Covington Turnpike Co. v. Sandford, 164 U. S. 578, 596; Int. Com. Comm. v. Un. Pac. R. R. Co., 222 U. S. 541, 549.

On the subject of confiscation the absence of the Atlantic Coast Line and the Seaboard Air Line companies from the case is again significant. As to them the rates have been published without protest and maintained as just and reasonable rates for similar transportation services. The railroads of those companies were built upon lands open to development where traffic may be secured. If the appellant erred in its judgment in building a railroad at such enormous cost over the barren Keys, into the Atlantic Ocean, the growers of the State of Florida who ship in the opposite direction should not be called upon to pay the bill

Mr. Charles W. Needham for the Interstate Commerce Commission:

The order does not violate the provisions of the Constitution of the United States guaranteeing due process of law and requiring that just compensation be paid for property taken for public use.

Confiscation cannot be predicated on a reduction of total revenue of the carrier caused by an order of the Commission reducing a single rate or rates upon a particular traffic.

The Commission, in the proceeding in which the order was entered, conformed to statutory authority.

In support of their contentions, see Florida Shippers' Protective Assn. v. Atl. Coast Line R. R. Co., 14 I. C. C. 476; S. C., 17 I. C. C. 552; Den v. Hoboken Land Co., 18 How. 272; Twining v. New Jersey, 211 U. S. 78; Reeves

Argument for Railroad Commissioners of Florida. 234 U.S.

v. Ainsworth, 219 U. S. 296; United States v. Grimaud, 220 U. S. 506; Blinn v. Nelson, 222 U. S. 1; United States v. B. & O. S. W. R. R., 222 U. S. 8; Standard Oil Co. v. Missouri, 224 U. S. 270; Jordan v. Massachusetts, 225 U. S. 167; Procter & Gamble v. United States, 225 U. S. 282, 297; Int. Com. Comm. v. U. P. R. R. Co., 222 U. S. 541, 547; Int. Com. Comm. v. Ill. Cent. R. R., 215 U. S. 452; Arkansas Rate Case, 187 Fed. Rep. 290; Reagan v. Farmers' L. & T. Co., 154 U. S. 362, 397; Smyth v. Ames, 169 U. S. 466, 541, 544, 547; St. L. & San F. Ry. v. Gill, 156 U. S. 649, 657, 665; Minneapolis &c. Ry. v. Minnesota, 186 U. S. 257, 266, 268; Covington Turnpike Co. v. Sandford, 164 U. S. 578, 594; Tex. & Pac. Ry. Co. v. Abilene Cotton Co., 204 U. S. 426, 444; Southern Ry. Co. v. St. Louis Hay Co., 214 U. S. 297, 301; Int. Com. Comm. v. Burnham, 218 U. S. 88, 111; Atl. Coast Line v. Nor. Car. Corp. Comm., 206 U. S. 1, 24, 25; Int. Com. Comm. v. Chi., R. I. & P. Ry., 218 U. S. 88, 102; Int. Com. Comm. v. Chi., B. & Q. R. R., 218 U. S. 113; Ill. Cent. R. R. Co. v. Int. Com. Comm., 206 U. S. 441; Cincinnati &c. Ry. v. Int. Com. Comm., 206 U. S. 142, 154; Int. Com. Comm. v. Un. Pac. Ry. Co., 222 U. S. 415, 446.

Mr. Frederick M. Hudson for the Railroad Commissioners of Florida:

This case is not controlled by Smyth v. Ames. It is not a case in which the value of the property is the proper basis of calculation as a test of reasonableness. Petitioner's theory of the case is therefore wholly erroneous.

The cost of the service rendered would have been a sounder basis of calculation in this case, and petitioner has not met that requirement.

Petitioner might have used the average freight receipts as a test, but has not met that requirement.

Even if this case were controlled by Smyth v. Ames, the petitioner is not within the terms of that rule because

there is no separation or apportionment of interstate and intrastate business.

Even if this case were controlled by Smyth v. Ames the petitioner is not within the terms of that rule because its theory of the case assumes that the carrier is entitled to a profit on its investment regardless of qualifying circumstances.

Mr. A. A. Boggs filed a brief for the Florida Fruit and Vegetable Shippers' Protective Association and the East Coast Fruit and Vegetable Growers' Association, intervening appellees.

MR. CHIEF JUSTICE WHITE delivered the opinion of the court.

The order of the Interstate Commerce Commission concerning which the appellant, hereafter called the East Coast Line, complained before the court below and which that court refused to enjoin was made on a second supplemental petition presented in controversies which had been long pending and twice before decided, such controversies involving many railroads and being concerned with the rates as to pineapples, citrus fruits and vegetables from places of production in Florida to exterior points of distribution or consumption. While the report here under consideration made on the second supplemental petition deals with only a few of the railroads concerned in the previous inquiries and with only a part of the controversies involved in the previous cases, yet the reports in the previous cases and the reasons stated by the Commission for its action in those cases are so connected with its action complained of in this case that it is impossible to understand this controversy without recurring to and stating the previous reports of the Commission in the controversies to which we have referred.

Opinion of the Court.

234 U. S.

We observe before coming to make that statement that none of the testimony taken before the Commission in the cases prior to this one is in the record, it having been stipulated that the facts stated by the Commission in its reports in such previous cases should be taken as the facts of such controversies. For the purpose of the statement which we shall make the record therefore consists of the reports in such previous cases, of the report in this case and the testimony taken in this case before the Commission and in the court below. The future application of the facts which we shall state will be facilitated by giving a description of the East Coast Line as stated in the several reports of the Commission to which we shall immediately

recur.

The East Coast Line is wholly within the State of Florida, the main line extending from Jacksonville south along the Atlantic coast to Miami, a distance of 366 miles, then to Homestead, 28 miles south, and thence across the Florida Keys to Key West. At the time of the final hearing before the Commission on March 2, 1911, the road was not fully constructed and was only completed and being operated to Knight's Key, about 83 miles below Homestead. The total mileage of the road was about 583 miles, including 477 miles of main line from Jacksonville to Knight's Key and about 106 miles of branch line above Miami. The cost of the construction from Homestead on was enormous, amounting to nearly $175,000 per mile, and the total cost of the extension from Homestead to Knight's Key, 83 miles, nearly equalled the entire cost of the balance of the road, 500 miles. On July 3, 1907, a petition was filed by the Florida Fruit & Vegetable Shippers' Protective Association against the Atlantic Coast Line, the Seaboard Air Line and Southern Railway Companies and the East Coast Line complaining of and asking a reduction in interstate rates on pineapples, citrus fruits and vegetables. The East Coast Line was the only one

of the defendant railroads whose traffic was confined to the producing regions in Florida because while the other lines also undoubtedly penetrated to the area of production, their lines were not confined to Florida but were trunk lines carrying not only the product committed to them by producers in Florida, but also the products committed by producers to roads like the East Coast Line which did not extend beyond Florida and had therefore to be transshipped if destined to points beyond the State by other roads. In coming to make its report in the case thus referred to, the Commission thus stated the general situation of the railroad traffic of all the roads in Florida concerning the subjects under discussion (No. 1168, 14 I. C. C. 483):

"The shape and location of the state of Florida is such that these railroads which handle this traffic from the point of production up to the base point necessarily do but a limited business. They extend south considerable distances through a sparsely settled country which neither originates nor consumes a considerable amount of traffic. Some of them reach the seacoast, but none of them connect or can connect with railroads leading beyond, and the amount of through business handled is extremely light. Their traffic is confined almost entirely to bringing out the products which originate upon their lines, and carrying in the supplies which are consumed in the territory served by them. Fruits and vegetables, lumber, naval stores, and in some cases cotton and phosphate rock are the principal commodities carried, and of these, fruits and vegetables produce the most revenue."

In the report by which the Commission disposed of this controversy (No. 1168, 14 I. C. C. 476) it divided the rates to be considered into two classes: (a) gathering charges from production points in Florida to base points of which Jacksonville was the only one on the East Coast Line, and (b) rates from base points to points of final