that the duties of the rail carriers imposed therein are applicable to passenger traffic as well as freight traffic.

This Commission was established by the Congress to administer the Interstate Commerce Act, together with supplementary acts and related sections of various other acts. The national transportation policy enunciated by the Congress in 1940 required, in part, that "all of the provisions of this Act shall be administered and enforced * * *.” (Emphasis added.)

Section 1(3)(a) of the act, defines various terms used in the act as intended by the Congress. Among these definitions is the meaning of the term "transportation," which we find used in the first requirement set forth in section 1(4):

Section 1(3) (a) (in part)

The term "transportation" as used in this part shall include locomotives, cars, and other vehicles, vessels, and all instrumentalities and facilities, of shipment or carriage, irrespective of ownership or of any contract, express or implied, for the use thereof, and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and hauling of property transported (Emphasis added.)

In Ft. Worth & D.C. Ry. Co. v. Strickland, reported in 203 S. W. 410, the Court of Civil Appeals of Texas, held, in part:

Congress has defined "transportation" to include all cars, instrumentalities, and facilities of shipment, or carriage, etc. . . . Congress evidentally recognized that the duty to the public included a variety of services that, according to the theory of the common law, were separable from the servies of carriers as carriers, so that by the act of Congress the entire body of the services to be performed falls under the general head of transportation, among which is furnishing cars. So it is made the duty of the carrier to furnish suitable' cars as part of the transportation.

and again:

Railroads are quasi public corporations, and acquire thereby an exclusive privilege to carry on their business over their highways. These powers are granted with the express view of their rendering to the public adequate service.

Over the past 48 years, this Commission has held that a reduction or partial discontinuance of rail service does not constitute abandonment within the meaning of the act, and that the Commission is without jurisdiction to consider the matter. Palmer v. Massachusetts, 308 U.S. 79, has been cited as authority for this view. In the Palmer case the Supreme Court stated, in part:

The dependence of local communities on local railroad services has for decades placed control over this curtailment within the regulatory authorities of the States. Even when the Transportation Act of 1920 gave the Interstate Commerce Commission power to permit abandonment of local lines when the overriding interests of interstate commerce required it, Colorado v. United States, 271 U.S. 153, this was not deemed to confer upon the Commission jurisidction over curtailments of service and partial discontinuances.

The old principle that the state had the right to regulate the railroads because of "the dependence of local communities on local railroad services," had its beginning to a considerable degree in the celebrated long-and-short haul controversy before the turn of the century. At that time many railroads had a virtual monopoly on service through the countryside and could charge any rate they choose. At the large terminus areas, where competition was encountered with other railroads, the rates were lowered. Thus, in many instances a short haul rate between small communities or from a rural community to a terminal area, were much higher than the rate between two terminal areas over a much longer route. Many states enacted laws and assumed jurisdic

tion to correct this inequity even when the traffic was moving in interstate commerce.

The language used by Mr. Justice Frankfurter, who wrote the opinion of the Court in the Palmer case, makes it abundantly clear that the Court at that time (1939) was principally concerned with an instance which was, in its opinion, "one of the recurring phases of our federalism and involves striking a balance between national and state authority in one of the most sensitive areas of government." In that case the State of Massachusetts was resisting what it considered an incursion of its rights by Federal authority.

In the instant proceeding, three decades after the Palmer opinion, we find the exact opposite situation. Five sovereign states have petitioned the intervention of this Federal agency in a situation where it is alleged that the respondent has deliberately downgraded its passenger service in total disregard of the needs of the people and in defiance of an order of a state regulatory body. The court's position in the Palmer case is analogous to its position in Smith v. Townsend, 148 U.S. 490, 494, where it said: "It is well settled that where the language of a statute is in any manner ambiguous, or the meaning doubtful, resort may be had to the surrounding circumstances, the history of the times, and the defect or mischief which the statute was intended to remedy."

The Interstate Commerce Act, like the Constitution of the United States, is a vibrant organ which must readily respond to the stimulus of current need.

Admittedly part I of the Act addresses itself principally, though not entirely, to "do's" and "dont's" affecting property. This is readily understood when we recognize that in years past, when the act was written and amended, passengers were wooed and sought after, with great effort being made to improve many passenger trains to the point of luxuriousness. In this connection the following brief extract from the inaugural brochure of the new Sunset Limited service published by the S. P. in August 1950, is interesting:

3

The history of the first "Sunset Limited" was preceded, of course, by the building of the original Sunset Route between San Francisco, Calif., and New Orleans, La., which was opened to through traffic on February 5, 1883. (Four years prior to the establishment of the I.C.C.)

This original Sunset Route was started out of San Francisco in late 1869 down the San Joaquin Valley, reaching Los Angeles, then a sleepy little city of nearly 10,000 persons, in 1876. During the following years, construction was completed across Southern California into Southern Arizona, New Mexico and finally into Texas to connect with rails coming west from New Orleans. Thus Southern Pacific's Sunset Route became, in 1883, a new avenue of travel and commerce across the continent.

It was over this route that the "Sunset Limited", heralded as the first solid vestibule train to operate from the Pacific Coast, made its initial journey from San Francisco on the morning of November 1, 1894.

The "Palatial" four-car train with its tiny locomotive and diminutive wooden cars made the first trip from New Orleans twenty-five days later. It reached El Paso in 35 hours and 50 minutes. At the completion of its return to San Francisco, 75 hours away from New Orleans, a full day's running time had been cut between the two terminals and jubilant passengers told Southern Pacific officials that the railroad not only had placed in service one of the finest trains in the country, but had pioneered a new era in rail transportation.

These passengers of 55 years ago were talking about the Sunset Limited's "Composite Car" with its large parlor and wicker chairs, separate smoking room, and a buffet for light lunches. About the "Ladies Compartment Car" with its Appendix RMJ-3, to exhibit 141.

parlor and library, seven nicely furnished sleeping rooms and the maid in attendance. And of the "Dining Car" which was very grand with wicker chairs and potted plants. Of course, in the very early days the passenger equipment was quite primitive by today's standards, but they were a wonderful improvement over the stage coach, which they supplanted.

A study of the practices of the railroad industry from the Civil War to World War II, indicates relatively few allegations of malfeasance or nonfeasance directed at passenger operations. The practices of preference and prejudice, and unjust and unreasonable acts were connected with the receiving, handling, transporting, storing, and delivery of property. It was to these latter inequities that the Congress directed its attention and with which this Commission was most concerned.

In response to this situation through routes and joint rates were established, equitable divisions were required, and unjust and unreasonable freight classifications were prohibited. Section 15(5) of the Act concerned itself with the furnishing of suitable facilities for the handling of livestock, and the Federal 28-hour law was enacted in 1921 to assure that dumb animals would not be made to suffer because of thirst, hunger or exhaustion. Humans were certainly not excluded from such humanitarian considerations out of callousness or indifference, but rather because the human creature was being treated with deference and accorded every consideration. There was no present need to set forth with specificity the duties of the rail carriers as contained in section 1(4) with regard to passenger service. Today, we are confronted with an entirely different situation. While we still have laws to protect the treatment of dumb animals, the human beings riding the involved passenger trains are provided marginal eating and no sleeping facilities on a 2,033 mile run which takes 45 hours and 15 minutes to complete, if the train is on schedule. The respondent contends that the commission has no authority to protect the welfare of these passengers unless and until the carrier itself creates such jurisdiction by filing under section 13a(1) of the act.

The examiner cannot accept such contentions. Under consideration is the service of passenger trains operating over 2,000 miles in each direction between New Orleans, La., and Los Angeles, Calif. This line of railroad operates in or through 5 states. It is evident from the record that the interest of the state regulatory agencies varies from casual to intense. The various requirements that might well emanate from the several state regulatory agencies affecting these trains engaged in interstate commerce could be chaotic to both the public and the carrier.

In the Colorado case (supra), the Supreme Court said in part:

This railroad, like most others, was chartered to engage in both intrastate and interstate commerce. The same instrumentality serves both. The two services are inextricably intertwined. The extent and manner in which one is performed, necessarily affects the performance of the other. Efficient performance of either is dependent upon the efficient performance of the transportation system as a whole. Congress did not, in the respect here under consideration (abandonment of a narrow gauge branch line located wholly in one State), assume exclusive regulation of the common instrumentality as it did in respect to safety coupling devices. * * * Congress has power to assume not only some control, but paramount control, insofar as interstate commerce is involved. (Emphasis added.)

At this point it might be well to define "commerce". In McCall v. California, 136 U.S. 104, the Supreme Court stated:

In County of Mobile v. Kimball, 102 U.S. 691, 702, this court defined interstate commerce in the following language: "Commerce with foreign countries and among the States, strictly considered, consists in intercourse and traffic, including in these terms navigation and the transportation and transit of persons and property as well as the purchase, sale, and exchange of commodities."

Pomeroy in his work on "Constitutional law," Section 378, referring to the signification of the word "commerce" says: "It includes the fact of intercourse and traffic. The fact of intercourse and traffic, again, embraces all the means, instruments, and places by and in which intercourse and traffic are carried on, and, further still, comprehends the act of carrying them on at those places and by and with these means. The subject matter of intercourse or traffic may be either things, goods, chattels, merchandise or persons. All these may, therefore, be regulated." (Emphasis added.)

When we apply this definition of "commerce" to the intent of Congress as enunciated in the national transportation policy "all to the end of developing, coordinating, and preserving a national transportation system * * * adequate to meet the needs of the commerce of the United States *** " (emphasis added), we must conclude that it embraces all the means and instruments by and in which traffic is carried on, and that all these may, therefore, be regulated.

The examiner is firmly convinced that the Commission should take an up-to-date and realistic approach to the very serious matter of adequacies of passenger-car and passenger-train service. As far back as 17 years ago in Barton v. Baltimore & O.R. Co., 280 I.C.C. 9, Commissioner Knudson observed:

In view of the important changed conditions in recent years respecting passenger traffic, I am of the opinion that we should reexamine in an appropriate proceeding the question of our jurisdiction to require safe and reasonably adequate service in those instances where passenger fares have been or are sought to be substantially increased.

Although it is difficult to understand why the Commissioner restricted the assumption of jurisdiction to increased fares, it is important to note that the Commissioner in 1950 was of the opinion that the Commission should reexamine the question of jurisdiction "in view of the important changed condition in recent years respecting passenger traffic."

Again, in All Commodities, New England to Chicago and St. Louis, 315 I.C.C. 419, 433, Commissioner Webb in his dissenting opinion stated, in part:

A good argument can always be made for the proposition that the settled policies of the Interstate Commerce Commission, whether the result of action or inertia, should be altered only by the Congress. The better view, in my opinion, is that the Congress, in delegating authority couched in such broad terms as "just and reasonable" intended the Commission to adjust its regulation in the light of changes in the industry and, whenever deemed necessary, to scuttle outmoded theories and practices without regard to their antiquity.

In annulling and setting aside the Commission's order in that proceeding, and thereby sustaining Commissioner Webb's dissenting expression, the Federal District Court, (221 F. Supp. 370), said:

It would appear that the Commission here invokes section 1(6) as a means of preserving a basis for the "value of service" concept in ratemaking referred to above, in a desire to hold to a part which has already slipped away beyond our reach.

In its reply to the petition of the state regulatory agencies, the respondent cites Wisconsin R.R. Comm'n v. Chicago, & N. W. Ry., 87 I.C.C. 195 (1924) in which the Commission concluded:

It is scarcely debatable that the broad provision of the Constitution with respect to commerce among the States rests in the Congress the power to regulate the operation of passenger trains, but as an instrumentality of that body we may exercise jurisdiction only within the limits of the power delegated to us. In the absence of specific language only the most unmistakable evidence of an intention to confer upon us power to act under given circumstances would warrant the assumption of such power through our own construction of the act. We accordingly find that jurisdiction to regulate the operation of passenger trains under the circumstances here presented has not been rested in us. The complaints will be dismissed.

This position taken a half century ago only serves to dramatize the need, under present conditions, for the Commission to carry out its duties and responsibilities in a purposeful and responsive manner. In N.Y., N.H. & Hartford R.R. Co., Et Al., (supra), the Court said: Nor will it do to say that if the past decisions of the Commission are to be changed, the job should be left to Congress. This is an erroneous view.

In Smith v. Interstate Com. Comm., 245 U.S. 33, 45, the Court said: The outlook of the Commission and its powers must be greater than the interest of the railroads or of that which may affect those interests. It must be as comprehensive as the interests of the whole country. If the problems which are presented to it therefore are complex and difficult, the means of solving them are as great and adequate as can be provided. Interstate Commerce Commission v. Chicago, R.I. & Pac. Ry., 218 U.S. 88, 103. And they must necessarily be expressed in generalities. A precise specification of powers might work a limitation and all not enumerated be asserted to be withheld. (Emphasis added.)

The examiner concludes that this Commission does have jurisdiction under section 12(1) of the act to institute this investigation proceeding; that it does have authority to exercise jurisdiction and control over passenger-car and passenger-train service operated in interstate commerce, and that this authority is found in section 1(4) of the act; and that the present general sub-standard condition of the railroad passenger service in the United States requires the exercise of such jurisdiction on its own motion or upon proper complaint by State regulatory bodies or the general public. Motions made by the the Southern Pacific Company at the oral hearing, and renewed on brief, to dismiss the proceeding for lack of jurisdiction is denied.

CONTENTION OF STATE REGULATORY COMMISSIONS

The petitioning States argue that in spite of other forms of transportation available, there is still a useful and necessary place for passenger trains and that the carrier has an obligation to provide good passenger service.

They assert that the S. P. has, over a period of years, consistently downgraded, discouraged the use of, and eroded the quality of its passenger rail service. It is further stated that is appeared that this downgrading of service was part of a systematic plan by the carrier to create intolerable service conditions, thereby discouraging passenger traffic. The resulting revenue loss would support its applications for discontinuances of certain trains.

The petitioners argue that even though the S. P. denies an intention to withdraw completely from the service but would continue to run trains that the public shows it needs and wants, its real reason for its policy on passenger service is that it believes such service is not as profitable as its freight business.