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Home > Journals > Michigan Law Review > MLR > Volume 29 > Issue 4 (1931)

 

Abstract

California growers have for several years complained that railroad freight rates to eastern points on decidious fruits were unreasonably high, contributing to their suffering from the agricultural depression. In 1925, the Interstate Commerce Commission found these rates not reasonable nor unduly prejudicial, 100 I. C. C. 79. That year, Congress passed the Hoch-Smith Resolution, c. 120, 43 Stat. 801, 49 U. S. C. A. 55. This provided for investigation of rate structures by the Interstate Commerce Commission, and stated that in rate-making due regard should be paid to conditions in the various industries, the market-value levels of commodities, the natural and proper development of the country as a whole, and the maintenance of an adequate transportation system. It also provided that, "In view of the existing depression in agriculture, the commission is hereby directed to effect * * * such lawful changes in the rate structure * * * as will promote the freedom of movement * * * of the products of agriculture * * * at the lowest possible lawful rates compatible with the maintenance of adequate transportation service." In 1927, the growers again sought relief; and this time lower rates were set, Calif. Growers v. Southern Pacific, et al., 129 I. C. C. 25, 132 I. C. C. 582. Here there was conflicting evidence as to whether or not the new rates would compel carriage of these commodities without compensation; but that was not clearly shown. A bill by the carriers to set aside this rate order was dismissed by the federal district court in California, relying chiefly upon this Resolution, 30 F.(2d) 940. On appeal, held that the Hoch-Smith Resolution did not empower the Commission to compel carriage of commodities at rates not yielding compensation, even though from its business as a whole, the carrier might be earning a fair return. Ann Arbor R. R. et al. v. United States, 281 U. S. 658, 50 Sup, Ct. 444. (Adv. Op. 632).

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