James Clark McReynolds

“ Theretofore power in respect of past divisions existed only when rates had been determined and prescribed after full hearing-that is, where the Commission had passed upon the reasonableness of the rate and required observance. Obviously a carrier may have assented to a through rate only because of the divisions accorded to it; to permit the Commission to change this arrangement as to past transactions would be exceedingly harsh, if not wholly unreasonable. Ordinarily, divisions of a particular rate are not of public interest, if the rate itself is reasonable. ”

“ The Commission's first report-April 4, 1922-declared the Brimstone Company a common carrier subject to the interstate commerce act entitled to participate in joint rates, or have its charges absorbed under appropriate tariff provisions, and further:
'The divisions to the Brimstone should produce no more than an amount sufficient to cover the cost of its service and a fair return upon the property held for and used in the service of transportation. ”

“ This construction will insure compliance with the purpose of Congress by requiring the Commission, upon full hearing, to pass upon the particular rate before divisions for the past can be directed. Mere permission to increase or diminish all rates according to the general needs of carriers throughout the country is not enough. ”

“ And it accordingly authorized general increases as specified 'in the rates, fares, and charges of railroads within the continental United States.' It did not approve or require the adoption or maintenance of any particular rate. ”

“ Prior to 1920 appellant and connecting carriers established through rates and divisions by agreements. These were modified as permitted or suggested in Ex parte 74 (1920) 58 Interst. Com. R. 220, and Matter of Reduced Rates (1922) 68 Interst. Com. R. 676.
In Ex parte 74, the Commission considered applications under section 15a, [2] Transportation Act 1920 (49 USCA § 15a; Comp. St. § 8583a) , for authority generally to increase rates so that carriers as a whole might earn a fair return. ”

“ Eastern group, 40 per cent.; Southern group, 25 per cent.; Western group, 35 per cent.; Mountain-Pacific group, 25 per cent. * * *
'After carefully considering the situation we find that with the exceptions hereinafter noted general percentage increases made to fit the needs of the groups of lines serving each of the four groups must be considered for present purposes the most practicable. ”