Louis Brandeis

“ Instead of attempting to show by evidence, reasonably specific and direct, what the actual operating cost of this traffic was to the several carriers, the department created a composite figure representing the weighted average operating cost per 1,000 gross ton miles of all revenue freight carried on the four systems and made that figure a basis for estimating the operating cost of the log traffic in Washington. ”

“ The intrastate transportation of sawlogs in carload lots constitutes a large part of all of the intrastate freight traffic in Washington on each of the four transcontinental railroad systems by which much of that service is performed. [1] Prior to federal control the rates had, with few exceptions, been initiated from time to time by individual tariffs of the several carriers. In 1918 the Director General of Railroads made a horizontal increase of 25 per cent. In 1920, after the decision in Ex parte 74, Increased Rates, 1920, 58 I. C. C. 220, a further increase of 25 per cent. ”

“ The use of this factor in computing the operating costs of the log traffic vitiated the whole process of reasoning by which the department reached its conclusion.
The mere admission by an administrative tribunal of matter which under the rules of evidence applicable to judicial proceedings would be deemed incompetent (United States v. Abilene & Southern Ry. Co., 265 U.S. 274, 288, 44 S.C.t. 565, 68 L, Ed. 1016) , or mere error in reasoning upon evidence introduced, does not invalidate an order. ”