Robert H. Jackson

“ The basic railroad facilities of the United States were constructed under state authorization and restrictions by corporations whose powers and limitations were prescribed by state legislatures, or resulted from limitations on the states themselves. Construction in reference primarily to local or regional transportation needs created duplicating and competing facilities in some areas and provided inadequate ones in others. ”

“ It apparently leaves it open to the state courts, or to the parties by negotiation, to add to the surviving carrier's capital obligations which the Commission has found to be just and reasonable, others founded only in state law and as to which it has made no such findings. We conclude that neither position is wholly consistent with the federal statutory plan for authorization and approval of mergers.
It is not for us to adjudicate the existence or the measure of any rights that Michigan law may confer upon dissenting stockholders. ”

“ The new act seeks affirmatively to build up a system of railways prepared to handle promptly all the interstate traffic of the country. It aims to give the owners of the railways an opportunity to earn enough to maintain their properties and equipment in such a state of efficiency that they can carry well this burden. ”

“ Assuming such to be their rights under the law of the State, we must decide whether approval of a railroad merger under the Transportation Act of 1940 [5] is conditioned upon observance of such state law rights or can be made by the Commission contingently subject to them. ”

“ Public regulation is not obliged and we cannot lightly assume it is intended to restore values, even if promised by charter terms, if they have already been lost through the operation of economic forces. ”

“ Federal law requires that merger terms be just and reasonable to all groups of stockholders, in contemplation of the continued use of their capital in the public calling to which it has been dedicated. Congress has made no provision by which minority stockholders, dissatisfied with a proposed railroad merger, may block it or compel retirement of their capital, as statutes often permit to be done in the case of private corporationsw here the public interest is not much concerned with its effect on the enterprise. ”

“ A court of three judges, convened as required by law, [3] sustained the Commission, 72 F.Supp. 560. Appellants bring to us [4] the question whether the Commission, in view of its authority over mergers, which is declared to be exclusive and plenary, could decline to determine just what the dissenting stockholders'l egal rights were under the Michigan law and the Pere Marquette charter, and to recognize them in full by the terms of the merger. ”

“ If they met that test, Congress provided that mergers could be consummated notwithstanding any restraint or prohibition by state authority. [11]
By 1940 it had become apparent that the ambitious nation-wide plan of consolidation was not bearing fruit. Various studies and investigations [12] led to the conclusion that it was a case where the best was an enemy of the good and waiting for the perfect official plan was defeating or postponing less ambitious but more attainable voluntary improvements. ”