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as interstate carriers from Shreveport, Louisiana, to various points in Texas, and unjustly discriminated in favor of traffic within the State of Texas and against similar traffic between Louisiana and Texas. The basis of the complaint was that the carriers made rates out of Dallas and other Texas points into eastern Texas which were much lower than those which they fixed from Shreveport into Texas. The situation may be thus specifically described: Shreveport, Louisiana, is about 40 miles from the Texas State line, and 231 miles from Houston, Texas, on the line of the Houston, etc., Railway Company: it is 189 miles from Dallas, Texas, on the line of the Texas & Pacific Railway. Shreveport competes with both cities for the trade of the intervening territory. The rates on these lines from Dallas and Houston, respectively, eastward to intermediate points in Texas were much less, according to distance, than from Shreveport westward to the same points. It was undisputed that the difference was substantial, and injuriously affected the commerce of Shreveport. It appeared, for example, that a rate of 60 cents carried first-class traffic a distance of 160 miles to the eastward from Dallas, while the same rate would carry the same class of traffic only 55 miles westward from Shreveport into Texas.

The Interstate Commerce Commission directed the carriers to desist from charging higher rates for the transportation of any commodity from Shreveport to Dallas and Houston, respectively, and intermediate points, than were contemporaneously charged from Dallas and Houston toward Shreveport for equal distances.

The carriers petitioned the Commerce Court for a reversal of the order made by the Interstate Commerce Commission, contending that Congress (through the Commission) had no power to control the intrastate charges of an interstate carrier even to the extent necessary to prevent injurious discrimination against interstate traffic. The Commerce Court affirmed the order of the Interstate Commerce Commission.

An appeal was then taken to the Supreme Court of the United States.

MR. JUSTICE Hughes delivered the opinion of the Court:

We find no reason to doubt that Congress is entitled to keep the highways of interstate communication open to interstate traffic upon fair and equal terms. That an unjust discrimination in the rates of a common carrier, by which one person or locality is unduly favored as against another under substantially similar conditions of traffic, constitutes an evil, is undeniable; and where this evil consists in the action of an interstate carrier in unreasonably discriminating against interstate traffic over its line, the authority of Congress to prevent it is equally clear. It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with interstate rates. The use of the instrument of interstate commerce in a discriminatory manner so as to inflict injury upon that commerce, or some part thereof, furnishes abundant ground for Federal intervention. Nor can the attempted exercise of State authority alter the matter, where Congress has acted, for a State may not authorize the carrier to do that which Congress is entitled to forbid and has forbidden.

It is to be noted—as the government has well said in its argument in support of the Commission's orderthat the power to deal with the relations between the two kinds of rates, as a relation, lies exclusively with Congress. It is manifest that the State cannot fix the relation of the carrier's interstate and intrastate charges without directly interfering with the former, unless it simply follows the standard set by Federal authority. This question was presented with respect to the long and short haul provision of the Kentucky Constitution, adopted in 1891, which the court had before it in Louisville & N. R. Co. v. Eubank, 184 U. S. 27. The State court had construed this provision as embracing a long haul, from a place outside to one within the State, and a shorter haul on the same line and in the same direction between points within the State. This court held that, so construed, the provision was invalid as being 2 regulation of interstate commerce because "it linked the interstate rate to the rate for the shorter haul, and thus the interstate charge was directly controlled by the State law." (See 230 U. S. pp. 428, 429.) It is for Congress to supply the needed correction where the relation between intrastate and interstate rates presents the evil to be corrected, and this it may do completely, by reason of its control over the interstate carrier in all matters having such a close and substantial relation to interstate commerce that it is necessary or appropriate to exercise the control for the effective government of that commerce.

It is also clear that, in removing the injurious discriminations against interstate traffic arising from the relation of intrastate to interstate rates, Congress is not bound to reduce the latter below what it may deem to be a proper standard, fair to the carrier and to the public. Otherwise, it could prevent the injury to interstate commerce only by the sacrifice of its judgment as to interstate rates. Congress is entitled to maintain its own standard as to these rates, and to forbid any discriminatory action by interstate carriers which will obstruct the freedom of movement of interstate traffic over their lines in accordance with the terms it establishes.

Having this power, Congress could provide for its execution through the aid of a subordinate body; and we conclude that the order of the Commission now in question cannot be held invalid upon the ground that it exceeded the authority which Congress could lawfully confer.

The Decree of the Commerce Court is affirmed.

Section 3.




8 WALLACE, 603. 1869.

In this case a certain Mrs. Hepburn made a promissory note, dated June 20, 1860, by which she promised to pay to one Henry Griswold on February 20, 1862, the sum of $11,250. There was at the time the note was made, and at the time it fell due no lawful money of the United States but gold and silver coin. The note was not paid at maturity. On February 25, 1862, in a crisis of the nation, Congress authorized the issue of $150,000,000 of its own notes and enacted in regards to them "Such notes * * * shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports, etc." These notes were issued on the credit of the United States alone. In March, 1864, suit was brought upon the note. Mrs. Hepburn tendered the United States notes issued under the act in satisfaction and payment of Griswold's claim. The tender was refused, and the money paid into court. On appeal from the State courts, the cause was brought into the United States Supreme Court.

CHIEF JUSTICE CHASE delivered the opinion of the court:

Applying the rule just stated (i. e., that statutes shall be construed so as not to be unjust and inequitable, if another sense, consonant with those principles can be given to them), there appears to be strong reason for construing the word "debts” as having reference only to debts contracted subsequent to the enactment of the law. For no one will question that the United States notes, which the act makes a legal tender in payment, are essentially unlike in nature, and being irredeemable in coin, are necessarily unlike in value, to the lawful money intended by parties to contracts for the payment of money made before its passage. * * * Contracts for the payment of money, made before the act of 1862, had reference to coined money, and could not be discharged, unless by consent, otherwise than by tender of the sum due in coin. Every such contract, therefore, was in legal import, a contract for the payment of coin. (The court discusses the question whether Congress has power to make notes issued under its authority a legal tender in payment of debts, which, when contracted, were payable in gold and silver coin, and concludes the opinion as follows:) * * * We are obliged to conclude that an act making mere promises to pay dollars a legal tender in payment of debts previously contracted, is not a means appropriate, plainly adapted, really calculated to carry into effect any express power vested in Congress; that such an act is inconsistent with the spirit of the Constitution; and that it is prohibited by the Constitution. We are obliged, therefore, to hold that the defendant (Griswold) was not bound to receive from the plaintiff the currency tendered to him in payment of the note, made before the passage of the act of February 25, 1862.



12 Wallace, 79 U. S., 457. 1871.

In the case of Knox v. Lee, a suit was brought in the Circuit Court of the United States for the Western District of Texas by Lee to recover the value of certain sheep, which Knox had purchased at a confiscation sale held under the authority of the socalled Confederate States. Upon the trial of the case the judge charged the jury as follows: "It appears from the evidence that these sheep were confiscated as the property of an alien enemy, and sold under the authority of the so-called Confedate Government, March 7, 1863, and the defendant Knox, in connection with others, perhaps, became the purchaser thereof. I have to say to the jury that such sale conferred no title whatsoever upon the purchaser or upon any one knowing that title was derived from this source.” The plaintiff Lee during the trial, offered to prove the difference in value between specie (gold and silver) and United States currency generally known as greenbacks, for the purpose of showing that gold and silver had a greater value than greenbacks, and for the purpose of allowing the jury to estimate the difference between the two. The defendant Knox objected to this testimony on the ground that United States currency was made legal tender by law, and there was no difference in value between the two in law. The court sustained the objection and excluded all such evidence, saying to the jury:

“In assessing damages, the jury will recollect that whatever amount they may give by their verdict can be discharged by the payment of such amount in legal tender notes of the United States." Judgment having been given for the plaintiff, the defendant Knox sued out this writ of error to the Supreme Court.

The case of Parker v. Davis arose in the Supreme Judicial Court' of Massachusetts, upon a bill in equity filed by Davis to compel Parker to perform a contract to convey a lot of woodland upon the payment of a given sum of money. This contract was dated and the suit brought upon it prior to the passage of the Act of Congress of February 25, 1862, which provided for a paper currency. The Supreme Court of Massachusetts decreed that Parker should

execute to Davis a deed of the land in question, upon Davis' paying into court the consideration money mentioned in the contract. In pursuance of that decree, Davis paid the said sum into court in legal tender or treasury notes of the United States. The defendant refused to execute the deed, claiming that the money should be paid to the court in coin. The court then ordered that the plaintiff Davis should pay the specified amount in treasury notes of the United States. From this order the defendant Parker sued out a writ of error to the United States Supreme Court.

The Supreme Court on April 10, 1871, ordered that the two cases, together with others pending upon the same question, be heard upon the following propositions:

1. Is the Act of Congress, known as the Legal Tender Act, constitutional as to contracts made before its passage.

2. Is it valid, as applicable to transactions since its passage, MR. JUSTICE STRONG delivered the opinion of the court:

The controlling questions in these cases are the following: Ate the Acts of Congress, known as the legal tender acts, constitutional when applied to contracts made before their passage? And, secondly, are they valid as applicable to debts contracted since their enactment? These questions have been elaborately argued, and they have received from the court that consideration which their great importance demands. It would be difficult to overestimate the consequences which must follow our decision. They will effect the entire business of the country, and take hold of the possible continued existence of the government. If it be held by this court that Congress has no constitutional power, under any circumstances, or in any emergency, to make treasury notes a legal tender for the payment of all debts (a power confessedly possessed by every independent sovereignty other than the United States) the government is without those means of self-preservation which, all must admit, may, in certain contingencies, become indispensable, even if they were not when the Acts of Congress now called in question were enacted. It is also clear that if we hold the acts invalid as applicable to debts incurred, or transactions which have taken place since their enactment, our decision must cause, throughout the country, great business derangement, wide-spread distress and the rankest injustice. The debts which have been contracted since February 25, 1862, constitute, doubtless, by far the greatest portion of the existing indebtedness of the country. They have been contracted in view of the Acts of Congress declaring treasury notes a legal tender, and in reliance upon that declaration. Men have bought and sold, borrowed and lent and assumed every variety of obligations contemplating that payment might be made with such notes. Indeed legal tender treasury notes have become the universal measure of values. If now, by our decision it be established that these debts and obligations can be discharged only by gold coin; if, contrary to the expectation of all parties to these contracts, legal tender notes

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