382

Opinion of the Court.

The proceedings before the Interstate Commerce Commission, the evidence presented there and its action were presented to the court. The cause was heard at a special session held by one judge of the Court of Appeals and two judges of the Supreme Court. A final decree dismissed the bill and the cause is here upon direct appeal. 38 Stat. 208, 220, U. S. C., Title 28, § 345.

Section 1, par. 3, Interstate Commerce Act, as amended by Transportation Act, 1920, provides that the term "railroad" as used in the Act, shall include all bridges, car floats, lighters, and ferries used by or operated in connection with any railroad. Paragraph 18 prohibits carriers from extending their lines, or constructing new ones, "unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation, or construction and operation, of such additional or extended line of railroad." Paragraph 19 prescribes the procedure in respect of applications for such certificates. Paragraph 20,-" from and after issuance of such certificate, and not before, the carrier by railroad may, without securing approval other than such certificate, comply with the terms and conditions contained in or attached to the issuance of such certificate and proceed with the construction, operation, or abandonment covered thereby. Any construction, operation or abandonment contrary to the provisions of this paragraph or of paragraph (18) or (19) of this section may be enjoined by any court of competent jurisdiction at the suit of the United States, the Commission, any commission or regulating body of the State or States affected, or any party in interest; and any carrier which, or any director, officer, receiver, operating trustee, lessee, agent, or person, acting for or employed by such carrier, who knowingly authorizes, consents to, or permits any violation of the provisions of this paragraph or of paragraph (18) of this

section, shall upon conviction thereof be punished by a fine of not more than $5,000 or by imprisonment for not more than three years, or both." Chap. 91, 41 Stat. 474, 477, 478; U. S. C. A., Title 49, § 1.

Sections, 18, 19, and 20 were added to the Act to Regulate Interstate Commerce by the Transportation Act, 1920. They are restricted to carriers engaged in transporting persons or property in interstate and foreign commerce and were intended to affect intrastate commerce only as that may be incidental to the effective regulation of interstate commerce. Texas v. Eastern Texas R. Co., 258 U. S. 204, 213, 217.

Considering Texas v. Eastern R. Co., supra, Colorado v. United States, 271 U. S. 153, Western Pacific California R. Co. v. Southern Pacific Co., 284 U. S. 47, and Transit Commission v. United States, 284 U. S. 360, it must be held that appellant is a "party in interest" within the meaning of the statute capable of instituting the present proceeding. The bill disclosed that the proposed and permitted action might directly and adversely affect its welfare by changing the transportation situation. The cause is one of the class to be tried by a specially constituted district court, under the Urgent Deficiencies Act, Oct. 22, 1913, c. 32, 38 Stat. 208, 220 (U. S. C., Title 28, § 47).

U. S. Code, Title 28, § 46 (Jud. Code, § 208) provides that suits to enjoin, set aside, annul, or suspend any order of the Interstate Commerce Commission shall be brought in the district court against the United States, &c. Section 47 directs that they shall be heard before three judges, at least one of whom must be a circuit judge.

It has been suggested that the Supreme Court of the District of Columbia cannot be regarded as a district court, and judges of the Court of Appeals of the District are not circuit judges within those provisions; conse

quently the District Supreme Court had no jurisdiction to hear the present cause. The point is without merit. Section 43, Title 18, District of Columbia Code, 1929, provides that the Supreme Court "shall possess the same powers and exercise the same jurisdiction as the district courts of the United States, and shall be deemed a court of the United States." Federal Trade Commission v. Klesner, 274 U. S. 145, 156, held that § 5, of the Federal Trade Commission Act, conferring jurisdiction on the Circuit Courts of Appeals to enforce, set aside, or modify orders of the Commission, should be construed as conferring like jurisdiction upon the Court of Appeals of the District of Columbia. "The parallelism between the Supreme Court of the District and the Court of Appeals of the District, on the one hand, and the district courts of the United States and the circuit courts of appeals, on the other, in the consideration and disposition of cases involving what among the States would be regarded as within federal jurisdiction, is complete." And see Pitts v. Peake, 50 F. (2d) 485.

Whether the Railway Company has corporate power to operate the proposed ferry is a question which cannot be considered in this proceeding. We think Congress never intended to impose upon the Interstate Commerce Commission the duty of determining matters of this nature before granting or withholding assent to the construction of an extension. Cleveland, C., C. & St. L. Ry. Co. v. United States, 275 U. S. 404, 414.

The right of appellant Ferry Company to institute and maintain this proceeding rests wholly upon the permission granted by paragraph 20, § 1. "Any party in interest" may institute a suit to enjoin proposed construction, operation, or abandonment of a carrier's line unless it has obtained a certificate of public convenience and necessity from the Interstate Commerce Commission. In

the absence of such certificate the doing of any of these things is declared to be unlawful-a crime subject to punishment by fine and imprisonment. And the permission is to apply to the court for an order to arrest the unlawful undertaking. The inhibition applies where there is no certificate in fact, or where the Commission lacked power to grant the outstanding one because of insufficient evidence to support its findings or other reason. An invalid certificate would leave the situation as though none had issued. Chicago, R. I. & P. Ry. v. United States, 274 U. S. 29.

Here, undoubtedly, the Commission had power to entertain and act upon the Railway's petition, also to grant the certificate of public convenience and necessity upon sufficient evidence. If the record discloses such evidence, the certificate is not a nullity and the Ferry Company has no right now to demand decision of any other question.

The

We think there was enough evidence-when material and conflicting we may not pass upon its weight—to support the Commission's conclusion. A large district on the Eastern Shore of Chesapeake Bay lacks adequate railroad connection with Washington and points beyond. possibilities of the proposed ferry, operated as a part of the Railway's line, were disclosed and the Commission's conclusion that material advantages to the public would result from the additional facilities for interstate transportation is not without support.

The decree below is

Affirmed.

MR. JUSTICE CARDOZO took no part in the consideration or decision of this case.

Argument for Petitioner.

BURNET, COMMISSIONER OF INTERNAL REVENUE, v. CORONADO OIL & GAS CO.

CERTIORARI TO THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA.

No. 341. Argued January 15, 1932. Reargued March 16, 1932.Decided April 11, 1932.

Lands granted by the United States to the State of Oklahoma for the support of common schools and dedicated to that purpose by the state constitution, were leased by the State to a private company for extraction of oil and gas, the State reserving a part of the gross production, the proceeds of which were paid into the public school fund, and the lessee taking the remainder. Held:

(1) The lease was an instrumentality of the State in the exercise of a strictly governmental function. P. 398.

(2) Application of the federal income tax to the income derived from the lease by the lessee was therefore unconstitutional. Gillespie v. Oklahoma, 257 U. S. 501, followed; Group No. 1 Oil Corp. v. Bass, 283 U. S. 279, distinguished. Id.

60 App. D. C. 233; 50 F. (2d) 998, affirmed.

CERTIORARI, 284 U. S. 606, to review a judgment overruling a decision of the Board of Tax Appeals sustaining an income and excess-profits tax, 14 B. T. A. 1214.

Solicitor General Thacher, with whom Assistant Attorney General Youngquist and Messrs. Sewall Key, Hayner N. Larson, and Franc: H. Horan were on the brief, for petitioner.

The effect of the federal tax is too indirect and remote to interfere with any governmental function of the State. The tax is less direct and burdensome than those which this Court sustained in Metcalf & Eddy v. Mitchell, 269 U. S. 514, and in Willcuts v. Bunn, 282 U. S. 216. The decision below is contrary to the principle of Forbes v. Gracey, 94 U. S. 762; Gromer v. Standard Dredging Co., 224 U. S. 362; Baltimore Shipbuilding Co. v. Baltimore,