Constitutional Law in 1923–1924: The Constitutional Decisions of the Supreme Court of the United States in the October Term, 1923

No one who has followed the steady expansion of federal authority over the business of interstate carriers sanctioned by the Supreme Court in the Shreveport Case, Illinois Central R. Co. v. Public Utilities Commission, and Railroad Commission v. Chicago, B. & Q. R. Co., will view with surprise the unanimous decision of that tribunal in Dayton-Goose Creek R. Co. v. United States, sustaining the validity of the “recapture” clause of the Transportation Act of 1920. This clause provided in substance that since it is impossible to establish uniform rates upon competitive traffic which will adequately sustain all the carriers needed to do the business, without giving some of them a net income in excess of a fair return, any carrier receiving such excess shall place one-half of it in a reserve fund to be maintained by the carrier for certain specified purposes, and shall pay the other half into a general railroad revolving fund to be maintained in the interstate commerce commission. This fund is to be used by the commission to make loans to carriers to meet expenditures for capital account, and so forth.