This is a direct appeal by the Interstate Commerce Commission, whose orders the District Court of New Jersey has set aside, and by the Hudson & Manhattan Railroad Company, whose rates are subject to the enjoined orders. Respondents are the City of Jersey City and the Price Administrator, who intervened under powers duty delegated to him pursuant to the Emergency Price Control Act of 1942 and the Inflation Control or Stabilization Act of 1942.
The Hudson & Manhattan Railroad Company owns about 8.5 miles of electric railway, of which all but .63 miles is underground. It has two double-track lines, one of which, known as the 'uptown line,' connects Hoboken, New Jersey, with Christopher Street, New York, by who parallel tunnels under the Hudson River, and runs uptown under Sixth Avenue from Christopher Street to a terminal at 33rd Street. The other line, known as the 'downtown line,' crosses under the river by two parallel tunnels between Exchange Place, Jersey City, and Hudson Terminal, New York. It also extends westwardly in Jersey City to Journal Square, where connection is made with the Pennsylvania Railroad. The uptown and downtown lines are connected on the New Jersey side by means of a line paralleling the Hudson River. In conjunction with the Pennsylvania Railroad the Hudson & Manhattan operates a joint rapid-transit service between Hudson Terminal and Newark. It carries only passengers.
The present controversy has its roots in a rate case precipitated by the Company's effort to establish a 10-cent fare on its downtown line in 1937. After full hearings the Interstate Commerce Commission fixed an 8-cent fare effective July 25, 1938.' The 10-cent fare was denied chiefly on the ground that, while the Company might be entitled to the revenue, such a fare would decrease its patronage, and the Commission believed that an 8-cent fare would produce more revenue. Commissioners Miller and Mahaffie dissented from denial of the 10-cent fare on such grounds, holding it had been 'amply justified' as 'reasonable and lawful for the services performed.' This Court held such grounds of denial to be sustained by evidence and to be within the Commission's discretion. Hudson & Manhattan Railway Co. v. United States, 313 U.S. 98, 61 S.Ct. 884, 85 L.Ed. 1212. The 8-cent fare remained in effect until the carrier on June 27, 1942 filed a petition in the same proceeding for further hearing, alleging changed conditions and increased costs in support of a 10-cent fare on the downtown line. Protests were filed by the City of Jersey City and the Hudson Bus Corporation. The Commission opened the proceeding and extensive hearings were held in September of 1942. Counsel for the Price Administrator appeared, stating that it was not his intention to offer evidence but that he reserved the right to make any motions and to file appropriate briefs. The hearings were concluded on September 19, 1942.