The Interstate Commerce Commission, by its report and order of October 4, 1933, authorized the Kansas City Southern Railway Company, a corporation organized under the laws of Missouri, to acquire control by lease of the railroad and properties of the Texarkana & Fort Smith Railway Company, incorporated under the laws of Texas. 193 I.C.C. 521. In this suit, the state of Texas, and officers and municipalities of that state, assailed the order as transcending the authority granted to the Commission by the Congress. The order was sustained by the District Court (6 F.Supp. 63), three judges sitting as required by statute (28 USCA § 47), and from its decree this appeal is taken.
The single point in controversy is with respect to the authority of the Commission to approve the acquisition of control by a lease which permits the lessee to abandon, or to remove from the state, the general offices, shops, etc., of the lessor. The provision of section 5 of the lease, which has that effect, is set forth in the margin. The provision is attacked as being in violation of the laws of Texas, which confine to Texas corporations the right to 'own or maintain any railways' within the state, which require every railroad company chartered by the state to 'keep and maintain permanently its general offices within this State at the place named in its charter,' and at that place also to maintain the offices of its principal officers, and which prohibit any railroad company from changing 'the location of its general offices, machine shops, or roundhouses, save with the consent and approval of the Railroad Commission' of the State.
The Interstate Commerce Commission was divided in opinion. Upon a prior hearing, the Commission approved the lease upon the condition that the paragraph in controversy should be eliminated. Report and order of December 27, 1932; 189 I.C.C. 253. Following the enactment of the Emergency Railroad Transportation Act 1933 (Act of June 16, 1933, c. 91), the proceeding was reopened, and, after hearing, the Commission modified its order by striking out the above-mentioned condition, thus approving and authorizing the lease with its provision, in section 5, as to offices and shops.
The findings of fact set forth in the Commission's report are not contested. The lines which constitute what is called the Kansas City Southern Railway system (embracing the portions covered by the proposed lease) extend from Kansas City, Mo., to Port Arthur, Tex. (over 800 miles). The line of the Kansas City Southern Railway Company, the applicant, extends from Kansas City, Mo., to Mena, Ark. The line of the Texarkana & Fort Smith Railway Company is in two segments. The northern segment extends from Mena in a southerly direction, crosses the Arkansas-Texas state line, and runs through Texarkana and thence southeasterly into Arkansas and to the Arkansas-Louisiana state line. The portions of this segment in Arkansas are operated by the applicant under a lease previously authorized by the Interstate Commerce Commission. 105 I.C.C. 523. The portion of the northern segment which lies in the state of Texas is approximately 31 miles in length. The southern segment of the Texarkana & For Smith Railway extends from the Louisiana-Texas state line at the Sabine river to Port Arthur, Tex., and is approximately 50 miles in length. Thus the total main line mileage of the Texarkana & Fort Smith Railway in Texas is 81 miles; there are about 18 miles of branch lines. The portion of the railroad system lying between the Arkansas-Louisiana state line and the Louisiana-Texas statel line, approximately 228 miles, is owned by the Kansas City, Shreveport & Gulf Railroad Company, a subsidiary of the applicant.