Appellants are steamship corporations engaged in the transportation of freight through the Panama Canal between United States ports on the Gulf of Mexico and on the Pacific Coast. They constitute the Gulf Intercoastal Conference, which operates under an agreement, approved March 28, 1934, by the United States Shipping Board Bureau of the Department of Commerce, as provided by section 15 of the Shipping Act of 1916, 39 Stat. 733, 46 U.S.C. § 814 (46 U.S.C.A. § 814). On May 25, 1933, the Conference, in conformity to the Intercoastal Shipping Act of 1933, section 2, 47 Stat. 1425, 46 U.S.C. § 844 (46 U.S.C.A. § 844), filed with the United States Shipping Board Bureau a new tariff, effective June 2, 1933, publishing certain rates for the transportation of freight, westbound from coast to coast.
The tariff, continuing the contract system in use by the Conference, provided for 'contract rates' for specified commodities, to be enjoyed by shippers who agree with the Conference, by written contract, to make all their shipments of those commodities by vessel of the Conference members for a specified period. The tariff rates on the same commodities for shippers not entering into contracts were $2 per ton higher than the contract rates. In 1934, the Secretary of Commerce ordered an investigation by the Shipping Board Bureau of the lawfulness of the contract rate system (see section 22 of the Shipping Act, 39 Stat. 736, 46 U.S.C. § 821 (46 U.S.C.A. § 821), and section 3 of the Intercoastal Shipping Act of 1933, 47 Stat. 1426, 46 U.S.C. § 845 (46 U.S.C.A. § 845)). The ensuing report condemned the discrimination, and on July 3, 1935, the Secretary ordered the appellants to cease charging the higher rates to shippers who had not entered into contracts.
In September of that year appellants filed new rate schedules, effective October 3, 1935, which continued the contract rate system. Thereupon the Secretary vacated his order of July 3d and made an order suspending the schedules and directing a second hearing concerning the lawfulness of the contract rate system. On this hearing new evidence was introduced, and relevant portions of the evidence adduced on the previous hearing were spread upon the record. In a report reviewing this record, the Secretary found that the 'real purpose of the suspended rates * * * is to prevent shippers from using the lines of other carriers and to discourage all others from attempting to engage in intercoastal transportation from and to the Gulf.' He accordingly found the rates unduly prejudicial and ordered their cancellation.
The present suit was brought in the District Court for the District of Columbia, three judges sitting, to set aside the order of the Secretary as without his statutory authority and because not supported by substantial evidence. From the decree of the district court sustaining the Secretary's order, 18 F.Supp. 25, the case comes here on appeal under section 31 of the Shipping Act, 39 Stat. 738, 46 U.S.C. § 830 (46 U.S.C.A. § 830), and the Act of October 22, 1913, 38 Stat. 220, 28 U.S.C. § 47 (28 U.S.C.A. § 47). Appellants here, as in the court below, have assigned as error that the Secretary was without authority to make the order under review because the Executive Order of June 10, 1933, No. 6166, § 12, which abolished the United States Shipping Board and transferred its functions to the Department of Commerce, was without constitutional and legislative authority, and because the findings and order of the Secretary were without support in the evidence.
First. Since the appeal was taken, the contention that the transfer to the Secretary, by Executive Order (No. 6166, § 12), of powers conferred by the Shipping Act on the United States Shipping Board, was unauthorized by the terms of Title 4 of the Legislative Appropriation Act of June 30, 1932, 47 Stat. 413, as amended, 47 Stat. 1517, has been put at rest by the decision of this Court in Isbrandtsen-Moller Co., Inc., v. United States et al., 300 U.S. 139, 57 S.Ct. 407, 81 L.Ed. 562, February 1, 1937. There we held that the failure of Congress, if any, to express its will in the earlier act had been remedied by various later acts mentioning the Executive Order, and making appropriations to the Department of Commerce for payment of the expenses of carrying out the provisions of the Shipping Act, and by section 204(a) of the Merchant Marine Act of June 29, 1936, 49 Stat. 1985 (46 U.S.C.A. § 1114), which referred to functions of the former Shipping Board as 'now vested in the Department of Commerce pursuant to section 12 of the President's Executive Order No. 6166,' and transferred them to the newly-constituted United States Maritime Commission.