Panama Canal Company v. Grace Line, Inc.

PETITIONER: Panama Canal Company
RESPONDENT: Grace Line, Inc.
LOCATION: Wolverine Tube, Inc.

DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 356 US 309 (1958)
ARGUED: Apr 02, 1958 / Apr 03, 1958
DECIDED: Apr 28, 1958

Facts of the case


Media for Panama Canal Company v. Grace Line, Inc.

Audio Transcription for Oral Argument - April 03, 1958 in Panama Canal Company v. Grace Line, Inc.

Audio Transcription for Oral Argument - April 02, 1958 in Panama Canal Company v. Grace Line, Inc.

Earl Warren:

Number 251 and 252, Panama Canal Company, Petitioner, versus Grace Line, Incorporated, and Grace Line, Incorporated, Isbrandtsen Company, Luckenbach Steamship Company, et al., versus Panama Canal Company.

Mr. Solicitor General.

J. Lee Rankin:

Mr. Chief Justice, may it please the Court.

This action involves the question of the fixing of tolls on the Panama Canal, a property of the United States.

The broad issue involved is whether or not the ultimate control on the fixing of the tolls for the Canal shall be with the petitioner and finally the president, as provided by the statute, or if the Comptroller General as in this case developed should find that certain procedures of accounting that are followed by the petitioner are not satisfactory to him and persons who are financially interested can appeal to the courts to compel the petitioner to adopt those accounting practices in arriving at the tolls.

Over considerable period of years, in fact from the time the Canal was constructed up to 1950, the statute provided that the President was authorized to prescribe tolls from time to time for the Canal.

This action was considered final.

There was no procedure for judicial review and no one claimed that there was.

Under this procedure up until 1950, the President set the tolls at various times.

President Taft, President Roosevelt and the last instant was a attempt on the part of President Truman to increase the tolls from 90 cents, but they were fixed by President Roosevelt in 1937 to a dollar in 1948.

How is that mechanic there operate without going into details?

Did the -- did the President appoints commission to look into it or what?

J. Lee Rankin:


He --

I wish he didn't do it himself.

J. Lee Rankin:

He usually followed the advice of the people working with the Canal and its operations and the Panama Canal Railroad Company and the -- the army people who were operating the Canal in regard to that.

And when he proposed to increase this additional 10 cents, there was a considerable protest on part of the shipping in -- industry.

And the -- the statute provided the issue to give six months notice of any such proposed increase.

So the Congress responded to that protest by the industry and suggested that the President -- excuse me -- review the question in the procedures and the operations of the Canal and come forth with recommendations as to any changes that he might desire or think proper, so for a period of about three years, the Congress considered whether there's number of hearings in which the railroads participated and the ship -- ship owners and the -- the army and the Bureau of the Budget.

The Bureau of the Budget recommended that all of the activities of the Canal be consolidated in one corporation that the corporation being the Panama Railroad Company with the name be changed to Panama Canal Company and have the -- both the supporting business activities as well as the Canal operations themselves all handled by this one corporation.

William J. Brennan, Jr.:

Mr. Solicitor, what are the supporting activities that don't give me a lot of details that -- what are the --

J. Lee Rankin:

Well, they operate hotels, steamship lines, a railroad, commissaries, dry docks, terminals, all the different things that this Court held in ex rel. Rogers versus Graves were apart of the operation of the Canal.

William J. Brennan, Jr.:

That doesn't include industries of any kind or commercial activities does, other than commissaries that --

J. Lee Rankin:

Well, I think a considerable part of those, the commissaries and the utilities and other things would be considered ordinary commercial activities, but they're necessary (Voice Overlap) --

William J. Brennan, Jr.:

Department stores in that sort of thing?

J. Lee Rankin:

Well, it isn't quite department stores but they are large commissaries and the gross income runs around $27 million, $28 million a year in some years.

And it's a very substantial operation running into many millions of dollars in these business activities, but they all support.

It's the contention of the Government, the operation of this Canal.

And they wouldn't be provided by -- by the Government at all if it wasn't necessary and has been proven so over the years.

William J. Brennan, Jr.:

But now, the Canal Zone is rather narrow --