Argument for Appellees. 224 U.S. Under our dual form of government the Federal Government is supreme in the field of interstate commerce and the state governments are supreme in the field of intrastate commerce. McCulloch v. Maryland, 4 Wheat. 472; Worcester v. Georgia, 6 Pet. 515; Ableman v. Booth, 21 How. 506; License Tax Cases, 5 Wall. 462; Employers' Liability Cases, 207 U. S. 463, 498; Pennsylvania v. Knight, 192 U. S. 28; B. & O. R. R. Co. v. I. C. C., 221 U. S. 612, 617, 621. Section 20 of the Act to Regulate Commerce and the orders of the Commission both in re "Special Accounting Methods," and in re "Special Reports Series Circular No. 10," are void. They are not a regulation of the rates on which interstate commerce moves; they are not a regulation of the road bed over which interstate commerce moves; they are not a regulation of the vehicles in which interstate commerce is carried; they are not a regulation of the employés engaged in handling interstate commerce; they are not a regulation of interstate commerce itself. On the contrary they are an interference with the internal affairs of the appellees; they prohibit the appellees from keeping for their corporate purposes such books as in their own judgment the corporate necessities may require; they prohibit a common carrier engaged as to any part of its business in interstate commerce from keeping any books or memoranda not prescribed by the Commission with respect to any business which is not under the Act to Regulate Interstate Commerce. In the cases at bar there are no troublesome questions involving the necessity of regulating intrastate commerce in order to regulate interstate commerce. While the appellees deny that Congress intended to subject any of the water carriers to any regulation, nevertheless (assuming for the purposes of this point that they are wrong in this contention), each of the four bills of complaint states in apt language that it is not necessary for the Commission to establish the assailed accounting methods or to make 224 U.S. Opinion of the Court. the assailed inquiries respecting the intrastate business, and the internal affairs of the appellees in order to properly regulate or investigate their interstate business. Each of the bills states in apt language that there is no necessary or legitimate or reasonable relation between many of the rules and regulations and many of the inquiries made affecting and respecting interstate business, and the appropriate regulation or investigation of the interstate business. These facts are admitted by the demurrers. Congress has no power to make a general inquisitorial excursion or examination into the internal affairs of a corporation organized under the laws of one of the States. Angell & Ames, § 687; Guthrie v. Harkness, 199 U. S. 148; Sinking Fund Case, 99 U. S. 720; Northern Securities Co. v. United States, 193 U. S. 348; Hale v. Henkel, 201 U. S. 75; In re Pacific Railway Investigation, 32 Fed. Rep. 241; Interstate Com. Comm. v. Brimson, 154 U. S. 447; Wilson v. United States, 221 U. S. 361, 384. Congress may not inquire into the internal affairs of a state corporation except for certain specific purposes. Kilbourne v. Thompson, 103 U. S. 168; In re Chapman, 166 U. S. 661; Interstate Com. Comm. v. Brimson, 154 U. S. 478; Harriman v. Inter. Com. Comm., 211 U. S. 407, 417; Wilson v. United States, 221 U. S. 361, 384. MR. JUSTICE DAY delivered the opinion of the court. The appellees in these four cases are corporations organized under state laws and engaged in the carriage of passengers and freight by water upon the Great Lakes. They filed bills in the United States Circuit Court for the Northern District of Illinois to enjoin the enforcement of certain orders of the Interstate Commerce Commission. The cases were afterwards transferred to the United States Commerce Court. The orders of the Commission complained of comprise: First, an order prescribing the method of accounts and Opinion of the Court. 224 U.S. bookkeeping as to the operating expenses of the carriers and a similar order as to bookkeeping concerning the operating revenues of the carriers; and, second, an order requiring a report of the carriers respecting their corporate organization, financial condition, etc. The Government of the United States intervened and filed an answer in each case, but the cases were practically heard on demurrer, as the record discloses, and therefore the allegations of the bills well pleaded must be deemed to be true. The bills contain many conclusions, and argumentative deductions as to the effect of the orders upon the carriers, which, under the rules of pleading, are not considered as admitted. United States v. Ames, 99 U. S. 35, 45. The pertinent averments necessary to a decision of the cases, as we view them, show that the carriers are corporations organized under the laws of certain States of the Union; that they carry passengers and freight upon the Great Lakes between ports in different States, which they designate as their port-to-port interstate business; that they carry passengers and freight wholly within a State, which they designate as their port-to-port intrastate business; and that they also carry passengers and property in interstate commerce under joint tariffs in connection with certain railroad carriers of the United States with whom they have agreed upon joint through rates, which they designate as their joint rail and water business. As to the Goodrich Transit Company, it is averred that eighty per cent of its gross revenue is derived from its port-to-port interstate and intrastate business, and less than twenty per cent of its gross earnings is derived from its joint rail and water business. A like averment is made with respect to the White Star Line, except that it is said that in its business the revenue derived from joint rail and water traffic, as aforesaid, is less than one per cent of its entire revenue. It is averred that the bookkeeping and accounting methods required by the orders of the Commission differ from those prescribed and now kept by the companies; that the orders of the Commission make no difference between the intrastate port-to-port business and the interstate port-to-port business and the joint rail and water business; and that the orders entered by the Commission prohibit the companies from keeping any accounts, records or memoranda other than those prescribed by the Commission in such orders. In the White Star Line cases the bills contain an additional averment that that company operates two amusement parks, one at Tashmoo and one at Sugar Island, both in the State of Michigan, and in connection therewith owns, operates and derives revenue from lunch stands, merry-go-rounds, bowling alleys, bath houses, etc., and collects admission fees from people entering the parks. It complains that its business concerning said parks is included within the accounting methods prescribed by the Commission. As to the report called for by the order of the Commission, it is averred that such report was not required because of any complaint filed against the corporations for the violation of the Act to Regulate Commerce; that there is no statute requiring the report to be kept secret, and, if it is made public, the affairs of the companies will be thrown open to inspection to their injury; that a large number of the inquiries contained in the order of the Commission relate to details of the companies' business solely intrastate, or that which is from port to port; and that the report is not limited to the joint rail and water business of complainants. There are also averments that the orders were unconstitutional, because the Commission, in undertaking to put in force such requirements, exceeded its authority in so far as the power was asserted to examine into the af fairs of the companies not relating to their joint rail and water business, and having reference, as it was alleged, to their domestic business or interstate business not within the terms of the act. The Commerce Court enjoined the execution of the orders (190 Fed. Rep. 943), declaring that (p. 966): "It [the Commission] acted within its authority when it made an order calling for reports of all business done by the petitioners under through bills of lading where the transportation was partly by railroad from one State to another, or from one place in the United States to Canada, an adjacent foreign country; and it was within its power when it prescribed the system of accounts and the uniform method of keeping accounts for such interstate business, and so far as the orders call for information confined to such traffic, or directly related thereto, and so far as the orders prescribe uniform systems of bookkeeping and accounting for such traffic and such as is directly related thereto, they must be sustained. But, in so far as the reports called for and the accounting rules prescribed extend beyond such interstate business of the carriers, or include matters of intrastate traffic accounts and affairs and concerns exclusively, they become invasions of the rights of the carriers, and to the extent of such invasions are unlawful." The court held that the orders concerning the report and auditing would be lawful respecting the interstate business done by the carriers in connection with railroads, as provided by the act, but, in requiring a report concerning the other business of the companies and prescribing bookkeeping methods therefor, the Commission exceeded its authority, and the court granted the prayers of the petitioners for the orders of injunction, ordered a recast of the form of report in conformity with its opinion and remanded the cases to the Commission for that purpose. Whether this order of the Commerce Court was correct |