contemplation of the parties when the franchises were granted and accepted, and under these circumstances the Company is entitled to a release of the obligations, if any, that these grants may have imposed upon it to continue to operate under them. The Kronprinzessin Cecilie, 244 U. S. 12; Metropolitan Water Board v. Dick, Kerr & Co., [1918] App. Cas. 119; Baily v. De Crespigny, L. R. 4 Q. B. 185; Liston v. Steamship Carpathian, [1915] 2 K. B. (E. & J.) 42; Tamplin S. S. Co. v. Anglo-Mexican Co., [1916] 2 App. Cas. 397, 407; Brenner v. Consumers Metal Co., 41 Ont. L. R. 534; Krell v. Henry, [1903] 2 K. B. 740, 749; Chicago, Milwaukee & St. Paul Ry. Co. v. Hoyt, 149 U. S. 1; The Styria, 186 U. S. 1; B. E. & C. R. Co. v. N. Y., L. E. & W. Co., 123 N. Y. 316; Moore & Tierney, Inc., v. Roxford Knitting Co., 250 Fed. Rep. 278.

The Fourteenth Amendment is a complete protection against the enforcement of the confiscatory rates prescribed by the legislative enactments represented by these two franchise grants.

Mr. Henry L. Scarlett, with whom Mr. David F. was on the brief, for appellees.

Pugh

MR. JUSTICE DAY delivered the opinion of the court.

The Columbus Railway, Power & Light Company filed its complaint and amended bill of complaint in the District Court of the United States for the Southern District of Ohio against the City of Columbus, Ohio, and officials and members of the City Council of the City, asking an injunction against the enforcement of ordinances concerning the operation of street railways upon certain streets in the City of Columbus. Upon motions to dismiss, and for a temporary injunction, the District Court held that there was no jurisdiction as the amended bill of complaint presented no substantial federal question, and,

Opinion of the Court.

249 U.S.

considering the case upon its merits, held that the amended bill did not state facts constituting a valid cause of action in equity against the defendant, and dismissed the same. An appeal was prosecuted to this court; the case has been argued and submitted.

The amended bill of complaint alleges in substance that the Company and its predecessors have since the enactment of two ordinances, hereinafter mentioned, and until the 20th of August, 1918, operated a system of street railway lines in the City of Columbus. The two ordinances in question are referred to in the bill and attached thereto. The one, denominated the Blanket Franchise Ordinance, was passed February 4, 1901, and the other, called the Central Market Franchise Ordinance, was passed January 21, 1901. The allegations as to these two ordinances are supplemented by a statement of certain so-called perpetual franchise ordinances on certain streets. The two ordinances, above referred to, are each for the term of twenty-five years. The ordinances were duly accepted by the grantees thereof. Under the provisions of the Blanket Franchise Ordinance the grantee and its successors are required to issue and sell eight tickets for twenty-five cents, and give universal free transfers. The issue and sale of such tickets continued until August 20, 1918, when, it is alleged, the franchise under that ordinance was surrendered and canceled by the Railway Company. Under the Central Market Franchise Ordinance the Company issued and sold eight tickets for twenty-five cents, and gave universal transfers, and continued so to do until August 20, 1918, when, it is alleged, the franchise was surrendered and canceled by the Company.

The bill sets forth allegations as to the extent of the business of the Company-that its railway system includes more than one hundred and ten miles of main track, and supplies the only street railway service in the

City of Columbus, except a very limited service furnished by interurban cars running at long intervals upon certain streets, that the Company also supplies power for war and industrial purposes, and is the only commercial company furnishing electricity in the City of Columbus. That Columbus and its suburbs contain a population of more than 250,000 persons, and constitute a large industrial, manufacturing, military, and railroad center. That more than 25,000 persons are employed in the manufacture of munitions, clothing and a great variety of other war materials for use directly by the United States Government, and for the use of others furnishing war supplies to the Government; also large railroad shops in which are employed many thousands of persons engaged in the making and repair of railroad engines, cars, and other equipment used and to be used by the United States Railroad Administration. That a large majority of the employees of these shops do and must depend upon the street railway service of the Company as their means of transportation to and from their places of employment; and in said area is located the Columbus Barracks in which are quartered more than one hundred thousand recruits per annum, who also are dependent upon said railway service. That the discontinuance or impairment of the plaintiff's street railway service would cause irreparable harm to the Government of the United States, to the City of Columbus and to all persons dependent upon the service. That the Company has more than twelve million dollars invested in the street railway lines and equipment. It has large amounts of outstanding mortgage bonds, of which the sum of $7,295,000 is chargeable against its street railway property, the annual interest charged being more than $333,000. The operation and management of the Company show increased and increasing costs of operation and decreased and decreasing net revenue as a result of the War in which the United States

was then engaged. The bill charges increases in the cost of coal and in wages paid to the employees. The net earnings of the operations of the lines for the twelve months ending June 30, 1918, after deducting operating expenses, taxes and a proper charge for depreciation were $301,987, an amount insufficient by more than $31,000 to pay the interest on the outstanding bonds of the Company, properly chargeable to the railroad property, and barely enough to pay 22% on the value of the property employed by the Company in furnishing street railway service to Columbus. That in June, 1918, the street railway employees of the Company demanded an increase in wages, and inaugurated a strike, which resulted in the discontinuance of the service of the Company for two days. That the controversy was referred to the National War Labor Board, which Board on July 31, 1918, rendered its decision increasing the wages of the street railway employees more than 50%, thereby increasing the operating expenses of the street railway line by about $560,000 per year. It is averred that as a result of such operation for the current year ending June 30, 1919, the gross earnings will fall short of paying expenses, depreciation, and taxes by approximately $250,000, and that there will be no carnings from which to pay its interest charges, or to yield any return to the Company on the value of its property. That on August 20, 1918, the Company surrendered and canceled its Blanket Franchise and its Center Market Franchise by notification in writing, addressed to the City of Columbus, the Mayor, Council and Clerk thereof. The Company charges that the rates of fare prescribed by the terms and conditions of the two ordinances were not either before or when said franchises were surrendered as above stated, and would not be if longer enforced against the Company, sufficient to enable it to maintain its street railway property in good order and repair and to perform its duty as a public

utility; that the further operation of the street railway lines in the City of Columbus under the two ordinances would be not only impracticable but impossible, and that the enforcement of the said rates of fare would violate the Fourteenth Amendment to the Constitution of the United States. That said rates of fare are inadequate and confiscatory, and their enforcement will deprive the Company of its property without due process of law. The Company charges that the defendents, unless enjoined, will attempt to force it to continue to operate its street railway lines under the said Blanket and Center Market Franchises in violation of rights secured to it by the Fourteenth Amendment to the Constitution. The amended bill further sets forth that controversies, confusion, risks, and multiplicity of suits will result from the resistance of the Company to the enforcement of the inadequate and confiscatory rates of fare prescribed in said ordinance. The bill prays for an injunction restraining the defendants from compelling the Company, or attempting so to do, to operate its lines of street railway in the City of Columbus under the said ordinances; from in any way forcing, compelling, or attempting to compel it, to charge and collect only the rates of fare prescribed by the two ordinances for carrying passengers, and from interfering in any way with the operation by the Company of the lines of street railway covered by the said perpetual franchises.

In the written notice of surrender of the franchises, attached to the bill as part thereof, the alleged facts as to the operation of the Company are set forth much as stated in the amended bill, and the award of the National War Labor Board is set out. The request of February 25, 1918, to the City Council to authorize the Company to charge higher rates, is stated, which was refused, as was a later request. A recital of the recommendation of the War Labor Board for increased rates of fare is also