The case involves a challenge by two railroad companies to the incentive per diem rates established by the Interstate Commerce Commission to address chronic freight car shortages. The District Court set aside the Commission's order, but the Supreme Court ruled that the Commission's proceeding was governed only by § 553 of the Administrative Procedure Act. The case was remanded for further consideration of other contentions raised by the appellees. The Commission initiated a rule-making procedure in 1967 to investigate the need for an interim incentive element increase, and some of the affected railroads had concerns about the proposed study or requested modifications in the study procedures outlined by the Commission. The case concerns the latest chapter in a long history of freight-car shortages in certain regions and seasons and of attempts to ease them. The District Court erred in assuming that the language in § 1 (14) (a) requiring rulemaking "after hearing" was equivalent to a statutory requirement that the rule "be made on the record after opportunity for an agency hearing." The inquiry of whether the hearing requirements necessarily include submission of oral testimony, cross-examination, or oral arguments, as required by the statute, remains unresolved.

This legal case involves a dispute among judges over an administrative order that imposes charges on non-owning railroads for using boxcars owned by other railroads. One judge dissented, arguing that the order creates a new financial liability without a full hearing that includes the right to present oral testimony, cross-examine witnesses, and present oral argument, which is required by the Administrative Procedure Act. The case concerns the incentive per diem rates to be paid by railroads for the standard boxcars they use, and whether the procedures used by the Interstate Commerce Commission in a rate case complied with the Administrative Procedure Act. The case was remanded to the Commission for further proceedings to determine whether the appellees were prejudiced for lack of a proper hearing. The article discusses three cases related to the procedures of the Commission for establishing incentive per diem rates and the interpretation of § 1 (14) (a) of the Interstate Commerce Act, which requires a full hearing when ratemaking must be based on evidential facts. The case also concerns the distinction between quasi-judicial and rulemaking proceedings, and the Morgan II case dealt with the "full hearing" requirement of § 310 of the Packers and Stockyards Act.