The San Francisco call., 1904-07-23
Supreme Tribunal of State
Declares in Favor Of the
Southern Pacific in Fa-
nous Fresno Rate Case
COMPANY INNOCENT
OF DISSEMINATION
Argument of Commissioners
Based on the Law, Which
Is Held to Be Inappli-
cable to Facts Alleged

The famous Fresno rate case was
decided in favor of the Southern Pa
cifc Company yesterday by the Su-
preme Court ii is held that the rail-
road did not reduce the fare for pas
sengers in violation of the cOnstitu-
ton, as was alleged by the State Rail-
road Commission. The law, it is said,
was not Obeyed literally, but the in
tent OF its trainers was not disregard
ed. The dispute has been in the courts
for about five years. The action was
begun by the State board TO secure an
Injunction against an increase in rates.
In July. 1898. the San Francisco and
san Joaquin Valley Railroad Company
had tracks from Fresno to Stockton.
By arrangement with an independent
line Of steamers a through passenger
service was established from Fresno to
San Francisco and the fare was fixed
at So =. The Southern Pacific had a
rate OF s. 80 for the trip from San
Francisco TO Fresno, but on July IS,
1898, the fare on limited" tickets was
reduced TO So Is.
When the rival road went out OF ex-
istence as an independent line the Rail
road Commission petitioned for an in
junction TO prevent the Southern Pa
cifc from increasing the rate again.
The Superior Court decided in favor of
the commission and the Supreme Court
reversed that decision. At the second
trial the Superior Court refused to
grant the injunction sought by the COM
mission, and the Supreme Court this
time sustains the lower tribunal.
CONSTITUTION is CITED.
The Commissioners based their petit
tion on section %, article XII, of the
constitution, which says:
And whenever railroad corporation shall,
for the .uruC-a of competing with any other
common carr lower its rates for transpor-
tarion Cf PAS -igers or freight from one point
70 another. such reduced rates will not be
sEain raised OF increased from such standard
without The consent q the governmental
authorities il which shall be vested the power
10 regulate fares and freights
The company claimed that it had
never lowered its regular rate for the
transportation Of passengers, and that
even if such had been the case the law
cited was in violation Of the fourteenth
amendment TO the constitution of the
United States. While the Southern Pa
cifc maintained its So IS fare on Tim
ited" tickets it continued TO charge
$ 80 for an alleged different service.
When the fight was over and the old
rate had been restored the company in
sisted that it had simply discontinued
an inferior service.
DENIES COAIPANY'S CLAIMS.
The court dissects the argument Of the
railroad and holds that it is faulty. The
limited ticket gave first-class service,
but was good only on the day of sale,
gave no stoD-over privileges and i'm
posed conditions as to the amount of
baggage and the method of checking
It. The court says that in form the
railroad did not lower its s. 80 rate,
but as nineteen out Of every twenty
persons Travelled frst-class on the lin
tied" tickets and as all essential privi-
leges were secured Herewith, the fare
was really established for purposes OF
competition.
On this point the court says:
For the reasons and upon the ground stated
We hold that the defendant, ~ Southern Pa
cihc COMPANY, did lower its fate from s. 80
- - % within the meaning OF the constitu-
ton But was the rate lowered for the pur-
pose or competing with another common car
rier2 IN the ordinary sense OF the
word no doubt the rate was lowered for the
purpose Of comDetiri1n but If we
consider the evident intent Of the provision
in question more especially II We consider
the circumstances and history Of its adoption.
II Is clear that the act Of the defendants was
not such as the trainers Of the constitution OF
the people who adopted II had in view or had
any desire punish The whole object OF the
provision was 10 foster legitimate competition
b. preventing destructive competition
DRAWS DISTINCTIONS.
i was no part OF their design TO punish 9
corporation FOR merely lowering its rates in
EeIf-defense. And that Is all that the
Southern Pacific Company is found to have
done in this instance. It is the corporation
which lowers its rates for the purpose Of de-
Etroying a rival that is the proper subject OF
the penalty imposed by the constitution
substantial lowering Of the rates should