The New York herald., 1921-04-13
7. S. c. ASKED Z CENTS
Refusal Based on Confisca-
tion OF Property of Rail
way Company.
CONTRACT RIGHT CLAIMED
Decision Holds San Antonio
Cannot Interfere With
Fare Tariff.
Special Despatch to The NE~ YORK HERALD.
Now York Herald Bureau,
Washington, ID. c., April IL.

Special Despatch to The NE~ YORK HEsALp.
Now York Herald Bureau,
Washington, ID. c., April IL.
On account Of the nationwide inter-
est in the decision Of the United States
Supreme Court yesterday preventing
the city Of San Antonio, Tex, from
enforcing five cent fare, with uni
versal transfers. over the street rail-
way lines OF the Public Service SOM
pany. THE NEW York HERALD gives
herewith some important extracts from
the opinion Of the court. which may
have a bearing on similar situations
in other cities.
The city Of San Antonio sought to
force the Public Service Company to
continue to charge five cent fare on
IFS street railway lines in the city,
claiming it's right to do so under or
dinance and franchise contracts
The Public Service Company obtained
q decree from the Federal District Court
enjoining the city from enforcing the
nve cent rate on the ground that the
right to enforce such rate was not Sc
cured TO me city by contract, and such
enforcement was beyond the power Of
the city because OF confiscation Of the
property OF the railway company.
The United States Supreme Court af-
armed the decree Of the lower Federal
Court in an opinion delivered by Chief
Justice White The Texas District
Court, in enjoining the enforcement by
the City OF San Antonio. Of five cent
rate on the ground that it would be con-
fiscatory. held that the court was not
a primary rate making authority and
referred the matter OF rate back to the
city ana the street railway company to
agree en- a rate A rate Of seven cents
was demanded by the Public Service
Company, and the city was enjoined
from interfering with this rate.
The United States Supreme Court de-
gision Gays in part:
Connscatton q Fact.
'That in view OF the admitted fact or
conascation the court had power to deal
TOO clear for anything but statement,
and we think It Is equally clear that as
the right to regulate gave no power
whatever to violate the Constitution by
enforcing a confiscatory rate, a result
which could only be sustained as con-
sequence of the duty to pay such rate
arising from the obligations Of a con-
tract, it follows that the solitary ques-
tion to be considered is whether a con-
tract existed empowering the city to en-
force the connscatory rate.
Primarily the answer to that Quee-
tion must depend upon whether the or
dinance OF 1899 fixing the five cent rate
was q contract That 1t was not and
could not be we are OF opinion is the
necessary result OF the provision OF Sec
ton IL, article !, OF the State constitu-
ton, existing in 1899. prohibiting any
irrevocable or uncontrollable grant OF
special priviieges,' &C.. when considered
In the light Of the irrevocablc and un-
controllable elements which must neces-
sarily inhere in the ordinance of 1899 to
give 1t the contract consequent relied
upon.
But il is urged that as by the amend
nent to the State constitution Of 1912
the city was endowed with authority
broad enough to enable Il to contract in
granting a street railway franchise con-
cerning the rate Of fare to be charged,
iisenthralled from the limitation of sec
tion II, article /, Of the State constitu-
tion, t follows that the franchise ordi-
nance must after that date be viewed as
such q contract and treated accordingly.
But as no contract between the city and
the traction company made after the
constitutional amendment in 1919 con-
corning the fare in question is referred
TO. it Is plain that even IL tho PROPOSE
tion as to power Of the city after 1919
he. FOR the sake Of argument. conceded.
it is irrelevant to the case.
No Contract Possible.
And this is true also OF the sugges-
ton made in argument that although no
contract was possible under the consti-
tutional restriction which would bind the
city not to lower the rate. nevertheless
there was an unelsteral contract or con-
dition resulting from the granting Of the
franchise wf,5ch bound the railway COM
pauy to the franchise rate, since again
there is not the slightest suggestion of
any attempt on the part OF the parties
consciously to produce such a condition.
But besides the error underlying the
proposition is not far to seek. The duty
AZ an owner OF prfvnto property used