New-York tribune., 1921-04-14
Fare Case i'm
Texas Not Like
Situation Here
Supreme Court Ruled That
There Was No Contract
With City, but Did Not
Pass Upon Coniscation
Only Ordinance Existed
State Constitution Prevent
ed City From Making
Agreement Fixing Fare

The text of the decision of the
United States Supreme Court enjoin-
ing the City Of San Antonio, Tex, from
enforcing a scent fare against the
Public Service Company reveals that
the case involved is not analogous to
the situation in New York City.
The decision did not turn on the
question whether the rate of fare was
confiscatory. 1t was based on the
finding that there was no contract
between the city and the company pro-
viding for scent fare.
The original San Antonio Traction
Company was organized by special
act of the Texas Legislature in 1874.
In 1899 the City of San Antonio
adopted an ordinance providing that
streetcar companies should charge
five-cent fare for one continuous ride.
Later the Legislature passed an act
providing for the sale of school tickets
at one-half the regular fare. A suit
was brought against the present trac-
tlon company to compel it to carry
students at half fare.
Ordinance Not a Contract
The company in that suit contended
that the ordinance fixing the five-cent
fare was contract, that the act of
the Legislature impaired it and that
the latter, therefore, was void The
highest court of Texas held that the
ordinance was not a contract and that
the city had not the power to make
such contract on account of a pro-
" ba
1876, which said: "No irrevocable, or
uncomfortable grant of special privi-
leges, or immunities shall be made:
all privileges and franchises granted
by the Legislature, or court, under its
authority shall be subject to the con-
troll thereof This decision of the
Texas court was affirmed by the United
States Supreme Court in 1906.
The case decided last Monday showed
a changed situation. Instead of having
an act reducing fares, the city had
passed an ordnance prohibiting their
increase. The company asserted its
right to increase the fare because the
fve-cent fare would not give fair re-
turn upon its investment and was con-
fscatory. This time the CITY of San
Antonio contended that the 1899 ordi-
nance constituted a contract and that
the company was bound by it. Following
the earlier case, the Federal court in
Texas held there was no contract and
that the city did not have the power
to make contract fixing the rate of
fare. The United States Supreme Court
decision Of last Monday affirms that
decision.
In Cleveland vs.. Cleveland City
Railway Company, 1914 U. s. SIT. de-
cided May, 1904, the Supreme Court
Of the United States held that where
it clearly appeared that a city had the
power to make valid contract bind
ing 1t as to rates of fares and the
street railway had entered into such a
contract, it would not abrogate the
contract it would not abrogate the
tpen showing made by the company
that the contract rates were, at the
time the suit was brought, confisca-
tory. 1t emphasized the fact that the
power of the city to make such a con-
tract must clearly appear, because
this is contracting away legislative
power
Excerpts from Decision
Some excerpts from the San Antonio
decision follow:
The decree below enjoined the City
OF San Antonio from enforcing a five
cent fare against the Public Service
Company on the ground that the right
to enforce such rate was not secured to
the city by contract and such enforce
ment was beyond the power of the city
because of the confiscation of the prop
erty, of the railway company which
would result in violation Of the Four
teenth Amendment
The ordinance of the city March.
1899. granting the franchise to the
Public Service Company provided
among other things, that the two com
panies (appellee here and another)
which operated street railways in the
city, shall charge five-cent fare for
one continuous ride over any one of
their lines with one transfer to or
from either line to the other
"In August, 1918, the Public Service
Company applied to the city for per
mission to increase its rate of fare
from five cents to seven cents, based
upon the ground that although the five
cent fare was remunerative at the time
it was fixed it had by the increase in
the cost of operation in practically
every department become totally in
sufficient for that purpose and could
not be continued without conhscating
the property Of the company. After a
hearing the city, by an ordinance re.
citing that as the company was bound