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of every road that transgresses in this manner is that some competitor does it. Fraud, therefore, is the incentive to the business. And in its conduct every step is one of actual fraud. The scalper's vocation, the necessity for his occupation, is to sell transportation at less than published and established rates; in other words, below lawful charges. Every such sale is a fraud upon the law, a fraud upon competing roads, and a fraud upon the stockholders and the creditors of the road for which the sale is made.
But bad as these transactions are, they are not the worst. There are other branches of the business which we are told by railroad officials are practiced, to their actual knowledge, which are even more culpable. These are said to embrace such acts as dealing in tickets and passes that have been stolen, and tickets that have already been used but not defaced or canceled by conductors, as also in tickets fraudulently altered in respect to dates or extent of journey, and spurious tickets to which the use of some artful device gives the appearance of genuineness. In such cases an imposition is practiced either on a railroad or upon a passenger, certainly upon the latter if the fraud be detected. Whether all or only some brokers engaged in these fraudulent practices, or whether the frauds by which stolen, defunct or altered tickets are palmed off on the public and on the railroads as well, are perpetrated by brokers themselves, or by others acting in collusion with them, are not material. The acts are incidents of the business, and arguments of great potency for legislative action to eradicate the evil. One might suppose that a practice of this character could no more be defended than larceny or forgery, but strange as it may appear it is defended before legislative bodies and elsewhere, and the right to carry it on unmolested is demanded. It is urged by way of defense that through the ticket scalper a portion of the public get lower rates and therefore his operations are in the interests of the public. The circumstance that lower rates so obtained are forbidden by the fundamental principle of the law, that equality of charges for equality of service shall be made, and that such rates are unjust discrimination, is wholly disregarded by this defense.
It is also said that railroad tickets are merchandise, and may be bought at wholesale at any price for which they can be pro
cured, and may be sold at retail for any price the purchaser will pay. This, again, ignores the plain requirements of the law, that a railroad as a public agency must establish and publish its fares and charges, and sell its transportation only at its established rates, and that it is declared a criminal offense to do otherwise. The merchandise theory is an entire perversion of the nature and objects of railroad tickets. A railroad ticket, instead of being merchandise, is in law only a receipt or voucher for the payment of the cost of a journey, and evidence of a contract on the part of the railroad to carry the passenger. It imports that the lawful price of carriage has been paid, and that the holder is entitled to the extent and kind of transportation indicated by the instrument. If it were practicable, fares might be paid on the train, but the nise of tickets has been found a great convenience both to railroads and to passengers, especially to railroads in the economy of the time of train agents and as a protection against negligence or dishonesty on the part of such agents. If, in spite of the strong reasons from the railroad standpoint for the use of tickets, they are to be used clandestinely by the consent of railroads to violate the law and diminish earnings, it is questionable whether it is important, from the standpoint of the public, whether the scalping is done by professional scalpers or by the direct agents of the road.
Another defense of the business is put on the benevolent ground that passengers holding tickets for a considerable journey often change their minds, or are obliged by some happening to stop short of their destination, or to return without making the whole journey, and that by the charitable interposition of a broker the tickets are taken off their hands at no great loss, whereas otherwise the loss might be considerable. This overlooks the obvious fact that it is quite as convenient for a passenger to have his unused ticket redeemed at the office of a railroad upon which he is traveling as to the office of a broker, and that at a railroad office he can receive the full pro rata value of the unused part of his ticket without losing the broker's profit.
These are, in brief, the grounds upon which ticket brokerage is publicly defended, and which are urged to prevent legislation for the suppression of an acknowledged abuse of large and growing dimensions, seriously injurious in its character, bad in its influence, and owing its existence to the vices of human nature.
With the view of procuring a general and authentic expression from railway officials and others upon the subject of ticket brokerage, the Interstate Commerce Commission, early in June, 1890, issued a circular calling pointed attention to the practice and requesting answers to the following questions:
"First. Whether the existence of this business is not & serious public evil.
"Second. Whether the profits of the business and the cost of transacting it do not necessarily either come from the revenues of the railroad companies, or tend to increase the charges which they impose upon passenger traffic, with a view to a sufficient revenue.
“Third. What are the chief causes which afford a field for the business and which are responsible for its existence ?
“Fourth. If in your opinion the business should be brought to an end what remedy or remedies should you suggest for that pur
This circular was sent to the railroad commissioners of all the states in which such otficers exist, and to sixty-five officials of leading roads, and to soine others connected with transportation, many so addressed being men of national reputation and of high character and standing. Replies have been received from forty officials of railroads, from ten state commissions and from some other sources. The answers received furnish a body of testimony of the most convincing character. They are unanimous and emphatic in representing ticket scalping as a serious public evil. They declare it to be an unmixed evil in all its phases, detrimental alike to the public and to the railroads, and they agree that the evil is two-fold—in its effect upon the morals of the people and its effect upon the business interests of the roads.
The third inquiry in the circular, relating to the chief causes which afford a field for the business, and which are responsible for its existence, was fully answered by the communications received. Both the public and the railroads, it is said, have a share in the responsibility. The too general desire on the part of the public to get goods or service at less than established prices, and the avidity of nearly every railroad to do a greater amount of passenger business than any competitor, are said to be among the primary causes.
Other and immediate causes, however, are specifically set forth. These are as follows:
. First. The business is largely sustained by the direct encouragement and co-operation of railroad companies themselves, in the payment of commissions to scalpers, in placing with them blocks of tickets in times of rate wars, and in frequently turning over to them the return portion of round-trip tickets. The absence of good faith between rival companies opens the door for the employment of the broker. At the outbreak of a cut in rates agreements to maintain schedule rates are ignored, the services of the broker are invoked, and he is supplied with tickets at greatly reduced rates, or is paid heavy commissions which may be, and are expected to be, divided with the passenger.
Second. Excursion, tourist and milage tickets are all factors, and important ones, in the maintenance of the scalping business. The first two are often purchased by a class of travelers who do not contemplate their use except for one way. After being so used the return portion of the ticket is sold to a broker, who in turn sells to some traveler, and the difference in rate between a round trip ticket and one good in only a single direction is divided between the broker and the passenger, the former getting the larger share. The milage ticket, which many roads do not attempt to confine to the original purchaser, is also largely utilized by brokers, and rented out by piece-meal to travelers.
Third. Dishonest employés of railroads contribute in no small degree to keeping up the business of furnishing the scalpers with tickets which have been used but not canceled; and stolen and counterfeit tickets also furnish their contribution to the stock of the broker.
Fourth. Tickets given by railroad companies for advertising in newspapers, and to men in business, such as hotel keepers and others, as well as passes, are made merchandise of and converted into money, the broker being the medium through which they get into the possession of persons who have no right to their use and who often find it necessary to make misrepresentations to avoid the consequences of detection. The final inquiry, whether the business shonld be brought to an end, and the means to be employed for the purpose, receives an emphatic answer. The leading railroad officials of this country are a unit in the recommendation of a national law for the suppression of the business, embodying the general features of the Canadian statute. Several of the state legislatures have enacted laws of a similar character, but in the absence of a national statute they cannot be made as effective as they would be with a national statute on the subject.
It is stated by a Canadian railroad official that there is not a ticket scalping office in Canada. This tends to show the effectiveness of a general law, and renders it probable that like results might follow from such a law in the United States. The Canadian statute, in substance, forbids the sale of tickets by anyone except a railway station agent or the regularly appointed agent of a legitimate transportation company, and fixes full responsibility upon the company whose ticket he sells for his acts, and puts it
, in the power of any person to make complaint and prosecute for violation of the law. The law also provides that all unused tickets or portions of tickets shall be redeemed by the issuing company. This takes away any excuse on the part of the public for dealing with outsiders.
These features are embodied in the Act now pending before Congress, together with penal provisions for the punishment of offenders. The two safeguards that are deemed essential, and that it is believed will work a substantial cure of the evil, are, first, the limitation of the sale of tickets exclusively to duly authorized agents of the company, who shall publicly display their license or certificate; and, second, the redemption on a fair basis, by the issuing company, of all tickets not used in their entirety.',
$ 139. Rates must be Reasonable. Prior to the enactment of the Act of February 4, 1887, to regulate commerce, commonly known as the Interstate Commerce Act, 24 Stat. at L. 379, chap. 104, railway traffic in this country was regulated by the principles of the common law applicable to common carriers, which demanded little more than that they should carry "Report of Interstate Commerce Commission, Noo. 29, 1890, 3 Inters. Com.