Scalping Is Legal

To what extent may states regulate business ? Last week, the U. S. Supreme Court, in a five to four decision, ruled that states can regulate only businesses involving public utilities or morals, that theatre ticket scalping* does not come under either of these classifications, that the New York law limiting scalpers' charges to 50c in advance of the rate printed on the face of the ticket is unconstitutional. This decision reversed a lower court opinion and ended the case of Tyson & Brother, United Theatre Ticket Offices, Inc. v. New York State officials.

Majority Opinion. Associate Justice Sutherland handed down the majority opinion, assented to by Chief Justice Taft and Associate Justices Butler, McReynolds, Van Devanter. He wrote: "A theatre is a private enterprise which, in its relation to the public, differs, obviously, widely, both in character and degree, from a grain elevator standing at the gateway of commerce and exacting toll. . . . Sales of theatre tickets bear no relation to the commerce of the country. . . . And, certainly, a place of entertainment is in no legal sense a public utility; and, quite as certainly, its activities are not such that their enjoyment can be regarded under any conditions from the point of view of an emergency. ... A theatre, of course, may be regulated so as to preserve the public peace, insure good order, protect public morals and the like."

Dissenting Opinion. Associate Justices Holmes, Brandeis, Sanford and Stone dissented. With brief eloquence Mr. Holmes, 86,* wrote: "We fear to grant power and are unwilling to recognize it when it exists. . . . The truth seems to me to be that, subject to compensation when compensation is due, the legislature may forbid or restrict any business when it has a sufficient force of public opinion behind it. Lotteries were thought useful adjuncts of the State a century or so ago; now they are believed to be immoral and they have been stopped. Wine has been thought good for man from the time of the Apostles until recent years. But when public opinion changed it did not need the 18th Amendment, not withstanding the 14th, to enable a State to say that the business should end. What has happened to lotteries and wine might happen to theatres in some moral storm of the future. . . .

"But if we are to yield to fashionable conventions, it seems to me that the theatres are as much devoted to public use as anything well can be. ... I am far from saying that I think this particular law a wise and rational provision. That is not my affair. But if the people of the State of New York speaking by their authorized voice say that they want it, I see nothing in the Constitution of the United States to prevent their having their will."/-

Specific Effects. Scalpers are now free to charge any price they wish for theatre tickets; but the larger Manhattan agencies immediately announced that they would stick to the 50c fee, "unless the demand for tickets develops into a wild scramble." The smaller, scurrilous dealers, who have been conducting a surreptitious business since 1922, rubbed their palms and cheered the five black-robed justices, of whom they had probably never heard before last week. Broadway producers and managers sought to reach an agreement to combat any renewed scalping activity.

Obiter dicta. Meanwhile, Louis Marshall, able Manhattan lawyer, who represented the Tyson agency in the appeal to the Supreme Court, offered a few obiter dicta on the decision:

"In plain words, the Supreme Court has told state legislatures they must keep their hands off price-fixing in private business. Of course public utilities must be regulated, but a theatre is a private enterprise, just as much as is a grocery store. . . . Had this decision gone the other way we would soon have the price of a haircut and the price of a stick of gum and the price of a newspaper fixed by legislation. . . .

"The State of New York has the right to abolish prize fighting, but under this decision it has not the right to fix the price at which tickets shall be sold. Prize fighting is clearly covered by the decision, which mentions baseball, football and other sports."

*No Manhattan "hit show" is so popular that tickets within the first five rows centre cannot be purchased a day or less in advance at the smeary-windowed little scalpers' offices along Broadway between 43rd and 45th streets. Scalpers' prices: for a hit drama 88.80 or 59.90 ; for a hit revue $11.00 to S:33.00; for a sure fire first night, up to $100.

*He had his birthday last week, and even the Hearst feature service found that there was news in the famed New England poet's son who, at 86, has the keenest and busiest mind in the Supreme Court. "Work keeps me young," said Justice Holmes. "If I should quit, I would die." It has been wisely said that Plato dreamed of such men as this when he chose scholars and philosophers, tried by the world and by age, to govern his ideal Republic.

/-The majority opinion said that New York's scalping regulation law violated the 14th Amendment: "No state shall ... deprive any person of life, liberty, or property without due process of law."