until the payment thereof. Failure to adjust and pay such claim within the periods respectively herein prescribed shall subject each common carrier so failing to a penalty of fifty dollars for each and every such failure, to be recovered by any consignee or consignees aggrieved in any court of competent jurisdiction: Provided, That unless such consignee or consignees recover in such action the full amount claimed, no penalty shall be recovered, but only the actual amount of the loss or damage, with interest as aforesaid: Provided, further, That no common carrier shall be liable under this act for property which never came into its possession, if it complies with the provisions of section 1710, vol. 1, of the Code of Laws of South Carolina, 1902."

The difference between the value of the goods shipped and the freight charges, $1.75, and the amount of the penalty, $50, naturally excites attention. The Supreme Court of the State held the section constitutional, a decision conclusive so far as the state constitution is concerned, and therefore we are limited to a consideration of its alleged conflict with the Constitution of the United States. The shipment was wholly intrastate, being from Columbia, S. C., to McBee, S. C., and undoubtedly subject to the control of the State. It is of course unnecessary to consider the validity of the statute when applied to a shipment from without the State.

It is contended that the equal protection of the laws, guaranteed by the first section of the Fourteenth Amendment, is denied. The power of classification is conceded, but this will not uphold one that is purely arbitrary. There must be some substantial foundation and basis therefor. It is asserted that this is merely legislation to compel carriers to pay their debts within a given time, by an unreasonable penalty for any delay, while no one else is so punished, and that there is no excuse for such distinction. We have had before us several cases in- volving classification statutes, and while the principles upon which classifications may rightfully be made are clear and easily stated, vet the application of those principles to the different

cases is often attended with much difficulty. See among others, on the general principles of classification, Barbier v. Connolly, 113 U. S. 27; Bell's Gap Railroad Company v. Pennsylvania, 134 U. S. 232, and of cases making application of those principles; Gulf, Colorado & Santa Fe Railway Company v. Ellis, 165 U. S. 150; A. T. & S. F. R. R. Co. v. Matthews, 174 U. S. 96, and cases cited in the opinion; Erb v. Morasch, 177 U. S. 584; Fidelity Mutual Life Association v. Mettler, 185 U. S. 308; Farmers' &c. Ins. Co. v. Dobney, 189 U. S. 301; M. K. & T. Ry. Co. v. May, 194 U. S. 267.

We are of the opinion that this case comes within the limits · of constitutionality. It is not an act imposing a penalty for the nonpayment of debts. As the Supreme Court of South Carolina said in Best v. Seaboard Air Line R. R. Co., 72 8. Car., 479, 484:

"The object of the statute was not to penalize the carrier for merely refusing to pay a claim within the time required, whether just-or unjust, but the design was to bring about a reasonably prompt settlement of all proper claims, the penalty, in case of a recovery in court, operating as a deterrent of the carrier in refusing to settle just claims, and as compensation of the claimant for the trouble and expense of the suit which the carrier's unreasonable delay and refusal made necessary."

This ruling of the Supreme Court finds support, if any be needed, in the preamble of the statute, which reads: "An act to regulate the manner in which common carriers doing business in this State shall adjust freight charges and claims for loss of or damage to freight."

It is not an act levelled against corporations alone, but includes all common carriers. The classification is based solely upon the nature of the business, that being of a public character. It is true that no penalty is cast upon the shipper, yet there is some guarantee against excessive claims in that, as held by the Supreme Court of the State in Best v. Railroad Company, supra, there can be no award of a penalty unless there be a recovery of the full amount claimed.

Further, the matter to be adjusted is one peculiarly within the knowledge of the carrier. It receives the goods and has them in its custody until the carriage is completed. It knows what it received and what it delivered. It knows what injury was done during the shipment, and how it was done. The consignee may not know what was in fact delivered at the time of the shipment, and the shipper may not know what was delivered to the consignee at the close of the transportation. The carrier can determine the amount of the loss more accurately and promptly and with less delay and expense than any one else, and for the adjustment of loss or damage to shipments within the State forty days cannot be said to be an unreasonably short length of time. It may be stated as a general rule that an act which puts in one class all engaged in business of a special and public character, requires of them the performance of a duty which they can do better and more quickly than others, and imposes a not exorbitant penalty for a failure to perform that duty within a reasonable time, cannot be adjudged unconstitutional as a purely arbitrary classification.

While in this case the penalty may be large as compared with the value of the shipment, yet it must be remembered that small shipments are the ones which especially need the protection of penal statutes like this. If a large amount is in controversy, the claimant can afford to litigate. But he cannot well do so when there is but the trifle of a dollar or two in dispute, and yet justice requires that his claim be adjusted and paid with reasonable promptness. Further, it must be remembered that the purpose of this legislation is not primarily to enforce the collection of debts, but to compel the performance of duties which the carrier assumes when it enters upon the discharge of its public functions. We know there are limits beyond which penalties may not go-even in cases where classification is legitimate-but we are not prepared to hold that the amount of penalty imposed is so great or the length of time within which the adjustment and payment are to be

207 U. S.

Argument for Plaintiff in Error.

made is so short that the act imposing the penalty and fixing the time is beyond the power of the State.

The judgment of the Supreme Court of South Carolina is

MR. JUSTICE PECKHAM dissents.

Affirmed.

INTERSTATE CONSOLIDATED STREET RAILWAY COMPANY v. COMMONWEALTH OF MASSACHUSETTS.

ERROR TO THE SUPERIOR COURT OF THE STATE OF MASSACHUSETTS.

No. 13. Argued October 15, 16, 1907.-Decided November 4, 1907.

Requirements contained in another statute or document may be incorporated in a charter by generic or specific reference and, if clearly identified, the charter has the same effect as if it itself contained the restrictive words, and the question of the constitutionality of the statute referred to is immaterial.

A street railway corporation taking a legislative charter subject to all duties and restrictions set forth in all general laws relating to corporations of that class cannot complain of the unconstitutionality of a prior enacted statute compelling them to transport children attending public schools at half price.

187 Massachusetts, 436, affirmed.

THE facts, which involve the constitutionality of the statute of Massachusetts requiring the transportation of school children by certain railways at half fare, are stated in the opinion.

Mr. Everett Watson Burdett, with whom Mr. Joseph H. Knight was on the brief, for plaintiff in error:

The statute is invalid as a rate regulation. It makes an arbitrary and unreasonable discrimination, at the expense of the plaintiff in error, in favor of certain members of the community, to wit, school children, and of a portion only of such children, to wit, those attending public schools. That this is unlawful is

Argument for Plaintiff in Error.

207 U.S.

admitted by the Supreme Judicial Court of Massachusetts in its opinion in this case, where it says that if the statute were to be regarded as an absolute and arbitrary selection of a class, independently of good reasons for making a distinction, the provision would be unconstitutional and void. Commonwealth v. Interstate Street Ry. Co., 187 Massachusetts, 436, 438; Gulf &c. Ry. v. Ellis, 165 U. S. 150. And see Lake Shore &c. Ry. v. Smith, 173 U. S. 684, holding it unlawful to charge one class of passengers, to wit, those who can afford to buy 1000-mile tickets, less than those who are not fortunate enough to be members thereof. As a question of rate regulation, there is no distinction between that case and this.

Plaintiff in error is not estopped to set up the unconstitutionality of the statute. O'Brien v. Wheelock, 184 U. S. 450, 489.

The statute is invalid as a police regulation.

The promotion of education has no real or direct relation to the statute in question. It does not bear any reasonable or just relation to the act in respect to which the classification is proposed. Lake Shore &c. Ry. v. Ohio, 173 U. S. 285, 290.

While education may be promoted in aid of the general welfare, like all subjects of legislation in aid of the general welfare, it is subject to the limitations of the Constitution, and a statute in order to be valid must not impinge upon the fundamental rights guaranteed thereby. Connolly v. Union Sewer Pipe Co., 184 U. S. 540, at 558; Barbier v. Connolly, 113 U. S. 27, 31, 32; Lake Shore &c. Ry. Co. v. Smith, 173 U. S. 684.

While the destruction of property or of its use is not subject to the limitation of the constitution respecting compensation, if such destruction is in pursuance of police regulations for the public health, morals or safety; if a taking of property or of its use is involved, then it can only be done subject to the constitutional guaranties of just compensation and equal protection of the laws. In the present case plaintiff's property, or the use of its property, is taken without due process of law, ie., without just compensation; and the corporation is dis