which shall be conveyed upon said railroad, exclusive of the expense of transportation, payable at such time and in such manner as may be described in the by-laws.' It will be noticed that this charter, like the Maryland charter already referred to, makes at least a theoretical division of the aggregate charge into "toll" and "transportation."

The early charters granted by Michigan are essentially like those granted by Ohio, Illinois, and Wisconsin. Many of them are quite complete and contain leading features of typical charters. Those which are more carefully drawn contain provisions relating to maximum rates for both freight and passengers. The amount which the company may charge varies, however, very materially, not only in charters granted during succeeding years, but also in those enacted during the same year. For all of the Western States the statement holds true that among earlier charters we find more numerous examples of maximum rates, even though the same charters give the board of directors wide discretionary powers over rates. Following the period during which charters of this kind were granted, it was more common to omit the maximum-rate feature and to incorporate the power over rates in the board of directors, giving this body the right to charge such rates as it may from time to time think expedient. It may be noticed that an early Ohio charter (1838) makes a distinction in charges upon ordinary and "pleasure carriages."

There is no essential difference among the early charters of Pennsylvania and Maryland, except perhaps that in Pennsylvania a distinction was sometimes made between "through" and "way" passengers. Nor is the difference between the charters in these States and those granted by North and South Carolina a striking one, except that the systems of voting rather common in the Carolinas do not appear in the Atlantic States farther north. In 1837 North Carolina granted a charter which provided for maximum rates as follows: On persons, not exceeding 6 cents per mile for each, unless the distances to which any person be transported be less than 10 miles, in which case the president and board of directors may be entitled to make an extra charge of 50 cents for taking up and putting down each person so transported; for transportation of goods, * not exceeding an average of 10 cents per ton mile; and for the transportation of mails, such sums as they may agree upon." In a similar manner later charters in both North and South Carolina prescribe maximum rates. These rates frequently bear a direct relation to distance and space occupied.

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These quotations suffice to indicate the manner in which early charters in different parts of the United States attempted to control rates. The variety existing among provisions of this kind is no greater than among provisions on other subjects, and in nearly all instances the maximum rates prescribed appear to have been much above what railway companies would in ordinary circumstances be inclined to charge.

As a matter of interest, rather than of importance, it may be noted that in a few States several charters prescribe rates by reference to another charter previously granted by the same legislature. Thus a Michigan charter of 1848 refers to rates charged by the Michigan Central Railway; a Georgia charter of 1838 specifies that the company may charge as much as the Georgia Railroad and Banking Company; in 1831 Mississippi adopted a charter granted by Louisiana; and å Tennessee charter of 1851 grants the same provisions which have previously been granted to the Nashville and Chattanooga road.

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Publicity of rates.-Publicity of rates is not generally provided for, although provisions on this subject are found in some of the charters granted by Indiana, Louisiana, Maine, New Hampshire, Vermont, New Jersey, South Carolina, Georgia, Missouri, and in occasional charters granted in the Northwestern States, all of which are fairly well illustrated by the clause of an Indiana charter quoted above. A Louisiana charter of 1831, after providing that such rates may be charged as shall have been previously fixed by the resolution of the board of directors, stipulates that "rates shall be published in some newspaper, * * and it shall be unlawful to increase such rates, after the same shall have been established, during the period for which they have been established." The same charter further provides that every new board of directors shall publish a schedule of rates within 10 days after its election. Another charter granted 2 years later specifies the number of newspapers in which the schedule of rates shall be published, and that such rates "shall not be changed during the year in which they are established." Publicity of a different kind, and quite unique in railway legislation, is provided for by joint resolution of the South Carolina legislature of 1836: That no charter for the incorporation of railroad companies, or in extension thereof, shall be granted by the legislature unless 3 months' public notice of the application for same be previously given by advertising in one of the papers of

the city of Charleston, and also in the paper of one of the counties in which said road may be situated, or, if there be no newspaper in such connty, then by publication of such notice at the court-house or some conspicuous place in the county." The South Carolina resolution evidently aimed to accomplish the same thing as the declaration of utility in some of the other States, namely, to give interested parties an opportunity to be heard and to demonstrate to the public the necessity of incorporating the projected company.

Another, but a much more restricted, kind of publicity is that provided for in some charters granted in all parts of the country, by giving stockholders the right to inspect the books of the company at any time. This, however, is not publicity as we now understand it, for it simply gives the persons directly interested in the financial success of the enterprise access to the books, while the real and essential publicity suggested to-day is of a very different kind. It is therefore more a matter of curiosity than of vital importance that notice is taken of a New Hampshire charter of 1836, which provides that the books of the company shall be open for inspection by a committee of the legislature. Analogous provisions are occasionally met with in charters of Rhode Island and the Northwestern States, but to what extent legislative committees ever exercised this privilege does not appear. Discriminations.-Relatively few early charters contain any reference to the matter of discrimination, which figures so largely in later railway legislation. Among the States which granted charters containing clauses on discrimination are North Carolina, Rhode Island, Vermont, and Wisconsin. A North Carolina charter of 1837 says: They shall give no undue preference to the property of one person over that of another, but as far as practicable shall carry each in the order of time in which it shall be delivered or offered for transportation with the tolls paid or tendered." An early Wisconsin charter contains a much more elaborate provision on discriminations.

Administrative agents.—So far as internal evidence is concerned, early charters were granted upon the assumption that the companies organized under them would voluntarily fulfill the obligations imposed by the franchise. The assumption which underlies early as well as later railway charters is that they execute themselves. It is consequently doubly interesting to observe that the small State of Rhode Island apparently took the initiative in establishing commissions, for in 1836 the legislature of that State passed "An act to establish railroad commissioners." After providing for the appointment of three commissioners by the general assembly, the act specifies that "it shall be the duty of said board of commissioners, upon complaint or otherwise, whenever a majority of them shall deem it expedient, personally to examine into any or all of the transactions or proceedings of any railroad corporation that now is, or hereafter may be, authorized and established in this State, in order to secure to all the citizens and inhabitants of the same the full and equal privileges of the transportation of passengers and property at all times that may be granted, either directly or indirectly, by any such corporation to the citizens of any other State or States, and ratably in proportion to the distance any such persons or property may be transported on any railroad as aforesaid; and to inquire into any contract, understanding, or agreement by which any railroad company shall attempt to transfer or give to any steamboat company any favor or preference over any other such company or boat. either as to freight or passage, contrary to the true intent and meaning of this act and the several acts hereafter passed in relation to railroads."

The commissioners in the Connecticut charter quoted before may here be recalled, together with the boards of internal improvement of Tennessee and Florida, which had some, although much more restricted, administrative powers over certain railways. Analogous functions were performed under a Vermont charter of 1843, by which" the supreme court at any stated session thereof, * * * upon application of ten freeholders in any town or towns through which said road may pass, may alter or establish the rates of toll upon said road for any term not exceeding ten years at any one time." It is evident that the Rhode Island commission is the only one of these bodies that could exercise, under the law, fairly comprehensive administrative functions. The Vermont court is here alluded to simply because it is another illustration of the introduction into the management of railway affairs of persons other than those directly interested in the corporation.

Powers reserved to the legislature. Considered numerically, a majority of the charters granted in the different States do not reserve to the legislature either specified or general powers. It is very common, however, for charters to contain provisions reserving to the legislature the right to regulate, with more or less latitude, the charges of transportation. In the New England States this power could generally be exercised under charter rights as long as the net income of the

railway in question exceeded a certain per cent, usually 10. Thus a Massachusetts charter of 1829 reserves to the legislature the right to revise the schedule of rates every 4 years if the net income exceeds 10 per cent. A contemporary New Hampshire charter gives the board of directors full power over rates, and permits the legislature to reduce them after 10 per cent net on the investment has been realized. A clause typical of provisions of this kind is found in an early Maryland charter: "That nothing in this act shall be construed so as to prevent the legislature of this State from legislating upon the subject of the tolls reserved in this act at any time after the expiration of 20 years after the passage of the act: Provided, That at no time shall the toll be so regulated or reduced as to yield less than 6 per cent per annum." Other Maryland as well as Pennsylvania charters embody analogous provisions. Ten per cent net income is by far the most common limit placed upon the discretionary powers of legislatures over railway rates in all the States in which such chartered provisions are found. In a few instances the rate of net profits permitted under the law is very much larger. For instance, in Indiana charters were granted permitting the legislature to regulate rates whenever the profits exceeded 15 per cent, and any excess above 15 per cent was to be paid into the common-school fund.

Another right reserved to the State in a considerable number of charters is the power to purchase the railway after a certain number of years. This power was frequently reserved in the charters of the New England States, the significance of which was perhaps illustrated in the agitation accompanying the recent leasing of the Boston and Albany Railway. Early Massachusetts charters reserved to the State the power to purchase after a period of 20 years. In Vermont this period of discretionary power of the State varied from 20 to 50 years. New Hampshire followed Massachusetts, fixing it at 20. An Illinois charter of 1850 gives the State the right to purchase, after 25 years, by refunding to the company the cost of the entire plant, with interest at the rate of 6 per cent per annum. In New Jersey similar right was reserved after 30 years. An early Michigan charter contains a provision which is typical of isolated charters in all of the Northwestern States: The State shall have the right, at any time after the expiration of 15 years from the completion of said road, to purchase and hold the same for the use of the State at a price not exceeding the original cost of said road, exclusive of repairs thereof, and 14 per cent thereon, of which cost an accurate account shall be kept and submitted annually, on the first Monday in January, to the legislature, duly attested by the oath of the officers of said company, and at such other times as the legislature shall require the same." In Missouri a charter granted in 1837 reserved to the general assembly the right to purchase the railway after 4 years by giving notice in writing. This charter also provided for the appointment of valuers, whose function it was to fix the price of the transfer.

Limitations on the life of charters. The preceding paragraph illustrates one class of limitations placed upon some charters in all parts of the United States. While a majority of the charters are silent upon this point, now and then charters were granted which were limited in their existence to a certain period of years, varying all the way from 10 and 20 to 99 or more years. One of the powers granted in the charters which do not contain provisions directly limiting their life was that which gave to the board of directors "perpetual succession," which means, of course, a franchise unlimited in the period of its existence. In the Northwestern States a few charters were granted limiting the life of the corporation to 50 and 60 years. Florida granted a few which were to lapse after a period of 20 years; Louisiana, after 40 and 50, and, in one instance, 25. In one charter, a provision is found that after a certain number of years the same shall expire, and the assets of the corporation shall be distributed among the stockholders. The session laws of the different States contain numerous acts extending the charter period in those cases where the original act contained time limits; and it is obvious that in all those instances in which the charter reserved to the legislature the right to purchase, no time limit whatever was necessary.

Limitations on the power of taxation.-After the country at large had begun to realize the necessity and importance of railway transportation, various means were resorted to to encourage the construction of railways. American manufacturers were unable to provide the necessary material. This had to be imported from abroad, hence it was but natural that legislators should have resorted to the expediency of exempting from import duties materials to be used in the construction of railways. But the railways, after they had been constructed, represented valuable property, and to that extent increased the taxable resources of the territory in which they lay. To provide against the imposition of taxes, which might become burdensome or even discourage the construction of railways, legislatures of States in all parts of the Union incorporated, in some charters, a provision

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limiting the power of the respective States to tax railway property; and, in a considerable number of instances, exempting such property altogether from taxation, usually for a limited period of years. That the capital stock of said corporation shall be and remain free from taxation until the profits collected by said railroad corporation shall be sufficient to afford a dividend of 5 per cent per annum on the capital stock." This is from a Connecticut charter of 1833, and represents analogous provisions found in New England charters of that period. In Massachusetts some charters exempted railway property from taxation for one or more years, after which the legislature had the right to levy a tax not exceeding a certain sum, frequently 25 cents per annum, on each share of the stock. In the Northwestern States isolated charters limit the power of taxation to a certain per cent on the capital stock; others to a certain per cent on the net income. Then, again, other charters make railway property liable to taxation like all other property; and late laws in a few of the Western States specifically state that no railway property shall be exempted from taxation.

State participation.-To a limited extent the individual States participated in the construction of railways, either by becoming stockholders and lending the credit of the State or by giving direct financial aid. The well-known illustrations of the railways owned by the States of Georgia and South Carolina and the city of Cincinnati, stand quite alone in the contemporary railway history of the United States. The history of internal improvements had been such as to discourage the active participation of our commonwealths in the construction of railways. Works of internal improvement, greatly exceeding both the capacity to construct and to utilize them, had been projected by many States. The inevitable failure of these gigantic projects brought these States into disrepute as active economic agents; hence we find in constitutions and charters granted after this period of disaster in State works of internal improvement direct prohibitions of State participation. As a matter of historical interest, however, it may be well to notice a few typical instances of direct or indirect participation of the State in building up our railway system. It should be noted that the term "state" is here used in the specific rather than the generic sense, for even after constitutional prohibitions and statutory restrictions had become common, the smaller political units— county, town, village, and city-freely participated in railway enterprises. Large numbers of illustrations can be found in nearly every State. An act of the legis lature of Maryland, in 1827, authorized subscription on the part of the State to the stock of the Baltimore and Ohio Railway. A contemporary Michigan charter empowers the State to take stock in the company chartered; likewise in case of New Jersey; also in Arkansas and other States in the Mississippi Valley. An early Indiana charter limits the State in its subscriptions to 500 shares, and in Louisiana the governor is authorized to subscribe a certain amount in behalf of the State after a certain number of shares have actually been paid for by individuals. In turn, the governor may appoint one director to represent the interests of the State. It is important to notice that in this representation of the State in the management of railways to protect the financial interests of the Commonwealth may be found the beginning of attempts at administrative control of our railways. In like manner the board of internal improvements, and later the commissioner of railroads appointed by the governor, were intrusted with the interests of the State in the control of railways to which Tennessee had given aid. Isolated charters in Wisconsin, Michigan, and other Northwestern States, as well as in various other States, authorized the company to borrow money and to pledge the credit of the State in its payment. In a few States, like Wisconsin and Texas, attempts were made to utilize the school fund in the construction of railways, on the plea that such an investment of these funds would be carrying out the provision of the law directing that school moneys shall be invested in the most profitable manner. In the estimation of the promoters of such plans, nothing could be more profitable than the railways which they had projected. Miscellaneous provisions.-Under this head mention will be made of provisions found in isolated charters in States in all parts of the country, being essentially alike in substance, although varying in the form of expression or exact scope of their contents. During the early part of the nineteenth century it was common to organize corporations for a variety of purposes. Experience soon demonstrated that corporations which divided their interests and their energy among two or more enterprises became involved sooner or later in difficulties, if not in absolute failure. As a result of this experience it was not long before State legislatures enacted general laws or inserted provisions in special charters to the effect that corporations shall be organized only for one specified purpose. A few charters, for instance, were granted, which authorized the construction of a railway, as well as participation in other kinds of business. An excellent illustration of this is

found in the title of the Georgia Railroad and Banking Company, which has lasted into our own times. There appears to have existed a very close affiliation between railroading and banking, the same corporation frequently engaging in both kinds of business. A reaction against this is clearly shown in statutes and charter provisions prohibiting railway companies from engaging in the banking business. Such prohibitions are found in the charters of Alabama, Illinois, Kansas, Michigan, Nebraska, Pennsylvania, South Carolina, Florida, Georgia, Wisconsin, and other States.

The route of the railways chartered by the various acts is described with varying degrees of completeness and accuracy. In perhaps the great majority of charters the termini and a few leading intermediate points are named; in others, only the termini; and in still others, nothing more definite than the expression that the railway in question shall be constructed between some eligible point on a certain river to another eligible point on a certain lake or in a certain township. Instances are recorded in which projectors solicited aid in the construction of a railway along one route and then chose another, and repeated their solicitations for aid along the second, and perhaps secured support from both.

The amount of land which the railway company might legally hold was quite generally restricted to that which was necessary for construction and operationa strip of 100 feet in width, and, in addition, whatever may be necessary in order to secure material and for the construction of depots, warehouses, and other necessary buildings. In many of the States the right of way was donated to the company; and, of course, in numerous instances, State and Federal grants were given in aid of railways. But to provide for the purchase of the necessary land, charters usually contain provisions relating to eminent domain or expropriation. Most charters name some officer or tribunal before whom cases relating to condemned property may be heard and the manner in which decisions and awards may be made.

The capital stock of the company was usually named in the charter, although, with very few exceptions, the amount of the capital stock apparently bears no relation to the magnitude of the railway in question. In only a few instances does the charter fix a definite ratio between the number of miles of road and the amount of the capital stock. While now and then a charter does not provide for the payment of anything whatsoever at the time subscriptions are made, or calls for only a dollar or two, in a large number of charters a payment of $5 is called for at the time subscribers enter their names on the books of the company. Usually the manner in which the balance shall be paid is indicated, and the number of days' notice which must be given is stated. The voting power of stockholders is quite generally limited to one vote per share, although in the North and South Atlantic States the graded system of voting, by which the number of votes of the individual stockholder decreases as his holdings increase, is common.

It is a familiar fact that our early railways were built for short distances and without reference to one another, and that our present magnificent systems are but consolidations of large numbers of smaller roads. We are not surprised, therefore, to find the subject of consolidations rarely touched upon in early charters. To be sure the term is used; and now and then a clause, either directly authorizing or prohibiting consolidations, was put into a charter. The right to cross other railways, as well as to form junctions, is frequently granted; and in reality such a right can easily be construed as the right to consolidate. Similarly, the power to operate and lease other railways was frequently given, although in the Southern States the term "farming" is sometimes used.

Later charters quite generally expressly prohibit the leasing or joint operation of parallel or competing lines; and in numerous early charters companies are protected against the construction of parallel lines either within a certain number of years or a certain distance from their own roads.

A great majority of charters provide for an annual report in one form or another. This report is most frequently made by the board of directors to the stockholders; in fewer instances to the legislature; and, in still others, to both the stockholders and the legislature. The number of items specified in this report varies all the way from less than 10 to more than 100.

Forerunners of laws relating to safety appliances and the protection of persons and property can also be detected in early charters. Provisions may be found relating to the order in which cars shall be put into a train, the manner in which crossings shall be protected, bells upon locomotives, fences along tracks. (It is a matter of curiosity that in some of our earliest charters, provision is made for the construction of gates across the railway tracks, which the train operators are to open and close whenever they cross the public highways.)