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from becoming stockholders in all joint stock companies, except “railroad corporations, companies, or associations.")

Intersections, junctions, and consolidations.-Varying somewhat in the number of subjects specified in the constitution, 11 States make provision for the connection, crossing, and intersection of railways and interchange of traffic. In one form or another, it is prescribed that every railway shall have the right to intersect, cross, or connect with any other railway, and that it shall receive and transport the freight and coaches, loaded or empty, of every other railway, without delay or discrimination. Closely allied to the subject of connections and the interchange of traffic is the question of consolidations, and constitutional provisions dealing with both subjects are found in several States. The most common form in which the traffic arrangements of the different roads is expressed is that which permits one railway to lease, control, purchase, or consolidate with any other railway, provided that the other is not a parallel or competing line. To what extent provisions relating to mere interchange of traffic would permit the consolidation of competing lines is not clear. Isolated provisions prohibiting the holding of stock of other railway companies may be found. (Among the States prohibiting the consolidation of competing lines are: Arkansas, Colorado, Illinois, Kentucky, Missouri, Montana, North Dakota, South Dakota, Texas, Utah, Washington, West Virginia. The following provide for junctions, connections, etc.: Alabama, Kentucky, Idaho, Louisiana, Mississippi, Missouri, Montana, Pennsylvania, South Dakota, Texas, Wyoming.)

Vote of shareholders.-Only 9 States provide for some system of suffrage on the part of shareholders, and for these the constitution of Illinois appears to have served as a model. "The general assembly shall provide, by law, * * the right of every stockholder to vote, in person or by proxy, for the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate such shares, and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them on the same principle among as many candidates as he shall think fit." (Found in the following constitutions: Delaware, Illinois, Idaho, Kentucky, Mississippi, Missouri, Montana, Nebraska, West Virginia.

Free transportation.-The granting of free passes to members of the legislature, State, municipal, and other officers, or the selling of tickets at a discount, is constitutionally prohibited in Alabama, Arkansas, California, Florida, Kentucky, Mississippi, Missouri, New York, Pennsylvania, Washington. The constitution of Wyoming also treats of the sale of unused tickets or parts of tickets.

Regulation. The establishment of tariff schedules and the regulation of rates are treated in the constitutions of Georgia, Mississippi, Missouri, Utah, Washington, and West Virginia. The legislature expressly reserves full power of control, in addition to reservations expressed in other sections of the constitutions of Alabama, Florida, Idaho, Illinois, Louisiana, Nebraska, South Dakota, Wyoming. Discriminations against persons and places or industrial sections are occasionally directly prohibited in the constitution. The form in which the prohibitions are expressed varies, but they all have in view the equal treatment of all the interests affected by the railway service. (The following constitutions contain more or less complete provisions on the subject of discrimination: Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Kentucky, Missouri, Montana, Nebraska, Pennsylvania, Texas, Utah, Washington, Wyoming.)


Pooling. The formation of trusts or combinations and the making of contracts restricting competition or having in view the control of prices is prohibited in ten constitutions (California, Kentucky, Idaho, Mississippi, Montana, North Dakota, South Dakota, Utah, Washington, and Wyoming).

Miscellaneous.-Only a few States provide in their constitutions for the organization of administrative bodies, such as railway commissions, and the powers and duties of the same. The California constitution not only prescribes the organization of the commission, but enumerates the more important powers of this commission, specifies the manner in which the commission shall be elected by the districts into which the State is constitutionally divided, and fixes fines for violations of the law on the part of railway agents or employees. Analogous provisions are found in the constitutions of Kentucky and Louisiana. The constitutions of Arkansas, Missouri, and Pennsylvania make it unlawful for railway officials to be interested in the purchase of materials and supplies for the construction of a railway. The constitutions of Arkansas, Kentucky, and Indiana prohibit the charging of a greater sum for a shorter distance over the same line in the same direction under similar conditions. Four constitutions-Colorado, Kentucky, Mississippi, and Montana-make it unlawful for a corporation to require its

servants or employees, as a condition of their employment, to sign a contract limiting the liability of the company in case of suits for damage, or precluding the possibility of bringing such suits altogether, by contract. About ten constitutions expressly limit the activities of a chartered corporation to the business which is expressly provided for in the charter. In a few cases the constitutions specify that no railway company can become a foreign corporation by consolidation; and, in a small number, a provision common in many of the earlier laws is enacted, compelling railway companies to establish stations or depots whenever they pass within a certain distance of towns and villages, frequently the county seat. The constitution of Washington stands alone, in that it expressly prohibits discriminations against express companies. Idaho and Wyoming demand the appointment of legal representatives of railway companies in those States. (This provision is common in general laws but not in constitutions.) The Missouri constitution provides for the payment into the State treasury of specified sums of money proportionate to the amount of capital stock, before a charter can be issued.

This analysis presents the leading features of the constitutional provisions of the several States. None of importance have here been omitted and only a few of the less important ones have not received mention. An examination of the appendix containing these constitutional provisions will show the great similarity which exists among many of the constitutions with respect to certain clauses, and the manner in which constitutional provisions were copied in one State from the constitution of another.


Terms applicable to later charters.-In a technical sense the term "charter" can scarcely be applied to the instruments issued to railway corporations under contemporary general laws. The word charter, through long usage, has come to signify a special grant of authority and power. In the constitutions of 21 States, as was noticed in the preceding section, the incorporation of railway companies under special or local acts is prohibited; in other States this prohibition is found in general laws; and in some States in both the constitution and in the general laws. The statutes of South Carolina mention the organization of railway companies "under charters," and in the Kansas statutes the term charter is also used. But these are exceptions. Terms like "articles of association," "certificate of incorporation," "articles of incorporation," "articles of agreement," and "letters patent" have come into use, and carry with them the significance of earlier special charters. Articles, certificates, etc., are charters only in a loose and general sense, because the contents of the franchise itself are expressed in the general law relating to railways and the constitutional limitations under which these have been exacted. The grant of a charter involves a distinct legislative act, authorizing the company receiving the same to exercise, in a measure, the rights of sovereignty, and to do the things for which the organization was accomplished. A certificate of incorporation, on the other hand, is issued in pursuance of law by administrative and not by direct legislative authority. Formerly a separate act of the legislature was necessary. Under general laws an administrative act for each such grant of power is all that is requisite for the organization of a railway company. To be sure, there is a very direct connection between the earlier charters and the later general laws, for many of the latter embody not only the essential features of the former, but frequently they are expressed in similar and even identical language. The change of name from article or certificate did not carry with it any radical change in the nature of the franchise. In this respect there exists continuity of development. The greatest change brought about by the transition from special charters to incorporation under general laws consisted in uniformity. Almost infinite variety in charter provisions was common during the earlier period of special legislation. Under general laws, even when compliance therewith was not enforced or enforceable, a certain degree of uniformity was brought about from the very first.

Conditions under which railway companies may be organized.-There are, however, features of railway legislation in the United States which reveal many elements of uniformity as to the conditions under which railway companies may be organized; and yet, after admitting this much, we are compelled to recognize the fact that railway laws are very far from being uniform, and that numerous variations and differences are noticeable.

The number of persons who may associate themselves for the purpose of incorporating railway companies varies from two or more in Washington to any number in Iowa. Between these extremes there exist 10 different numerical groups which may effect an organization: Three or more in Florida, Oregon, Montana, and Wyoming; 5 or more in Illinois, Indiana, Kansas, Nebraska, Wisconsin, Montana, etc.; 6 in Louisiana; 7 in Michigan, Kentucky, Alabama, New Jersey (for roads less than 10 miles in length); 10 in Maine, Georgia, Arkansas, Texas, etc.; 13 in New Jersey (for roads more than 10 miles in length); 15 in New York, Indiana, etc.; 20 in Vermont; 25 in Massachusetts, New Hampshire, etc. These numbers, or more, may in some States be composed of any persons whatsoever; in others, a certain proportion must be citizens; and, in a few, all of them must be citizens. Certain restrictions are occasionally made with respect to residence, both on the part of the stockholders and on the part of the board of directors and officers. The object of restrictive provisions relating to residence was evidently

to prevent the projected road from being controlled by “foreign influence.” During the early history of railways in the United States the possibility of foreign control, on the assumption that such control would result in the neglect of local interests, was used as a weapon to encourage local subscriptions to the stock of railway companies.

Contents of the articles.-The nature of the contents of the articles of association, or certificates of incorporation, can best be indicated by presenting the salient features of such articles in a few of the leading States, which may be considered typical of analogous provisions from the laws of other States-understanding by the term "typical" not identity, but essential similarity, leaving room for modifications of one kind or another in particular cases.

The law of Illinois requires a statement of the name of the corporation to be organized, the States from and to which the railway is to be constructed, the location of the principal offices, the time of beginning and completing construction of the railway, the amount of capital stock and the number and size of the shares, the names and residences of the persons who contemplate effecting an organization, and the names of the first board of directors.

According to the statutes of Maine, the articles must contain the name of the corporation and the gauge of the projected railway, the names of the places from and to which the same is to be constructed, the amount of the capital stock, which shall be not less than $3,000 per mile for narrow-gauge and $6,000 for standardgauge railways, the number of shares of stock, and the names and residences of 5 directors. Since, on this point, the laws of Maine (General Laws, 1899, p. 117, Sec. I) are in many respects much better than those of most of the States, a full quotation is here inserted:

"Said directors shall present to the board of railroad commissioners a petition for the privilege of said articles of association, accompanied with a map of the proposed road, on a proper scale. The board of railroad commissioners shall, on presentation of such petition, appoint a day for a hearing thereon, and the petitioners shall give such notice thereof as the said board deems reasonable and proper, in order that all persons interested may have an opportunity to appear and be heard therein. If the board of directors, after notice and hearing parties, finds that all the provisions (of law) have been complied with and that public convenience requires the construction of said railroad, said board shall indorse upon said articles a certificate of such facts and the approval of the board, in writing. The secretary of state shall, upon payment of $20 to the State, cause the same, with the indorsement thereon, to be recorded, and shall issue a certificate in the following form.”

Then follows the prescribed form of certificate, with the contents indicated above.

The laws of Arkansas, for 1899, created a State board of railroad incorporation, composed of the governor, who acts as chairman, the attorney-general, auditor, secretary of state, treasurer, and commissioner of State lands. This board hears all applications for certificates of incorporation, and on its recommendation such certificates may be filed with the secretary of state, and thus legally empower an organization to construct a railway under the terms of the general laws of the State. Ten or more persons may organize, elect a board of directors, and subscribe to the articles of association when $2,000 per mile has been subscribed and 5 per cent of the subscriptions paid to the board of directors, a majority of which must be citizens of the State.

The laws of California require the articles of incorporation to state the name of the projected corporation; the purpose for which it is to be organized; the places from and to which the railway is to be constructed, as well as all intermediate branches; the estimated length of the road; the amount of the capital stock, $1,000 per mile of which must be subscribed before the articles can be filed, and 10 per cent actually paid in. The number of directors varies from 5 to 11. but 5 of them must be residents of the State. The sale of railway franchises and municipalities must be advertised, and the franchise given to the highest bidder. Massachusetts.-The articles must contain the name, route, gauge, capital stock, and other common items. In case of standard-gauge railways $10,000 per mile must have been subscribed and for narrow gauge $3,000. The amount of the capital stock depends upon the detailed estimate of costs. No increase in capital stock can be made without the authority of the railway commission, before whom a hearing must previously have been given, upon which such increase or refusal to permit such increase is determined. The articles and certificate must be filed with the secretary of state. All petitions (compare the laws of Maine) for such charters must be accompanied by a map upon a proper scale, showing in detail the entire route of the road. A certificate of public exigency" is also required


before a charter can be granted. The railway commission, upon due notice, must give a hearing to all persons interested in the projected railway, and not until such persons have been given an opportunity to be heard and all the other provisions of the law complied with can a charter be granted. It will be noticed that the Massachusetts law still provides for the granting of special charters, although these special grants are surrounded by wholesome and what appear to be entirely adequate provisions and safeguards.

Michigan. Although a law of 1891 of this State declared every railway company operating within the limits of the State "to be in all respects subject to the general laws of the State respecting railroads, as now existing or as hereafter amended," a conflict between such charter provisions and general law provisions is still possible, as has already been indicated in another connection. Consequently, in 1889, there was created in this State a commission-composed of the commissioner of railroads, the State treasurer, and the secretary of state-whose duty it is to negotiate with railway companies operating under special charter, to determine upon what terms such railway companies will surrender their charter rights. For this purpose the commission is given authority to inquire into the business of railways, to secure the necessary information by subpoenaing witnesses, etc.

Georgia.-In addition to the usual provisions of the articles of incorporation the laws of Georgia provide for a petition which must be presented at least 4 weeks before a charter can be secured. Companies may amend their charters by adopting the general railway laws of the State.

Significance of certificates and articles.-These articles and certificates empower railway companies to make examinations and surveys for the proposed railway, in order to select the most advantageous route; to purchase, receive, and hold an amount of real estate necessary for the construction, maintenance, and operation of the road; to own other kinds of property essential to railway business; to have perpetual succession, or succession for a certain period of time; to have the power to sue and to be sued; to establish connections with other railways; to charge or to receive such remuneration for their services as from time to time may seem reasonable; and, in general, to enjoy those rights, privileges, and immunities which the law guarantees to all similar corporations, and which are essential in carrying out the legitimate aims and purposes of the corporation. The completeness with which the powers and duties of railway corporations are prescribed in different laws vary somewhat, yet there exists, perhaps, greater similarity and more completeness in this respect than in any other subject of railway legislation. In some States corporate powers of railway companies are enumerated in separate laws; and, in others, all the leading features of legal provisions relating to railways are expressed in the commission laws. It is unnecessary to enumerate in the lengthy phraseology of the law books the detailed rights and privileges of railway companies, for they are the same as those enjoyed by corporations in general, and are not essential to a consideration of the degree of regulation and control which is possible under the existing railway laws of the different States of the Union.

The provisions of the few articles which have been presented above are sufficient to show that there exist differences among the States with respect to the time limits within which railways may be constructed; the amount of capital stock, and the subscriptions thereon per mile of railway; the degree of publicity given to the applications for charters, and other things. A fee for filing certificates is charged in a number of States. For instance, in North Carolina $250 must be paid before a bill can be introduced to incorporate or amend. In Maine, a fee of $20 is exacted; and similar fees are charged in Wisconsin, Washington, and other States. The laws are weak in the financial requirements which they exact of railway companies. It would seem that some definite proportion should exist between the amount of the capital stock and the length and characteristics of the projected road; but such is not generally the case. Idaho and Indiana require a subscription of $1,000 per mile; Kentucky, $250 per mile, of which 20 per cent must be paid in cash; Arkansas, $2,000 per mile; Maryland, 10 per cent payment on shares; Virginia, a payment of $2 per share when subscriptions are made; New Jersey, $10,000 per mile, and a deposit of $2,000 per mile when the articles of association are filed, which latter sum, however, is returned to the board of directors when the road is completed. This is sufficient to show existing variations.

Corporate life and reserved rights of the State.-While many of the early charters and general laws were unrestricted in their nature, it was not long before a reaction against this lack of restraint set in, and regulating features, more or less adequate in their nature, were introduced in charters and certificates. Many such charters contained in one of their concluding sections the proviso that the

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