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The transportation of troops and munitions of war is occasionally provided for; and in various Southern States railway officers are expressly exempted from the performance of military duty. In a few charters the power of the company to own slaves is treated. A sinking fund is also mentioned in a very few of them.
An archaic feature of our charters is found in the provisions relating to the use of the same railway track by different shippers, and the rules governing the construction of rolling stock. For example, in Massachusetts a corporation was authorized to specify in its by-laws the form and construction of the wheels, and the weight of the loads which should pass over its road. This clause had directly in view the use of vehicles other than those owned by the corporation. In several charters granted in the Northwestern States the form of the vehicles, as well as the price to be charged for the transportation of goods and owners' vehicles, is specified in the charters. In New Jersey, it is provided "that no farmer belonging to this State shall be required to pay any toll for the transportation of the produce of his farm to market over the said road or roads, in his own carriage, weighing not more than one ton, when the weight of such produce shall not exceed 1,000 pounds, but the same farmer may be charged toll as for empty carriage." It will be noticed that the term "toll" is here used to designate remuneration for the act of transportation, while the term “expense," or "cost of transportation," as was noted in an earlier paragraph, relates more particularly to remuneration for the use of the track and represents a contribution to the fixed charges of the road.
PART II.-LATER CHARTERS AND EARLY GENERAL LAWS.
General characteristics.-The terms "early" and "late," used with reference to railway charters, are relative in their significance; for the same year which is early in the history of one State may be late in that of another. For instance, charters granted in the New England and Middle States between 1835 and 1840 may be characterized as later, while those granted in States like Wisconsin and Minnesota during those years would decidedly belong to the earlier charters of that section. The legislative history of railways in the various States of the Union is essentially similar, and as we observe the movements of this legislation from east to west we may notice that in turn each State goes through, in the main, all the experiences and stages of advancement of other States which preceded it in railway development. An examination of the contents of these char ters, as one observes their march westward, clearly indicates the fact that the restrictions of the earlier types granted in the East are gradually made milder, if they are not altogether lost. Occasionally there is a reversion to type-a Western charter embodying all the salient restrictions and regulating features of the severest Eastern charters. The additional observation may be made that the maximum-rate provisions, which are rather common in the charters of the earlier East and Middle West, are frequently embodied in later charters. Then, as time advances and the more modern phases of railroading make their appearances, clauses referring to consolidations, discriminations, and even long and short haul are occasionally inserted. Aside from the enumeration of names comprising the board of commissioners, which usually appears in the first or second section of the charter, no regular order is maintained.
It is clear that States copied largely from one another, and in the process of copying different charter sections appear to have become badly mixed; and in numerous instances a considerable number, even a majority, of clauses incorporated in the more complete charter which served as the model are left out altogether.
While large numbers of special charters were granted up to 1870, general laws relating to railways appeared early in the thirties, and in a few isolated cases even before that time. A custom which aided in bringing about the transition from special to general laws was the abbreviation of railway charters by reference to previously granted charters in the same or, in isolated cases, in other States. Under this custom the charter only contained a few purely individual and local specifications, with the additional blanket provision that the company thereby incorporated shall enjoy all the rights and privileges previously granted to another specified corporation. Thus, in New York numerous charters are abridged by reference to the Attica and Buffalo charter granted in 1836. The same method was largely employed in the construction of charters in Maine, Virginia, Missouri, Indiana, Minnesota, Tennessee, and other States. When, as was often the case, a considerable number of charters were abridged in the same State by reference to some one charter, an element of uniformity was introduced with almost as much efficiency as if general laws had been enacted.
One of the peculiarities of railway legislation in all sections of the country is the granting of special laws after general laws had been enacted in the respective States. Indeed, it is not uncommon to find upon the statute books a comprehensive general law enacted on a certain day and perhaps a special_charter granted, if not on the same, then on immediately succeeding days. Large numbers of special charters were granted completely ignoring in their provisions existing general laws.
The Northern Pacific franchise.-A late illustration of the organization of a railway company under special charter is afforded by the history of the Northern Pacific Railroad, the leading facts of which are set forth by the general counsel of that company in the preface to his compilation of the Northern Pacific charters.
"Soon after the institution of the foreclosure proceedings it was determined that it would be necessary to reorganize the Northern Pacific Railroad Company under a new charter, to be obtained either from Congress or from some one of the States. Congressional legislation was considered doubtful, and the reorganization committee early took steps to secure a charter for reorganization under a State law.
"In all of the States in which any portion of the property is situated the granting of charters by special act is prohibited, and corporate organization can only be effected under general laws. Such a constitutional amendment had been adopted in Wisconsin in November, 1871, but the supreme court of Wisconsin had several times decided that the amendment was prospective in its operation, and left the legislature at liberty to amend special charters granted prior to the adoption of the constitutional amendment.
"It was considered preferable to secure a special charter, which should be open from time to time to special amendment, and it was determined that the charter of the Superior and St. Croix Railroad Company (a Wisconsin corporation) would be the best adapted for the purpose. This charter was acquired by the purchase of all the stock of the company and was amended by special act (chapter 244, Laws of 1885) of the legislature of Wisconsin, as hereinafter set forth.
"As the reorganized company was to acquire the vast properties of the Northern Pacific Railroad Company and to issue thereon a great amount of stock and bonds in order to carry out the plan of reorganization, it was thought prudent to leave unsettled no possible question, however technical, based upon nonuser or upon any other ground, concerning the validity of the charter. To test the question the attorney-general of Wisconsin applied to the supreme court of that State for leave to file in the court, according to the practice thereof, a bill in the nature of a quo warranto to forfeit the franchise on the ground of nonuser. The case was fully argued, and on the 19th day of June, 1896, the supreme court unanimously decided that the corporation was not dissolved by nonuser, and that if any ground for forfeiting the charter had existed it was waived by chapter 244 of the Laws of 1895 amending the charter above referred to. So that before the purchase of the properties of the Northern Pacific Railroad Company and the increase of its capital stock and the provision for the issue of securities, the validity of the charter of the present Northern Pacific Railway Company (formerly Superior and St. Croix Railroad Company), by the unanimous decision of the highest court of the State, had become res adjudicata."
The charter of the Superior and St. Croix Railroad Company, upon the basis of which the Northern Pacific now does business, was granted in 1870 and provided for the construction of a rather short and not very important railway in the northwestern part of the State of Wisconsin. The road, however, was not built, and the charter provisions were not made use of. A few unimportant amendments were adopted in 1871, and in 1895 the legislature of Wisconsin adopted another and very comprehensive amendment which, together with the original charter, constitutes the present franchise of this great transcontinental line. The amendment of 1895 describes the route of the present Northern Pacific; it gives the company power, among other things, to receive and store any property in any of its depots or other buildings, including elevators ; to demand, collect, and receive such sum or sums of money for the transportation of persons and property and for the storage of property as shall be reasonable." The extension of the road and its connection with other lines was not directly provided for in the charter itself, but the general laws of the State, as amended in 1897, grant ample powers for this purpose:
"Any railroad corporation organized and existing under the laws of the Territory or State of Wisconsin, or existing by consolidation of different railway companies under the laws of the Territory or State of Wisconsin, and of any other Territory or Territories, State or States, may consolidate its stock, franchises, and property with any other railroad corporation, whether within or without the State, when their respective railroads can be lawfully connected and operated together, to constitute one continual main line, with or without branches, upon such terms as may be agreed upon, and become one corporation by any name selected, which within this State shall possess all the powers, franchises, and immunities, including the right of further consolidation with other corporations under this section, and be subject to all the liabilities and restrictions of this chapter, and such in addition, including land grants and exemptions of land from taxation, as such corporations peculiarly possessed or were subject to at the time of consolidation or amalgamation by the laws then in force applicable to them or either of them."
The Wisconsin statutes, like those of most other States, as will be noted more in detail later, prohibit the consolidation, lease, purchase, or control by one railway corporation of another parallel or competing line, to be determined by jury. To complete its franchise the Northern Pacific filed this charter in all the other States through which it runs, and appointed certain persons as its legal representatives in those Commonwealths. In Idaho a special promise is exacted to the effect that the corporation accepts in full the provisions of the State constitution. It should be noticed that the reorganization of the Northern Pacific under a special charter took place at a time when every State through which its lines pass had on its statute books general laws governing the organization of railway companies.
The physical location of the railway is by no means an indication of the source of its legal power, for, as in the case of the Northern Pacific, a great system may be operated on the basis of a charter granted to an insignificant road in a distant State. The Southern Pacific, for instance, is organized under the laws of Kentucky. What constitutes the essence of the legal privilege of a modern railway corporation. is an extremely complex problem, the difficulty of which is strongly impressed upon us when we realize that scores, if not hundreds, of separate charters granted by different States are comprised in the existing franchises of our great companies. The Pennsylvania company, for instance, represents more than 150 original lines, each having its special charter or certificate of incorporation. Many of these charters represent conflicting, if not mutually exclusive privileges, and what the charter rights of such a corporation are is a question difficult of solution. Not only is there a possibility of conflict between the diverse provisions of different charters, but also between the charters and the general laws, although in many States the supremacy of general over special laws has been at least acquiesced in, if not publicly recognized. The chairman of the Massachusetts railway commission writes that in that State it has been recognized that general laws have superseded the earlier special enactments. This appears especially significant when we remember that, with a few minor exceptions, all the railways of Massachusetts were incorporated under special charters-a compilation of which makes a good-sized volume-before comprehensive general laws had been passed. This possibility of a conflict between special and general laws is illustrated in the railway history of Michigan. The legislature of that State in 1898 created a commission, composed of the railway commissioner and two State officers, to negotiate with certain railwa companies of the State operating under special charters, for the purpose of ascertaining upon what terms the companies would be willing to surrender their charters. While the question of the amount of taxes these companies were to pay was the immediate cause of this action on the part of the legislature, a similar situation with respect to the other question is by no means an impossibility. No further reference is here made to this difference between the railways and the State, because it involves the question of taxation, which the Industrial Commission has fully treated in another part of its report. (The well-known instance of the Illinois Central and the reserved rights the State with respect to taxation in the charter of that company is also suggested in this connection.)
Early general laws.-In the first part of this report on early charters reference is made to an early law of Massachusetts of 1808. In 1833 the legislature of that State enacted a law "defining the rights and duties of railway corporations in certain cases." This law was included in a larger act on canals, turnpikes, and railroads. The law of 1833 also embodied the idea of a preamble by specifying that petitions for the construction of a railway shall be accompanied by the report of a competent engineer. Connecticut, in 1849, adopted a fairly comprehensive amendment to the earlier act relating to railway companies. In the first section this law provides that all railway companies shall be subject to general laws, except when otherwise specially provided for. A provision similar to that found in Massachusetts was embodied in the 1 w providing for the report of a competent engineer in connection with the petition for a charter. The usual provisions with respect to organization, shares of stock, location, annual reports, and other financial affairs of railway companies were provided for. In Maine a general law adopted in 1841 contained the following section: No petition for the establishment of any railroad corporation shall be acted upon unless the same is accompanied and supported by the report of a skillful engineer, founded on actual examination of the road and by other evidence, showing the character of the soil, the manner in which it is proposed to construct said railroad, the general profile of the country through which it is proposed to be made, the feasibility of the route, and an estimate of the probable expense of constructing the same.
petition shall set forth the places of beginning and ends of the proposed railroad, the distance between the same, the general course of said railroad, together with the names of 5 towns through which the same, on actual survey, may be found to pass." This provision is typical of analogous clauses in the laws of other North Atlantic States. By 1848 Maine granted charters containing only a few sections, together with the additional statement that "all the privileges and immunities usually granted to such corporations" shall be delegated to the company thereby formed. New Hampshire adopted a general law in 1843 dealing with expropriation, crossings, fences, contracts among railway companies, and so on. The year following "An act to render railroad corporations public in certain cases, and constituting a board of railroad commissioners" was adopted. The commission established by this law was empowered to lay out routes on petition only, to inspect roads and railway accounts. Vermont enacted similar laws in 1846-47 and 1849, the latter being quite a comprehensive general law.
New York, which is representative of the Middle States, had passed 30 general laws before 1834, beginning with an act to prevent injury to railroad property and to insure the safety of passengers. These laws embraced subjects like the relation of railroads to canals, highways, Indian lands, to taxation, maps and profiles, contracts, loaning the credit of the State, carrying mails, junctions, baggage checks, altering lines, transportation of freight, suits against companies, destruction of noxious weeds, and such like. A law of 1843 compelled railway companies to report annually to the secretary of state. Like the New England States, New York declared the "public use" of a railway, and demanded proof that the proposed railway was of "sufficient utility to justify the taking of private property in accordance with the provisions of the general law authorizing the organization of railway companies. By 1848 New York had worked out a fairly comprehensive general law, but it was not until 1850 that what may be called the fundamental law of the State was adopted. (The New York law of 1850 was transcribed, with the exception of a few sections relating to the Erie Canal, by the legislature of Wisconsin in 1853, which, however, failed to pass the bill.) The law of 1850 forbids the organization of corporations by special acts, except for municipal purposes and in cases where, in the judgment of the legislature, the objects of the corporation can not be obtained under general laws. In addition, it contains, among others, provisions relating only to the organization of railway companies, subscription and forfeiture of stock, transfer and increase of stock, expropriation, change of route, filing maps and profiles, paying labor employed in construction, formation of trains, baggage, intoxication of employees, annual report of over 100 items, and other phases of legislative control.
Notwithstanding numerous general laws, the New York and Erie Railway secured 17 amendments before 1850. The Portsmouth and Concord Railway secured 1 amendment during each of the first 10 years of its existence. The Western Branch, Massachusetts, secured 22 amendments before 1853, and the Eastern Branch secured 18. Thirteen were granted to the Housatonic between 1838 and 1850; the Camden and Amboy, 15; the Delaware and Raritan, 14. The Pennsylvania adopted 22 up to 1854, and the Baltimore and Ohio 21 between 1828 and 1852. Since these amendments dealt with such topics as the increase of stock, the issuance of bonds, holding lands, building telegraphs, extending lines and forming connections, the construction of bridges, and so on, it is obvious that a single comprehensive law, properly observed would have answered all the purposes, and in a uniform way, of all the special charters with which the various legislatures had to concern themselves. Numerous contemporary newspaper paragraphs can be found deploring the fact that legislatures are obliged to use so much of their time for the construction of special laws which could be so much more efficiently dealt with under general statutes.
Among the States of the Middle West, Illinois began early. In 1849 the legislature of that State passed "an act to provide for a general system of railroad incorporations." This law prescribes the formation of railway corporations and the powers, duties, and liabilities of officers. The board of directors is given full power over rates, but these are limited to 3 cents per mile for passengers, unless otherwise provided for by special act of the legislature. The legislature is empowered to reduce rates without the consent of the company, but no such reduction shall cause the net profits to fall below 15 per cent per annum. The probable use of the proposed railway must first be ascertained, and the interested parties must be given an opportunity to be heard. Annual reports are demanded, and the act is to apply to all existing corporations, so far as the same is not in conflict with special charters granted. The legislature of Massachusetts, in 1855, adopted a comprehensive general law including provisions on legislative control of rates, junctions, taxing capital stock 1 per cent per annum, providing for reasonably good service, consolidation, and so on. However, in this, as in so many