part of the railway companies to make these connections, under conditions determined by the commission, a fine of from $500 to $1000 may be imposed. Copies of all contracts for joint rates must be filed with the Nebraska board of transportation. The corporation commission of North Carolina has power to establish through rates and to approve contracts for the division of earnings. in such cases. The law of North Dakota guarantees ample facilities for transferring freight and passengers from one line to another, and prescribes that no railway company shall do anything which may interfere with shipments of freight from being continuous. In 1899 South Carolina enacted a law making connections compulsory, and providing that the expense involved in making such arrangements shall be borne ratably in accordance with the orders of the commission. Older laws provide for through bills of lading. The laws of Texas. compel the railway companies to receive freight from connecting lines. Penalties are imposed for collecting more than the charges specified in the bill of lading, and goods are to be delivered on the payment of the amount named in the bill. In Wisconsin, on complaint, the railway commissioner shall investigate connections made between railway companies, and if he thinks the case of sufficient importance he shall bring the same before a board composed of the commissioner, the attorneygeneral, and the governor, who shall try the case and make a proper order in accordance with their

findings. Perhaps a half dozen additional states have laws specifying that railway companies shall permit an interchange of business; that track connections shall be made on demand, and analogous provisions. More than one-half of the states, it will be noticed, have thus far failed to provide by law for matters relating to through traffic. To what extent the federal law on interstate commerce, and the powers given to the Interstate Commerce Commission, makes this unnecessary or undesirable, lies outside the province of this chapter.

Consolidation and Pooling. The assumption on which state and federal railway legislation largely rests is that of free and unrestricted competition among the railways of the country. Provisions on consolidation were rather common among early charters, and are almost universal in case of later charters and general laws. Pooling, whether regarded as an end in itself or as a stage in the growth of consolidations, has received much less attention at the hands of state legislatures than discriminations, for more than one-half of the states have no statutory provisions governing pooling contracts or in any way recognizing them. Among economic students it is a familiar fact that railways are not, like many other industries, subject to the laws of competition; that competition acts only within narrow limits among different lines of railways.1 But the accuracy or inaccuracy of the 1 See chap. II, Part 3.

assumptions of our laws is not the problem before us. We are concerned here primarily with the statement of facts in regard to legislation governing railway consolidations and pooling.

Consolidations. — Legislation under this head falls into two groups. On the one hand, those

laws which either directly or in a modified form permit consolidations among all classes of railways, and, on the other hand, laws which prohibit consolidation among parallel or competing lines but permit it in cases of continuous lines of railway. In a number of states, like Michigan, Maryland, Georgia, and Missouri, laws governing the consoli. dation of continuous lines are very elaborate. It is common to specify a certain number of days' notice which must be given to shareholders when action upon consolidation schemes is to be taken. The number of votes requisite to approve the consolidation contract is usually prescribed, and varies from a unanimous to a majority vote a two-thirds or three-fourths vote of the stockholders being most common. It is worth while briefly to indicate the contents of a few typical laws of this kind.

Georgia permits the consolidation of continuous lines and the leasing of other railways, but all contracts must be recorded, and suit for the unlawful acquisition of railway lines may be brought in any country through which the same runs. Under the statutes of Maryland one railway company may acquire the property and rights of other railway companies, but articles governing such acquisition

and control must be filed with the secretary of state. In Michigan these contracts have no force before a duplicate copy has been filed in the office. of the secretary of state and the articles of consolidation have been submitted to and approved by a board consisting of the attorney-general, commissioner of railroads, and the secretary of state. In Wisconsin parallel or competing lines are enjoined from consolidating, but the fact whether or not such lines are competitive may be determined by jury. To quote the laws governing this topic in full, even in one or two states, would unduly increase the length of this chapter without adding anything of vital importance to its contents; and it may therefore suffice to give a brief extract from one of the most condensed statutory provisions of this kind: "Any railroad, canal, or other corporation, or the lessee, or purchaser, or manager of any railroad or canal corporation, shall consolidate the stock, property, or franchises of such corporation with, or lease or purchase the works or franchises of, or in any way control any other railroad or canal corporation, owning or having under its control a parallel or competing line; and the question whether railroads or canals are parallel or competing lines shall, when demanded by the party complainant, be decided by a jury as in other civil issues." This is illustrative of the provisions in two-thirds of the states. Only a few, like Delaware, Oregon, and Rhode Island, are silent on this point.

Coming now to that group of a dozen states which permit consolidation within limits, attention may be called to the laws of New Jersey under which domestic-that is, state railways-may consolidate, but consolidation with foreign railways is prohibited except with the consent of the legislature; and a law of 1900 expressly provides that railway companies may acquire the rights of other companies. While New York laws prohibit the consolidation of parallel lines, such consolidation may, nevertheless, be permitted by authority of the railway commission. New York provisions for the consolidation of continuous lines, like those of Ohio and Michigan, are extremely elaborate. In Massachusetts the consolidations are subject to the approval of the railway commission; and in Florida contracts for the consolidation of competing lines are ultra vires unless approved by the commission.

Without duplicating further legal provisions bearing upon both types of consolidation, the lack of uniformity upon this, as upon so many other questions, is apparent. When we view the facts of railway history, the steady and uninterrupted consolidations which have absorbed line after line, on the one hand, and the contemporary existence and growth and duplication of laws attempting to govern these, on the other hand, the conclusion is irresistible that somehow these laws did not accomplish the purposes for which they were enacted. The wisdom of the purposes of these laws