STATE OF WISCONSIN THE RAILROAD LAW OF 1874. PROCLAMATION AND ADDRESS BY THE GOVERNOR. Opinion of the Attorney General. CLASSIFICATION OF ROADS AND RATES OF FARE AND FREIGHT, BY THE RAIL¬ ROAD COMMISSIONERS. . MADISON, WIS.: ATWOOD & CULVER, PRINTERS AND STEREOTYPERS. i874- library bureau of railway economics, , | washington. d. c. uwv, of wta m exehawwfc' librafi v b'ureau of railway f.)'jnomio'- ■ washingto'l. >). 0. PROCLAMATION BT THE GOVERNOR. State of Wisconsin, Executive Office, Madison, May 1, 1874. Whereas, The legislature, at its last session, passed an act enti¬ tled " An act in relation to railroads, express and telegraph compa¬ nies in the state of Wisconsin," classifying railroads and freights, limiting and fixing the compensation to be charged for the transpor¬ tation of freight and passengers, and providing for the appointment of railroad commissioners; and Whereas, The power of the legislature to regulate the operation of such companies in the respects named, is conceded to exist; and Whereas, Said act was duly approved on the 4th day of March, A. D. 1874, and was officially published on the 28th day of April, A. D. 1874, and is now to all intents and purposes, the law of the land ; and Whereas, The Chicago, Milwaukee and St. Paul Railroad Com¬ pany, and the Chicago and Northwestern Railroad Company, on the '29th of April, A. D. 1874, filed in the Executive Department com¬ munications signed by their respective presidents, and addressed to the Governor of the state of Wisconsin, in which they announce a determination to operate their roads without reference to the provis¬ ions of the act, and in defiance of its requirements; and Whereas, This unusual course on the part of these two great •corporations, is at once a source of profound regret, and in marked contrast with the patience and submission exhibited by the people in the presence of what they have deemed the unjust and burdensome •exactions of the railroad companies in the past, and if persisted in must seriously disturb the business and greatly imperil the indus¬ tries of the state ; and Whereas, Tne constitution of the state devolves upon the exec¬ utive the duty to " expedite all 3uch measures as snail be resolved by the legislature, and to take care that the laws be faithfully exe- •ecuted." Now, therefore, I, William R. Taylor, governor of the state of Wisconsin, do proclaim and make known that the law of the land must be respected and obeyed. While none are so weak as to be without its protection, none are so strong as to be above its re¬ straints. If the provisions of the law be deemed oppressive, re- 4 sistance to its mandates will not abate, but rather multiply the anti¬ cipated evils. It may be that the law is defective in some of its de¬ tails, but it is still the law of the land, enacted by the legislature in the exercise of its conceded powers, and in accordance with the clearly expressed sentiment of the people of the state. It is the right of all to test its validity through the constituted channels, but with that right is coupled the duty of yielding general obedience to its requirements until it has been pronounced invalid by competent authority. I am not without hope that better counsels will yet pre¬ vail with the railroad companies of the state ; but if they or any of them are fixed in the determination to pursue the policy announced, •upon them will fall the penalties of the law, and the consequences of severe popular condemnation. I, therefore, enjoin all railroad corporations, their officers and agents, peaceably to submit to the law, for, since the executive is charged with the responsibility of seeing that the laws are faithfully executed, all the function of his office will be exercised to that end; and for this purpose he invokes the aid and co-operation of all good citizens. In testimony whereof I have hereunto subscribed my name and caused the great seal of the state to be hereto affixed. Done at the capitol in the city of Madison, this first day of May,, in the year of our Lord, 1874. [l. s.] By the Governor: Peter Doyle, Secretary of State. ADDRESS BY THE GOVERNOR. State of Wisconsin, Executive Department, Madison, May 21, 1874. To the People of Wisconsin: The act of your legislature, passed at the last session, entitled "An act relating to railroads, express and telegraph companies in the state of Wisconsin," was approved by me March 11, 1874, in the firm conviction of the necessity and validity of such legislation. But, in order that ample time should be given to the railroad com¬ panies affected thereby to arrange their business so as to meet its re¬ quirements, the legislature very considerately directed that its pub¬ lication, which was essential to its taking effect, should be delayed until the 28th day of April. So far from using this period of forty-eight days for such purpose, however, two of the most powerful railroad companies, as you are aware, to-wit: the Chicago, Milwaukee & St. Paul, and the Chicago & Northwestern Railway Companies, appear to have employed it in conspiring against the law, and in laying plans to defeat its opera¬ tion. To this end, they procured, and widely published, the opin¬ ions of counsel hitherto in high repute, denying, first, the right of the state to limit the tariff's of railway corporations; and, secondly, upon the basis of ex parte testimony, pronouncing this particular law invalid, on account of the rates therein prescribed being unjust and unreasonable, and gravely encouraging disobedience to its com¬ mands. Acting upon these opinions of interested counsel, and under the dictation of directors residing in remote parts of the coun¬ try, the presidents of these companies then addressed to your exec¬ utive, communications, declaring their belief in the injustice and in¬ validity of the law, and their deliberate purpose to disregard its pro¬ visions. It is known to you that immediately thereafter, to wit, on the first day of May, I made public proclamation of these facts, de¬ claring that the law of the land must be obeyed; that while the right of all to test the validity of the law is conceded, with that right is coupled the duty of yielding obedience to its require¬ ments until it has been pronounced invalid by competent authori¬ ty ; expressing the hope that better counsels would yet prevail with the railroad companies of the state; and enjoining all rail¬ road corporations, their officers and agents, peaceably to submit to 6 the law. This counsel and proclamation of your Executive have have been wholy disregarded. The corporations above named have arranged their tariffs without the slightest apparent regard to the classification and rates prescribed in the law, and prepared and published by the Board of Railroad Commissioners. In many cases they have even increased their rates- for transportation of freight above what they were when the# law was enacted and became of binding obligation. They have issued commands to their agents and employees, requiring of them a like obedience, under pains and penalties which, in many cases, practi¬ cally amount to compulsion; thus usings their influence and power to insure the criminal disobedieuce of many citizens, habituating them to a contempt for the authority of the state, when its laws are not in harmony with a supposed self-interest, and hence contributing in a high degree to weaken the respect for law in general. They are- now exacting and receiving rates which the Legislature, after much consideration, and the patient hearing of able counsel and officers- representing their interests, has, in effect, solemnly declared unreason¬ able, unjust and extortionate, and they boldly proclaim to the authorities and people of the state, and to the world, that they will continue so to do, any law of the state, not approved by them, to the contrary notwithstanding. In a word, they have set up another law than that of the state, and have made obedience to it the su¬ preme duty of all their corporate servanls and the present necessity of the whole people. No objection is made to any just contest upon the validity of the law. The courts of this state are open to every suitor, and the cause of every defendant will be heard with impartiality and decided upon principles of justice. Indeed, the state has already instituted, and will urge to the speediest possible issue, suits in the supreme court,, involving the validity of the law. But for the meantime, or until the law is amended or repealed, it is sufficient for your Executive, and should be enough for every corporation and every citizen, that the principle upon which it rests, has been affirmed by the supreme courts of the state and the United States, as well as by very many of the ablest jurists in the country, and that the statute itselt has been in due form enacted and approved, and is the law of the land. If other motives were needed to insure obedience to its mandates it might easily be found in the fact that the law had origin in a deep conviction, widely felt, that the railway corporations of the state, al¬ though recipients of great gifts and franchises, have, in many in¬ stances, exacted excessive tolls, and made unjust discriminations, to the injury of citizens and the enrichment of directors and managers, if not of stockholders; and that the very powers conferred upon them for the public good, as well as for their corporate advantage, have been systematically exercised to prevent the enactment of just laws for the redress of these grievances. However this may be, it cannot be suffered that the charge of ■unreasonableness made by those whom the law seeks to restrain from extorting excessive rates shall so far arraign its justice as to 7 suspend its operation until, by the tedious processes of the courts, delayed by appeals and every possible legal artifice, its validity is, at length fully determined. Submission like this on the part of the Executive and people would result in a continuance of extortionate gains by the corporations, and perhaps yet greater sacrifice by the people for years to come. Nor is this all. The delay being granted, what guaranty is to be found in the present attitude of these great corporations that they would yield a willing obedience in the event of an affirmative'decision by the courts? If they have become so strong and independent of the State that the legislature cannot be sure of their obedience until its enactments are first approved by the courts, is it certain that even the courts will be able to effect a jieaceable compliance ? It cannot be suffered that any law, which the legislature has enacted and the Executive approved, shall be put in abeyance and treated with open disobedience and flagraht contempt by any person, corporation or combination of corporations, on the plea of unreasonableness, or upon any plea whatever. Such a sufference would tend to a subversion of all legal authority. Fellow Citizens: The foregoing facts and considerations can lead but to one conclusion. As stated in my Annual Message, " It must be admitted that railroad companies are necessary to the prosperity and development of the state, and that in the discharge of their honorable obli¬ gations to the public, they are entitled to the gratitude and positive and uniform, protection of the legislative authority. In this matter the people will make no peace with enemies, but they seek no war with friends "While they are willing to encourage to the fullest extent, the development of the railway system of our state, they cannot submit to manifest injustice, nor permit the abuse of chartered privileges." The law must therefore be enforced, and with a rigor duly propor¬ tioned to the power and defiance of the offenders. It is for this reason, and because of the general apprehension that exists as to the steps necessary to the enforcement, that I have felt it my solemn duty, after reasonable delay and the accumulation of evidence, to follow my proclamation with this plain and fuller statement of the whole case in its present aspect; setting forth the nature and enormity of this conspiracy against the law, and the dan¬ ger it threatens to our free institutions and the imperative duty of every citizen to lend his aid in putting it down. The law clearly defines the obligations of the railway corporations, and provides ample remedies for its violation. But the legislature, anticipating no such extraordinary and flagrant violation and con¬ tempt of its statutes, has made no provision to enable either the executive or the railroad commissioners to meet the emergency with extraordinary means; it is simply provided that every infraction should be punished by the ordinary means of prosecuting to con¬ viction and punishment by fine and damages, every offender. It naturally assumed that the people, who had so repeatedly made the charge of extortion and oppression, only waited for an opportunity to apply the remedy for their grievances ; that they were prepared for a prompt discharge of the patriotic duty of co-operating with the public authorities for a vindication of the sovreignty of the 8 state, and for the enforcement of a law by themselves declared to be essential to the general welfare. And hence, although ample facil¬ ities are afforded for the convenient trial of offenders by giving to justices of the peace concurrent jurisdiction with the circuit courts, yet, as in other actions of a criminal nature, no prosecution can origi¬ nate otherwise than in complaint made by the injured party or some other person having knowledge of the offense. With the usual cheerful obedience given to the laws, a few appli¬ cations of this remedy would induce a general acquiesence. But if the aggregate wealth of great corporations is to support an organized and general defiance of law, the only means provided must be cordi¬ ally employed by all good citizens, and your Executive sustained by the hearty co-operation of subordinate officials. I cannot doubt that this support and co-operation will be accorded, "when the whole case is fairly understood. The interests at stake are too vast and too vital to admit of any other conclusion. For it will then be seen, not only that this particular law, framed by a legislature of your own choosing, enacted in your interest, and in obedience to your own express command, is disregarded and con¬ temned, but that the very idea and principle of law, and a just sense of the duty of obedience to the constituted authorities, would be clouded and imperilled by a neglect promptly to meet, rebuke, and punish such defiance of the popular will. It will also be seen that the people are dealing with a powerful and dangerous combination, which holds itself above the law, and seeks to make its own sanction superior to the sanction of any statute—that it is not the form and terms of this law upon which issue is taken, but that these corpora¬ tions deny the principle that a railway, though built with the public consent, for a public use, and in part with the aid of public gifts, and chartered under a constitution which expressly reserves to the people the right of general control, can, for any purpose, in any way, be limited as to its tolls by regulations other than those of its own corporators. Believing, then, that to the authority of the state and to the sup¬ port of public officers in their efforts to curb and restrain the threat¬ ening powers of the great corporate bodies which now boldly defy them, you will bring promptly and manfully all the aid and co-ope¬ ration which every citizen owes to the state in any time of peril to her institutions, her authority or her laws ; and being deeply sensi¬ ble of the obligations resting upon me to avert, if possible, the dan¬ ger now impending, I call upon and enjoin every citizen of this state to observe with scrupulous care the requirements of the law herein re¬ ferred to, in every instance and particular of business dealings with any railroad company of this state, especially the companies herein named ; to pay as a traveler no higher fare than the law prescribes; to pay as a shipper or receiver of freights no higher rates than the law prescribes, all which rates the Railroad Commissioners have fixed and published ; and that if in any exigency or necessity he should suffer any sum in excess of legal rates to be extorted from 1 him by any agent of any such company, he notify, with all conveni- 9 •ent dispatch, the district attorney of his county of such violation of law. I also request and enjoin all district attorneys promptly and vigor¬ ously to prosecute to conviction and punishment all offenders against said law. I further enjoin all constables and police officers within the state, to inquire of all such offenses, and to complain against the offenders before some justice of the peace, and diligently to take care that this law be not violated in their own precincts with impunity. Printed forms and instructions for the prosecution of such actions will be promptly furnished, on the request of any officer of the law, made to the Attorney General, at Madison. In the possible contingency of a sufficient resistance to the local authorities to require the interference of the Executive, the guaran¬ tees contained in my proclamation of May 1st can be relied on with the utmost confidence. WM. R TAYLOR, Governor of Wisconsin. OPINION OF ATTORNEY GENERAL SLOAN. To His Excellency, William R. Taylor, Governor of the State of Wisconsin: Sir: In pursuance of your request, I submit the following opinion: The legislature of the state of Wisconsin, at its last annual session passed " an act relating to railroads, express and telegraph companies in the state of Wis¬ consin," being chapter 273, and which tools effect on the 28th day of April, 1874.. This act classified all the railroads of the state, fixed and limited the compen¬ sation to be charged for the transportation of freight and passengers thereon, and provided for the appointment of three railroad commissioners with the pow¬ ers and duties therein prescribed. The question submitted to this office, is as to the constitutionality and validity of this enactment. The constitution of the state provides, Art. XI. § 1, "that corporations maybe formed under general laws, but shall not be created by a special act, except for municipal purposes, and in cases where, in the judgment of the legislature, the objects of the corporations cannot be attained under general laws. All gen¬ eral laws or special acts enacted under the provisions of this section may be al¬ tered or repealed by the legislature at any time after their passage." It seems to be conceded on all sides that the railroads of this state take and hold their franchises subject to this reserved power of alteration and repeal, but the precise meaning of the reservation, and what, if any limits shall be applied to it, have led to some discussion and difference of opinion. Since the decision of the Darmouth College case, in which the supreme court of the United States held that a charter of incorporation wras in the nature of a grant, creating a contract, beyond the power of the legislature to impair, many of the states have, by general statutes, special clauses in corporate charters, or by constitutional provisions, sought to re-establish over such corporations tlie- legislative control which, previous to that decision, was supposed to exist. And any construction which so limits this reservation of power, as to deprive tlie- legislature of all supervision over, or right to regulate, the exercise of the fran¬ chise, would fall far short of the evident intention of its enactment, and of the remedy which it was designed to afford, against the encroachments of powerful corporations. This intent is well expressed in the case of Tomilson vs. Jessup, 15 Wall., p. 454, in which Justice Field, delivering the opinion of the court says, " the object of the reservation and of similar reservations is to prevent a grant of corporate rights and privileges in a form which will preclude legisla¬ tive interference with their exercise, it the public interest should at any time require such interference; it is a provision intended to preserve to the state, the control over its contract with the corporations, which, without that provision- would be irrepealable, and protected from any measures affecting its obli¬ gation." The courts of our own state have had frequent occasion to refer to this con¬ stitutional provision, and while they have not passed upon the direct question now presented, have expressed an opinion as to the purpose of its adoption and of its scope and effect. In the Madison, Watertown & Milwaukee Plank Road Co. v. Reynolds, 3. Wis., p. 287, there was an amendment of a territorial charter, affecting the rate of toll which might be charged by the Plank Road Company, and the point raised was that the act of incorporation was a contract under which the com- 11 pany invested its money, in consideration of the tolls it was authorized to re¬ ceive, and that the legislature could not amend the charter by reducing such, tolls, and thus take away a portion of the property of the company. Chief Jus¬ tice Wliiton, after discussing the question under the territorial laws, quotes Art. XI, of our state constitution, and remarks, " this provision may obviate the ne¬ cessity of the consideration of questions like the one before us, in all cases where the corporation is created by the state,'' asingularly mistaken idea, if it be indeed true that the provision reserves no power of alteration to the legislature and could not prevent the future consideration of such questions. So in the case of Pratt v. Brown, 3 Wis., p. 603, Mr. Justice Smith, after re¬ ferring to the doctrine established in the Dartmouth College case, proceeds to say " it is competent, nevertheless, for each state by constitutional regulation or specific legislative enactment, to reserve the power to modify or repeal all such, acts of incorporation, where the power of modification or repeal is reserved,, either in the one mode or the other; it is obvious that the grantees must rely for the perpetuity and integrity of the franchise granted to them, solely upon the faith of the sovereign grantor * * and all such corporations now rest upon, the faith of the state, taking care to deserve its favor or command its justice by observing strictly the limits of their powers and accomplishing by all legiti¬ mate means the objects of their creation." And in Nazro v. Merchants' Ins. Co., 14 Wis., p. 295, Chief Justice Dixon, in discussing an amendment to the charter of the defendant company, authorizing the trustees to adopt a new mode of insurance, makes use of this language :: "This is a grant to the trustees of new and distinct powers, such as they could not before have exercised, either as a matter of corporate authority, or of legal or constitutional right as between themselves or the corporation and the stock¬ holders. The latter might have.objected to it as a violation of the contract under which they became members of the company. But for the reserved power of the legislature to alter or repeal the charter, this objection would be still open to them." And in Chapln and another, v. Crusen and another, 31 Wis., p 209, Mr. Jus¬ tice Lyon, in discussing the power of the legislature to repeal the grant of a ferry franchise before the expiration of the time for which it was to continue by the original act, and to confer the franchise upon another person holds that such power existed as to an individual, because the grant did not amount to a con¬ tract; and he adds: "These views may perhaps be strengthened by the provis¬ ions of the constitution, Art. XI, Sec. 1, which give the legislature power to al¬ ter or repeal the charter of corporations created by it. Had this franchise been conferred on such a corporation, there can be no doubt that the legislature might take it away." These citations sufficiently show the opinions entertained by the courts of our own state, as to the design and extent of the reservation, and seem to war¬ rant the conclusion that there can be no such limitation of the power as is now claimed for it, or that can effect the validity of the law under consideration; and the adjudications in the courts of other states, and of the supreme court of the United States, are in entire harmony with our own, and abundantly sustain the legislation of last session and its constitutional validity. The case of McLaren v. Pennington, 1 Paige, ch. p. 102, was where the legis¬ lature of New Jersey had incorporated a bank to continue not exceeding twen¬ ty-one years, with a proviso that it should be lawful for the legislature at any time to repeal the charter. As a consideration for the charter, the sum of $25,- 000 was to be paid by the bank to the treasurer of the stale. The bank was or¬ ganized in June; it paid into the treasury of the state the $25,000 and com¬ menced operations. In the November following the legislature repealed the act of incorporation, and the court held, Chancellor Walworth delivering the opinion, not only that the power to repeal existed under the reservation, but that the court would not presume it to have been improperly exercised. The case of Crease v. Babcock, 23 Pick. p. 334, was where a bank of which the defendant was a stockholder had been incorporated and with power to re¬ peal reserved only in case of some violation of the charter or other default. In that state stockholders were only liable individually, on the expiration of the charter, and the defendant insisted that under the clause reserving the right to repeal the charter, the default of the bank must first be ascertained and deter¬ mined by the courts, and that until that were done, the legislature could not ex¬ ercise the power of repeal, but the court held that the acceptance of the charter 12 made a compact under which the legislature could repeal " and the grantees could have no reason to complain of the execution of their own contract." The court also held that they would presume that the contingency upon which the right to repeal depended, had happened. Suydam v. Moore, 8 Barbour, p. 588, was the case of an amendment or rather an act imposing additional obligations upon railroads as to cattle guards, and the court held that the right to legislate in that respect existed and that the policy of the enactment could not be questioned in the courts. The Northern Railroad Co. v. Miller, 10 Barbour, p. 2G0, was an action to en¬ force payment of stock subscribed by the defendant, and resisted on the ground that the legislature had amended the charter of the company. The court held that the power to amend existed and that the individual, by subscribing for the stock " stipulates that the legislature may alter or repeal the law, and thus change the obligation or defeat it altogether." In Perrin v. Oliver, 1 Minn., p. 202, the court decided that an act granting a ferry franchise two miles in extent could be altered by the legislature and re¬ duced to one-fourth of a mile, under the reserved power to amend or repeal. And so in the Erie railroad cases, 26 and 27 Penn., the court held that the language of the reservation was to be construed strongly in favor of the state and that under it the legislature had the right summarily to repeal the charter of the Erie railroad. In the matter of the Reciprocity Bank, 22 N. Y., p. 9, the charter of the bank was amended by imposing an individual liability on the stockholders, not pro¬ vided for by the original charter, and the Court of Appeals held that by the re¬ served power, as a part of the contract, the state could amend the charter at will, reaffirming the matter of the Olive Lee Bank, 21 N. Y.,p. 9. This last case was appealed to the Supreme Court of the United States, and is reported in 1 Black, p. 587. The general banking law, under which this bank was organized pro¬ vided in express terms that no shareholder should be individually liable for any contract, debt or engagement of the corporation, and the articles of association contained a similar clause. The law also provided that the legislature might at any time alter or repeal the act. ■ The plaintiff:', Sherman, became a stockholder, and subsequently the legislature passed an act making shareholders personally liable for the debts of the association. The question raised was whether the last act was in conflict with the constitution of the United States which forbids a state to make any law impairing the obligation of contracts. All the courts of New York held that it was not, and the Supreme Court of the United States affirmed the decision, Mr. Justice Nelson remarking: "Now the 32d section, which reserved to the legislature the power to alter or repeal the act, by neces¬ sary construction reserved the power to alter or repeal all or any one of these terms and conditions or rules of liability prescribed in the act; the articles of association are dependent upon and become a part of, the law under which the bank was organized, and subject to alterations or repeal, the same as any other part of the general system." In the Penn. College cases, 13 Wall., p. 190, Mr. Justice Clifford uses this lan¬ guage: " Charters of private corporations are regarded as executed contracts between the government and the corporators, and the rule is well settled that the legislature cannot repeal, impair or alter such a charter against the consent, or without the default of the corporation, judicially ascertained and declared. Of course these remarks appty only to acts of incorporation which do not con¬ tain any reservations or provisions annexing conditions to the charter, modify¬ ing and limiting the nature of the contract. Cases often arise where the legis¬ lature, in granting an act of incorporation for a private purpose, either make the duration of the charter conditional, or reserve to the state the power to alter, modify or repeal the same at pleasure. Where such a provision is incorporated in the charter it is clear that it qualifies the grant, and that subsequent exercise of that reserved power, cannot be regarded as an act within the prohibition of the constitution." In the case of Tomlinson v. Jessup, 15 Wall, p. 454, the Northeastern Rail¬ road Company was incorporated in 1851 by the legislature of the state of North Carolina. At that time there was a general law of the state, passed in 1841, pro¬ viding that the charter of every corporation should be subject to amendment, al¬ teration or repeal by the legislature. In 1855 an act was passed by which the stock of the company and its real estate should be exempted from taxation, dur¬ ing the continuance of the charter, which was for the term of fifty years. In< 1868 13 a constitute on was adopted, in which it was provided that the property of all corporations should he subject to taxation. Jessup, a stockholder in the roadr filed a bill to restrain the state officers from levying a tax on the property of the road. The court held that the reservation of the power, to alter, contained in, the Jaw of 1841 affected the the entire relation between the state and corpora¬ tion, and placed under legislative control all rights, privileges and immunities- derived by the charter from the state, and Mr. Justice Field, in delivering the opinion of the court, uses this language: " It is true that the charter of the com¬ pany, when accepted by the corporators, constituted a contract between them and the state, and that the amendment, when accepted, formed a part of the con¬ tract from that date, and was of the same obligatory character, and it may be equally true, as stated by counsel, that the exemption from taxation added great¬ ly to the value of the stock of the company and induced the plaihtiff to purchase the shares held by him, but these considerations cannot be allowed any weight in determining the validity of the subsequent taxation. The power reserved in the state by the law of 1841, authorized any change in the contract as it origi¬ nally existed, or as subsequently modified, or its entire revocation. The original corporators or subsequent stockholders took their interests with knowledge of the existence of this power and of the possibility of its exercise at any time in the discretion of the legislature." The case of Miller v. State, 15 Wall., p. 478, was where a railroad company was organized under the general laws of the state of New York, whose consti¬ tution had a similar clause to our own, as to alteration and repeal. By the original charter of the company a capital of $800,000 was provided for, to build a road fifty miles in length. The city of Rochester was authorized by law to subscribe for $300,000 of the capital stock, and was to have the right, by the act of the legislature, to appoint four out of the thirteen directors of the company. All but 18 miles of the road was abandoned, and the legislature afterwards passed an act, authorizing the city of Rochester to appoint seven directors, that being a majority of the whole number, and this last act was assailed as impair¬ ing the obligation of contracts. The courts of New York held the act consti¬ tutional, and the Supreme Court of the United States affirmed the decision, citing and approving the language above quoted from 13 Wallace. These cases have been cited with some particularity of detail, because they construe and apply this reservation of power to a variety of cases, and seem to cover and meet, to a great degree, all the objections which have been urged against the validity of the law under consideration. Other similar cases might be added, and the elementary writers cited as being in accord with the doctrine of these decisions, but the opinion of Chancellor Kent will only be given as expressed in his Commentaries. Vol. 2, page 396, he says: " and though the va¬ lidity of the alteration or repeal of a charter in consequence of such a reserva¬ tion may not be legally questionable, yet it may become a matter of serious- consideration in many cases, how far the exercise of such a power could be consistent with justice or policy. If a charter be granted and accepted with that reservation, there seems to be no ground to question the validity and effi¬ ciency of the reservation." To this should perhaps be added the case of Olcott v. Supervisors of Fond du Lac County, 16 Wall, p 694, which, while not turning on the construction or effect of the reserved power of alteration or repeal, yet is referred to in this emphatic language: "That the legislature of Wisconsin may alter or repeal the charter granted to the Sheboygan & Fond du Lac Railroad Company is certain. This is a power reserved by the constitution. The railroad can therefore be controlled and regulated by the state, its use can be defined, its tolls and rates for transportation may be limited''''—precisely what chapter 273 undertakes to do, and which the Supreme Court of the United States declares may be done, and done under and by virtue of the constitutional reservation. It is, I understand, conceded by all who have given opinions hostile to this legislation, that, by virtue of the constitutional reservation, all acts of incorpo¬ ration may be absolutely repealed and the corporations created by them dis¬ solved. If the legislature can thus wholly destroy every corporation it has cre¬ ated, and compel a total surrender of all franchises and privileges, and of all power to transact business, except such as may be necessary to convert its prop¬ erty into money and wind up its affairs, it seems difficult to urge any valid rea¬ son against legislation which merely limits the corporate power and restricts the privilege of charging higher rates for transportation than the legislature may 14 deem just and equitable. But it is now claimed by those who propose to disre¬ gard the law of 1874, that although the power reserved in the constitution to al¬ ter all acts creating corporations is in terms unlimited, this reserved power is still subject to certain latent limitations which it is the duty of the courts to recognize and define; that among the latent limitations one is to be found or •created which prevents the legislature from reducing the charges for transport¬ ing passengers and freight below a reasonable compensation. The result of this doctrine would be practically to repeal the constitution of the state, so far as this clause is concerned, and to restore to corporations in this vital particular that exemption from legislative control secured to them by the Dartmouth College decision, and to guard against which the clause was incor¬ porated into the constitution of the state. The power to alter is given, by the constitution, just as clearly as the power to repeal, and it is difficult to see why a limitation cannot as well be applied to the one as to the other. If the state may take away the franchise entirely, why may it not so regulate and control its exercise as to further the public purpose for which it was bestowed. Ordinarily the greater includes the less; here the lesser power is given in express terms. The legislature may " alter," and this word must be given some signification different in sense or in degree from*the power to repeal. It cannot be said to apply to the right of taxation and police regulation, for these are inherent in the state, applicable alike to individuals and corporations and in no way dependent on the clause of the constitution re¬ ferred to. It must mean that the legislature may in its discretion, instead of taking the extreme and severe measure of repeal, exercise the lesser and milder right, and impose such restrictions and conditions upon the conduct of the affairs of the corporation, and so limit its charges as will best promote the ob¬ ject of its creation and prevent the abuse of the powers and privileges granted to it. The corporations cannot justly complain of this. They have accepted their charters subject to this express reservation, and having so accepted, they hold them upon the faith of the state only, taking care to deserve its favor or com¬ mand its justice by the manner in which they exercise the power conferred. If a wrong is done or a mistake made in the exercise of the reserved power, the aggrieved party must resort to the legislature for redress. This was the agree¬ ment created by the acceptance of the charter and the application for relief must be made to the tribunal selected by the contracting parties. The courts cannot interfere, for, says Chancellor Kent, "the legality of the reservation can¬ not be questioned." Should the legislature refuse or fail to correct the wrong, no worse results could ensue to the corporation than would have followed from ab¬ solute repeal. But it is hardly to be supposed that the legislature would fail to respond to any application founded in justice. The people cannot fail to appre¬ ciate the necessity of railroads to the business and industrial interests of the state and to the convenience and prosperity of all its citizens. They do not de¬ sire any unwilling or uncompensated service from the railroads, nor will they consent that the state should be placed in a condition of servitude to the corpo¬ rations." But if this limitation, that the rates fixed by the legislature must be reasona¬ ble, exist at all, it arises, not from the reservation or its construction, but rather out of the common law rule that in the absence of any legislative enactment on the subject, common carriers are bound to carry all freight and passengers which are offered at reasonable rates, and cannot discriminate unjustly between shippers. In my judgment it is impracticable to adply this common law rule to railroad corporations, as a substitute for legislative control and regulation. The use of railroads has increased the business of transporting freight and passengers to immense proportions; it has brought about great and radical changes in the commerce and business of the country; it has created new and diverted old channels of trade, built cities and formed states. The gigantic corporations controlling the railrpads of the country, with their great wealth and influence are practically placed beyond the reach of the common law obli¬ gation and this warrants the position that legislative control ought to be and is put in the place of this common law liability of common carriers. Besides, a suit by the individual to enforce the common law liability settles nothing. No general rule can be established in a single suit, while such a suit would involve n inquiry and determination of the cost of the road and its equipment, the perating expenses, the amount and character of the business, and the whole 15 ■detail of the condition, management and relative cost of everything connected with the road. When this is done the reasonableness of the charge in every other instance remains open to be litigated at such an expenditure of time and money as to deter individuals from entering such a field of hopeless litigation. I am led to the conclusion that the better view is that the judgment of the legislature is by the reservation of power, and the necessities of the case, the measure of the reasonableness of the regulation imposed. The corporation cer¬ tainly cannot arbitrarily determine the question, and on the assumption that the rates are unreasonable disregard the law. The legislative act is conclusive that the rate is reasonable. The exercise of the power is of itself an assertion of its justice and of its necessity. The railroads cannot question it; the courts may not review it, for by the agreement of the parties in accepting the charters under the reservation, the whole subject is withdrawn from the domain of judi¬ cial decision and remains only a matter for the legislative conscience. And so with the objection that the provisions ot this law assume control of the property of the corporation, and deprives them of its use without making any compensation, and is therefore in conflict with the constitution of the State and of the United States. As these corporations have no natural existence, but are created wholly by legislative enactments, their power to act, in every particular, is derived from the state; their capacity to make contracts, acquire and use property, and to •charge for its use comes from the state, and is granted on such terms and to .such extent as the legislature may prescribe; the power of the state to gi ant is given by the constitution and coupled with this power is found in the same fun¬ damental law, the authority to alter the act of incorporation as the legislature may think the public intereste demand. The rights and privileges conferred cannot be separated from the restrictions and duties imposed. The power to take toll cannot be distinguished from the duty to take only such as the legisla¬ ture shall establish. It is difficult to see how restricting these tolls within cer¬ tain limits which the legislature deems just, is any more depriving the corpora¬ tions of their property than it would be to repeal their charters and thus deprive them of the power of charging any rates at all, and this latter power mr.y con¬ fessedly be exercised without making compensation. Whether the state can compel the companies to operate their roads for such compensation as it chooses to prescribe, is another and different question, not involved in this discussion. The only inquiry, while companies are openly violating the law by charging higher rates than it allows is, as to the power of the legislature to prohibit them from charging above certain fixed rates. If it shall be made to appear that the companies cannot operate their roads except at a loss under the rates fixed by the law, the remedy is not in an attitude of open hostility to the law; but in an application to the legislature for its modification. As suggested in relation to the other objection, this is the forum which the constitution has provided for the determination of that question, and in accepting the charters, the companies assented to be governed and bound by the legislative sense of justice. This sense of justice will undoubtedly coincide with the mutual interest of the people and of the railroad companies. These in¬ terests demand, with a force almost equal to the provisions of positive law, that remunerative rates shall be allowed for the services of these corporations; but as a mere question of legal right, full power has been reserved by the constitution, in the language of Olcott v. Supervisors, supra, to alter or repeal the charters of these corporations, and the roads can therefore be controlled and regulated by the state, their use can be defined, and their tolls and rates for transportation limited. But it is also claimed that the reserved power to interfere is confined to con¬ tracts made by the state with the corporation, and can have no application to such as are made by the companies with bona fide creditors, The latter are said to be within the protection of the constitution of the United States, which pro¬ hibits the passage of any law impairing the obligation of contracts. The views already expressed apply somewhat to this objection, but the direct and obvious answer is that the creditor contracts with the corporation precisely as the corporation contracts with the State, and both must take notice of, and are bound by the conditions and reservations in the charter. The courts will read the contract with the creditor, as if the legislative con¬ ditions were printed therein in full. The charter is granted by the State and accepted by the corporation, and the creditor contracts with it subject to the 16 power of the grantor to alter or impair the obligation. No right can vest, for it is agreed by both the grantee and the creditor that none shall vest. The cred¬ itor makes his investment cum onere, and cannot complain that the alteration of the charter impairs his obligation, because by its terms it admits of the very alteration imposed. It may be folly for the creditor to invest, in view of this possible interference, but he assents to the terms and takes the risk of just such interference. The creditor gains no right which the company did not possess, and the state surrenders none of the power it had reserved. A mortgagee stands in no dillerent relation in this respect, than any other creditor. The extent of the mortgage lien is to be measured by the interest of the mortgagor in the property to which the lien attaches, and the courts will not by construction so- enlarge the lien as to relieve it from the burdens or restrictions to which it is subject—much less will they give to the mortgage such sancity and force as to repeal a fundamental law of the state, or essentially change its meaning and intent. The examination of these questions and the principles governing them might be further extended, but it seems hardly necessary. The conclusion reached is that said chapter 273 is not obnoxious to any of the objections urged against it, but is a constitutional enactment, and as such entitled to obedience. A. SCOTT SLOAN, Attorney General. / CLASSIFICATION OF ROADS, AND RATES OF FARE AND FREIGHT. Office of Railroad Commissioners, Madison, May 14, 1874.. To any Individual, Company or Corporation, owning, operating, managing or leasings, any Railroador part of a Railroad in the State of Wisconsin : Notice is Hereby Given by the undersigned, Railroad Commissioners for the State of Wisconsin, appointed in pursuance of Chap. 273 of the General Laws of said State, approved March 11, 1874, that the following Classification of Railroads, Classification of Freights, maximum Rates of Fare, and maximum Rates of Freight, have been established by law, and by said Commissioners in pursuance of authority conferred upon said Commissioners by said act: classification of roads. Class A—All Railroads, or parts of Railroads, in the State of Wisconsin, now owned, operated, managed or leased, either by the Milwaukee & St. Paul Railway Company, the Chicago & Northwestern Railway Company, or the Western Union Railway Company. Class B—All Railroads, or parts of Railroads, owned, operated, managed or leased by the Wisconsin Central Railway Company, the Green Bay & Minne¬ sota Railway Company, or the West Wisconsin Railway Company. Class C—All Railroads, or parts of Railroads, in this State, not herein¬ before enumerated. classification of freight. All freights hereafter transported upon any Railroad, or part of Railroad, in this State, are divided into four General Classes, to be designated as First, Second, Third and Fourth Classes, and into seven Special Classes, to be desig¬ nated D, E, F, G, H, I, J. GENERAL CLASSES. Said four General Classes shall include all merchandise and other articles of transportation, included in the standard Classification of the Milwaukee & St. Paul Railway Company, which took effect December 1st, 1873, and at this date used by said Company for all business done in Wisconsin, except such articles 2 18 as are hereinafter assigned in accordance with law to Special Classes hereinafter named. SPECIAL CLASSES. The Special Classes hereinafter named shall include the following articles, respectively: D—All Grain, in car loads. E—- Flour in lots of fifty bbls., or more; Lime in lots of twenty-four bbls., or more. E—Salt in lots of 60 bbls., or more; Cement, Water-Lime and Stucco, in lots of twenty four bbls., or more. G—Lumber, Lath and Shingles, in car loads. H—Live Stock, in car loads. 1—Agricultural Implements, Furniture and Wagons. J—Coal, Brick, Sand, Stone, and heavy Fourth Class articles, in car loads. RATES OF FARE AND FREIGHT. LIMITATION OF CHARGES FOR FARES. Any Individual, Company or Corporation owning, operating, managing or leasing any Railroad, or part of a Railroad, in the Classification of Roads herein¬ before prescribed, is limited to a compensation for the transportation of any person, with ordinary baggage not exceeding one hundred pounds in weight, as follows : Class A—Three cents j>er mile. Class B—Three and one-half cents fer mile. Class C—Four cents fier mile. Provided, That no such Individual, Company, or Corporation, hereinbefore designated, shall charge, demand or received any greater compensation per mile for the transportation of children of the age of twelve years, or under, than one-half the respective rates above prescribed. LIMITATION OF CHARGES FOR FREIGHT ON RAILROADS CLASSED A AND B. No Individual, Company or Corporation owning, operating, managing or leasing any Railroad mentioned in Classes A and B, is entitled to charge for, or receive, a greater or higher rate for carrying any freight belonging to either of the four General Classes of freight hereinbefore named, than was charged for carrying freights now belonging to said tour General Classes, on said Railroad, on the first day of June, 1873. Nor is any Individual, Company or Corporation owning, operating, manag¬ ing, or leasing any Railroad belonging to said Classes A and B, entitled to charge for, or receive, a greater or higher rate for carrying articles belonging to any of the Special Classes hereinbefore named than is specified in the annexed table: 19 Railroads "A" and "B,"'—Freight Tariff—Special Classes. "O rt O i-l w a! u o 100 Lbs. 06 10 11 12 13 14 15 16 17 18 *9 20 21 22 22K 23 23^ 24 _D .15 -Q J2 0 c °j 6 u o o §3 o fvg U | c/3 o i- -»-» DO *" 4-t —« (/) ^ 2 „£} """' ^ - Car. 8.00 13.00 I I4-5°j 15.00 16.50 I7°°i 18.50 19.001 T9-5°j 21.00 22.5o1 23. oo' 24.50 25.00 26.50 27.00 28:50 29.00 30 50 31 - °° 32-50 33 00 c 5 v o E g & E -13 1—1 a —. rt «> u v 3 a .E £ Car. M 3 ™ ™ on » C! ^ >v.5 o > - •n « ft PQ E — M -c o f—T"rt "■*-» 03 c M o§