was the right of the Chicago, St Paul and Fond du Lac Railroad Company, in Illinois, to fix its rates of fare and freight. The Illinois company surrendered its franchises and property under that contract. The "Potter-Law" invalidates that contract and virtually deprives the Illinois corporation of its property without compensation, and this it does by destroying the contract made in pursuance of law.

The taking of this company's property, or rendering it valueless, was not necessary. The common law would afford an adequate remedy for extortion by the company, or, if it would not, a statute which should punish the company for exacting unreasonable or unequal rate of compensation for the transportation of persons and property, would fully protect the public and still leave to the company the beneficial use of its property.

pas

I submit this case to the court with this suggestion: The owners of this property have invested their money in this railroad upon the faith that they should derive some reasonable return for its use. As shown by the record they can not secure such return under this act. The property has been so placed that it must be used where it is, or become comparatively worthless. If this property is to be controlled by men who have no practical knowledge concerning it, nor any means of forming an accurate judgment of what is a fair compensation for its use, under any inflexible tariff of rates incapable of being adjusted to the varying circumstances of the time, it will be worthless. This is demonstrated by the fact that the sage of this act has caused the property to depreciate millions in value, and has ruined the credit of every railroad enterprise in the State. The loss in such an event will not fall solely upon the stockholders of this corporation; it will fall also upon the people of the State who can not dispense with the railroads, and who must pay for the risk incurred by those who invest their money in such enterprises in the State of Wisconsin, and it will furnish an example unparalleled in modern history of the folly of depending upon the good faith of a people who make the most sacred rights of property subservient to partisan and personal aggrandisement, and it will add new point and force to the language used by this court in the case of Loan Association vs. Topeka, 20 Wallace, 662:

"It may well be doubted if a man is to hold all that he is accustomed to call his own, all in which he has placed his happiness, and the security of which is essential to that happiness, under the limited dominion of others, whether it is not wiser that this power should be exercised by one man than by many." B. C. COOK. Of Counsel for Appellant.

BRIEF OF ARGUMENT OF C. B. LAWRENCE,

OF COUNSEL FOR APPELLANTS AND PLAINTIFFS IN ERROR.

Statement of the Case.

This record presents the question, whether an act of the legislature of Wisconsin, approved March 11, 1874, entitled "An act relating to railroads, express, and telegraph companies, in the State of Wisconsin," is a violation of the Constitution of the United States.

The act will be found in full on pages 34 to 40, of the original bill, and is printed as an appendix to this argument. It divides all the railroads of the State into three classes, and fixes the maximum rates of compensation for the transportation of passengers and freight to be charged by each class.

It also authorizes the Governor of the State to appoint three persons as Railroad Commissioners, who are clothed with a general authority over rates of freight. Every agent of a corporation who in behalf of such corporation charges a higher rate of freight than that allowed by the act is declared guilty of misdemeanor and subjected to a fine not exceeding two hundred dollars for each offense. Jurisdiction to impose the fine is conferred on justices of the peace. Any person who is charged a rate of fare or freight exceeding the limits fixed by this act, may recover back from the company, or its agent, three times the amount of the overcharge.

The officers of the company are to be bound by the decision of the commissioners in regard to freights, and if they disregard such decision, they are made liable to a fine of two hundred dollars for each offense.

The Chicago and Northwestern Railway Company has been organized in its present shape by the consolidation of various railroad campanies, incorporated by the States of Illinois, Wisconsin, Michigan, and Minnesota. It is the great channel of commerce from the city of Chicago through the northwest, measuring with its branches more than sixteen hundred miles. It has, in its existing form as a consolidated road, issued its bonds to the amount of over forty millions of dollars, secured by a deed of trust upon its franchises and property. The money received upon these bonds has been used by the company in paying its old indebtedness and in completing and equipping its various lines of road.

At the July term, 1874, of the Circuit Court of the United States for the Western District of Wisconsin, certain holders of the bonds thus issued by this company, one of them, Willem Frederick Piek, a resident of Amsterdam, in Holland, and the others residents of New York, brought a bill in behalf of themselves and other bondholders, against the Railway Commissioners and the Attorney-General of Wisconsin, the object of which was to enjoin them from the execution of said act in regard to the Chicago and Northwestern Railroad. The bill sets forth the grant of public lands made by the Federal Government, to the State of Wisconsin, to aid in the construction of railroads in said State, approved June 3, 1856, the acceptance of said grant by the State, on the 3d of November, 1856, the incorporation of the Wisconsin and Superior Railroad Company, and the grant of a portion of said lands to said com

pany.

The bill further shows the incorporation, by the legislature of Wisconsin, of the Madison & Beloit Railroad Company, its subsequent change of name to the Rock River Valley Union Railroad Company, its consolidation on the 30th of March, 1855, with a corporation of the State of Illnois, called the Illinois & Wisconsin Railroad Company, by virtue of the laws enacted respectively by the legislatures of Wisconsin and Illinois, under which laws, the said consolidated corporations became the Chicago, St. Paul & Fond du Lac Railroad Company.

The bill further shows the consolidation with this company on the 5th of March, 1859, of the company first above named, entitled the Wisconsin & Superior Railroad Company, said consolidated companies retaining the name of the Chicago St. Paul & Fond du Lac Railroad Company. The bill further shows the sale of this railroad on the 2d of June, 1859, under certain trust deeds, that it was sold as one entire road extending from Chicago in Illinois to Fond du Lac in Wisconsin, and was on the second of June, 1859, conveyed by that description to the purchasers. The bill further shows the incorporation of said purchasers under the name of the Chicago and Northwestern Railway Company on the 6th of June, 1859, under the authority of certain acts of the legislatures of Wisconsin and Illinois, passed previous to said sale, by which it was provided, that in the event of a sale of said road under a deed of trust the purchasers should have the right to become a corporation by filing a certificate in the office of the Secretary of State, specifying the name of the corporation, and the names and number of the directors. The bill further shows the consolidation of this company, on the 2d of June, 1864, with another company in Illinois, called the Galena & Chicago Union Railroad Company, under the authority of both States, the said consolidated companies retaining the name of the Chicago and Northwestern Railway Company. The bill further shows the issue, by this company, on the 30th day of November, 1872, of bonds amounting to forty-eight millions of dollars, secured by deeds of trust upon its property executed to the Union Trust Company, of New York, as trustees,

said bonds being issued for the purpose of canceling all previous indebtedness of said company.

The bill further shows that the complainant, William Frederick Piek, is the owner of bonds to the amount of $217,000, and that the complainants, Henry R. Pierson and Moses Taylor, are also the holders of large amount of said bonds.

The bill further shows that the average of the dividends declared by the company, since the consolidation of the roads, in 1859, does not exceed, including stock dividends, seven and three-quarters per cent. on the preferred stock, or three and three-quarters on common stock.

The bill further shows that the company had, up to the date of filing the bill, paid all its accured interest on its bonds, but that since December 1872, it has paid no dividends whatever to its stockholders on its common stock, and but three and one-half per cent. upon its preferred stock.

The bill further alleges that the rates of fare and freight as established by the company, are reasonable and just, and are in fact so low as not to produce an income sufficient to pay the legal rate of interest on the money actually invested by its stockholders, after paying operating expenses, costs of repair, and interest on its bonds. The bill sets forth in full the act of the Wisconsin legislature for the regulation of fares and freights first above stated, and alleges that under the rates of freight and fare prescribed by act as maximum rates, the income of the road will not be sufficient to do more than pay the operating expenses and keep the road and its equipment in proper repair, and the company will be wholly unable to pay the interest upon its bonds.

The bill charges that said act is a violation of the constitution of the State of Wisconsin, and that of the United States, both as to the rights of the stockholders and those of the bondholders.

The bill further charges that various prosecutions have been commenced under said law against agents of the company for charging greater rates of fare and freight than the rates prescribed by said act, under which prosecution said agents have been arrested and required to give bail.

The bill further alleges a request by the complainants to the railway company, to cause legal proceedings to be instituted in its name, for the purpose of protecting the rights of the bondholders against all attempts to enforce the act of March 7, 1874, and the refusal of the company to take any steps in the premises.

The bill makes the Railway Commissioners appointed under the act, and the Attorney-General of the State, parties defendant, and prays an injunction restraining them from prosecuting the agents of the company, or from executing the provisions of said act, as against the Chicago and Northwestern Company.

The bill makes the Chicago and Northwestern Railway Company a defendant, and asks that it may be enjoined from accepting said act. The Farmers' Loan and Trust Company, and the Union Trust Company, corporations of the State of New York, and trustees

named in the deeds of trust executed by the company, also join in the bill as complainants.

The defendants filed a demurrer to the bill. The case was heard upon the demurrer, at the July term of the circuit court, 1874, and the bill was dismissed, From this decree, the complainants appealed.

The act of March 11, 1874, regulating the rates of fare and freight, is set out in full in the bill. All the other acts referred to in this argument are made exhibits to the bill, and set out in full.

ERRORS ASSIGNED.

1. The circuit court erred in holding that the said act of the legislature of Wisconsin, passed March 11, 1874, entitled "An act relating to railroads, express and telegraph companies in the State of Wisconsin," was a valid law, and not a violation of the Constitution of the United States, or of the act of Congress granting lands to the State of Wisconsin, to aid in the construction of roads, bearing date June 3, A. D. 1856, or of the constitution of Wisconsin.

2. The circuit court erred in holding that the legislature of the State of Wisconsin could determine or appoint commissioners to determine the maximum rates to be charged by the Chicago and Northwestern Railway Company for transporting passengers and freight.

3. The circuit court erred in dismissing the bill.

BRIEF OF THE ARGUMENT.

The power on the part of the State of Wisconsin to pass the act of March 11, 1874, regulating railway fares and freights is claimed under the first section of the 11th article of the constitution of that State. The section reads as follows:

"Corporations, without banking powers or privileges, may be formed under general laws, but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment of the legisture, the object of the corporation cannot be obtained under general laws. All general laws or special acts enacted under the provisions of this section may be altered or repealed by the legislature at any time after their passage."

The power to pass the act in question is to be considered:
First, in reference to the rights of stockholders.

Secondly, in reference to the rights to the bondholders.

Under the first head are to be considered:

1st. The rights which the Chicago and Northwestern Railway Company possesses in common with all other railway corporations of Wisconsin, as against the enforcement of the act of March 11, 1874.

2d. The rights which the Chicago and Northwestern Railway Company possesses which are peculiar to itself.