nies by the laws of the States of Wisconsin and Illinois respectively, the same and not otherwise as though the said consolidation had not taken place, and the right of way may be taken in the same manner, in all respects, as though the said companies had not consolidated."

By this act the State of Wisconsin contracted with the Illinois and Wisconsin Railroad Company of Illinois, that if it would unite itself with the Wisconsin corporation, the two companies thus united should have all the "rights, privileges, and franchises" conferred on either company by the laws of their respective States. The Illinois corporation was to have the same rights in Wisconsin that it possessed in Illinois, one of which was the right to demand reasonable rates of fare and freight, without any pretense on the part of the State to exercise the control claimed by Wisconsin over its own corporations, there being no "reserved power" in Illinois. The State of Wisconsin said to the Illinois corporation, "if you will unite your capital with that invested in the road built within my borders, and consolidate your stock with the stock of that road, you shall lose none of your rights, privileges or franchises."

The offer thus made was accepted, but the pledge has been kept with Punic faith.

The 5th section of the same act provides as follows:

"The said consolidated company shall be and remain subject to the laws of the State of Wisconsin and the State of Illinois, respectively, and shall have in all respects the same privileges as though this consolidation had not taken place; provided, the laws of the State of Illinois shall have no force or effect in the State of Wisconsin under the provisions of this act."

This clause is an additional pledge that although the road in each State would remain under the control of the local laws, yet the Illinois company should have "in all respects the same privileges as though the consolidation had not taken place "-that is to say, it should lose none of its rights by virtue of the consolidation. But in defiance of this pledge, its right to control its own business and rates, the State of Wisconsin now seeks to take away.

It would be mere paltering with good faith to say that the act under consideration only applies to the consolidated road within the limits of Wisconsin, and, thererore, is no violation of the contract with the Illinois corporation. There is now, as a matter of fact, no such separate corporation. The interests of the stockholders of the Illinois corporation are identified and consolidated with those of the stockholders in the Wisconsin corporation. A blow at the Wisconsin portion of the road is the same as if struck in Illinois. While, in a metaphysical sense, there may be distinct entities in the two States, in substance, and for all the actual purposes of corporation life, and in reference to all the actual interests of the stockholders, the two corporations are but one. The State of Wisconsin, by this legislation, is destroying the interests of the stockholders in the Illinois corporation in a mode which could not have been adopted by the State of Illinois, and is doing this in de

fiance of its pledge to the Illinois company, that it should lose none of its rights by consolidation.

Besides the contract of the State of Wisconsin, already stated, the State made a subsequent pledge of the same character.

On the 2d day of June, 1864, the Chicago and Northwestern Railway Company consolidated its stock with an Illinois corporation, known as the Galena & Chicago Union Railroad Company, the consolidated road retaining the name of the former company.

On the 15th of February, 1865, the legislature of Wisconsin passed an act in relation to this road (Exhibit 12 of bill), the third section of which provides that the consolidated company "may have and exercise all the powers heretofore conferred by the laws of this or any other State, upon the Chicago and Northwestern Railway Company, and the Galena and Chicago Union Railroad Company, or any other company consolidated with it."

Although the State of Wisconsin can repeal or alter the charter of any corporation it may itself create, yet if it makes a contract with a corporation of another State, such contract is as far beyond its power to violate as if made with a natural person.

If the State of Wisconsin should become by any mode the owner of a railroad within its borders, it could unquestionably contract with an Illinois corporation to operate the road, and it could not alter such contract by virtue of any control given to it by its constitution over corporations of its own creation.

Such foreign corporations would not, by such contract, become a Wisconsin corporation created by that State, and it is only as to such corporation that it can claim to be exempted from the provision of the Federal Constitution, forbidding the violation of contracts.

In the case supposed, the Illinois corporation would be exercising its faculties in the State of Wisconsin, under a contract with the latter State, but it would still retain its identity as a foreign corporation.

In the case of Railway Co. vs. Whiton, 13 Wallace, 284, this court used the following language in explaining the meaning of a previous decision, and what is said is precisely applicable to the point we are seeking to present.

Referring to the case of the Railway Company vs. Harris, 12 Wallace, 65, the court, by Mr Justice Field, said:

"In that case a Maryland railroad corporation was empowered by the legislature of Virginia to construct its road through that State, and by an act of Congress to extend a lateral road into the District of Columbia. By an act of Virginia the company was granted the rights and privileges in that State, which it possessed in Maryland, and it was made subject to similar pains, penalties and obligations. By the act of Congress the company was authorized to exercise in the District of Columbia the same powers, rights and privileges in the extension and construction of the road as in the construction and extension of any railroad in Maryland, and was granted the same rights, benefits and immunities in the use of the road which were provided in its charter, except the right to construct from its

road another lateral road, and this court held that these acts did not create a new corporation, either in Virginia or in the District of Columbia, but only enabled the Maryland corporation to exercise its faculties in that State and District: they did not alter the citizenship of the corporation of Maryland, but only enlarged the sphere of its operations, and made it subject to suit in Virginia and in the district. The 'corporation,' said the court, 'cannot migrate, but may exercise its authority in a foreign territory, upon such conditions as may be prescribed by the law of the place.

In the case of Morris Canal & Banking Company vs. Townsend, 24 Barb., 663, the court used the following language:

"It is contended that our legislature cannot authorize a foreign corporation, located in another State, and subject to no power of visitation or control on the part of our functionaries, to take lands in this State belonging to its citizens. There is certainly nothing in our constitution thus restricting the power of exercising the right of eminent domain. The objection must be urged on the allegation of incompatibility. But incompatibility with what? Certainly not with our ordinary practice. We have recognized the existence of foreign corporations in various ways, and granted to them many privileges in this State. We have to prevent the forgery of the bills of foreign banks. We authorize foreign insurance companies to transact business in this State. Foreign corporations may institute, maintain and defend suits in our State courts, and they do so. And we have authorized a railroad company of another State-the New York & New Haven Railroad Company-to extend their road into this State, to accquire (compulsorily, if need be) the title to, or the right to use the lands of our citizens in the county of Westchester. So far as I have heard, none of the acts confering such privileges, powers and rights, have been deemed incompatible with our institutions, or the rights of our citizens, and therefore void."

These cases clearly show that a State may contract with a foreign railway corporation. The State of Wisconsin has done so, and we ask that it shall not be permitted to violate its contract.

VI.

The act violates, in principal, the terms of the Congressional Land Grant of June 3, 1856, which required, as one of the conditions of the grant, that the roads receiving its benefits, should “remain public highways for the use of the Government of the United States, free from toll or other charges upon the transportation of property or troops of the United States," and that the mails should be transported at such prices as congress might by law direct. If the legislature of Wisconsin can pass such an act, it can fix a rate of compensation which will prevent the operation of the road, or disable it from performing its duties to the general Government.

The State of Wisconsin desired to obtain a grant of government land to aid the building of railroads. It obtained it on the above

conditions, and by an act passed November 3, 1856, it accepted the grant on these conditions. The legislature of the State can pass no law violative of these conditions; and yet the act under consideration asserts a power and is founded upon a principle completely destructive of the conditions of the congressional grant. It is plain, if the legislature of Wisconsin can determine the precise rate at which this corporation shall perform its duties, or can fix an arbitrary maximum, it can take from the corporation all power to operate the road. It can anihilate it. This act says to the corporation, in effect, "if you do not transport freight and passengers at the rates fixed by this act, you shall loose your franchises and cease to exist.' It is not in the power of the State to say this, because the corporation owes a duty to the Federal Government which the State can not incapacitate it to perform. The charter in terms imposed that duty upon the company; and independently of the charter, the terms of the congressional grant would have required it. It is plain that the corporation can not perform this duty to the government unles it is permitted to charge a reasonable compensation for performing its duties as a common carrier to the people of Wisconsin.

The act in question is found on page twenty, volume second of United States statutes at large, and is entitled "An act granting public lands to the State of Wisconsin, to aid in the construction of railroads in said State." The third section provides that " said railroads shall be and remain public highways for the use of the Government of the United States, free from toll or other charge upon the transportation of property or troops of the United States.

The fifth section, provides "that the United States mail shall be transported over said roads, under the direction of the Post-office Department, at such price as Congress may by law direct."

VII.

The act in question violates the contract entered into between the corporation and its bondholders, which contract the State had authorized, and thus violates the tenth section of the first article of the Federal Constitution, which forbids a State to pass a law impairing the obligation of contracts.

The charters of the various companies, by the consolidation of which the Chicago and Northwestern Railway Company was formed, expressly empower the corporations to issue their bonds, and to mortgage their property to secure payment of the debt. The act authorizing their consolidation contained the same grant of power. Under this authority this company has contracted and now owes a debt amounting to above forty millions of dollars. These bonds have gone over this country and Europe, into the hands of persons who knew they were issued by the authority of the State of Wisconsin, and who never could have supposed that a State, deriving its very existence from a constitution, designed to secure a system of just laws and the security of natural rights, either would

or could take to itself the income of the property thus mortgaged, and deprive the company of all means of paying its bonds.

This corporation has contracted to pay a vast sum of money in return for the same amount received and expended by it in an enterprise which has added vastly more than that amount to the value of the property owned by the citizens of the State. The State now passes a so-called law taking from the corporation a large portion of its income, for the supposed benefit of the public, and thereby taking away, to a great extent, the means of performing its contract with its creditors, But the defenders of the act say the legislature had a reserve right to pass it, and perpetuate this injustice. It had a right to amend the charter of this company. If, before these bonds were issued, it had thought proper to take away the right to issue them, its power to do so could not have been denied. But we do deny, the bonds having been issued, that it can now impair the contract between the corporation and the bondholders, by taking from the corporation for public use, and without compensation, the means of payment. Under the power given by the legislature, the company has conveyed its property subject to the right of redemption. Can the legislature, under pretense of amending its charter, cancel that conveyance? Can it enact, as in principle it has done, that all the income from the property conveyed above the expense of operating the road shall, be paid into the State treasury, or devoted to public uses? Is this in any just sense, an amendment of

the charter?

The contract between the company and its bondholders has become an accomplished fact, which the legislature cannot change. The legislature has authorized the creation of the debt, and the conveyance of the property to secure it, and whatever amendment of the charter it may make, it cannot take from the mortgagee either the property conveyed or its income. It might as well undertake, under pretense of amending the charter, to amend in express terms, the deeds of trust executed by the corporations.

No court has ever held that under the reserve power to alter or repeal charters, contracts between the corporation and third persons can be impaired, except the Supreme Court of Wisconsin, when passing upon this law. As the question arises under the Federal Constitution, the decision belongs to this tribunal. The Supreme Court of Massachusetts explicitly denies that contracts between the corporation and third persons can be affected by an alteration of the charter. In Durfee vs. Oid Colony, 5, Allen, 247. that court speaks as follows:

"It would be well to add, in order to avoid misapprehension, that we do not intend to say that the legislature have any power to change or modify an act of incorporation in such a way as to affect, in a material particular, a contract which they have entered into with a third person. Such an exercise of legislative power would be unconstitutional and invalid, because it would impair the obligation of a contract."

In Tomlinson vs. Jessup, 15 Wallace, 459, this court says:

"The reservation affects the entire relation between the State