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throughout its borders at the lowest rates possible. By section 4 the rates of freight are fixed for the carriage of the articles in quantities specified in classes D, E, G, and H, and also in the three other special classes, F, I, J. By section 5 of the act the roads classed as A and B were not to charge higher rates of freight for carrying freight classed under the four general classes mentioned in the third section, than was received by said companies on the first of June, 1873; but these rates were much higher than those prescribed for the carriage of the freight classed as D, E, H, and G, and the three Railroad Commissioners to be appointed under the act were empowered by section 13 to so classify all articles transported on any railroad, except articles mentioned in D. E. H, and G, as to place them in either of the said four general classes, or in the special classes except D, E, H, and G, thus expressly declaring that the Commissioners should in no manner interfere with either of those four general classes by removing from them either of the articles comprised therein, and placing them in classes where a higher rate of freight might be chargeable thereupon. And whilst these Commissioners were empowered to reduce rates of freight on articles comprised in either of the general or special classes, they had no authority to increase the same, except as such increase might result from a change in the classification as aforesaid-by removing articles comprised in F, I, and J to one or more of the four general classes numbered first, second, third and fourth-thus it will be preceived, carefully excluding from this possible increase articles constituting the staple products of Wisconsin. In the nature of things, and upon solid principle, there was no reason for this discrimination. It must be found in the desire of the representatives of the people of Wisconsin to secure for them a benefit, by an arbitrary and unjust exercise of supposed legislative power.
Without entering fully into the details of this act, it is enough to present here its general features, and these are certainly extraordinary. The railroads of the State are divided into three classes, A, B and C, instead of being designated by their corporate names; and as the roads descend in the alphabet, they rise in the scale of the rates they are severally authorized to charge for the carriage of freight and passengers-these rates being arbitarily fixed by the legislature, without investigation, and with no opportunity given to the several companies to be heard on a subject so vital to their interests, and even existence. Three Commissioners were to be appointed, to be in no manner interested in railways, with authority to examine witnesses, &c., and, among other things, to ascertain the cost of each railroad within the State, the gross receipts and total net earnings thereof, and various other facts, as one would naturally suppose, for the purpose of increasing rates, freight, and fare, if those fixed by the act were too low. This, however was not confided to their discretion; for they were only authorized further to reduce the rates prescribed, if, in their judgment, or in the judgment of a majority of them, it can be done without injury to said railroads; and the bill avers that they will proceed to re-classify and reduce rates,
unless restrained by injunction. The act also declares that the said railroads shall be bound by the decision of said Commissioners, or a majority of them, with reference to said rates, and that every violation thereof shall be a misdemeanor, subjecting the offending company or individual to fine, and to an action by the party aggrieved. Penalties are inflicted for any refusal to transport freight at the rates prescribed by the act, or by the Commissioners, or for charging more than such rates; and whilst the companies are thus required to perform these services, and to continue to operate their roads for that purpose, they are commanded, under heavy penalties, to do so for a compensation, confessed by the demurrer to be so inadequate as not to pay running expenses. And the bill also avers that even these rates it is the purpose of the Railroad Commissioners to reduce, and that they and the Attorney-General, who are appellees, are preparing to enforce the provisions of said act by prosecutions for penalties, and otherwise, to the injury and destruction of the rights and interests of the appellants.
On this state of facts the appellants will insist that the court below had jurisdiction to grant the relief asked for; that the act in question was repealed by that of March 12, 1874; that such portions of the act complained of as prescribe rates of fare or freight for the carriage within Wisconsin of persons or property coming from or going to other States, is in conflict with the provision of the Constitution of the United States empowering Congress to regulate commerce between the States, and to that extent is void; that the legislature had no authority to alter said charter; that the act in question does not alter or purport to alter the charter of said company, but is in substance a confiscation of its property, a taking of it for public use without compensation and without due process of law; that the power to determine what is a reasonable compensation for the services of common carriers, is a judicial, not a legislative power, which the courts alone can exercise; that if this were otherwise, there is a limit to the authority of the legislature to alter charters by virtue of the power to that effect reserved therein, or in the constitution of Wisconsin, and that this limit is to be prescribed, not by the will of the legislature, but by that of the law as administered by courts of justice; that the legislature has no authority to impair the obligation of contracts entered into, as aforesaid, between the several stockholders of the Illinois and Wisconsin railroad companies in precise conformity with the statutes of those States: that such statutes operated as a compact between those States, which neither could alter without the assent of the other; and that the legislature of the State of Wisconsin could not lawfully impair the contracts made between the bonholders and their trustees, and the said company, as attempted by the act of March 12, 1874; for all and each of which causes above stated, the appellants will insist that the said act is unconstitutional and void.
Before proceeding to argue these several propositions, a few general observations are deemed appropriate. If the act be valid, the legislature of Wisconsin, or such of its officers or agents as it sees fit to designate, may arbitrarily fix the compensation to be received
by the railway companies for their services and risk as common carriers, without appeal, without reference to the cost of operating their roads-permitting some companies to charge more than others for similar services; and acceptance of these rates may be enforced by the State by penalties and criminal prosecutions. If one conveys the profits of land, the land passes, for what, says Lord Coke, in language adopted by this court as expressing the law, is land, but the profits thereof? If these rates are binding upon the corporation, it is because the legislature and its agents have absolute power to fix them independent of, and against the will of stockholders and directors. If this power to determine what compensation common carriers may receive can be thus arbitrarily assumed and exercised by the State having no interest whatever in the property, may it not with equal propriety fix the sums the corporation shall pay for the hire of men and purchase of materials necessary for the conduct of its business? The exercise of one of these powers necessarily involves the right to employ the other, for what propriety or justice is there in fixing the carrier's compensation, without regard to the cost or risk of conducting his business, and if the right here claimed may be exercised, does it not follow that the price of the products of the manufacturer may be thus fixed without regard to its cost? By the terms of this act the corporation is in substance prohibited, under heavy penalties, from making contracts for the price of the carriage of freight or passengers, or for the performance of any service or risk as a common carrier. This authority the State claims the exclusive right to exercise, although as was said in 4th Hill's Reports, page 143, the power of making bargains for individuals has never been delegated to any branch of the government. Whilst this authority is thus claimed, and the corporation is expressley forbidden to bargain for, ask, or receive any greater compensation than that prescribed, it must of course be conceded that the persons for whom services are rendered by the company, are not bound by the rates fixed, for as against them these must be reasonable, and that question they may at any time submit to the determination of a court and jury; and of this right they cannot be deprived. If the legislature may lawfully exercise this power, it is obvious it can at pleasure render the entire property of the company worthless; for it is quite immaterial with what prudence, skill, and economy its affairs are conducted, if its receipts may be regulated by the arbitrary will of the legislature or its agents. If this may be lawfully done it needs no argument to show that the property of every corporation held subject to this extraordinary power, may in substance be taken from it, and its benefits transferred to the public who travel and send freight over its roads. The case is not altered by saying that the title to its road-bed, cars, and equipments still remain in the company; for the only purpose of investing in these is to obtain a fair profit from their use in connection with the services of the officers and agents to be employed by the corporation. When, therefore, its income is taken, or so controlled by the State that none, or less than a just compensation is derivable from its
property, the latter is in the most substantial sense taken without dne process of law, and without compensation. The utmost subtlety cannot wriggle out of this conclusion. To say that the right to take a reasonable compensation for the services of a common carrier is a franchise, proceeding from the State, which it may at pleasure recall, is simply to assert that when it creates a corporation for the construction and operation of railways or for the manufacture of cloths, it invites the investment of capital, subject to the right of the legislature immediately utterly to destroy its value to the owner by prescribing what may be received for services or products. Is the right to obtain this just compensation a franchise derived from the State, or a part, and the only valuable portion of the capital invested? By what process is this extraordinary transformation effected, whereby the State may at will so dispose of the property of the stockholders, that whilst they may continue to hold its barren title, the State may control its use, and distribute its income and profits to strangers? To say that this is but altering the franchise, which the State conferred, is but christening a wicked fraud under another name. The property of the stockholder is, nevertheless, taken from him, without due process of law; and without compensation; and to call this the withdrawal of a franchise, which the State gave, and may at pleasure take away, is but a wretched falsehood poorly clad. This, however, seems to have imposed upon the supreme court of Wisconsin, if we may judge from a late opinion of its chief justice, in which it is declared that the act does not at all meddle with the material property distinct from the franchise, but acts only on the tranchise, and not at all on the material property. Does that court really believe the income of a railroad company is not material property, and that only its road-bed and cars when incapable of yielding a profit, are? What would the judge who delivered the opinion on that subject judicially say if a like proposition were urged on behalf of men who by fraudulent management as directors should deprive the stockholders of all income from their investments? He certainly would not call this, or the right to receive it, a franchise and say the directors had not meddled with the material property. He would probably tell the fraud-doers in very plain language that the right of stockholders to a fair return for their investment was as sacred as that of any other owner of private property to its proceeds, and that such investment was of no material value whatever except as a source of income.
In the same opinion, the justice who delivered it said the statute in question had been denounced as an act of communism, but that he thanked God communism was a foreign abomination, without recognition in Wisconsin, where the people were too intelligent, too staid, too just, too busy, too prosperous, for any such horror of doctrine. It is quite true that the theory of the statute is distinct from the doctrine of the communists. The latter divides property ratably between the plundered and the plunderers, while the former takes all for the grangers.
It is clear, therefore, that the State has assumed to exercise such
absolute control over the property of the corporation, by whatever name it may be called, as renders it quite valueless, at the pleasure of the legislature; and it is equally clear, that unless corporate property is wholly unprotected by those invincible common law and constitutional provisions which protect all other private property, the act in question is utterly void It has sometimes been said that railways are public highways which, in substance, belong to the State, and may, therefore, be dealt with as public property. At others, that inasmuch as the State exercised the right of eminent domain to enable railway corporations to secure the needful land for their roadways, this rightly subjected them and their property to State control. These are but feeble pretexts on which to build the right to take millions of property forcibly and without compensation. In so far as railways are subject to public use, they are public highways, open to all persons who see fit to travel in, or send freight by, the cars of the corporations owning them, at reasonable rates of compensation; but it is well settled that these are private corperations, and their property private property. The State has never paid a dollar towards the construction or equipment of our railway, and by its constitution is expressly prohibited from so doing, or from operating public works except as hereinafter stated. How, then, or by what title does the State own the railway constructed by the Chicago and Northwestern Railway Company? Is it because it has seen fit to declare it a public highway? And how much is gained by invoking the aid of the right of eminent domain exercised to enable the company to obtain a small portion of its land, which it acquired only upon pay-. ing to the owners full compensation therefor? The State lost nothing by this, nor did those whose lands were thus taken. These pretenses of franchise altered, of public highway, of eminent domain, are but flimsy muniments of title to the millions which the State seeks to grasp and hold by force of the act in question. Those who attempt to accomplish and to justy this appropriation of the property of corporations can find no precedent for the outrage in the legislation of any State or country. A reference to 1st Shelford, on the law of railways, containing the act of parliment of 1844, will illustrate with what justice the legislature of Great Britain, having imperial power, deals with this kind of property. There, in a general act, provision is made for regulating the rates of fare chargeable by railway companies thereafter to be created in that company, and these are subject to such revision, that when the companies are able to pay ten per cent. dividends upon the cost of the roads, the rates may be reduced, provided the Government shall guarantee a continuance of profits equal to that sum; and a somewhat similar provision, without the guarantee, will be found in the 18th section of the act of Congress incorporating the Union Pacific and other connecting railways. It has been reserved to the Western States, where the money lender is permitted by law to exact for loans a high rate of interest-in Wisconsin, ten per cent.-and where the manufacturer and the farmer may charge at pleasure for their products, to attempt arbitrarily, without legis