ground that the right of a railway corporation to receive a reasonable compensation for its services and risk of a common carrier, is purely and exclusively a franchise, derived solely from the State, and not from the ownership of the road, or the labor of its officers and servants, and therefore that such right to compensation may be withdrawn, or its measure fixed at the pleasure of the legislature. and if this right be simply a franchise conferred by the bounty of the State, to be continued, or changed at its will, it necessarily follows that proceeding from the State it may be appropriated, or wholly taken away at will, and hence, that the State may adopt other modes of absorbing the income of the corporation than that here attempted; for, assuming the correctness of this monstrous doctrine, it would be highly unreasonable to insist that the State is limited to but a single method of despoiling the stockholders of corporate property. If it may prescribe the limit of compensation to be charged, and that limit, be as here, so low that no income can be derived from the investment, stockholders are as effectually deprived of their property as they would be if permitted to receive a reasonable compensation subject to be immediately taken from them and appropriated by the State. The injustice of the proceeding consists of depriving the stockholders of the entire value of their property, and not in the mode of its bestowment; and when this is done, it is to them immaterial how the income thus taken is employed. Perhaps the State of Wisconsin, if it shall be allowed to indulge in this species of confiscation, may upon reflection conclude that it can make a better use of its "franchise" than is here attempted. As now employed, the income-or as it may on this theory be called the franchise, is absorbed in some small degree in the carriage at insufficient rates, of persons not citizens of Wisconsin, and of property not belonging to them. It would be equally agreeable to the stockholders and bondholders of the company, if the legislature should permit reasonable rates to be charged, and as they accumulated, take and divide them fairly among the traveling and freight-sending portion of its citizens, and thus appropriate the entire spoils in harmony with that provision of the act which discriminates in favor of the carriage of such freights as constitute the staple products of Wisconsin; or, if thought by its legislature more just, the proceeds of its altered franchise and of our property might be paid into the treasury of the State.

It is eminently desirable, before adopting this theory of granger legislation, to discern, if possible, some plausible ground on which to place the proposition, that the right to receive compensation for the use of corporate property, or the performance of corporate service, is a franchise to be withdrawn or changed by the State at will, and to discover, if within the compass of human intelligence, some reason of at least apparent solidity why, the moment private individuals invest their money in railways, their natural right to receive income therefor is surrendered, and replaced by this franchise, which the State may so mould and employ as to divert into its own treasury, or at least from the owners of the property thus created, all profit or hope thereof.

Will it be said, in support of this doctrine, that railways are public highways, and therefore the property of the State, as has been urged by an eminent senator of Wisconsin? If this be so, doubtless the State may control such property without resort to the pretext of so doing under the reservation contained in the constitution. But on what foundation can such a proposition stand in a court of justice? By the constitution of that State it is absolutely prohibited from contracting any debt for works of internal improvement, and from being a party in carrying the same on, except as hereinafter stated. If it be said that the first clause of this prohibition would not be violated by its assuming ownership without payment or liability to pay for the railways within its borders, it would nevertheless violate the second clause of the prohibition by engaging in their management. If this difficulty could be obviated, by force of what consideration known to the law or morals has any such ownership vested in the State? It is true that, to enable the corporation to secure a small portion of its road-bed, the State authorized the exercise of its right of eminent domain; but in delegating this the State lost nothing, and paid nothing, nor has it ever paid or advanced a farthing towards the construction of the road. To the same extent to which the company exercised this right of eminent domain it is, and commonly has been, employed by manufacturing companies to take land for the purpose of flowing it with water; but it has never, I believe, been pretended that this vested their property in the State granting the right or authorizing its legislature to fix the price at which they should sell their manufactured products. If the granting of charters be suggested as the consideration moving from the State, by force of which it may claim the property, or use or control of the property of the corporations it creates, the answer is that railway charters afford no different or better pretext for this claim than those of companies formed for banking or manufacturing purposes; and it is believed that never in the history of legislation has an attempt been made to fix a rate of interest below that prescribed by the general law as the limit of charge by a banking institution, nor to fix the price at which manufacturing companies should sell to the public their wares. The right to sell these at such prices as would yield a fair return for capital invested, and the right of incorporated banks to charge the usual lawful rate of interest, have never been regarded as franchises bestowed by the State and subject to be recalled or varied at its pleasure; nor have they ever been considered, so far as I am informed, proper subjects of State plunder or confiscation. Why, therefore, this odious and wicked discrimination between these several species of private corporations, and against railway companies.

It is difficult to point out any reason why the same protection should not be afforded to the stockholders of each and all alike. On what then is the discrimination based? Is it exercised to the injury of railway companies because their property is capable of use for vast numbers, and is in many ways serviceable to every individual in the community? Whatever may be the pretext for this as

sault upon and appropriation of their property, I am persuaded the law as declared here will denounce and condemn it; and I, therefore, proceed to state such reasons as occur to me, why, under the power reserved to alter charters, the State has no power to fix the compensation of incorporated common carriers, unless expressly authorized to do so by the charter, and then not by virtue of its capacity as sovereign, but solely as a party to the contract between it and the corporation.

1st. There are many subjects to which legislative power does not extend, and among these may be mentioned its inability to transfer the property of A to B, or to take the property of A for public use without just compensation, which compensation it is powerless to fix, and especially it has no authority to do a judicial act. Hence it could not on petition adjudge that A should pay to B even the smallest sum, or that the latter should perform the most trivial act. So, too, it cannot make or alter contracts between individuals. Its functions are the enactment, not the construction or execution of laws.

2d. The ascertainment of what is a just and reasonable compensation to be paid to common carriers for services as such, is a judicial and not a legislative act, and the determination of this question must always be adjudicated and settled in a proceeding in which the person for whom the service was rendered is a party. Hence if the State and the corporation should by charter fix rates of compensation for such service, they would not bind the public, for it is the duty of common carriers-and this may be judicially enforcedto perform all services as such, for every person demanding them, for a reasonable compensation, to be fixed in case of dispute by courts of justice. The reason of this is obvious. A legislative body does not proceed to deliberate inquiry, upon proofs and a hearing of the parties; which is indispensable for the ascertainment of that just measure of compensation to which the carrier is entitled, and which the party availing of the service ought to pay. Thus, if the question should be presented to a court of justice whether the rates charged by the Chicago and Northwestern Railway Company before the act in question, were reasonable, the judicial mind would inquire as to the amount of capital invested in the road and its equipment, the reasonable cost and risk of operating the same, the value of wear and tear of road, machinery, &c., the gross annual receipts, and the probability of their diminution or increase in view of established facts; and if upon a fair estimate of all these elements of calculation it should appear that, deducting all expenses and risk, the rates charged would yield but little if any more than lawful interest to the stockholders upon their investment, such compensation would not by any respectable court be considered unreasonable or unjust. Such, in general terms, would be the mode of judicial inquiry, and from this it is evident that as a legislative body does not so proceed in its investigations, there is sound reason for holding that what is a reasonable and just compensation to the common carrier for services is a judicial and not a legislative question.

3d. It is well settled that the charter of a private, as distinguished from a public, corporation-created for government purposes-constitutes a contract between it and the State creating it, which could not be repealed, nor in any substantial respect altered or amended without consent of both contracting parties.

The corporation might, by misuse or non-use of its franchises, forfeit them, but this forfeiture the courts only, and not the State could adjudge. A charter, with a right reserved to the State to alter, amend or repeal it, is not the less a contract between the State and corporation because of this reservation. When this is inserted in the charter, or declared in the public acts or constitution of the States granting it, the reservation becoms a part of the agreement between the corporation and the State. It is not a right to be exercised as a part of the absolute power of the State, like the exercise of its right of eminent domain, or its power to impose police regulations. These powers are exercised for the general welfare, and cannot by the State be surrendered, and never could have been, to private persons for any consideration, however great. Over these subjects the State exercises, and ever must, absolute authority. They are sacred trusts for the benefit of the entire people which it is powerless to barter away. Hence all property, all franchises, may be appropriated by the State, in the exercise of this right of eminent domain, on making just compensation therefor; and without compensation, all property and persons must submit to the exercise by the State of its power to impose regulations of police.

These observations illustrate how entirely different are these two powers and their purposes from a legislative authority to create private corporations. These may be so organized as to have perpetual succession without aiteration of their charters, for the franchises to them granted rarely impair, and generally promote the public welfare. And the law which empowers courts of justice to annul charters when corporations abuse their franchises, has generally been supposed to guard sufficiently against the evils which might otherwise flow from irrepealable and unalterable contracts. This reservation of the right of one of the contracting parties to alter or amend the contract between them, is created by force of the contract, and could not exist but for the assent of both State and corporation thereto; for it is at the option of the latter whether it will or will not accept a charter containing such a provision. A State might, if it saw fit, authorize the corporators, by vote of a majority, to alter, amend or put an end to their charter, and in such case their right so to do would rest solely on this provision of the contract.

The power of the State to do this rests upon precisely the same foundation, and cannot be exercised at its discretion without judicial control-as it may impose police regulations, or exercise the right of eminent domain. Justly and rightly viewed, therefore, a charter of incorporation which contains the reservation we are considering, is, in its entirety a contract, every provision of which, including this reservation, is subject to judicial control, and must

be construed in subjection to constitutional provisions for the protection of contracts and property, and to the meaning and purpose of the parties, like any other agreement. When, therefore, courts have considered what force shall be given to contracts, which in conformity to charters have been made between corporations and third parties, they have invariably said: this agreement by which the State may alter or amend its contract with the corporation, so as to vary its corporate rights and franchises, is made exclusively between the two, and cannot affect persons who before the charter was altered, and the power of the corporation varied, have contracted with it upon the faith of its ability to make agreements in the manner prescribed by that instrument.

4th. It is therefore to be considered and judicially ascertained what is the true legal effect of that provision by which the parties agreed, when the charter was accepted, that the State might at any time alter it, for the consequences of its repeal need not be considered, inasmuch as that has not been attempted, and is not likely to be by any legislature of any State; for such an act would at once remit to the stockholders absolute right to their property, subject to its just administration and control by courts of equity, and would by discontinuing the operations of its railway, subject the people of the State to great inconvenience and loss. Hence the clause authorizing the legislature to repeal charters is one of very little consequence to the stockholders or creditors of railway corporations; for it is a power which if exercised would be quite sure to inflict more injury upon the State than upon the corporators. This, and the enormity of such proceeding, unless a case of flagrant misconduct by the corporation, will always protect it from extermination; but even this, which would enable stockholders and creditors to avail of their property, would be to them much less hurtful than such legislation, under the guise of alteration, as we are here considering. The extent, therefore, to which this power of alteration by the legislature may be exercised is to be judicially determined, for that body cannot on pretext of so doing, violate other constitutional provisions, or the most sacred rights of property. A few illustrations may not be inappropriate.

Thus if a bank were incorporated with such a reservation in its charter, would an act of the legislature which required it to loan half its capital to the State without interest, or at such a rate as the State Commissioners to be appointed by it might prescribe, constitute an alteration of its charter? And if a corporation were created subject to such reservation, having authority to flow lands for the purpose of securing water-power, and having authority also to operate its machinery by steam, would a statute forbidding it to use the power of water for that purpose be regarded as an alteration or amendment of its charter within the true meaning of the reservation?

Again, let us suppose that the State of Wisconsin were to prohibit the Chicago and Northwestern R. R. Co. from using the power of steam to operate its road, but with a view to encourage the raising of horses, were to require that the road-bed should be so