Tickets: Scalping, redemption of unused tickets, passes 928 929 Long and short hauls. 930 931 932 934 934 935 State railway commissions. Summary of commission laws 936 937 Page. Part V.-Foreign railway charters and important laws.. 943 Introductory 943 Classification of foreign railways 944 Influence of private interests in railway construction 968 968 Part VII.-Views and opinions of railway men 984 Appendix I.-Preamble and description of a part of the route, from a 989 Appendix II.-Constitutional provisions relating to railways. 991 INTRODUCTION. For the purpose of this report special charters, granted by every State and Territory in the United States, were examined. The session laws of the various legislatures, as published, contain the charters granted by them; and while not all the charters that have been granted were examined, the number which was examined is so large that generalizations may safely be based upon them. As a rule, the charters granted during the first 10 years or so in any one State were compared with one another. The charters granted during the later decades were likewise examined, with a view of noticing in what ways, if any, these differed from the earlier ones. Parallel with these, an analysis of general laws was undertaken, including only the earlier enactments on the subject of railways. The discussion of contemporary railway legislation was based upon the latest edition of the revised statutes of the different States, supplemented by the general laws of the States which had been enacted since the publication of the statutes. In this manner, it is believed, no essential provision of the railway laws of any State, whether included in the revised statutes or not, have been overlooked. The material upon which the treatment of constitutional provisions is based is found in the appendix to this report. The treatment of foreign railway charters and legislation rests almost exclusively upon material submitted by the various departments of public works in the different foreign countries. The respective officers were requested to submit typical charters and important general laws; and there is every reason to believe that the material thus submitted is thoroughly representative of the railway legislation of the countries concerned. Without attempting to formulate definite conclusions or to express whatever opinions may be justified on the basis of the facts presented in this report, a number of the leading characteristics brought out may be enumerated here. In the first place, the essential similarity of charters the world over has been confirmed. The lineal descent of present railway charters from the earlier canal and turnpike acts in England can likewise not be questioned. While in different countries certain forms of expression found their way into the charter, in many respects more than similarity can be discovered. Identity of contents, even, can in many instances be established. A characteristic of railway legislation in the United States is the great extent to which special legislation was persisted in after general laws had been enacted by the respective State legislatures. In all sections of the country the statute books afford numerous instances of the granting of special railway charters, completely ignoring the existence of general laws for the incorporation of railway companies. In addition, illustrations can be found of the organization of railway companies on the basis of special charters granted many years before, when at the time of such organization general laws and constitutional provisions prohibiting special franchises were found upon the statute books. As a whole, the railway legislation of the United States is incomplete, especially with respect to such subjects as the issuance of stock, making joint arrangements, providing for emergencies, and similar topics. A tabular analysis of railway laws shows at a glance the absence of essential provisions in the laws of many States. Together with this incompleteness there goes a certain lack of uniformity, which must be extremely exasperating to railway companies that attempt to act in obedience to the law. Our great railway systems lie in territory under the jurisdiction of a number of different States, and when two or more of these States legislate in diverse ways on the same subject, it is difficult to see how a railway manager can act in accordance with the laws of all the States to which his road is subject, and at the same time adhere to that unity in management which good business principles demand. The railways are essentially alike all over the United States, and no good reasons can be advanced for the extraordinary differences which exist among the laws of some of the States. The lack of elasticity in railway legislation is best illustrated by the many constitutional provisions which have been incorporated by various States. It is a well-known fact that amendments can not be readily secured, and, that legislation which is rigidly limited in its scope by constitutional amendments can not embody that freedom of action which the nature of the railway business demands. Our railways are an important part of our industrial mechanism, and, in common with all other domains of social and economic life, they undergo changes and adjust themselves to modifications and variations in this social and economic life. Rigidity in railway legislation prevents that prompt readjustment which progress demands. The tendency, noticeable in the laws and constitutional provisions of a number of States, to permit supension of the long and short haul provisions, for example, is an excellent illustration of a most commendable tendency in our railway legislation, because it gives to administrative authorities discretionary powers, which will enable them better to adjust the railway service to concrete conditions as the same may arise. In general, it is true that our laws do not recognize differences in the degrees of importance represented by different railways. A subordinate branch of a small independent road in a remote section of the undeveloped part of a State is subject to the same laws that govern the most important systems, except, perhaps, in regard to taxation, for which purpose various schemes of classification have been adopted. Again, it may be said that our laws do not provide for adequate administrative machinery, and that many of them appear to have been enacted on the assumption that statutes execute themselves. An examination of the commission laws shows clearly the great lack of uniformity in the qualifications of commissioners, their terms of office, and in the powers exercised by them. The question naturally arises whether any system of administrative control could not be greatly strengthened by legal provisions, outlining certain qualifications for every agent who may be a part of the administrative machine. At present there is nothing in our State laws to prevent persons totally unfamiliar with railways from occupying positions which call for high ability and thorough knowledge of railway affairs. Furthermore, there is very little in our laws which enables the commissions or other officers to compel prompt compliance with the laws on part of individual railways which do not see fit to obey them. A single obstinate manager may prevent other managers from voluntarily doing what justice to shippers and railways alike demands, and what every citizen should have a right to demand; and, in case the demand goes unheeded, to have the same enforced through an efficient and prompt administrative agent. A study of the laws of Prussia, Switzerland, and Japan impresses one with the lack of representation of social and economic interests in the management of our railways. The full significance of this becomes apparent when the composition of advisory bodies in these and other countries is taken into view, and the wholesomeness of the influence and power which they exercise over the railway systems of their respective countries is realized. They are, in a sense, clearing houses of information through which the railways and the people learn to know each other. PART I.-EARLY RAILWAY CHARTERS. General characteristics.—A railway charter may be defined as a special act of a legislative body authorizing a person or persons duly organized to construct and operate a railway or railways in a certain territory under certain conditions. Such a legislative act is a private law. With the exception of a few of the Western States—Arizona (Territory), California, Colorado, Idaho, and Montana— which began with general laws, special charters have been granted by every State and Territory in the United States. The charters have numerous resemblances and differences which will be noted more in detail later on, but at the outset it is well to notice certain features which charters in all parts of the United States have in common. In spite of numerous striking differences which exist, we may speak of a typical railway charter. The leading features which are common to railway charters of the different States may be associated with the following points, every charter having one or more provisions relating to some or all of these points: Name of company; number of commissioners; number of board of directors; the amount of capital stock: size and number of shares; the amount of the payment per share at the time of subscription, and the maximum assessment per share, together with the number of days' notice required; systems of voting: the time limit as to beginning and completing construction; junctions, branches, and extensions; route; expropriation and methods of valuation, together with the manner in which disputes are settled; the amount of land which may be held; the number of miles to be constructed before traffic may be opened: the power to borrow money and the rate of interest; the distribution of dividends, liability of stockholders, annual reports, passenger and freight rates. In every State charters may be found which contain provisions on only a few of these points, while in most States charters were granted containing provisions on all of them, and perhaps others not here indicated. Following an old English custom, a few charters in a number of States contain a preamble. Where a preamble is found, it usually sets forth the reasons why the proposed railway should be constructed, the public service which it can be made to perform, and the manner in which the project is to be carried out. Preambles of this kind can be found in charters of States so far apart as Wisconsin, Pennsylvania, and Georgia. Similarly, charters in some North Atlantic States declare the public use of the projected railways. Both the preamble and the declaration of public utility serve the same purpose, namely, to bring before the legislative body before the franchise is granted the social and economic conditions which make the project desirable, if not necessary. While there is no general order in which the different provisions of a typical railway charter are incorporated, in the individual charters of the different States, it is very common for a charter to enumerate first of all a number of persons, designated commissioners, under whose direction the proposed railway is to be organized. These commissioners are authorized to open subscription books in specified localities on a certain date, and to continue to receive subscriptions during a certain period of time. The charter further specifies that after a certain minimum sum has been subscribed, and a certain payment on each subscription, varying greatly in its amount, has been made, the subscribers shall hold a meeting and elect a board of directors. The size of the board to be elected, like the number of commissioners, varies very greatly in the different charters, although 9 and 13 are perhaps the most common numbers. In a few States, like Connecticut, Maryland, and Kentucky, charters were granted making it obligatory on the part of the elective officers to bind themselves to the performance of their respective duties by an oath. The board of directors having been elected, the company has obtained legal status and is prepared to carry out the provisions of the charter in its possession. |