servants or employees, as a condition of their employment, to sign a contract limiting the liability of the company in case of suits for damage, or precluding the possibility of bringing such suits altogether, by contract. About ten constitutions expressly limit the activities of a chartered corporation to the business which is expressly provided for in the charter. In a few cases the constitutions specify that no railway company can become a foreign corporation by consolidation; and, in a small number, a provision common in many of the earlier laws is enacted, compelling railway companies to establish stations or depots whenever they pass within a certain distance of towns and villages, frequently the county seat. The constitution of Washington stands alone, in that it expressly prohibits discriminations against express companies. Idaho and Wyoming demand the appointment of legal representatives of railway companies in those States. (This provision is common in general laws but not in constitutions.) The Missouri constitution provides for the payment into the State treasury of specified sums of money proportionate to the amount of capital stock, before a charter can be issued.

This analysis presents the leading features of the constitutional provisions of the several States. None of importance have here been omitted and only a few of the less important ones have not received mention. An examination of the appendix containing these constitutional provisions will show the great similarity which exists among many of the constitutions with respect to certain clauses, and the manner in which constitutional provisions were copied in one State from the constitution of another.

PART IV.-PRESENT GENERAL RAILWAY LEGISLATION.

Terms applicable to later charters.-In a technical sense the term "charter" can scarcely be applied to the instruments issued to railway corporations under contemporary general laws. The word charter, through long usage, has come to signify a special grant of authority and power. In the constitutions of 21 States, as was noticed in the preceding section, the incorporation of railway companies under special or local acts is prohibited; in other States this prohibition is found in general laws; and in some States in both the constitution and in the general laws. The statutes of South Carolina mention the organization of railway companies "under charters," and in the Kansas statutes the term charter is also used. But these are exceptions. Terms like "articles of association," "certificate of incorporation," "articles of incorporation," "articles of agreement," and "letters patent" have come into use, and carry with them the significance of earlier special charters. Articles, certificates, etc., are charters only in a loose and general sense, because the contents of the franchise itself are expressed in the general law relating to railways and the constitutional limitations under which these have been exacted. The grant of a charter involves a distinct legislative act, authorizing the company receiving the same to exercise, in a measure, the rights of sovereignty, and to do the things for which the organization was accomplished. A certificate of incorporation, on the other hand, is issued in pursuance of law by administrative and not by direct legislative authority. Formerly a separate act of the legislature was necessary. Under general laws an administrative act for each such grant of power is all that is requisite for the organization of a railway company. To be sure, there is a very direct connection between the earlier charters and the later general laws, for many of the latter embody not only the essential features of the former, but frequently they are expressed in similar and even identical language. The change of name from article or certificate did not carry with it any radical change in the nature of the franchise. In this respect there exists continuity of development. The greatest change brought about by the transition from special charters to incorporation under general laws consisted in uniformity. Almost infinite variety in charter provisions was common during the earlier period of special legislation. Under general laws, even when compliance therewith was not enforced or enforceable, a certain degree of uniformity was brought about from the very first.

Conditions under which railway companies may be organized.-There are, however, features of railway legislation in the United States which reveal many elements of uniformity as to the conditions under which railway companies may be organized; and yet, after admitting this much, we are compelled to recognize the fact that railway laws are very far from being uniform, and that numerous variations and differences are noticeable.

The number of persons who may associate themselves for the purpose of incorporating railway companies varies from two or more in Washington to any number in Iowa. Between these extremes there exist 10 different numerical groups which may effect an organization: Three or more in Florida, Oregon, Montana, and Wyoming; 5 or more in Illinois, Indiana, Kansas, Nebraska, Wisconsin, Montana, etc.; 6 in Louisiana; 7 in Michigan, Kentucky, Alabama, New Jersey (for roads less than 10 miles in length); 10 in Maine, Georgia, Arkansas, Texas, etc.; 13 in New Jersey (for roads more than 10 miles in length); 15 in New York, Indiana, etc.; 20 in Vermont; 25 in Massachusetts, New Hampshire, etc. These numbers, or more, may in some States be composed of any persons whatsoever; in others, a certain proportion must be citizens: and, in a few, all of them must be citizens. Certain restrictions are occasionally made with respect to residence, both on the part of the stockholders and on the part of the board of directors and officers. The object of restrictive provisions relating to residence was evidently

to prevent the projected road from being controlled by " foreign influence." During the early history of railways in the United States the possibility of foreign control, on the assumption that such control would result in the neglect of local interests, was used as a weapon to encourage local subscriptions to the stock of railway companies.

Contents of the articles.-The nature of the contents of the articles of association, or certificates of incorporation, can best be indicated by presenting the salient features of such articles in a few of the leading States, which may be considered typical of analogous provisions from the laws of other States-understanding by the term "typical" not identity, but essential similarity, leaving room for modifications of one kind or another in particular cases.

The law of Illinois requires a statement of the name of the corporation to be organized, the States from and to which the railway is to be constructed, the location of the principal offices, the time of beginning and completing construction of the railway, the amount of capital stock and the number and size of the shares, the names and residences of the persons who contemplate effecting an organization, and the names of the first board of directors.

According to the statutes of Maine, the articles must contain the name of the corporation and the gauge of the projected railway, the names of the places from and to which the same is to be constructed, the amount of the capital stock, which shall be not less than $3,000 per mile for narrow-gauge and $6,000 for standardgauge railways, the number of shares of stock, and the names and residences of 5 directors. Since, on this point, the laws of Maine (General Laws, 1899, p. 117, Sec. I) are in many respects much better than those of most of the States, a full quotation is here inserted:

"Said directors shall present to the board of railroad commissioners a petition for the privilege of said articles of association, accompanied with a map of the proposed road, on a proper scale. The board of railroad commissioners shall, on presentation of such petition, appoint a day for a hearing thereon, and the petitioners shall give such notice thereof as the said board deems reasonable and proper, in order that all persons interested may have an opportunity to appear and be heard therein. If the board of directors, after notice and hearing parties, finds that all the provisions (of law) have been complied with and that public convenience requires the construction of said railroad, said board shall indorse upon said articles a certificate of such facts and the approval of the board, in writing. The secretary of state shall, upon payment of $20 to the State, cause the same, with the indorsement thereon, to be recorded, and shall issue a certificate in the following form."

Then follows the prescribed form of certificate, with the contents indicated above.

The laws of Arkansas, for 1899, created a State board of railroad incorporation, composed of the governor, who acts as chairman, the attorney-general, auditor, secretary of state, treasurer, and commissioner of State lands. This board hears all applications for certificates of incorporation, and on its recommendation such certificates may be filed with the secretary of state, and thus legally empower an organization to construct a railway under the terms of the general laws of the State. Ten or more persons may organize, elect a board of directors, and subscribe to the articles of association when $2,000 per mile has been subscribed and 5 per cent of the subscriptions paid to the board of directors, a majority of which must be citizens of the State.

The laws of California require the articles of incorporation to state the name of the projected corporation; the purpose for which it is to be organized; the places from and to which the railway is to be constructed, as well as all intermediate branches; the estimated length of the road; the amount of the capital stock, $1,000 per mile of which must be subscribed before the articles can be filed, and 10 per cent actually paid in. The number of directors varies from 5 to 11. but 5 of them must be residents of the State. The sale of railway franchises and municipalities must be advertised, and the franchise given to the highest bidder. Massachusetts.-The articles must contain the name, route, gauge, capital stock, and other common items. In case of standard-gauge railways $10.000 per mile must have been subscribed and for narrow gauge $3,000. The amount of the capital stock depends upon the detailed estimate of costs. No increase in capital stock can be made without the authority of the railway commission, before whom a hearing must previously have been given, upon which such increase or refusal to permit such increase is determined. The articles and certificate must be filed with the secretary of state. All petitions (compare the laws of Maine) for such charters must be accompanied by a map upon a proper scale, showing in detail the entire route of the road. A certificate of public exigency" is also required

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before a charter can be granted. The railway commission, upon due notice, must give a hearing to all persons interested in the projected railway, and not until such persons have been given an opportunity to be heard and all the other provisions of the law complied with can a charter be granted. It will be noticed that the Massachusetts law still provides for the granting of special charters, although these special grants are surrounded by wholesome and what appear to be entirely adequate provisions and safeguards.

Michigan.-Although a law of 1891 of this State declared every railway company operating within the limits of the State "to be in all respects subject to the general laws of the State respecting railroads, as now existing or as hereafter amended," a conflict between such charter provisions and general law provisions is still possible, as has already been indicated in another connection. Consequently, in 1889, there was created in this State a commission-composed of the commissioner of railroads, the State treasurer, and the secretary of state-whose duty it is to negotiate with railway companies operating under special charter, to determine upon what terms such railway companies will surrender their charter rights. For this purpose the commission is given authority to inquire into the business of railways, to secure the necessary information by subpœnaing witnesses, etc.

Georgia. In addition to the usual provisions of the articles of incorporation the laws of Georgia provide for a petition which must be presented at least 4 weeks before a charter can be secured. Companies may amend their charters by adopting the general railway laws of the State.

Significance of certificates and articles.-These articles and certificates empower railway companies to make examinations and surveys for the proposed railway, in order to select the most advantageous route; to purchase, receive, and hold an amount of real estate necessary for the construction, maintenance, and operation of the road; to own other kinds of property essential to railway business; to have perpetual succession, or succession for a certain period of time; to have the power to sue and to be sued; to establish connections with other railways; to charge or to receive such remuneration for their services as from time to time may seem reasonable; and, in general, to enjoy those rights, privileges, and immunities which the law guarantees to all similar corporations, and which are essential in carrying out the legitimate aims and purposes of the corporation. The completeness with which the powers and duties of railway corporations are prescribed in different laws vary somewhat, yet there exists, perhaps, greater similarity and more completeness in this respect than in any other subject of railway legislation. In some States corporate powers of railway companies are enumerated in separate laws; and, in others, all the leading features of legal provisions relating to railways are expressed in the commission laws. It is unnecessary to enumerate in the lengthy phraseology of the law books the detailed rights and privileges of railway companies, for they are the same as those enjoyed by corporations in general, and are not essential to a consideration of the degree of regulation and control which is possible under the existing railway laws of the different States of the Union.

The provisions of the few articles which have been presented above are sufficient to show that there exist differences among the States with respect to the time limits within which railways may be constructed; the amount of capital stock, and the subscriptions thereon per mile of railway; the degree of publicity given to the applications for charters, and other things. A fee for filing certificates is charged in a number of States. For instance, in North Carolina $250 must be paid before a bill can be introduced to incorporate or amend. In Maine, a fee of $20 is exacted; and similar fees are charged in Wisconsin, Washington, and other States. The laws are weak in the financial requirements which they exact of railway companies. It would seem that some definite proportion should exist between the amount of the capital stock and the length and characteristics of the projected road; but such is not generally the case. Idaho and Indiana require a subscription of $1,000 per mile; Kentucky, $250 per mile, of which 20 per cent must be paid in cash; Arkansas, $2,000 per mile; Maryland, 10 per cent payment on shares; Virginia, a payment of $2 per share when subscriptions are made; New Jersey, $10,000 per mile, and a deposit of $2,000 per mile when the articles of association are filed, which latter sum, however, is returned to the board of directors when the road is completed. This is sufficient to show existing variations. Corporate life and reserved rights of the State.-While many of the early charters and general laws were unrestricted in their nature, it was not long before a reaction against this lack of restraint set in, and regulating features, more or less adequate in their nature, were introduced in charters and certificates. Many such charters contained in one of their concluding sections the proviso that the

charter in question should be considered a public act and, as such, to be construed favorably for the purposes for which the company was organized. Both in England and the United States, however, it has been held that the mere insertion of such a clause does not make a special or private law a public act, and that unless a charter is public by the nature of its contents it will be construed as a special act when passed with reference to a particular company organized to construct a certain road. The public importance of railways and the vital connection between them and the social and economic interests of the States, frequently led legislators into a good deal of indulgence, especially during the early period of railway development. The limitations of charter rights had not yet been established; and it was not uncommon for incorporators to maintain that the rights and privileges granted by their charter were absolute and unrestricted. Not until the advent of Granger legislation, culminating in the leading case of Munn v. Illinois, had the right of the State to interfere in the management of railways incorporated under special charters been established; and at the present time nearly twothirds of the States have statutory provisions reserving to the respective States the right to alter, amend, or repeal the franchise of any corporation, whether organized under special or general law. Reference to Part III, on constitutional provisions, will show similar limitations placed upon franchises by State constitutions.

The nature of the reserved rights of the States and the limitations placed upon the corporate life of railway companies are illustrated by provisions in several States here inserted:

Maine. The laws of Maine provide that "no corporation can assign its charter or any rights under it; lease or grant the lease or control of its right or any part of it, or divest itself thereof, without consent of the legislature." In addition, all corporations, whether organized under special or general laws, shall be subject to general laws. In Maine and Massachusetts the State may amend or repeal the charter, or the Commonwealth may purchase railways on 1 year's notice, after 20 years' corporate existence.

Michigan.-Legislation in Michigan on this point has already been indicated. Illinois.-In Illinois charters are granted for 50 years, with the privilege of renewal for the same length of time; and a law of 1895 reserves to the legislature power to enact laws on all the leading topics relating to corporate existence.

Iowa.-In Iowa companies may likewise be chartered for 50 years, with the privilege of renewal for as many more, and they shall eventually be subject to legislative control. The legislature may alter, abridge, set aside the charter, or impose new conditions which it deems necessary for the public good.

Kansas.-Special charters which do not designate the period of corporate life continue 99 years. The legislature has power to extend the charter period as it may deem proper.

Wisconsin. The legislature of Wisconsin expressly reserves the power to pass laws relating to reasonable maximum rates, the correction of abuses, unjust discrimination, and for the protection of the just rights of the public. Corporations, however, under the laws of this State "shall continue perpetually."

North Carolina.-Sixty years, unless otherwise provided for in the act creating the same, is the corporate life under the laws of North Carolina.

Louisiana.-This State limits the corporate existence to 99 years.

Texas.-In Texas a charter is forfeited if 10 miles of the proposed road are not put into running order within 2 years, and 20 miles during every year thereafter until the road is completed. Charters may be granted for a period of 50 years, with the privilege of renewal for an equal number of years.

Maryland and Rhode Island illustrate an entirely different type of statutory provision:

Rhode Island. The laws of Rhode Island prescribe a course of procedure which appears to be entirely in harmony with the needs of our growing railway and industrial systems. In that State the general law alters special charters whenever the latter are found to be inconsistent with the former.

Maryland.-Exactly the opposite is true in Maryland, where the adoption of the "general code" is not to affect the rights and privileges granted by special charters.

Provisions found in the laws of all the other States dealing with this subject at all, do not contain anything not found in what has here been presented.1

1States having statutory or constitutional provisions, or both, directly reserving to those States the power to alter, repeal, or amend charters, are the following: Arkansas, California, Colorado, Indiana, Iowa, Kansas, Massachusetts, Michigan, Mississippi, Montana, New Hampshire, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin.