THE WISCONSIN RAILROAD ACTS.

LEGISLATION in Wisconsin previous to 1874 encouraged the construction of railroads. It is stated, that in December, 1873, there were in that state 2203 miles of completed railroad, of which 1075 miles were built in the last four years. These railroads cost $88,149,382, of which it is estimated that citizens of that state, by cash payments, farm mortgages, and other settlements, contributed about $1,000,000; and towns, counties, and cities, by various forms of bonds and pledges of municipal credit, about $5,846,404; while the residue was furnished by non-residents, say, $81,302,978.

The inducements which the state and people of Wisconsin had offered to foreign capital, and by which so large an amount of money had been drawn from sources outside the state to be expended within its borders, had been liberal, and had caused development of values in land and all its products correspondingly great, and had created of course taxable wealth much larger than the considerable sums directly expended upon the railroads.

But, in 1873, from causes which it is not our province to consider here, a political revolution occurred in Wisconsin, and resulted in the choice, by the new Reform party, of their candidate for governor, and gave the Reformers a majority in the assembly, -the popular branch of the legislature, while in the senate the Republicans retained a majority of one vote. When the legislature met, the general excitement throughout the West, about cheap transportation for its crops to the markets of the world, made railroad legislation the popular topic in all western legislatures for all parties to discuss, and to make capital out of if they could. This was eminently true in Wisconsin, and the Reformers felt that they could not afford to adjourn the session without some railroad legislation, while the Republicans were equally determined that their own party should have the credit of any new railroad laws. Two laws were finally passed,―chapter 273, approved March 11, 1874, which is currently known as the Potter law, from the name of its author; and chapter 341, approved March 12, 1874, which is in like manner called the Henderson bill. Hardly had

these bills been approved, when a comical contest began in the newspapers about their political paternity. The "Milwaukee Sentinel," the leading Republican paper in Wisconsin, declares: —

"Whatever has been done in this direction has been accomplished by Republicans. The so-called Reform ticket in this state was helped into office by the railroad interest. . . . The Henderson bill and the Potter bill came from the Republican ranks, and the latter would never have become law but for the loyalty of Republican support."

Thereupon the "Milwaukee News," the leading Reform paper in the state, replies:

"It is well known that the Henderson bill was drawn by John Winans and Dr. Wight, whom nobody will claim as Republicans. As to the Potter bill, on the contrary, the simple truth is, a thousand times stated, that the Reformers proposed a bill of their own in the assembly; guarding carefully the rights of the people, asserting the power and duty of the legislature to assume supervision and control of railways, yet not fixing an arbitrary tariff, alike injurious to the public and the railway interest; but the Republican senate would not concur, and tenaciously adhered to the injudicious and unjust Potter bill, which was finally passed by the Reform assembly, because the majority of it did not wish to incur the responsibility of its defeat."

It would seem, therefore, that the extraordinary legislation we are about to consider is the result rather of a political dead-lock in the Wisconsin legislature than the deliberate policy of any political party. At all events, it is clearly unjust to charge upon the Grangers, or the Reform party in Wisconsin, the responsibility of authorship of the Potter law, or adoption of its principles, which they have disavowed, ever since the law was passed, as the policy of their party. It would be as unfair also to suppose that the Republicans in Wisconsin will persist in maintaining laws which are so disastrously affecting the reputation and credit of the state, which had their origin in a supposed political exigency to out-herod Herod, and for which already all parties are apologizing. The extreme impolicy of frightening capital out of a new state by such legislation foreshadows an early death to these enactments; but, even if they die next winter, as is confidently predicted, they will hold a famous place in American legal history, for they have given rise to litigation which involves the gravest constitutional questions, and the principles of ownership in all property, as well as the control of the state over the corpo

rations it creates. It would be difficult to instance more important issues ever brought before the Supreme Court of the United States than will come up for consideration under these laws; and the consequences which must follow from their decision by that high tribunal are so momentous, that no apology is necessary for laying the facts before the profession, and inviting to them their attention. We propose, at this stage of the case, to do little more than state the facts, and a resumé of the opinions and arguments which have already been offered in this discussion by some of the most eminent lawyers in the country, and give a sketch of some of the cases which have already arisen under this legislation.

The provisions of the Potter law are substantially as follows, viz. The railroads in Wisconsin are divided into three classes,A, B, and C. "The compensation per mile for the transportation of any person, with ordinary baggage, not exceeding one hundred pounds in weight," to be charged by the railroads in class A is limited to three cents; in class B, to three and onehalf cents; and in class C, to four cents. Maximum rates for the transportation of the different kinds of freight are also fixed for each class of railroads, and graded on the same principle. Rules for estimating distances and transportation over connecting roads are prescribed. Fines, penalties, and forfeitures are imposed for violation of the provisions of the act by any individual or corporation, and jurisdiction given to justices of the peace in all civil suits within two hundred dollars. A board of railroad commissioners is constituted, with defined duties and salaries, and authority "to reduce said rates on any of said railroads, or parts of railroads," whenever a majority of the board think it can be done without injury to such railroad, but without authority to increase them under any circumstances. Freight from other states for carriage across Wisconsin is excepted from operation of the act, and the commissioners given free passage over all the railroads in performance of their duties. The act is in force "from and after its passage and publication," and was approved March 11, 1874.

The provisions of the Henderson law are substantially these, viz.: Railroads are declared public highways; and all railroad and transportation companies, common carriers; and they are required to transport all cars, passengers, and freight without unreasonable delay, or unjust, undue, and unreasonable discrimination. Competing lines must not consolidate their interests by purchase, lease,

or in any manner, nor have common officers. Railroad officers must not be interested in furnishing materials, supplies, or transportation over their own roads. No discrimination between transportation companies and individuals in any manner is permitted, and free passes are prohibited to state officers. Fines, imprisonment, and penalties are enacted for violations of the provisions of the act; and "all acts or parts of acts contravening or conflicting with the provisions of this act are hereby repealed;" and the act is in force "from and after its passage and publication." It was approved March 12, 1874, and contains no saving clause as to the Potter law; but on March 12, 1874, the legislature passed a joint resolution, directing the Secretary of State not to publish the Potter act until April 28, 1874;1 and in Wisconsin no general law is in force till after publication.

It is variously estimated by different railroads in Wisconsin that this law reduces their income from twenty to thirty per cent; and, if the new rates were observed, would not only absorb all profit from the stock, but would render very doubtful any payment, out of their earnings, of interest on their bonds.

The constitution of Wisconsin contains the following provisions :

Article I. § 12.

"No bill of attainder, ex post facto law, nor any law impairing the obligation of contracts, shall ever be passed." Article I. § 13. "The property of no person shall be taken for public use without just compensation therefor."

Article XI. § 1. "Corporations without banking powers or privileges may be formed under general laws, but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws. All general laws or special acts enacted under the provisions of this section may be altered or repealed by the legislature, at any time after their passage."

It is to be noticed that the Potter act, without regard to the value of money, and without any investigation by the legislature previously had into the affairs of the railroads or the actual cost of transportation, and without any previous finding that the existing rates were unreasonable, and without giving the railroads a chance to be heard, not only fixes absolute rates for the carriage of persons and property, but also, by legislative selection,

1 Acts of 1874, p. 599.

classifies all the railroads in Wisconsin, and requires that Class A should do for three cents exactly the same work for which it permits Class B to charge three and one-half cents, and Class C to charge four cents. It also imposes thereby unequal burdens upon all travellers, and severely discriminates against all residents on the lines of Classes B and C. The owner of a farm on any railroad in Class C is thus forced to pay one-third more for moving his wheat to Milwaukee than the farmers on Class A: and, in undertaking to prevent the railroads from regulating their own charges, the legislature itself has adopted a system which, if persisted in, would render it impossible for towns and farms on Class B, and still more on Class C, to compete with those on Class A ; and would inevitably result in the depreciation of homesteads and farms, and gradual diminution of business, on Classes B and C; while it would prevent new settlements on those lines, and stimulate them on the lines of the favored Class A. If, therefore, the classification of roads in this unequal manner was based upon the supposed wealth of the several roads, it would in the end. make the rich roads richer at the expense of the poor roads, by attracting settlers and traffic from the lines where transportation was relatively so much more costly. Manifestly the legislature has in reality instituted, on a larger scale than any railroad could possibly do, the very system of discriminating rates it undertook to destroy, the practical operation of which will probably lead to a speedy modification of the law.

It is foreign to our purpose to discuss the many practical objections to which this law is open. But the fact that it not only imposes unequal burdens on the railroad corporations, but also confers on particular localities special privileges, by the express terms of a general law, raises the question of the constitutionality of such legislation. "A statute would not be constitutional," says Mr. Cooley," which should proscribe a class or party for opinion's sake; or which should select particular individuals from a class or locality, and subject them to peculiar rules, or impose upon them special obligations or burdens, from which others in the same locality or class are exempt." 1 The Potter act, for no apparent reason, requires certain railroads to perform for three cents identically the same service for which it allows other railroads to charge four cents. The classification of railroads into

1 Cooley on Constitutional Limitations, 390.