must take notice of and are bound by the conditions and reservations in the charter. The courts will read the contract with the creditor as if the legislative conditions were printed therein in full. The charter is granted by the state and accepted by the corporation, and the creditor contracts with it subject to the power of the grant, or to alter or impair the obligation; no right can vest, for it is agreed by both the grantee and the creditor that none shall vest. The creditor makes his investment cum onere, and cannot complain that the alteration of the charter impairs his obligation, because by its terms it admits of the very alteration imposed. It may be folly for the creditor to invest, in view of this possible interference; but he assents to the terms, and takes the risk of just such interferThe creditor gains no right which the company did not possess, and the state surrenders none of the power it had received. A mortgagee stands in no different relation in this respect than any other creditor. The extent of the mortgage lien is to be measured by the interest of the mortgagor in the property to which the lien attaches; and the courts will not by construction so enlarge the lien as to relieve it from the burden of restrictions to which it is subject, much less will they give to the mortgage such sanctity and force as to repeal a fundamental law of the state, or essentially change its meaning and intent."

ence.

Mr. Matthew H. Carpenter, one of the senators from Wisconsin, and a candidate for re-election next winter, wrote a letter to the "Madison State Journal," soon after these opinions had been given, in which he maintained the validity of this legislation. Though not strictly a professional opinion, since it was a voluntary communication, and perhaps intended to influence voters rather than members of the bar, it is entitled to attention, not less for its peculiar doctrines than for the great reputation of its author, whose ability, had it been concentrated on law instead of politics, would have placed him in the front rank of great constitutional lawyers. Remarking that he has carefully examined the opinions of Messrs. Curtis and Evarts, and admires " the ingenuity and skill with which they have concealed the real question beneath arguments to establish some propositions which everybody concedes, and others which, if established, would be altogether irrelevant," he declares the real question to be

"Can the legislature regulate the tariff of rates to be charged upon the railroads of the state, for the transportation of passengers and freight? The answer to this question depends upon the legal character of railroads, and the relations which exist between the state and railroad corporations; or, in other words, whether a railroad is public property or mere private estate, and

whether these corporations are subjects of the state, amenable to its laws, or sovereignties independent of state control. If railroads are mere private estates, owned by the corporations in absolute right, then they are no more subject to legislative control than a farm, or any other mere private property. If, on the other hand, railroads are public highways, then they are a part of the public domain of the state, farmed out for administration, but subject to the control of the legislature, like any other highway by land or water. But fortunately for the people it is well setttled that railroads are public highways, and, as such, subject to legislative control." 1

Starting with these premises, and relying on this case, he asserts: "As railroads are public highways, the right of the legislature to control their management is a logical consequence, and exists to the same extent as in regard to other public property."

Discussing the relation of the company to the state, he says: "First, in relation to the state, it is the agent of the state to operate a railroad of the state. And, Second, in its relations with persons engaged in commerce, it is a common carrier." Taking these very advanced positions as his starting-points, he naturally arrives at the same point which the last legislature reached.

We will not comment on these views of the learned senator, but confine ourselves to quoting the words of Mr. Lawrence, the late Chief Justice of Illinois, who thus referred to them in his argument at Madison:

"To say that a court, because it has called railroads 'public highways' in reference to their uses, and as bearing upon the question of municipal taxation to aid in their construction, will also say that the road and its appurtenances are public property, whose income may be usurped by the state without compensation, is one of those amazing conclusions which should not perhaps surprise us in an argument addressed to the forum of the public, but which we shall hardly expect to hear urged in the presence of an intelligent court."

We have deemed it best to present with fullness the substance of these opinions, because they cover the ground since taken in argument, and express the ideas of great lawyers who may not hereafter be reported. They laid the foundation for the great test cases now pending, which will bring before the highest tribunal in the country the fundamental principles upon which private ownership of property and legislative regulation of its use

1 State v. Supervisors, 16 Wall. 688.

alike depend. Immediately after the opinion of the AttorneyGeneral of Wisconsin was declared, the government issued proclamations, and invited citizens to institute legal proceedings. But, apparently, the contest was rather political than popular, and few individuals cared to take the trouble to begin suits, though the railroads generally did not conform to the new rates. The Attorney-General, therefore, commenced numerous prosecutions, under the new law, against the agents of the Chicago and Northwestern Railway Company, and the Chicago, Milwaukee, and St. Paul Railroad Company, for alleged violations in charging greater rates of toll than the law allowed, and arrested many agents, and forced them to give bail in order to avoid imprisonment. While matters were in this position, a bill was filed in the Circuit Court of the United States for the Western District of Wisconsin, by Willem Frederik Piek and others, against the Chicago and Northwestern Railway Company, the AttorneyGeneral of Wisconsin, and the railroad commissioners, praying that the defendants be restrained from taking steps to execute the Potter law. The plaintiffs were bond-holders of the defendant railroad, one an alien, resident in Amsterdam, and the others residents of New York, who sued in behalf of themselves and other bond-holders. The bill alleged that the rates of freight and fare under which the company was operating its road, when the act was passed, were reasonable, and only sufficient to enable the company to pay its operating expenses, repair its road, and pay interest on its bond, leaving nothing during the previous year for dividends on its stock. The bill and affidavits showed that the average of dividends declared since 1859 did not exceed, including stock dividends, seven and three-fourths per cent on preferred stock, and three and three-fourths on common stock. The bill alleged that, under the maximum rates allowed by the Potter law, the income of the road would not be enough to more than pay operating expenses, and keep the road and equipments in proper repair, and that the company would be wholly unable to pay the interest on its bonds. The bill charged that the Potter act was unconstitutional.

The case came on for hearing at Madison, Wisconsin, on July first, before Mr. Justice Davis of the Supreme Court of the United States, Judge Drummond, the Circuit Judge, and Judge Hopkins, the District Judge, being the full bench of the circuit

for that district. The hearing lasted several days. Messrs. C. B. Lawrence, late Chief Justice of Illinois, B. C. Cook, of Chicago, E. W. Stoughton, of New York, and John W. Cary, of Milwaukee, appeared for the plaintiffs; and Messrs. A. Scott Sloan, Attorney-General of Wisconsin, J. C. Sloan, Assistant Attorney-General, and L. S. Dixon, late Chief Justice of Wisconsin, appeared for the defendants. The case was argued at length upon the motion for an injunction, and no effort was made to controvert the allegations of the bill and affidavits filed by the plaintiffs. The plaintiffs contended that, after the railroad had been incorporated with its chartered powers, and had borrowed and expended, in pursuance of the then existing state laws, vast sums of money for building its road, the state had no constitutional right to pass an act which so changed those previously existing laws as made it impossible to pay its interest on those loans, or any dividends to its stockholders.

"I insist," said Mr. Cook, "that the right to render such services as are rendered by railroads, is a right derived from no charter of the state, but inheres in every individual in the state who has the means and the power to render the services; and that the legislature has no constitutional authority to take away, by an alteration of the charter, rights which were never derived from the state through the charter. The state can deal with the property of a railway corporation only in the same manner that it can deal with the property of an individual citizen. . . . Such rights are not rights which inhere clearly in individuals and corporations; such as the right to own property, to render personal services, and to take risks for fair compensation. It must be clear that the rights conferred by the charter are only those which do not exist, where no charter exists, and cannot be exercised by individual citizens."

"This constitutional clause," remarked Judge Lawrence, "only empowers the state to take back as a right what it has bestowed as a favor. . . If the legislature can require this company to carry passengers for three cents a mile, it can require passengers to be carried for one mill per mile. . . . It is the principle asserted in the act, and lying at its foundation, upon which it must stand or fall, without reference to its details. And what is that principle? It is, without possibility of candid denial, that the legislature of Wisconsin may, under the power reserved by its constitution to alter or repeal' a charter at any time after it is granted, simply confiscate, for the supposed benefit of the public at large, the property of the stockholders and the debts due the creditors of the corporation. Human ingenuity cannot torture this act, or the principle it asserts, into any thing

else than this. It is confiscation pure and simple of the property of the bond-holders and of the property of the stockholders.”

He then argued that all the provisions of the Wisconsin constitution must be construed together, so as to stand harmoniously.

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Admitting that the legislature can alter a charter, it can do so only by an act which belongs to the sphere of legislation. It cannot confiscate property. It cannot, under pretence of amending a charter, despoil a chartered company for the public good. Such an act is not legislation: it is merely a legislative decree diverting public property. . . . It takes away the income of property; and therefore, in principle and fact, it takes away the property itself. . . . In no mode whatever can the legislature confiscate this property to the public use, without making due compensation. The present act, if enforced, will do this, and it is therefore void." 1

...

Having thus maintained that the act was unconstitutional under the special reservation of the Wisconsin constitution, Judge Lawrence also urged that the act is void, because it is an exercise by the legislature of judicial powers, because the factors which go to determine reasonable rates are constantly changing. Other points, interesting but of less general character, were taken by the plaintiffs, which our limits prevent us from stating. The reasons expressed in the opinions already given were urged with great vigor and fulness, for the plaintiffs.

We are unable to set forth the arguments presented in support of the law, as minutely as we wish, because no printed briefs were used by the state. The Attorney-General's opinion, already given, was submitted to the court, and was deemed to sufficiently supply the place of a brief, and to present the case of the state. Ex-Chief Justice Dixon argued, if the newspapers reported him correctly, that the state claims to hold the power of life and death over the franchises and the property of the corporations, and that it is not for a third party, who may be their creditor, to come in and complain of being hurt; that the only question was the right of the legislature not only to repeal but to amend charters, under their constitutional reservation; and contended that corporations held their privilege as a man holds a license to lay a tramway over another's land, where the licensor expressly reserves the right to revoke the licence upon any disagreement arising. He maintained

1 Sage v. Dillard, 14 B. Munroe, 353; Allen v. McKean, 1 Sumn. 277.