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§ 110. The policy of holding all companies and individuals engaged in the business of transportation by rail to the same restrictions is founded on clearly established principles of common law. To forbid unjust discrimination and charges on the part of the owners of road beds and locomotives, which may or may not have cars of their own, and exempt the very persons, individual or corporate, with whom the public has most to do, would be subversive of the end sought. There has grown up a system intermediate between the companies owning the railroads and the shippers patronizing them, and of the two, it is more important to regulate this intermediate system than to control the owners of the roads and engines.

§ 111. While no suit at law has arisen under the foregoing statutory definitions of a railroad corporation, the principle on which it rests has been established by frequent precedents. The supreme court of Illinois has pronounced that "companies who receive goods for transportation to remote points, without any special undertaking, except what is implied from the manner of accepting the charge, are responsible as common carriers."1 That eminent jurist and legist, Chief Justice REDFIELD, states that "it was decided at an early day that persons assuming to carry goods upon railways for all who applied, were responsible as common carriers, and indeed it is now regarded as an elementary principle in the law that all who carry goods, in any mode, for all who apply, are common carriers." It is entirely safe to conclude that if the propriety and justice of classing transportation companies and individuals as railroad corporations, in the

1 Baldwin v. Am. Express Co. 23 Ill. 197; S. C. 26, ibid. 504.

sense of being amenable to the statutes designed tc declare and enforce the common law liabilities of common carriers by rail, should be called in question. the courts would sustain the classification. 1

§ 112. Careful research has failed to disclose that any charter was ever granted to a railway transportation company by the general assembly of Illinois Two public statutes are to be found in which transportation companies are mentioned; but neither is really applicable to such companies as those now under consideration. One refers to companies organized to do business by water, in part or in whole; the other is a general incorporation act for such companies only as are engaged in coal mining. Those statutes have in effect, if not in terms, been re pealed.

§ 113. All the express companies and fast freight lines doing business in Illinois at the present time, or that have ever done business here, were created by other states. They are, however, as much subject to the laws of Illinois in their operations within the limits of this state as if they were domestic companies. This proposition is so far axiomatic that no authorities to the contrary could be given, and none in its support are necessary.

§ 114. While no domestic transportation company is doing business in the state at this date, one has

1 Aurora R. R. Co. v. Thompson, 19 Ill. 578; Ponnelee v. Mc. Nulty, 19 Ill. 556; Mercantile Mut. Ins. Co. v. Chase, 1 E. D. Smith, 115; Sherman v. Welles, 28 Barber, 403; Lowell Wire Fence Co. v. Sargent, 8 Allen, 189; Langworthy v. N. Y. & Har lem Ry. Co. 2 E. D. Smith, 195; Farmers' & Mechanics' Bank v. Champlain Transportation Co. 23 Vermont, 186; N. Y. Steam Nav. Co. v. Merchants' Bank, 6 Howard, 344.

been authorized aud others may follow.1 Such companies must organize under "an act concerning corporations," and in their management be consistent with the rules laid down in that law, and the supplemental act, in os far as those statutes apply to companies formed for profit.2

§ 115. The organization of a transportation company must be effected under, and conducted in accordance with, the general corporation law of the state, which for simplicity and thoroughness of safeguard against corporate dishonesty is a model.

1 Reference is had to the Mutual Transportaiton Company, Hon W. C. Flagg, President of the Illinois State Farmers' Association and Ex-Gov. John M. Palmer are among the prime movers. The success of one corporation of this kind will inevitably result in the formation of other companies of a similar nature, and be of incalculable benefit in bringing about the system of railway control discussed in the first chapter, and designated "Management by Competition."

2 Gross, vol ii, page 102.

CHAPTER III.

MUNICIPAL AID TO RAILROADS.1

I. ISSUE OF BONDS.

II. LATEST ILLINOIS DECISION.

III. FUNDING AND RELIEF LEGISLATION.

I. ISSUE OF BONDS.

§ 116. The term "municipal."

117. State aid to private enterprises forbidden.

118. Liberal general laws.

119. Constitution of 1870 and railway aid.

120. Probable total issue.

121. Statute of 1849.

122. Its limitations.

123. Submission to the people.

124. Details of the notice required.

125. The necessary majority.

126. The investment fiction.

127. Raising money to meet the aid obligation.

128. Par value of the bonds.

129. Statute of 1854.

130. Consolidation and municipal aid.

131. Municipal aid in other States.

§ 116. The term "municipal" in its more frequent use applies only to cities. When used in connection with subscriptions to the stock of a railroad company, or donations made to stimulate the enterprise, it has come to include also counties, towns and townships.

The latest U. S. Supreme Court decision on this subject, agreeing with all kindred decisions of that tribunal previously rendered, is Cheete v. Winnegar, 15 Wallace.

In that wider significance it will be employed in this chapter

$117. It has ever been unconstitutional in Illinois for the state as such to aid private enterprises of any kind, however needful they might be to the public.1 The constitution of 1848 provides that "the credit of the state shall not in any manner be given to or in aid of any individual, association or corporation." The same organic law forbid the aiding of private persons or enterprises by exemption from taxation. Many questions, then, which arise in some states touching railway aid have no place in a treatise on railway law in Illinois. The only aid the general assembly could extend to such enterprises, in obedience to the constitution of the state, was to encourage internal improvements by passing liberal general laws of incorporation for that purpose. Even special liberality in charters has no warrant in the constitution under which every railway charter in Illinois was granted.

2

§ 118. The constitution of 1870 went still further,

1 In the period just prior to railroads, when canals were the hope of the people for cheap and rapid transit, all sorts of wild and disastrous schemes were devised in aid of "internal improvements," resulting finally in failure and disaster, with few exceptions. The Michigan & Illinois Canal, a wholly public enterprise, yet not wholly so in fact, has alone justified the hopes of its projectors. See Ford's Illinois and Lamon's Lincoln.

2 Constitution of Illinois, 1848, art. x, sec. 6. A case was quite recently decided in the Supreme Court of the United States, wherein the Commonwealth of North Carolina was the defendant. The State government had promised a railroad company perpetual exemption from all taxation. It was on the strength of that promise that the road was built. The court held that the State could not repudiate the contract, or in any way evade its provisions.

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