which is easily aroused against a money corporation which is successful. Various petitions were presented to the legislature at its session in 1843, asking for legislation to regulate railroads as to various matters which were the subject of complaint. A select committee of the Assembly made an elaborate report which may be found in Assembly Document No. 85, for 1843, favoring generally the views of the petitioners, accompanied by a bill for the regulation of railroads in many minute matters, not appropriate for legislative interference. The railroad companies, as soon as they were advised of this movement, prepared a joint remonstrance, setting forth in a clear, calm, and conclusive manner, the impolicy and inexpediency of such proposed legislation,* and the proposed bill did not become a law.

Again in 1845, many petitions were presented, asking the legislature to reduce the fare on the railroads, and the railroad committee of the Assembly not hearing from the companies, reported, without much investigation, a bill to reduce the fare of all the railroads in the central line to three cents per mile per passenger. This attempt to interfere with the railroad corporations by legislation, presented the case under a new and more formidable aspect, and renders it necessary for us to refer to another feature of New York legislation in regard to corporations. The legisla. ture of this State had provided by general law, that the charter of every corporation thereafter to be granted, should be subject to alteration, suspension and repeal, in the discretion of the legislature. Fearing that this would not be sufficient to secure legislative control, a provision has been inserted in every charter subsequently granted, reserving to the legislature the power of altering, modifying, or repealing such charter. The railroad charters under consideration all contained such a provision. This clause retains in the legislature the strict, legal, technical right to modify or take away any charter, for any reason or no reason. If the other parties to the contract, looking upon the charter as a contract between the government and the corporation, complain of unreasonable or capricious legislation, they can be answered by pointing to the charter, and showing them that it is "so nominated in the bond"-that such are the specific provisions of the contract. It has always been understood, however, that in relation to all corporations, this was a mere slumbering power, to remain dormant unless it should be necessary to arouse it to beat down any mere quibs or technicalities which astute lawyers might raise to protect corporations from punishment who had grossly abused their privileges, or violated plain provisions of law, and who could not be reached in any other way.

In relation to these railroad corporations, it was claimed that the legisla ture could not modify their charters by reducing the rate of fare, inasmuch as they had provided another mode for preventing them from receiving too large an income, in the provision for the assumption of the property by the State contained in the charters themselves. It was urged that the legislature, in effect, said to the corporators by the charters given to them, “if you will make such a road, you shall have the privilege of carrying passengers thereon, and charging them four cents per mile, and you may obtain as large an income as you can, within that restriction as to charge; but your income become too large, we reserve to ourselves the right of tak

if

* Assembly Documents for 1843. No. 106.

ing the work for the benefit of the people, upon paying you the amount of your investment, with 10 per cent interest.' It was contended that the legislature had, by such provision in the charters, precluded themselves from reducing the income of the road by altering the rates of fare, although the right to modify the charter was reserved.

As soon as the railroad companies received intimation of the report of the bill to reduce the fares, they again met, and united in a remonstrance which received respectful attention at the hands of the legislature. The railroad committee, after ascertaining the true state of facts, asked to have the bill recommitted, which being done, they made a full report expressive of their views upon the whole subject. Both the remonstrance of the railroad companies and the report of the railroad committee of the Assembly are very clear, able, and convincing papers, and may be found, the former in Assembly Documents for 1845, No. 194, and the latter in the same Documents, No. 224.

The railroad committee in their report do not distinctly pass upon the question of strict technical right in the legislature to modify the charters by reducing the rates of fare, but they say that the spirit and equity of the law forbids such interference, and put it upon the ground that the equitable good faith of the State was pledged to the corporators not so to interfere with their income, and that such faith should be kept as implicitly with the stockholders as with the public creditor. The legislative session of 1845 terminated without any legislation adverse to railroads.

At the session of 1846, a fresh attempt was made to obtain a legislative reduction of the fares on the central line of railroads. The public who had cheered on the stockholders to subscribe and construct the roads, now that the roads were constructed the money expended beyond recallthe benefits conferred-began to express the belief that four cents per mile was an exorbitant rate of fare. They were the more readily induced to sign petitions to the legislature praying for such reduction, as the advantage would be to them, and the loss only to the stockholders, from whom no further benefits were to be expected. The railroad committee of the Assembly had become possessed with the notion that the railroad fare was too high, and refusing to hear the agents of the railroad companies, or listen to the information which they had it in their power to give, they introduced bills greatly to reduce the passenger fares on all the railroads in the central line between Albany and Buffalo. Fortunately, twothirds of the Assembly could not be persuaded to vote for these bills, and they consequently failed to become laws. But the discussion of the question, and the claim on the part of the legislature to interfere with railroad charters by reducing their rates of fare, has startled railroad proprietors as to the security of their investments, and the actual passage of a law to reduce the rates of freight on the Tonawanda Railroad has contributed to confirm their fears and spread the alarm.

We wish now to submit some remarks as to the legislative policy which we think the State of New York should adopt in relation to railroads. We do not consider it material whether the legislature have or have not a technical right to modify these railroad charters by reducing the rates of fare they are allowed to charge. We are rather inclined to concede the naked technical right; but if it exist, it should not be exercised, except in extreme cases. It is unjust and oppressive to exercise it, except in such cases, and whatever is unjust, is impolitic. It is unjust, because the stock

holders in these corporations have taken the stock and built the roads under the promise contained in the charter that they might receive certain specified rates of profit for the traffic on it. After their money is thus invested, beyond the possibility of recall, and locked up in a railway structure, the rates of profit, upon the faith of which it was so invested, should not be reduced against their consent. If the reduction is to benefit their income, convince them of the fact, and they will reduce voluntarily. If the reduction injure their income, it violates the faith upon which they made the investment; and it may be so great as to render their property valueless. If the charter authorizes the passage of such laws, it is not the less unjust and oppressive to pass them, and thus take away property from one set of men to give to another-to take away property from the railroad corporations to give to the travelling public.

A single case which actually exists, will illustrate the injustice of such legislation. The charter of the Auburn and Rochester Railroad was granted in 1836, with the privilege of charging three cents per mile per passenger. The public refused to subscribe to the stock. They did not deem the chance of compensation sufficient to justify the expenditure of their money upon such an offer. The next year, the legislature authorized this company to charge four cents per mile per passenger. Under this amended offer from the government, the stock was taken, and the road built. The proposition of the legislature now is, after the stockholders have invested their money past recall, to reduce the fare of this company to the rate, or to less than the rate at which they originally refused to take up the stock and build the road. Who does not perceive that this would be the grossest injustice and oppression-and though in terms authorized by the contract-unworthy of the great State of New York to enforce? It would be a stain upon the legislation of this State, which has so perfectly preserved her plighted faith, to perpetrate such injustice by a legislative enactment.

We do not deem it material, either, whether the fares upon this line of railroads are too high or not. If they are too high, it will be for the interest of the companies to reduce them; and when they are satisfied of the fact they will do so. But if they are too high, it is not good policy to reduce by legislation. Indeed such enforced reduction will probably defeat the object of both petitioners and legislators. The great object they have in view is to insure greater speed and cheaper fares. With a very trifling exception, the structures upon this line of railway are of wood, with the ordinary flat rail; they are therefore frail, temporary and imperfect, liable to fall soon to decay, and, while in existence, not subserving the purposes of speed, economy of use and safety, as would be desirable. The necessity of the substitution of a heavy iron rail for these imperfect structures is very evident. The public perceive this necessity-the railroad companies perceive it, and its early accomplishment is desirable. When this change of structure is effected, the same motive power will move about twice the burden, at double the present rate of speed, and with both greater economy and safety in its use. It will be for the interest of the companies then to lessen the rates of fare. This substitution of a more permanent structure for the present frail one is the first object of desirable attainment. The legislature would unquestionably be inclined to encourage such a change of structure. At the present prices of iron, such change of structure will cost the companies on the line about three mil.

lions and a half of dollars. This money can only be raised by increasing the capital of the companies or by loans. If the legislature impair the equitable good faith of the State by reducing the rates of charges by legis lation, they impair the confidence of capitalists in such enterprises. No one would feel safe in an investment, when the legislature should reduce the income capriciously, and might annihilate it. Capitalists would therefore be unwilling to contribute to the reconstruction of these roads, either by taking the increased stock or making loans. The reconstruction must therefore be abandoned; the present structures would be worn out, to the loss of the corporators, and the injury of the public. In other words, the public would fail of securing a permanent structure of heavy iron rail, so much wanted on this line, and thus fail of securing the chief object, greater speed and cheaper fares. This is not all. In regard to other roads projected or about commencing, the effect of such legislation would be to dishearten their projectors, and deter them from the further prosecution of such enterprises, in the fear that the legislature, as soon as they were successfully accomplished, would interfere, and deprive them of the expected results. Such legislation would inflict a paralysis on all railroad enterprises within the State. Capitalists would foresee in it an example which might be expected to be followed up in other cases, and they would refrain from embarking in enterprises, when no sympathy would be manifested for their losses, and no security afforded for their possible gains. In point of fact, the discussion in the legislature, at the last session, and the legislation in relation to the Tonawanda Railroad, has had the effect to depress the market value of the stocks of the roads in the central line, and to prevent the prosecution of new enterprises.

Legislative coercion may reduce fares, but its effect will be to frighten timid capitalists, and arrest the progress of railroad enterprises in this State. The desired results may be brought about more naturally, more certainly, and without impairing confidence in any quarter. The New York and Erie Railroad has received a new impulse, and it now seems certain that it will be pushed to speedy completion. This road, when completed, will be a competitor with the central line for the long travel. This will force the central line to prepare themselves for the competition. It will force them to reconstruct their roads with a heavy rail. It will force them to increase their speed and accommodations, and to reduce their fares. Indeed, it will effect all which it is hoped to effect; but will vainly attempt to effect by coercive legislation. The completion of the New York and Erie Railroad, is the most stringent coercion which can be applied to the central line. Leave it to this, and the desired results will be produced certainly, naturally, and without dissatisfaction in any quarter.

The true legislative policy in regard to railroads, for the State of New York, is to inspire capitalists with confidence, by giving them an assurance, in some shape, that the rate of fares authorized by their charters shall not be reduced by legislation, and trust to the competition afforded by rival routes to insure that character of road, speed, and cheapness, which will be satisfactory to the public. Investments in the different routes will thus be secured, and their natural competition will effect the desired results.

A few desultory remarks, incidentally connected with the subject under

consideration, will close this article. Complaints are made that the fares on the central line of railroads through the State of New York are too high. We do not pretend to determine whether these complaints are well founded or not. One must have an extensive experimental knowledge of the working of railroads, and of the peculiar circumstances affecting any particular line of roads, to enable him to determine such questions satisfactorily to himself. A rate of fare which would answer on one line of roads, would not, owing to peculiar circumstances, answer at all upon another line. We are quite well satisfied that the rate of fare which subserves the interest of the public in the long run, is also the rate of fare which is best for the stockholders. In other words, both the public and the carrier are interested in the same rate. If the fare is above the proper medium, the carrier loses business; if below, the traveller loses in comfort. The public are interested that the carrier should have a fair profit, as, if he has not, the means of conveyance will deteriorate, and finally fail. The true medium, or just rate of fare, can only be satisfactorily ascertained by experiment. The managers of these different railroads are the proper persons to make the experiments. They are the persons equally interested in the result with the public. They understand all the circum. stances under which their business is transacted; and they know many things affecting the question which the public will not take the pains to know or to weigh. Common prudence would dictate that such experiments be made cautiously.

The experiment of reduction of fare upon all the roads in this line, was made in 1843. It did not succeed. The receipts did not afford a remunerating profit, and the season subsequent, the former rates of fare were restored. It has been supposed that a reduction to a sufficient extent would transfer all the passengers from the canal-boats to the railroads. This we believe to be an error. The canal-boats can carry passengers at lower rates than railroads, and the latter cannot reduce so that the former will not still be below them. There is but little capital vested in a line of canal-boats, but a very large sum in railroads. Competition would ruin the latter, without seriously affecting the former. Reference has been frequently made to the Massachusetts railroads, to show the benefi cial effect of low fares. The comparison is hardly a fair one. The Massachusetts railroads receive a large income from freight-the rail. roads under consideration comparatively nothing. These railroads must look to the passenger fare for their whole income. Take from the Massachusetts railroads their freight, and they would scarcely be able to make dividends from their passenger receipts. The following table will show the comparative business of a number of companies in Massachusetts, with these railroads in New York :

MASSACHUSETTS RAILROADS, COMPILED FROM LEGISLATIVE REPORTS FOR 1845.