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In the study of this table, and of the larger table of which it is a partial summary, as well, one thing can not escape notice. Most of the more important changes have been due to the establishment or abolition of commissions, the establishment of the North Carolina, Texas, Tennessee, Louisiana, and Arkansas boards, the abolition of the Nebraska, North Carolina, and Oregon boards, and the abolition and subsequent reestablishment of the Florida and Kansas boards. In the case of Kansas all of the rate-making powers of the first commission were revived for the benefit of the second, while in Florida they were increased by the addition of authority over joint rates. These facts explain most of the changes in the rate laws. Several others are explained by the fact, already mentioned, that three weak commissions—those of Kentucky, Oregon, and South Dakota-became strong during our period. The remaining changes are not numerous. The most sweeping one occurred in North Dakota in 1897, when the second form of law, covering joint as well as single rates, was abandoned in favor of the first, covering single rates only. South Carolina made three changes-in 1892, granting power over joint rates to its commission; in 1896, allowing it to revise the maximum passenger fare fixed by law; and in 1900, authorizing it to tix transfer charges. A Minnesota law of 1897 permitted the commission to investigate the reasonableness of rates upon its own motion, as well as upon complaint. And minor changes were made in the laws of Georgia, Iowa, New Hampshire, and Texas.
From a survey of the whole period it seems clear that the tendency, already remarked, toward an extension of the rate-making power, has pursued two general directions. In the first place, that form of law which imposes upon the commission the duty of making a schedule of rates for each railroad has been more in favor than the other less rigid one. All of the strong commissions established during the period (except the new Kansas board) have worked under such a law, as have also the commissions of Oregon and South Dakota, which became strong in 1891 and 1897, respectively. In the North Dakota revision of 1897 this form was adopted in place of the less rigid one. Moreover, no State has abandoned it except incidentally to the abolition of its commission. On the other hand, the only addition to the number of States possessing the less rigid form has been Kentucky, in which the commission was changed from weak to strong.
In the second place, there has been a tendency to confer upon commissions the power to make joint rates. This has been true in the case of two new commissions, those of Arkansas and Texas, in the case of the reestablished Florida commission, in the case of the South Dakota commission, which was changed from weak to strong in 1897, and in the case of the South Carolina commission. On the other hand, no board which had previously possessed this authority was deprived of it during the period, with the single exception of North Dakota. In connection with the power over joint rates, the hands of the commission have, in several cases, been strengthened by the addition of power to divide the proceeds of the rates among the railroads, or to do so if the railroads fail to agree upon the division.
Except for these two facts, it can not be said that since 1890 State legislation affecting the powers of commissions over rates has shown any marked tendencies.
A few comments may be made upon the statutory provisions concerning the procedure of commissions in investigating, making, or enforcing rates. Most of the commissions are required to give reasonable notice of their investigations or of their intention to fix rates, serving such notice upon the railroads to be affected, and also required to hear the parties, in person or by attorney, and to receive such pertinent evidence as is offered. These requirements, designed to secure fair, open, and deliberate investigations are, however, omitted in more than a third of the commission laws. Another provision which appears in the statutes of a number of States, is one requiring the commission to receive and investigate complaints against the rates established by its own order. The more recent enactments seem to show a tendency toward the extension of all these requirements.
With regard to the enforcement of orders fixing rates, it will be seen from a study of the laws that, in a number of cases, the commission may apply to the proper court for a writ of injunction, or other process, to compel observance of its rates by the railroads. In above half of the States the commission is directed or permitted to bring suit for the infliction of the statutory penalties upon railroads violating its orders concerning rates. The more recent legislation shows a decided tendency to embody such provisions. There has, moreover, been a distinct tendency to include the provision that suits for writs of injunction shall be advanced on the calendars of the courts, taking precedence, usually, of all except criminal cases, and that they must be tried speedily, without the usual formal pleadings, though “in such manner as will do justice in the premises." The laws often provide for the appeal to the higher courts, of cases involving rates; and in four States the statement is made that suits brought by railroads to test the reasonableness of rates established by commissions, shall not operate to stay the orders of the commissions.
Other Powers over Conditions of Business Administration.—A few powers over business management, of a miscellaneous character, have been conferred upon a few commissions, such as
In Florida, Oregon, and North Carolina.
the power to permit consolidation of parallel lines, to publish and approve contracts between railways, to supervise the interchange of traffic, and to approve the issues of stocks and bonds. All but a few States, furthermore, empower their commissions to examine books and papers, and no less than eight commissions are clothed with authority to require a uniform system of accounting by all of the railroads in their respective States.
Another power possessed by railroad commissions is that of receiving the public reports of railroads. All but three of the commissions have been clothed with this power. In about half of the cases the commission has been empowered to prescribe the details to be included in the reports of the railroads, and in some cases they have been required to prescribe the form of the report and often to furnish blank forms. Most of the commissions are also empowered to require details in addition to such as may be specified in the law, and any other information which they may deem necessary. A few States have required the commission to furnish the form in use by the Interstate Commerce Commission-Connecticut since 1889, Maine since 1891, and South Dakota between the years 1895 and 1897.
Powers over Construction, Maintenance, and Operatiom.-- Part B of Table IV is devoted to the powers of railroad commissions over matters of construction, maintenance, and technical operation. Here, again, although a study of the laws of all the States discloses a large number of details, a comparatively small number has been the subject of legislation in any one State. A few general powers are conferred upon all commissions, but there has been little tendency to enumerate the specific matters to which the powers of the commissions extend. Almost all the States confer the general power to inspect condition and management, to order repairs, changes, and improvements, and to require railroads to cease from any violation of the law. Specific powers which have more or less frequently been conferred upon commissions are as follows: The power to order repairs to tracks and bridges; to order tracks connected at railroad crossings; to approve interlocking devices; to order flagmen, gates, or automatic signals at crossings; to approve or forbid grade crossings of railroads; and to order the erection and maintenance of stations, side tracks, and depot facilities at railroad crossings. The laws of Connecticut, Massachusetts and Michigan are fairly complete in their treatment of these various matters, and, in a less degree, the laws of Mississippi, Maine, Rhode Island, Vermont, and Kansas. It is not possible to discover any general tendencies since 1890 in the legislation of the States in regard to this subject.
OTHER STATUTORY PROVISIONS PERTAINING TO RAILROADS.
Conditions of Railroad Incorporation.-Respecting the organization of railroad corporations, the statutes of the States provide that railroads shall be incorporated under general laws only, or by special act of the legislature only, or by either of these two methods. The following statement shows the number of States in which these provisions prevailed in 1890 and 1902:
Three States, namely, Delaware, Kentucky, and South Carolina, abandoned the principle of incorporation by special act, in favor of incorporation under general laws. Among the general incorporation laws four forms are found in the statutes of various States. In some States railroads are incorporated under laws which provide for the formation of railroad companies only. In some States there is such a law with preliminary provisions applicable to all corporations. In still other States railroads are incorporated under a general law for the formation of all corporations. And, finally, a few States have such general incorporation laws with supplementary provisions specially applicable to railroads. The following summary gives the number of States in which each form of the law prevailed at the beginning and end of the period under review:
From the above exhibit it is evident that there is something of a tendency to abandon the principle of incorporation under general railroad laws in favor of railroad laws accompanied by provisions applicable to all corporations. It may be added that the new constitution of Virginia requires the formation of corporations under general laws after April 1, 1903, although the principle has heretofore been to incorporate them by special act of the legislature.
Other provisions respecting the incorporation of railroads may be found in a large number of States. The provision is usually included in the laws that articles of incorporation must be filed with some public officer, in all but two cases with the secretary of state. Often it is required that they be filed with other officers, as county clerks, in addition to the secretary of state. Minimum subscriptions to stock, which must be received before the articles may be filed, are required in about two-thirds of the States. Usually this is a fixed amount per mile, and varies from two hundred and fifty dollars in Kentucky to tive thousand dollars in Pennsylvania, the usual amount, however, being one thousand dollars. Twenty States also provide for a minimum cash payment, which must be made upon all stock subsribed for before the articles of incorporation can be filed. There is a wide range in the amount of these payments, but usually it is from five per cent to twenty per cent of the par value of the stock subscribed.
In a number of States the articles of incorporation must be approved before they are filed, usually by the commission or the attorney-general, though in Arkansas and Kansas ex officio boards have been created for this purpose. In almost all States the provision is made that articles of incorporation shall be presumptive evidence of the fact of incorporation and of the facts therein stated.
Incorporation laws always include the minimum number of persons who may unite to form a railroad corporation. This number ranges from one to twenty-five. The most usual number, however, is tive, although a number of States provide for twenty-five, three, and ten. During the past twelve years six States have changed this minimum requirement, but the changes exhibit no general tendency. A number of States prescribe the qualifications of incorporators. The most frequent requirement is that a majority must be citizens or residents of the State.
About one-half of the States specify the limit of the duration of a railroad corporation. That limit is usually fifty years, but many States provide for renewals of corporate existence. The provisions determining these renewals, however, follow no general rule. Finally, among the general provisions respecting incorporation, it may be stated that in eight States special provision is made for the formation of corporations for the construction of narrow-gauge railroads, railroads in foreign countries, etc.
Part A of Table V next exhibits the facts which must be stated in the articles of incorporation. No less than thirty-eight such facts are required in the various States, although each State as a general rule requires but eight or ten. The facts which are most commonly required are the name and purpose of the corporation, the time of commencement and term of its corporate existence, the amount of stock and the number of shares, the number of the director's and the names and addresses of the first directors, the place of the principal business office, the approximate length of the line, the location of the termini, the name of each county which it is proposed to enter, the names and addresses of the incorporators, and the number of shares which are taken by each.
Part B of Table V is concerned with provisions respecting stock and stockholders, and it may be stated that the enactments since 1890 exhibit no general tendencies in this subject. In almost all States the provision is made that stock shall be regarded as personal property. The minimum amount of capital stock is sometimes fixed and when fixed is usually ten thousand dollars per mile. In a majority of the States stock may be issued not only for money but for property or services as well. Almost all States provide for the result of failure to pay for stock as required by the board of directors. In some cases such failure results in forfeiture of the stock to the corporation. In some cases the directors may bring suit for the recovery of the amount required; in still other cases the directors are permitted to sell enough of the stock to pay the assessment; and in still other cases the directors are permitted to choose two or all of these methods, as they see fit. Many States fix the par value of the shares and in almost all cases the amount stated is one hundred dollars. The larger number of States, also, define the liability of stockholders, which is almost invariably only for the unpaid balance of stock subscribed. Most States, again, provide that stockholders may vote by proxy and that each share of stock shall confer the privilege of one vote. They also provide that the books, records, etc., of the corporation shall be open for inspection by stockholders or creditors.
Part C of Table V deals with officers and directors and here, again, no tendencies may be perceived in the laws passed since 1890. In almost all States the minimum and maximum nunn ber of directors is fixed, though the limits vary greatly among the several States. The length of the director's term is frequently limited and in over one-half of the cases is fixed at one year. Almost all States provide that corporations shall not be dissolved by a failure to elect directors upon any given date, also that the president must be elected by and from the directors. The majority of statutes contain provisions relative to the civil and criminal liabilities of directors, the most common provisions of this class being that directors shall be punishable for consenting to a declaration of dividends except from the surplus profits of the corporation, and that they shall be liable for all corporate debts when consenting to a declaration of dividends while the corporation is insolvent or when the payment of such dividends would render it insolvent. Many States, finally, prescribe qualifications for the directors of railroad corporations. The most common provision is that a certain proportion, usually a majority, shall be inhabitants or citizens of the State.
Part D of Table V is concerned with provisions determining the location of the offices of the corporations, and the time limits within which railroads must be constructed. Here, also, the same absence of general tendencies since 1890 is observed. Most States provide that railroads must keep an office, such as a "principal office" or an office for the transfer of stock in the State, and in eleven cases domestic railroads are required to keep their principal office or their general offices in the State. Almost all States provide that railroads shall begin construction within a prescribed period after the articles of incorporation are filed and shall carry forward the work of construction at a prescribed rate. In a few cases the time within which the entire road must be completed is fixed, but the provisions in the various States concerning the time limits or the rate of construction show no uniformity.
Part E of Table V is concerned with the liability of railroad corporations to public control. The laws often declare that railroads are to be considered as public highways and railroad corporations as common carriers, and provide that railroads shall be subject to inspection and regulation by public officers.
Provisions are also made in the laws of almost every State in regard to forfeiture of railroad franchises and the dissolution of railroad corporations. Twenty-nine States provide for forfeiture by failure to complete the construction of the railroad within the legal time limit, but in nine of these cases the forfeiture extends only to the rights of the company in respect to the part of the line not already constructed. Twenty-four States provide by law for the voluntary dissolution of railroad corporations. Laws are also enacted providing for the individuals upon whom process may be served. In twenty-nine States it is stated that process may be served on any officer or agent, but in eight States service may be had upon the general officers only. In several States, also, special provisions are made for foreign corporations.