PART II

THE PROGRESS OF RAILWAY

LEGISLATION 1

1The greater portion of Part II was included in a report to the United States Industrial Commission, published in Vol. IX, pp. 897-1004, of the Reports of the Commission. The present

treatment differs from the report to the Commission in that specific references have been indicated wherever practicable.

CHAPTER I

EARLY RAILWAY CHARTERS

General Characteristics. A railway charter may be defined as a special act of a legislative body authorizing a person or persons duly organized to construct and operate a railway or railways in a certain territory under certain conditions. Such a legislative act is a private law. With the exception of a few of the Western States — Arizona (Territory), California, Colorado, Idaho, and Montana- which began with general laws, special charters have been granted by every state and territory in the United States. The charters have numerous resemblances resemblances and differences which will be noted more in detail later on, but at the outset it is well to notice certain features which charters in all parts of the United States have in common. In spite of numerous striking differences which exist, we may speak of a typical railway charter.

common to

The leading features which are railway charters of the different states may be associated with the following points, every charter having one or more provisions relating to some or all of these points: Name of company; number

of commissioners; number of board of directors; the amount of capital stock; size and number of shares; the amount of the payment per share at the time of subscription, and the maximum assessment per share, together with the number of days' notice required; systems of voting; the time limit as to beginning and completing construction, junctions, branches, and extensions; route; expropriation and methods of valuation, together with the manner in which disputes are settled; the amount of land which may be held; the number of miles to be constructed before traffic may be opened; the power to borrow money and the rate of interest; the distribution of dividends, liability of stockholders, annual reports, passenger and freight rates. In every state charters may be found which contain provisions on only a few of these points, while in most states charters were granted containing provisions on all of them, and perhaps others not here indicated.

Following an old English custom, a few charters in a number of states contain a preamble. Where a preamble is found, it usually sets forth the reasons why the proposed railway should be constructed, the public service which it can be made to perform, and the manner in which the project is to be carried out. Preambles of this kind can be found in charters of states so far apart as Wisconsin, Pennsylvania, and Georgia. Similarly, charters in some North Atlantic States declare the public use of the projected railways. Both the