gers and to produce freight. Reflex activities are of course stimulated, and contribute in their turn to the development of traffic; but in many instances the railroad itself primarily constitutes the determining condition of settlement in a particular place, and of the transportation of passengers and merchandise through a particular channel. Subject to the restraints of equitable regulation, the right of a constructing company to the increasing benefit of the business, which it builds up by its outlay and its skill, is no less real than that of the founder of a purely commercial or professional business to the increasing benefit of his capital or ability. If it has undertaken extraordinary risks in consideration of the special protection of a charter, statutory rights are added to its natural equities.

To transfer in whole or in part the increment of value of a railroad by ex post facto legislation, without regard. to existing charters and without giving equivalent of any kind, while decrement is allowed to take care of itself, is to say the least of it a strong measure. It constitutes a new departure in respect of the rights and incidents of ownership. It involves pecuniary incidents of great immediate value, and suggests remoter political inferences in respect of the definition and rights of property, which it is impossible to regard lightly.

The return of comparative prosperity in railroad enterprise, which ensued after the severe depression incident to the great panic of 1873, brought with it conditions calculated to excite possibly not alarm, but certainly vigilance.

A formidable indictment, including counts in respect of discrimination and extortion, was brought against transportation companies at the instance of the people; and

very drastic treatment was recommended, with an emphasis too cordial to admit of misapprehension. So long as this movement was confined to occasional complaints conveyed through the press or to isolated action taken in the courts, railroad managers regarded it lightly. But as soon as it was seriously taken in hand by several State Legislatures, the subject assumed a graver aspect.

The agitation of a popular grievance in a State Legislature has, ere now, been known to result in legislation altogether more sweeping than the champions of the grievance originally desired or deserved. Excited feeling is often an indispensable agent in accelerating the correction of abuses; but it is a dangerous basis for hasty legislation touching rights of property. It is too often unrestrained by accurate knowledge and unchastened by fair discussion; and is therefore frequently uncritical and sometimes unjust. Searching criticism and a calm review of relative rights are conditions essential to sound and permanent legislation. In the absence of these elements, it sometimes happens that, by the hasty adoption of unsound principles, mischief is done in a single Session which it needs the labour of many years to repair. No doubt the "heroic" mode of treatment has its merits, when applied by a master-mind under very special conditions. But experience shows that, in cases involving the nice adjustment of complex and conflicting interests in property, it is apt to be somewhat heavy-handed. The laws of trade and the traditions of commercial good faith recognize a close relation between burthens and privileges, risks and profits. Special legislation, which purports to modify this relation to an appreciable extent, should at least be deliberate and well-considered. Again, the laws of supply and demand require special care and insight for their correct interpre

tation. The statesman who seeks to evade or postpone their natural operation by the creation of an artificial mechanism, is undertaking to interfere with laws which do not readily lend themselves to external regulation or control. The whole subject is complex and difficult. Rash and hasty treatment of it is likely to involve injustice on the one hand and short-sightedness on the other.

If this be so, it may be worth while to note the tenour or drift of popular aspiration in connection with this most important subject. This may be roughly formulated under the following heads, of which some have already obtained legislative acceptance, and others are recommended as subjects for immediate conference between the Railroad Commissioners of several States, with a view to more extended and uniform legislative action.

Ist. The institution of boards of Railroad Commissioners with unprecedentedly large powers involving the assumption of important directorial functions. The cost of their maintenance to be paid by the railroads subject to their jurisdiction.

2d. The formal incorporation into the statute-book of the several States of the proposition that "a railroad is a public highway, the property of the people." As incidents thereof,

3d. The right of the people by their Commissioners to fix rates, settle tariffs and revise special contracts.

4th. The like right to limit dividends in advance.

5th. The right to direct from time to time additional expenditure by corporations, in order to furnish such improved accommodation as may be deemed suitable for the public convenience, outside the requirements of public safety.

As regards No. 1, it may be broadly stated that the

better opinion in America favours the institution of Railroad Commissions, provided their powers be confined to "regulation," as the term is commonly understood. Subject to this condition, no objection would probably be made to a special tax on railroads for maintenance of such Commissions, though it may be doubted whether this expense be not properly chargeable to the public (State) revenue. Nor would serious opposition be offered to a maximum rate for freight and passengers, if special equities were provided for. A sound Commission, competent to judge of evidence and free from party bias, would probably, by its mere existence, prevent more grievances than it would ever be called on to redress. But, in order to accomplish this result, its judicial characteristics should be essential and predominant, and its political characteristics accidental and subordinate. It should be empowered to interpret rights of property, not to make or unmake them.

Although discrimination or extortion cannot for a moment be defended, it is a matter of some importance that these offences should be clearly and equitably defined. Much litigation has already arisen out of the question, how far transportation companies can be properly charged with discrimination for observing the familiar distinction between wholesale and retail and between constant and spasmodic business.

The tenour of recent decisions is, so far, adverse to the claim of the transportation companies that they should be at liberty to carry at special rates freight which they can handle with special ease and cheapness.

The proposition (No. 2) that “a railroad is a public highway, the property of the people," is a somewhat equivocal proposition, and is susceptible of a great variety

of interpretation. under which it can be unequivocally affirmed, can of course only be determined by reference to the history and status of each individual railroad; but it is notorious that a very large group of railroads were constructed under substantially identical conditions. Let us take an instance fairly typical of a large class, and examine its genesis.

Its soundness, and the limitations

A State contemplating its vast undeveloped resources was struck with the astounding contrast which existed between its great potential wealth and its comparative lack of cash. An obvious solution readily suggested itself -viz., that the need of the moment was effective transportation. But the construction of an adequate railroad system postulated a large immediate outlay of cash, amounting possibly to many millions of dollars; and that was precisely the element which the State did not at the moment command. The question arose, “who will become producers or purveyors of transportation ?" Native capitalists took up the challenge, and associated themselves with foreign investors; but it was felt that the risks to be incurred were very serious indeed. Rival roads might be built; commerce might, by the operation of unforeseen conditions, be diverted from its customary channels; panics might render the permanent locking up of capital dangerous or even fatal to the credit of the investing capitalist; the period of productiveness might be indefinitely postponed by delay in construction; and then dissatisfaction of shareholders might develope into disunion, and result in irretrievable loss. But still intending producers of transportation were willing to accept these risks, if a satisfactory inducement and protection were offered in the solemn form of a charter. It was admitted