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4 cents per mile. The constitution of Iowa provides. what ours does not, that "all laws of a general nature shall have a uniform operation." The case went to the Supreme Court of the United States, and is found in 94 U. S. 155. (Railroad Co. v. Iowa.) It was held, in spite of this constitutional provision, and also of another, to wit:

"The general assembly shall not grant to any citizen or class of citizens privileges or immunities which, upon the same terms, shall not equally belong to all citizens,”That this legislation was valid. The Court said:

"The statute divides the railroads of the state into classes, according to business, and establishes a maximum of rates for each of the classes. It operates uniformly on each class, and this is all the constitution requires."

This latter clause of the Iowa constitution is not found in ours; neither did the constitution of that state directly authorize the passage of laws fixing maximum rates, as does ours, in article 19a.

The statutes of Arkansas fixed the passenger rates on lines of railroad 15 miles or less in length, eight cents per mile; 15, and less than 75, in length, five cents; and on lines over 75 miles in length, three cents. In Dow v. Beidelman, 125 U. S. 680 (8 Sup. Ct. Rep. 1028), the Supreme Court of the United States upheld this legislation, and said:

Whether the classiamount of passengers

"The legislature, in the exercise of its power of regulating fares and freights, may classify the railroads according to the amount of the business which they have done, or appear likely to do. fication shall be according to the and freight carried, or of gross or net earnings, during a previous year, or according to the simpler and more constant test of the length of the line of the railroad, is a matter within the direction of the legislature. If the same rule is applied to all railroads of the same class, there

is no violation of the constitutional provision securing to all the equal protection of the laws."

The Iowa case was cited and approved. It was shown in Dow v. Beidelman that the cost of construction of the railroad was $4,000,000, and that the company's indebtedness, bonded, was $2,850,000. The net income for 1886 was $162,000, earned principally from passenger traffic at five cents per mile. The law under consideration would reduce such net income to $58,000.

But it is contended that the reasonableness of such a classification was not raised before or determined by the Supreme Court of the United States in any of these cases, but simply the power of the legislature under the different state constitutions to do so. But, if this is so, we are then left to interpret our own Constitution and the Federal Constitution without the light of that Court upon the subject. As has been already said, I think the classification adopted a fair and reasonable one, does it appear to me to conflict, if reasonable, with the provision of the State and National Constitutions, that no person "shall be deprived of property without due. process of law." But in Dow v. Beidelman, supra, it was claimed that the legislation there under consideration would reduce the net income so that the company would be able to pay less than 1 per cent. on the cost of its road, without paying any interest on the bonded debt. If it was applied on the interest of such debt, which was bearing interest at 8 per cent., it could only pay a little over 2 per cent. upon such debt. This seems to have raised the question of reasonableness. But the Court said, and the opinion was not dissented from by any member of the Court:

"The plaintiffs in error do not contend that it is always or generally unreasonable to restrict the rate for carrying each passenger to three cents a mile. They

argue that it is so in this case by reason of the admitted fact that, with the same traffic that their road has now, and charging for transportation at the rate of three cents per mile, the net yearly income will pay less than one and a half per cent. on the original cost of the road, and only a little more than two per cent. on the amount of its bonded debt. But there is no evidence whatever as to how much money the bonds cost, or as to the amount of the capital stock of the corporation as reorganized, or as to the sum paid for the road by that corporation, or its trustees. It certainly cannot be presumed that the price paid at the sale, under the decree of foreclosure, equaled the criginal cost of the road, or the amount of outstanding bonded debt. Without any proof of the sum invested by the reorganized corporation, or its trustees, the Court has no means, if it would under any circumstances have the power, of determining that the rate of three cents a mile, fixed by the legislature, is unreasonable. Still less does it appear that there has been any such confiscation as amounts to a taking of property without due process of law." 125 U. S. 690, 691.

The conclusion, then, is that the Legislature has the power, under the constitutional provision contained in article 19a, and also independently of it, as shown by the cases cited, to classify the railroads of this State, as it has, according to the amount of business done, and also as to their location in the Upper and the Lower Peninsula.

Another contention is that this legislation is invalid. because it violates the contract which was entered into between the State and this railroad corporation when it organized under the general laws of this State. Mr. Meddaugh, in his brief, says:

"Railroad corporations organized under general laws of Michigan take their being under an implied contract that the State shall not reduce their tariff of passenger and freight rates, either in the exercise of its common-law powers or the constitutionally reserved power to repeal, alter, or amend, so as to deprive these corporations of the ability to earn a reasonable profit on the capital

invested. And the act in question clearly violates this principle."

The defendant corporation, as appears by its own bill of complaint filed in this Court in Chicago & Grand Trunk Ry. Co. v. Turner, 79 Mich. 133, was incorporated under our laws by the consolidation of different railroads. This consolidation and incorporation took place after the adoption of article 19a, to wit, as shown by its report to the Railroad Commissioner, April 1, 1880. The companies thus consolidated were five, three of whom had lines within this State, to wit: Michigan Railway Company, of Michigan, running from Michigan and Indiana state line to Lansing, Mich., incorporated January 7, 1880; Chicago & North Eastern Railroad Company, running from Lansing to Flint, incorporated August 12, 1874; Northwestern Grand Trunk Railway Company of Michigan, running from Flint to Port Huron, incorporated August 26, 1879. Each one of these, it will be seen, was also incorporated after the constitutional enactment, and also subsequent to the general revision of 1873. It is claimed by Mr. Webber, in his brief, that the proper construction of the phraseology of the statute under consideration does not

"Subdivide the railroads of Michigan in accordance with the original charters under which the roads were constructed. It applies to railroad companies operating passenger trains; it does not apply to railroad companies not operating passenger trains. To illustrate: The Grand River Division of the Michigan Central Railroad was built, under a special charter, as the Grand River Valley Railroad Company;' yet the Grand River Valley Railrand Company operates no passenger trains, and makes no report of passenger earnings. The road is operated by the Michigan Central Railroad Company, and the Michigan Central Railroad Company reports the passenger earnings for this road; and it is the Michigan Central Railroad Company, as to the mileage of this division, which is the company whose passenger trains,

83 MICH-39.

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reported as aforesaid,' earn the money. Every railroad in the State having now any considerable mileage is made by a union of companies,-that is, different portions of the road were constructed under separate and different charters, but the ownership of the passenger trains, and the practical ownership and control of the railroad, is vested in the company which operates it; and this law under consideration, when it says. All companies the gross earnings of whose passenger trains, as reported to the Commissioner of Railroads,' must have reference to the companies operating the railroads, and it cannot be held to apply separately to each particular corporation, whether general or special, by authority of which the road was originally constructed."

I think this construction is the correct one. Consequently this defendant, the Chicago & Grand Trunk Railway Company, must stand upon its own incorporation in this State. The law is aimed at it, and not at the separate corporations which it has absorbed, and which no longer exist, as far as this statute is concerned. Therefore, when it came under the provisions of our laws, and accepted the privilege of doing business in this State, it came in under a Constitution expressly authorizing the Legislature to alter the rates, with only the limitation that all legislation in such direction should be reasonable. This ends the question as to the violation of any contract, implied or otherwise. The Constitution prevails; and, as long as such provision remains therein, I deny the right of one Legislature expressly or impliedly to contract away the right of the people, through another Legislature, to enforce this provision of the Constitution by such legislation as to them may seem proper, provided it is reasonable. This view renders it unnecessary to discuss what might have been the rights of the defendant had it been organized, and operating passenger trains in this State, before the adoption of this article of the Constitution.

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