upon the doctrine of charter rights announced in the Dartmouth College case, and placed great store upon the constitutional guaranties of private property to which certain decisions by state courts seemed to lend color. In 1869, the Supreme Court of Iowa decided that a railway is essentially private property and in no sense public, and in the following year the Supreme Courts of Wisconsin and Michigan handed down similar decisions.[1] In 1871, Judge Brewer, then a member of the Supreme Court of Kansas, in a dissenting opinion said:
A railroad is founded upon an absolute property-interest. The corporation owns everything. The interests it possesses have all the attributes of absolute property.[2]
These opinions appear in cases where the right of railway companies to enforce the levying or payment of taxes voted to subsidize construction was questioned on the ground that a tax for a private purpose is invalid.
In the face of these opinions, the contention of the railway attorneys was overruled and the regulative power of the state was upheld in Munn v. Illinois, Ruggles v. Illinois and other cases. It was held that property embarked in a railway is clothed with a public purpose and therefore properly falls within the police power of the state. The fact that a railway corporation is the creature of the state, in the opinion of the Supreme Court, constituted an additional ground for state control of rates. In regard to the Dartmouth College case, the rule of strict interpretation of all charter rights was adopted. It was maintained that the right of the state to regulate railway rates can only be bargained away by language that admits of no uncertainty, that any and all doubts about the meaning of charters are to be construed in favor of the state, and that the power of the state to regulate does not lapse by non-user. In the early "granger decisions," the Supreme Court even went so far as to say that the final authority in the fixing of rates rested with the legislature and not with the courts, and that if the former reduced rates unduly the remedy of the railway interests was political rather than judicial. But in Chicago, Milwaukee and St. Paul Railway Co. v. Minnesota in 1890, it was held that a rate fixed by a state railway commission is subject to judicial review. Under this and subsequent decisions, the reasonableness of practically every rate fixed by a state legislature, either directly or through a commission, can be called in question in the federal courts, and the police power vested in the state legislatures is subjected to an important restriction.
- ↑ Iowa Supreme Court Reports, 27, p. 28. Wisconsin Supreme Court Reports, 25, p. 167. Michigan Supreme Court Reports, 20, p. 452. These references are taken from an unpublished manuscript upon "Farmers' Organizations, the Supreme Court and the Railroads," by my father, Simon Emerick.
- ↑ Kansas Supreme Court Reports, 7, p. 542
