EXECUTIVE DEPARTMENT,
INDIANAPOLIS, March 16,
1867.
Enrolled Act of the House of Representatives, No. 19, entitled "An act to regulate and make uniform the prices charged by railroad companies for transporting goods, merchandise and materials to and from stations in this State," passed at the late session of the General Assembly, was not presented to me until the day of the final adjournment of the Legislature, viz., March 11th, 1867.
The constitution provides that "no bill shall be presented to the Governor within two days next previous to the final adjournment of the General Assembly.
The practice has been, so far as my experience extends, for the Legislature to continue passing bills up to an hour that will allow just two days to intervene between then and the time fixed for the final adjournment, and to have all the bills, at least informally in their engrossed form, presented to the Governor, so as to allow two days to intervene between such presentation and the final adjournment.
This practice was observed at the late session in regard to every bill except the one now under consideration. This one, however, was not even informally presented in its engrossed shape until the morning the day of final adjournment. If the bill were not objectionable in itself, I should feel no disposition to take any exception to the time of its presentation, but believing that its becoming a law would be detrimental to the best interests of the State, I feel free to make the time of its presentation one of my objections to its taking effect. The first section of the bill enacts -
"That the price charged by any railroad company operating its road or any portion thereof in the State of Indiana, or carrying any package or quantity of goods, merchandize or material of any description whatsoever, to or from any station upon the line of said road in this State, shall be in proportion to the number of miles of such road over which such package or quantity of goods or material shall be, or shall be agreed to be carried, and shall bear the same ratio to the customary price actually charged and received by said company for carrying the same and and quality of package goods or material over the entire main line of such company's road as the number of miles over which such package or quantity of goods or material is so carried or agreed to be carried shall bear to the entire length of the said main line, with an addition to such proportionate price of transportation to or from any way station upon such road of not exceeding fifteen per centum of the price charged for carrying a like package or quantity of a like kind of goods and material over said main line of road ; provided that nothing in this section shall be so construed as to compel the carrying of any package or quantity of goods for less than twenty-five cents."
The second section provides that -
"It shall be the duty of such Railroad Company to prepare, or cause to be prepared, within thirty days from the passage and approval of this act, a printed list or schedule of the customary prices actually charged and received by said company for carrying goods, freights and material over the entire main line of said road, designating the same as per package, bulk, car, ton, or hundred weight, according to the mode on which the price for each class of goods or freight is commonly determined, and shall cause such schedule to be posted up in some conspicuous place in or about the freight offices, depots, or stations of such company along the line of its road in the State of Indiana When any change is made in any of the prices designated in such schedule, the schedule shall be changed accordingly. In case of failure of any company to prepare and put up such schedule as is herein required at any station along its road in this State, it shall be unlawful for such company to receive any compensation for any package or quantity of goods to or from that station until such full and true schedule shall have been posted up as herein prescribed; Provided, that nothing herein shall be construed to exempt such company from the duty to receive, transport and deliver at such station all goods and material tendered for that purpose as now required by law."
The third section provides that -
"To the schedule in this act required, there shall be attached an affidavit subscribed and sworn to by the President, General Superintendent, and the General Freight Agent, stating that said schedule is a full and true list of the lowest customary prices charged and received by said company for the transportation of goods and material over the main line of said company's road, and that the classes of goods therein named are nor carried over said road for a less price than is therein named, and any person who shall knowingly make, or post up, or assist in making of or posting up, or cause to be made or posted up, any such list or schedule, containing any false statement of the matter or matters therein required to be stated, or who shall make, or assist in making or cause to be made any false alteration of such schedule, and any station or freight,agent of any Railroad Company at any station thereof in this State who shall fail to post up or to keen posted up an his station such full and true schedule as hereinbefore required, shall be deemed guilty of a misdemeanor and on conviction shall be fined not less than twenty five dollars for each and every offense, and in case of such failure to keep posted up such schedule at every station, each day of such failure shall be deemed and adjudged a separate offense."
This is the entire act, except the emergency clause, declaring the act to be in force from and after its passage.
It is due to the General Assembly that I should state wherein I deem this act to be objectionable independently of the time of its presentation to me. I proceed to do this.
It is well known that a majority of the railroads operating in this State are exist- page: 7[View Page 7] ing under special charters older than the present Constitution, and in which charters no power of amendment was reserved by the Legislature.
The bill in terms applies, to all the railroads, of this State. The roads existing under special charters are in the main the strongest roads in the State, whilst these incorporated under the General Law since the adoption of the present Constitution are weak roads, struggling for an existence. If, then, this act would be inoperative on constitutional grounds as to a majority of the roads of the State, and if that majority constitutes nearly all the strong roads of the State who could best endure such legislation, it would be a manifestly unjust discrimination against the weak roads of the State existing under the general law, to apply the provisions of this act to them without being able to throw around their more formidable rivals similar restrictions. The important question then arises as to the constitutional power of the Legislature to regulate the proportionate rate of freights to be charged by railroads for carrying between way stations, as compared with rates over their entire line, where these roads are operating under special charters and no such power is reserved in the charter.
That an act creating a private corporation, which has been accepted and acted upon by the corporators, becomes a contract, the obligation of which can not be impaired by the State under the Constitution of the United States, is too well settled to require discussion. The only question is, does an act proposing so to regulate the freights of such a railroad company, in the absence of any reservation of power in the charter, impair the obligation of the contract created by the charter and the company's acceptance thereof? The only suggestion that I have ever heard in support of the opinion that such legislation would not be in violation of the contract, is that railroad companies are common carriers, and as such are subject to greater liabilities and surrounded by more restrictions than other bailees for hire. This is certainly true. They are, by the common law, because they hold themselves out as common carriers, compelled to carry the freights which may be offered, to the extent of their capacity, and they are held to a higher degree just of diligence in the preservation of the commodities entrusted to them, and are made liable for a less degree of negligence, than others.
But I am not aware that because a man is exercising the functions of a common carrier, it has ever been held that the Legislature may prescribe the rates or the proportionate rates at which he shall carry between the way-stations of his line as compared with his rates over the whole line on which he may carry, and to my mind it is clear that the same rules apply to corporations who may act as common carriers, that are applicable to individuals engaged in the same vocation. Would it be competent then for the Legislature to prescribe the rates of freight to be charged by the individual owner of a steamboat navigating the waters of the Ohio or Wabash river, or that the way-rates of such an owner should bear a certain proportion to his through rates of carriage? I think this question can only be correctly answered in the negative, and the Legislature would have no more right to make such a regulation than it would to enact that the merchants' retail prices should bear a certain proportion to his wholesale prices. In my judgment, therefore, the act under consideration, so far as it relates to railroad companies operating under special charters in which no power of amendment was reserved, would be inoperative on constitutional grounds, and that its provisions could in any event only apply to the weaker roads operating under the general law as to which such restrictions are the least necessary. Some of these roads, I believe, would cease to exist if this law took effect and should be enforced. The destruction of a single one of them would be a great loss to the State, and an incalculable injury to the people living along its line. Such legislation, too, I apprehend, would be fatal to the construction of any new roads which may be now in contemplation. I cannot see the wisdom of the policy which by one act proposes to stimulate the construction of railroads by allowing towns and townships to contract debts to an indefinite extent, to enable them to make donations to, or subscribe stock in railroad companies, and which by another act simultaneously passed, adopts such regulations as would assuredly cripple, if not destroy, companies already existing, as well as prevent the success of those proposed to be brought into existence by this stimulating process.
I have no sympathy with extortion in any shape, and least of all when it is practiced by incorporated capital, and no one would more cordially approve than myself of any just, efficient and constitutional remedy which might be devised to prevent such practices, so far as they may exist in the management of the railroads of this State.
It is because I am fully satisfied that this bill presents no such remedy that I interpose these objections.
The railroad companies have themselves the power to remedy existing evils, and it page: 8[View Page 8] is their interest, as well as duty, to exercise it, in such a manner that justice will be done to the public, and all reasonable cause of complaint removed.
In a country where the people are free and intelligent no great public wrong will long be permitted to exist.
In my judgment a commission consisting of persons fully informed as to railroads and their operations, should be instituted by the Legislature to collect and report such facts as might become the basis of wise and in intelligent legislation on so difficult and intricate a subject.
But until some such plan is adopted I think it highly probable that any measure which the Legislature could devise at a session so limited as to time as ours, would like the one now under consideration, cripple, if not destroy some of the least offending roads, while it might perhaps do nothing more than justice, if it could be enforced, to others.
For these reasons I file said bill, with these my objections thereto, in the office of the Secretary of State within five days next after the final adjournment of the Legislature, to the end that the General Assembly may at its next session have an opportunity to reconsider the subject.
CONRAD BAKER,
Lieutenant Governor of Indiana, Acting as Governor.
