, 1873-06-13
RAILROAD "P0oLs" AND THE C0MM0N

1AW,
Thcro WAS proposition not long since to
"pool" tho earnings Of. tho Chicago l. North
western and tho Milwaukee, 4 st. Paul Rail-
roads. Tho managers Of tho two roaas wero in
clinod to make tho arrangement, and 1t might
havo been consummatel but for timely opin-
ion submitted by Mr. r. L. spooner, tho Assist
mt Attorney General Of Wisconsin, in reply to
an inquiry which Gov. Washburn mado CHEN tho
runaor camo to his en1s. hlr. spoonor oppressed
tho opinion TINT tho "pooling Of earnings
ia virtual consolidation. and, rs such,
would como under tho prohibition Of tho State
statute. Ho wont further, howcvor, and stated
that tho arrangement would bo unlawful ovon if
thero wero no statute prohibiting it. "such an
arrangement" sayn b1r. spoopor, sis in tho
nature OF partnership. It would make COM
mon interests which the law and public policy
require should be kept distinct, and would cub
joct, practically, to ono management, distinct
franchises which can be lawfully exercised only
by the several corporations upon which thoy
were respectively bestowed" Mr. spooner then
proceeded to say that ho would consider it his
duty to bring an action OF quo toarranto against
the railroads entering into such combination,
for forfeiture Of franchise.
This opinion is of more general importance
than in tta immediate application to tho
Northwestern and tho Milwaukee d St.
Pau1 Railroads. It IL undoubtedly sound
Inv. As principle OF common law,
1t applios in Illinois. or Indiana, or Ohio,
OF Pennsylvania, as well as Wisconsin. It may
bo invoked in any case of railroad "poo1ing,"
and thoro is no doubt that It will imply protect
the public, Railroads receive charters from tho
State Tor specific purposes. They a1o author
lied to construct railroad lines and operate
them between certain points. They are not au-
| thorized to construct or operate other lines Of
railroad, or to go i1ko partnerships. The rail-
| roads aro tho property Of certain Incorporated
companies, and their earnings must bo paid over
to the owners Of tho stock. It would
bo unlawful to pay them to anybody
else. But 1t would be impossible for
tho Chicago & Northwestern and tho Milwau-
kee d st. Paul, or any other two railroads,
| to "pool" their earnings without paying them
over to each other. Tho Milwaukee l. Bt. Paul
would pay over its earnings to tho Northwest
ern, and the Northwestern pay over its earnings
to the Milwaukee L St. Paul. This would be M
| unlawful aa II the agent Of John Doc should
mako q contract to pay over tie earnings OF his
| principal to Richard Roc. competitor IN busi-
ness, or uico uersa. The directors and managers
of railroads aro but tho agents Of tho etockhold-
ers who own the property, aud it ia a breach Of
trust to the stockholders Of the road as we'll as
to tho public to agree to divide those earnings
with any other road.
Tho pooling Of earnings has become q fre-
qucnt proceeding among railroad companies, but
this liz no reason why 1t may nos be brokon up
whenever any ono who hns sufIioiont interest at
stake will proceed against tho partios to auch
an arrangement. Tho Chicago, nook Island 4
Pacific, Chicago, Burlington Il Quincy, aud the
Chicago d Northwestern lavo for long time
pooled their receipts botweon Omaha and Chi
cago. There hns been no effort to broak 1t up
perhaps for tho roason tint it has not, In this
Instauco, been productive Of injury to tho stock
holders of tho different roads or to tho public
The proceeding is unlawful, nevertheless, ant
It mny bo brought to IN end at any tImo by
party In interest without the MD Of Stat
, statute. Thie feature Of tho common law
J 30 pointolly set forth by. A1r. Spoonor
ia another Illustration OF tho completeness o
, tho law as It stands, and of the unseasonabl
, haste OF thoso poraons who ecck to obair
/ through immature Legislation, ronody wlic
] they always hayo at hand. Tho Supreme Couf
} Of Illinois has already doclarod that railroad
may not chnrgo unreasonable ratos, nor mak
unjust discriminations, no mattor what tho word
, / ing Of their charters may be. The law wlic
, prohibits this antcdatos Stato statutea and rai
r road franchises. Now, tho Attorney-donoral {
Wisconsin intorprots tho common law q
!, prohibiting railroad combinations tlt
arc calculated to opprcsa tho people, md tho ii
, depreciation will undoubtedly hold in the coul
4 Of last resort. Every other form Of railroa
9 tyranny, In which railroads are advancing tho
+ own interests ut tho expense Of the rights Of til
@ people, will unquostionably be brought undt
d tho eamo ban, strong with the growth OF ago
% aud auSs fgqm tho RsQV1aplatQa NlsaQR Qi p