Page:The Green Bag (1889–1914), Volume 17.pdf/51

 THE GREEN BAG

itself, in the early charters, frequently in serted some maximum limitation of fares. These original limitations, however, were so far in excess of anything now charged as to be no longer material. Often, also, alder men and selectmen endeavored, as a condi tion in locating a railway, to prescribe its fares. These attempts, though unauthor ized, were indirectly recognized in some of the early general legislation. The first gen eral act provided that the mayor and alder men of a city, or selectmen of a town, might apply to the Supreme Court for the appointment of a special commission to re vise street railway fares. The report of the commission, when confirmed by the court, was final and conclusive for one year, but the commission could not raise fares be yond the rate fixed by agreement between the local authorities and a company, as a condition of location, nor so reduce them as to deprive the company of a minimum profit of to per cent upon the actual cost of its railway property. The duties of these special commissions were transferred to the railroad commission, after its creation, but its action was subject to the same limita tions. In the Street Railway Act of 1898,' both limitations upon their power were re pealed, and there was substituted the single provision that fares should not be reduced below the average rate charged for similar service of other companies operated under substantially similar conditions. In 1901 all absolute power to regulate street railway fares was, at the suggestion of the railroad commissioners themselves, taken away, and street railway fares were made subject to the provisions which had always prevailed regarding railroad fares: that the board should hear complaints and make recommendations, the authority to enforce the recommendations remaining in the legislature. In a very recent case J the Supreme Court held that this recommenda1 Acts, 1898, chapter 578, section 23. 185 Mass. 183.
 * Keefe v. Lexington & Boston St. Ry. Co.,

tory power of the railroad commissioners is exclusive, and that attempted conditions to fix rates of fare in grants of location by boards of aldermen or selectmen are invalid and of no effect. The old statute forbidding the special commissioners, and afterwards the railroad commissioners, to raise fares above the rate fixed by agreement as a condition of loca tion or otherwise, refers specifically to agree ments between the company, on the one hand, and the mayor and aldermen of a city or the selectmen of a town on the other hand. It in no way recognizes an agreement between a company and a muni cipality in its corporate capacity, or between a company and the local authorities as rep resenting the municipality. This statutory reference did not, therefore, in any way conflict with, but rather confirmed the principle laid down in Cambridge v. Cam bridge Railroad Company.1 Any statement of the Massachusetts policy regarding public service corporations, and particularly regarding street railway com panies, would be incomplete without a word as to its features governing capitalization. It is at this point and in the regulation of this important matter that the State has successfully sought to limit the profits of those providing the service to a just com pensation. The earliest street railway char ters prohibited the issue of any share for a less sum, to be actually paid in, than the par value of the shares. Subsequent special charters contained the same provision, which was re-enacted in the general law of 1864. The further restriction was then added that the payment must be in cash, and that the directors should be personally liable for all debts until they filed a sworn certificate of the full cash payment of the company's capital. These provisions are still in force. The first general act authorizing an in crease of capital stock, and the first general act authorizing the issue of mortgage bonds,
 * io Allen 50.