State was able to accomplish by the creation of the Board of Railroad Commissioners.

Following upon this period of unrestricted competition came the era of railroad consolidation. Special acts permitting the consolidation of railroad corporations were passed, and general laws were enacted which authorized railroad corporations to be leased by or united with other railroad corporations. These amalgamations were permitted, however, only under restrictions, and subject to the approval of the Board of Railroad Commissioners. This policy was found to result in economy of administration, improved roadbeds, better train service and lower passenger fares and freight rates.

The history of street railway companies in the Commonwealth has not been dissimilar. The original horse car lines, which were constructed in and about the great centres of population, maintained at first an active rivalry, and then, after a period of competition, usually became merged in one company. Thus, the West End Street Railway Company of Boston was the result of the consolidation of several minor horse railroad companies. The stimulus given to the construction of street railways by the use of electricity as a motive power again caused the organization of a large number of new companies, which, during the last few years, after varying fortunes, verging oftentimes on insolvency, have in their turn shown a tendency to fall into the control of a single company. Here, as in the case of railroads, the tendency to consolidation has been accompanied by better accommodations and cheaper fares, or longer rides for the same fare.

The subject of the acquisition of street railway companies by railroad corporations has engaged the attention of the State Board of Railroad Commissioners, which, in its report to the General Court of the year 1905, says:

The two systems ought to work together advantageously under one administration, subject, as they would be, to the supervision enforced under our statutes, changes in service upon one or the other being made only in furtherance of a greater comfort and convenience in travel.

The committee, therefore, submits a draft of a bill, which, in its judgment, should be enacted, in order to remove the present legal

restrictions, and to permit directly what has already been accomplished, or is being accomplished, indirectly. Although apparently there is no sound reason why railroad corporations and street railway companies should not be given equal rights and privileges in this matter, yet, inasmuch as the railroad corporations of the Commonwealth are practically all combined in three great systems, it has seemed to the committee unadvisable to recommend that street railway companies be authorized to hold railroad stock, believing that such legislation would be useless for all practical purposes. The bill is, therefore, limited to legalizing the acquisition of street railway stock or property by railroad corporations. Should a situation arise in which it would be desirable to permit street railway companies to purchase the stock or lease the property of railroad corporations, it may readily be met by amendment.

The committee does not recommend that a general and unrestricted permission be given to railroad corporations to purchase street railway stock, in the manner that they may, under the present law, hold the stock or bonds of telegraph companies, steamship companies, grain elevator corporations and connecting railroad corporations. On the contrary, it should be a condition precedent to any acquisition of street railway stock or property, either by purchase or lease, by a railroad corporation, that the Board of Railroad Commissioners, after public notice and a hearing, should certify that such acquisition is in the public interests. Furthermore, it seems unwise to permit the corporate consolidation of railroad corporations with street railway companies. The identity of a street railway company should be preserved, that there need be no change in the laws providing for supervision by the Board of Railroad Commissioners, and in those prescribing methods of taxation of street railway companies. It is especially important, in the view of the committee, that the present excise tax, based upon the mileage and earnings of street railway companies, should not be lost by merger to the cities and towns of the Commonwealth.

Although, in the first instance, the price to be paid by the railroad corporation should be determined between the two parties to the bargain, — the buyer and the seller, other terms of the sale may directly affect the accommodations pro

yet, as this price and the

vided for the travelling public, or the rates of fare or freight charged to it, the Board of Railroad Commissioners, which is the representative of the public, should, if in its opinion the price or other terms of the sale appear unreasonable, have a right to prohibit or modify such bargain. In the bill, therefore, in addition to a positive prohibition against a decrease of the facilities of travel, or an increase of the rates of fare or freight, by the merger, the following clause is inserted :

Such purchase, acquisition or holding shall not be valid, unless the board of railroad commissioners after a public hearing, notice of which, etc. shall certify that in its opinion such purchase, acquisition or holding, and the price and other terms thereof, are consistent with the public interests.

The committee also recommends that the stock of a railroad corporation issued to meet the expenditure incurred by the purchase of the stock of a street railway company be issued under the antistock-watering laws; and that such stock be relieved from taxation, so far as is equitable, in the manner provided by chapter 231 of the Acts of the year 1901, in an analogous case, for the reason that it represents street railway stock held in the treasury of the railroad corporation, which is, of course, still subject to taxation. There does not seem, under the circumstances, to be any justification for double taxation, which would put an additional burden upon the earning capacity of the railroad corporation.

The bill as drawn further provides for the lease of the property of a street railway company by a railroad corporation, subject to the same restrictions as surround its purchase, and for the association of a railroad corporation in the organization of a company incorporated under the provisions of the general laws relative to street railway companies. There appears to be no good reason why, if it be sound policy to allow a railroad corporation to acquire the stock or lease the property of an existing street railway company, it should not have authority to take part in its organization.

The new legislation gives foreign and domestic railroad corporations equal privileges with regard to the purchase of the stock or the lease of the property of a street railway company or participation

in the organization thereof. This privilege the foreign company in practice now enjoys. By this bill, domestic corporations are given by law the same privileges.

V.

CONCLUSION.

The committee recommends, that, if the general revision of the railroad law or street railway law be adopted by the General Court, all changes therein which are thereafter made should be drafted in the form of amendments of such revision, so that they may be inserted as an integral part of it. This applies to additions to such general revision, as well as to alterations thereof.

The committee has not undertaken to present repeal sections with the revision bills relative to railroad corporations and street railway companies, inasmuch as, in its opinion, these sections can be better drawn when such bills shall have taken their final form.

WILLIAM F. DANA.

PRENTISS CUMMINGS.
JOHN P. MUNROE.

SILAS D. REED.

ARTHUR M. TAFT.

WILLIAM H. I. HAYES.

JOHN M. GROSVENOR, JR.

JOHN N. COLE.

GEORGE A. SCHOFIELD.

JAMES A. LOWELL.

CHARLES S. DAVIS.

CHARLES A. ANDREWS.

W. RODMAN PEABODY.

HENRY S. AMES.

JOSEPH E. MOONEY.

VIEWS OF MINORITY.

[Representative Davis; Senator Reed concurring.]

I am unable to agree with the report of the committee in regard to "merger," so called, as I do not believe the acquisition of street railways by steam railroads should be allowed in this Commonwealth.

I include as street roads the proposed electric road running largely over private land, as, although the committee do not report in favor of allowing steam roads to acquire such electric roads, yet it has been so suggested, and if the right to acquire one is granted, the railroads will soon demand the right to acquire the other. The present street roads should in time become electric roads running largely on private land, and this change would be prevented if the street roads were controlled by the steam roads. I also believe the present law should be amended so as to encourage street roads to acquire locations on private land.

The present law prohibits "merger," and good reasons should be shown for its repeal. The chief argument for its repeal was the fact that one of our large railroad systems had notoriously broken the law, in spirit if not in letter, and that the other large railroad system should therefore be allowed to acquire street railways. If the present law is not sufficient, or cannot be easily enforced, it is an easy matter to pass other laws, which could be enforced.

Exploiting street railways is only in its infancy, and the benefits that the public will eventually derive from them have only just begun. The field for steam and street roads and the uses and ways by which they will benefit the public are distinct. The questions of transportation of light freight and produce and interurban communication by quick and frequent accommodations will be distinctly for street roads to work out. Street roads and steam railroads will of course be competitors, and their interests will in many respects be adverse; but both will live, and neither will destroy the other, any more than the elevated roads have destroyed the street roads running directly under their structure and carrying people along the same route. New capital and new progressive energies are required for this exploiture, and the steam road management, both on account of their fixed ideas and on account of the competition with their ex