CHAPTER XII.

THE RIGHT OF EMINENT DOMAIN.--UNCONSTITUTIONALITY OF MUNICIPAL AID

TO RAILROADS.

The question of taxation for the benefit of private corporations has

agitated the public mind since the construction of railroads became one

of the admitted necessities of the country. For the purpose of

justifying and legalizing governmental aid to railroad corporations, in

the various forms in which such aid has been afforded, the doctrine has

obtained among the advocates of the measure that railroads are public

highways, as well as a public necessity; and such being the fact, that

aid in the shape of grants, taxes, and subsidies, are legal, legitimate,

and proper. They draw an argument in favor of this doctrine, from the

fact that legislatures, state and national, have provided by law for the

condemnation of private property, for the use of the companies,

respectively, upon paying the assessed value thereof; and that thus the

right of eminent domain is vested in these corporations; that the right

of _eminent domain_ is an attribute of sovereignty, and that the

granting of this attribute to corporations imparts to them the character

of public highways. They reason that because they are public highways,

and the companies owning them are common carriers, taxes may be legally

levied and collected for the exclusive use of these companies. They

claim that because the United States, states, counties, cities, towns,

and townships, have authority to construct, or to aid in constructing,

common highways, they have the same right to construct, or aid in

constructing, railroads.

If it were not that precedent has tended to sustain this "false

doctrine," we would not think it profitable to combat it. The only point

in the argument in favor of this doctrine that has any real foundation,

is, that railroad companies are allowed to locate their roads where they

please, upon payment of the damages assessed in the manner prescribed by

statute. The answer to this is, that railroads could not be built,

unless the companies had permission to pass over the lands of private

citizens. If the title from each land owner could be procured only by

negotiation and purchase, no railroad could be constructed, for the

reason that a direct or continuous line for a road could rarely be

secured. Railroads are constructed to aid in the transportation of

freight and passengers from one part of the country to another; to

promote commerce throughout the whole country; to supply the wants of a

people, just as a mill or factory supplies the wants of a particular

locality. The miller constructs his dam across a stream, and, under the

statutes of most of the states, he can procure the condemnation of the

land of his neighbor overflowed by his dam, to his own use, upon payment

of the damages assessed. It is not a condemnation for the use of the

public, but for the use and benefit of the owner of the mill. The mill

itself, while it is owned by a private individual, and can be sold and

transferred by him at any time, is also a public benefit. Can it be said

that the right of eminent domain attaches to the mill or its owner? So

with railroads: They are owned by private companies--are built and

controlled by them; they are of public benefit, but not owned or

controlled by the public or by the state, or local authority, as in the

case of public highways. Their private owners can sell them, with all

their franchises, rights, and privileges. The rules for their operation,

rates of charges, and all other matters affecting their government, are

exclusively under the control of the parties owning them. Only that the

companies may become the owners of the necessary grounds over which to

build their roads, have legislatures provided that they may enter upon

lands owned by private persons, and upon the payment of the appraised

value thereof, appropriate a narrow strip (the width being fixed by

statute) for the purpose of locating their road upon it. It is not

condemned for public use, as in the case of a public highway, or where

land is needed for public buildings, or any other public purpose. The

assessed value is not paid by the government, or from the public fund,

nor by individuals for the public; but by the private corporation out of

its own purse, and for its own gain.

This is what is called, by the advocates of the measure, "the right of

eminent domain," a right that only belongs to the supreme government.

This power cannot be exercised by local or subordinate governments,

unless it is delegated to them by the supreme or superior government.

While the courts in some of the states, Iowa included, have, by

decisions, made this right of eminent domain attach to railroad

companies, it cannot be supported on principle. To allow it to obtain is

to clothe private corporations with the attributes of sovereignty. But

conceding that this right attaches to these corporations, upon no

principle of constitutional law or justice can the right to levy taxes

upon private citizens to aid in the construction of railroads, either by

acts of congress, by state statutes, or by local municipal government,

be supported. And it matters not in what form these taxes are imposed

upon the people, whether in the shape of municipal subscriptions of

stock, to be paid by assessments upon the people; by donations of land

or money, to be repaid by imposing a larger price upon lands sold to the

citizen; by indirect taxation, or by special local elections held in

cities, towns, or counties,--the compulsory taxation of the property of

individuals, under our system of government, can only be imposed for

governmental or public purposes. Taxes are levied for the support of the

government in all its departments; for the construction and repairing of

highways; for the building of school houses and all other edifices of a

public character; for the support of schools; for the necessities of

local municipal governments, and for other objects having the public

weal for their sole consideration. These taxes are legitimate and

proper, because the ends sought to be reached by such taxation are for

the use and benefit of the whole people, and for the protection of their

rights. For all of these purposes the legislature can provide an uniform

system of taxation. But when the government attempts to compel A to pay

a tax to assist B and C in building a railroad, it enters upon the

exercise of a despotic and oppressive power, that is in conflict with

the letter and spirit of our constitutions, both state and national.

The legislature, by the passage of such a statute, says, in substance,

to the taxpayer: "A company is formed for the purpose of building a

railroad which passes through the county in which you reside. This

company has not sufficient means for constructing and stocking its road.

That the necessary means may be furnished to it for that purpose, you

must pay a tax upon your property, amounting to one-tenth or

one-twentieth of its value; this amount you must donate to the company.

True, you will have no interest in this road when it is completed; you

will not be a stockholder; you cannot ride in its cars, or ship your

freights over the road, without paying the same price as other persons.

It may cause you to sacrifice a part of your property to pay this tax,

but the road will be of great advantage to the public, and you must make

this donation to help the enterprise." The consequences flowing from

this unjust and oppressive system of taxation are appalling. It has no

foundation in right or justice. The legislature has no inherent right to

impose taxes for any purpose. The authority to levy taxes is dependent

upon the power delegated by the people as contained in the fundamental

law. In a republic even a majority of the people do not possess the

inherent right to tax the minority for private purposes. Such taxation

can be imposed by no other government than a despotic one, where the

will of the despot is the supreme law, and where might rather than right

is the controlling power. So conscious are the advocates of this species

of taxation of the fact that taxes can be levied for public purposes

alone, that they deem it all-important to connect and blend in one--the

right of eminent domain and taxation.

But this position is not tenable. Bouvier defines the term, "Eminent

Domain," as follows: "The right which the people or government retains

over the estate of individuals, to resume the same for public use."

Taxes are defined to be burdens or charges imposed by the legislative

power of a state, upon persons or property, to raise money for public

purposes. It will be seen that there is a wide distinction between the

taxing power and the right of eminent domain: that while they both

appropriate private property for public uses, they differ in degree.

While the right of eminent domain takes from the private citizen the

absolute title to property upon just and fair compensation, taxation

exacts from each property owner a contribution for the support of the

government, or for the benefit of the public, without any other

compensation than the protection the government affords him in life,

liberty, and property. Contribution for this purpose is a duty imposed

upon all who are under the protection of government. A complete power to

procure a regular and adequate supply of revenue forms an indispensable

article in our constitution; and provisions for levying and collecting

this revenue is a charge laid upon the legislative department. The levy

and collection of all taxes deemed necessary for the administration of

the government and for the public good, is an incident of sovereignty;

but this does not extend to the levy and collection of taxes to aid

private interests or enterprises. The taxing power is limited; the needs

of the public fix this limit. When this is passed, the citizen is

subject to continual plunder. The value of his property is destroyed; he

is but a trustee holding his property subject to the will of an

arbitrary power, that can at any moment call for a part or all of it. He

had entered into a governmental contract for the purpose of appealing to

the strong arm of constitutional law when his rights are assailed, but

finds, instead of the protection he had reason to expect, an

irresponsible, arbitrary, power, compelling him to divide his property

with railroad corporations, or other private parties, without any

consideration; not only without consideration, but the taxes illegally

and forcibly taken from him are used to build up and protect a monopoly

that is blasting the fruit of his labor, while it is as surely

destroying constitutional and republican government. His property is

taken from him by what can only be termed a superior, despotic, power,

and appropriated without his consent for the benefit of a private

corporation.

It is not difficult to distinguish what are proper objects of public

support and for which taxes can be levied and collected from those that

are not, if we keep in sight the fundamental or organic law. In the

formation of a republic no new rights are created. The adoption of a

constitution is but declaratory of pre-existing rights and laws; its

object is to define and limit the powers of the government, and to guard

and protect the rights of the citizens. An eminent jurist, in speaking

of the constitution, uses the following clear and forcible language: "It

is not the beginning of a community, nor the origin of private rights;

it is not the fountain of law, nor the incipient state of government; it

is not the cause, but the consequence, of personal and political

freedom; it grants no rights to the people, but is the creation of their

power, the instrument of their convenience, designed for their

protection in the enjoyment of the rights and powers which they

possessed before the constitution was made; it is but the frame-work of

the political government, and necessarily based upon the pre-existing

condition of laws, rights, habits, and modes of thought. There is

nothing primitive in it; it is all derived from a known source. It

pre-supposes an organized society, law, order, property, personal

freedom, a love of political liberty, and enough of cultivated

intelligence to know how to guard it against the encroachments of

tyranny. A written constitution is, in every instance, a _limitation_

upon the powers of the government in the hands of agents, for there

never was a written republican constitution which delegated to

functionaries all the _latent powers_ which lie _dormant_ in every

nation, and are boundless in extent, and incapable of definitions."

Keeping in mind the distinction existing between measures of a

governmental or public nature, and those that are private, and applying

the above quoted definition of constitutional power, we cannot find it

difficult to determine what are, and what are not, constitutional levies

and collection of taxes.

Another thought having weight in connection with the constitutional

right to tax the people in aid of railroads, is, that minorities have

the right to live, and to own and enjoy property; and the majority has

no right to compel the minority to contribute aid to railroad

corporations. It has always been conceded that in a republican

government the majority should rule, and that their will expressed in a

constitutional and legal manner should be the law of the land; yet no

one claiming to respect constitutional law will contend that this will

of the majority can act outside, or independent of, constitutional

restrictions. If this doctrine should obtain, constitutional government

is at an end; private rights are destroyed, and the unrestricted will of

a bare majority becomes supreme; all the guarantees of the constitution

are annulled; life, liberty, and property, are all dependent upon the

popular will; constitutional safeguards are destroyed, and the stability

of the government is lost. The first step in this direction is fraught

with the greatest danger. When the restrictions embodied in the

constitution are overridden and disregarded in one instance it affords a

precedent for a second step in the same direction. Acquiescence in

encroachments upon constitutional restriction by the people, undermine

and absolutely destroy republican institutions and the government

itself. If, for the accomplishment of some private purpose, a community,

a state, or the general government disregard the provisions of the

constitution, and assume powers not granted them by that instrument,

they arbitrarily act the part of the absolute tyrant. And it makes no

difference whether the course pursued, or the measure adopted, proves

beneficial to the public, or oppressive. In the fact that it is the

usurpation of an unauthorized power, lies the danger. The disregard of

the limits fixed by the constitution, in the administration of the

government, destroys the only guarantee the people have for the

protection of their private rights. Among all the unconstitutional

measures which now obtain throughout the country, the affording of aid

to railroads, by the government, state and national, has proved the most

burdensome to the people. Of this class of subsidies, that afforded by

local, municipal subscription, with or without a vote of the people, has

caused the greatest injury. A local or municipal government can lawfully

impose taxes for the support of its administration, and for contribution

to the general comfort and happiness of the people. It can tax for the

purpose of laying out and constructing streets and public highways,

because these objects are intended to be, and in fact are, open to the

use of the whole people; all can use them on equal terms; they are made

for the benefit of the public; each citizen has undertaken to contribute

his just proportion of the expense of providing for the common, public

benefit. But when a county, a city, town, or township, organized for

the convenience of the people, and to more effectually protect their

rights, attempts to become a stockholder in a railroad corporation, it

attempts the exercise of a power it does not and cannot possess under

the constitution. Municipal corporations were not created for the

purposes of private speculation or private gain, but for purely and

strictly government purposes. No power is granted (nor can it be

implied) to county judges, commissioners, or supervisors, nor to

township trustees, or city boards, to take stock in railroad

corporations, or to issue bonds of the municipality in payment for such

stock, for the reason that such power is not necessary for the

administration of these several governments, and does not come within

the limit of the powers granted by the people. We know there are many

decisions of courts sustaining the position that municipal corporations

can become stockholders in railroads, and may issue bonds in payment

therefor, and that it is within the scope of the powers vested in such

corporations to levy taxes for the payment of the bonds so issued; but

we have yet to see a decision that is sustained by any provision of the

constitution. Many of these decisions admit that the right to subscribe

stock is not contained in the constitution, and cannot be justified on

constitutional grounds. Of these decisions we shall speak hereafter, and

we leave them for the present. We insist that there is no authority in

the constitutions, state or national, under which any department of any

of the governments can become stockholders in a railroad corporation;

nor is the right to take such stock in accordance with the genius or

spirit of republican government. The distinction that exists between

cities and towns acting under charters, and counties, townships, school

and road districts, is marked, and should be kept in mind in considering

the nature of the powers possessed by each. County, township, school,

and road district organizations are necessary in the administration of

the laws of the state. They are at most but _quasi_ corporations; all

their powers are derived from, and executed under, the general statutes

of the state. They have no special grants or privileges, but are the

chosen means for executing state laws. In the distribution of the powers

and duties vested in and imposed upon the state governments, the duties

of administering the local affairs of the counties, townships, and

districts, are delegated to, and imposed upon, these _quasi_

corporations respectively. They can only exercise such powers as are

necessary for the accomplishment of the objects of their creation. Their

acts are the acts of the state government as applied to their respective

localities. They are not clothed with any extraordinary power; nor can

the state government delegate to them a power it does not itself

possess. When the constitution of a state (as in the case of Iowa and

other states) prohibits the state from subscribing stock, loaning its

credit, or issuing its bonds to private corporations, we would at once

conclude that it could not delegate authority to one of its subordinate

departments to do an act forbidden to itself by the constitution. But

this is what it has done, if these _quasi_ corporations possess the

power to afford aid to railroad or other private enterprises. Municipal

corporations, such as cities, towns, &c., act under special charters,

and in some respects are sovereign. But they are governed and controlled

as absolutely by the provisions of their charters, as is the state by

its constitution. They can only act within the scope of their delegated

powers, and in all doubtful questions the presumption is against their

right and in favor of the public, for the reason that only special

privileges are conferred upon them. Nor can the legislature confer upon

them privileges or powers not possessed by itself under the

constitution. It is then absolutely certain that neither counties,

cities, nor towns can aid private corporations, or become stockholders

in such corporations, unless the power has been delegated to them by the

state legislature. It is equally certain that unless the state, in its

sovereign capacity, possesses this power, it cannot delegate it to

either counties or cities, and that when the constitution of a state

forbids the exercise of a power, it includes the legislature, all the

departments of the state government, all counties, cities, and towns,

and all the people. All these corporations are agencies in the

administration of the affairs of the public. Being political in their

nature, they are entirely distinct from private corporations organized

for the purpose of pecuniary profit. They are established for public

purposes exclusively. Judge Dillon, in his valuable work on municipal

corporations, says that "They can exercise the following powers, and no

others: First, those granted in express words. Second, those necessarily

or fairly implied, or incident to the powers expressly granted. Third,

those essential to the declared objects and purposes of the

corporation--not simply convenient, but indispensable." The same author,

in treating upon aid to railroads, while admitting that the current of

judicial decision is in favor of the principle that in the absence of

special constitutional restrictive provisions, it is competent for the

legislature to grant this power to municipal corporations, says that

"Notwithstanding the opinions of so many learned and eminent judges,

there remains serious thought as to the soundness of the principle,

viewed simply as one of constitutional law. Regarded in the light of its

effects, however, there is little hesitation in affirming that this

invention to aid private enterprises has proved itself baneful in the

last degree," and he adds: "Taxes, it is everywhere agreed, can only be

imposed for public objects, and taxation to aid in building the roads of

private railway companies is hardly consistent with a proper respect for

the inviolability of private property and individual rights. Fraud

usually accompanies its exercise, and extravagant indebtedness is the

result, and sooner or later the power will be denied either by

constitutional provision (as in Pennsylvania, Ohio, and Illinois, it

already is) or by legislative enactment."

As we are now dealing with constitutional rights, and not with judicial

decisions, we think we have fully shown that public or municipal

corporations have no authority under the constitution to aid railroads

by subscription of stock, or the issue of bonds, and that no authority

exists for taxing the people to pay for such stock or bonds; and if it

be true that counties and cities are not, and cannot be, clothed with

the power to aid in the prosecution of private enterprises, it is

equally true that the legislature cannot delegate to the majority of the

voters of a county, city, township, or district, the authority to tax

the minority for the same purpose. Legislatures cannot create new

powers; they can only exercise such as they possess under the

constitution. The powers not delegated by the people in the fundamental

law, are retained by them. If the people are sovereign, they are the

source of power, and all that is not vested in some department of the

government remains vested exclusively in the sovereign. If the

legislative, executive, or judicial department of the government can act

independently of the restrictions and prohibitions contained in the

constitution, then the will of the servants of the people is the supreme

law, and the sovereign power supposed to reside in the people is

destroyed, and constitutional government is at an end. Oppressive

taxation imposed without authority, for private and selfish ends, if

persisted in, will eventually subvert our republican institutions. This,

and other unconstitutional legislation, to some of which we have already

referred, has caused such a departure from the old landmarks that it is

questionable if we now have, in fact, a republican government. Under the

rules adopted in legislation, and the pliant decisions of courts,

constitutions are made to yield to the demands of combinations,

stock-jobbers, and private corporations, until we cease, as a people, to

revere and respect these safeguards of our liberty.

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