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makers and interpreters of law. Then, too, the farmers felt that the
railway companies made rates unnecessarily high and frequently practised
unfair discrimination against certain sections and individuals. When the
Iowa farmer was obliged to burn corn for fuel, because at fifteen
cents a bushel it was cheaper than coal, though at the same time it
was selling for a dollar in the East, he felt that there was something
wrong, and quite naturally accused the railroads of extortion.
The fundamental issue involved in Illinois, Minnesota, Iowa, and
Wisconsin, where the battle was begun and fought to a finish, was
whether or not a State had power to regulate the tariffs of railway
companies incorporated under its laws. Railway companies, many jurists
argued, were private concerns transacting business according to the laws
of the State and no more to be controlled in making rates than dry goods
companies in fixing the price of spools of thread; rates, like the price
of merchandise, were determined by the volume of trade and the amount
of competition, and for a State to interfere with them was nothing less
than tyranny. On the other hand, those who advocated regulation argued
that railroads, though private corporations, were from the nature of
their business public servants and, as such, should be subject to state
regulation and control.
Some States, foreseeing difficulties which might arise later from the
doctrine that a charter is a contract, as set forth by the United States
Supreme Court in the famous Dartmouth College case,* had quite early in
their history attempted to safeguard their right to legislate concerning
corporations. A clause had been inserted in the state constitution of
Wisconsin which declared that all laws creating corporations might at
any time be altered or repealed by the legislatures. The constitution of
Minnesota asserted specifically that the railroads, as common carriers
enjoying right of way, were bound to carry freight on equal and
reasonable terms. When the Legislature of Iowa turned over to the
railroad companies lands granted by the Federal Government, it did so
with the reservation that the companies should be subject to the
rules and regulations of the General Assembly. Thus these States were
fortified not only by arguments from general governmental theory but
also by written articles, more or less specifically phrased, on which
they relied to establish their right to control the railroads
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