chase price of any farm product at a price greater by four or more times than the fair market value of the same product at the time in the locality, or in which the consideration shall be in whole or in part membership of and rights in an association, company or combination to produce or sell any farm product at a fictitious rate, or of a contract or bond to purchase or sell any farm product at such rate, without having the words "given for a speculative consideration," or other words clearly showing the nature of the consideration prominently and legibly written or printed on the face of such note or instrument above the signature thereof is guilty of a misdemeanor.

§ 2. Section two of chapter sixty-five of the laws of eighteen hundred and seventy-seven, and section two of chapter two hundred and sixty-two of the laws of eighteen hundred and ninety-one, are hereby repealed.

§ 3. This act shall take effect the first day of October, eighteen hundred and ninety-seven.

CHAPTER XI

RAILROADS

Interest of Engineers. Civil engineers or mechanical engineers are nowadays so often selected for the management and operation of railroads that a special chapter on railroads seems appropriate; electrical engineers in the near future may be expected to have a similar and equal interest. The engineer's interest is not restricted to location and construction, but extends to operation and to management.

Route. The first duty in connection with a railroad project is the selection of the general route, in pursuance of the wishes of the projectors in the case of a new railroad, or of the proper officials in the case of extension of an existing railroad. In either case this is commonly a preliminary either to securing or to formally extending a charter. The general route stated should be sufficiently explicit to meet the requirements of law but not so closely defined as to limit such freedom of action and selection as is allowable under the law. In a venture of this magnitude, the services of a lawyer should be available and preferably in consultation with the engineer. In some cases exact location may be required previous to incorporation, in others not.

Incorporation. The details of incorporation differ from those necessary for business corporations, but those are the lawyer's, and not the engineer's duty. So far as the route is concerned, the approval of the engineer is properly necessary. The raising of funds belongs to the incorporators; nevertheless the engineer should read and come to understand the laws of the State dealing with the incorporation of railroads. It is worth his while to have a broad outlook over the entire railroad field.

Financing. In financing railroads, in earlier days all the money required was in some cases raised by stock subscription. Nearly all of the railroads now are financed in part from the sale of bonds. Stocks and bonds of railroad companies are of great variety. Among the classes of stock there are common and preferred; the latter may be 1st preferred or 2d preferred, cumulative or non-cumulative.

Bonds. Bonds are more commonly mortgage bonds, but often are not. One railroad has 1st, 2d, 3d, 4th, and 5th mortgage bonds. There

are also income bonds which in some cases are little better than preferred stock. Some bonds are "convertible" into preferred stock, some into common stock. Equipment bonds are not uncommon. There are also occasionally prior lien bonds, and other bonds with various names and characteristics. Following the customs of their country, English owners often show a preference for " debentures" or debenture bonds, the terms of which are such that foreclosure is not possible for non-payment of interest when due.

Most of the special forms of bond and much of the preferred stock are the result of re-financing or re-organizing, in many cases after railroads have been placed in the hands of a receiver. With railroads whose credit is satisfactory, the common stock and mortgage bonds usually furnish sufficient variety to satisfy investors.

The railroads of the United States as a whole show a moderate excess of bonds over stock. Individual railroads show great differences in the proportion between the two, even among the important systems.

At the close of the year 1915, 38,861 miles of railroad with stock and funded debt amounting to $2,372,204,457, were in the hands of receivers, more commonly from inability to pay interest on their bonds but sometimes more directly from inability to meet other obligations. Receiver's certificates are another form of security issued to acquire funds necessary to tide over an emergency during the receivership. They are issued to protect the interests of the creditors, under the orders of the Court, and thus properly have priority over the bonds and all other forms of indebtedness.

Location. The definite location of the line of railroad is the next step in order. This must be followed, or accompanied, by the filing of plans, and perhaps profiles, of the located lines; these filings must comply with the laws of the State involved, and with United States laws in case the public domain is entered or crossed. The maps filed must be adequate to the purpose. The requirements involve the kind of maps and perhaps the scales, and also the forms of certificates to accompany them. Here again the lawyer is necessary, unless the engineer has had previous experience in exactly the same thing. Unless State laws or the charter confer the right to enter private lands for surveying purposes, or until by right of eminent domain a right is obtained, entry upon lands may be a trespass. The charter very frequently does authorize such entry subject ordinarily to the payment of damage actually caused, if any.

Approval Necessary. It should be understood that a location by an engineer, not reported to the company nor accepted by it, does not secure title to the company. Acceptance or approval by some adequate official authority is necessary. Priority over another company is not secured until

the location is thus formally adopted, and in some cases not until the proper filings are made. In some cases where filing is not a prior requirement, priority in instituting condemnation proceedings under the right of eminent domain will serve to secure title against another railroad. Sometimes failure to build within a limited time means abandonment of location and forfeiture of a right previously acquired; statutory provisions may often cover this.

Discretion as to Route.

Railroad authorities have reasonable discretion in selecting the route. The railroad's rights in this matter must be reasonably exercised, but there is no necessity for proving the route the best or the only feasible one.

It is often possible to make minor changes in location; in some cases rights may have been acquired by landowners or perhaps by another railroad, and the change may involve expense or other difficulty for such

reasons.

In some States no new line can be constructed until a certificate of exigency" is issued by the Railroad Commission. The object is to prevent the building of unnecessary lines which the public must eventually support.

Lands of Other Railroads.

Unless the charter or some statute authorize it, a newer railroad has not the right to occupy and use lands previously appropriated to another railroad, but the State has the right to specifically grant such authority. The right to cross another railroad may often be implied. Crossing at grade is in disfavor, and in very many cases will not be allowed if any other feasible method is apparent.

Highway Crossings. Unless some statute prevents it, crossing a highway at grade is allowable, but many States have passed laws not only forbidding or restricting this, but even providing for separating the grades of railroads and highways at existing crossings, and providing for the distribution of the expense of the change. In Massachusetts the railroad pays 65 per cent, the State 25 per cent, and the city or town 10 per cent of such cost. There is no uniformity in the provisions of those States which have made any similar provisions.

In some cases crossings must be maintained for the benefit of private owners of farms which have been cut in two, and a lawyer should be consulted as to the rights of such owners.

Operation at Crossing. In the operation of railroads at crossings of other railroads, or of highways at grade, the precautions necessary either at Common Law, or required by Statute Law, should be well understood. For regulating crossings with railroads, there is often a statute requiring a full stop before crossing or else the installation of an adequate interlocking plant.