clude this Commission from inquiring into the reasonableness of the rates fixed therein.

The Supreme Court of the United States as well as the Supreme Court and the Commissions of many states have held that a contract made with a public utility for a definite period prescribing rates for its service, cannot prevent the regulation of the rates of such public utility by the duly authorized authority and this is true even if such contract is made by a public utility with a municipality and it will be presumed that all such contracts fixing rates were made subject to future regulation of the rates therein specified by the proper regulating authority.

In the recent case of Armour Packing Company vs. United States, 209 U. S. 56, the packing company on June 17, 1905, made a contract specifying rates for the shipment of certain products from Kansas City to New York, which contract was to remain in force for a period of about seven months, and the rates therein specified were the lawful rates at the time the contract was made. About two months after this contract was made the Railroad Company filed an amendment to its tariffs according to law, in which the rates specified in said contract were changed. Jus tice Day in writing the opinion of Court said:

(Page 74) The all-embracing prohibition against either directly or indirectly charging less than the published rates shows that the purpose of the statute was to make the prohibition applicable to every method of dealing by a carrier by which the forbidden result could be brought about."

"The Elkins Act proceeding upon broad lines, was evidently intended to effectuate the purpose of Congress to require that all shippers should be treated alike. and that only the rate charged to any shipper for the same service under the same condition, should be the one established, published, and posted as required by law."

(Page 81) "It is strongly urged that there is nothing in the Acts of Congress regulating interstate commerce which can render illegal the contract between the

shipper and the railroad covering the period from June
to December, 1905. The contract it is insisted, was at
the legal published and filed rate and there is nothing
in the law destroying the right of contract so essential to
carrying on business such as the petitioner was engaged
in. But this contention loses sight of the central and
controlling purpose of the law which is to require all
shippers to be treated alike and but one rate to be
charged for similar carriage and freight and that the
filed and published rate equally known by and available
to every shipper. .
. There is no provision ex-
cepting special contracts from the operation of the law."

In the case of the Home Telephone and Telegraph Company vs. the City of Los Angeles, 211, U. S. 265, wherein the city by an ordinance contract for a definite period fixed the rates of the telephone company and afterwards sought to produce the same the Supreme Court said:

(Page 273) This ordinance enacted by the city council which exercises the legislative and business powers of th city and as has been shown the charter power of regulating telephone service and fixing the charges, contains, it is contended, the contract whose obligation the subsequent ordinance fixing lower rates impaired. One question obviously arises here. Did the city council have the power to enter into a contract fixing unalterably during the term of the franchise charges. for telephone service and disabling itself from exercising the charter power of regulating? . . . The surrender by contract of a power of government, though in certain well defined cases it may be made by legislative authority, is a very grave act and the surrender itself as well as the authority to make it must be clsely scrutinized. No other body than the Supreme Legislature has the authority to make such a surrender unless the authority is clearly delegated to it by the Supreme Legislature. The general powers of a municipal

ity or of any other political subdivision of the State are
not sufficient. Specific authority for that purpose is
required. This proposition is sustained by all of the de-
cisions of this Court which will be referred to hereafter
and we need not delay further upon that point.

But for the very reason that such a contract has the
effect of extinguishing pro tanto an undoubted power
of government, both its existence and the authority to
make it must clearly and unmistakably appear and all
doubts must be resolved in favor of the continuance of
the power."

In the case of Louisville and Nashville Raiload Company vs. Mottley, 219 U. S. 466, a person was injured and in consideration of the liquidation of the damages for the injury sustained the railroad company in 1871 entered into a contract with the person injured whereby the company was released from all damages in consideration of the issuing a free pass during the life time of the person injured. This contract the company carried out and performed until 1906 when it refused to issue any pass on account of the passage by Congress of the Interstate Commerce Act of 1887 and the amendment thereto of June 29, 1906. A suit was brought against the railroad company for specific performance of the contract and the Court of Warren Circuit of the State of Kentucky entered a decree directing the railroad company to comply with the terms of the contract, which decree was affirmed by the court of appeals. On an appeal being taken to the United States Supreme Court, that court reversed the Court of Appeals. The Court said:

66

(Page 483) These principles control the decision of the present question. The agreement between the railroad company and the Mottleys must necessarily be regarded as having been made subject to the possibility that at some future time Congress might so exert its whole constitutional power in regulating interstate commerce as to render that agreement uninforcable or to impair its value. That the exercise of such power

may be hampered or restricted to any extent by con-
tracts previously made between individuals and cor-
porations is inconceivable. The framers of the Consti-
tution never intended any such state of things to exist

(Page 486) In our opinion the relief asked for by the plaintiff's must upon principle and authority be denied. That the railroad company rightly refused after the passage of the Commerce Act further to comply with the agreement of 1871 and that the decree requiring performance of its provisions by issuing annual passes was erroneous.”

In the case of the C. B. & Q. R. R. Co. vs. Nebraska, 170 C. S. 57, where the City of Omaha and the railroad company had made a contract providing for the building of a viaduct in the City of Omaha, and after the making of such contract, the state enacted a statute changing the terms of the contract with reference to the duty of keeping the viaduct in repair, the Supreme Court of the United States held:

(Page 73, Usually where a contract not contrary to public policy has been entered into between parties competent to contract, it is not within the power of either party to withdraw from its terms without the consent of the other; and the obligation of such contract is constitutionally protected from hostile legislation. Where, however, the respective parties are not private persons, dealing with matters and things in which the public has no concern, but are persons or corporations whose rights and powers were created for public purposes, by legislative acts, and where the subject matter of contract is one which affects the safety and welfare of the public, other principles apply. Contracts of the latter description are held to be within the supervising power and control of the legislature when exercised to protect the public safety, health and morals, and that

clause of the Federal Constitution which protects con-
tracts from legislative action cannot in every case be
successfully invoked. The presumption is that, when
such contracts are entered into, it is with the knowledge
that parties cannot, by making agreements on subjects
involving the right of the public, withdraw such sub-
jects from the police power of the legislature.'

In the case of Milwaukee Electric Railway and Light Company vs. the Railroad Commission of Wisconsin, 238 U. S. Supreme Court, 172, wherein the Supreme Court of the United States affirmed the decision of the Supreme Court of Wisconsin, it appeared that a franchise contract for a definite period had been granted to the railway company fixing the rates to be charged.

The Railroad Commission of Wisconsin sought to reduce these fares and the Supreme Court of that State upheld the action of the Commission.

Justice Day of the Supreme Court of the United States delivered the opinion and inter alia said:

(Page 179) The fixing of rates which may be charged by public service corporations, of the character here involved, is a legislative function of the state, and while the right to make contracts which shall prevent the state during a given period from exercising this important power has been recognized and approved by judicial decisions, it has been uniformly held in this court that the renunciation of a sovereign right of this character must be evidenced by terms so clear and unequivocal as to permit of no doubt as to their proper construction. This proposition has been so frequently declared by decisions of this court as to render unnecessary any reference to the many cases in which the doctrine has been affirmed. The principle involved was well stated by Mr. Justice Moody in Home Telephone and Telegraph Company vs. Los Angeles, 211 U. S. 265.