and absolutely forbid the further issuance of municipal aid bonds, except that the city of Quincy might complete a contract then partially made with a railroad company in Missouri. The municipal subscription section was submitted to the people separately, and was ratified by a majority of nearly four to one. It reads as follows: "No county, city, town, township, or other municipality shall ever become subscriber to the capital stock of any railroad or private corporation, or make donation to, or loan its credit in aid of such corporation: provided, however, that the adoption of this article shall not be construed as affecting the right of any such municipality to make such subscriptions where the same have been authorized, under existing laws, by a vote of the people of such municipalities prior to such adoption."

§ 119. The supreme court held in the case of Schall v. Bowmar, not yet officially reported, that this section went into effect July 2, 1870. Although no more railroad aid can be afforded by municipal gifts, or subscriptions to, or purchases of railway bonds, the legal basis on which such aid rests is of vital concern. That ground has been critically surveyed by the courts since the prohibition, and it had been frequently surveyed before, and is liable at any time to be the main issue in important litigation.

§ 120. It is worthy of remark in this connection that while no new railway aid bonds have been issued since July, 1870, it is quite possible at this time to determine the amount of the municipal indebtedness

1 See sec. 24 schedule of the constitution for the Quincy provision. The corporation benefited by that exception was the Quincy, Missouri and Pacific R. R. Co.

of the state in furtherance of railroad projects. In some cases the conditions precedent, on which the final issue will be legal, may or may not hereafter be complied with. The aggregate will probably foot up not far from $15,000,000.

§ 121. The main statute authorizing municipalities to take stock by subscription or purchase in a railroad company, dates back to 1849. Subsequent legislation modified some of its details, but in its general features that law stood intact until repealed by organic law. The changes made were at the instigation and in the interest of the railroad companies being benefited.1

8 122. No city or county could invest more than $100,000 in any one railway project. This maximum was not often reached. The rate of interest that could be paid on bonds so subscribed or purchased, or on money borrowed to make such investments, was limited to ten per cent. per year. The second annual report of the railroad and warehouse commissioners shows that this maximum of interest has been the rule, but has had many exceptions.

$123. The question of aiding a railroad project by subscribing to its stock, or by purchase of the same, could only be decided by a direct vote of the people of the municipality. The submission of the proposition could occur in connection with a general election, or a special election for that purpose could be called. In either case notice of the proposed submission had to be given at least thirty days in advance. In the case of counties, the county judiciary issued the notice; in the case of cities that duty devolved upon the com

1 All the legislation of Illinois on this subject may be found in Gross Statutes, vol. i, chap. lxxxvi, div. xiii, first part.

mon council. This notice had to be given in the same manner as notices for elections of state or county officers.

$124. This notice was not legal unless it contained the following specifications: 1. The company in which it was proposed to take stock. 2. The amount proposed to be taken. 3. The length of time the proposed bonds would run. 4. The interest they were to bear. In case it was proposed to borrow the money to pay the subscription, then the notice had to state: 5. The terms on which the loan could be negotiated. The ballots were: "For Subscription;""Against Subscription." The counting and returning had to be the same as in ordinary elections.

§ 125. It was not enough that a majority of the votes cast should be in favor of the proposition. The law required a majority of all the voters. If the submission was at a regular election, then the number of votes cast for county officers should be taken as decisive of the number of qualified voters in the municipality. If the submission were at a special election, then the standard should be the vote at the general election immediately preceding. It has never been claimed that in any event bonds would be good, or could be made good, if a majority of the votes cast were against the issuance, however "innocent" the party holding them at some subsequent period might be.

§ 126. It will be seen that it was contemplated that the county or city should, in effect, go into partnership with the railroad company. At that early day the subscription was not probably looked upon as a gratuity. The stock subscribed was placed under the control of the county court or common council, as the

case might be, "in all respects as stock owned by individuals." It was not necessary that the municipality should take the stock as an original shareholder, or by subscription, strictly speaking, but it might be taken by purchase as well.

§ 127. In order to raise the money to subscribe for or purchase the stock, the custodian thereof, as just defined, was authorized to borrow money at a rate not exceeding ten per cent. per annum, and to "pledge the faith of the county or city for the annual payment of the interest and the ultimate redemption of the principal, or if the said judges or common council should deem it most advisable, they are hereby authorized to pay for such subscriptions or purchase in bonds of the city or county, making such subscription to be drawn for that purchase, in sums not less than $50, bearing interest not exceeding ten per cent. per annum."

128. There seemed to be considerable solicitude about the par value of the bonds. A proviso to the clause quoted in the foregoing section forbid the paying out of any bond at a rate less than par, and in authorizing the railroad company to accept the bonds, it is specified that it shall be at par "and in lieu of cash." To still further guard against discount it is declared that "no bonds shall be issued under the provisions of this act by any county or city except for the amounts required to be paid at the time of subscription." Lest other subscribers or purchasers should evade payment, while the municipality was held to its agreement, it is in the same connection asserted that the bonds shall be issued only "for the amounts of and at the time when assessments upon all the stockholders of said company shall be regularly assessed

and made payable." Having accepted the bonds at par the company was authorized to dispose of them the same as of other assets, except that the money realized had to be used in defraying construction expenses, or for the purchase of engines or cars. The exact language of this feature of the statute is, "the company is hereby authorized to issue their bonds, bearing interest not exceeding ten per cent. per annum for any money by them borrowed for the construction of their railroad and fixtures, or for the purchase of engines and cars, and for such purpose may dispose of any bonds by them received as aforesaid."

$129. No change in the statutes occurred until 1854, when a supplemental law was passed. That statute removed one of the restrictions of the original act. It authorized and empowered the custodian of the bonds (the court or common council, as the case might be,) to issue and deliver to the railroad company "the whole or any portion of the bonds of such city or county, payable on such subscription at any time hereafter, when in their opinion the interest of the city or county will be promoted thereby, whether the asessments upon the stockholders of said company have been regularly assessed and made payable or not.” This law dates from March 1, 1854.

§ 130. In a case recently decided by the United States district court of Northern Illinois, the court, Mr. Justice BLODGETT, held that where a county had voted to subscribe to the stock of a railroad company, and after such vote, and before the issuing of the bonds, such company consolidated with another with a different capital stock, termini, and board of directors, and changed its name, and the bonds were