never arises when the power has been exerted before the contract has been made. Impairment is conceivable as the result of a statute passed thereafter. Impairment is inconceivable when, at the time of the contract, the statute is in force. Statutes

then existing are read into the contract. They enter by implication into its terms. They no not change the obligation. They make it what it is. The statute which clothed the Commission with jurisdiction to increase charges, if found to be inadequate, was notice to municipalities that franchises thereafter granted must be coupled with no conditions inconsistent with the jurisdiction thus conferred. The Commission is now holding the city to terms which were accepted by implication when the conditions were imposed. This is not to 'transform a consent that was qualified into one that is absolute'

as the result of retroactive legislation. This is merely to give effect to the settled rule that contracts are made in submission to existing legislation. . . . We have held, in view of the constitutional provisions requiring the consent of municipalities to the construction and operation of railroads in their streets, that the statutes ought not to be interpreted as permitting the Public Service Commission in such circumstances to nullify existing contracts. We are now asked to hold that the municipalities by their contracts may nullify existing statutes. We will not go so far. . . . In thus holding, it may be prudent, even though unnecessary, to say that we decide the case before us, and no other. The conditions of other franchises may supply elements of distinction which cannot be foreseen. Contracts made after the passage of the statute may conceivably be so related to earlier. contracts, either by words of reference or otherwise, as to be subject to the same restrictions. We express no opinion upon these and like questions. They are mentioned only to exclude them from the scope of our decision. In deciding this case, we put our ruling upon the single ground that the franchise contract of October, 1912,

was subject to the statute, and by the statute may now be changed."

The power of the New York Public Service Commission to increase rates of fare established by agreement beween the city of Buffalo and certain street railway companies, known as the Milburn Agreement, was sustained in International R. Co. v. Public Service Commission (N. Y.) supra, affirming (1919) 188 App. Div. 944, 175 N. Y. Supp. 906, which affirms (1919) 106 Misc. 293, P.U.R.1919C, 390, 174 N. Y. Supp. 403. But in this case the agreement, which was ratified by the legislature, expressly provided that nothing therein should be construed to prevent the legislature from regulating fares of the companies; and the court said that this was not a case where demand was made on the Commission to abrogate a defeasance reserved by the local authorities as one of the conditions of a franchise, but a case where the local authorities, in imposing a condition, had consented that the legislature might change it, and thus had renounced the right of forfeiture or revocation that might otherwise be theirs; and that in the light of this provision amendment by legislation must be held to have been as much within the contemplation of the parties as amendment by agreement.

And the Public Service Commission was held in Niagara Falls v. Public Service Commission (1919) 108 Misc. 567, P.U.R.1920A, 175, 177 N. Y. Supp. 861, to have power to authorize an increase of fares of a street railway company in Niagara Falls, which it appeared was not receiving income sufficient to meet actual expenses of operation, notwithstanding limitation of fares in the railway franchise. The court said: "The municipal consent granted to the International Railway Company did not impose the fare provision as a condition. The charter of Niagara Falls does not limit street railroad fares. railroad fares. There is no special contract fixing the rate of fare recognized by the legislature, and no consent was granted for construction and operation within the city of Niagara Falls, which was required by the state

Constitution. It is quite apparent that the Public Service Commission has the delegated legislative power to regulate fares and to grant such a rate as will enable the carrier to live and to furnish transportation to the people of a community, except and unless the circumstances and conditions are extraordinary. . . . We gather that the doctrine of the Quinby Case is not to be extended to cover local consents or franchises which are based upon legislative enactment."

Also the jurisdiction of the New York Commission over rates of interurban railroads constructed on private rights of way, but across streets of municipalities, was sustained in Koehn v. Public Service Commission (1919) 107 Misc. 151, P.U.R.1919D, 953, 176 N. Y. Supp. 147, notwithstanding maximum rate provisions in the municipal consents accepted by the company, where the consents had been obtained since the passage of the Public Service Commission Law, and power to fix rates in and outside of the limits of such municipalities had not been conferred on them.

The position that the New York legislature, at least prior to the enactment of the constitutional provision requiring the consent of local authorities to the establishment of street railway lines, might have increased street railway franchise rates, was taken by the New York Public Service Commission in Re Van Brunt Street & E. B. R. Co. (1919; N. Y.) P.U.R.1919E, 723. And it is intimated that even since that time the legislature probably had such power.

That the Public Service Commission had the power to regulate gas rates, notwithstanding franchise provisions limiting the rate, was conceded in Warsaw v. Pavilion Natural Gas Co. (1920) 111 Misc. 565, 182 N. Y. Supp. 73, where the question was whether, by filing a new rate schedule with the Commission, the rate could be changed by the utility in advance of an order of the Commission authorizing the change.

The Railroad Commission of North Carolina, it was held in Southern Public Utilities Co. v. Charlotte (1919)

N. C. P.U.R.1920C, 907, 101 S. E. 619, has been granted power to increase or lower rates of street railways, although fixed by the terms of the franchise by virtue of which the company is occupying the streets of a municipality.

The North Dakota Commission held in Re Bismarck Gas Co. (1919; N. D.) P.U.R.1920A, 877, that it had jurisdiction to increase gas rates notwith standing a rate limitation in the franchise of the gas company, which had been construed by the supreme court of the state as a contract. Express power in this regard was apparently conferred on the Commission by a statute enacted in 1919 granting authority to the board of railroad commissioners cn applications for increases in rates over the maximum rates prescribed by franchise.

In the earlier note on this question in 3 A.L.R. on page 736, it is said that the rule in Ohio seems to be definitely settled that the municipalities in that state have the power, both constitutional and statutory, to make inviolable contracts as to rates. In accord with this rule is the recent case of Lima v. Public Utilities Commission (1919) Ohio St., 126 N. E. 319, holding that the Constitution of Ohio authorizes municipalities to contract with public utilities for their product or service to be furnished to the municipality or its inhabitants, and that when such contract, duly executed, fixes the rate for furnishing such prod uct, the Public Utilities Commission is not empowered to authorize the utility to exact payment of a rate in excess of that agreed upon.

The Ohio Commission held in United Fuel Gas Co. v. Ironton (1920; Ohio) F.U.R.1920C, 553, that a contract between a municipality and a gas company limiting the rate for gas might be enforced by the municipality whether the rate was adequate or otherwise, and the Commission had no jurisdiction to hear and determine the question whether it was just and reasonable.

The decision in Pawhuska v. Pawhuska Oil & Gas Co. (1917) Okla. P.U.R.1917F, 226, 166 Pac. 1058,

which is cited in the earlier note on the present question, was affirmed by the United States Supreme Court in (1919) 250 U. S. 394, 63 L. ed. 1054, P.U.R.1919E, 178, 39 Sup. Ct. Rep. 526, the court taking the view that the municipality was a mere agent of the state in contracting with a gas utility for the furnishing of gas at specified rates, and that where the state subsequently empowered the State Corporation Commission to fix rates of such utilities, and the municipality objected to a higher rate fixed by the Commission, no Federal question as to impairment of contracts was presented. In this case the power of rate regulation was expressly reserved, the state Constitution at the time the franchise was granted providing that no grant of any franchise or other use of the streets of any municipality should devest the state or any of its subordinate subdivisions of their control and regulation of such use; nor should the power to regulate charges for public services be surrendered.

In Hillsboro v. Public Service Commission (1920) Or., P.U.R.1920C, 817, 187 Pac. 617, a franchise providing for free hydrants to a municipality after a term of years was held to be a rate-making contract, and subject to modification by the Public Service Commission on application by the utility, so as to require the payment of a specified rate in lieu of the free hydrants. The court followed the case of Woodburn v. Public Service Commission (1916) 82 Or. 114, L.R.A. 1917C, 98, P.U.R.1917B, 967, 161 Pac. 391, Ann. Cas. 1917E, 996, which is cited in the earlier note on the present question, and which, the court said, conclusively determines that whenever a city enters into a franchise agreement with a public utility involving rates for service, the law reads into such a contract a stipulation by the city that the state may at any time exercise its police power and change the rates.

The validity of a statute empowering the Public Utilities Commission to hear complaints and to fix just and reasonable rates whenever it should determine that any existing rate or

fare was unjust or unreasonable, howsoever the same might have been originally established, was sustained in Memphis v. Enloe (1919) 141 Tenn. 618, P.U.R.1919F, 508, 214 S. W. 71, where a municipality which had an ordinance forbidding street railway companies from charging more than 5-cent fares sought to enjoin the Commission from hearing an application filed by a street railway company asking authority to charge a higher fare. The court, it seems, took the view that the state, even if it has delegated to a municipality the rate-fixing power, can thereafter change the rate, so far as the municipality is concerned, since the latter is merely an agent of the state.

It is pointed out in the note in 3 A.L.R. on pp. 736-8, that under the Constitutions and statutes of Ohio and Virginia municipalities have been held to have power to make inviolable contracts with public utilities as to rates. The decision of the Virginia supreme court in the reported case (VIRGINIAWESTERN POWER Co. v. COM. ante, 1148), in holding that municipalities have power to make franchise-rate agreements beyond the power of the state to alter against the consent of the municipality, is in accord with the decisions in these two states cited in the above note. The decision is also in accord with the rules laid down in the above note, that the grant by the state of power to make irrevocable rate contracts must be in clear and unequivocal terms, and the intent to make such a delegation of power must clearly and unmistakably appear, and will not be implied; and that the power of a municipality to make an inviolable contract as to rates is not to be inferred or implied from the power granted to a municipality to control its streets and regulate the use thereof by the public utility. It is stated in the opinion in the VIRGINIA-WESTERN POWER Co. CASE that the authorities recognize no difference in the power of a municipality by a franchise provision to make a contract binding on public utility companies with respect to rates to be charged the con- . suming public within the municipal

limits and with respect to rates to be charged the municipality itself. This point is treated in subdivision II. a, 4, of the note referred to, from which it appears that some authorities have noted a distinction in this regard.

The power of the Washington Commission to fix reasonable and sufficient rates at the request of the carrier, notwithstanding a franchise contract fixing rates, was sustained in State ex rel. Seattle v. Public Service Commission (1918) 103 Wash. 72, P.U.R.1918F, 810, 173 Pac. 737, where it was held that the Commission had power to authorize the discontinuance of the sale of commutation tickets by a street railway company, provided for in the franchise.

Without setting out more particularly the holdings in the' various decisions, which, for the most part, are of cumulative weight only, as precedents on the present question, in addition to the cases cited above and in the earlier note on this question,, attention is called to the following recent decisions, among possibly others, by the utilities commissions of the various states, which expressly or by implication sustain the power of the Commission to increase franchise or municipal contract rates:

Arkansas.-Re Arkansas Light & P. Co. (1920) P.U.R.1920D, 775; see also Stuttgart v. Arkansas Light & P. Co. (1920) P.U.R.1920D, 763.

Colorado.-Re Denver Gas & E. L. Co. Decision No. 216, I. & S. Docket No. 30, Nov. 9, 1918, cited in note P.U.R. 1919D, 139.

Idaho. Re Adams County Light & P. Co. Case F-232, Order No. 541, Dec. 26, 1918, cited in note in P.U.R.1919D, 139.

Illinois. Re Spring Valley Utilities Co. (1919) P.U.R.1919C, 839; Re Chicago R. Co. (1919) P.U.R.1919D, 573; Re Quincy R. Co. (1919) P.U.R.1919E, 390; Re Tri-City R. Co. (1919) P.U.R. 1919E, 836; Re Chicago, L. S. & S. B. R. Co. No. 7328, June 16, 1919, cited in note in P.U.R.1919F, 178 (power to fix reasonable rates notwithstanding ordinance prescribing rates); Re Mt. Carmel Public Utilities & S. Co. No.

7356, May 7, 1919, cited in note in P.U.R.1919F, 178.

Indiana. Re Northern Indiana Gas & E. Co. No. 4227, Feb. 21, 1919, cited in note in P.U.R.1919D, 139; Re Northern Indiana Gas & E. Co. (1919) P.U.R. 1919F, 567.

Kansas.-Re Kansas City R. Co. (1919) P.U.R.1919E, 132; Re Topeka, R. Co. Docket No. 2914, June 24, 1919, cited in note in P.U.R.1919F, 177.

Maine. Biddeford & S. Water Co. v. Itself (1920) P.U.R.1920B, 580; Lincoln County Power Co. v. Itself (1919) P.U.R.1919C, 862; Re Presque Isle Water Co. (1920) P.U.R.1920C, 976.

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Maryland.--Warfield v. Cumberland & W. Electric R. Co. Case No. 1603, Order No. 4977, June 5, 1919, cited in note P.U.R.1919F, 178 (utility has right to file with Commission schedule of rates in excess of franchise rates). Massachusetts.-Re Scituate Water Co. (1919) P.U.R.1919D, 844. Missouri. Re Edina Light Co. (1919) P.U.R.1919C, 515; Springfield City Water Co. v. Springfield (1919) P.U.R.1919D, 853; Re Joplin & P. R. Co. (1919) P.U.R.1919F, 171; Re United R. Co. (1919) P.U.R.1919F, 264; Re Missouri Gas & E. Service Co. Case No. 1548, April 28, 1919, cited in note in P.U.R.1919F, 177; Re Missouri Gas & E. Service Co. Case Nos. 1546, 1547, April 28, 1919, cited in note in P.U.R. 1919F, 177; Re Lafayette Teleph. Co. (1919) P.U.R.1920A, 169; Kansas City R. Co. v. Kansas City (1919) P.U.R. 1920A, 926.

Montana.-Re Mission Range Power Co. (1920) P.U.R.1920C, 56.

New Jersey.-Re Hackensack Water Co. (1920) P.U.R.1920C, 160.

New York.-Granville v. Granville Electric & G. Co. (1919) P.U.R.1919C, 540 (gas and electric rates); Sag Harbor v. Long Island Gas Corp. (1919) P.U.R.1919E, 163 (gas rates).

Pennsylvania.- Chamber of Commerce v. West Chester Street R. Co. (1919) P.U.R.1919D, 130; Allied Printing Trades Council v. Scranton R. Co. (1919) P.U.R.1919D, 133; New Castle v. Mahoning & S. R. & Light Co. (1919) P.U.R.1919D, 783; Beaver v. Beaver County Light Co. (1919) P.U.R.1919D, 894; Spencer v. Waverly, S. & A. Trac

tion Co. (1919) P.U.R.1919E, 559; Moore v. Valleys R. Co. (1919) P.U.R. 1919F, 493; East Pittsburgh v. Pennsylvania Water Co. (1919) P.U.R. 1919F, 631; Meadville v. Northwestern Pennsylvania R. Co. (1919) P.U.R. 1919F, 637; Tamaqua v. Eastern Pennsylvania Light, Heat & P. Co. (1919) P.U.R.1919F, 712; Sellersville v. Highland Gas Co. (1919) P.U.R.1920A, 321; Fox v. Pine Grove Electric Light, Heat & P. Co. (1919) P.U.R.1920B, 380; Re Lehigh Valley Transit Co. (1920) P.U.R.1920D, 584.

Utah.-Re Brigham City Municipal Corp. (1919) P.U.R.1919E, 339.

West Virginia.-Re West Virginia Traction & E. Co. (1919) P.U.R.1919E, 95.

Wisconsin-Milwaukee v. Railroad Commission (1920) P.U.R.1920B, 976. The note does not cover the question as to the conditions under which franchise rate increases will be granted by utility commissions, assuming that the power exists to authorize the increase. See, for example, Re St. Joseph

Transmission Co. (1920; Mo.) P.U.R. 1920C, 670, where the Missouri Commission denied an application for increase in rates for electricity, although holding that it had authority to grant the increase, where the rates were fixed in a franchise which had been entered into in January, 1918, during disturbed economic conditions inciIdent to the World War, the contract providing that it should be in force for ten years, and that the rates during this period should not be modified or changed. The view was taken that the rate increase should not be permitted in this instance, in view of the fact that the utility had only recently entered into the franchise contract, and had done so at a time when conditions were abnormal, that the Commission in any case would proceed with caution in interfering with this class of contracts, and only do so for the public interest where emergency conditions arose after the contract was made. R. E. H.

V.