REPORT OF THE COMPTROLLER OF THE TREASURY. vii

It was contended by the Railway Company that the said Act
of 1880 being "An act to adjust and settle finally by agreement
all pending controversies between the State of Maryland and
the Northern Central Railway Company," was a valid contract,
and as such under the Constitution of the United States, which
prohibits a State from making any law impairing the obligation
of a contract, could not be put an end to or impaired by an act
of the Legislature of Maryland without the consent of the
company.

It was contended by the State that the Act of 1880, Chapter
16, did not constitute a contract between the said railway com-
pany and the State which was beyond the power of any subse-
quent Legislature to repeal or impair, because the provision in
the Constitution of 1850, antedating the charter of the company
(ch. 250 of 1854) provides, that all charters granted by the State
may be altered or repealed, a most wise provision and one incor-
porated in every constitution since that time, therefore the sail
Railway Company in accepting the consolidation of certain
railroads under ch. 250 of the Act of 1854 was presumed to
know that the immunity from taxation was liable to repeal by
future Legislatures.

It was further contended by the State that the Act of 1890,
imposing a tax of one per centum on the gross receipts of all
railroad companies, whose roads- are world by steam, incor-
porated by and doing business within the State, repealing all
acts in conflict therewith, repealed by necessary implication
Chapter 16 of the Act of 1880.

The contention of the State was thoroughly established by
the decision of the Court of Appeals of Maryland and after-
wards sustained by a decision of the Supreme Court of the
United States. Justice White in delivering the opinion of the
latter court, said that "where a legislature is inhibited by the
constitution from making an irrepealable charter it cannot
create a new contract and bring into being a new corporation,
and yet by the charter of such corporation give rise to the irre-
pealable contract which the constitution absolutely prohibits."

By reason of the great importance and value to the State of
this decision a brief history of the case may be given.