special legislation upon this point a city government may act under the general powers conferred by its charter to do such things as may be necessary to the security and welfare of the people for preserving the peace, health and good luth, 49 Minn. 280; Dodge v. Council Bluffs, 57 Iowa, 560. "The New Orleans Water Works Company was in existence before the adoption of the present constitution of Louisiana, one of the articles of which, as we have seen, repeals the monopoly features in the charters of all her then existing corporations other than railroad companies. This case is, therefore, controlled by the decision just rendered in New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650. The two are not to be distinguished upon principle; for, if it was competent for the State before the adoption of her present constitution, as we have held it was, to provide for supplying the city of New Orleans and its people with illuminating gas by means of pipes, mains and conduits placed at the cost of a private corporation, in its public ways, it was equally competent for her to make a valid contract with a private corporation for supplying by the same means pure and wholesome water for like use in the same city. The right to dig up and use the streets and alleys of New Orleans for the purpose of placing pipes and mains to supply the city and its inhabitants with water is a franchise belonging to the State, which she could grant to such persons or corporations, and upon such terms as she deemed best for the public interests. And as the object to be attained was a public one, for which the State could make provision by legislative enactment, the grant of the franchise could be accompanied with such exclusive privileges to the grantee, in respect of the subject of the grant as in the judgment of the legislative department would best promote the public health and the public comfort, or the protection of public and private property. Such was the nature of the plaintiff's grant, which, not being at the time prohibited by the constitution of the State, was a contract, the obligation of which cannot be impaired by subsequent legislation, or by a change in her organic law. It is as much a contract, within the meaning of the Constitution of the United States, as a grant to a private corporation for a valuable consideration, or in consideration of public services to be rendered by it, of the exclusive right to construct and maintain a railroad within certain lines and between given points, or a bridge over a navigable stream within a prescribed distance above and below a designated point. It is idle to insist that this contract was prejudicial either to the public health or to the public safety, as might, perhaps, be said to be the case if the State, after making it, was prevented from exercising any control whatever over the matter of supplying the city and its inhabitants with water. But, notwithstanding the exclusive privileges granted to the plaintiff, the power remains with the State, or with the municipal government of New Orleans, acting under legislative order of the public, and for making such contracts as may be essential to the welfare of the municipality. In Georgia it has been held that under a power conferred by the legislature upon a municipal corporation, to make all contracts authority, to make such regulations as will secure to the public the uninterrupted use of the streets, as well as prevent the distribution of water unfit for use, and provide for such a continuous supply, in quantity, as protection to property, public and private, may require. In the case just decided we said: 'The constitutional prohibition upon State laws impairing the obligation of contracts does not restrict the power of the State to protect the public health, the public morals, or the public safety, as the one or the other may be involved in the execution of such contracts. Rights and privileges arising from contracts with a State are subject to regulations for the protection of the public health, the public morals, and the public safety, in the same sense as are all contracts and all property, whether owned by natural persons or corporations. New Orleans Water Works Co. v. Rivers, 115 U. S. 674, 680. A contract with a municipal corporation, whereby the corporation grants to the contractor the sole privilege of supplying the municipality with water from a designated source for a term of years is not impaired, within the meaning of the contract clause of the constitution, by a grant to another party of a privilege to supply it with water from a different source. Stein V. Bienville Water Supply Co., 141 U. S. 67. "The construction and effect to be given to the contract between the State and the grantee of a fran chise have been the subject of much discussion, and the view of Chancellor Kent at one time was that, although the creation of the franchise be declared exclusive, yet it is necessarily implied in the grant, as in the case of the grant of a ferry, bridge or turnpike or railroad, that the government will not either directly or indirectly interfere with it, so as to destroy or materially impair its value. All grants or franchises ought to be so construed as to give them due effect by excluding all contiguous competition which would be injurious and operate fraudulently upon the grant.' (3 Kent's Com. 469; Newburgh Turnpike Co. v. Miller, 5 Johns. Ch. 101.) Whatever support that rule may seemingly have in reason or propriety, it is not now available to that extent for the beneficial protection of the grantee in the exercise of his franchise, but, on the contrary, public grants are to be so strictly construed as to operate as a surrender by them of the sovereignty -no farther than is expressly declared by the language employed for the purposes of their creation. The grantee takes nothing in that respect by inference. Such is deemed the legal intent of the State in imparting to its citizens or corporations powers and privileges of public character. And. therefore, except so far as they are by the terms of the grant made exclusive, the power is reserved to grant and permit the exercise of competing and rival powers and in their corporate capacity, which they may deem necessary for the welfare of the city, and which do not conflict with the constitution and laws of the Federal or State government, they have the right to make a contract for the construction of water works.1 A contract between two corporations, under which one supplies the water to the other, or makes the other a special and exclusive agent, has been upheld. In a recent and very important case, it was held that a contract making a water company the exclusive agent of a flume company for the sale and distribution of water within the corporate limits of a city to consumers of water, all sales of water being subject to the approval of the flume company, is not illegal, nor beyond the powers of either of the corporations, nor is such contract against public policy, as being a combination between the corporations for the purpose of creating a monopoly for the sale of water to the city and its inhabitants, nor as injuriously affecting the interests of the city or its inhabitants. A contract between corporations for a common supply of a city and its inhabitants with water through one distributing system at reasonable rates, whereby the interests of the city is furthered in that its streets are not subjected to the burden of laying * privileges, however injurious they make such by-laws, rules and regulations as the public interest or welfare of the city may require. Milhau v. Sharp, 27 N. Y. 611; New York v. Second Ave. R. R. Co., 32 N. Y. 261; Richmond Co. Gas Light Co. v. Middleton, 59 N. Y. 228; Gale v. Village of Kalamazoo, 23 Mich. 344; s. c.. 9 Am. Rep. 80; Logan v. Pyne, 43 Iowa, 524; s. C., 22 Am. Rep. 261; Des Moines Gas Co. v. City of Des Moines, 44 Iowa, 505; s. C.. 24 Am. Rep. 756; Norwich Gas Light Co. v. Norwich City Gas Co., 25 Conn. 19." Bradley, J., in Syracuse Water Co. v. City of Syracuse, 116 N. Y. 167, 178, 180. 1 Mayor v. Cabot, 28 Ga. 50. and keeping in repair an additional system of mains and pipes, is not an unreasonable restriction of competition between the parties; nor does public policy condemn or prohibit an arrangement intended to prevent a competition between corporations which would result in the financial ruin of one or both of them, and which could not in any event benefit the city or its inhabitants. Where water can be supplied more cheaply through one distributing plant by two corporations, the governing body of the city in whom is vested the power to fix water rates is bound to take that fact into consideration, as well as all other facts which enable it to fix reasonable rates and award a just compensation, and an agreement between such corporations for a common supply, through one distributing plant, cannot increase the rate of compensation to be paid by the city or its inhabitants for the water supplied. The agreement between the flume company and the water company, making the latter an exclusive agent for the sale and distribution of water in the city limits, and providing for a distribution of profits, does not create a partnership between the two corporations, but only a limited agency with a mode provided of determining the compensation to be received by the flume company for the water furnished by it to the water company.1 § 125. The Subject Continued.-It has been held that a committee of a municipal corporation, unless specially authorized, has no power to bind the city by a contract for the introduction of a new and expensive improvement in a system of water works. Such power can be exercised only under a corporate act. In Tennessee it has been held that the power to make a contract for the introduction of a new and expensive improvement in a system of water works, being equivalent in general to the power to levy, collect and disburse taxes, must be exercised in the same manner and by the same authority, that is, by a corporate act. There being no general law or ordinance modifying this rule, a water works 1 San Diego Water Co. v. Flume Co., 108 Cal. 549. committee had no power to bind a corporation by a contract of this character. In a case in Minnesota, it was held that, under the statute, the board of water commissioners of St. Paul is invested with authority to make contracts with reference to the water works in its own name, as the representative of the city. This is not the creation of a corporation within the inhibition of the constitution. The contracts which the board is thus authorized to make are, in effect, made with as well as for the city. The statute which requires contractors for doing any work or furnishing any material to or for said city, to enter into a bond with the city for the use of all persons who may do work or furnish materials pursuant to any such contract, is applicable to the case of a contract made by the board of water commisioners in its own name, within the scope of its authority, in reference to water works, and the bond may be taken by the board in its own name.2 Where a municipal government has entered into a contract that is illegal, as conferring a monopoly, the tax payers of the city may maintain a bill in equity to enjoin it from carrying out the contract. The fact that such contract, if carried out, would increase the burden of taxation, and thus inflict an injury upon the plaintiffs, would be a sufficient ground for the action.3 1 Mayor v. Hagan, 9 Baxt. 495. 2 Morton v. Power, 33 Minn. 521. 3 Davenport v. Kleinschmidt, 6 Mont. 502. The city charter of Helena contains the following provisions: "The city council shall have power to provide the city with water, erect hydrants and pumps, build cisterns, and dig wells in the streets for the supply of engines and buckets (Sec. 8. page 8), to provide for the prevention and extinguishment of fires.' (Sec. 18, page 9.) Under the powers to provide the city with water, and to erect hydrants, and to provide for the prevention and extinguishment of fires are doubtless included, as necessarily incident thereto, or implied therein and essential thereto, the power to do this by agents employed for that purpose and to make contracts with individuals or other corporations to do the same. The city could scarcely accomplish such objects in any other way; and it is hardly probable that any other method was contemplated in the granting of the charter. Though, doubtless, the city council would cause water works to be built, and own, operate and control them thereafter as the property of the city, the charter does not limit the city corporation to either one method or the other. Any appropriate means necessary to carry |