or restriction of the powers of such a corporation (Trustees of Dartmouth College v. Woodward) otherwise than as the right to do so may have been reserved by the state at the time of its creation (either by special provision in the charter or by general provision in the constitution or statutes in the state) would be an impairment of the contract with the state (see below, § 269). The provisions as to due process of law and equal protection of the laws are applicable to private corporations, which are deemed persons within the language of those clauses of the constitution, although they are artificial and not natural persons; a private corporation is in this sense a person, although it is not a citizen. (See below, § 259.)

One further distinction must here be made relating to the government control of private corporations. With reference to their property and business they are subject to the same supervision under the police power as private individuals. But so far as their business is public in its nature, such as the carriage of goods and passengers for hire, the supply of water, gas, electric light, and other public utilities, or the operation of pipe lines for the transmission of oil or gas, or of warehouses, telegraphs, and telephones, they are peculiarly subject to the police regulation as to rates. (Munn v. Illinois. See also above, § 48.)

97. Public Corporations Classified.

Powers and privileges are given by the state to public corporations, not for the individual benefit of the persons who are members of them, but for their collective benefit as a part of the people of the state, and membership in such corporations depends, not upon individual choice, but upon residence in a particular locality or within particular limits. It is evident, therefore, that the charter of a public corporation or the privilege granted to it to have corporate existence does not constitute a contract, the impairment of which is prohibited by the federal constitution relating to impairment of contracts by the states. (See below, § 269.) Consequently it is entirely optional with the legislature of a state to create such

§ 97] Public Corporations Classified.

169

public corporations as it sees fit, to change the laws relating to their powers and privileges whenever and however it is deemed to be advisable, and to discontinue them according to its best judgment, having in view the public interests, regardless of any claim of vested right. But so far as such corporations may be authorized to make contracts and own property, they may perhaps be said to have vested rights. which the legislature cannot directly interfere with. It has also been contended that there is a constitutional right of local self-government, that is, a right possessed by the people. composing a city or town to manage their own local affairs which cannot be taken away or substantially impaired by the state legislature. If the state constitution, either in express language or by implication, recognizes the right of local selfgovernment, then no doubt a limitation on the power of the legislature with reference to such public corporations as cities and towns may well be inferred. But as yet no such implied limitations have been agreed to and it will be impossible to discuss the matter more fully or accurately without an elaboration which would be out of place in an elementary treatise. While, as a general principle or theory, the right of local self-government is recognized, it by no means follows that a state legislature is limited otherwise than as its discretion may dictate in legislating with reference to the power of public corporations which can exist only as a result of the legislative will. At any rate, it is universally conceded that the state legislature may provide for changing the boundaries of public corporations and fixing the limits within which the powers conferred upon them are to be exercised.

In this connection it is proper to suggest a convenient division of public corporations into two classes. The term public corporation can properly be applied only to collections of persons to which are given some powers of local self-government and which are authorized to act in an independent and collective capacity. Such corporations are usually termed municipal corporations. But the state may be divided into counties, townships, or similar portions for general govern

mental purposes, including the ownership of property, without the people of such portions being given any corporate powers. Such divisions are created merely to facilitate the election of officers, the levying of taxes, and like purposes which the state can provide for as it sees fit. Counties and townships are therefore not public corporations in a proper sense and are not municipal corporations, but for convenience they are sometimes designated as quasi-corporations. The distinction between these two classes of corporations is not very definitely fixed, but some distinction is usually recognized. The state itself is sometimes spoken of as a public corporation, but only for purposes of convenience. It does not derive its authority from the federal government, nor from any other definite source except the will of the people as expressed in its constitution; and the rules respecting the powers which it may exercise are only remotely analogous to those recognized as applicable to corporations.

98. Power of the Federal Government to Create

Corporations.

As the federal government has only the powers which are expressly or by implication conferred upon it in the constitution, and as the constitution does not expressly provide for the creation of corporations by Congress, the power of Congress to create a corporation must exist, if at all, by implication. It is well settled, however, that Congress may, in the exercise of its implied powers, create corporations when their creation is a necessary and proper means of carrying out the powers conferred upon it (McCulloch v. Maryland). Thus, as Congress has the power to borrow money and regulate the currency, it may charter a United States bank with branches through which the financial operations of the government may be conducted; or it may, by general law, provide for the organization of national banks with authority to carry on a general banking business and issue currency. It has also, in the exercise of its power with relation to post offices and post roads and interstate commerce, chartered railroad companies with authority to

§ 98] Power of the Federal Government. 171

operate lines of road through different states and territories. No doubt the power to create private corporations and to regulate the corporations thus created might legitimately be further extended if Congress should deem it wise to do so. Municipal corporations within the various states must necessarily, however, derive their authority from the states and not from Congress. But in the portions of the territory of the United States which are not within the limits of any state and which are therefore subject exclusively to congressional legislation, Congress may create or provide for the creation of both municipal and private corporations as it sees fit.

It is apparent, therefore, that while Congress may regulate corporations created under its authority, and may also to some extent control the business of corporations engaged in interstate or foreign commerce (see above, § 93), it has no power to regulate other corporations (United States v. E. C. Knight Co.). The fact that state regulations are not applicable beyond the limits of the state, and that these regulations are by no means uniform as to their policy or their methods, has suggested the desirability of a further control by Congress which should be uniform throughout the states. But without an amendment to the federal constitution giving Congress further power, it does not seem possible to suggest any theory on which Congress can legislate with reference to corporations in general.

CHAPTER XVI.

OTHER ENUMERATED POWERS OF CONGRESS.

99. References.

*

NATURALIZATION: J. Story, Constitution, §§ 1102–1104; J. R. Tucker, Constitution, § 269; J. Kent, Commentaries, 423; T. M. Cooley, Constitutional Law, ch. iv, § 3; Henry Wheaton, International Law (Lawrence's ed.) Appendix, p. 891; A. B. Hart, Actual Government (Amer. Citizen Series) §9; Boyd v. Thayer (1892, 143 U. S. 135; McClain's Cases, 423); In re Rodriguez (U. S. Dist. Ct. 1897, 81 Federal Rep. 337; McClain's Cases, 434).

BANKRUPTCY: J. Story, Constitution, §§ 1105-1115; J. R. Tucker, Constitution, §§ 270, 271; T. M. Cooley, Constitutional Law, ch. iv, § 4; Baldwin v. Hale (1863, I Wallace, 223; McClain's Cases, 436); Ogden v. Saunders (1827, 12 Wheaton, 213; 7 Curtis' Decisions, 132; Thayer's Cases, 1590; Marshall's Decisions, Dillon's ed., 549); Sturges v. Crowninshield (1819, 4 Wheaton, 117; 4 Curtis' Decisions, 362; Thayer's Cases, 1582).

COPYRIGHTS AND PATENTS: J. Story, Constitution, §§ 1151–1156; J. R. Tucker, Constitution, § 277; T. M. Cooley, Constitutional Law, ch. iv, § 10; E. A. Drone, Copyright; A. H. Walker, Patents; A. B. Hart, Actual Government, §§ 492, 493; Wheaton v. Peters (1834, 8 Peters, 591; II Curtis' Decisions, 223; McClain's Cases, 480); Patterson v. Kentucky (1878, 97 U. S. 501; McClain's Cases, 489); Herdic v. Roessler (1888, 109 N. Y. 127; McClain's Cases, 495); Dale Tile Manufacturing Co. v. Hyatt (1888, 125 U. S. 46; McClain's Cases, 498); Trade-Mark Cases (1879, 100 U. S. 82).

WEIGHTS AND MEASURES: J. Story, Constitution, § 1122; A. B. Hart, Actual Government, § 213; The Miantinomi (1855, 3 Wallace, Junior, 46; Thayer's Cases, 2192); Weaver v. Fegely (1857, 29 Penn. State, 27; McClain's Cases, 471; Thayer's Cases, 2195).

Post-OFFICES AND POST-ROADS: J. Story, Constitution, §§ 1124-1150; J. R. Tucker, Constitution, §§ 274-276; T. M. Cooley, Constitutional Law, ch. iv, §9; Ex Parte Jackson (1877, 96 U. S. 727); In re Rapier (1892, 143 U. S. 110; McClain's Cases, 478; Thayer's Cases, 732).