insolvent laws were valid but had no extra-territorial or interstate effect, the Chief Justice said:

"Yet, when we consider the nature of our Union, that it is intended to make us, in great measure, one people, as to commercial objects; that, so far as respects the intercommunication of individuals, the lines of separation between the States are, in many respects, obliterated; it would not be a matter of surprise if, on the delicate subjects of contracts once formed, the interference of State legislation should be greatly abridged or entirely forbidden. . . . The power of changing the relative situation of debtor and creditor, of interfering with contracts a power which comes home to every man, touches the interest of all, and controls the conduct of every individual in those things which he supposes to be proper for his own exclusive management — had been used to such an excess by the State legislatures as to break in upon the ordinary intercourse of society, and destroy all confidence between man and man. The mischief had become so great, so alarming, as not only to impair commercial intercourse, threaten the existence of credit, but to sap the morals of the people and destroy the sanctity of private faith. To guard against the continuance of the evil was an object of deep interest with all the truly wise as well as the virtuous of this great community, and was one of the important benefits expected from a reform of the government."

If bankruptcy is a commercial regulation, and in order to its achievement control absolute and exclusive is essential of every person and thing within its scope, the same is true of all other commercial regulation.1

1 This has been asserted repeatedly on the floor of Congress: Jan. 15, 1799, Feb. 18, 1803, Jas. A. Bayard, of Delaware; Feb. 25, 1818, Whitman, of Massachusetts; May 26, 1824, Webster; in 1833, Story in his Commentaries; 1867, Stanley Matthews, later Justice

The individual members of a corporation are citizens of one State, of many States, or of a foreign country. Their corporate contract receives final sanction and protection in the courts of the United States. Citizens of the other States enjoy rights under the law of the land as set forth in the Constitution. Thus, while evidence is admissible in United States courts to show that members of a corporation are not citizens of the sovereign to whom it owes its charter,' yet the only power that can protect or limit them is the national government." There are corporations which exercise

of the Supreme Court, and by David Davis; April 15, 1878, John J. Ingalls; April 25, 1878, W. P. Frye; 47th Congress, Hoar on the Lowell Bill; Dec. 1, 1890, President Harrison's Message; 53d Congress, Dingley. They all asserted what Senator Hoar expressed most pithily as follows:

"Commerce and Manufactures know no State lines."

1 Louisville R. R. Co. v. Letson, 2 How. 497; 550; Ohio R. R. Co. v. Wheeler, 1 Black's Reports, 286, 296; Steamship Co. v. Tugman, 106 U. S. 118; Louisville Railway Co. v. Louisville Trust Co., 174 U. S. 552, 564.

Wisconsin passed an act granting a permit to foreign corporations on condition of their filing an agreement not to remove any cause to Federal courts. The Home Insurance Company filed such an agreement and received its permit. It afterwards wished to remove an action to the Federal courts. The Supreme Court of Wisconsin held that the corporation after filing the agreement was estopped to set up its foreign citizenship (Morse v. Home Ins. Co., 30 Wisc. 496), but on appeal this decision was reversed in the Supreme Court of the United States. The court laid down these rules: "1. The Constitution of the United States secures to citizens of another State than that in which suit is brought, an absolute right to remove their cases into the Federal courts, upon compliance with the terms of the Act of 1789. 2. The statute of Wisconsin is an obstruction to this right, is repugnant to the Constitution of the United States, and the laws in pursuance thereof, and is illegal and void. 3. The agreement of the insurance company derives no support from an unconstitutional statute and is void as it would be had no such statute been passed." Insur

powers which can only be regulated by the national government, as a railroad company engaged in interstate commerce, an interstate telegraph company, an interstate telephone company, a national banking company, and companies, or societies, exercising under the sanction of the nation powers necessary to the purposes of the national government. These companies can go no farther in their rights than in their responsibilities. If a company is willing to limit its operations to one State and its dealings to the citizens of one State, it would not be questioned that its affairs could be controlled within that State, where no basis for jurisdiction of the national courts or the application of an act of Congress arises, in the same manner as they could be controlled in a city or in a school district which the dealings of the corporation exclusively concerned. But if the corporation extends its activities over two or more States, then the only adequate control is under the law of the only government which represents these States the national government. As to activity limited to the territory and citizens of one State, the State government should exercise control. To this principle the obvious limitation exists that there are no such corporations except political corporations; that there is no citizenship the rights under which are limited to one State; and that the attempt to sever control, ance Co. v. Morse, 20 Wall. 445, 22 L. Ed. 365. See, however, Doyle v. Continental Life Ins. Co., 94 U. S. 535; Barron v. Burnside, 121 U. S. 186; Southern Pacific Co. v. Denton, 146 U. S. 202; Barrow S. S. Co. v. Kane, 170 U. S. 100; Blake v. McClung, 172 U. S. 239; Cable v. U. S. Life Ins. Co., 191 U. S. 288, 307; Dayton Coal & Iron Co. v. Barton, 183 U. S. 23, 25; Lafayette Ins. Co. v. French, 18 How. 407; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28; New York Life Ins. Co. v. Cravens, 178 U. S. 389; Hancock Mutual Life Ins. Co. v. Warren, 181 U. S. 73, 76.

which is based not upon what is done but what may be done,' has resulted, and always must result, in failure. The United States has been decided to be one and inseparable as regards commerce.' Commerce is intercourse, and the essence of that definition lies in the fact that this is a commercial nation, and that as to business it is a unit legally and practically. The corporation contract, as distinct from corporate activity, is in all cases under the protection of the Constitution. The only requirement of a corporate contract is that by its terms it adopt unequivocally the privileges and responsibilities of corporate existence.

$109. THERE IS NO HISTORICAL BASIS FOR STATE REGULATION OF CORPORATION CONTRACTS. Until the adoption of the Declaration, the colonies were themselves corporations, de jure or de facto. In the eighteenth century, however, they assumed to grant corporate privileges for business purposes.

"Down to 1741, when Parliament intervened and absolutely forbade, for the future, any American grants, there had been but three such, and during the whole of the eighteenth century, including the period subsequent to the Declaration of Independence, the number granted probably did not exceed two hundred and fifty.'

113

"No considerable impulse towards the granting of business charters was felt in any of the United States until after the adoption of the national Constitution. Of the charters granted prior to 1800 for moneyed corporations, two thirds were of a quasi-public character, and such as might have carried the right of eminent domain. Most of these 1 Trans-Missouri Freight Case, United States v. Trans-Missouri Freight Ass'n, 166 U. S. 290.

Moore v. U. S., 91 U. S. 270.

Baldwin, Two Centuries of Growth of American Law, 268.

were for the improvement of transportation facilities by roads, bridges, and canals, or by deepening rivers or harbors. Of the corporations whose business would bring them into daily contact with the people at large, irrespective of locality, there were less than eighty, the most considerable of which were twenty-eight banks and twenty-five insurance companies. By this time, however, the number of public and municipal corporations, religious societies, academies, library companies, and public quasi-corporations, such as drain companies, had become very large, and probably approached two thousand. The principles of freedom of incorporation or organization under general laws had been applied to them in several of the States, although only extended thus far to a single class of private corporations, and by a single State North Carolina, in the case of canal companies. The American corporation could only come into existence for the public good. Such franchises, under the principles of our government, could only be dealt out with an equal hand.”1

"The principle of free incorporation early found its way into American legislation, while it is now in England subject to some restrictions. The first general incorporation law, since the days of Queen Elizabeth, was enacted in New York in 1784. Delaware followed in the same line in 1787,2 and Pennsylvania followed in 1791.3 The system thus early inaugurated and since so extensively pursued, of free incorporation, offered to all on equal terms, removed the foundations of the common-law doctrine that to charter a corporation indicated special confidence in those named as corporators, and so implied a trust in the artificial person thus created which justified a liberal construction of its rights and powers."

1 Baldwin, Two Centuries of Growth of American Law, 276. Laws of Delaware, Ed. of 1789, II, 879.

Baldwin, Modern Political Institutions, 174, 179.

Baldwin, Two Centuries of Growth of American Law, 281.