States, and cannot be controlled by them. From this, which may be almost termed an axiom, other propositions may be deduced as corollaries, on the truth or error of which, and on their application to this case, the cause has been supposed to depend. These are: First. That a power to create implies a power to preserve. Second. That a power to destroy, if wielded by a different hand, is hostile to and incompatible with these powers to create and preserve. Third. That where this repugnancy exists, that authority which is supreme must control, not yield to that over which it is supreme."

While this may be true of corporations which are to be formed in the future, yet could the present corporations, which, acting under State laws,' are engaged in interstate commerce, be forced to come under the national law? There seems to be no reason why Congress could not so force them. No constitutional

2

1 The Home Insurance Company's Case, 8 Ct. of Claims, 449 (1872), affirmed by U. S. Supreme Ct., 22 Wall. 99, decided practically the same question as Texas v. White, 7 Wall. 700, and followed the doctrine of an indestructible Union of indestructible States. All acts of the rebellious States were deemed valid except those supporting rebellion. "Applying to the charter of the Home Insurance Co. the test indicated, we find it was intended as a means of regulating the domestic affairs of the State, in which work in every civilized State the creation [sic] of corporations bears no inconsiderable part." See Scott's Cases on International Law, P. 59, 61, n.

There is a strong tendency toward extending the scope of interstate commerce. In Lowry v. Montague, 193 U. S. 38, decided Feb. 23, 1904, it was said: "The purchase and sale of tiles between the manufacturers in one State and the dealers in California was interstate commerce as defined in the Addyston Pipe Case. It was not a combination or monopoly among manufacturers simply, but one between them and the dealers in the manufactured article, which was an article of commerce between the States."

provision stands in the way of Congressional action of this kind. That Congress has omitted or neglected to exercise powers granted to it by the Constitution gives no person the right to assume that it will never exercise them. One has no vested right to enjoy franchises conferred upon him by State authority when Congress chooses to assert its paramount right. If it is true that a corporate charter is a contract between the corporation and the State granting it, yet the prohibition upon laws impairing the obligation of contracts applies to the States alone, not to Congress.' It could hardly be claimed that the use of an unused power by Congress was not "due process of law."

When the national government again took up the control of banking corporations which it had relinquished in 1836, it wished no interference on the part of the State banks, so far as the issuing of paper money was concerned. No direct prohibition was placed upon the money of the State banks, but an equally effective means of suppression was found in the levying of a tax of ten per centum on all notes issued by them. The constitutionality of this law was, of course, soon tested, and the matter was considered by the Supreme Court in the case of Veazie Bank v. Fenno.2 One ground of objection to the tax was that it was so excessive as to impair the franchise granted by the State. The opinion of the court, given by Chief Justice Chase, after stating that Congress had the undoubted right to provide a circulating medium for the country, proceeds as follows:

1 Sinking Fund Cases, 99 U. S. 700.

8 Wall. 533.

"Having thus in the exercise of undisputed constitutional powers, undertaken to provide a currency for the whole country, it cannot be questioned that Congress may constitutionally secure the benefit of it to the people by appropriate legislation. To this end Congress has denied the quality of legal tender to foreign coins, and has provided by law against the imposition of counterfeit and base coin on the community. To the same end, Congress may restrain by suitable enactments the circulation as money of any notes not issued under its own authority. Without this power, indeed, its attempt to secure a sound and uniform currency or this country must be futile."

The effect of this decision is obvious. It means that Congress can tax out of existence any corporation. which enters upon the sphere of Federal control. And the power to impose a tax which renders a profitable continuation of a business impossible, is as effective as the power to prohibit a business altogether. "It is true," as Mr. Justice Nelson, in his dissenting opinion, pointed out, "that the present decision strikes only at a power to create banks, but no person can fail to see that the principle involved affects the power to create any other description of corporations, such as railroads, turnpikes, manufacturing companies, and others."

116. NATIONAL DETERMINATION OF CORPORATE STATUS. But we have created artificial difficulties in order to remove them. Hamilton did not rely upon any comparison between the powers of the nation and those of the States, but went directly at the matter by resting the power of the national government upon the admitted fact of national sovereignty. Even if there were a question of the denial of certain powers to the

States which they might otherwise have, not even that fact deserved investigation when it was shown that the alternative, resulting from surrender to the States, would be to destroy the powers of the national government. The theory of free incorporation and the theory of the identity of commerce and industry remove the errors upon which the right of the State to hold up national industry is based. Bronson, J., who wrote the learned opinion in Sackett v. Andross,' declaring the National Bankrupt Act constitutional, said, in Thomas v. Dakin,' the case in which the General Banking Act of April 18th, 1838, was tested as to its constitutionality, in a concurring opinion:

"I cannot concur that the legislature has the constitutional power to provide by general law for the creation of an indefinite number of corporations at the pleasure of any persons who may associate for that purpose."

We are prone to give too great weight to the artificial attributes that have been so often bestowed in argument upon the States. The attributes of the nation are, from the very fact of remaining unquestioned, lost sight of.

It may be asked, what would become, if all corporations were to depend upon a national statute, of the de facto corporations? The States have all come to act

1 5 Hill (N. Y.), 317.

2 22 Wendell, 9.

3

See State v. Stevens, 92 N. W. Rep. 420; and Mavor v. Stevens, ibid., and a note in Harvard Law Review, March, 1903. In these cases an attempt was made to organize a banking corporation when there was no statute authorizing it. Later the statute was passed, but the bank took no steps to comply. The bank was held to be a de facto corporation. Note that this was not the ordi

upon the conclusion of the common law that a corporation is nothing more than a public contract for the peculiar conditions of which the law makes special provisions. The general corporation laws in all the States recognize this. They are nothing more than a recording statute for the publication of the terms upon which the incorporators have associated themselves an admission that the terms of a charter never were "Be it enacted," but "It is hereby certified," so that all concerned may have notice. The theory of the general corporation law of New Jersey, the most prolific creator of "Certificates of Incorporation," is that a corporation has the powers which it specifically claims under the law.1 And this is true of de facto corporations. To say that these powers are the gift of the sovereign State of New Jersey or a contract with the State is absurd. In all the States these corporations exist under the common law subject to common law regulation by State and nation, and the general law of the State not only does not destroy the common law but is forced to rest upon it. A general law for the nation would, likewise, find its sanction and its expression in the common law and would disturb no properly vested rights of corporations.

nary private corporation, but of the class of railroads and telephone companies. The same theory is the basis of the corporation law of New Jersey (Revision of 1896), notes to sec. 1, on powers of corporations and cases cited. Either Dill or Corbin Edition. Blackstone, * p. 469, " tres faciunt collegium."

1 Dill, New Jersey Corporations, notes to sec. 1.