to exercise this power would not be recognized in that State. The formal right to be may be granted for use anywhere, the substantial right to use public property is the real gift of the State. For such purposes as using public property or exercising a public calling the corporations organized under national laws are by the States considered to be foreign. If the property used is that of a city, the real creator of that which is the subject of public regulation is the city which granted the property and the right to use it.

"The term, other governments, as used in 2 Rev. Stat. p. 281, defining a foreign corporation to be one created by the laws of any other State, government, or country than Indiana, applies to the government of the United States. "1

"A national bank is a foreign corporation, under Code of Procedure, sec. 227, defining a foreign corporation to be a corporation created under the laws of any other State, government, or country.

1 2

"A national bank organized under act of Congress is a foreign corporation within 2 Rev. Stat. p. 457, sec. 2, allowing foreign corporations created by the laws of any other State or country to prosecute a suit in this State, on giving security for costs.

"3

"A corporation created in the District of Columbia by an act of Congress is not a corporation for the entire Union, and can do business outside of the District only under comity of States, on the same terms as other foreign corporations."

1 Daly v. Nat'l Life Ins. Co., 64 Ind. I.

2 Cooke v. State National Bank, 50 Barb. 389; 52 N. Y. 96. National Park Bank v. Gunst, 1 Abbott, N. C. 292. In 1836 the Bank of the United States, in a suit by it, was obliged to produce an exemplification of its charter. U. S. Bank v. Stearns, 15 Wend. 314; the United States is a foreign corporation, In re Merriam, 141 N. Y. 479, but § 227 is now repealed and see § 3343.

4 Hadley v. Freedman's Savings and Trust Co., 2 Tenn. Ch. 122.

"But a corporation chartered by Congress is neither an alien nor a citizen of another State. It has a legal existence in every one of the United States.

"Where a corporation is organized by an act of Congress, the determination of whether it is a foreign or domestic corporation depends on whether or not it is located within the State. " 2

"A company incorporated by an act of Congress is not a foreign corporation within the meaning of Revenue Act, June 7, 1879, and although it does business in the State, is not, therefore, obliged to take out a license, and to pay the tax, provided for by said section,"

It is well established now that the power of Congress to govern the territories is absolute. The corporations created by the legislature of the territory are subject to such provisions as Congress may make. Yet, on the admission of a territory as a State into the Union, corporations created by the legislature of the territory become corporations of the State.1

§ 29. STATE CONTROL IS LIMited to the Exercise OF POLICE POWER AND THE TAXATION OF PROPERTY FOR PURPOSES OF LOCAL GOVERNMENT. The true rule which stands out through all the decisions is that the State governments may exercise the police power over the corporations of the other States and of the national government and may tax their property, but that such exercise is subject to the Constitution and the laws of the United States. This is made

1 Eby v. Northern Pacific R. R. Co., 13 Phil. 144.

2 First Nat'l Bank v. Doying, 2 Civ. Proc. Rep. Pa. 61. Commonwealth v. Texas & Pac. R. Co., 98 Pa. St. 90; Eby v. Northern Pac. R. R. Co., 13 Phil. 144.

Kansas Pacific Ry. Co. v. Atch., Topeka & Santa Fé R. R. Co., 112 U. S. 414.

clear in the succeeding sections by an examination of some of the leading cases upon the police and other powers which the State governments assume to exercise supposedly in concurrence with the national government but really in the exercise of the right of local self-government.

$30. THE POWER TO CREATE CORPORATIONS.

"Unlike the State legislatures," it is said, "Congress has no inherent power to create corporations, for its powers of legislation are only such as are conferred upon it by the Constitution of the United States. That instrument, in addition to conferring upon Congress various specific powers, provides that it shall have the power 'to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.' Under this provision Congress has the power to create a corporation whenever the corporation is a necessary or proper means for carrying into execution any power which is conferred by the Constitution upon the government of the United States, or upon any department or officer thereof.2 In no other case has it any power to create a corporation when acting as the legislature of the United States." 3

This is true upon the principle enunciated by Dicey:

"Every legislative assembly existing under a federal constitution is merely a subordinate law-making body, 1 Const. Art I, sec. 8. cl. 18.

' McCulloch v. Maryland, 4 Wheat. 316; Osborn v. Bank, 9 Wheat. 738; Brown v. Maryland, 12 Wheat. 419; Weston v. Charleston, 2 Pet. 466; Farmers' & Mechanics' National Bank v. Dearing, 91 U. S. 29.

• Clark & Marshall on Private Corporations, Vol. I, p. 113, sec.

whose laws are of the nature of by-laws, valid whilst within the authority conferred upon it by the Constitution, but invalid or unconstitutional if they go beyond the limits of such authority." 1

But this is true of the States as well, and it cannot be shown that the States have been given the right expressly to create corporations. An examination of the subject by Judge Simeon E. Baldwin showed that no such right was assumed before 1789.2 But the assumption of an implied power by States does not deny the power to the United States. An implication of power for this purpose in the States would give force to a similar implication in the nation.

It is admitted that for certain purposes the power to create corporations was implied to Congress by the Constitution. And the national government was not restrained by the provision concerning the impairment of contracts which denied to the States that control of artificial persons necessary for the protection of the public. Any power, whether reserved or not to the States, is as little capable of exercise by the States, if it conflicts with the Constitution, as by the national government, on the ground of want of express grant. The power of regulating the formation of corporations is as natural to the province of the national government as it is in theory, and has proved in practice, incapable of effective exercise by the States. The admission of the power of Congress to create corporations for specific enumerated purposes goes too far, in the absence of specific prohibition, to permit

1 The Law of the Constitution, 140.

' Corporations before 1789, Am. Hist. Review, Vol. VIII, p. 449, and in Two Centuries of Legal Growth.

of the denial of the right to create corporations.' The Supreme Court has recognized the rule that those who have the power may not be restricted as to the means. The right to create a corporation as a means to an object specified in the Constitution cannot be said to be a prohibition of the right, but rather an assertion of the capacity of the national government for the exercise of the means. And the exercise of a means without specific grant of the means is proof of the power of the government to exercise that means without express grant whether as a means or as a power. The national government is that kind of government to which let us not say the creation but rather the recognition of the existence of artificial persons is the natural and exclusive prerogative, namely, the government of a nation; this the State governments are not. The national government does in fact through its control of the District of Columbia exercise to the fullest extent that supposedly sovereign function of certifying that A, B, and C, have incorporated themselves for certain purposes, with a certain capital, and certain powers. Thus without drawing upon the truly national power Congress may provide for the incorporation of companies to the same extent as any State. The nation, then, has a deeper source of power than the States.

This is only half seen by Dicey:

"A Federal State derives its existence from the Constitution just as a corporation derives its existence from the grant by which it is created. Hence every power, executive, legislative, or judicial, whether it belong to the nation or to the individual States, is subordinate to and controlled

1 Gibbons v. Ogden, 9 Wheat. 1.