The Constitution of the United States of America: Analysis and Interpretation Part 71

[1601] Ibid. 431.

[1602] Ibid. 435.

[1603] "The _Blaisdell_ decision represented a realistic appreciation of the fact that ours is an evolving society and that the general words of the contract clause were not intended to reduce the legislative branch of government to helpless impotency." Justice Black, in Wood _v._ Lovett, 313 U.S. 362, 383 (1941).

[1604] Wright, The Contract Clause of the Const.i.tution, 95 (Cambridge, 1938).

[1605] Farrand, Records, III, 548.

[1606] The Federalist, No. 44.

[1607] Works of James Wilson, I, 567, (Andrews, ed., 1896).

[1608] 2 Dall. 410 (1793).

[1609] Ogden _v._ Saunders, 12 Wheat. 213, 338 (1827).

[1610] 6 Cr. 87 (1810).

[1611] In Ware _v._ Hylton, 3 Dall. 199 (1797) the Court had earlier set aside an act of Virginia as being in conflict with the Treaty of Peace, of 1783, with Great Britain.

[1612] As given by Professor Wright in his treatise, The Contract Clause of the Const.i.tution, 22. Professor Wright dates Hamilton's pamphlet, 1796.

[1613] 6 Cr. 87, 139 (1810). Justice Johnson, in his concurring opinion, relied exclusively on general principles. "I do not hesitate to declare, that a State does not possess the power of revoking its own grants. But I do it, on a general principle, on the reason and nature of things; a principle which will impose laws even on the Deity." Ibid. 143. _See also_ his words in Satterlee _v._ Matthewson, 2 Pet. 380, 686 (1829); and those of the North Carolina Supreme Court in Barnes _v._ Barnes, 8 Jones L. 53 (N.C.) 366 (1861), quoted in Thomas Henry Calvert. The Const.i.tution and the Courts, I, 948 (Northport, L.I., 1924). In both these opinions it is a.s.severated that the contracts clause has been made to do the work of "fundamental principles."

[1614] 7 Cr. 164 (1812). The exemption from taxation which was involved in this case was held in 1886 to have lapsed through the acquiescence for sixty years of the owners of the lands in the imposition of taxes upon these. Given _v._ Wright, 117 U.S. 648 (1886).

[1615] Dartmouth College _v._ Woodward, 4 Wheat. 518 (1819).

[1616] It was not until well along in the eighteenth century that the first American business corporation was created: "This was the New London Society United for Trade and Commerce, which was chartered in Connecticut in 1732. It had, however, an early demise. Following this was a second Connecticut charter, namely, for building 'Union Wharf,' on 'Long Wharf,' at New Haven. A similar company, 'The Proprietors of Boston Pier,' or 'The Long Wharf in the Town of Boston in New England,'

was chartered by the Ma.s.sachusetts General Court in 1772. In 1768 the Pennsylvania a.s.sembly incorporated 'The Philadelphia Contributions.h.i.+p for the Insuring of Houses from Loss by Fire.' Alone of the colonial business corporations it has had a continuous existence to the present day.

"Apparently the only other business corporations of the colonies were companies for supplying water. One was incorporated in Ma.s.sachusetts in 1652, and three in Rhode Island in 1772 and 1773. Alongside of these corporations, and, indeed, preceding them, were a large number of unincorporated a.s.sociations, partners.h.i.+ps, societies, groups of 'undertakers,' 'companies,' formed for a great variety of business purposes. In the eye of the law all of them were probably mere partners.h.i.+ps or tenancies in common. Whaling and fis.h.i.+ng companies, so-called, were numerous. There were a number of mining companies, chiefly for producing iron or copper. There were some manufacturing companies, but they were not numerous. Banking inst.i.tutions were represented notably by the 'Bank of Credit Lumbard,' promoted in Boston by John Blackwell and authorized by the General Court in 1686, and by the 'Land Bank or Manufacturing Scheme' in the same colony in 1739-41.

"In addition to these there were a few insurance companies, a number of companies formed for the Indian trade, numerous land companies, large and small, a number of a.s.sociations for erecting bridges, building or repairing roads, and improving navigation of small streams or rivers.

Besides these there were a few colonial corporations not easily cla.s.sed, such as libraries, chambers of commerce, etc.

"During the Revolution few corporations of any sort were chartered.

After the conclusion of peace the situation was materially altered.

Capital had acc.u.mulated during the war. The disbanding of the army set free a labor supply, which was rapidly increased by throngs of immigrants. The day was one of bold experimentation, enthusiastic exploitation of new methods, eager exploration of new paths, confident undertaking of new enterprises. Everything conspired to bring about a considerable extension of corporate enterprise in the field of business before the end of the eighteenth century, notably after the critical period of disunion and Const.i.tution-making has pa.s.sed. Prior to 1801 over three hundred charters were granted for business corporations; 90 per cent. of them after 1789. Judged by twentieth-century standards these seem few, indeed, but neither in the colonies nor in the mother country was there precedent for such a development." 105 The Nation 512 (New York, Nov. 8, 1917), reviewing Joseph Stancliffe Davis, Essays in the Earlier History of American Corporations (2 vols., Harvard University Press, 1917).

[1617] In 1806 Chief Justice Parsons of the Supreme Judicial Court of Ma.s.sachusetts, without mentioning the contracts clause, declared that rights legally vested in a corporation cannot be "controuled or destroyed by a subsequent statute, unless a power be reserved to the legislature in the act of incorporation," Wales _v._ Stetson, 2 Ma.s.s.

143 (1806). _See also_ Stoughton _v._ Baker et al., 4 Ma.s.s. 522 (1808) to like effect; _cf._ Locke _v._ Dane, 9 Ma.s.s. 360 (1812) in which it is said that the purpose of the contracts clause was to "provide against paper money and insolvent laws." Together these holdings add up to the conclusion that the reliance of the Ma.s.sachusetts court was on "fundamental principles," rather than the contracts clause.

[1618] 4 Wheat., especially at 577-595 (Webster's argument); ibid. 666 (Story's opinion). _See also_ Story's opinion for the Court in Terrett _v._ Taylor, 9 Cr. 43 (1815).

[1619] 4 Wheat. 518 (1819).

[1620] Ibid. 627.

[1621] 4 Wheat. at 637; _see also_ Home of the Friendless _v._ Rouse, 8 Wall. 430, 437 (1869).

[1622] 4 Pet. 514 (1830).

[1623] 11 Pet. 420 (1837).

[1624] Note the various cases to which munic.i.p.alities are parties.

[1625] 4 Wheat. at 629.

[1626] In Munn _v._ Illinois, 94 U.S. 113 (1877) a category of "business affected with a public interest" and whose property is "impressed with a public use" was recognized. A corporation engaged in such a business becomes a "quasi-public" corporation, the power of the State to regulate which is larger than in the case of a purely private corporation.

Inasmuch as most corporations receiving public franchises are of this character, the final result of Munn _v._ Illinois was to enlarge the police power of the State in the case of the most important beneficiaries of the Dartmouth College decision.

[1627] Meriwether _v._ Garrett, 102 U.S. 472 (1880); Covington _v._ Kentucky, 173 U.S. 231 (1899); Hunter _v._ Pittsburgh, 207 U.S. 161 (1907).

[1628] East Hartford _v._ Hartford Bridge Co., 10 How. 511 (1851); Hunter _v._ Pittsburgh, 207 U.S. 161 (1907).

[1629] Trenton _v._ New Jersey, 262 U.S. 182, 191 (1923).

[1630] Newton _v._ Mahoning County, 100 U.S. 548 (1880).

[1631] Attorney General ex rel. Kies _v._ Lowrey, 199 U.S. 233 (1905).

[1632] Faitoute Iron & Steel Co. _v._ Asbury Park, 316 U.S. 502 (1942).

In this case the contracts involved were munic.i.p.al bonds, and hence "private" contracts; but the overruling power of the State in relation to its munic.i.p.alities was one of the grounds invoked by the Court in sustaining the legislation. _See_ Ibid. 509. "'A munic.i.p.al corporation *

* * is a representative not only of the State, but is a portion of its governmental power. * * * The State may withdraw these local powers of government at pleasure, and may, through its legislature or other appointed channels, govern the local territory as it governs the State at large. It may enlarge or contract its powers or destroy its existence.'" United States _v._ Baltimore & O.R. Co., 17 Wall. 322, 329 (1873); and _see_ Hunter _v._ Pittsburgh, 207 U.S. 161 (1907).

[1633] Butler _v._ Pennsylvania, 10 How. 402 (1850); Fisk _v._ Police Jury, 116 U.S. 131 (1885); Dodge _v._ Board of Education, 302 U.S. 74 (1937); Mississippi Use of Robertson _v._ Miller, 276 U.S. 174 (1928).

[1634] Butler _v._ Pennsylvania, 10 How. 420 (1850). _Cf._ Marbury _v._ Madison, 1 Cr. 137 (1803); Hoke _v._ Henderson, 15 N.C., (4 Dev.) 1 (1833). _See also_ United States _v._ Fisher, 109 U.S. 143 (1883); United States _v._ Mitch.e.l.l, 109 U.S. 146 (1883); Crenshaw _v._ United States, 134 U.S. 99 (1890).

[1635] Fisk _v._ Police Jury, 116 U.S. 131 (1885); Mississippi Use of Robertson _v._ Miller, 276 U.S. 174 (1928).

[1636] Hall _v._ Wisconsin, 103 U.S. 5 (1880). _Cf._ Higginbotham _v._ Baton Rouge, 306 U.S. 535 (1939).

[1637] Phelps _v._ Board of Education, 300 U.S. 319 (1937).

[1638] Dodge _v._ Board of Education, 302 U.S. 74 (1937).

[1639] Indiana ex rel. Anderson _v._ Brand 303 U.S. 95 (1938).

[1640] 7 Cr. 164 (1812).

[1641] Delaware Railroad Tax, 18 Wall. 206, 225 (1874); Pacific R. Co.

_v._ Maguire, 20 Wall. 36, 43 (1874); Humphrey _v._ Pegues, 16 Wall.

244, 249 (1873); Home of Friendless _v._ Rouse, 8 Wall. 430, 438 (1869).

[1642] 16 How. 369 (1854).