*271 security, industry, *trade, and the arts, revived in Italy, France, Spain, Germany, Flanders and England; and to the institution of civil or political corporations, with large charter privileges, may be attributed, in some considerable degree, the introduction of regular government and stable protection, after Europe had, for many ages, been deprived by the inundation of the barbarians, of all the civilization and science which had accompanied the Roman power.a

But although corporations were found to be very beneficial in the earlier periods of modern European history, in keeping alive the spirit of liberty, and in sustaining and encouraging the efforts for social and intellectual improvement, their exclusive privileges have too frequently served as monopolies, checking the free circulation of labour, and enhancing the price of the fruits of industry. Dr. Smithb does not scruple to consider them throughout Europe, as generally injurious to the freedom of trade, and the progress of improvement. The propensity, in

Stephens, in their History of Boroughs and Municipal Corporations in the United Kingdom, vol. i. Int., London, 1835, contend, that there were no municipal incorporations until the reign of Henry IV., though boroughs existed in England from the earliest period; and the burgesses were the permanent, free, and privileged inhabitants and householders sworn and enrolled at the court leet. The terms corporation and body corporate first appear in the reign of Henry IV., in any public document. The first charter of incorporation to a municipal body was granted, under Henry VI. Afterwards, under Edw. IV., the doctrine was first advanced in the common pleas, that the existence of corporations might be inferred from the nature of the grant, without words of incorporation. Ibid. Int. 34.

Smith's Inquiry into the Wealth of Nations, vol. i. p. 395–401. Robertson's Charles V., vol. i. p. 31. 34. Hallam on the Middle Ages, vol i. p. 78-80. Prescott's History of Ferdinand & Isabella, vol. i. Int. p. 14-18. 53-56. The Castilian cities in Spain anticipated the cities of Italy, France, England and Germany, in the acquisition of valuable privileges and jurisdictions.

b Inquiry, vol. i. p. 62. 121. 130. 132. 139. 462.

• The monopoly or restrictive system which protected the industry of privileged individuals, by confining the exercise of business as traders, manufacturers and mechanics, to persons licensed, or who had undergone ap

modern times, has, however, been to multiply civil corporations, especially in the United States, where they have increased in a rapid manner, and to a most astonishing extent. The demand for charters of incorporation is not merely for municipal purposes, but usually for the more private and special object of assisting individuals in their joint stock operations and enterprising efforts, directed to the business of commerce, manufactures, and the various details of internal improvement. This branch of jurisprudence becomes, therefore, an object of curious as well as of deeply interesting research. The multiplication of corporations, and the avidity with which they are sought, have arisen in consequence of the power which a large and consolidated capital gives them over business of every kind; and the facility which the incorporation gives to the management of that capital, and the security which it affords to the persons of the members, and to their property not vested in the corporate 'stock. The convention of the people of NewYork, when they amended their constitution, in 1821, endeavoured to check the improvident increase of corporations, by requiring the assent of two thirds of the members elected to each branch of the legislature, to every bill, for creating, continuing, altering, or renewing, any body politic or corporate.a Even this provision

*272

prenticeships and examinations, destroyed free competition and perfection in the mechanic arts. The policy still prevails in many parts of continental Europe, and in considerable vigor in Sweden. Laing's Travels in Sweden, 1838. In England the Statute Concerning Monopolies of 21 J. 1. c. 3, which was a magna charta for British industry, was a declaratory act, and declared that all monopolies and all licenses, charters, grants, letters patents, &c., " to any persons or bodies politic for the sole buying, selling, making, working, or using of any thing within the realm," were unlawful and void, with the exception of patents for 21 years for inventions, &c., and of vested corporate rights, relative to trade. This statute, said Mr. Hume, contained a noble principle, and secured to every subject, unlimited freedom of action, provided he did no injury to others, nor violated statute law.

This provision it has been said only applied to private and did not ap

seems to have failed in its purpose, for in the session of 1823, being the first session of the legislature, under ope

ply to public or municipal corporations. Nelson, Ch. J., in the case of The People v. Morris, 13 Wendell, 325. Walworth, Ch., in Warner v. Beers, 23 Wend. Rep. 126. Purdy v. The People, 4 Hill's Rep. 391. But it was decided by the supreme court of New-York in De Bow v. The People, 1 Denio, 1, and by the court of errors in the case of Purdy v. The People that the constitutional check extended to all corporations whether public or private, and that to ascertain whether a bill requiring a vote of two-thirds of each house was properly passed, the courts may look beyond the printed statute book, to the original certificates endorsed on the bill, and even to the journals kept by the two houses. The constitution of Michigan requires the assent of two-thirds of the members of each house of the legislature to every act of incorporation. The constitution of New-Jersey also requires threefifths of the members elected to each house to pass any charter for banks or moneyed corporations, and all such charters to be limited to a term not exceeding 20 years. The Revised Constitution of New-York in 1846, imposed further restraints upon the creation, and further responsibilities upon the duties of corporations. It declared that corporations might be formed under general laws but should not be created by special act, except for municipal purposes, and in cases where general laws would not enable them to attain their object. The term corporation in the article was to be construed to include all associations and joint stock companies, having any of the powers and privileges of corporations, not possessed by individuals or partnerships. No act was to be passed granting any special charter for banking purposes, but corporations may be formed for such purposes under general laws. The legislature may provide for the registry of all bills and notes issued as money and require ample security for the redemption of them in specie. The stockholders in every corporation and joint stock association for banking purposes, issuing notes of any kind to circulate as money, after the 1st of January 1850 are to be indivdually responsible to the amount of their respective shares therein, for all its debts and liabilities contracted after that day. In case of insolvency of any bank or banking association, the bill-holders to have preference over all other creditors. Constitution of N. Y. of 1846, art. 8. The Constitution makes it the duty of the legislature to provide for the organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts and loaning their credit; so as to prevent abuses thereof. So the legislature itself is prohibited from giving or loaning in any manner the credit of the state to, or in aid of any individual, association or corporation. Const. art. 7, sec. 9. There has been a constantly increasing prejudice in this country against civil and especially moneyed corporations, ever since President Jackson, during his administration, commenced and carried on an unrelenting hostility to the bank of the United

ration of this check, there were thirty-nine new private companies incorporated, besides numerous other acts,

States, and which terminated in the final extinction of that bank. The constitution of Wisconsin established in 1846 went to the utmost extreme in its hostility to all banking institutions. It declares that there shall be no bank of issue within that state; that the legislature shall not have power to authorize or incorporate any institution having any banking power or privilege, or confer any banking power or privilege on any institution or person; that no corporation or person within that state under any pretence, shall make or issue any paper money, note, bill, certificate, or other evidence of debt, intended to circulate as money; that no corporation within that state, under any pretence, shall exercise the business of receiving the deposits of money, making discounts, or buying or selling bills of exchange, or do any other banking business whatever; that no bank or agency of any bank or banking institution in or without the United States, shall be established or maintained in that state; that it shall not be lawful to circulate within the state after 1847, any paper money, note, bill, certificate or other evidence of debt, less than the denomination of $10, and after 1849 less than $20, and the legislature is required forthwith to enact adequate penalties for the punishment of all violations and evasions of the provisions.

The construction of the restrictive clause, in the constitution of NewYork of 1821, received a learned discussion and great consideration, in the cases of Warner v. Beers, President of the North American Trust and Banking Company, and of Bolander v. Stevens, President of the Bank of Commerce in New-York. 23 Wendell's Rep. 103. Those institutions were voluntary associations of individuals formed under the provisions of the act of New-York. of April 18th, 1838, entitled "an Act to authorize the Business of Banking," and which act allowed the voluntary creation of an indefinite number of such associations, at the pleasure of any persons who might associate for the purpose upon the terms prescribed by the statute. The great question raised in those cases was, whether those institutions were corporations within the purview of the constitution, requiring the assent of two thirds of the members elected to each branch of the legislature, to every bill creating any body politic or corporate; and the statute in that case did not appear to have been passed, and did not in fact pass by such an enlarged majority. The decision of the court of errors, on a writ of error from the supreme court, on the 7th of April, 1840, was that the banking act was constitutionally passed, though it did not receive the assent of two-thirds of the members elected to each branch of the legislature, and that the associations formed under the act were not bodies politic or corporate within the meaning of the constitution. It seemed to be admitted, in the opinions given, that the restrictive clause had not answered the policy which dictated it. It was considered that the spirit and mean

amending or altering charters. The various acts of incorporation of private companies, for banking, manufacturing, literary, charitable and insurance purposes; for turnpike and rail-roads and toll-bridges; and for many other objects, upon which private industry, skill and speculation, can be freely and advantageously employed, constitute a mighty mass of charters, which occupy a large part of the volumes of the statute law in almost every state. All these incorporations are contracts between the government and the company, which cannot ordinarily be affected by legislative interference; and it has accordingly been attempted to retain a control over these private incorporations, by a clause, now usually inserted in the acts of incorporation, that "it shall be lawful for the legislature, at any time thereafter, to alter,

ing of the restrictive clause, was to guard against the increase of joint stock corporations for banking and other purposes of trade and profit to the corporators, with exclusive privileges, not enjoyed by the citizens at large -that although those banking associations had many of the distinguishing characteristics of corporations, they did not come within the true legal interpretations, and still less within the spirit and design of the restrictive clause. The statute conferred the power of free banking, and did not create any monopoly, nor secure to any association, privileges which might not be enjoyed in the same manner by all others, nor place them beyond the entire control of the legislature. This decision of the court of errors was received and confirmed on the principle of stare decises, in a subsequent writ of error from the supreme court to that court in December 1845, in the case of Gifford v. Livingston. 2 Denio R. 380. But though these associations are not corporations within the spirit and meaning of the restrictive clause in the constitution, requiring the assent of two-thirds of the members of each branch of the legislature to pass a corporation, yet it is held that they are to all other intents and purposes corporations, and as such, liable to taxation on their capital, if deriving any income or profit from it, like other corporations. The People v. Assessors of Watertown, 1 Hill's N. Y. Rep. 616. The People v. The Supervisors of Niagara, 4 Hill's N. Y. Rep. 20. See also infra, vol. 3. p. 26, for a British statute founded on similar principles in the creation of joint stock companies. The above decision in 4 Hill was affirmed on error in the same case in 7 Hill, 504.

■ The laws of Massachusetts give the greatest facility to the creation of bodies politic and corporate. "When any lands, wharves, or other real