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APPENDIX.

[In a former Article (Dem. Rev. Vol. 1, No. 2. Art. 1.) the subject was discussed at some length, of the enormous extension which had taken place, within the preceding twenty-five or thirty years, of the authority and action of the federal judiciary, in its assumed paramount supremacy over the sovereign legislation of States. The subject was then, however, but sketched out in general terms, a promise being given to develope it more thoroughly on another occasion. The individual authorship of that Paper was generally understood at the time, especially among the profession particularly interested in its subject. In fact, to the eye of every reader acquainted with the author, the screen of the anonymous afforded no concealment to the name distinctly written upon the Article itself, from beginning to end. Of the impression made by it upon the public mind, it is not for us to speak. The further developement of the subject, with which it was to be succeeded, was drawn forth so fully in a speech shortly afterwards made by the same gentleman in the recent Pennsylvania Convention for amending the Constitution of that State, that we have thought it best to publish it in the manner here adopted. For although there may appear, in the course of it, some portions less immediately pertinent to the subject, than would be strictly appropriate to a Review Article, the whole will be found at the same time so combined and fused together that discrimination would be difficult, if not impossible; while we regard it as so valuable, for research, learning, argument, and illustration, directed and animated by a pervading influence of sound Democratic doctrine, that we cannot consent that our readers, interested in the views of the former Article referred to, should lose the benefit of this its appropriate sequel,--the speech never having been reported or published in any other form. We desire not to be misunderstood--exemption from misrepresentation would be too much to expect-with respect to the objects. in view in its publication in the present mode, and to the various ideas and expressions that may be contained in an Article appearing thus under the responsibility of an individual name, and of course without editorial revision It is not aimed as an attack upon any institution or institutions, in one State of the Confederacy or in another. We disclaim in advance all imputations of any intention to assail any incorporation or any system of incorporations; any desire to invoke the repeal of any existing charter, whether of city, bank, college, canal, road, bridge, or of any character whatVOL. V. NO. XIII.-JANUARY, 1839

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ever. Erroneous and pernicious as we deem that whole system of legislation, such a course is neither called for by public opinion, nor would it be either the easiest or the best mode of arresting its future injurious action, and of remedying the present evils that have resulted from it. The only true and wise mode of rectifying these is, according to our views, by destroying-not existing institutions, of what nature soever-but the monopoly feature of their specially privileged character. The simple and direct means of attaining this object is by general free incorporation laws, which would extend and improve such benefits as may now proceed from them, and soon annihilate or neutralize their many and serious evils. The indication of this idea, as the one radical principle of reform needed, in our judgment, by the disorders of the times, will suffice, with every liberal and candid mind, to repel all such imputations as are here explicitly disclaimed, of hostile views towards any existing chartered institutions or "vested rights." The only thing it is our intention or desire to attack is an inveterate common error of opinion, and judicial abuse of power, which have gone far essentially to vitiate the Democratic spirit of our institutions. The remark has been most justly made by M. de Tocqueville, as quoted in the course of the following pages, that the jurisdiction of the federal judiciary over State laws, of an ex post facto character, or involving contracts, attacks more deeply than any other provision of the Constitution, the sovereignty of the States. No disciple of the profoundly wise and simply beautiful doctrines of the State Rights school of politics can, then, look with any other than a jealous eye upon the exercise of such jurisdiction. And when it is found to have been extended, by a long course of vicious constructive adjudication, so immensely beyond all tolerable limits, by bringing in under its paramount control the whole system of State legislation in relation to charters, whether of public or private character, we cannot but feel the deepest interest in contributing to rectify the public opinion, long led so widely astray from all sound principles of government and legislation on this subject. Our general object, therefore, in the following pages-without assuming the responsibility of every minor and incidental idea thrown out--is to show, simply as abstract truths, and without reference to any practical applications of them:-that public charters of incorporation, and especially bank charters, are not contracts, as we hear often maintained, but laws, subject, as all other general laws, to modification or repeal, on general principles of policy alone; and that they are in no sense under the protection, as contracts, of the federal judiciary, against the sovereign will and pleasure of the State legislation which has called them into being.]

APPENDIX.

SPEECH

OF

CHARLES J. INGERSOLL.

In the Convention of Pennsylvania, on Legislative and Judicial control over Charters of Incorporation.

In what was said, the 15th of December, respecting political economy, I mentioned what I now repeat, that the former view was but preliminary to this greater question of the right to repeal bank charters by enactment of law, without judicial agency. This restoration of public supremacy is the great desideratum. Settle this in general consent, and with a coin basis, banks will be useful and States sovereign. Without it banks are government, and the very worst government.

I disclaim all power of this Convention to act directly on banks. It can reach them only through future legislation. And I desire to introduce my argument by expressly repudiating nearly every assertion and concession of Mr. Dallas's much abused letter. All that he concedes of contract I contend for; all that he asserts of the effect of fraud in legislation, I dispute. I question, at any rate, his doctrine as to the contract obligation of reimbursing a bank bonus; and I need hardly add that I disown every one of his unlucky, though misconstrued and perverted, illustrations.

Furthermore, I acknowledge the supremacy of the Federal Government in whatever may be the appropriate way to control State laws, and the acts of this Convention; and wherever a charter is a contract within the Constitution of the United States, that is the supreme law, to maintain the obligation of such contract against all State laws impairing it, whether proceeding from Convention or Legislature.

I repudiate, and strongly deprecate, every violation of property and vested right. I own the inability of a State, by law or otherwise, to resume its grant of private property; and I hold a State bound to protect private property and right. I cannot but dwell a moment on my denial already intimated of what has been conceded by Mr.Dallas, Mr. Forward, Mr. Porter, and Judge Hopkinson, that a law infected by fraud is therefore either void, or voidable by judicial proceeding. The argument in Peck's case appears to me in this particular to be conclusive; and on this point alone is the Supreme Court unanimous in that case. If a majority of both Houses of a Legislature can be proved to have enacted a law from fraudulent motives, perhaps that may be reason enough for its repeal by law, but not for its judicial abrogation. To take the instance of fraud imputed to the Bank of the United States in the alleged corruption of a certain number of one branch of the Legislature, in the persons of two members of this Convention, with other Senators, I cannot perceive

how such a circumstance is to annul, though it may vitiate the act of all the rest constituting a majority of both branches. Without prior conviction a court of justice cannot judicially know the fraud; and, as is said in Peck's case, there appear to be insuperable difficulties in the way of ascertaining, assuming, or acting upon it judicially at all. Plutarch states, in his life of Cicero, that Cornelius Lentulus, under accusation, corrupted most of his judges; and being acquitted by a majority of two, he said that what he had given one of them was thrown away, for a majority of one was all he wanted. At least a majority must be corrupted; and even then there remain many difficulties before a court of justice can set at naught a law on the plea of fraud.

Having thus, by liberal concession, cleared my premises of all that might embarrass the real, and my only, question, I deny that bank charters are contracts, within the meaning of the Constitution. That they have been thought such was, without due consideration, judicial determination, or other sanction, taken for granted from the sweeping but individual doctrines of one of the judges in the Dartmouth College case and its unfortunate offspring, as novel as they are latitudinary; from Judge Story having, without any authority, said so in the course of his discussion and support of those doctrines; and from inconsiderate and unauthorized compilers and book-makers, to whom the legal profession is beholden (and doubtless they are convenient) for commentaries, digests, and other works, which abridge research, but ought seldom to be taken as law. Let it always be kept in mind that I speak of bank charters only. It is a common error to confound all charters of incorporation-which is done often without reflection, though sometimes disingenuously. Modern free republican self-government, with bills of rights, liberty, and equality, are confounded with the totally different political systems of old, when charters less known were entirely unlike modern corporations. Mr. Forward, in his letter on this subject, treats all charters as alike, a very prevalent misapprehension; assuming that all are contracts, because some are. "Every body knows," he says, "and even partizans (alluding probably to Mr. Dallas) do not deny that a charter is a contract between the Government and individuals, and has all the essential attributes of any other contract." And so he proceeds, on premises altogether assumed, and as I conceive fallacious, confounding all charters, and affirming that all are contracts because some may be, making no distinction between public and private, or between a State and an individual, and concluding from such premises that because a State has no power to resume a private grant or impair contracts between individuals, it therefore has no right to control public incorporations or regulate what is part of political government. Having thus, by assumption and confusion of the subject-matter, established his position, Mr. Forward adds that "it is to be recollected that it is not the solitary power of destroying the Bank of the United States that is ascribed to the Convention, but a power to destroy all charters-annihilate all vested rights." "If there be any exception," says he, exultingly, "let the friends of absolute power point it out, and let them fix the limits that shall circumscribe the omnipotence of the Convention. No such limits can be assigned. The power to annul charters is the power to annul patents for lands; and if either the one or the other can be done by the Convention, they may expel us from our houses and rob us of our goods." All this eloquence and obloquy, these hard words and alarms, are

the result of mistaken premises, of not discriminating between obviously different kinds of charters, and assuming what Mr. Dallas's letter may perhaps warrant,but I plant as the very cardinal question, whether bank charters are private contracts. Every lawyer is familiar with the distinction between public and private acts of incorporation. Every statesman should recollect the difference between the guilds and colleges of despotic ages, and a charter of privilege from our free condition. Every American feels to his cost that power to make public currency a substitute for money, is a recent grant or usurpation of part of the sovereignty wh ch, for the first time, is now mistaken for a mere private charter. Charters of old were mostly municipal exemptions and immunities from the general lot of individual restraint and subjection-grants of freedom-such as Magna Charta and others. But modern acts of incorporation are generally grants of special privilege and franchise from common liabilities and segregation from individual equality; grants of priviege, contrary to common right, almost peculiar to this country and this century. Old charters were asylums of liberty; modern charters are strongholds of privilige. Formerly the freedom of some town or guild was necessary to a man's being permitted to follow a trade; whereas, now all men are free alike to choose any calling; but the incorporated are privileged above the rest in property. If American Legislatures can charter at all, the charters they grant for private purposes may be rights, which, once vested, cannot be resumed or impaired by legislation. Whether such grants are contracts, in the meaning of the Constitution, or not, they may be rights, as well vested as other private rights. It is a great mistake to suppose that charter or corporate rights are more sacred that personal rights. Judicial speculations and professional obsequiousness have tended, if not endeavoured, to place property on higher ground than persons. But this is a mischievous error, without the least foundation in justice or authority. Charter property is held by no better tenure than private. All rights are vested. No charter vests corporate rights more firmly than every individual right, whether actual acquired, or howsoever held. I assert all personal rights; and I question no private or vested rights, by denying that a bank charter is a contract. No novel or alarming denial of any right is set up, by vindicating the right of Government to superintend, regulate, control, and repeal, if need be, without judicial agency, the bank charter which Government grants.

I will not altogether deny, but desire to question briefly, the power almost universally taken for granted, without express authority by constitution of an American State, to grant a charter of incorporation. We are taught that social and political authority in the old world proceeds from either parentage or force; which is the derivation of Government, according to Paley, and other inquirers into its origin. The power of parents on that of force, founds political authority. Perhaps our American Governments are founded in consent-that of the United States certainly is. But however established, why is an American Legislature necessarily authorized, by tacit commission, without express grant, perfunctorily to confer chartered privileges on a favored few? Such franchises have no foundation but in public convenience and public utility; and are they within the ordinary scope of the mere trust of American legislative function? That Legislatures should not, if they can, grant monopolies, seems to be yielded by the studied effort to show that corporations are not monopolies. Are perpetuities within the power of legislation?

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