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Privilege of exemption from individual liability, which is no part of the Roman original, is assumed in this country as an incident of English common law. As a corporation cannot be committed to prison or outlawed, be arrested or appear to suits in person, therefore, proceedings against it are by distress on its lands and gools. But on what principle of common law or good government are the members privileged from personal responsibility for their corporate property? Granting that to be the English coinmon law, no part of that law was adopted in America which is inconsistent with American institutions. There were very few if any political corporations at the time of the Revolution; and what is taken for conmon law perhaps even there, but certainly here, is not that custom arising from universal agreement which Blackstone defines to be the corninon law, but rather assumption or usurpation of very recent and unnatural growth-the fungus or imposthuine of professional plethora. The Roman original being entirely departed from, and even the English royal prerogative of incorporating extended, may it not be questioned whether by the American Revolution this formidable power passed to our Legislatures? If the people are the State, and the Legislature is not, it follows that no legislature has authority to grant charters, unless permitted by the people in a constitution. It is of vast importance to the permanence of our institutions that the origin of assumed power should be ascertained. Corporation power is now an overshadowing inAuence in this State whose very prepotency requires investigation. Such as its rights are, let us abide by them, but let us ascertain what they are.
Mr. Porter concedes as most others seem to do, the right of posterior legislation to tax banks, limit dividends, and otherwise restrain banks. Power to limit bank issues of paper, and confine them to coin, is universally asserted and acquiesced in. The Governor in his late message, insists on much more extensive intervention than is necessary, by subsequent enactment to impair the original privileges of bank charter. I never heard a denial of the legislative right to change the public circu. lation by diminishing the paper and increasing the coin of banks, (whatever may be said of direct repeal of their charters,) till Judge Hopkinson insisted upon it here. It has not been questioned before, I believe, either in practice or principle. He contends that power to issue the paper or coin medium continues always as granted at first; which is pushing vested right in public power to the uttermost; though perhaps the best test of the validity of the argument which denies posterior legislation any power to affect the alleged contract of bank charters. Paine, as cited by Mr. Porter, evades the question of power and fabricates an argument on contract, by suggesting that charters are not laws but act3--acts of bargain and sale by the Legislature. But who commissioned Legislatures to sell and bargain acts of favor for money, as kings sell titles? Mr. Forward in his letter, calls a charter the act of a Legislature, clothed with limited po vers, he grants, but to the extent of those powers representing the people; and he would be pleased by some one's defining what is meant by sovereign power. Chief Justice Marshall says, in Peck’s case, that it may well be doubted whether the nature of society and government does not prescribe some limits to the legislative power. Although less susceptible of definite restriction, legislative power requires limitation at least as much as Executive or judicial power; and it is a great desideratum of American politics to teach our legislators, many of whom, especially the professional members, are extremely loose
in their notions of legislative power, that it is limited at all Too many suppose they may vote as they will, provided it is not morally wrong. Paine's suggestion is but an evasion of the question of power. The notion that a law may not be a contract, because called an act and not a law, though clothed with all the forms, solemnities and effects of a law duly enacted, is a mere sophism. By whose commis. sion do law makers become chapmen, to sell privileges for money in which they too often contrive to share themselves, or with friends, relations, or partisans ? Not only is a charter a letter of attorney, to be executed to the letter, and infringed by every departure from it; but legislation is a strict commission also, and every representative, whether corporator or legislator, who forgets that he is a trustee, violates his trust. Kings of England have sold charters, and even granted to others the power to sell them, as they have sold titles. But that American legislators have no such power, Paine himself proves in the following extract from a publication by him, dated June 21, 1805, addressed to the citizens of Pennsylvania on the proposal for calling a convention to reform this Constitution :
“A constitution is the act of the people in their original character of sovereignty. A government is the creature of the constitution; it is produced and brought into existence by it. A constitution defines and linnits the powers of the government it creates. It therefore follows as a natural, and therefore a logical, result, that the government exercise of any power not authorised by the constitution, is an as. sumed power and therefore illegal.
“ There is no article in the Constitution of this State, nor of any other State, that invests the Government, in whole or in part, with the power of granting charters or monopolies of any kind; the spirit of the times was against all such speculations; and therefore the assuming to grant them is unconstitutional, and, when obtained by bribery and corruption, is criminal. It is also contrary to the intention and principle of annual elections. Legislatures are elected annually, not only for the purpose of giving the people, in their elective characters, the opportunity of showing their approbation of those who have acted right, by re-electing them, and rejecting those who have acted wrong; but also for the purpose of correcting the wrong (where any wrong has been done) of a former Legislature. But the very intention, essence and principle of annual election would be destroyed, if any one Legislature, during the year of its authority, had the power to place any of its acts beyond the reach of succeeding Legislatures; yet this is always attempted to done in those acts of Legislatures called Charters. Of what use is it to disiniss legislators for having done wrong, if the wrong is to continue on the authority of those who did it? Thus much for things that are wrong. I now come to speak of things that are right, and may be necessary.
* Experience shows that matters will occasionally arise, especially in a new country, that will require the exercise of a power differently constituted from that of ordinary legislation ; and therefore there ought to be an article in a Constitution defining how that power shall be constituted and exercised. Perhaps the simplest method which I am going to mention is the best, because it is still keeping strictly within the limits of annual elections, makes no new appointments necessary, and creates no additional expense. For example:
“ That all matters of a different quality to matters of ordinary legislation—such, for
instance, as sales or grants of public lands, acts of incorporation, public contracts with individuals or companies, beyond a certain amount,shall be proposed in one Legislature, and published in the form of a bill, with the yeas and nays, after the second reading, and in that state shall lie over to be taken up by the succeeding Legislature; that is, there shall always, on all such matters, one annual election take place between the time of bringing in the bill and the time of enacting it into a permanent law.
“ It is the rapidity with which a self-interested speculation or fraud on the public property can be carried through within the short space of one session, and before the people can be apprised of it, that renders it necessary that a precaution of this kind, unless a better can be devised, should be made an article of the Constitution. Had such an article been originally in the Constitution, the bribery and corruption employed to seduce and manage the members of the late Legislature in the affair of the Merchants’ Bank could not have taken place. It would not have been worth while to bribe men to do what they had not the power of doing. That Legislature could only have proposed, but not enacted the law; and the election then ensuing would, by discarding the proposers, have negatived the proposal without any farther trouble.
“This method has the appearance of doubling the value and importance of annual elections. It is only by means of elections that the mind of the public can be collected to a point on any important subject; ard as it is always the interest of a much greater number of people in a country to have a thing right than to have it wrong, the public sentiment is always worth aitending to. It may sometimes err, but never intentionally and never long. The experiment of the Merchants’ Bank shows it is possible to bribe a small body of men, but it is always impossible to bribe a whole nation; and therefore in all legislative matt rs that, by requiring per. manency, diifer from acts of ordinary legislation, which are alterable or repealable at all times, it is safest that they pass through two Legislatures, and that a general election intervene between. The c!ecủon will always bring up the mind of the country on any important pro, osed bill, and thus the whole State will be its own council of revision. It has already passed its veto on the Merchants’ Bank bill, notwithstanding the minor council of revision approved it.”
It is not my iutention, however, to fitique or perplex by metaphysical inquiries into the origin of communities, or the power of their representatives to enact Charters, meaning to submit, with deference, views divested of every questionable assumption or preliminary doubt, in the plainest way to common understanding, and therefore I superadd to all preceding concessions, that American Legislatures have power, without constitutional grant of it, to create Charters for Banks; which I concede for argument's sake, yet contend that a bank charter, created by any American State, is not a contract within the purview of the Constitution of the United States, or this State forbidding acts of state impairing contracts. That a Bank Charter is not a contract within the purview of the Constitution, is what I undertake to prove:
There is still, however, another preliminary to be noticed before that position is taken up. Bank Charters, as I have shown, are apt to be confounded with all other charters. My view requires, not only that their kinds should be discriminated, but that their classification also should be somewhat better fixed than it is in the law books to which we must lock for most of the published learning on this subject. We should guard against technical and professional impressions, for lawyers, like other men, are wedded to their peculiar reverence. They seldom define corporations accurately, and describe only two classes, viz: public, those created for muni cipal purposes, such as counties, cities, towns and boroughs; and private, such as insurance companies or others for merely private concerns. I submit that there are at least three classes, viz: first, private, such as an incorporated hotel, forge, quarry, or the like, of which I believe there are instances owned by individual members of this Convention; second, municipal, such as incorporated cities and places, which are public, though local; and third, political, such as share the sove reignty, among which I piace banks, because they share the sovereignty by making the public currency, together with corporations allowed by law to partake of the sovereignty by controlling public highways, whether rivers or roads, and all other political corporations whatever. Professional learning surrenders what Judge Story rather oddly calls stricily public corporations, to legislative control. Consider, then, for a moment the reason of that law which surrenders the city of Philadelphia, for instance, with its complicated interests, debts, loans, innumerable contracts, plans, and future as well as present involvements, bye-laws, and all, to the regulation or repeal of an act of Assembly, while it deems the Charter of a bank making the circulating medium or a State, perhaps for thirty States, beyond the reach of legislation. Does it stand to reason that the State may at any time destroy all the vested interests, and impair, if not destroy, the contracts, of a city, while it cannot prevent a bank from affecting all the property and all the contracts of the State, including the city, by a substitute for money? Is there any reason for constructive law that all the private interests, held under a city, are of political cognizance, but all the public power of a Bank is intangible private right? In the true definition or the philosophy of corporations, is a Bank less a public concern than a city ? Mr. Hallam, in his Constitutional History of England, holds that corporate privileges may be revoked when it can be done without injuring private rights.
It is only for the advantage of the public, say3 Blackstone, that artificial existence is ever given by incorporation to natural persons. In the judgment of the Circuit Court of the United States for the New Jersey District, on the Camrien and Amboy Railroad Company, Judge Baldwin was at a loss to determine whether that immense private sovereignty is a public or a private corporation, the true criterion . being, he says, whether the objects, uses and purposes of the incorporation are for public convenience or private emolument, and whether the public can participate in them by right or only by permission. But so careful and accurate a lawyer as Judge Baldwin falls into a mistake in classing corporations,-public corporations being, he says, towns, cities, counties, parishes existing for public purposes ; private corporations being for Banks, insurance, roads, canals, bridges, &c. For authority he cites 4 What. 664; at which page of that book is to be found Chief Justice Marshall's classification of corporations, but with no mention of, or allusion to Banks for the introduction of which Judge Baldwin must have mistaken Judge Story for Marshall, and the profession might take from him as law what has no 1oundation in authority, though it may be published as judicial sentiment. Judge Story, I be
lieve, is the only Federel Judge who has ever ventured to say that a bank is a private corporation, in which he merely repeats what Mr. Webster said at the bar, no doubt without adverting to the distinction I am essaying. Even he has nevar so adjudged; but even in the sweep of those large and radical notions which he has broachell, this is one of the unsupported sayings for which so respectable a judge may be quoted; to whom it is but justice to remark, that probably his aítention never was directed to the difference between municipal and political corporations, both public, both in a meas are partaking of the sovereignty, but the latter much more than the former. Judge Baldwin, when throwing banks into the diffinition of a private corporation, does not mean to put himself in conflict with a very able opinion pronounced by himn and Judge Hopkinson, that “ bank notes, payable to bearer, form the currency of the country, passing irom hand to hand in all the pursuits of life, like coin, they circulate on their intrinsic or representative value by
It is their being a currency and a substitute for coin that makes the ditlerence between them and bills of exchange, proinisory notes or checks on banks.” The mints in which such currency is made would hardly be defined as private institutions, and Judge Baldwin will not so class them whenever his discriminating understaniling applies itself to the subject as its novelty and importance deserve. I believe that when he looks beyond mere law-book definition to the enlargement I have attempted, of three instead of but two kinds of Charters, he will perceive that banks which are political, cannot be private, though not municipal corporations; and that it does not follow that a Charter falls within the class of private, because it is not municipal, the true criterion being, as Judge Baldwin explains, whether the objects, uses and purposes are for public convenience or private emolument.
Mr. Porter also relies on the published opinion of the present Chief Justice, while Attorney General of the United States, on the same Camden and Amboy Raidroad, that Charters for canals and railroads are contracts. That opinion made much sensation from its inputed denial of what, without reflection, are apt to be thought not only vested but sacred rights. Its argument against the power of legislatures to bind their successors in all cases coincident with some of my views; and I feel no disposition to contradict Mr. Taney's acknowledgment, that private charters are vested rights not to be resumed or impaired. It is too well settled to be disputed, he says, yet the recency of federal adjudication and the 'conflicts of judicial opinions about it, warrant, I conceive, the propriety of reviewing and endeavoring to settle the whole subject. Without reference to other charters it is enough for my purpose that bank charters are not railroad or canal charters, much less merely private charters. The latter may be contracts without affecting my argument that the former are not. The subject of charters altogether, whether political, municipal, or private, has acquired vast importance. By the official documents on our table it appears that one hundred and sixty millions of property have been, within the last forty-five years, locked up, in Pennsylvania, in this modern mortiain corporation law, and therefore calls loudly for dispassionate American consideration to ascertain what it was in its first Roman state, what in its English, and what it ought to be in its American. Bank and other charters have become an estate in our realm. They are, in effect, perpetuated by renewals, oiten