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power to prevent unlawful interference with such commerce, as he may in preventing interruption in the carrying of the mails, and injunction suits may be prosecuted under his authority to stop any such interference. This power was exercised by President Cleveland in 1894 on the occasion of the so-called "Pullman Strike," and was sustained by the Supreme Court in the Debs Case.

CHAPTER XV.

CORPORATIONS: CREATION AND REGULATION.

94. References.

James Kent, Commentaries, Lect. xxxiii; J. Story, Constitution, §§ 1259– 1271, 1392-1395; T. M. Cooley, Constitutional Limitations, ch. vii and ** 276-284, 575-582; T. M. Cooley, Constitutional Law (3d ed.), 333, 334, 338-342, and ch. xvii; J. R. Tucker, Constitution, 829-836, 863865; S. D. Thompson, Commentaries on Corporations, I, chs. i-v, IV, ch. 118; H. O. Taylor, Corporations, chs. i-iv, viii; J. F. Dillon, Municipal Corporations, chs. i-vi; C. B. Elliott, Private Corporations, chs. i, iv; C. B. Elliott, Public Corporations, chs. i-iv; W. L. Clark, Corporations, chs. i, ii, viii; E. Freund, Legal Nature of Corporations (University of Chicago Press, 1896); J. P. Davis, Nature of Corporations (Pol. Sci. Quart., XII, 273); G. W. Pepper, Introduction to Study of Law of Associations, (Am. Law Register, Vol. XLIX, O. S., 255); S. D. Thompson, Abuses of Corporate Privileges (Am. Law Rev., XXVI, 169); A. J. Eddy, Combinations; R. T. Ely, Monopolies and Trusts; F. H. Cooke, Law of Trade and Labor Combinations; W. W. Cook, Corporations as Affected by Statutes and Constitutions; E. L. Von Halle, Trusts or Industrial Combinations and Coalitions in the United States; T. C. Spelling, Trusts and Monopolies; A. Stickney, State Control of Trade and Commerce; Civic Federation, Report of Chicago Trust Conference of 1899; Industrial Commission Report, Vol. I (Government Printing Office, 1900); J. W. Burgess, Private Corporations from the Point of View of Political Science (Pol. Sci. Quart., XIII, 201); R. C. Davis, Judicial Decisions and Statutes Prohibiting Combination and Trusts, (Quart. Jour. of Econ., XIV, 416); F. J. Goodnow, Trade Combinations at Common Law (Pol. Sci. Quart., XII, 212); A. T. Hadley, Difficulties of Public Business Management (Pol. Sci. Quart., III, 572); E. Q. Keasbey, New Jersey and the Great Corporations (Harv. Law Rev., XIII, 198, 264); E. Q. Keasbey, Jurisdiction over Foreign Corporations (Harv. Law Rev., XII, 1); F. E. Horack, Organization and Control of Industrial Corporations (1903); A. B. Hart, Actual Government (Amer. Citizen Series) $209; McCulloch v. Maryland (1819, 4 Wheaton, 316; 4 Curtis' Decisions, 415; McClain's Cases, 1; Thayer's Cases, 271; Marshall's Decisions, Dillon's ed., 252); Munn v. Illinois (1876, 94 U. S. 113; Thayer's Cases, 743; McClain's Cases, 946); Trustees of Dartmouth College v. Woodward (1819, 4 Wheaton, 518; 4 Curtis' Decisions, 463; Thayer's Cases, 1564; McClain's Cases, 1006; Marshall's Decisions,

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Classes of Corporations.

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Dillon's ed., 299); East Hartford v. Hartford Bridge Co. (1850, 10 Howard, 511; 18 Curtis' Decisions, 483; McClain's Cases, 1021); United States v. E. C. Knight Co. (1895, 156 U. S. 1; McClain's Cases, 263; Thayer's Cases, 2185); Northern Securities Co. v. United States (1904, 24 Sup. Court Reporter, 436).

95. Classes of Corporations.

A corporation is a collection of individuals authorized by the government to enjoy the privilege of acting as one body, and of being considered as an artificial person, in the owning of property and the enjoying of rights, as distinct from the persons composing it. As an artificial person, it has a continuous existence, notwithstanding changes in its membership. This artificial being cannot be created or continued except in pursuance of some authority from the sovereign power. Individuals may contract with each other as to their collective rights and become joint owners of property, may form partnerships, and in various ways may have, for the time being, a unity of interest; but the privilege of organizing associations which shall be considered as owning property as units and having rights which are not treated in law as the rights and property of the individuals composing such associations is a privilege which only the sovereign power can confer. In England corporate franchises may be conferred by the crown, but they may be also authorized by act of Parliament, and in this country the creation of corporations is one of the important functions of the legislative department of government.

Formerly the legislative power to create a corporation was exercised by the passage of a statute defining the powers of the corporation created, and providing for the method of its organization and management and the exercise of the powers conferred, and this was called its charter. But it is now usual to make general statutory provisions for the organization and the management of the affairs of corporations, and to define the powers which they may exercise, so that individuals desiring to associate themselves together into a corporation may do so without special legislation by pursuing the course pointed out by statute. In some states, special statutes for the creation

of corporations are prohibited in the constitution, and no corporations can be created except in accordance with general statutory provisions. When a corporation is thus organized under general statutory authority it has no charter, properly speaking, but the articles of incorporation or ordinances or by-laws which it adopts under the general power to incorporate, taken in connection with the general statute authorizing such corporation, constitute its charter, and it has the powers which it undertakes to exercise in the proper method, subject always to the limitations of the general statutory provisions under which its organization is attempted or effected.

The purposes for which corporations may be chartered or organized are various, but may be divided into general classes: (1) those for private advantage; (2) those public in their nature, analogous to the purposes for which governments are instituted. Corporations are correspondingly divided into private and public corporations.

The ordinary corporation organized for transacting business and owning property is a private corporation; the object of its creation is primarily to promote the personal interests of its members. Manufacturing corporations, corporations organized to carry on wholesale or retail business of various kinds, insurance companies, and railroad, telegraph, telephone, and steamboat companies, all will be readily recognized as corporations private in their objects, for they are all created and carried on with the primary purpose of promoting the individual financial interests of those interested in them. Such corporations as these are sometimes designated as corporations organized for pecuniary profit, because they contemplate the ownership of property or the expenditure of money for the personal advantage of their members. Other private corporations, however, are organized for the purpose of promoting the common individual interests of their members without having any immediate financial purpose. Thus persons may associate themselves together in a corporation with the object of promoting scientific research, or preserving or inculcating a particular form of religious belief, or promoting some work

of charity or the like. Although such corporations have not for their primary objects the financial benefits of the members, they may nevertheless own property and raise and expend money in furtherance of the general purposes of their organization.

Public corporations, on the other hand, are organized for the general benefit and welfare of the people of a particular locality, in the promotion of objects of a public nature. Familiar examples of public corporations are cities, towns, and school districts; but, as will hereafter be explained, the state itself and the subdivisions of a state for political and governmental purposes, such as counties and townships, are also spoken of as public corporations.

96. Powers of States as to Private Corporations.

In general, the power to create and regulate private corporations is in the state governments and not in the federal government. It is a branch of the general police power, that is, the power to legislate as to the relation of individuals to each other. As already indicated in the preceding section, this authority is incident to the general legislative power without further specification, and is exercised by the legislative department by virtue of provisions in a state constitution for the creation of a legislative department. There are limitations on the power of the state in this respect, found in the provisions of the federal constitution that no state shall impair the obligation of contracts (Art. I, § 10, 1); and that no state shall deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws (Amend. XIV, § 1).

The importance of the provisions as to the impairing of the obligation of contracts grows out of the fact that the privilege which is granted by the state to a private corporation, whether it be for pecuniary purposes or for purposes not pecuniary, is considered to be granted as the result of a contract between the state and the corporation, and therefore any impairment