But while on the one hand the construction of the Secretary of State cannot be allowed, it will not be contended on the other that the clause in question confers any new or substantive power. It is conceived to have been only intended to obviate the embarrassments which had been experienced under the confederation from the clause declaring1 and to give an express sanction to the exercise of implied powers fairly incidental or relative to the declared ones. This, however, it is conceived, is equivalent to an admission of the proposition that the Government as to its specified objects where no restrictions are annexed to them has sovereign and plenary authority in some cases paramount to that of the states, in others coördinate with it. Indeed as has been remarked this principle seems inseparable from the idea of a legislative or sovereign power.

It is no valid objection to this principle to say that it might lead to an extension of the powers of the general government throughout the intire sphere of state legislation. The same thing has been said and may as justly be said with regard to every exercise of power by implication or construction. Wherever the literal meaning is departed from there is a chance of error and abuse. And yet an adherence to the letter of its powers would speedily arrest the motion of the government and destroy its utility. It is agreed on all hands that the exercise of implied or constructive powers is indispensable. Every act that has been past is more or less an exemplification of it. That which declares the Power of the President to remove officers at pleasure is a signal one.2

The truth is that difficulties on this point are inherent in the nature of the National Constitution which is founded on a division of the legislative power assigning certain portions of sovereignty to the Union. and leaving the rest with the particular members. The consequence of this will be that there will be some cases clearly within the power of the National government, such as the right to lay duties on imported articles, some clearly not within its power, such as a provision to convey water by pipes through the city of Philadelphia for the accommodation of its inhabitants, which is a matter purely local; and there are others which will admit of room for dispute and difference of sentiment and in regard to which a reasonable discretion must be exercised.

The position which has been stated does not assert that the National Government is sovereign in all respects, but that it has sovereign power to a certain extent; that is, as far as its specified objects extend.*

There is therefore always a criterion of what is constitutional and what is not constitutional. This criterion is the end to which the measure relates as a mean. If the end is one clearly entrusted to the

1 An unfinished sentence. The preceding paragraph, somewhat changed, is

Is any state competent to doing what is proposed to be done?

National Govern'; and if the measure has any obvious reference to that end, and is not forbidden by any particular provision of the constitution, it may be deemed to be within the compass of the National authority. These are also these criteria which ought to have weight in the decision: Does the proposed measure abridge a preexisting right of any state or of any individual? If this question can be answered in the negative, it will always afford a strong presumption in favour of the constitutionality of the thing, and slighter relations to any declared object of the constitution may be permitted to turn the scale.1 The objectors to this rule which has been stated may be confidently asked what other can be adopted? What is there in the nature of things to render the declared powers in the national constitution less sovereign than the powers in the state constitutions? What are the characteristics which distinguish the means that sovereign or legislative power may employ to attain an end within its acknowledged province from those which it may not employ?

It is observable that both the Secretary of State and the Attorney General build their objections wholly upon a supposed inability in the National government to erect a Corporation; and this not in the particular case only but in every case whatever. Indeed the Attorney General acknowledges "that if any part of the bill does either encounter the constitution or is not warranted by it, the clause of the Corporation is the only one." 2

How it has come to pass that the power of erecting corporations has been conceived to be of so peculiar or transcendent a nature, as to form an implied exception to every power granted to the United States and in every case, is not easy to be conjectured and remains unexplained. Why it should not be as much as incident to legislative anthority to erect a corporation, if a necessary and proper, or a requisite and fit mean to a given end, as to do any other thing, is, to say the best of it, not obvious.

Congress for example have power to regulate Trade with foreign nations. This power is not supposed to be confined merely to the prescribing of rules for the orderly conducting of Commerce between the United States and other Countries; but it is agreed on all hands to extend to the adoption of proper measures for the advancement of Navigation and foreign commerce. To this end are various regulations in the revenue laws that have been passed. Let it be supposed that it were demonstrable that there was an opportunity for opening a particular branch of Trade with some foreign country, which would be highly beneficial to the United States; but that in order to entering upon it,

it was absolutely necessary there should be a union of the capitals of a number of Individuals; and that in order to engage proper persons to embark on it it was equally necessary that they should be incorporated and should for a time be permitted to enjoy certain peculiar privileges and exemptions in such a state of things as this, can there be any reasonable ground of doubt that it would be within the compass of the general power of regulating commerce with foreign nations to erect such a corporation and to grant to it the requisite privileges and immunities? It is apprehended that there cannot be any such ground of doubt.1

It would not be a good answer to say that such a case cannot be supposed. It is certainly a possible one. It has been believed to exist in other countries, and has produced institutions of the kind contemplated which remain to this day. The possibility of it is enough for the argument. It would doubtless be expedient to be well assured that the circumstances were such as to require and justify it; but this would be a mere question of expediency not of right or power.

As far as the sense of the different state Conventions can be supposed to have weight in the question it will appear that there was a prevalent idea that Congress had power to erect trading companies or corporations. Hence is found among the amendments proposed by them generally a clause to this effect, "That Congress shall not grant monopolies nor erect any company with exclusive advantages of commerce"; thus tacitly admitting the power of Congress to erect such Corporations or companies, and objecting no further than to the grant. of exclusive privileges.

The existence of such a power is indeed a natural and obvious inference from that of regulating Trade.

Neither the Origin of the power of erecting corporations nor the practice respecting it in the country from which we have borrowed our notions of it are of a nature to warrant the conclusion that it is of so preeminent a nature as to lie beyond the reach of the powers of the United States.

Its origin is traced to the Roman empire where a voluntary association of individuals was alone sufficient to produce a Corporation. In England the power of erecting corporations forms a part of the executive authority, [and the exercise of it may even be delegated to that Authority to other purposes.] 2 Certainly then there is something not a little forced in the supposition that the whole Legislative power of the Union is unequal to incapable of it.3

The Secretary of State asserts indefinitely that the power of erecting

1 Much compressed and altered in Lodge, 111. 185, 220.

2 These words are written in the margin.

3 Neither term is cancelled in the MS.-Lodge, 1. 186.

corporations remains exclusively with the states; but he certainly has not proved it. The arguments already adduced are sufficient, it is presumed, to shew that this is at least a very questionable position. But that it is not true in the extent in which [it] is advanced may be reduced to precise demonstration. And it is not doubted that in the progress of the investigation the contrary of it will appear more and more clearly.

Congress are empowered "to exercise exclusive legislation in all cases whatsoever over the district which shall become the seat of the Government of the United States and over all places purchased for the erection of forts, magazines, arsenals, dock yards and other needful buildings." By what process of reasoning can it be made a doubt that a power of exercising exclusive legislation in all cases whatsoever must include that of erecting a corporation within the limits which are embraced by it? There can be none.

Here then are cases in which it is certain that Congress may erect corporations. And if a direct power of instituting a Bank in other places is denied to the government, it has only to establish one at some place [over] which it may have acquired exclusive jurisdiction and the matter may be so managed as to have the administration of it where it shall be found most convenient. Doctrines which lead to consequences like these are at least to be suspected of error.1

There is indeed a case in which Congress have exercised the power of erecting a Corporation and that one of the most important kind; one not less important than the establishment of a Government. The "Act for the Government of the Territory of the United States south of the River Ohio" is here alluded to. A constitution of Government is a corporation of the highest nature, and that act establishes one; proceeding as is supposed upon

If then it ought to be admitted that the Gov. of the United States has the power of erecting Corporations in cases relative to the objects entrusted to it, it remains to see 3

the 2d. Clause of the 3d Section of the Constitution, which declares that Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.

Let it now be seen what are the objections to the power of erecting corporations generally.

The sum of them as respects the Secretary of State seems to be that

1 "Embraced with caution" was first written. - Lodge, II. 198.

2 Lodge, 111. 206.

8 These lines are struck out. It would appear that the preceding paragraph originally ended with the words "establishes one," and what followed was an afterthought.

1909.]

CONSTITUTIONALITY OF A NATIONAL BANK.

167

they contain capacities, properties or attributes; which are against the law of mortmain, against the laws of Alienage, against the law of descents, against the laws of forfeiture and escheat, against the law of distribution; and, as respects the particular institution contemplated, against the laws of Monopoly. And it is added to the rest that a power is given to make laws paramount to the laws of the States. Nothing but a necessity invincible by other means can justify, it is said, such a prostration of laws which constitute the pillars of our whole system of jurisprudence, and are the foundation laws of the State Governments.1 Let it be seen, how far these observations are correct, and what force they have.

The power of erecting Corporations is nothing more than that of giving individuality to a number of persons. When once this individuality is created, the Common law of every state annexes to it those incidents which produce the effects abovementioned as far as they really exist. It establishes that Aliens in the artificial capacity thereby created may hold lands, notwithstanding the laws of Alienage; that the lands shall be transmitted to the successors of the first corporators in the same capacity, not to the heirs of the individuals, notwithstanding the laws of descents; that the corporate property in case of the dissolution of the corporation shall revert to the donor, not to the sovereign, as in the case of a failure of heirs of private persons, notwithstanding the law of escheat; and that it shall not be forfeited for the crimes of the individual members, notwithstanding the laws of forfeitures. All these circumstances too are mere consequences of the creation of an artificial person. The distinction between citizen and alien can only apply between real persons. Such an artificial person may have successors but can have no heirs; therefore the laws of descent cannot reach it, and, for the same reason, it is equally out of the reach of the law of escheat which relates wholly to a failure of heirs. An artificial person cannot commit a crime; therefore its property cannot be liable to forfeiture.

This shews that it is inaccurate to say that the erection of a corporation is against those different heads of the state laws. It is in fact only to create a certain Artificial or legal entity, to which the law of every state itself, annexes an exemption from the operation of the rules that fall under these heads, as being inapplicable to it. It is only to put a certain number of individuals with their own consent in a situation which subjects their property to a different regulation from that which would attend it if they had not consented to enter into this state.

But if the thing were not truly to be viewed in this right, if the creation of a corporation were really against those different heads

1 Lodge, 111. 192, 193; 2 194.