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his argument in the Bank of Augusta of it is held by corporations. More v. Earle,

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'No corporation is created in contemplation of law but for the public good. Charters are intended to benefit the unincorporated more than the incorporated.'

Obviously, for, except in the degree that it ministers to a public want, no business corporation can operate with financial profit.

At the beginning of the nineteenth century there were in America probably not more than one hundred corporations, of which at least one half were in Massachusetts. By the year 1840 Chancellor Kent observed that corporations had multiplied with a flexibility and variety unknown to the common law. He says, "The increase of corporations in number, and of private industry and enterprise, has kept pace in every part of our country with the increase of wealth and improvement. The Massachusetts Legislature, for instance, in the session of 1837, incorporated upwards of seventy manufacturing corporations.' In 1857 Judge Dillon remarked that, 'It is probably true that more corporations were created by the legislature of Illinois at its last session than existed in the whole civilized world at the commencement of the present century.' In the fiscal year 1909, according to the report of the Commissioner of Internal Revenue, there were in the United States 262,490 corporations of all kinds, with more than $84,000,000,000 of stock and bonds and $3,125,000,000 of income, paying a Federal tax of about $27,000,000. For the fiscal year 1910-11 the figures had risen to 270,000 corporations with more than $88,000,000,000 of stock and bonds and $3,360,000,000 of income, paying a Federal tax of $29,432,000. As the total wealth of the United States has been estimated at $125,000,000,000, it would appear that nearly two thirds

than one fifth of the tax payments were made by 32,925 corporations of New York.

These figures proclaim in trumpet tones the public usefulness of the busi'ness corporation, but not more significantly than the following glowing words from the eloquent address of President Nicholas Murray Butler before the New York Chamber of Commerce on November 16, 1911:

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'I weigh my words, when I say that in my judgment the limited liability corporation is the greatest single discovery of modern times, whether you judge it by its social, by its ethical, by its industrial, or, in the long run, after we understand it and know how to use it, by its political, effects. Even steam and electricity are far less important than the limited liability corporation, and would be reduced to comparative impotence without it. Now, what is this limited liability corporation? It is simply a device by which a large number of individuals may share in an undertaking without risking in that undertaking more than they voluntarily and individually assume. It substitutes coöperation on a large scale for individual, cut-throat, parochial competition. It makes possible huge economy in production and in trading. It means the steadier employment of labor at an increased wage. It means the modern provision of industrial insurance, of care for disability, old age, and widowhood. It means and this is vital to a body like this it means the only possible engine for carrying on international trade on a scale commensurate with modern needs and opportunities.'

The paramount encouragement for the growth of corporations has been acutely stated by Professor Taussig, as follows:

'Perhaps the most important of all

the ways in which corporate organization has promoted the development of industry has been the ease of investment, and the consequent stimulus to the saving and the making of capital. In the eighteenth century almost the only possibility of investing in securities was through the purchase of public obligations; and these, though they meant investment by the individual, usually brought no increase in the community's capital. . . . The ease of investment in corporate enterprises has stimulated savings, and by a reciprocal influence, the increasing accumulation of savings has made possible an immense increase of real capital under corporate management.'

This statement receives recent and impressive confirmation in the distribution among more than 100,000 stockholders of the United States Steel Corporation, of the steel and iron industries, held only recently by a few hundred concerns. The great and lucrative industries known as the Carnegie Steel Works were held by only forty partners.

English experience has been similar to that in our own country. There the companies have been increasing at the rate of more than four thousand a year. In 1910 they had reached 40,000, with a capital and bonds of more than twelve billion dollars, and an increase in much greater ratio in the number of shareholders.

Now we may consider what has been, and what is, the customary attitude of the government and the public toward tese voluntary instrumentalities of the trading community, which are thus Perognized to have been advantageous to the public in a degree unattained by By other human agency.

The governmental disposition shows self first, and most fully, in the exerise of the taxing power. The home sate, each foreign state in which the

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corporation does business, and the United States, all find an easy mark in the identifiable and conspicuous capital of the corporation. The home state, as imagined creator, exacts enormous payments: (1) For the privilege of registration; (2) for the privilege of continuing existence; and (3) for the privilege of permitting the transfer of its shares by the holders thereof, or from the estates of deceased holders. The foreign state, exhibiting the spirit of comity which alone permits what in effect is the migration of the corporation, levies an entrance fee, and sometimes also an annual tax. The Federal government, concededly lacking any power of registration inherent in the creator of the state corporations, levies a tax, not upon them or their property or their income, but a tax, measured by their income, upon the privilege of doing business as corporations, such privilege existing under the laws of the several states, not of the United States.

These taxes are over and above, and in addition to, the ad valorem property tax which the corporations pay just as natural persons do, save that, unlike natural persons, in the assessment of their property the corporation officers are not allowed to deduct, but often are compelled to add, the amount of their bonded indebtedness.

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A second important discrimination against corporations is that which takes them out of the protection of the Fourth Amendment and the Fifth Amendment to the Federal Constitution. These two amendments forming part of the Bill of Rights have been regarded as the bulwarks of protection for natural persons. But it seems now to be the established law that in every case the creating state, and, in cases involving commerce between the states, or foreign commerce, the Federal government, are free from most if not all of the prohibitions of these two guaran

tees of security of the people in their persons, houses, paper, and effects against unreasonable searches, and against compulsory examination as witnesses against themselves in criminal cases.

A third disadvantage of a corporation relates to its transactions outside of its home state.

Under the luminous and far-reaching opinion of Mr. Chief Justice Taney in the Bank of Augusta v. Earle, corporations would be entitled to enter any state, and to transact business therein, unless expressly forbidden by the law of that state, or of the state of its origin. This privilege, guaranteed by Section 2 of Article IV of the Federal Constitution to natural persons, citizens of the several states, has been substantially curtailed (except in respect of interstate commerce) by statutes, more or less restrictive, in nearly every state. This right of exclusion may be exercised so as to disenable a foreign corporation to exercise its right as a citizen of its home state to remove to a Federal court a suit brought against it in the foreign jurisdiction. Thus has resulted a great practical difference to the corporations as compared with natural persons in the exercise of untrammeled action in the several states.

A fourth restriction, almost without limit in the field and the force of its operation, is imposed by the so-called anti-trust laws of the several states. The great business enterprises of the country since the Ohio dissolution of the Standard Oil Trust in 1892 have been conducted not under trust agreements, but by corporations, and therefore, it is the large corporations that have felt the special force of these statutes. So far as they are intended to protect the communities against monopolistic practices tending to prevent reasonably competitive conditions in trade, or to protect and to punish op

pressive or unfair conduct, they must be accepted as within the exercise of the state's right of reasonable legislation. But when, as recently, the courts of a state felt themselves compelled by law to exclude from the state the International Harvester Company solely because of its constitution, and in spite of their judicial ascertainment that its conduct in that state had never been oppressive or injurious, but on the contrary highly beneficial to the people, it is permissible to doubt whether such a statute really embodies a just and reasonable conception of the function of positive law as distinguished from natural law.

Anti-trust laws have been enacted in more than two thirds of the states, which, perhaps, are to be swallowed up by the Sherman Anti-Trust Law and legislation supplementary thereto, passed or proposed for passage by the Congress. The penalties - civil and criminal imposed by such laws often are more severe than those directed against offenses involving infractions of the Ten Commandments or of the laws of nature.

Juries hesitate to enforce such penalties personally against officers of the very same corporations whose practices they are willing to condemn. Laws of somewhat similar import long prevailed in England, but after centuries of unsatisfactory operation were swept away by the repealing acts of 1772 and 1844, on the express ground that the prohibited acts had come to be considered as favorable to the development, and not in restraint, of trade. To-day no statutes of the same purport or effect are to be found in any civilized country except the United States. It would be idle to pretend that these laws do not represent a real and honest conviction of the American people, that they are necessary for protection against real or imagined abuses; and

undoubtedly corporations must conform to them. No form of business or social activity is comparable in importance with obedience to the law. Until, as is inevitable, these laws shall be modified so as to apply in respect of evil practices, rather than the mere potentiality of such practices, a modus rivendi must be established. In the mean time it cannot be gainsaid that, for the common good or otherwise, they must operate as a check upon the growth and development of corporate enterprise.

But the fifth, and the greatest burden upon the corporations is that imposed, not as a result of governmental laws or regulations, but by a popular indisposition to accord to corporations the same kind or measure of justice that is deemed to be due to natural persons. The concrete form and the visible and imagined possessions of corporations expose them to impositions which no jury or community would think of inflicting upon individual suitors or citizens. Themselves incapable of sentiment, corporations seldom elicit sympathetic treatment from others. Many years ago an eminent English barrister gave expression to the experience of most corporation lawyers, before and since, on both sides of the ocean, when he declared that, except in the clearest of cases, a corporation had small chance of a favorable verdict.

No corporation can expect any jury to treat it like an ordinary personal suitor. One result of this discrimination doubtedly has been unfortunate in ts effect upon the administration of justice, or upon the popular feeling with regard to that administration. The errors of prejudiced or unreflecting ries have required, and they have eived, correction from courts of reew so frequently as to lead to a popar impression that if juries are biased gainst corporations, judges are biased

in their favor. It is no part of the present discussion to demonstrate that such an impression is wholly erroneous, though there is far less reason for it than is often declared. The right of the corporation to even and approximately exact justice is, of course, as sacred as that of any private suitor. Whenever such right is denied, corresponding injury is inflicted upon a form and mode of honest business enterprise which, as we have already observed, is regarded by men of wisdom and experience as the greatest social achievement of the nineteenth century. Thus a serious loss results to society itself.

The corporation is entitled to receive no more and no less than the justice due to every citizen. So long as such measure of justice is denied by juries or by commissions, the aggrieved corporation is bound to seek, and should receive, just redress in the courts. To pillory either corporations for seeking, or courts for awarding, remedial justice in accordance with the principles and procedure laid down for all citizens is not only unpatriotic and unfair, but is also unwise. For so long as the instinct of self-protection animates human nature, impatient and conscienceless men, in charge of properties, whether corporate or personal, will resort to abhorrent methods if they distrust, or have reason to distrust, legitimate modes of defense. This, like lynch law,' may be condemned, but the fact cannot be ignored. The effort of every reasonable man should be to contribute his influence toward the fair treatment of industrial enterprises in every form, whether individual or corporate, according to their merits and demerits.

It may be answered, and with considerable force, that in the long run men and institutions receive the kind of treatment that their conduct provokes or invites. But, as already noted, in

the case of corporations, their impersonality, invested in the popular imagination with inexhaustible resources, seems to relieve the community from extending to them any measure of that patient consideration which in many difficult cases is the safeguard of the personal litigant. A single illustration may indicate how remote and irrelevant may be the prejudices governing the result in the trial of claims against corporations. An eminent southern lawyer told me that one of his earliest cases was against a telegraph company for negligence in the transmission of a message. Having succeeded by his evidence in establishing his point, his satisfaction in his achievement as a forensic victory was considerably modified when the foreman of the jury told him, 'We found for you because we are against these corporations: they make people superficial.'

The temper of the times which now we are passing through, also contests the reasonable development of corporate enterprise. As already observed, a chief public advantage in the process of corporate organization has been found to be in the opportunities generally afforded for the investment, and the making, of capital by the investor of moderate means. But, in an era of vast and growing discontent with capital in any form, there is also a growing disposition to question whether the public service rendered by corporations in this particular has not been overestimated. This suspicion openly and boisterously expressed by the avowed socialistic organs undoubtedly lurks in the minds of many not yet prepared to wear the label of the Socialists. Their attitude, however, is reflected in many forms of governmental enactment and administration adopted in supposed response to this popular unrest, or in expectation of popular approval.

For this difficulty there is no reason

able remedy comparable with the remedy of reasonable and patient discussion. The principles of our popular government by representation are sound, or they are unsound. To many of us they seem as sound as when they were adopted in 1789, and our constitutional guarantees are entitled to veneration and maintenance, not merely because they are venerable (though that means much), but because in the main they are right, and are such as, if not already ordained, should now be ordained by the people of the present day.

That the initiative, the referendum, and the recall, as measures of federal concern, are beyond the domain of present practical politics seems to have been recently recognized by Mr. Bryan and by Colonel Roosevelt, and so far as I know, the contrary has not yet been asserted by any important leader of public opinion. That the applicability of these expedients for ascertaining the popular will in particular instances within the jurisdiction of a state, is very limited in extent, must also be recognized. As methods of reform within these limits, they are only methods and not principles. They do not in and of themselves make men good, but are devised to permit the good to exercise a more direct influence. Their practical operation within the jurisdictions that have adopted them will demonstrate before long whether those who advocate them have seen a great light or only an ignis fatuus. But certainly as yet the measures are in the experimental stage. Equally certainly it is not the part of prudence, in advance of the ascertained result of these experiments, prematurely to commit our communities generally, and with inconvenience of withdrawal. The sober second thought of the people surely is as valuable as its first impression, and this sober second thought is

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