to the federal government to accept a cession of territory for the seat of government, and to exercise exclusive legislation thereover, congress may without doubt erect corporations therein both public and private.' It may exercise a like power over the public domain, establishing temporary governments and creating private corporations therein, or providing for the creation of the latter by the territorial governments themselves.2 § 4. Of the power of the federal government to incorporate a bank. In the discussion of the bill to grant a charter to the Bank of the United States, the power of congress to pass the act was seriously questioned. President Washington tion of President Washington, the charter of the Bank of the United States was under discussion in congress, and Mr. Madison, after criticising the bill, said that "in making his remarks on the merits of the bill, he had reserved to himself the right to deny the authority of congress to pass it. He had entertained this opinion from the date of the constitution. His impressions might, perhaps, be the stronger, because he well recollected that a power to grant charters of incorporation had been proposed in the general convention and rejected." Mr. Sterne's Argument, supra. 1 Story on the Constitution, § 1266; "National Corporations," 21 Cent. Law J. 428; 19 U. S. Stat. at Large, 38. 2 Story on the Constitution, § 1265, and Rev. Stat. of the U. S., §§ 1889, 1890, providing that territorial legislatures shall not grant private charters, but may permit persons to associate themselves together as bodies corporate for mining, manufacturing or other industrial pursuits. For a further consideration of the power of congress to create a corporation, and a full presentation of the subject from the point of view of a Hamiltonian, see Hare's American Constitutional Law (Boston, 1889), 98, 105, 111, 249, 1310. 33 U. S. Stat. at Large, 266. 4 Mr. Madison, after some general remarks upon the limitations of all political power, took notice of the peculiar manner in which the federal government is limited, saying:—“It is a grant of particular powers, leaving the general mass in other hands. So it has been understood by its friends and foes; and so it was to be interpreted." Reviewing, therefore, the constitution most elaborately, with this canon of interpretation before him, Mr. Madison denied the power of the federal congress to incorporate a bank. But notwithstanding the adverse position of this, the greatest interpreter of the constitution, the charter was finally granted. President Washington, however, hesitated to accord the bill his approval, submitting its constitutionality to three of his cabinet: to Mr. Randolph, the Attorney-General; to Mr. Jefferson, the Secretary of State; and to Mr. Hamilton, the Secretary of the Treasury, whose written opinions thereon he requested. The former two reported in the negative. Mr. Hamilton, however, whose ad signed the bill only after much hesitation. And when, twenty years later, the question of continuing the power of the bank was presented to congress, so serious was the constitutional objection deemed to be, that for four years successively a renewal of its charter was refused. In 1819 the question came before the Supreme Court in the case of McCulloch v. Maryland, and it was there decided that, with reference to the performance of such functions as the government of the United States itself could undertake, which were expressly and in terms delegated by the States, and in reference to such only, the federal government could create a corporation as an instrumentality and an agency, and that the instrumentality must be necessary to that end. The doctrine of this case was subsequently affirmed by the same court in Osborn v. The Bank of the United States, a case which arose out of an at 4 vocacy in the constitutional convention of the adoption of a nationalistic form of government is historic, and who never fully reconciled himself to the form actually adopted, seized eagerly upon this opportunity to advocate strengthening, by a liberal interpretation of the constitution, a government which he believed too weak to accomplish the great objects for which it was created. But even he argued only in favor of the power of the United States to erect a corporation necessary to aid it in the accomplishment of those purposes for which the government was founded. He thereupon examined the nature of a national bank, its tendency to enhance the credit of the government by forming the basis of borrowing money, and shows its necessity as a fiscal arm of the government, freely admitting that congress has no authority to erect corporations beyond the sphere of the powers expressly delegated by the States, nor unless it be shown to be a proper and necessary means of ex 3 ecuting those powers. 1 Hamilton's Works, 113, 114, 131. 1 The debates of that period are full of instruction upon this question, as showing what the leading statesmen and constitutional interpreters thought of the exercise of that power on the part of congress, the federal judiciary not having delivered any opinion on the subject until 1819. Mr. Simon Sterne's Argument, supra. 24 Wheat. 316. 3 McCulloch v. Maryland, 4 Wheat. 316, 421, where Chief Justice Marshall, delivering the opinion of the court, said:-"Had it been intended to grant this power, as one which should be distinct and independent, to be exercised in any case whatever, it would have found a place among the enumerated powers of the gov ernment. But being considered as a means, to be employed only for the purpose of carrying into execution the given powers, there could be no mo tive for particularly mentioning it." 49 Wheat. 61. tempt on the part of the State to tax the bank, the right being denied by the court. Notwithstanding these decisions, the question was re-debated during President Tyler's administration, the controversy having extended beyond the time when the life of the bank was destroyed by the action of President Jackson. The present National Banking system was created under the exigencies of the civil war, as part of the fiscal arm of the government and in aid of the regulation of the currency, at a time when its absolute necessity could not be doubted and when the public mind subordinated every matter of constitutional law to the paramount question of expediency. Having, moreover, the support of the doctrine declared in McCulloch v. Maryland, the constitutionality of its existence may be deemed, at the present day, to be well established." § 5. Of the power of the federal government to incorporate a railway through the territories.- Until the second session of the fiftieth congress, the only other cases in which the general government has exercised the power to create corporations have been those in which it imposed duties and obligations or conferred powers upon various State organizations to enable them and others to extend the building of a railroad through the territories of the United States from the Missouri River to the California State line, all of which, so far as congress alone authorized its construction, was built through territory over which the authority of the federal government was exclusive. Inasmuch as congress had power to build post-roads, and therefore to construct a highway within the territory of the United States, it could delegate that power to a corporation or create a corporation for the purpose of per 1 Chief Justice Marshall, delivering the opinion in this case also, said:"Why is it that congress can incorporate or create a bank? This question was answered in McCulloch v. State of Maryland. It is an instrument which 'is necessary and proper' for carrying on the fiscal operations of government." And again, referring to the authority to incorporate:-"The question on which this right would depend must always be, are these faculties so essential to the fiscal operations of the government as to authorize congress to confer them?" 24 Wheat. 316. 3 For the act creating the present National Banks, see 12 U. S. Stat. at Large, 665. 4 Mr. Simon Sterne's Argument, 15, supra, § 3. forming its own functions. That power has not been seriously questioned.' How careful congress was in the Pacific Railroad legislation, which was admittedly of the greatest national importance, not to overstep the constitutional boundaries in that regard, is evinced by every act from 1857 to 1873 in relation to those highways. Land grants were made to the several States through which the separate links which were finally to constitute the great national route were constructed, so as to enable the States to subsidize and organize the railroads which were ultimately to form a part thereof. The direct action of the United States, in the way of conferring corporate powers and authority to construct, and its direct investment by way of subsidies of land, were made only from the borders of Missouri across a country at that time wholly under a territorial form of government, no further than to the State line of California.2 § 6. Of the incorporation of the Nicaragua canal by the federal government.- In the second session of the fiftieth congress, that body granted a charter to the Maritime Canal Company of Nicaragua, a company organized for the purpose of constructing, equipping and operating a ship canal from the Atlantic to the Pacific oceans, through the territory of the Republic of Nicaragua, or in part through that State and the Republic of Costa Rica. This is the first time in the history of the constitution that congress has attempted to grant an act of incorporation for a purpose apparently foreign to any power expressly delegated to the federal government by the 1 In California v. Pacific Railroad, 127 U. S. 39, Justice Bradley, referring to the Pacific Railway legislation, said: "It cannot at the present day be doubted that congress, under the power to regulate commerce among the several States, as well as to provide for postal accommodations and military exigencies, had authority to pass these laws. The power to construct or to authorize individuals or corporations to construct national highways and bridges from State to State, is essential to the complete control and regulation of interstate commerce." It will be observed that Justice Bradley avoids speaking here of the power of congress to create any corporation. It is the power on the part of the gov ernment to construct, or to "authorize" individuals or corporations to construct, which is declared to be essential, the creation of the corporations, upon which the authority is conferred, remaining, as is implied, with the States. 2 Mr. Simon Sterne's Argument, 16, supra, § 3. States, and unless, under a most liberal construction of the constitution, the purposes and objects of this company can be shown, pursuant to the rule in McCulloch v. Maryland,1 to be necessary and proper to the exercise of some power expressly delegated to the general government, that act of incorporation must, under the doctrine of the same case, be ultimately held to be null and void.2 7. Creation by implication.- No precise form of words is necessary in the creation of a corporation. If the words "found," "erect," "establish," or "incorporate," are wanting, it is not material, and if powers, rights, or franchises such as cannot be exercised or enjoyed without corporate existence, be conferred by the enabling act upon an association of persons designated by a collective name, it will be sufficient to invest them with the further franchise of being a corporation. This is the rule, although the statute may in terms declare that the powers thereby conferred shall not be so construed." 14 Wheat. 316. 2 This company, however, derives an unquestionably constitutional corporate existence from the State of Vermont, from which it had obtained a charter before it sought incorporation at the hands of the federal government. 3 Dunn v. Oregon University, (1883) 9 Oregon, 357; Stebbins v. Jennings, 18 Pick. 187; New Boston v. Dunbarton, 15 N. H. 201; Tone Conservators v. Ash, 10 B. & C. 349; Angell & Ames on Corporations (11th ed.), § 76; Rex v. Armory, 1 T. R. 572; 10 Rep. 406; 1 Rol. 513; 4 Com. Dig. tit. Franchises (F. 6); Harrison v. Timmins, 4 M. & W. 510; Wordsworth on Joint Stock Companies, 41, 275; Mahoney v. State Bank, 4 Ark. 620, per Lacy, J.; 1 Kyd on Corporations, 63, 64, 65; Falconer v. Campbell, 2 McLean C. C. 195. sible for me to see the force of the argument that because the legislature have constantly avoided to call these associations, or any of their machinery, a corporation, therefore we cannot adjudge them to be so. If they have the attributes of corporations, if they are so in the nature of things, we cannot refuse to regard them as such.” "For this reason it was decided by the Supreme Court of the United States and of the State of Massachusetts, that a company formed in England under acts of Parliament, investing it with corporate functions, was a corporation within the meaning of a law enacted in Massachusetts, although the acts of Parliament expressly provided that they should not be construed to incorporate the company. The provision in the acts of Parliament declaring that they should not be con 4 Dunn v. Oregon University, (1883) strued to incorporate the company 9 Oregon, 357. was contradictory to the other provisions, which actually did invest the company with the attributes of |