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detrimental a hundred years hence; and when charities receive the privileges which they do receive from our law, — when, as is generally the case, they are exempt in whole or in part from any share in the public burdens, and have powers of holding and enjoying property, and of receiving devises and bequests, such as ordinary institutions have not, - it is but right that some power to regulate them, and to make them conform to the changing public necessities, notwithstanding any special direction given by the founder, should exist either in the legislature or in the State itself. No man has the power to make a perpetual disposition of his estate beyond the control of the law, either present or future; and why should the founder of a charity or an eleemosynary corporation have this power? Why, too, is it a greater breach of public faith to change the condition on which a corporation holds its property, than it would be to change the conditions upon which unincorporated trustees do? We, therefore, insist that such a power is eminently proper, and that there is no violation of public faith, no breach of “the social compact,” to use Mr. Madison's words, in a legislature's interfering and regulating the administration of all charities, whether incorporated or not. But to admit the power of the legislature in regard to them at all, we must admit it to the fullest extent, so far as the Federal Constitution is concerned. If charters are not contracts, then the Constitution of the United States throws no protection over them or over the property held under them.
All that we have said with regard to the necessity of having a power to control charitable corporations, applies à fortiori to great mercantile corporations like railways. Indeed, had the decision in the Dartmouth College case extended no further than to the charters of eleemosynary institutions, we should not have taken the trouble to review it. The power for harm which these corporations have is comparatively small; and if they are badly administered, the injury can be remedied to some extent by establishing similar institutions. But when we come to huge monopolies like railways, the necessity of some power of supervision becomes apparent; and this supervisory power, which, in its broadest extent, is not more than the necessities of the case demand, has been greatly limited and shackled by this decision. No supervision which the courts can exercise over them is sufficient to control them. The control they require is legislative control, not judicial; but regulations even of a police character, not reserved or established by existing laws at the time the charter was granted, would be a violation of the contract within the meaning of Dartmouth College v. Woodward, just as much as the repeal of the charter and confiscation of the property would be. For the legislature, without such a power being reserved directly or indirectly, to forbid a railway to cross a highway, at level, when, by the increase of business, it has become dangerous for it longer to do so, is, within the principle of the Dartmouth College case, impairing the obligation of contracts, and, in the opinion of Mr. Justice Story, a violation of Magna Charta.
It is evident that this doctrine makes the rights and privileges of artificial persons more sacred than those of natural persons. A man doing business is liable to the interference not only of all existing laws, but of any future law which the legislature may think it best to pass in respect of it. What is legal business to-day, may become illegal to-morrow. What business may be carried on to-day without taxation, may be heavily taxed to-morrow. His interests are subordinate to the changing requirements of the times and the changing interests of the public; and he lives, moves, and has his being, subject to constant legislative supervision. Are human beings of less account than corporations ? Are the rights of a natural person less sacred than those of an artificial, political person, the creature of the legislature ? This is very like a reductio ad absurdum. Yet such a doctrine is taught by Dartmouth College v. Woodward.
The truth is, that the power of the State to enact laws affecting the status of individuals, ought to be equally applicable to corporations. Corporate rights are contracts in the sense in which the so-called “social compact” is a contract. Corporations have a right to protection, the same as natural persons; they can rightly expect that they will not wantonly be interfered with, that their property rights will be respected, and to insist that they shall not be subjected to arbitrary regulations or restrictions. These are their rights; but none of them is a right protected by the Federal Constitution. That there is any contract that their charters shall never be amended, that their privileges shall never be lessened, that their burdens shall never be increased, we cannot admit. Of course the State can make a contract with a corporation, as it can with an individual; and a
law impairing it would be unconstitutional. All this, however, is true of corporations which hold their franchises expressly subject to legislative control. It does not affect the question we are discussing.
We have reviewed the arguments of court and counsel in this celebrated case as fully as our limits will permit, but still necessarily very imperfectly. We have avoided two subjects much discussed ; namely, the peculiar franchise enjoyed by the trustees, which Mr. Webster and Judge Story regarded as in the nature of private property, and the character of the property possessed by the college. Whatever may have been the rights of the trustees, and whatever the character of the college property, as we hold that they were not protected by contract from legislative interference and control, they are outside the question before us. As the right of the trustees to administer the charity uncontrolled by any one was the interest which Mr. Webster was employed to defend, it may well be imagined that he magnifies it greatly. Indeed, we believe the interest of the indefinite public is not alluded to throughout his argument, and it is very little considered by the judges. But it was this public interest — indefinite, in some respects remote, and yet the sole purpose for which the college was endowed, and its franchises conferred upon it — that gave the legislature a moral as well as a legal right to control trustees and college. As to the property of the college, its particular character depended upon the local law. It was in one sense private ; that is to say, it was not government property: but it was dedicated to a perpetual public use; and the trustees' relation to it as well as to the college was purely fiduciary, and not that of beneficial owners. And, as Mr. Burke says, the essence of a trust is accountability, – judicially, to the courts ; legislatively, to the legislature.
But the court in its wisdom decided all this differently, and people applauded at the time. Colleges showered their honors upon the successful counsel, and their professional effort was praised, and has been praised down to our time, to a degree somewhat beyond its merits, high as these are. Dartmouth College has enjoyed much prosperity, and has given us a succession of distinguished men that entitles her to the grateful regard of the whole country. Perhaps no other college in the land can mention among its graduates in the present century three such men VOL. VIII.
as Mr. Webster, Mr. Choate, and Chief Justice Chase. But we believe that, as Dartmouth University, she would have enjoyed equal prosperity, and that the dangers to which her eloquent son thought her exposed were to a great extent factitious and imaginary. Were an actuary called upon to calculate the chances of life of those colleges in New England over which the legislatures have control and those over which they have not, he would find it difficult, so far as danger from legislative interference is concerned, to estimate the difference between them. When New England legislators set out on a crusade against charitable institutions, public opinion there and throughout the Union will be too much demoralized to make even the protection of the Federal Constitution of much value.
We had intended to examine some of the later decisions of the court, and likewise to discuss the question of how far legislative grants might be annulled for bribery or fraud (on which subject, notwithstanding some recent opinions to the contrary, we think the position taken by Chief Justice Marshall in Fletcher v. Peck is the safest and wisest), and also to consider the argument that all the power which the State needs, she possesses under the law of eminent domain, — that is to say, that a State having been deprived by fraud of her prerogatives, has the privilege of buying them back. But we have already far exceeded our intended limits, or the limits of any ordinary review article; and these, and other interesting branches of the same subject, must be omitted.
It is proverbially easier to point out an abuse than to propose a remedy. Whatever may be said of Dartmouth College v. Woodward, there the decision is, fortified by half a century of precedent and practice. To overrule it, even if desirable, would demand, in the face of the vast interests involved, or supposed to be involved, in its preservation, more nerve than perhaps can be expected in any human tribunal. To attack it, we are vain enough to think, has required some courage. Whether it would not be wrong to overrule it under any circumstances, is a most serious question. We see the full force of the observations of Mr. Justice Davis in a recent case, that “a departure from it now would involve dangers to society that cannot be foreseen, would shock the sense of justice of the country, and unhinge its business interests, and weaken, if not destroy, that respect which has always been felt for the judicial department of the government.”] Indeed, we think that, if the decision cannot be controlled and limited without completely overruling it, a declaratory amendment to the Constitution, - such as was adopted to overcome Chisholm v. Georgia, - bad as that would be with the bitter agitation that would certainly accompany it, may be a safer remedy, as we should then avoid the shock to our system of law, which a judicial reversal of it would give. However, we have only attempted to prove that the decision was wrong, not to find a remedy for it, although we believe that a remedy must sooner or later be found for some of the evil consequences which we have been considering, and which directly flow from it.?
1 The Binghamton Bridge, 3 Wallace, 73.
2 Since writing the above, we have received Mr. Garfield's recent address on The Future of the Republic: its Dangers and its Hopes, in which the correctness of the Dartmouth College decision, so far as concerns railways, is questioned, and the necessity of the fullest legislative control over them, forcibly stated.