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railway companies, – corporations possessing, in many particulars, the nature of public institutions.
How far-reaching this decision really was, could not at the time have been perceived by the most far-sighted judge. Its effects have been avoided to some extent by legislative and constitutional enactments reserving the right to amend and revoke all subsequent.charters; but the large number of cases arising under it, and which fill the reports of the Supreme Court, show that all efforts on the part of State legislatures to recover the power of which the Federal Constitution, as thus expounded, has deprived them, have been only partially effectual. It frequently stands in the way of what all admit would be beneficent legislation, and places many corporations monopolizing enormous privileges and wielding enormous influence — influence so great as often to shape legislation and control political action — entirely beyond governmental control, so long as they keep within the limits of vague and loosely worded acts of incorporation originally drawn up by themselves. Since the decision, a new class of corporations have sprung up and extended their operations over all the continent, of a character such as was before unknown. Commerce is almost entirely dependent upon them, and in their honest administration and wise co-operation with the various great industries of the country, every person in the land is interested. To these great associations, often so powerful as to constitute quasi sovereignties, the decision in the Dartmouth College case has been indeed, not a Magna, but a Major Charta, for it has conferred upon them an independence such as the East India Company in its palmiest days never possessed, or even aspired to.
We have spoken of the acquiescence with which the first decision was received. It was doubtless to a great extent owing to the fact, that the existing and succeeding generations did not feel the consequences which we begin to feel and perceive to flow from it. Corporations then were few in number, and possessed little power for harm; and great confidence was felt, and justly felt, in the good sense, judgment, and caution of the persons who composed the various State legislatures. There was still, too, a lingering suspicion that the main danger in our institutions lay on the side of attempted infringements of the rights of property, and if the interpretation by the court of this prohibition
on the States was broader than had ever been intended, — if statesmen were rather startled to learn that the obscurely worded protection given to contracts extended to grants of governmental prerogatives and releases from essential public burdens, — the thinking public, strongly interested in s serving the sacredness of vested rights, was consoled with th« thought that proper was weak and the electoral franchise all but universal, and t! if the decision was inconvenient, it protected them from dang infinitely more calamitous.
To question the correctness of this decision may seem to many and particularly to some ardent admirers of Chief Justice Marshall and Mr. Webster, as profane as it would be to question the authenticity of the writings of St. Paul, — nay, in this sceptical age, even more so. And some of those who think it would have been better had the case been decided the other way, may reasonably condemn any attempt to unsettle a branch of the law so long established. But the murmuring at the entire doctrine which is beginning to be heard throughout the country, the restless, fitful desire to get rid of it, not yet fully understood by themselves, which large classes of people begin to feel, indicate. that the whole subject must at no distant day be carefully reexamined. Any decision in an ordinary case ought as a rule to stand ; and when a decision has stood for fifty years, even to question it, lightly and without sufficient consideration, is injurious and censurable, as tending to unsettle our entire system of jurisprudence. But constitutional decisions which take from the political department of government powers and prerogatives usually belonging to it, and which legislation cannot remedy, stand on a different footing from ordinary precedents involving questions of private rights. Fifty years is a short period in the history of a nation living under a constitution intended to be perpetual. The consequences of the Dartmouth College case are now beginning to press heavily upon great communities, and the pressure, we believe, will increase rather than diminish. It involves questions of political power, political necessity, it may yet be of political safety, and the case will not be let alone, however wise it may be to do so.
Under these circumstances, even hostile criticism of the case may do good, if in no other way than in strengthening the foun
1 Legal Tender Cases, 12 Wallace, 554.
dations on which it rests, and convincing the public that their complaints of it are unjust. And as we are yet unsatisfied of its correctness, we shall briefly state, with the profoundest veneration for the great judges who first announced this decision and for the high tribunal that has steadily sustained it, in what respects
2 think it unsound. A legislature, in a fit of benevolence, inserts in the charter of a aritable institution (or rather does not strike out of it) that it all be exempt from taxation. . A great railway company wheeles a State out of privileges, — perchance coupled with a release from public burdens, — which enables it to hold whole communities in a state of vassalage more galling and more durable than any established by the feudal system ; or it combines with a ring of bad men, corrupts the judiciary, and plunders the commercial capital of the country at pleasure. Or, to use a more painful illustration, the perhaps most shamelessly corrupt and contemptible body of men that ever called themselves a legislature, grant to a corporation, for twenty-five years, the exclusive monopoly - enforced by penal legislation --- of killing butchers' meat in a great city and its suburbs. To rescind the exemption from taxation, when it proves burdensome to the State ; to \ttempt to limit the powers incautiously granted to the railway mpany, when shown to be mere instruments of oppression and
tortion; to repeal the monopoly of furnishing an essential o cle of food, even to save two hundred thousand people from
ration, ---are not wise and beneficent acts of legislation, but laws impairing the obligation of contracts, breaches of public faith so contrary to sound principles of government that they are classed with ex post facto laws and bills of attainder! Chief Justice Marshall did not mean this; but his decision means this to the present generation. 1 The truth is, that the Dartmouth College case, instead of protecting the weak against the strong, is a decision all on the side of power, making the strong stronger, and the weak weaker, almost to helplessness. Passing by the notorious corruption that has disgraced some of our legislative bodies, any one acquainted with governments and legislatures knows that when the servants of the State are honest and capable men, the danger is, not that private rights will be sacrificed to public wants, but that public rights will be made subservient to private or local interests and private cupidity. When we remember how the crown (that is, the public) property has been granted away in England, and even now, with all the safeguards that Parliament has thrown around it, is often alienated in a manner most detrimental to the State ; when we know how the New England States have been deprived of almost the entire seashore by legislative grants made in the supposed interests of commerce for erecting wharves, and afterwards often used for building purposes, and as a means of extorting money from the public for relinquishing privileges that cost nothing ; when we see how Western States have been duped into making most extravagant grants of the public domain for the purposes of railways, by capitalists who took advantage of their necessities, and, having grown rich out of their bounty, have frequently left the railways to them overburdened with debt, and scarcely able in consequence to accomplish the purposes for which all this property was given, - we see that no Dartmouth College decision was needed to protect legislative grants in free, or even in the most democratic, countries.
That corporate franchises often involve questions of private vested rights which would be destroyed by their revocation, we readily admit. But the Federal Constitution does not profess to protect property from local State legislation, unless some contract is impaired within the meaning of the prohibition in regard to them. Property is of various kinds, and is protected to different degrees of certainty and on different conditions. Real property is one kind; ordinary personal property is another; slave property, as the owners of it have found out, was another; and the peculiar interest which a corporation has in its franchises is another. These species of property differ from each other according to the different nature of each, and of necessity must be held with different degrees of security. Laws may be passed, seriously affecting them, and even destroying them, which, although producing great hardship, would not be unjust, or calling for compensation to the losers by them. We shall show, we think, that the laws impair ng contracts to which the Constitution refers, are laws esse tially dishonest, immoral. Not every law impairing private contracts is immoral. An embargo does this; yet, when necess -y, it is just, although it may destroy contracts, and even ruin, pecuniarily, people interested in them. A bankrupt law impairs contracts; but it is generally admitted to be wise ; and we do not believe that it was intended that the States should be restricted from passing laws of this kind, with their full operation and effect, unless the restriction can be implied from the grant of this power to the general government. " It is not,” says Mr. Justice Strong, in the Legal Tender Cases, 1 “ every hardship that is unjust, much less that is unconstitutional.” There are governmental functions which must go on, be the consequences to private interests what they may, and where the law provides no indemnity. The civil operations of government sometimes destroy property, life, and even contracts. Its military operations destroy these to an appalling extent.
A fire-engine, driven at full speed on its way to a fire, knocks a man down and kills him. He is deprived of life " without the judgment of his peers and the law of the land.” Is Magna Charta violated ? The answer is, that it has no application. The public safety requires the engine to drive through crowded and narrow streets at a dangerous speed, and no private rights can stand in its way. No such right or power is given in the Constitution. It has its origin in the law of nature. Salus populi suprema lex is the first of law maxims. And herein lies, in our judgment, the solution of the much vexed question whether Congress can impair the obligation of contracts. There was no such power given; it would have been anomalous indeed if there had been. But contracts are no more sacred than life and limb; and there are governmental prerogatives that must at times be exercised, however they affect contracts. The power to lay an embargo, and to establish a bankrupt law, are instances of these. The Legal Tender Cases afford a most striking illustration. However doubtful may have been the constitutionality of the Legal Tender Act (and all admit it was a very close case), we must confess that we never could appreciate the argument drawn from its impairing contracts. All this, we think, holds true equally in respect of the States acting within the limits of their sovereignty. Of course this principle has limits which we cannot now consider. We merely use it as an illustration. It is liable to abuse; but that only shows the imperfection of all human institutions, and in no wise disproves its necessity. Out of it grows what is known as the police power, which we apprehend may often seriously
i 12 Wallace, 552.