hardened to them by custom, submissive to them through despair, or maddened by them into rebellion, and shall keep the honorable the Legislature, and all other honorables, in constant admonition that, though the Convention is passed away, and a new political millennium is begun, the people are not bound, like Satan, for any given number of years, but are unshackled and vigilant, all powerful to correct abuses, and as willing as powerful.*

*The new Constitution embodies these views.

10

CHAPTER II.

OF PRIVATE CORPORATIONS.

LEGISLATIVE HISTORY OF CORPORATIONS IN THE STATE OF NEW-YORK: OR, THE PROGRESS OF LIBERAL SENTIMENTS.*

§ 1. STATE CONSTITUTION OF 1777.-The first Constitution of New-York contained no specific provision for the creation of corporations, and they came into existence as only an incident of the general powers of the Legislature. The Legislature, on being solicited to create them, came easily to deem them favors, which were to be dispensed sparingly, lest capitalists should refuse to invest money in corporate enterprises-a notion that was assiduously propagated by the few then existing corporations, who naturally loved the possession of special privileges, and, perhaps, honestly feared competition.

Banking came early to be deemed peculiarly within the province of corporate agency, and as the business was lucrative to capitalists, and to men void of capital, who desired to borrow, a sharp contest soon arose between applicants for new banking corporations, and the existing banks that resisted the creation of rival institutions. This resistance was deemed so effective, that, in April, 1799, a bank was smuggled through the Legislature, under the guise of a charter" to supply the City of New-York with pure and wholesome water." Such an expedient could neces

Published in 1851.

sarily not be immediately repeated; hence, in the year 1803, some persons associated without a legislative grant, and organized a joint stock bank in the City of New-York, on a species of limited partnership, and another was formed on the same principle in Albany. But the influence which could prevent the creation of banking incorporations was sufficient to procure, when the Legislature assembled, the enactment, in the spring of 1804, of a law to prohibit unchartered banking, and under its very penal restraints the joint stock associations were suppressed, and banking, which previously was a lawful business to any person who possessed the requisite means of conducting it, was made a franchise, to be exercised only under a special grant of the Legislature. It qualifiedly continues a franchise up to this day, except as to the reception of deposits, and making of discounts, which branches of banking were, in the year 1837, exempted from the restraining law, and made lawful to any person, or persons, except foreign banks and officers of the chartered banks of the State.

§ 2. LOBBY MEMBERS.-To resist the creation of new banks, or to assist in procuring them, came at length to be a regular mercenary employment, by men who, like the straw bail in courts of law, attended the halls of legislation to be hired, and were sarcastically called lobby members. They disguised their venality, by feigning to possess a reputable interest in the projects they undertook to support, or to be patriotic promoters of the measures for merely an alleged public benefit; or if they were hired to oppose the measures, they feigned to be disinterested exponents of an alleged hostile public sentiment. Some of the persons thus engaged were otherwise respectable, and some were even distinguished as men of station, talent, and wealth. But the practices to which they resorted in secret, were worse

than their open acts, and became so threatening to public virtue, that on the 27th March, 1812, the then Governor of the State, Daniel D. Tompkins, terminated abruptly the Legislature, by prorogation, that the members might have time for reflection on the appliances to which they were. ostensibly yielding. He declared, in a public message,

that beyond any reason of doubt, corrupting inducements were some years since, held out to the members of the Legislature, to obtain their votes for the incorporation of a banking institution in the City of New-York, and very strong and general suspicion existed, that the emoluments then tendered were, in certain instances, accepted, thereby inflicting a deep wound upon the honor of the State, and upon the purity and independence of legislation. At the last session, an act was passed incorporating the late Jersey Bank, and a very general public opinion exists, that unwarrantable attempts were resorted to, on that occasion, to influence unduly the then Legislature. The journals of the Assembly show that attempts have been made to corrupt, by bribes, four members of that body, in relation to the bank now under consideration, and that improper influences have been employed on, at least, one member of the Senate. I entertain, therefore, the most fearful apprehensions that the confidence of the people, in the purity and independence of the Legislature, will be fatally impaired."

§ 3. LEGISLATION AGAINST THE TENDENCY OF Nature.— But the evil reprobated by the governor was not curable by prorogation, and when the Legislature re-assembled on the 21st of the following May, the bank, which had caused the prorogation, was triumphantly incorporated. The evil of the times consisted, not in the susceptibility to bribery of the Legislature, nor in the existence of corrupt corpora

tion procurers, but in the attempt to restrain the creation of corporations that were lucrative to the corporators, and beneficial to the public. We might well despair of the purity of legislation, at any time, if its security consisted in the absence of bribes. Providence has so organized man that he can rarely be bribed to perpetrate actions that will affect, injuriously, private persons or the public; but he can be easily bribed to perform actions which he deems beneficial, how much soever any erroneous laws may interdict them. Beneficial laws are rarely violated, and the violation of them is always d.sreputable; but laws of an opposite character are everywhere violated systematically, and the violation of them is hardly disreputable. Men will endeavor to circumvent unjust restraints; hence, in the year 1816, another attempt to smuggle through the Legislature a bank charter, was again successful in an act to incorporate an insurance company, though it was met by a new restraining law on the 21st of April, 1818, which, under very penal enactments, stopped the newly-discovered leak in the existing prohibitions. The above examples show the demoralizing effect of legislative attempts to restrain men unnecessarily from promoting their own interests. The rape perpetrated on the Sabine women by the Romans, was more a sin of the Sabines, who refused their daughters in marriage to the Romans, than of the Romans, who were destitute of women. In a recent publication of Carlyle, he reprobates legislation that is counter to the laws of God, and he probably alludes to legislation like the foregoing, which unnecessarily conflicts with the fruition of man's natural aspirations.

§ 4. THE CONSTITUTION OF 1777 SUPERSEDED BY THE CONSTITUTION OF 1821.-When our State adopted a new Constitution in 1821, corporations were for the first time