recognized as one of the great interests which the organic law should regulate. The legislation which we have described had long caused corporations to be deemed odious monopolies, and partisan agitators designated bankers as "rag barons," and manufacturers as "cotton lords." The new Constitution, in attempting to remedy the existing evil, prohibited the creation of any new corporation, except by the affirmative vote of two-thirds of the members elected to each branch of the Legislature. This alteration was either a political blunder of men who wished to remedy an existing evil without knowing how, or it was a stratagem of interested men to perpetuate existing monopolies, by rendering the creation almost hopeless of competing new institutions. But contrary to every reasonable expectation, the restraints imposed by the new Constitution facilitated the creation of corporations, by reason that a negative vote came to be deemed a harsh exercise of an unreasonable power, while an affirmative vote came to be deemed a common courtesy, which every member of the Legislature ought to grant to a fellow-member, whose constituents desired to participate in corporate privileges. So numerous, by these means, became banking corporations, that except in some few inland localities, no pecuniary interest existed to resist the further creation of those institutions. Hence, in the year 1838, a law was enacted by which banks could be instituted by voluntary associations, under prescribed general forms and regulations. The Legislature was unable to accord to the associations a complete corporate organization, by reason that the Constitution had been construed as prohibiting the creation of more than a single corporation in any one bill. The associations are, however, essentially corporations, though not endued with the usually prescribed machinery of a

corporate seal, a board of directors, and a right to sue and be sued, under a corporate name, and without the usually prescribed limitation to the number of the directors, the duration of their office, and the mode of their election. The associations have remedied such of these omissions as are remediable; but some of the associations have adopted few directors, and some many. Some are governed by directors, who are chosen annually, while others are governed by directors who are never elected by the stockholders, but continue in the office for life, with a power in the survivors of the board to supply all vacancies that may happen therein by death or resignation. Such an organization seems almost irreconcilable with honest intentions on the part of the originators, and is certainly capable of great perversion against stockholders, who happen not to be directors; but we have heard of no fraudulent result, a fact which shows remarkably that the absence of dishonest practices depends but little on legislative precautions, and that honest practices depend as little on legislative furtherance.

§ 5. THE CONSTITUTION OF 1846.—Thus existed corporate agency, and banking corporations in particular, when the Constitution of 1821 was superseded, in 1846, by our present Constitution. The old argument, that corporations could not sustain unrestricted competition, had been disproved by eight years of prosperous experience in banking, under the above system of voluntary associations, and of several laws for the creation, at will, in 1811, of manufacturing corporations; in 1813, of religious corporations, medical corporations, and colleges; and, as early as in 1796, of corporate libraries; besides the daily experience, in his private concerns, of every man, that "competition is the life of business,"-not its death. The Convention that formed

the Constitution of 1846, became, therefore, intent on removing from corporate agency its monopoly character, which was so generally odious as to excite, at one time, an ill-directed zeal for the disallowment of any corporate grants, no other remedy for the monopoly evil being apparent. But the new Constitution devised a better remedy. It retained corporate agency as an allowable and valuable facility of social progress, but removed its monopoly feature, by permitting, under general laws, every person to obtain a corporate organization who desired the facility, and by interdicting only special grants of corporate powers. And thus was consummated the greatest triumph that our American experiment of equal rights has ever achieved in practical results. And when we reflect that this triumph was not achieved till sixty years after the theoretic legal equality of our citizens had been a fundamental axiom of our Government, we can see how slowly the human intellect comprehends new truths, and how long men bear patiently, and almost unconsciously, accustomed abuses. We can see, also, the fallacy of the belief that property is not strong enough to protect itself against numerical personal preponderance, when it was able, from 1777 to 1846, to engross for itself, in our State, privileges that could always have been advantageously shared in common by all persons. Unfortunately, however, the makers of the Constitution of 1846 were not wholly untrammeled from old prejudices, or, perhaps, from sinister influences: for, to the above prohibition against special privileges, they added an exception in favor of cases, "where, in the judgment of the Legislature, the objects of the corporation cannot be obtained under general laws"-an exception which enabled the timid, and the interested, to still make a logical fight to shield, under various pretexts, some few remaining objects

of corporate enterprise; as, for instance, the business of insurance, till the winter of 1849; of rail-roads, till the winter of 1850; of savings-banks that are not yet extricated from the grasp of special philanthropists, the care of the poor not being so wholly destitute of resulting private gains as it would seem to be. But as the reserved branches are annually diminishing in number, by reason of the pressure from without the Legislature, and the progress of intelligence within, we may well felicitate the world on the hopeful prospect, that after a few more struggles against both the letter and the spirit of our new Constitution, special acts of incorporation will be wholly discontinued in the great exemplar State of New-York. When any man shall find that no general law is adapted to his wants, he will be compelled to obtain some salutary enlargement of an existing general law, or the enactment of some new general law, to suit all class of cases like his own, and thus each man's interest will tend to the promotion of the interests of all men similarly situated; and all our citizens will enjoy the legal facilities to enterprise that are accorded to any citizen-an extent of privilege never before enjoyed by any people. Then, also, the time of our law-makers will no longer be dissipated in private legislation, and the morals of our senators and assemblymen no longer be subjected to the corrupting influences of private solicitation, for the consummation of personal advantages.

10*

ADVANTAGES AND DISADVANTAGES OF PRIVATE

CORPORATIONS.*

PART I.

THEIR ADVANTAGES.

AN absence of great wealth was common to the inhabitants of the United States at the commencement of our national Independence, and such a condition of society came soon to be deemed preservative of our republican institutions; hence a mediocrity of property among our citizens was early promoted in the State of New-York by an abolishment of entailments, a suppression of the English rights of primogeniture, and of protracted fiduciary accumulations. By the operation of these preventives our State would have possessed few large manufacturing establishments, and accomplished little in banking, insurance, and railroads, had not the absence of great capitalists been remedied by corporate associations, which aggregate the resources of many persons, and thereby yield us the advantages of great capitals without the supposed disadvantages of great private fortunes. Corporations are, therefore, the rose of wealth without its supposed thorn; artificial pecuniary giants, without the dangers that might be consequent to the existence of natural giants.

THEY ARE NOT NECESSARILY MONOPOLIES.

Corporations are occasionally permitted to engross some business, to the exclusion of natural persons; as till recently in our State, the business of banking, and as formerly in

Published in December, 1850.