t
characteristic, that of relieving the members of responsibility for
the debts of the corporation, is an invention of very modern times
indeed, the first statute of that sort having been invented in the
State of Connecticut, enacted in May, 1818. These early English
corporations, such as the Turkey Company, the Fellowship of Merchant
Adventurers, chartered in 1643, or the Hudson Bay Company, usually
gave a monopoly of trade with the respective countries indicated, such
monopolies in foreign countries not being considered obnoxious.[1] The
wording of such early charters follows substantially the language of
a town or guild charter, and was doubtless suggested by them.
Unfortunately, it has never been the custom to print corporation
charters in the Statutes of the Realm, and it is practically
impossible to get a sight of the original documents if, indeed, in
many cases, they now exist. So far as I have been able to study them,
they always give the right to transfer shares freely, with the other
great right, perpetual succession; but no notion appears, for at least
two centuries, that the shareholders are relieved from any of the
legal obligations of the corporation.

[Footnote 1: The charter of the East India Company was attacked on
this ground and successfully defended by Holt on the ground that the
common law did not mind monopolies in trade with heathens!]

In order to understand this whole problem it is necessary to bear
in mind certain cardinal principles of our constitutional law. All
corporations, with the exception of national banks, two or three
railroad companies, and the Panama Canal, have been and are creatures
of the State, not, as yet, of the Federal government, which can only
create them for purposes specifically delegated to it and not merely
for private profit. The power to create corporations is essential to
sovereignty, and the sovereign may decline to recognize all but its
own corporations. Under the doctrine of comity, such corporations can
act in any other State with all the powers given them in the State
where they are created, except only they be expressly limited by a
statute of such other State. They may, however, be entirely excluded;
only not to the destruction of property rights once acquired. On the
other hand, corporations conducting interstate commerce may not be
excluded or such business interfered with by State legislation.

The writer was for four years counsel to the Industrial Comm