many attractions to offer. It would
do away with the principal excuse for the holding-company device, and
pave the way for its abolition. It should satisfy the general public
because it would clothe the Government with enormously increased powers
of regulation and control; it should be attractive to the corporations
because it would afford relief from many of the intolerable
restrictions, not always fair or intelligent, imposed by state
legislatures. Under present conditions the right of a corporation of one
state to do business in another (other than business of an interstate
character) rests merely upon comity and may be granted or refused upon
such terms as interest or prejudice may dictate. The right of a federal
corporation to do business in the several states, on the other hand,
rests upon the powers conferred on Congress by the Constitution and is
not subject to the whims of state lawmakers. Such a corporation is not
"foreign" in the states into which its activity extends and state laws
aimed at foreign corporations will not hit it. Moreover a corporation
with a federal charter can always take its controversies into the
federal courts (except when Congress expressly forbids)[1]--a right of
extreme practical value where anti-corporation feeling or local
prejudice is strong.

[Footnote 1: The Act of Jan. 28, 1915, took away this right in the case
of railroad companies incorporated under federal charter (38 Stat.
804).]

The scheme of federal incorporation presents some constitutional
questions. As pointed out in a previous chapter, the Constitution
nowhere expressly confers on Congress the right to grant corporate
charters. Under Chief Justice Marshall's doctrine of "Implied Powers,"
however, it has become well settled that Congress has implied power to
charter a corporation whenever that is an appropriate means of
exercising one of the powers expressly conferred, for example, the power
to regulate interstate commerce. The most serious constitutional
question appears to be whether Congress can authorize such a corporation
to manufacture, the process of manufacturing not being an activity of an
interstate character. In any event, the difficulty could be surmounted
by a constitutional amendment. In these days of facile amendment such a
thing seems quite within the range of possibility.

The scheme of federal incorporation is by no means new. In the
Convention of 1787 which framed the Constitution, Mr. Madison advo