The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1889-04-21
STATE CONSTITUTIONS.


AxTsrxx sx-eexsozkrx0Ss
d corporation hss bees sesned - s.sn
s~fsassAa s~3ag. favisisse. irtzrg1e Ec aaa
sxizssnx onfy - eoztsM pAtzzss Of las
TIE Arts 81 . eeTporxtsen Mrs not. stySEsgs
speaking. Toe sess Of - rsenibers. naz5 81 -
fer this rexs@z, aoa5zsexs, sn&t txsza
zanfsy Ia apt 70 view with c4ssTrs< the
operations 81 corporations crgk1sxsd fas
parYosss thai ere quasi psibsse IA shslE
sssuss. A-s carry Essh thess possibilities
ssw sxttstisn as1 En5uss Discrimination
Passsc eFsnaaa aa1 The elaam Inst ct
ssehe1 70 Alshonoresse pFaesiees are power
fas factors In rezniAstnx tlie cDnanes OF
lad vsdUals 10 their rxszss6ra with seeszty
bsss ~ applied - q corp ssassoa fsey are
roet as nniy 10 Ear ax fheJ can invoke
sgasEsf Il shs power 70 which Il owes iss
exlsserne. Ii ether words corporations
are sys 10 knew 80 i&w af saoEsgGty OF
code of ethics such 81 ETe recognized ID
dealings between individuals. They are
crsasntes OF positive lay sra 20 long -
ss.sT refrain FROM acts snst are Illegal, o.
DISTINGUISHED froE acts thai are dfshon1F-
seie. hey fear 10 penalty. Ifis for THIS
Fsason that positive and de6aite restrie-
tioas become necessary TO regulate tie
eoraacs of eorpoEsticax AZ . general
rugs IL EsAy he. aad e0uhslxss Ia. fTue that
xssYernmens interference with the natural
e0passicns Of trade and sas sondues OF
private business Is productive Of more
hsssa thaa good Bnt experience has
demonstrated that in sous cases goveFn-
mens supervision sn1 regulation Is not
ouiy eessrAkie bat 20 q certsia extern.
necessary. This 10 the case with reference
to corporations TIE distinction between
&c Individual OF partnership and 3 corpo
ration is thai In the one case the liability
OF. fse Fssftses II unlimited aud the re-
sponstHllify fer their actions clear, while
la The other The liability OF the stock
faoIsseFs 10 limited and their responsibility
for sheir com bined arts IL hidden behind
corporate name Il "a clear that the lsw
In permitting the organization OF sssoesa-
tons with limited liability grants priv
lego, ard this being 10 there can De no
hardship In imposing certain restrictions
or conditions UPON The right 70 enjoy IL
The question is not. therefore. 81 20 the
right Of the state 10 regulate corporations
bus az 10 the most effective manner of do
fog f.
II restrictions aud regulations regarding
corporations are embodied In q constifs-
ton, they differ from IegIs alive enact
mems not ia effect bat IA shesr suseepii-
bfiity 20 change. A statute may be altered
OF scseinded with comparative esse. " here
rs aa organic law, according to general
usage, can be changed only with difficulty
and by the observance OF prescribed for
malities. In discussing thu question OF
corporations, therefore. from eonstitu-
tIoissi standpoint. iL is proper 10 consider
not what Limitations should be ina posed
upon them. or By what rules they should
be governed. bat rsther shat limitations
and rules sre sufficiently important and
general In their nature 10 a,ec0me sneor-
porated in the constitution Of The state as
part of IT'S fundamental law. II has been
Admirably said by an eminent writer upon
constitutional law that 'aiil ono sense q
state constitution il properly called an or
ganir iAw-ihe fundamental Law pursuant
to which the state government IL perma-
nently organized and conducted II Is not
. code. civil or penal; and whatever tends
to turn IL snto one, en6angeis its ultimate
stability By exposing IL TO every gust OF
popular excitement or caprice.
A correct understanding OF the true
scope OF q constitution is especially mecca
sary Ia discussion of the provisions that
II should contain regarding corporations,
and IL ID also necessary to bear In mind the
distinctions that exist between the differ
emit kinds Of corporations. There IS q
plain distinction between pablo corpora
tons like towns and villages, which are
political institutions created by law for
purposes of civil government, aud private
corporations which are associations
frfmsd By agreement of members for the
sake OF peesnIary gain. There Ia also a
distinction. although 1t is not so well de-
fined, between corporations that are
strictly private In their nature and those
which are quasi public.
Regarding public corporations little need
be said. The provisions OF all the state
constitutions regarding them are similar in
their principal festnr s. II is generally or.
daiaed thar the legislature shall provide
for the organization of cities aud towns
either By general or special laws: aud that
The pnwsr OF contracting lad. bsedness or
loaniGg theis esedi. shall be restricted. In
many esses counties. cities. towns or other
munteipsl corporations are prohibited
from bee ming stockholders ia any Joint
stock company, association or corporation,
or laantDg their credit ia aid of the same.
An excs etion 10 son stfnses made. however,
In favor OF railroad companies.
common constitutional provision re.
gaFdng private corporations is one pro.
hioiting their creation EXCERPT under gen.
eral laws. sueh provision is not only
h{st IL x-fxftAtxatxss. So
esis IT = state, Laws authorizing the for.
nation OF private corporations apon com
piianee with certain conditions tend to en-.
cenfage the sggu CATION and employment
OF capital ia many enterprises OF private
aud pnelic neft which Ia many cases
might be retarded by the necessity of an.
Flting Ter special chatter. This method
of procedure also prevents the Obtaining of
special privileges and exemptions which
might be granted II special charters were
permitted. Among other pnyislous some.
times adopted are those fsrbldsing thu
granting 10 companies of nny exclusive
privilege, limiting their dufatien and the
right to hold real estate: and rrescrihing
specific rules for the copdues OF corporate
business With reference 10 che issue or in
crease OF stock, and with reference To the
Individual liability of stockholders. All
OF these provisions. as we'll ~ those re,
iating exclusively 20 banking corporations
which are sometimes inbodEed In the con
stttnitnHs of the states. are eininentsy wise
~ far as the restrictions Imposed are con
eeFaee. Tee only question regarding them
Is whether they had not hes; be left To the
legislature ~ he dealt with by statutory
eaaetfnents. As psrt of tho constitution
ihsy are limitations anon the aw.mskinx
power imposed by the people apou
their ehess n representatives.. aud as one
writer snsgests. lit may Dc that the scsp,ic
of popular Institutions would point To such
Limitations as pEoof that the people OF The
sfsies. conscious Of the decay es public viz.
tue. have ALREADY come to siissruss them.
selves ia the person OF their representa-
sisss The trsse course tn be followed
w@ald Stem 80 be TO etnhody In the Cons,i
tuition Only such provisions - experience
has shewa 10 be desirable as eermaneu,
interchangeable laws BOT likely 70 become
oenextuns az useless By tie LAPSE Of time
or the changing conditions incident anon
age and progress.
II Tsmsias 10 consider the constitutional
re saissleus hat should be imposed apon
corporations that sra quasi public IN their