Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/478

 •469a.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VTII. still the legislature for ordinary purposes may be regarded as the state itself; and for the purposes of the following discus- sion, except as restrained by the state and Federal constitu- tions, and by the constitutional doctrines before referred to, the power of the state legislature over corporations may be regarded as unlimited in law ; for persons interested in a cor- porate enterprise are, in respect of the same, subject to the laws of the state just as in all other respects. § 409a. The political powers possessed by the Federal and state governments over corporations may be grouped under the general heads of police power, power to tax, and eminent domain. These three powers have their common source in the function of government to provide for the welfare of the people. Their distinguishing characteristics may be thus stated : By virtue of its police power the state regulates the use of property, but takes nothing. By virtue of its power to tax, the state, according to a ratio proportioned as evenly and justly as may be, takes property for public uses without making direct compensation. 1 By virtue of its power of eminent domain, the state takes the property of individuals for a public purpose, making just compensation, but without regard to whether it takes more of one man's property than another's. It is essential to the existence of these powers that they should override private rights. Yet our system of institutions places limitations on them. These limitations are of two dis- v. Pike County, 101 U. S. 677. Com- pare Wade v. Travis County, 174 U. S. 499. But the Federal courts will not follow a state court in deciding upon questions of general commer- cial law not depending on local usage or statutes. Swift v. Tyson, 16 Pet. 1; Railroad Co. v. National Bank, 102 U. S. 14; nor, of course, in de- ciding whether a state statute con- flicts with the Federal constitution. Jefferson Branch Bank v. Skelly, 1 Black, 436. See § 318. 1 There would often be manifest injustice in subjecting the whole 458 property of a city or of any district to taxation for a local improvement. The rule of equality and uniformity prescribed in cases of taxation for state and county purposes, does not require that all property or all per- sons in a county or district should be taxed for local purposes. He who reaps the benefit should bear the burden. Hagar v. Reclamation District, 111 U. S. 700, 705; Louisi- ana v. Pillsbury, 105 U. S. 278, 295; County of Mobile v. Kimball, 102 U. S. 691, 704.