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THE GREEN BAG

tributes to the March Harvard Law Review (V. xix, p. 350) a discussion of " The Genesis of the Corporation," in which he reaches con clusions in accord with the article by W. Jethro Brown, on the " Personality of the Cor poration and the State," published in the Law Quarterly Review after this article was written. Mr. Brown's article is reviewed in our December number. He calls attention "to the fact that " the germ of the corporate idea lies merely in a mode of thought, in thinking of several as a group or as one. He contends that this mental process is familiar and inevitable and that the basis of all groups is the same. If a group acts together with sufficient regularity or frequency we begin to think of them and speak of them as some thing distinct from the individual compo nents. Thus without the aid of artificial crea-tion or authority from a sovereign power partnerships and corporations exist from the very nature of human activities. "The corporation, though representing per haps the most advanced attainment of the group idea, is only one manifestation of a de velopment which has gone on in every country tinder the sun having a claim to be called civi lized. Obviously, and this cannot be too strongly insisted upon, it was not the inven tion of any one man or one people." The corporation in its essentials is not pe culiar to any country or any people. The author then traces the history of the origin of corporations from which he sums up as follows: "Prom the temporal development we get. by reason of the association of individuals in the same locality plus an active interest there in, especially in trade matters, a unit interest which demands and receives franchises and privileges which belong to the associated per sons in a way not provided for by any of the existing theories of ownership. We get the fact of a oneness which has a place in business and law without the conscious recognition of;ts existence. The process was vague; it was not marked off by distinct steps. The one ness of the burgesses was there all the time, as it is in every group, but many years had to elapse and many unconsidered acts to be done before it emerged from the mist as something definite and real. Meanwhile the group idea was developing in ecclesiastical life. For

wholly different reasons religious groups were formed. "From the ecclesiastical development we get organizations of individuals formed for different purposes and by voluntary associa tion, which have a continuous existence and which are recognized as units." These facts called for a new legal theory and resulted in the conception of an ideal per son having legal rights and duties borrowed directly from the early English theory as to church ownership. "The corporation, then, grew by nature. It was the product of a natural evolution. During all the period with which our discus sion has concerned itself there was no rule that the corporation must have some definite and authoritative commencement. There was no rule that the corporation must be erected, set up, made by act of the sovereign power. By the middle of the fifteenth cen tury, however, it was settled as a matter of positive law that the corporation must be created by the sovereign power. This rule arose simply from considerations of political expediency. It was recognized that boroughs, organized communities, might be dangerous. It would not do for the sovereign power to have them exist too freely. This reason also applied to the gilds which were lik-y to become aggressive. Here too was a good source of revenue. The privilege of being a borough or the right to form gilds would be bought. The rule of law was based, like other rules of law, on public safety and convenience. "A corporation which in business affairs can do practically anything and everything that can be done by an individual and can do it anywhere and everywhere is a long distance from the true corporation which was brought into existence by absolute necessity, which was recognized simply because the progress ol events demanded its recognition, which was the result of natural growth, of logical evolu tion. The modern corporation is the product of arbitrary legislation struck off at a given time. It does not represent the natural growth of the corporate idea, but rather is a distorted application of that idea. Serving as a buffer between questionable acts and their natural consequences, it has been used to bring about a state of affairs in the commer