Page:The Green Bag (1889–1914), Volume 24.pdf/56

 The Editor's FEDERAL INCORPORATION THERE is little doubt that Con gress, under the interstate com merce clause of the Constitution, has the legal right to issue a federal charter of incorporation to a corporation which purposes to engage in interstate com merce. Hamilton's proposition for a United States Bank was met by the argument of Madison that the Consti tutional Convention of 1787 had re jected the grant of a power to Congress to give charters of incorporation, and that the proposed incorporation of a federal bank would be unconstitutional. Doubts on this score were set at rest by the decision of Marshall in McCulloch v. Maryland,1 upholding the con stitutionality of the incorporation of the second United States Bank. Marshall held that Congress has the power to create a corporation whenever the cor poration is a necessary or proper means for carrying into execution any power conferred by the Constitution upon the Government of the United States. Inasmuch as regulation of interstate commerce cannot be carried out by more appropriate or efficacious means than federal incorporation, and such regulation cannot be complete without recourse to incorporation, the power to incorporate seems to be implied in the interstate commerce clause. It is important to emphasize the fact that federal incorporation should not (1819) 4 Wheat. 316.

be looked upon chiefly as a device to afford a special class of corporations immunity from state restrictive legis lation. While some of its advocates do lay stress on that consideration, one may easily fall into the temptation to forget that legislation can no more de prive the states of their constitutional powers than it can add to the delegated powers of the federal Government. The decisions of the Supreme Court are set ting the boundaries separating federal and state powers, and Congress can only follow the trail blazed by the interpre tation of the fundamental law. The advantages of federal incorporation are sufficiently numerous without any sup posed immunity of greater extent than corporations now have the legal right to enjoy. The greater uniformity and sim plicity of corporation law under a system of permissive federal incorporation, and the ease of its administration both in the interest of the corporation itself and of the public, are alone sufficient advantages. Congress should not proceed upon the theory that the federal jurisdiction over federal corporations excludes at every point the state jurisdiction. The right of the state to exercise its own police powers for the protection of purely local interests should be freely admitted. A hint of the way in which it might be possible to determine the scope of this state jurisdiction may perhaps be found in Missouri Pacific Ry. Co. v. Larrabee Mills.* In this case the Supreme Court 2iTu. s. 612.