(§ 104) that, "regarded in the light of its effects, there is little hesitation in affirming that this invention to aid private enterprises has proved itself baneful in the last degree."

If we trace the beginning of this legislation, we shall find it originating at a time when there had been little occasion to consider with care the limitations to the functions of municipal government, because as yet those functions had been employed with general caution and prudence, and no disposition had been manifested to stretch their powers to make them embrace matters not usually recognized as properly and legitimately falling within them, or to make use of the municipal machinery to further private ends. Nor did the earliest decisions attract much attention, for they referred to matters somewhat local, and the spirit of speculation was not as yet rife. When the construction of railways and canals was first entered upon by an expenditure of public funds to any considerable extent, the States themselves took them in charge, and for a time appropriated large sums and incurred inmense debts in enterprises, some of which were of high importance and others of little value, the cost and management of which threatened them at length with financial disaster, bankruptcy, and possible repudiation. No long experience was required to demonstrate that railways and canals could not be profitably, prudently, or safely managed by the shifting administrations of State government; and many of the States not only made provision for disposing of their interest in works of public improvement, but, in view of a bitter experience of the evils already developed in undertaking to construct and control them, they amended their constitutions so as to

prohibit the State, when again the fever of speculation should prevail, from engaging anew in such undertakings.

All experience shows, however, that men are abundant who do not scruple to evade a constitutional provision which they find opposed to their desires, if they can possibly assign a plausible reason for doing so; and in the case of the provisions before referred to, it was not long before persons began to question their phraseology very closely, not that they might arrive at the actual purpose, which indeed was obvious enough, but to discover whether that purpose might not be defeated without a violation of the express terms. The purpose clearly was to remand all such undertakings to private enterprise, and to protect the citizens of the State from being taxed to aid them; but while the State was forbidden to engage in such works, it was unfortunately not expressly declared that the several members of the State, in their corporate capacity, were also forbidden to do so. The conclusion sought and reached was that the agencies of the State were at liberty to do what was forbidden to the State itself, and the burden of debt which the State might not directly impose upon its citizens, it might indirectly place upon their shoulders by the aid of municipal action.

The legislation adopted under this construction some of the courts felt compelled to sustain, upon the accepted principle of constitutional law that no legislative authority is forbidden to the legislature unless forbidden in terms; and the voting of municipal aid to railroads became almost a matter of course wherever a plausible scheme could be presented by interested parties to invite it. In

some localities, it is true, vigorous protest was made; but as the handling of a large amount of public money was usually expected to make the fortune of the projectors, whether the enterprise proved successful or not, means either fair or unfair were generally found to overcome all opposition. Towns sometimes voted large sums to railroads on the ground of local benefit where the actual and inevitable result was local injury, and the projectors of one scheme succeeded in obtaining and negotiating the bonds of one municipality to the amount of a quarter of a million dollars, which are now being enforced, though the work they were to aid was never seriously begun. A very large percentage of all the aid voted was paid to work up the aid," sacrificed in discounts to purchasers of bonds, expended in worthless undertakings, or otherwise lost to the tax-payers; and the cases might almost be said to be exceptional in which municipalities, when afterwards they were called upon to meet their obligations, could do so with a feeling of having received the expected consideration. Some State and territorial governors did noble work in endeavoring to stay this reckless legislative and municipal action, and some of the States at length rendered such action impossible by constitutional provisions so plain and positive that the most ingenious mind was unable to misunderstand or pervert them.

When the United States entered upon a scheme of internal improvement, the Cumberland road was the first important project for which its revenues were demanded. The promises of this enterprise were of continental magnificence and importance, but they ended after heavy national expenditures in a road no more na

tional than a thousand others which the road-masters in the several States have constructed with the local taxes; and it was finally abandoned to the States as a common highway. When next a great national scheme was broached, the aid of the general government was demanded by way of subsidies to private corporations, who presented schemes of works of great public convenience and utility, which were to open up the new territories to improvement and settlement sooner than the business of the country would be likely to induce unaided private capital to do it, and which consequently appealed to the imagination rather than to facts to demon

strate their importance, and afforded abundant opportunity for sharp operators to call to their assistance the national sentiment, then peculiarly strong and active by reason of the attempt recently made to overthrow the government, in favor of projects whose national importance in many cases the imagination alone could discover. The general result was the giving away of immense bodies of land, and in some cases the granting of pecuniary aid, with a recklessness and often with an appearance of corruption that at length startled the people, and aroused a public spirit before which the active spirits in Congress who had promoted these grants, and sometimes even demanded them in the name of the poor settler in the wilderness who was unable to get his crops to market, were compelled to give way. The scandalous frauds connected with the Pacific Railway, which disgraced the nation in the face of the world, and the great and disastrous financial panic of 1873, were legitimate results of such subsidies; but the pioneer in the wilderness had long before discovered that land grants

were not always sought or taken with a view to an immediate appropriation to the roads for the construction of which they were nominally made, but that the result in many cases was, that large tracts were thereby kept out of market and from taxation which otherwise would have been purchased and occupied by settlers who would have lessened his taxes by contributing their share to the public burdens. The grants, therefore, in such cases, instead of being at once devoted to improvements for the benefit of settlers, were in fact kept in a state of nature by the speculators who had secured them, until the improvements of settlers in their vicinity could make the grantees wealthy by the increase in value which such improvements gave to the land near them. In saying this the admission is freely made that in many cases the grants were promptly and honestly appropriated in accordance with their nominal purpose; but the general verdict now is that the system was necessarily corruptive and tended to invite fraud, and that some persons of influence managed to accumulate great wealth by grants indirectly secured to themselves under the unfounded pretence of a desire to aid and encourage the pioneers in the wilderness.

Some States also have recently in their corporate capacity again engaged in issuing bonds to subsidize private corporations, with the natural result of serious State scandals, State insolvency, public discontent, and in some cases it would seem almost inevitable repudiation. Their governments, amid the disorders of the times, have fallen into the hands of strangers and novices, and the hobby of public improvement has been ridden furiously under the spur of individual greed.

It has often been well remarked

that the abuse of a power furnishes no argument against its existence; but a system so open to abuses may well challenge attention to its foundations. And when those foundations are examined, it is not easy to find for them any sound support in the municipal constitutional law of this country. The same reasons which justify subsidies to the business of common carriers by railway will support taxation in aid of any private business what

soever.

It is sometimes loosely said that railway companies are public corporations, but the law does not so regard them. It is the settled doctrine of the law that, like banks, mining companies, and manufacturing companies, they are mere private corporations, supposed to be organized for the benefit of the individual corporators, and subject to no other public supervision or control than any other private association for business purposes to which corporate powers have been granted. Dartmouth College v. Woodward, 4 Wheat. 668; Buonaparte v. Camden and Amboy R. R. Co., Baldw. 205; Eustis v. Parker, 1 N. H. 237; Ohio, &c. R. R. Co. v. Ridge, 5 Blackf. 78; Cox v. Louisville &c. R. R. Co., 48 Ind. 178, 189; Roanoke, &c. R. R. Co. v. Davis, 2 Dev. & Bat. 451; Dearborn v. Boston & M. R. R. Co., 4 Fost. 179; Trustees, &c. v. Auborn, &c. R. R. Co., 3 Hill, 570; Tinsman v. Belvidere, &c. R. R. Co., 2 Dutch. 148; Thorpe r. Rutland, &c. R. R. Co., 27 Vt. 155; Alabama R. R. Co. v. Kidd, 29 Ala. 221; Turnpike Co. v. Wallace, 8 Watts, 316; Seymour v. Turnpike Co., 10 Ohio, 476; Ten Eyck v. D. & R. Canal, 3 Harr. 200; Atlantic, &c. Telegraph Co. v. Chicago, &c. R. R. Co., 6 Biss. 158; A. & A. on Corp. §§ 30-36; Redf. on Railw. c. 3, § 1;