part by municipal authorities. The constitution and laws of the state were subsequently changed so as to take away from corporations, which had been organized and put into operation under the old constitution and laws, the power to name members of the boards of water commissioners, and so as to place in municipal authorities the sole power of fixing rates for water; and it was decided that these changes violated no provision of the Constitution of the United States. Mr. Justice Field dissented in a very elaborate opinion, on the ground that the decision sanctioned the impairing of the obligations between the state and a corporation.

§ 586 c. Same Subject. — In Shields v. Ohio, 95 U. S. 319, a question similar to that of Munn v. Illinois arose, and it was decided that the consolidation, pursuant to the statute of Ohio of April 10, 1856 (4 Curwen, 2791), of two or more railway companies works their dissolution. All the powers and franchises of the new company which is thereby formed are derived from that statute, and are subject to "be altered, revoked, or repealed by the general assembly" under sect. 2, art. 1 of the constitution of that state, which took effect September 1, 1851. And it was held that the general assembly does not, therefore, impair the obligation of a contract by prescribing the rates for the transportation of passengers by the new company, although one of the original companies was, prior to the adoption of that constitution, organized under a charter which imposed no limitation as to such rates.

§ 586 d. In a subsequent case,1 two railroad companies in Georgia, chartered prior to January 1, 1863, were partially exempted from taxation. By the Code of Georgia of that date its right to change, modify, and repeal charters was retained. The two companies were consolidated by Act of April 18, 1863. It was held that thereby a new corporation was created, and that a subsequent. act taxing its property did not impair the obligation of any contract contained in the charter.

The power of limitation possessed by a state over its future 1 Railroad Company v. Georgia, 98 U. S. 359. ED.

taxation was again carefully considered in Farrington v. Tennessee, 95 U. S. 679 (1877), and notwithstanding the vigorous dissent of Justices Strong, Clifford, and Field, it was decided by a majority of the court that the charter of a bank, granted by the legislature of Tennessee, providing that the bank shall pay to the state an annual tax of one half of one per cent. on each share of the capital stock subscribed, which shall be in lieu of all other taxes, is a contract between the state and the bank, limiting the amount of tax on each share of the stock. And also that a subsequent revenue law of the state, imposing an additional tax on the shares in the hands of stockholders, impairs the obligation of that contract, and is void. Mr. Justice Strong in his dissenting opinion said: "All presumptions are against the legislative intent to relinquish the power of taxation over property. A tax upon a corporation proportioned to capital stock is a differ ent thing from a tax upon the individual shareholders of such stock. An exemption of one is not an exemption from the other. The true question in these cases is, whether a contract in express terms between the state and a corporation, to exempt its property and franchises from taxation, shall, by construction, extend to and exempt the property of individual stockholders, property which, for the purposes of taxation, is entirely different from that of the corporation. I think there is no ground for such a construction; none for any such implication.

§ 586 e. Taring Licenses. In the Beer Company v. Massachusetts, 97 U. S. 25 (1877), the validity of a law imposing a tax or charge on a license to a chartered corpora tion to sell liquor was upheld. And Mr. Justice Bradley said: "The question is, whether the charter of the plaintiff, granted in 1828, contains any contract whose obligation was impaired by the prohibitory liquor law of Massachusetts of 1869, as applied to the liquor in question in this suit. The proceeding was for the forfeiture of certain liquors, the property of the Beer Company. The charter of the company adopted the provisions of the Act of 1809, containing a general reserved power of alteration, and so became subject to

the reserved power of the legislature to make further provisions and regulations. The repeal of the Act of 1809 by the Act of 1829 does not operate as a surrender of this reserved power. There is another question equally decisive against the company. Although the company was chartered to manufacture malt liquors, it had no greater right to do so than any citizen had. Both were subject to the exercise of the police power by the legislature. There seems to be no doubt that it [the police power] does extend to the protection of the lives, health, and property of the citizens, and to the preservation of good order and the public morals. The legislature cannot, by any contract, divest itself of the power to provide for these objects. Boyd v. Alabama, 94 U. S. 645; Bartemeyer v. Iowa, 18 Wall. 129."

§ 586 f. Impairing Obligation of Contrcts. In Keith v. Clark, 97 U. S. 454 (1878), the facts were that the State of Tennessee, in 1838, organized the Bank of Tennessee, and agreed, by a clause in the charter, to receive all its issues of circulating notes in payment of taxes; but, by a constitutional amendment adopted in 1865, it declared the issues of the bank during the insurrectionary period void, and forbade their receipt for taxes. It was held that the amendment impaired the obligation of contracts. The opinion was by Mr. Justice Miller. "There never was," said he, "but one State of Tennessee, even during the war. That state has been in perpetual existence and identical since 1796. Texas v. Chiles, 7 Wall. 700; White v. Hart, 13 Wall. 647. Court of Tennessee has twice affirmed the laid down. If the notes on which action is brought were issued in aid of the rebellion they are void. Williams v. Bruffy, 96 U. S. 176. These notes were not so issued, so far as appears by the record, nor in history; nor are we to presume that they were so issued." The dissenting opinion by Waite, C. J., was on the single point that the notes were issued in aid of the rebellion, and had been so declared by the people of Tennessee by the ordinance of June 26, 1865. Bradley, J., expressed his "earnest dissent" in an elaborate opinion. The bank belonged to the state, which was the

The Supreme principles here

only stockholder. "These notes," he said, "were issued while the bank was controlled by an illegal and usurping government. Hence the true state and legal government is not bound to answer for them." Harlan, J., dissented "altogether" from the position that the present legal government of Tennessee is bound to recognize these notes which were issued by the usurping government. The dissenting opinions are vigorous and interesting.

§ 586 g. Same Subject. The Fertilizing Company was chartered in 1867. It was located in Hyde Park (near Chicago). In 1869 the legislature revised the charter of the village and the largest police powers were conferred on it. Afterwards the authorities prohibited the carrying of offensive animal matter through its streets and imposed a fine on those who disobeyed. Certain persons were arrested for disobeying; and the company asked for an injunction to restrain the town from enforcing its ordinance. The bill was dismissed by the Supreme Court of Illinois and that decision was affirmed.1 The opinion of Mr. Justice Swayne has some valuable remarks on the police power of a state, and some state cases are cited. Mr. Justice Miller concurred in the judgment, but not in the principal argument. Mr. Justice Strong dissented, on the ground that the legislation authorizing the ordinance impaired the obligation of a contract. § 586 h. Freedom from Taxation. The statute of Illinois, passed in 1872, conforming taxation to the new constitution of 1870, and limiting the exemption of the property of the Northwestern University to land and other property in immediate use by the institution, impairs the obligation of the contract contained in the statute of 1855, which declares that all the property of that University shall be forever free from taxation.2

§ 586 i. Corporation Charters. In the late case of Stone v. Mississippi, 101 U. S. 816 (1879), Mr. Chief Justice Waite observed: "It is now too late to contend that any contract which the state actually enters into when granting a charter 1 Fertilizing Company v. Hyde Park, 97 U. S. 659. ED. 2 University v. People, 99 U. S. 309. ED.

to a private corporation is not within the protection of the Constitution. The doctrines of Trustees of Dartmouth College v. Woodward, 4 Wheat. 878, announced more than sixty years ago, have become so imbedded in the jurisprudence of the United States as to make them to all intents and purposes a part of the Constitution itself. In this connection, however, it is to be kept in mind that it is not the charter which is protected, but only any contract the charter may contain." And in the same case the facts were that in 1867 Mississippi granted a charter to a lottery company. In 1868 her new constitution declared that no lottery should be chartered or allowed, and that none previously chartered should be drawn; and the question raised was whether the charter of 1867 created a contract between the company and the state. It was held it did not. "Whether the alleged contract exists, therefore, or not, depends on the authority of the legislature to bind the state and the people of the state in that way. All agree that the legislature cannot bargain away the police power of a state. Lotteries are proper subjects for the exercise of this power." Phalen v. Virginia, 8 How. 163; Beer Co. v. Massachusetts, 97 U. S. 25; Patterson v. Kentucky, Ibid. 501. "The question is therefore directly presented, whether, in view of these facts, the legislature of a state can, by the charter of a lottery company, defeat the will of the people, authoritatively expressed, in relation to the further continuance of such business in their midst. We think it cannot."

§ 586 j. Trades or Occupations. This subject again came up for consideration in the later case of the Butchers' Union Slaughter-House and Live Stock Landing Co. v. The Crescent City Live Stock Landing Co.1 on this state of facts: In 1881 an ordinance of the city of New Orleans, under the new Louisiana constitution of 1874, had given to another company the same privileges which in 1869 had been by statute granted to the Slaughter-House Company for twenty-five years. The latter company thereupon filed a proceeding to restrain the former from exercising such privi1 111 U. S. 746. See N. O. Gas-Light Co. v. La. Light Co. 21 Rep. 65. ED.

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