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very foundation is the idea that corporations are formed for some purpose beneficial to the public. If the law will bear interpretation which vests corporations with this sweeping power, then it is manifestly too broad and should be modified.

If a corporation can be formed under this act, with power to hold stock in other corporations, then that provision of the constitution of this,State, forbidding the consolidation of parallel or competing lines of railroad, may be effectually annulled by the formation of a corporation which shall buy and hold a controlling interest in the stock of all such railroads in this State, thereby not only consolidating their interests, but subjecting them to, and uniting them under one power of control. Again, if the power of holding stock as above mentioned, exists, then a case may readily be presented, where all the stockholders in a given company are corporations formed under the same act, and thus individual responsibility soon becomes so remote as to be entirely lost sight of, and practically incapable of ascertainment. No economic system can be safe or wholesome, in which the idea of individual responsibility is ignored or lost sight of.

But the objections above suggested are not the only ones that may be urged against the sweeping character of this law. Corporate organization is necessary for the aggregation of the large amounts of capital required in many great business enterprises, and for their convenient and successful management. But there is little necessity for, and less of sound policy in permitting the organization of corporations with a capital of a few hundred or a few thousand dollars for engaging in those branches of business which are usually conducted by individual enterprise and by a single person or firm. I doubt the wisdom of any policy which permits corporate capital with the easy advantages of the limited responsibility of stockholders, to come into competition with individual enterprises and limited private capital in all branches of business.

I believe that sound public policy indicates that at no distant day this act shall be revised, and the power to organize corporations materially limited.

The powers granted to those organizations necessary for conducting great business enterprises should be limited to one principal object, with such incidental powers as are necessary for the accomplishment of the principal object of the organization, so that the same company shall not be permitted to engage in distant branches or kinds of business, even though there may exist a commercial relation between them.

As already suggested, the power to form corporations of a general character should be greatly modified and curtailed.

BANKS AND BANKING.

The law enacted by the last General Assembly, entitled, “An act concerning corporations with banking powers," and the opera

tion of which has been held in abeyance by the constitution, awaiting ratification by the people at the recent general election has not yet become generally operative for want of time. I am informed by the Auditor of Public Accounts that a number of applications for permission to organize banks have been filed, and it seems probable, if the law is held to be valid by the courts, a large number of banking institutions will be organized thereunder. An examination will show that the act was very loosely drawn, and many of its provisions are uncertain.

Already, two important questions have arisen which will probably require judicial determination for their settlement in a manner sufficiently satisfactory to make the law generally acceptable. The first clause of section 11 of the act states that:

"Associations may be organized under this act, in incorporated towns, villages or cities of not to exceed five thousand population, with a capital stock of not less than twenty-five thousand dollars, and in all cities, villages or incorporated towns of not to exceed ten thousand population, with a capital stock of not less than fifty thousand dollars."

Here, it will be seen, express authority is given for the organization of banks in two classes of cities, villages and incorporated towns, but no authority is given in said section for the organization of a bank in a city, or village or town having a population of more than ten thousand, nor is such authority expressly found anywhere in the law. This omission is an important one and its consequences apparently serious.

The other question goes to the constitutionality of the act.
Section 6, article XI of the constitution provides that:

"Every stockholder in a banking corporation or institution shall be individually responsible and liable to its creditors over and above the amount of stock by him or her held, to an amount equal to his or her respective shares so held, for all its liabilities accruing while he or she remains such stockholder."

Section 6 of the act in question, provides, concerning the liability of stockholders as follows:

"The shareholders of each association formed under the provisions of this act, shall be held individually responsible equally and ratably, and not one for the other, for all contracts, debts, and engagements of such person or association to the extent of their stock therein, at the par value thereof, in addition to the amount invested in such shares."

It will be readily seen that the liability fixed in the act, as shown above, is different from that fixed by the constitution. Plainly, then, that fixed in the act can not stand, and unless the clause of the constitution relating to this matter is self operative, without the aid of legislation, then there will be nothing to fix the liabilities of stockholders in banking associations formed under

this act, and such a provision it seems to me, forms so essential a part of a banking act, that no law ought to be permitted to stand without it.

I respectfully suggest that in view of the loose character of the act, the whole subject should be revised.

Such revision becomes more important on account of the decision of the Supreme Court in case of Reed et al. vs. The People. etc., already mentioned, in which the act providing for the organization of savings societies is held to be unconstitutional because conferring banking powers.

When revised, the law should contain well guarded and suitable provision for the organization of savings banks.

INSURANCE.

The law relating to what are known as assessment insurance companies was revised at the last session of the General Assembly, but is still quite vague and uncertain in many of its provisions.

It also goes to the extreme of liberality in the promotion of these organizations, for while many of them have accomplished great good by furnishing their members cheap and convenient insurance, and are honestly and successfully managed, yet it is evident that the number of such organizations that can survive is limited, and the greater number of them are short lived. A number of them have been dissolved by legal proceedings, and the management of those dissolved reflected little credit on the officers, and justified a doubt as to the honesty of the motive of those promoting the organization.

Violations of the law regulating the admission of insurance companies from other States are of frequent occurrence. A number of suits have been brought against persons acting as agents of unauthorized companies and the legal penalties enforced.

STATE'S ATTORNEYS.

In my last report I called attention to the defective character and singular ambiguity of section 8 of the fees and salaries act, fixing the fees of State's attorneys. It is the source of frequent disputes between these officers and county authorities, and should be revised.

CRIMINAL LAW.

During the past two years, violations of an unusual nature of the criminal laws have been comparatively rare, and generally where crimes have been committed, a commendable disposition has been manifested by the officers of the law to bring the offenders to justice. Not only the courts and their officers, but the people as

well, have shown their devotion to the cause of good order by enforcing the law, in whatever capacity that duty has devolved upon them.

With the exception of the cases of the People vs. Ochs et al, in which a number of the county commissioners of Cook county and their employés were tried in the criminal court and convicted on an indictment for defrauding the county, which judgment was subsequently affirmed by the Supreme Court, charges of unfaithfulness against public officers have been very few, and those rarely sustained.

In closing this report, allow me to congratulate your Excellency on the success which has attended the peaceful proceedure of the law, and the beneficial results which have attended its impartial execution during your administration.

I append hereto a list of cases in the several courts to which I have given official attention during the past two years.

LIST OF CASES.

The following cases were pending at the time of making my biennial report for 1886, and since that time have been determined as indicated below:

IN THE SUPREME COURT OF THE STATE OF ILLINOIS.

Illinois Central Railroad Company 7. The People of the State of Illinois. Action of debt by the People to recover penalty for unjust discrimination.

Affirmed.

Ohio & Mississippi Railway Company v. People, ex rel. George Hunt, Attorney General. Petition for mandamus. Appeal from circuit court of Sangamon county.

Reversed.

George Hunt et al. . Vimeria Fowler et al. Appeal from circuit court of LaSalle county. Decree of circuit court was reversed and the bill ordered dismissed.

State Board of Dental Examiners v. People, ex rel. J. M. Cooper. Appeal from appellate court -first district. Affirmed.

People, ex rel. Attorney General v. James W. McFall et al., members of the Board of Education of the city of Quincy. Appeal from appellate court-third district. Affirmed.

People, ex rel. Walker, v. Louisville & Nashville Railroad Company. Original suit for mandamus. Mandamus allowed.

Matual Fire Insurance Company v. Charles P. Swigert, Auditor of Public Accounts. Original suit to compel Auditor to issue license. Mandamus denied.

The People, ex rel. Burritt v. Commissioners of State Contracts. Original suit for mandamus. Mandamus denied.

Lewis D. Leach . The People, ex rel. O. P. Patterson. Appeal from county court of Wayne Affirmed.

county.

IN THE SUPREME COURT OF THE UNITED STATES.

Wabash, St. Louis & Pacific Railway Company . The People of the State of Illinois.
Reversed.