Public corporation

“ It by no means follows that because the action of a corporation may be beneficial to the public, therefore it is a public corporation. This may be said of all corporations whose objects are the administration of charities. ”

“ We are also generally agreed in taking for granted the doctrine of public corporations, familiar since the Dartmouth College case, viz., that a public corporation is the legally recognized body of people in a given area; the body so constituted existing for the benefit of all its constituents; the constituents meanwhile, so long as they reside within the area, having no choice about membership of the corporation. ”

“ A public corporation, instituted for purposes connected with the administration of the government, may be controlled by the legislature, because such a corporation is not a contract, within the purview of the constitution of the United States. ”

“ When the corporation is said, at the bar, to be public, it is not merely meant, that the whole community may be the proper objects of the bounty, but that the government have the sole right, as trustees of the public interests, to regulate, control and direct the corporation, and its funds and its franchises, at its own good will and pleasure. ”

“ The most definite and workable definition of a semi-public corporation that I can propose or discover is that it is every corporation which is not public. The public corporation is distinguished in kind from other corporations by the fact that it is inclusive and involuntary. All other corporations are exclusive, but at the same time they are related to the members of the body politic, because whatever they do sooner or later in some measure affects these fellow-citizens. ”

“ The corporation which is honestly and fairly organized, whose managers in the conduct of its business recognize their obligation to deal squarely with their stockholders, their competitors, and the public, has nothing to fear from such supervision. The purpose of this Bureau is not to embarrass or assail legitimate business, but to aid in bringing about a better industrial condition—a condition under which there shall be obedience to law and recognition of public obligation by all corporations, great or small." Message of the President to Congress, December 7, 1903. ”

“ It is not only the right of the company to make such a provision but it is its duty to its bond and stockholders, and, in the case of a public service corporation at least, its plain duty to the public. ”

“ No legislative franchise has any more of the attributes of divinity than the law of entail or of primogeniture. Corporations are presumptively servants, not masters, of the public. They are to be judged by their performances, and should be treated accordingly. A corporation which is deficient in the discharge of its delegated function should be restored to usefulness by vigorous measures, if necessary, just as the proper public authority should repair a bad road. ”

“ The relations between the corporations and the public that they serve have been clearly defined by the Courts, as the foregoing quotations show.
That the mutual relations existing between the management of the corporations and the public are far from what they should be, there can be no doubt. On the one hand, the great mass of the voting public is uninformed as to actual revenues, disbursements, and operations of the corporations, as to whether their income is unreasonably large, or whether they are struggling to exist. ”

“ Within the latter denomination all corporations are included, which do not strictly belong to the former. There is no doubt, as to public corporations, which exist only for public purposes, that the legislature may change, modify, enlarge, and restrain them; with this limitation, however, that property, held by such corporation, shall still be secured for the use of those, for whom, and at whose expense it has been acquired. ”

“ The public service corporation which is administered, not to render service to the public, but to permit stock speculators to reap a harvest, can hardly hope for the same brand of justice, and it is hardly to be expected that such a corporation will welcome publicity. ”

“ Religious and eleemosynary corporations are also included in this classification. The public corporation is such as is created for the purposes of government, such as cities, towns, villages, and institutions founded by the State, and managed by it for governmental purposes. ”

“ Even as engineers, we are apt to be unconsciously influenced in our attitude toward public service corporations, not only because of the present public attitude, but because we are often put to great inconvenience by the ill-considered resistance of the corporations whose property we are called on to appraise for the public. ”

“ THEORY OF LEGISLATION RECOMMENDED The history of corporations, as well as the logic of the case, shows that there are possible two general theories as to the State's duty in creating corporations: first, the old theory that, being creatures of the State, they should be guaranteed by it to the public in all particulars of responsibility and management; and the modern quite opposite theory that, in the absence of fraud in its organization or government, an ordinary business corporation should be allowed to do anything that an individual may do. ”

“ One has but to contemplate the varied and often antagonistic legislation promulgated by the several States, relating to corporation management, and the many rulings and decisions of the different courts and commissions on the subject of regulation, assessment, and adjudication of corporate rates, revenues, taxes, and tolls, to become convinced of the complicated and tangled condition of the situation, and to realize the necessity for the early establishment of some logical basis on which to establish the fabric of corporate control. ”

“ It is not like the butcher, who has his stall in the public market in a row of twenty similar stalls, and who competes for trade among the passing throng. The public service corporation has, in great degree, the character of a monopoly. The quasi-public element in the public service corporation is recognized originally and conclusively by the grant of any franchise carrying special privileges or providing for exclusion of other similar corporations. ”

“ The Corporation is surely dependent on the State and the good will of the people for its welfare. Mistakes have been made, no doubt, just because this common ground has not been reached, and the writer thinks that it is largely within the province of the Engineer to establish it. ”

“ Each of the four types of government, national, State, county and city, is a corporation for public service, and the standard form provides for the nomination and election of an executive and legislative body by the people, these officers to be given full power of appointment and of removal and to be held responsible for the quality of public service just as the elective officers of private corporations are held responsible to the stockholders for quality in private service. ”

“ They are as follows:
'I may mention, that corporations aggregate are now so common, that I believe that a public journal is conducted by a corporation aggregate limited. Therefore, it seems to us, that for what is done by the authority of a corporation aggregate, that a corporation aggregate ought, as such, to be liable as well perhaps as the individuals. ”

“ In this light they are seen to be properly inventions that deserve social endorsement, in so far as they promote the public weal. There is no more sacredness about a corporation in itself, apart from its service to society, than there is about an ox-yoke or a tide-mill. Charter privileges imply corresponding corporate services; they imply that the party making the grant, as well as the party accepting it, is better off because of the arrangement than before. ”

“ Now, persons dealing with the managers of a corporation must take notice of the limitations imposed upon their authority by the act of incorporation. Their powers are conceded in consideration of the advantage the public is to receive from their discreet and intelligent employment, and the public have an interest that neither the managers nor stockholders of the corporations shall transcend their authority.' 21 How. ”

“ The writer believes that, under one form of agreement or another, nearly every kind of public service can be more economically and better performed by a public service corporation than by the public itself through employees directly hired. But if America is not to pass speedily into Government ownership and operation of all public utilities, there must be a pronounced change of attitude on the part of the public toward capital now invested in public service corporations. ”

“ It is necessary, therefore, to inquire into the true nature and character of the corporation which was created by the charter of 1769.
There are divers sorts of corporations; and it may be safely admitted that the legislature has more power over some than others. Some corporations are for government and political arrangement; such, for example, as cities, counties, and towns in New England. These may be changed and modified as public convenience may require, due regard being always had to the rights of property. ”

“ The State will have to exert eternal vigilance against the power of private corporations such as the above; but it must also control public corporations and its own departments and again quasi-public corporations like the Bank of England. ”

“ So far as concerns corporations of a public or quasi-public character—and none others should exist—the remedy is simple. They are completely under the control of the legislatures, whence they derive all their powers.
It is entirely competent for a legislature to provide the manner inin which the business of a corporation shall be conducted. It may provide that the directors shall consist of few or many persons, that a portion of them shall be taken 397from the employes of the corporation, selected by them, another part from the stockholders who furnish the capital for carrying on its business. ”

“ To repeat, the people of every state shall first decide whether they want to create a corporation. They shall also decide whether they want any outside corporation to do business in the state; and, if so, upon what conditions; and then Congress shall exercise the right to place upon every corporation doing business outside of the state in which it is organized such limitations and restrictions as may be necessary for the protection of the public. ”

“ The private corporation whatever its public duties is organized for private ends and may be presumed to intend to make whatever profit the business will allow. The municipal corporation is allowed to go into the business only on the theory that thereby the public welfare will be subserved. ”

“ In another State, a single corporation held it, and yet again, it was often held by a corporate group acting together. In many States one individual dominated public affairs and more often for good than for evil. ”

“ Whether we speak of private corporations or semi-public corporations, we are in reality using varied terms for what is essentially the same thing. The parish, the school district, the village, the county are public corporations. The legal persons not falling in this class are bodies that move and have their being within the societies making up the public corporations, and are properly distinguishable from each other only by the difference of degree in which their corporate conduct affects the public. ”

“ It appears necessary, therefore, to consider briefly the relation which these interests bear to one another, to study the causes which have led to mutual misunderstandings, and to note the proper relations which should, if possible, be established and maintained between the people and those corporations organized to perform certain of the functions of the State. ”

“ But those acts involve an overturn of the relations which the charter has arranged between the corporation and the community. Important franchises were conferred upon the corporation to enable it to provide facilities for communication and intercourse, required for the public convenience. Corporate management and control over these were prescribed, and corporate responsibility for their insufficiency provided as a remuneration to the community for their grant. The corporation cannot absolve itself from the performance of its obligations without the consent of the legislature. ”

“ Justice Story says: 'Public corporations are generally esteemed such as exist for public political purposes only, such as towns, cities, parishes and counties; and, in many respects, they are so, although they involve some private interests ”

“ There are corporations of another sort, where the aggregate body of corporators meet and assemble to discharge corporate functions, and have authority also to perform certain acts and duties, by means of different agents, sometimes designated in the statutes creating them, and sometimes left to their own choice. Of this nature are the townships in New-England, where the inhabitants are corporators, and assemble to exercise corporate powers, and have authority to appoint various officers to perform public duties, under the guidance and direction of the corporation. ”

“ Thus the growing legal usage bases distinctions between private and semi-public corporations on their relation to public interest. This view practically assumes that the difference between private business and public business is only one of degree. ”

“ The legislature, however, shall never enact any law permitting any public-service corporation to consolidate with any other public-service corporation organized under the laws of any other state or of the United States owning or controlling a parallel or competing line in the state. ”