Volume IV Part 28 (2/2)

As we have seen, Marshall had prepared his opinion under his trees at Richmond and in the mountains during the vacation of 1818; and he had barely time to read it to his a.s.sociates before the opening of court at the session when it was delivered. But he afterward submitted the ma.n.u.script to Story, who made certain changes, although enthusiastically praising it. ”I am much obliged,” writes Marshall, ”by the alterations you have made in the Dartmouth College case & am highly gratified by what you say respecting it.”[769]

Story also delivered an opinion upholding the charter[770]--one of his ablest papers. It fairly bristles with citations of precedents and historical examples. The whole philosophy of corporations is expounded with clearness, power, and learning. Apparently Justice Livingston liked Story's opinion even more than that of Marshall. Story had sent it to Livingston, who, when returning the ma.n.u.script, wrote: It ”has afforded me more pleasure than can easily be expressed. It was exactly what I had expected from you, and hope it will be adopted without alteration.”[771]

At the time of the Dartmouth decision little attention was paid to it outside of New Hamps.h.i.+re and Ma.s.sachusetts.[772] The people, and even the bar, were too much occupied with bank troubles, insolvency, and the swiftly approaching slavery question, to bother about a small New Hamps.h.i.+re college. The profound effect of Marshall's opinion was first noted in the _North American Review_ a year after the Chief Justice delivered it. ”Perhaps no judicial proceedings in this country ever involved more important consequences, ... than the case of Dartmouth College.”[773]

Important, indeed, were the ”consequences” of the Dartmouth decision.

Everywhere corporations were springing up in response to the necessity for larger and more constant business units and because of the convenience and profit of such organizations. Marshall's opinion was a tremendous stimulant to this natural economic tendency. It rea.s.sured investors in corporate securities and gave confidence and steadiness to the business world. It is undeniable and undenied that America could not have been developed so rapidly and solidly without the power which the law as announced by Marshall gave to industrial organization.

One result of his opinion was, for the period, of even higher value than the encouragement it gave to private enterprise and the steadiness it brought to business generally; it aligned on the side of Nationalism all powerful economic forces operating through corporate organization. A generation pa.s.sed before railway development began in America; but Marshall lived to see the first stage of the evolution of that mighty element in American commercial, industrial, and social life; and all of that force, except the part of it which was directly connected with and under the immediate influence of the slave power, was aggressively and most effectively Nationalist.

That this came to be the fact was due to Marshall's Dartmouth opinion more than to any other single cause. The same was true of other industrial corporate organizations. John Fiske does not greatly exaggerate in his a.s.sertion that the law as to corporate franchises declared by Marshall, in subjecting to the National Const.i.tution every charter granted by a State ”went farther, perhaps, than any other in our history toward limiting State sovereignty and extending the Federal jurisdiction.”[774]

Sir Henry Sumner Maine has some ground for his rather dogmatic statement that the principle of Marshall's opinion ”is the basis of credit of many of the great American Railway Incorporations,” and ”has ... secured full play to the economical forces by which the achievement of cultivating the soil of the North American Continent has been performed.” Marshall's statesmans.h.i.+p is, a.s.serts Maine, ”the bulwark of American individualism against democratic impatience and Socialistic fantasy.”[775] Such views of the Dartmouth decision are remarkably similar to those which Story himself expressed soon after it was rendered. Writing to Chancellor Kent Story says: ”Unless I am very much mistaken the principles on which that decision rests will be found to apply with an extensive reach to all the great concerns of the people, and will check any undue encroachments upon civil rights, which the pa.s.sions or the popular doctrines of the day may stimulate our State Legislatures to adopt.”[776]

The court's decision, however, made corporate franchises infinitely more valuable and strengthened the motives for procuring them, even by corruption. In this wise tremendous frauds have been perpetrated upon negligent, careless, and indifferent publics; and ”enormous and threatening powers,” selfish and non-public in their purposes and methods, have been created.[777] But Marshall's opinion put the public on its guard. Almost immediately the States enacted laws reserving to the Legislature the right to alter or repeal corporate charters; and the const.i.tutions of several States now include this limitation on corporate franchises. Yet these reservations did not, as a practical matter, nullify or overthrow Marshall's philosophy of the sacredness of contracts.

Within the last half-century the tendency has been strongly away from the doctrine of the Dartmouth decision, and this tendency has steadily become more powerful. The necessity of modifying and even abrogating legislative grants, more freely than is secured by the reservation to do so contained in State const.i.tutions and corporate charters, has further restricted the Dartmouth decision. It is this necessity that has produced the rapid development of ”that well-known but undefined power called the police power,”[778] under which laws may be pa.s.sed and executed, in disregard of what Marshall would have called contracts, provided such laws are necessary for the protection or preservation of life, health, property, morals, or order. The modern doctrine is that ”the Legislature cannot, by any contract, divest itself of the power to provide for these objects.... They are to be attained and provided for by such appropriate means as the legislative discretion may devise. That discretion can no more be bargained away than the power itself.”[779]

Aside from the stability which this p.r.o.nouncement of the Chief Justice gave to commercial transactions in general, and the confidence it inspired throughout the business world, the largest permanent benefit of it to the American people was to teach them that faith once plighted, whether in private contracts or public grants, must not and cannot be broken by State legislation; that, by the fundamental law which they themselves established for their own government, they as political ent.i.ties are forbidden to break their contracts by enacting statutes, just as, by the very spirit of the law, private persons are forbidden to break their contracts. If it be said that their representatives may betray the people, the plain answer is that the people must learn to elect honest agents.

For exactly a century Marshall's Dartmouth opinion has been a.s.sailed and the Supreme Court itself has often found ways to avoid its conclusions. But the theory of the Chief Justice has shown amazing vitality. Sixty years after Marshall delivered it, Chief Justice Waite declared that the principles it announced are so ”imbedded in the jurisprudence of the United States as to make them to all intents and purposes a part of the Const.i.tution itself.”[780] Thirty-one years after Marshall died, Justice Davis avowed that ”a departure from it [Marshall's doctrine] _now_ would involve dangers to society that cannot be foreseen, would shock the sense of justice of the country, unhinge its business interests, and weaken, if not destroy, that respect which has always been felt for the judicial department of the Government.”[781] As late as 1895, Justice Brown a.s.serted that it has ”become firmly established as a canon of American jurisprudence.”[782]

It was a principle which Marshall introduced into American Const.i.tutional law, and, fortunately for the country, that principle still stands; but to-day the courts, when construing a law said to impair the obligation of contracts, most properly require that it be established that the unmistakable purpose of the Legislature is to make an actual contract for a sufficient consideration.[783]

It is highly probable that in the present state of the country's development, the Supreme Court would not decide that the contract clause so broadly protects corporate franchises as Marshall held a century ago.

In considering the Dartmouth decision, however, the state of things existing when it was rendered must be taken into account. It is certain that Marshall was right in his interpretation of corporation law as it existed in 1819; right in the practical result of his opinion in that particular case; and, above all, right in the purpose and effect of that opinion on the condition and tendency of the country at the perilous time it was delivered.

FOOTNOTES:

[615] See vol. I, 147, 231, of this work.

[616] See vol. III, chap. X, of this work.

[617] 7 Cranch, 164.

[618] _Ib._ 165.

[619] 7 Cranch, 166-67.

[620] This was true also of the entire court, since all the Justices concurred in Marshall's opinions in both cases as far as the legislative violations of the contract clause were concerned.

[621] He was not at all related to the Chief Justice. See vol. I, footnote to 15-16, of this work.

[622] Chase: _History of Dartmouth College and the Town of Hanover, New Hamps.h.i.+re_, I, 49.

[623] Chase, 45-48.

<script>