Corporations in the American Colonies

by Joseph S. Davis

from Essays in the Earlier History of American Corporations

Harvard University Press

1917.





Chapter One



The Legal Basis of Corporate Powers



    The modern corporation is of ancient lineage. A thoroughly

adequate account of its ancestry and early development has yet to

be written. This, however, is not peculiarly a task for an

American student. For by the time this continent was discovered

the corporation had attained a definite status in the social

constitution of England. During the first century of European

contact with the New World the number of uses to which the

corporate form was put was considerably enlarged. Before the

English had made their first permanent settlements in America

their ingenious merchant adventurers had combined with this

developed institution their well-tested device of a joint stock

or common capital contributed in shares, and so paved the way for

its most extensive application, in the domain of business.(1*)

From the founding of Jamestown to the days of the Revolution,

successive shiploads of British subjects brought with them larger

and larger familiarity with the corporation, -- for plantation

and town organization, for charitable, religious, or literary

foundations, for trading and local business purposes. The

institution was well matured in England during the American

colonial period.

    It is therefore not surprising that from a very early date

the corporation should have played a prominent rôle in American

life. "In fact," says a keen student of English and American

history, "the whole advance of English discovery, commerce, and

colonization in the sixteenth and early seventeenth centuries was

due not to individuals, but to the efforts of corporate

bodies."(2*) It was a corporation to which Sir Walter Raleigh, in

1587, entrusted the colonization of Virginia. The first permanent

English settlements, both in Virginia and in New England, were

made on the initiative and at the expense of corporations

modelled after the contemporary joint stock compares for foreign

trade. For over a century before the Revolution the colonies of

Connecticut and Rhode Island were each governed by a "Governor

and Company," incorporated by charter from the English crown. The

colony of Georgia was founded, and for twenty years had its

destinies directed, by a group of charitable English gentlemen

who constituted a typical English eleemosynary corporation. The

London and Edinburgh missionary societies, incorporated, were

important factors in promoting the religious development in

several colonies.

    Furthermore, as fast as the plantations grew into communities

their inhabitants naturally reproduced the corporate institutions

with which they and their fathers had been familiar in the mother

country. The earliest of these to spring up in America were of

the type which we should now designate as public corporations,

such as towns, boroughs, and cities; but before the end of the

colonial period a considerable number of truly private

corporations had been established, for ecclesiastical,

educational, charitable, and even business purposes.

    It is the purpose of this essay to set forth the

naturalization of the corporation in the New World; in other

words, to summarize briefly the available evidence regarding

these American colonial corporations, especially in so far as it

concerns their number, classification, method of incorporation,

and distribution among the several colonies. As an almost

indispensable preliminary to this summary the legal basis upon

which their powers rested will be first considered.

    A corporation was then, as now, a group of individuals

authorized by law to act as a unit, though the term was extended

to include corporations sole (as well as corporations aggregate),

in which the corporation consisted of an individual and his

successors. Much was said about its being a person, -- a

"fictitious person" indeed, intangible, but no less real; and of

its perpetuity, even "immortality," -- despite the mortality

which overtook many, especially those for business purposes.

Certain attributes, at all events, this person or unified group

was recognized as possessing. It had a name distinct from the

names of its members, in which it could sue and be sued. It had a

"common seal," peculiar to itself, which was required to evidence

its acts. It had "perpetual succession," that is, members might

come and members might go, but it went on forever -- provided of

course no internal or external forces terminated its existence:

the death, insanity, withdrawal of old members and the entrance

of new ones in no way affected its legal existence or constituted

more than incidents in its legal life. It had the right of

holding property as its own -- which was not the property of any

of its members or of all of them together -- and to dispose of

such estate. Normally this property was not liable for

obligations of members, and their private property was likewise

not subject to be taken to pay debts of the corporation -- so

distinct were the "persons" kept. Moreover, this body had a

well-defined constitution, with power to regulate minor matters

by by-laws not inconsistent with its basic act or the laws of the

land. Such were the common characteristics of corporations, for

whatever purpose they came into existence. Features peculiar to

particular corporations were set forth in the document which

normally evidenced its right to enjoy these high powers and

privileges. All this was equally true in England and in America.

    Now the English law of this period laid great stress upon the

necessity for a proper legal foundation for the exercise of

corporate rights.(3*) To be a corporation was a special

privilege, not an inherent right, of a group of individuals. And

unless a would-be corporation had been "created" or "erected" in

due form and by a competent authority, its position was at all

times subject to attack, and it was liable to be suddenly and

ruthlessly shorn of the powers and privileges it was enjoying.

    In England the normal mode of conferring corporate rights was

by an issue of "letters patent" or charter from the crown,

formally designating the body of individuals a corporation and

specifying appropriate privileges.(4*) It was admitted that

corporations might be created by act of Parliament, to which the

king's assent was given, but Parliament seldom exercised this

right directly and generally confined its acts relating to

corporations to confirming royal charters, prescribing certain

features of charters to be granted, and setting limits on the

privileges which the crown might confer.(5*) Some bodies which

had long exercised corporate powers, moreover, were recognized as

corporations "by prescription" in view of their long existence as

such, even though they could show no specific grant.(6*) There

were also certain groups which were deemed corporations by the

common law without express grant of corporate powers; such were

the "Parishioners or Neighbors in a Parish, Village or Town, &

the Church Wardens of every Parish."(7*) Even in the case of

corporations "by prescription" or "at the common law" the assent

of the king was held to be implied. Neither class, however,

formed an important one among seventeenth and eighteenth century

corporations; and the dictum of Lord Coke pronounced in 1612,

that "none but the King alone can create or make a

corporation,"(8*) was quoted as substantially accurate throughout

this period.

    These principles of law applied to the English colonies in

America, as part of the realm of England. The earliest colonial

corporations, and occasional later ones, therefore possessed

charters granted directly by the crown, which were issued in the

same form, by the same process, and under the same conditions as

charters for corporations to operate in the British Isles.(9*)

But as soon as the colonial governments had attained a slight

degree of development the great majority of American corporations

were erected by grants from colonial proprietors, governors, or

assemblies, and not by letters patent issuing from the English

crown or by act of Parliament.(10*) Such methods of incorporation

were not specifically provided for in the common law. It is

necessary, therefore, to inquire with some care into the nature,

extent, and limitations of the right to incorporate as it was

enjoyed by these various colonial authorities.

    In legal theory such rights of incorporation as were

possessed by colonial authorities were presumed to be delegated,

explicitly or by implication, from the ultimate source of that

right, -- the sovereign. Such a delegation of the prerogative,

though once prohibited, was by this time sanctioned by the common

law, and was occasionally illustrated in English practice. Thus

by special grant the chancellor of the University of Oxford was

employed to erect corporations within his jurisdiction.(11*)

Likewise by special authorization, in particular cases, the final

act of erecting a charitable corporation was sometimes left to

the founder.(12*) And by ancient custom the power to incorporate

was counted among the "jura regalia" enjoyed by the Bishop of

Durham within his "county palatine."(13*) In England proper such

incorporation by delegated authority was of relatively minor

importance. In the colonies, on the other hand, practically all

the corporations that were strictly American in origin and

control were thus created.

    The delegation of the right to incorporate was seldom

explicit and practically never comprehensive in terms.(14*) As a

rule it had to be inferred from more or less general grants or

relationships, It was perhaps least inadequately expressed in the

grants to the proprietaries, In the first place, most of the

proprietary patents contained an authorization, in more or less

definite terms, to incorporate municipalities. Thus William

Alexander, upon whom James I bestowed the province of New

Scotland (1621), is invested "cum potestate civitates, liberos

burgos, liberos portus, villas et burgos Baroniae,

erigendi..."(15*) The charter of Maryland (1632) confers the

right



"Villas item in Burgos et Burgos in Civitates ad Inhabitantium

Merita et Locorum Opportunitates cum Privilegiis et Immunitatibus

congruis erigendi et incorporandi...."(16*)



Substantially the same clause is to be found in the charters of

Carolana (1629), New Albion (1634), and Pennsylvania (1681),(17*)

In Maine, Sir Ferdinando Gorges is given



"power to erect, rayse, and builte, from time to tyme, in the

province, teretory, and coasts aforesaide.... soe many forts,

fortresses, platforms, castells, citties, townes, and viladges,

and all fortificacons whatsoever, and the same and every of them

to fortifie...; And to the said citties, boroughs, and townes, to

graunt Letters or Charters of incorporacon, with all the

liberties and things belonging to the same;..."(18*)



Practically the same provision appears in the Carolina grants of

1663 and 1665, though here it is expressed with slightly greater

definiteness, in part:



"... and to the said cities, buroughs, towns, villages, or any

other place or places within the said province, to grant 'letters

of charters of incorporation,' with all liberties, franchises,

and priviledges requisite and usefull, or to or within any

corporations, within this our kingdom of England, granted or

belonging."(19*)



The Carolana (1629), Maryland,(20*) and Pennsylvania grants,

moreover, contain a further clause which seems broad enough to

include the entire power in question: the proprietary is

authorized



"to doe all and every other thing and things touching the

premises which to him or them [his assigns] shall seeme requisite

and meete albeit they be such as of their owne nature might

otherwise require a more especial commandment and warrant, then

in these presents is expressed."(21*)



    Furthermore, it is not unreasonable to infer that the power

to erect corporations was included among the prerogatives granted

by the "Bishop of Durham clause" which most of the proprietary

charters contain. This confers (to quote the grant of Maine)



"all and singuler, and as large and ample rights, jurisdicons,

priviledges, prerogatives, royallties, liberties, imunities,

fraunchisses and hereditaments, as well by sea as by land, within

the said Province and premisses..., as the Bishop of Durham

within the Bishopricke and Countie Palatine of Duressme in our

Kingdome of England, now hath, vseth, or inioyeth, or of right

ought to have, vse, and inioy within the said Countie Palatine,

as if the same were herin perticularly menconed and

expressed..."(22*)



Inasmuch as none of the charters contains any specific

restriction upon the exercise of this power, the courts would

almost certainly have upheld the proprietaries in a general

exercise of it; and at least negative testimony to the truth of

this view is given by the fact that no proprietary charter of

incorporation seems to have been contested.

    The power of incorporation was even less definitely conferred

upon the colonial governors. The nearest approach to an express

delegation of this prerogative appears in a section which was

inserted in substantially the same form in most of the

commissions issued to royal governors after 1680. In the

commission appointing Sir Edmund Andros governor of New England,

Connecticut, Rhode Island, New York, and New Jersey (1688), this

section reads:



"And Wee do hereby give and grant unto you full power and

authority to erect raise and build within our Territory and

Dominion aforesaid, such and so many forts platformes, Castles,

cities, boroughs, towns, and fortifications, as you shall judge

necessary; and the same or any of them to fortify... for the

security & defence of our said territory; and the same again or

any of them to demolish and dismantle as may be most

convenient."(23*)



And at least one royal governor, Seymour of Maryland (1708),

relied definitely upon this section in upholding his right to

erect a municipal corporation.(24*)



    In general it is not evident that the governors had this or

any other particular clause distinctly in mind, or indeed that

they thought any specific authorization needful. For such a

feeling there was ample basis. The royal governor was the direct

representative, the general agent, of the crown in the colonies.

By virtue of this office he was capable of exercising the royal

prerogative within his jurisdiction, subject only to the

limitations imposed by his commission and instructions;(25*) and

this part of the prerogative was among those upon which no

limitations were placed. The general practice, therefore, among

the royal governors was a somewhat free exercise of this power.

    To this statement a few exceptions must be made. In at least

one instance a royal governor questioned his competency to

charter corporations. Lord Cornbury, governor of New York and New

Jersey, refused in 1704 to issue a new charter to the rector and

vestry of Trinity Church, New York City. "I told them," he wrote

to the Lords of Trade, "I did not perceive that by my Commission

I have any power to grant Charters of incorporation, and that I

would not venture to do it without such a power."(26*) In the

same year a charter prepared for St. Mary's Church in Burlington,

New Jersey, failed to receive his consent, presumably for the

same reason.(27*) In each of these cases, it will he observed,

the proposed charter was for a private corporation. It does not

appear that Cornbury was confronted with a request to charter a

municipal corporation.(28*) Inasmuch, however, as his New Jersey

commission, and probably the New York one as well, contained the

usual clause relating to "castles, cities, boroughs,"(29*) he

might have felt justified in granting charters for public

corporations of this sort, despite the general terms in which he

couched his refusal to the church "managers." Cornbury's caution,

however, won him no particular commendation from the Lords of

Trade;(30*) and neither his predecessors nor his successors

scrupled to erect either public or private corporations,(31*)

without encountering interference from the crown on this account.

    Another royal governor, Sir Francis Nicholson, may have been

haunted by a similar uncertainty as to his right to incorporate.

While governor of Virginia after the Revolution of 1688, he was

active in the movement to establish a college in that colony. But

he seems to have had no thought of issuing its charter of

incorporation, and to have entered cordially into the plan to

have "Commissary" Blair go to England to solicit a charter direct

from the crown.(32*) A little later, (1696), as governor of

Maryland (then temporarily under royal control), he looked to the

assembly to incorporate "the Commissioners and Trustees for the

Porte and Town of Annapolis;"(33*) and in the same year he

approved a "Petitionary Act" by which the assembly prayed the

crown to erect into a corporation, with powers humbly suggested

in the act, "the Rectors, Governors Trustees and Visitors of the

ffreeschools of Maryland."(34*) Again, when in 1722 he was

governor of South Carolina, Nicholson had the colony agents in

England instructed to obtain leave from the crown for the

incorporation of Charles Town into a city; and, when impatient of

delay in securing this authorization, he procured from the

assembly the passage of an act granting corporate

privileges.(35*) There seems to be no direct evidence in

Nicholson's case, however, that these actions were due to his

uncertainty as to his power to grant charters; and it is not at

all improbable that considerations of practical policy were

responsible for them.(36*)

    Finally, Thomas Hutchinson, who was governor of Massachusetts

just prior to the Revolution, inquired of the Lords of Trade in

1771 and 1772 whether he was not entirely competent to grant

charters of incorporation without the intervention of the

assembly, by virtue of his position as the crown representative.

The question there at issue was merely whether the existing

"Province Charter" abridged the prerogative in this particular.

And on this point the solicitor of the Lords of Trade, Richard

Jackson, remarked that in that colony



"the Governor though appointed by His Majesty nevertheless

derives his power immediately from the Charter, which in many

respects qualifies the power usually intrusted to his Majesty's

Governors in other Colonies."(37*)



    Besides these instances of skepticism on the part of the

royal governors themselves in regard to this power, the colonists

in a few instances contested the right of the governor to

exercise it. The first of these, apparently, was in Maryland, in

1708. Seymour, the royal governor, had issued a new charter

erecting Annapolis into a city. The assembly, which met not long

after, unanimously resolved that the governor had no power "to

grant the charter in Manner and fform as it is granted;" and the

Annapolis delegates elected under the charter were excluded from

the house. The governor indignantly denounced such "an

Extrajudicial Way" of presuming "to construe her most Sacred

Majesty's Royal Commission to me...," and stated that he looked

"on this Aukward Step as Derogatory to her Sacred Majesty's Royal

Prerogative." The assembly protested that they intended no

"disrespect to your Excellency or any desire to lessen the

prerogative of the Crown or the power that her Majesty has

invested your Excellency with;" but, observing that the power was

not clearly expressed in the governor's commission, they prayed

that he would "leave the Granting of Charters undetermined till

Her Majestys pleasure therein be further known."

    The governor forthwith dissolved this assembly. When another

had been convened, it took up the question and inquired if the

governor had received any special instructions in the matter.

Seymour responded with heat that he was already well satisfied

that he had ample authority from the crown "to erect cities and

boroughs as well as castles and forts, and that the first are to

be erected by privileges and grants from the crown, neither are

boroughs seldom or ever walled and fortified."(38*) Thereupon,

after a conference between committees representing council and

lower house, it was decided that with some modifications the

charter would be acceptable. An act was accordingly passed which

coded the charter with certain explanations and alterations which

were desired by the assembly. Thus the incident was closed, the

assembly virtually admitting the governor's legal right to grant

the charter.(39*)

    About half a century after this Maryland dispute a similar

objection was raised in Massachusetts. The General Court had

refused the petition of certain gentlemen in the western part of

the province for a charter for a new college in that section.

When Governor Bernard was appealed to for a charter in the name

of the crown without any act on the part of the assembly, he was

about to accede to the request when the cry was raised that he

had not the requisite power. The governor (according to his own

account) insisted that he possessed the right to grant charters

of incorporation, as the representative of the crown, but he did

not choose to force the matter to an issue.(40*) Hutchinson,

Bernard's successor, did a few years later take the trouble to

refer the question to the Lords of Trade, as we have seen, and in

this case their solicitor upheld the objection raised by the

colonists in view of the existence of the charter.(41*)

    In the royal colonies in general, however, where there were

no colony charters to complicate matters, no such objection

arose. For the most part the royal governors were troubled by no

doubts as to their competency to charter corporations; in the

main the colonists acquiesced in this as the normal procedure;

and the official correspondence of the English authorities

affords no indication that they took exception to this view.(42*)

It was by charters thus granted, usually with the consent of the

provincial councils, running in the name of the crown,(43*) and

sealed with the provincial seals, that most of the colonial

corporations were erected.

    The right of proprietary governors to incorporate was

presumably similar to that of the royal governors, except as the

proprietary patents from the crown may have contained limitations

on the proprietary's power at this point. In the cases of North

Carolina and New Jersey, as will be mentioned below,(44*) some

limitation on the right of the governor to incorporate was placed

by grants to the colonists and their assemblies. In New Jersey,

however, this limitation, if indeed it was ever effective,(45*)

was soon removed at least as far as East Jersey was concerned;

for in 1674 Sir George Carteret sent out an order that henceforth

"the Granting & confirming of Corporations shall bee in the power

of the Governor & his Councill."(46*) Elsewhere there seems to

have been neither specific authorization nor express limitation.

    In the charter colonies, finally, the governor possessed no

independent powers. In Rhode Island there appear a few instances

in which, as in England, the executive issued the actual charters

of incorporation at the bidding of the legislature. In general,

however, in these colonies the incorporating agency was the

"Governor and Company." which acted simply by the regular passage

of an act. And in any case the authority was to be traced through

the charter granted by the crown.

    The right of colonial legislatures to grant corporate

privileges was expressly bestowed, apparently, only in the

"Concessions" which the proprietors of Carolina and New Jersey

issued to prospective settlers in 1665. In these cases the

assembly was specifically empowered



"to erect raise and build within the said Province or any part

thereof such and soe many forts fortresses Castles Citties,

Corporat'ons Burroughs, Towns, Villages, and other places of

Strength and defence, and them or any of them to incorporate with

such Charters and Priviledges as to them shall seem good and the

Grant made unto us will permitt...."(47*)



Like other acts of the assemblies, such action was of course

subject to approval by the governor and council and to review by

the proprietary. A slight limitation on this power appears in the

"Fundamental Constitutions" which were promulgated for the

Carolina colony in 1669, wherein an article stipulates:



"All towns incorporate shall be governed by a Mayor, twelve

Aldermen, and twenty-four of the common Council. The said common

council shall be chosen by the present householders of the said

town; the Aldermen shall be chosen out of the common council, and

the mayor out of the aldermen, by the palatine's court."(48*)



    Obviously the section quoted has reference only to municipal

corporations. Even this limited power was soon curtailed, and

then withdrawn, in New Jersey. In 1672 the Lords Proprietors sent

out a "Declaration of the True Intent and Meaning" of the

Concessions, -- a document which was in part interpretative and

in part amendatory. Here the order is given that "no more

Corporations be confirm'd but by or with the special order of us

the LORDS PROPRIETORS."(49*) And two years later, after the

temporary reoccupation by the Dutch had ended and Lord Berkeley

had sold his share in the province to Fenwick and Byllvnge,

Carteret issued a new "Declaration" which, as we have seen,

withdrew from the assembly all powers relative to incorporation

so far as his jurisdiction extended.(50*) The various

"fundamental constitutions" which were issued by the later

proprietaries contain no mention of this power. In fact it is of

interest to observe that those issued in 1683 by the successors

to Carteret's title to East Jersey(51*) contain almost verbatim

the section in the Concessions from which the statement above (p.

16) has been quoted, minus the part specifically relating to

corporations.(52*)

    Except in these cases, therefore, the colonial assemblies

which undertook to create corporations were forced to rely upon

an implied power so to act; and the question whether this

implication was justified remained somewhat unsettled throughout

nearly the entire colonial period.

    The power, even though unexpressed, was least dubious in the

proprietary and royal colonies. Here the acts of the assemblies

could not become laws until approved by the representatives of

the proprietary or the crown, and they were further subject to

annulment by these ultimate authorities. Hence it might well be

argued that the essential consent of the final authority was as

truly obtained to charters originally granted on the initiative

of the popular representatives as to those issued directly by the

governors.

    Certainly the passage of acts of incorporation was sometimes

looked upon with favor in such colonies by governors, colonists,

and even crown ministers. Thus, for example, Cornbury in New York

and Nicholson in Maryland and South Carolina two governors who

were chary of exercising directly this part of the royal

prerogative -- both recommended and sanctioned acts of

incorporation passed by the assemblies.(53*) In Pennsylvania this

was the common method, at least after 1740, and when in 1751 the

proprietary offered to grant a charter to the new hospital for

which subscriptions were being obtained, his proffer was declined

on the ground that the assembly charter was preferred.(54*) And

when Increase Mather was in England after the Revolution of 1688,

the "great ministers of state" with whom he spoke countered his

suggestion that a "particular charter" be granted to Harvard

College by the crown: as he reported,



"Answer was made that it should be so if I desired it, but that a

better way would be for the General Court of the Massachusetts

Colony by a law to incorporate their College, and to make it an

University, with as ample privileges as they should think

necessary."(55*)



    The expediency of this method of incorporation was

occasionally, indeed, called in question. Governor Hutchinson of

Massachusetts thus wrote to the Lords of Trade in 1772 concerning

the erection of corporations:



"If there is nothing in the Constitution [i.e., the Province

charter] to abridge or restrain the Prerogative which is in the

Crown of creating Corporations it may be more eligible to make

them in that way than by a Legislative Act. The frequent passing

such Legislative Acts will strengthen the exception that is taken

to this part of the Prerogative."



And Solicitor Jackson, to whom the Lords of Trade referred the

question submitted by Hutchinson, admitted that the Massachusetts

acts directly under consideration were



"similar to some that Your Lordships and Your Predecessors have

objected to in other Colonies because they were passed for a

purpose which the power of the Crown was by itself competent to

effect...."(56*)



The Board of Trade had earlier once declared that "Incorporation

should arise from the bounty of the Crown by letters patent,

rather than by act of Assembly."(57*) Yet they repeatedly allowed

acts of incorporation. Indeed, of the many that must have been

passed upon, only five seem to have been disallowed. Three of

these -- two would-be charters for Harvard College, of 1692 and

1697, and a Maryland law relating to free schools were rejected

because "no power is reserved to his Maty to appoint visitors for

the better regulating the said Colledge" or schools.(58*) The

others, for Charles City, South Carolina (1722), and an Indian

missionary society in New England (1762), were disallowed on

grounds of the expediency of the incorporation.(59*)

    Precautions were sometimes taken in the colonies to avoid the

accusation of lack of deference to the royal prerogative. Thus in

South Carolina, after 1730, most of the acts of incorporation are

cast in the form of memorials to the crown, "praying his most

sacred Majesty that it may be enacted," and so forth; commonly

with the addition of a clause postponing the operation of the act

until the royal approval shall have been communicated to the

governor.(60*) The Maryland "petitionary act" of 1696, relative

to the establishment of a corporate board of visitors for the

proposed free schools in that colony, is couched in similar

language.(61*) It is not unlikely that this form was adopted

because the governors considered applicable to incorporations a

certain section frequently embodied in the governor's

instructions, which provided that no bills of an unusual or

extraordinary character by which the royal prerogative might be

prejudiced should be permitted to go into effect unless a draft

of the bill had previously received the royal approval, or unless

the operation of at least the extraordinary provisions was

suspended till the act had passed the royal scrutiny.(62*) This

practice, however, was by no means general in the royal colonies,

and it was not uniformly followed in South Carolina.(63*)

    On the whole, therefore, it may be concluded that in the

royal and proprietary colonies the legal right of the assemblies

to incorporate "under the negative of the governor" and subject

to disallowance by the higher powers was recognized. This method

of incorporation was the common one in Massachusetts (under the

province charter), Pennsylvania, Maryland, and South Carolina;

and in a few instances it was resorted to in other colonies of

these types.

    In the "charter colonies" -- Massachusetts till 1684,

Connecticut, and Rhode Island -- the situation was somewhat

different. These colonies were themselves corporations existing

by virtue of crown charters.(64*) Their powers of legislation

were technically based, at bottom, upon their right and power as

corporations to pass by-laws for their better government. Now it

was an established principle of English law that "one corporation

cannot make another corporation." This is the unqualified

declaration that appears in the first English book devoted to the

law of corporations, which was published in 1659;(65*) and it was

repeated in two decisions concerning the City of London, rendered

about 1700, which were probably known or cited in the

colonies.(66*) In presuming to pass acts of incorporation,

therefore, these colonies were acting in direct contravention of

this principle.

    In view of this fact, and the eagerness with which

unwarranted acts by the governing bodies of these colonies were

seized upon by their enemies to justify the cancellation of their

charters, it is not surprising that they acted cautiously in the

matter of incorporation. It is worthy of note that the only

corporations chartered in Massachusetts under the colony charter

were incorporated during the English Civil War.(67*) It may also

be significant that the act of 1650, by which Harvard College was

incorporated, was not included in the Book of the General Laws

and Liberties of the colony, published in 1660, nor in the

revised edition of 1672; while the original act of 1642, which

contained no incorporating clauses and which was in fact

superseded by the act of 1650, was included in each

collection.(68*) It is in Connecticut, however, that the

necessity for caution was most expressly recognized, notably in

the case of Yale College and again in the case of a trading

company.

    Yale College was founded at a time when the charter of

Harvard College was in an extremely uncertain position. It was

generally assumed that this charter had become void when the

colony charter, by the authority of which it had been granted,

was annulled, even assuming that authority to have been

originally adequate.(69*) Its officers were therefore seeking for

a new charter, and had not yet succeeded in drafting one to meet

the approval of the General Court, the governor, and the English

authorities; nor had the suggestion that a charter be obtained in

England met with favor.(70*) The promoters of the new institution

thought it wiser, therefore, not to seek an act of incorporation.

Their dilemma is well expressed in a letter of Oct. 6, 1701, from

Judge Samuel Sewall and Isaac Addington of Boston, who had been

appointed to draft the authorizing act. Thus they wrote to the

trustees, when enclosing a few "Hints" for the act:(71*)



"There is another cause which makes us slow and feeble in our

Progress; Not knowing what to doe for fear of overdoing.... We on

purpose, gave the Academie as low a Name as we could that it

might better stand in wind and wether; nor daring to incorporate

it, lest it should be served with a Writt of Quo-Warranto."



Nor would it have been only the college which might have been

served with such a writ, if the act had purported to create a

corporation, but the colony as well. Accordingly the so-called

first charter of Yale College merely authorized certain

"trustees, partners, or undertakers" to take the necessary steps

to establish and manage "a collegiate school."(72*) Later acts

relating to the affairs of the "school" were frequent, but nearly

half a century elapsed before it was formally incorporated.(73*)

    The case of the trading company is of special interest in

that it concerns a business enterprise. In October, 1729, the

assembly convened at New Haven was memorialized by "the New

London Company for Trade," asking for a "patent" allowing the

petitioners "to be a company" according to the tenor of certain

articles and covenants recently agreed upon. They asked besides

for power to issue bills of credit, "as we may see occasion at

any time for promoting or maintaining our trade," and that

forgeries of these should be punished as the law had prescribed

for those of the colony itself. But the "patent" was not

granted.(74*)

    In 1732 a more conservative petition was presented by the

same group. This represented that



"for the promoting and carrying on Trade and Commerce to Great

Britain and His Majesties Islands and Plantations in America, and

other of His Majesties Dominions, and for encouraging the

Fishery, &c, as well for the common good as their own private

interests,... they have agreed and united themselves together to

be a society, and have one common stock; also observing that, for

want of authority to act and proceed in the business aforesaid,

by votes, &c., as societies do, they labor under great

disadvantages in carrying on and promoting the business and ends

aforesaid."



They therefore prayed for the "countenance" of the assembly, "in

putting them into a politick capacity as a society."(75*) This

petition was favorably received. An act was passed which

constituted the petitioners "one society in fact and in name, by

the name of the New London Society united for Trade and

Commerce," and gave to them "and their successors" power to have

continual succession and to be "persons capable by law to sue or

be sued, by their name aforesaid, as other societies are by the

laws of this government."(76*) The officers, to be chosen

annually, were to consist of a moderator, a clerk, and a

treasurer. The moderator was to be "endowed and vested with

authority as other moderators in other societies by law are." And

a committee of three was to be appointed "for ordering the

prudentials of the society, and for the putting in execution the

orders, agreements and rules of the society, and carrying on and

promoting the affairs and interests thereof."(77*)

    It would seem that the society thus authorized was to all

intents and purposes a corporation, unless the assembly

positively lacked the right to grant corporate privileges. But

the elaborate precautions taken to disguise it appear in the

obvious endeavor to make it conform to the structure and follow

the principles of the contemporary ecclesiastical societies, and

in the utter absence of all such terms as "incorporate,"

"corporation," "body corporate and politic," "charter," "patent,"

and even "company."

    The later history of this "Society" throws still further

light on the attitude of the Connecticut government. Trading

operations may have been begun,(78*) but funds were raised in a

way not endorsed by the act. The members paid in their

subscriptions in mortgages,(79*) and upon these as security an

issue of £30,000 of bills of credit was provided for, about half

this amount actually printed, and a large number put in

circulation.(80*) Thus the company soon virtually established

itself as a "land bank," -- a favorite scheme of the period.(81*)

The governor, however, regarded this action as an abuse of the

privileges granted and summoned the company to appear before the

assembly at a special session which he called for February,

1733.(82*) There the society were desired



"to shew by what authority they had emitted some thousands of

pounds, in like manner with the bills of publick credit on this

and the neighboring Provinces, and to shew cause why they should

not refund to the possessors of them according to the face of the

said bills in a proper currency, and why they should not be

amerced for their mismanagement, and cease to be a society."



    The society pleaded that the assembly had no jurisdiction;

that the bills emitted were merely in the nature of bills of

exchange, which they had a right to issue;(83*) and further

claimed "that they were a fraternity and not dissolvable."(84*)

Nevertheless the assembly resolved that the society had forfeited

its privileges and repealed the act which had granted them.(85*)

    At the regular session of the assembly the following May

(1733) the members of the now legally defunct society endeavored

to obtain an act which should constitute them a company with

explicit power to issue bills of credit. The assembly thereupon

took into consideration the question whether it possessed the

power "to make a company or society of merchants," and after due

deliberation resolved,(86*)



"That although a corporation [such as the Governor and Company of

Connecticut] may make a fraternity for the management of trades,

arts, mysteries, endowed with authority to regulate themselves in

the management thereof:(87*) yet (inasmuch as all companies of

merchants are made at home by letters patents from the King, and

we know not of one single instance of any government in the

plantations doing such a thing,) that it is, at least, very

doubtful, whether we have authority to make such a society; and

hazardous, therefore, for this government to presume upon it."



And the new charter was refused, not least, however, as it was

then resolved, because such acts as it contemplated would be

contrary to the "peace and health of the colony."

    Connecticut did not again authorize such a company or society

of merchants until long after the Revolution. It was not many

years, however, before her assembly became bold enough to pass an

undisguised act of incorporation in behalf of Yale College

(1745). Yet in May, 1758, the governor and council negatived the

bill passed by the lower house on petition of Eleazar Wheelock,

for incorporating the Indian School so dear to his heart, "upon

the ground that their action would not be valid if ratified in

England, beyond this Colony, and that a corporation within a

corporation might be troublesome as Yale College had sometimes

been." Six years later a like appeal to the same colony again

proved unavailing.(88*) There were, however, a number of other

corporations similarly created both in Connecticut and in the

other charter colony -- Rhode Island.(89*) Nor was there any

effort, apparently, to attack the validity of such charters or to

undermine the colony charters because of the action. In the

latter part of the colonial period, therefore, the power of the

colonial assemblies to incorporate was at least acquiesced in not

only in the royal colonies, but in the charter colonies as

well.(90*)

    This acquiescence by the royal authorities is especially

significant in view of an act of 1741 by which Parliament

extended to the colonies the operation of the principal

provisions of the "Bubble Act" of 1720.(91*) This act forbade



"particularly the acting, or presuming to act, as a Corporate

Body or Bodies, the raising or pretending to raise transferrable

Stock or Stocks, the transferring or pretending to transfer or

assign any Share or Shares in such Stock or Stocks without legal

authority, either by Act of Parliament or by any Charter from the

Crown, to warrant such acting as a Body Corporate, or to raise

such transferrable Stock or Stocks, or to transfer Shares

therein...."



    The particular occasion for the passage of this extending act

was the floating in 1740 of the famous "Land Bank or Manufactory

Scheme" in Massachusetts;(92*) and the act was manifestly aimed

primarily to suppress or to prevent the formation of joint stock

enterprises of this general character which did not have the

sanction of crown or Parliament. The wording of the act, however,

is far more comprehensive. "Acting... as a corporate body...

without legal authority... by act of Parliament or by... charter

from the crown" was to be penalized. Now in the colonies there

were hardly any corporations which had been authorized by

Parliament;(93*) only a very few enjoyed charters direct from the

crown;(94*) and of the other colonial corporations only those

chartered by royal governors, in the name of the crown (including

perhaps the majority of the whole number, but by no means all),

could, strictly speaking, be said to be authorized by "charter

from the crown." Especially in the charter colonies, therefore,

where acts of the assemblies were not subject to approval by a

royal agent or to review by royal authorities, and where no clear

grant of power to incorporate could be shown in the colony

charter, it would seem to have been potentially a simple matter

to subject to the penalties of this act the soCieties or

companies whose only authorization or incorporation had been

secured from these legislatures. However, the act was never

invoked against any corporation formally created by any colonial

assembly. It is probable that there was no thought of affecting

colonial methods of incorporation when the act was extended to

America; the clause, "either by Act of Parliament or by any

charter from the Crown," is copied verbatim from the act of 1720,

in which its limiting significance was practically nil, inasmuch

as these were the only two methods by which corporate powers were

regularly bestowed in England. Moreover, the act was not utilized

to attack unincorporated joint stock companies, several of which

appeared in America before the close of the colonial period.(95*)

The act may possibly have hindered the development of colonial

joint stock companies, corporate or unincorporate. Certainly

resort might have been had to it if companies distinctly

objectionable to the royal authorities had been formed. But its

actual significance may easily be exaggerated. Virtually it seems

to have become a dead letter in the colonies, as the act of 1720

became a dead letter in England. There is no evidence that it was

of any consequence in the colonies after 1750.

    A few more words may well be said concerning the opinions of

Solicitor Richard Jackson rendered to the Lords of Trade on the

questions submitted by Governor Hutchinson, to which brief

reference has already been made.(96*) These opinions are

significant as being perhaps the only instances in which the

right of a colonial legislature to incorporate, and the

corresponding powers of a royal governor, were definitely passed

upon by a crown official.

    The Massachusetts General Court, in 1771, passed an act to

incorporate a marine society at Salem, similar to one established

at Boston and incorporated in 1754.(97*) After the manner of

Parliament the legislature prescribed the terms of incorporation

and empowered the governor to issue the formal charter.

Hutchinson refused assent to the act, because he believed

probably erroneously(98*)) that the disallowance of an act of

1762 incorporating a missionary society in New England had been

due in part to



"the tendency of such an act to call in question the power of the

Crown by the Governor to grant Charters of Incorporation, without

the aid of the General Assembly."



He therefore inquired of the Lords of Trade his rights in the

matter.(99*) No answer being forthcoming, Hutchinson gave his

assent to this act when it was repassed in May, 1772, and

likewise to a similar act incorporating the Overseers of the Poor

of Boston; but he did not issue the formal charters and wrote

again to the Lords of Trade that he would withhold them till he

knew "the King's Pleasure" on the question of incorporating in

this fashion.(100*)

    On July 14, 1772, Mr. Jackson reported his opinion that both

acts were "certainly proper legislative Acts," and strongly

intimated that the charter limitations in Massachusetts were in

that colony a legal bar to incorporation by the governor without

the support of an act of assembly.(101*)

    Nine months later, apparently not wholly satisfied with this

opinion, the Lords of Trade requested Jackson's opinion on the

question



"whether by the Principles and provisions of the Charter of the

Province of Massachusetts Bay, the power of granting Patents of

Incorporation is or is not thereby vested in the General

Court."(102*)



To this Jackson answered:



"I have reconsidered the said Acts and have perused the said

Charter and am of opinion that the power to incorporate, not by

Patent but by Act of Legislature is vested in the General Court,

under the negative of the Governor by the Principles and

Provisions of the said Charter, inasmuch as the said Charter does

not only grant full powers of Legislature to the General Court,

of which the power to incorporate is a part, but has obviously in

view the old Charter which it recites and under which this power

was exercised frequently, for the constituting of Townships as it

was evident it must still continue to be by somebody under the

new one."(103*)



    Whether this opinion would have been upheld in an English

court may be doubted: for, in the first place, as will be pointed

out below , the erection of townships could hardly be regarded as

a precedent for the creation of true corporations;(104*) and, in

the second place, it is by no means clear that the power to

incorporate would have been included among general powers of

legislation, -- for even in England Parliament exercised the

right





only infrequently and the crown lawyers repeatedly pointed out

that the exercise of certain powers by Parliament implied nothing

as to colonial powers of legislation.(105*) Jackson's opinion may

possibly have been the more favorable to the colonists because he

had lately served (1760-71) very acceptably as the English agent

of Connecticut, one of whose corporations -- Yale College -- had,

in the interim between the two opinions, conferred on him the

degree of LL.D.(106*) But whether or not this pronouncement, or

the grounds upon which it was expressly based, is to be regarded

as legally correct, its existence without a counter-opinion is

indicative of the liberal way in which the right of incorporation

was regarded as belonging to the colonial legislatures.

    It would appear, then, that not only Parliament and the

crown, but colonial proprietors, governors, and legislatures as

well, possessed, within limits which were not always clear but

which were for the most part wide, the right to erect

corporations for operation in America. To what extent was this

right exercised?





NOTES:



1. The first joint stock corporation was chartered in 1555. W. R.

Scott, The Constitution and Finance of English, Scottish and

Irish Joint Stock Companies to 1720 (Cambridge, Eng., 1910-12),

ii, 37.



2. Edward P. Cheyney, "Some English Conditions Surrounding the

Settlement in Virginia," in Amer. Hist. Rev., xii, 512 (1907).



3. The English law of corporations during this period is

presented in Lord Justice Coke's decision in the Case of Sutton's

Hospital (1612), 10 Coke; William Shepheard's Of Corporations,

Fraternities and Guilds... (London, 1659); Anon., The Law of

Corporations... (London, 1702); and William Blackstone,

Commentaries on the Law of England (1st ed., Oxford, 1768), i,

467-485.



4. Blackstone, Commentaries, i, 472-473.



5. Ibid. Note the wording of the preamble of the act of 6 Geo. I,

c. 18 (1720), which authorized the crown to grant charters, on

specified conditions, to two insurance companies: "... whereas

the sole Right and Prerogative of granting Charters of

Incorporation (not being such as are repugnant to any Law or

Statute of this Realm) doth belong to your Majesty." After the

Revolution of 1688, however, it was recognized that the crown

could grant no exclusive or monopoly privileges without authority

from Parliament.



6. Blackstone, Commentaries, i, 473.



7. Shepheard, Corporations, 3; Blackstone, Commentaries, i, 472;

E. H. Warren, in Harvard Law Review, xxi, 308 (1908).



8. Case of Sutton's Hospital, 10 Coke 33 b (1612). Cf.

Blackstone, Commentaries, i, 472-474.



9. See Charles Deane, "The Forms in Issuing Letters Patent by the

Crown of England," in Mass. Hist. Soc. Proc., 1st Series, xi,

166-174 (1869).



10. It is not clear that there were in the colonies any

corporations existing "by prescription" or "at the common law."

In 1833, however, a judge of the federal Circuit Court stated (in

the Case of Sarah Zane, reported in Hazard, Register of Pa., xiv,

esp. 308-309): "The view which we feel constrained to take of the

Constitutions of 1701, 1776, and 1790, all of which remain in

force, so far as respects the rights of property, conscience, and

religious worship, is this: that all bodies united for religious,

charitable, or literary purposes -- though without a written

charter or law -- are to be considered as corporations by

prescription, or the usage of the common law of the State, with

all the attributes and incidents of such corporations, and

entitled to all rights which are conformable to the customs of

the Province." It is to be doubted whether this was "good law."

Cf. Dillingham v Snow et al., 5 Mass. 547, 568, where it was held

that a corporation might be proved to be such without showing the

act of incorporation.



11. Blackstone, Commentaries, i, 474,



12. Case of Sutton's Hospital, 10 Coke 33 (1612),



13. G. T. Lapsley, The County Palatine of Durham... (New York,

1900), 35-36.



14. A. M. Davis, "Corporations in the Days of the Colony," in

Col. Soc. of Mass. Pubs., i, 185-190 (1895).



15. Ebenezer Hazard, Historical Collections: Consisting of State

Papers and Other Authentic Documents... (Philadelphia, 1792-94),

i, 136.



16. Ibid., i, 333,



17. The Colonial Records of North Carolina.... Ed. by W. L.

Saunders (Raleigh, 1886-90), i, II; Hazard, State Papers, i, 166;

Pa. Colonial Records (Minutes of the Provincial Council of

Pennsylvania.... Harrisburg, 1838-52), i, 22.



18. Hazard, State Papers, i, 448.



19. N. C. Col. Recs., i, 30, III.



20. Edward McCrady, The History of South Carolina under the

Proprietary Government (New York, 1897), 54-58, points out that

both the Maryland and Carolina charters were based on the Heath

patent for Carolana.



21. Quoted from the Pennsylvania charter, in Pa. Col. Recs., i,

22 (ed. 1858). For corresponding clauses in the other patents,

see N. C. Col. Recs., i, 11; J. L. Bozman, History of Maryland...

(Baltimore, 1837), ii. 17.



22. Hazard, State Papers, i, 444. For corresponding clauses in

other charters, see ibid., i, 162 (New Albion), 329 (Maryland),

and N. C. Col. Recs., i, 22, 103. Cf. also E. B. Greene, The

Provincial Governor in the English Colonies of North America (New

York, 1898), 8-9, and H. L. Osgood, The American Colonies in the

Seventeenth Century (New York, 1904-07), ii, 4-7.



23. N. Y. Col. Recs. (Documents Relative to the Colonial History

of the State of New York.... Ed. by E. B. O'Callaghan, Albany,

1856-61), iii, 540. For similar clauses in other commissions, see

N. H. Province Papers (Documents relating to the Province of New

Hampshire.... Ed. by Nathaniel Bouton, Concord, etc., 1867-71),

i, 439, ii, 6-7, 60, 309, 370-371; N. Y. Col. Recs., iii, 377,

827; N. J. Archives (Documents relating to the Colonial History

of the State of New Jersey, 1st Series. Ed. by W. A. Whitehead,

F. W. Ricord, and W. Nelson, Newark, 1880-92), ii, 497, iii, 298,

iv, 1, vi, 9, vii, 2-4, ix, 30, 194-195, 272, 368-372; N. C. Col.

Recs., vi, 529. Commonly the advice and consent of the council is

stipulated. Note the resemblance to the clause in proprietary

charters; see supra, 8-9.



24. See infra, 13-14.



25. See Greene, Provincial Governor, 92-93; Edward Channing,

History of the United States, ii, 245-248.



26. Letter of June 30, 1704, in N. Y. Col. Recs., iv, 1114-1115.



27. N. J. Arch., xiii, 396n; W. S. Perry, ed., The History of the

American Episcopal Church... (Boston, 1885), i, 601.



28. The instrument which is sometimes referred to as the

"Cornbury charter" of New York City was merely a "patent" for

some land on Nassau Island: Documentary History of the State of

New York, ed. by E. B. O'Callaghan (Albany, 1849-51), iii, 425;

N. Y. Council Minutes, x, 148 (Calendar, 217).



29. N. J. Arch., ii, 497. The New York commission is not

accessible.



30. See letter in reply from Lords of Trade, Aug. 24, 1704: N. Y.

Col. Recs., iv, 1117-1118. The action does not appear to have

been mentioned again.



31. Numerous instances of New York corporations are given below,

and all of them were chartered by royal governors, except Trinity

Church, whose second charter, at Cornbury's recommendation, was

procured from the assembly. Bellomont, Cornbury's immediate

predecessor, protested against two particular charters, one of a

public and the other of a private corporation, which his

immediate predecessor had granted; but his action can hardly be

interpreted as questioning the governor's right to incorporate;

see infra, 53, 76. Cornbury's doubt was repeated in much the same

form about 1766 in connection with a request for a charter for a

Presbyterian church, but here the legal question was outweighed

by the ecclesiastical one; see infra, 77.



32. See infra, 45-46.



33. Archives of Maryland, (Baltimore, 1893-1912), xix, 452, 498

f.



34. Ibid., 420-426. See infra, 72.



35. See infra, 58-59.



36. On Nicholson, see the sketch in the Va. Mag. of Hist. and

Biog., vii, 154 (1900).



37. Acts... of the Province of Massachusetts Bay... 1692-1780

(Boston, 1892-96), v, 190-191; and see further infra, 27 29.



38. Obviously he has reference to the clause quoted supra, 8.



39. Md. Arch., xxvii, 213, 216, 191-193, 229-230, 232-234,

272-273, 275-276.



40. Letter of Bernard to Lords of Trade, April 12, 1762: Mass.

Prov. Acts, iv, 562-563; Josiah Quincy, History of Harvard

University (Boston, 1860), ii, 105-112, 464-479.



41. See Supra, 13, and infra, 27-29.



42. No exhaustive study of the records has been made as a basis

of this assertion, but it seems highly probable that evidence to

the contrary would be prominent if it existed at all.



43. For this reason the charters thus granted are frequently

termed "royal charters." They should be distinguished, however,

from those which were granted in England, directly by the crown;

for the crown authorities in England had even less supervision

over the charters granted by the colonial governors than they had

over colonial acts of incorporation, which at least were subject

to review in England.



44. See infra, 16.



45. See infra, 67.



46. N. J. Arch., i, 174.



47. N. J. Arch., i, 33; N. C. Col. Recs., i, 83. The Duke of

York's leases and releases to the New Jersey proprietors do not

mention this right: N. J. Arch., i, 8-14. Compare proprietary

charters and commissions to royal governors, quoted supra, 9, 10.



48. N. C. Col. Recs., i, 202. These were formally abrogated in

1693, and were never fully in force.



49. N. J. Arch., i, 100. Cf. Penn to the Provincial Council, Jan.

2, 1691-92: "And ffor all New Towns or Charters or Counties &c

Nothing to be done but by my Knowledge and Consent...." Pa. Mag.

of Hist. and Biog., xxxiii, 425.



50. N. J. Arch., i, 174. See supra, 15.



51. These were never in force: E. P. Tanner, The Province of New

Jersey, 1664-1738 (New York, 1908), 88-90.



52. N. J. Arch., i, 399-400.



53. See infra, 58-59, 70, 72, 76-77.



54. See infra, 83.



55. Quoted by A. M. Davis (Corps. in Col., 206) from "Brief

Account concerning Several of the Agents of New England, their

Negotiation at the Court of England, with some Remarks, etc.

[Increase Mather.] London, 1691, p. 21."



56. Mass. Prov. Acts, v, 190-191.



57. Quoted, apparently from a letter of Aug. 2, 1750, in E. B.

Russell, The Review of American Colonial Legislation by the King

in Council (New York, 1915), 178.



58. Russell, Review of Amer. Col. Legis., 177. Mass. Prov. Acts,

i, 38-39, 288-290; and infra, 77, 84-85.



59. See infra, 58-59, 80-81; and Russell, Review of Amer. Col.

Legis., 178.



60. See, e. g., S. C. Stats. at Large, iii, 431-436, viii,

106-114. Cf. N. C. Col. Recs., ix, 818, for Governor Martin's

postponement of granting a new charter requested by the

Wilmington freeholders, in 1774, till the previous sanction of

the crown officials could be received.



61. See supra, 12.



62. The South Carolina instructions are not available for the

time of the passage of these acts. The clause appears at least as

early as 1708 and was probably generally included thereafter.

See, e. g. the commission of Lovelace in New Jersey: N. J. Arch.,

iii, 320.



63. Cf. N. Y. Col. Laws, i, 564-569 (Trinity Church), and Edward

McCrady, The History of South Carolina under the Royal Government

(New York, 1899), 42-43 (Charles City).



64. See infra, 39-41.



65. Shepheard, Of Corporations, Fraternities and Guilds, 9, 112.



66. Robinson v. Groscot, Comberbach 372 (1696), and Cuddon v.

Eastwick, 1 Salkeld 192 (1704).



67. In addition to Harvard College there was authorized in 1652 a

corporation for providing a water supply on Conduit Street,

Boston, which because of the lack of a corporate name may not

have been a legal corporation: cf. infra, 89. At various times,

beginning as early as this, efforts were made to secure a

municipal charter for Boston, without success; but the records do

not indicate that the doubt of power to grant the charter

prevented the passage of the act desired. Josiah Quincy,

Municipal History of Boston (Boston, 1852), 16-18.



68. A. M. Davis, Corps. in Col., 199. Judge S. E. Baldwin states

(Private Corporations, 266-267 and elsewhere) that the grant of

the Harvard College darter was a ground for attack upon the

colony charter; but I have been unable to find evidence to

support his statement.



69. Quincy, Hist. of Harvard Univ., i, 58, 276, and passim; A. M.

Davis, Corps. in Col., 203-210. See also the letter of Governor

Cranfield of New Hampshire to the English authorities, June 19,

1683, quoted in Palfrey's History of New England (Boston,

1859-75), iii, 412 n. Acting on a similar assumption, many of the

colonial corporations which had been chartered by royal governors

sought, after the Revolution, for acts confirming old charters or

granting new ones.



70. Quincy, Harvard Univ., i, 81-109, 151, 158-159; and cf.

Supra, 18.



71. Letter Book of Samuel Sewall (Mass. Hist. Soc. Colls., 6th

Series, Boston, 1886-88), i, 263 264; Forrest Morgan, Connecticut

as a Colony and as a State... (Hartford, 1904), i, 427-429.



72. The Public Records of the Colony of Connecticut... Ed. by J.

H. Trumbull and C. J. Hoadley (Hartford, 1850-90), iv, 363-365:

October, 1701.



73. In 1745. See infra, 85.



74. Connecticut MSS. Archives (Trade and Maritime Affairs), i,

No. 161: quoted in A. M. Davis, Currency and Banking in the

Province of Massachusetts Bay, part ii, Banking (New York, 1901),

105. This company is best discussed in this chapter by Davis.



75. Quoted from the preamble of the act: Conn. Col. Recs., vii,

390-391.



76. Cf. act of May, 1705: ibid., iv, 500-501.



77. Ibid., vii, 390-392.



78. F. M. Caulkins, History of New London. (New London, 1852),

243.



79. See proceedings for dissolution: Conn. Col. Recs., vii,

421-422.



80. Talcott Papers (Hartford, 1892, 1896), i, 269-270; A. M.

Davis, Mass. Bay Banking, 112, 118.



81. Cf. A. M. Davis, Mass. Bay Banking, passim, and infra, 90-91

(New Jersey scheme, 1740).



82. Talcott Papers, i, 268-270.



83. Conn. Col. Recs., vii, 420-421. Note the judicial character

of the proceedings.



84. Conn. MSS. Arch. (Trade and Maritime Affairs), i, No. 168:

quoted by A. M. Davis (Mass. Bay Banking, 108 n).



85. Conn. Col. Recs., vii, 421-422.



86. Ibid., vii, 449.



87. See Robinson v. Groscot, Comberbach 372 (1696); Cuddon v.

Eastwick, 1 Salkeld 192 (1704). Massachusetts had already done

this: Mass. Col. Recs. (Records of the Governor and Company of

the Massachusetts Bay.... Ed. by N. B. Shurtleff, Boston,

1853-54), iii, 132-133, 135 (1648).



88. John M. Shirley, The Dartmouth College Causes, and the

Supreme Court of the United States (Chicago, 1895), 22-23. In the

latter instance the petitioners desired permission to locate

anywhere. For trouble with Yale College, see Benjamin Trumbull, A

Complete History of Connecticut... (New Haven, 1818), ii, chap.

12.



89. See infra, 78-79, 83, 85, 88-90, 100.



90. The growing strength of the colonies and the growing

complexity of England's own problems probably help to account for

this acquiescence.



91. Statutes at Large, 14 Geo. II, c. 37. Cf. act of 1720: ibid.,

6 Geo. I, c. 18, esp. sects. xviii-xxviii. Cf. also A. M. Davis,

"Provincial Banks, Land and Silver," in Col. Soc. of Mass. Pubs.,

iii (Boston, 1900), 27-28, and ibid., Mass. Bay Banking, 152,

160-163.



92. A. M. Davis, Mass. Bay Banking, chap. 7.



93. See infra, 38.



94. See infra, 32, 34, 35, 38, 39-41, 46.



95. See infra, 91-98.



96. See supra, 13, 18.



97. See infra, 101.



98. See Supra, 18, and infra, 80-81.



99. Letter of May, 1771: Mass. Prov. Acts, v, 190.



100. Letter of May, 1772: Mass. Prov. Acts, v, 190-191.



101. Ibid., v, 191: quoted supra, 13.



102. Mass. Prov. Acts, v , 191.



103. Opinion dated April 13, 1774: ibid., v, 191.



104. See infra, 61-63.



105. George Chalmers, Opinions of Eminent Lawyers on Various

Points of English Jurisprudence. (London, 1814), i, 263-264, 296.



106. Conn. Col. Recs., xi, 357, xiii, 518; S. E. Baldwin,

"American Business Corporations before 1789," in Amer. Hist.

Assoc. Report, 1902, i, 261.



Chapter 2



Colonial Corporations Chartered in England



    The corporations chartered for activity in the American

colonies were created, for the most part, by charters from

authorities in the colonies. On the other hand there were several

corporations whose primary concern was with this section of the

New World that were chartered in England, nearly all by the

crown. About half of these maintained the seat of the corporation

in England and remained distinctly English in complexion and

control; among these are to be counted the earliest colonization

companies and several famous missionary societies. The other half

were from the outset or quickly became distinctly American in

control and in the location of their governing bodies; of these

the most noteworthy were the "companies" whose destinies were

linked with those of the colonies of Massachusetts, Rhode Island,

and Connecticut. Inasmuch as both of these classes of

corporations were English at least in charter, and especially

since many of them were concerned with the founding of colonies,

they may well be considered before those which developed entirely

in the colonies and which were throughout definitely American in

origin, charter, control, and location.

    The first of these English corporations to be formed

primarily for an American enterprise was erected in January,

1587, by an "indenture of graunt" given by Sir Walter Raleigh,

now by royal patent "chiefe gouvernour of... Virginia," to John

White and twelve others, "of London, Gentlemen."(1*) These were

constituted a body corporate with the title of the Gouernour and

Assistants of the Citie of Ralegh in Virginia;(2*) and to them

was granted "free libertie to carrie with them into the late

discouered barbarous lande, and countrie, called... Virginia...

such, and so many of her Maiesties Subiects, as shall willingly

accompany them,... and also diuers and sundrie other

prerogatiues, iurisdictions, royalties and

preheminencies...."(3*) These were then the leaders of the

expedition which set out for Virginia in May, 1587.(4*)

    Two years later Raleigh made a new indenture with certain of

the original associates (most of whom were still "lying in

Virginia") and nineteen "merchants of London" "aduenturers...

purposing and intending to be made free of the corporation,

companie and societie lately made by the sayd Sir Walter Raleigh,

in the Citie of Raleigh, intended to be erected and builded in...

Virginia...." These agreed to "adventure divers and sundry sums

of money, merchandises, and shiping, munition, victual, and other

commodities into the said forraine and remote country of...

Virginia...." In consideration whereof Raleigh assigned to the

combined company privileges for seven years of freedom of trade

to and from the colony and freedom from rents and taxes; and as

further evidence of his "zeale of planting the christian

Religion, in... the sayde barbarous and heathen countries, and

for... the common vtilitie and profite of the inhabitants

therein, as also for the incouragement of the sayde" adventurers,

he liberally gave the company the sum of £100 to use as they

should see fit. Furthermore, Raleigh covenanted for himself,



"his heyres and assignes vpon sufficient and reasonable request

made to him by the persons aforesayd, or any of them, their

heires or assignes,... at any time, or times hereafter, to

ratifie, affirme, and approue by his deede, or deedes, or by any

other conueiance, or conueiances in lawe, the corporation

heretofore made, by him the sayd Sir Walter Raleigh, consisting

of the Gouernor, and twelve assistance as by his sayd indenture

made to John White and others, more plainely doth appeare, for

the more perfect, and better assurance, and sure making of the

sayd corporation, if any imperfection, and want in law thereof

bee. And further that hee the sayde Sir Walter Raleigh, his

heyres, and assignes, shall, and will, as much as in him or them

lieth, procure, and indeuor to obtaine, the Queene's maiesties

letters patents, for ratification, approbation, and more sure

confirmation, of the sayde corporation, and societie, with al

prerogatiues, commodities, iurisdictions, royalties, priuiledges,

and preheminences, whatsoeuer graunted and conueied by her

maiestie to the saide Sir Walter Raleigh...."(5*)



    It would appear from this document that the corporation was a

joint stock company or business corporation rather than the

municipal corporation which the name suggests.(6*) But what its

development might have been cannot be surmised, for it probably

did not survive Governor White's return from Virginia in 1591

with the news that the colonists had disappeared.

    The Raleigh corporation had better known successors. The

first of these was known as the Virginia or London Company,

which, though twice reorganized on a new basis and with somewhat

different membership, may be regarded as a single company.(7*)

This was first constituted by a grant from James I in 1606, but

by its first "charter" no corporate privileges seem to have been

given.(8*) Charters of 1609 and 1612, however, formally confer

upon the grantees the privileges of a corporation, with the title

of The Treasurer and Company of Adventurers and Planters of the

City of London, for the first Colony in Virginia.(9*) This

company was frankly a business corporation. It was organized on

the model of the East India Company. It attracted over a hundred

of the same shareholders, and prominent business men were leaders

in both.(10*) Business motives were dominant; as Crashaw lamented

in a sermon to the company in 1610: "Tell them of getting XX. in

the C. [20 per cent]. Oh how they bite at it, oh how it stirres

them? But tell them of planting a Church, of converting 10,000

souls to God, they are senseless as stones, they stirre no more

then if men spoke of toies and trifles."(11*) The business

motives were indeed necessary to raise the capital requisite to

plant the colonies, though religious motives were also appealed

to in raising funds: "the number of investors large and small

rose to thousands; general collections were taken up and

lotteries carried on for its expenses."(12*)

    The company was active for a time. It sent out numerous

expeditions and considerable supplies and made strenuous efforts

to develop the country agriculturally, industrially, and

commercially. Especially energetic were the efforts to develop

the tobacco cultivation and on this basis to secure a monopoly of

the tobacco trade in England. Incidentally efforts were made to

keep the colonists in good spirits, and subsidiary joint stock

companies were formed, not alone for setting on foot a glass

furnace to make glass and beads, and fishing and trading

ventures, but also "for Transporting 100 Maids to Virginia to be

made Wives."(13*)

    But the company, like its predecessor, was short-lived. Its

problems of management were much larger and more complicated than

even its capable business men were prepared to solve. Many of its

enthusiastic subscribers got lukewarm or colder and failed to pay

up their subscriptions. The colonists were poorly selected and

were unsuccessful both from their own standpoint and from that of

the company. The expected trade did not materialize. The company

therefore was not financially successful. Furthermore -- in part

doubtless because of this it was racked with internal

dissensions, and it got into the bad graces of the sovereign and

some of his powerful ministers. Such a combination of adverse

influences it could not withstand. In 1624 it became insolvent

and did not survive the steps taken in that year by the attorney

general to have its charter annulled, though judgment was not

finally entered until 1632.

    The next company affecting the territory of the future United

States was like its predecessors essentially a business

undertaking, incorporated in 1620 by a crown charter naming it

the Councill established at Plymouth, in the County of Devon, for

the planting, ruling, and governing of New-England, in

America.(14*) Here the corporate body did not consist, as in the

cases of the Virginia Company and the East India Company (1600),

of the body of stockholders, but of a "Councill" of forty

persons. This corporation maintained its existence for fifteen

years. It promoted the fishing industry and established some

temporary fishing settlements; and it was the source of numerous

grants for colonizing ventures in New England, including notably

those of the Plymouth colony and of the more famous Massachusetts

Bay Company.(15*) But its efforts were not long successful; in

1623 it was well-nigh moribund, and in 1635 it surrendered its

charter.(16*)

    Mention may be made, in passing, of some other English

business corporations which were concerned in the New World,

though not with that part of it which separated from the mother

country at the Revolution.(17*) Thus in 1610 a charter, probably

similar to that of the Virginia Company, was granted to the

Treasurer and Company of Adventures and Planters of the Cities of

London and Bristol for the Colony or Plantation in

Newfoundland.(18*) In 1612 a group of "undertakers" purchased the

rights of the Virginia Company to the Bermuda Islands, and

succeeded so well in the exploitation of the islands that in 1615

they applied for and secured a charter as the Governor and

Company of the City of London for the Plantation of the Somers

Islands, with Sir Thomas Smythe, treasurer of the Virginia

company, as first governor.(19*) In 1627 a crown charter was

obtained for the Governor and Company of Noblemen and Gentlemen

for the Plantation of Guiana.(20*) In 1630 there was erected a

corporation for printing what are now known as the Mosquito

Islands, off the coast of Nicaragua, which constituted "in

several respects the most important and progressive English

settlement, in the islands off the coast of America during the

reign of Charles I."(21*) Probably the most famous of all was

chartered in 1670 as The Governor and Company of Adventurers of

England trading into Hudson's Bay, which has yet not ended its

long and generally prosperous career.(22*) Finally in 1692 a

group of London merchants obtained from Parliament a

fourteen-year charter, with exclusive privileges in the fisheries

of the North Atlantic waters, for what is known as the "Greenland

Company." This enterprise was poorly managed, unsuccessful, and

soon fell through.(23*)

    None of these corporations, however, had any great

significance for that part of America which became the United

States, and most of them were short-lived and ineffective.

    One other of the "original thirteen" colonies was founded

and, for a time, governed by a completely English corporation.

This was the one in which James Oglethorpe was the moving spirit

and for which he obtained, in 1732, a charter from George II

incorporating himself and nineteen others as the Trustees for

establishing the Colony of Georgia.(24*) This corporation,

however, belongs to a distinctly different type from the ones

which have just been mentioned. Here the dominant motive was not

profit-making, but charity'. and in consequence the charter bears

close resemblance to those of the eleemosynary corporations of

its day. But it was no more successful than its predecessors of a

business nature; and in 1752, a year before its charter was to

expire by limitation, the trustees voluntarily gave over their

rights to the crown.(25*)

    Besides these English companies a few of other nationalities

must be mentioned. Henry Hudson was sailing in the service of the

Dutch East India Company (formed 1602) when in 1609, searching

for a westward passage to India and Cathay, he discovered New

York.(26*) But this company took no interest in America and did

not follow up this discovery.

    A Dutch West India Company had been a favorite project since

1592 with Willem Usselinx, Antwerp born, and bred a merchant in

Antwerp, Siam, and the Azores.(27*) The States-General issued a

charter early in 1607, but owing to rivalries of cities and

parties and capitalist backwardness, no use was made of it.(28*)

Under the stimulus of an offer (1614) of exclusive privileges to

discoverers of new places who should make four voyages thereto, a

group of Dutch merchants formed in 1614 The United New Netherland

Company and secured a special grant for four years for the

purposes of trade, apparently without corporate powers. A renewal

of its grant was refused.(29*) After repeated failures the

promoters of the West India Company procured a new charter in

1621, authorizing a capital of six million florins

(£500,000).(30*) Its fundamental purpose was to injure the

Spaniards and rob their treasure fleets, but in 1623 it began

trading operations in New Netherland. The early years were

markedly successful from the pecuniary viewpoint, chiefly because

of its conquests. But the basis for permanent prosperity was not

laid; the directors allowed their private interests to take

precedence over the company's interest; politics, domestic and

international, proved an opposing factor; and in 1638 the

company's monopoly was abolished.(31*) Opposition to the

Portuguese and jealousy of the English supplemented its internal

troubles, and for many years the company had been in sore

financial straits and accomplishing little in the New World, when

in 1664 the English seized New Netherland. Thereafter the company

did not appreciably affect the province, Despite the brief

reoccupation by the Dutch a few years later.

    Dissatisfied with the charter of the Dutch West India

Company, Usselinx went to Sweden and obtained from Gustavus

Adolphus in 1626 a twelve-year charter for the General Commercial

Company of the kingdom of Sweden, known as the South

Company.(32*) Delays, reorganizations, amplification of the

charter, but slight activity and none at all relative to America,

characterized the next few years. By 1646 the company was

practically dead. In 1636 a small "New Sweden" company was formed

and chartered, led by Peter Minuit and Peter Spiring, and in 1638

its first expedition landed in the Delaware. Other expeditions

followed, colonists were planted, and a modest trade developed.

Reorganized in 1642, it continued to enjoy privileges from the

crown and sent out more colonists and trading expeditions. In

1652, however, its privileges were materially curtailed by

throwing open the tobacco trade, and the definite establishment

of Dutch supremacy soon after reduced its importance. In

reorganized form it continued connection with the colony for many

years, despite political changes, but it was no longer of

particular significance.

    These companies belong in the same category with the English

companies for trade and colonization, although they are not

precisely analogous to the English corporations in essential

powers and privileges.

    Another important group of corporations active in America

secured charters in England and had both their origin and their

seat in the British Isles. These were the missionary societies,

which aimed at the evangelization of the Indians.

    The first was the President and Society for the propagation

of the Gospell in NEW ENGLAND, frequently known as "the New

England Company." This was incorporated by act of Parliament in

1649, during the suspension of the royal power.(33*) After the

Restoration (1662), however, despite its distinctly Puritan

complexion, the society secured from Charles II a new charter,

which confirmed it in the possession of corporate powers.(34*)

    Near the end of the seventeenth century a Presbyterian

society was founded in Edinburgh with a similar purpose, and two

years after the Parliamentary union with England (1709) this was

incorporated as The Society in Scotland for Propagating Christian

Knowledge.(35*)

    Most important of all, perhaps, was the missionary organ of

the Established Church, known as The Society for the Propagation

of the Gospel in Foreign Parts, which was incorporated in 1701,

with its seat in London.(36*)

    All three of these, while retaining their bases in the mother

country, carried on active operations in America down to the

Revolution; and although their efforts were expended elsewhere

thereafter, the war and its consequences did not end their

corporate existence.

    Besides these incorporated bodies there were several similar

missionary and charitable organizations which operated without

charters. Such, for example, were "a society of noblemen and

gentlemen in London, for the relief and instruction of poor

Germans, and their descendants, settled in Pennsylvania, and the

adjacent British Colonies..."(37*) and certain associates for the

conversion of adult negroes and the education of their

children.(38*)

    In contrast with these corporations, which are to be called

American only in the sense that in America lay the primary sphere

of their operations, there were a few which in spite of their

European charters were more thoroughly American corporations.

Foremost among these were the three which were identified with

the more important New England colonies.

    The first obtained in 1628 a grant from the Council for New

England, and a year later secured from the crown not only a

confirmation of this grant, but also an independent charter of

incorporation with the title of the Governour and Company of the

Mattachusetts Bay in Newe-England. This company, while in the

form of a business corporation like the East India and Virginia

companies, was not actuated to any great extent by the hope of

pecuniary profit, and it soon lost what little financial

character it originally possessed. It was rather dominated by the

desire to establish in the New World a colony in which certain

ways of thinking and living might find an unhampered expression.

As such it was more successful than its contemporaries and

predecessors of a business nature. Soon after its organization

its leaders took the bold step of transferring its seat to

America. There established it gradually lost its private

character, and out of its corporate organization it evolved the

political system of the chief New England colony.(39*) In 1684,

indeed, the Massachusetts Bay Company was deprived of its

corporate charter, by scire facias proceedings, and the "province

charter" granted in 1691 did not reestablish the corporate form

of organization. But in the struggle of half a century to

maintain the first charter the corporate organization had made an

indelible impression on the governmental machinery; and the

province charter, while it did not rebuild the corporate

structure, contained many of the important features which the

corporation under its earlier charter had developed.(40*)

    Soon after the opening of the English Civil War three towns

to the south of the Massachusetts Bay colony petitioned

Parliament for a charter granting them powers of self-government.

Accordingly the Commissioners of American Plantations, acting by

authority of an act of Parliament, granted in 1643



"to the aforesaid Inhabitants of the Towns of Providence.

Portsmouth, and Newport, a free and absolute Charter of

Incorporation, to be known by the Name of the Incorporation of

Providence Plantations, in the Narragansett Bay, in

New-England."(41*)



This "charter," which the towns accepted in 1647 and to which

they conformed until the Restoration, may not technically have

created a corporation. It is not in the usual form and it does

not specifically grant any of the general powers customarily

belonging to corporations, except "to make and use a public

seal."(42*) Uncertainty on this point might well have existed at

the time, for there was no recognized sovereign to give assent to

the grant and no substitute for the crown had vet been evolved.

    After the Restoration, however, Charles II was prevailed upon

to replace this charter, whose validity was no longer to be

relied upon, with another. The new charter, granted in 1663, was

quite definite in its terms and, besides specifying the usual

general powers which appertained to corporations, it provided

that the petitioners



"shall be... forever hereafter, a body corporate and politick, in

fact and name, by the name of the Governor and Company of the

English Colony of Rhode-Island and Providence Plantations, in

New-England, in America."(43*)



    A year before (1662) Charles II had granted a like charter

making the towns of Connecticut a corporate province.(44*)

    Both of these charters, in general form not dissimilar to

that of the Massachusetts Bay Company, were the fundamental law

in these two colonies down to the Revolution; and indeed it was

not until 1842 that Rhode Island's charter was definitely

replaced by a new state constitution.(45*) Here, then, were two

important public corporations in the colonies which long

maintained a corporate existence by virtue of charters from the

English crown.

    In addition to these "charter colonies" at least two other

corporations, of a somewhat less public character, were organized

under English charters for establishment in America -- a

Pennsylvania trading company and the college in Virginia.

    The Free Society of Traders in Pennsylvania (46*) was

chartered by William Penn early in March, 1682, a few months

before his departure for his province.(47*) Penn had earlier

refused an offer of



"six thousand pounds, and pay the Indians for six shares, and

make the purchasers a company, to have wholly to itself the

Indian trade from south to north, between the Susquahanagh and

Delaware Rivers, paying me two and a half per cent.

acknowledgment or rent."(48*)



In contrast to this the preface to the articles of settlement of

the Free Society remarks:



"It is a very unusual Society, for it is an Absolute Free One,

and in a free Country: A Society without oppression; wherein all

may be concerned that will; and yet have the same Liberty of

private Traffique, as though there were no Society at all."(49*)



    In May of the same year, by one of the "laws" agreed upon in

England by the "governor and freemen" of the province to be

founded, the charter was in some sense ratified.(50*) In England

its articles of association were drawn up (March 25), most of its

stock subscribed, and the first "General Court" or organization

meeting held (May 29).(51*)

    In spite of this distinctly English origin, however, the

society was intended from the outset to be a thoroughly American

institution in activity and control, and it was designed to play

an important part in the province. Its base of operations was to

be promptly removed to America; and its articles provided that

after that event each stockholder not resident in Pennsylvania

was restricted to a maximum of a single vote unless he should own

at least one thousand acres of inhabited land in the province,

while those who had this much of a stake in the success of the

province or who had gone thither to settle were allowed two votes

for two shares and three votes for six shares or more (Arts. I,

II).

    In addition to its charter Penn granted the society a city

lot running from river to river and containing one hundred acres,

and twenty thousand acres of land in the country, including four

hundred in the "City Liberties," with the privileges of a manor,

including the right to representation in the provincial

legislature.(52*) Plans were made for a variety of operations

besides ordinary trade and commerce: during the first year, for

example, the society was to send over two hundred servants, "of

such Trades and Capacities as may be most for the benefit of the

Society;" mines were to be operated; and the society was to

assist the Indians in making settlements (!) (Arts. VIII, XIX,

XXII). It was required that the officers and servants of the

society should dispose of their private purchases of furs through

the society, and others were permitted to do similarly, the

society's English factors attending to the entire business. The

advantages of this phase of its activities were especially

stressed in the roseate preface to the articles.(53*)

    The early days of the society were bright. On April 26, 1682,

the subscription book showed subscriptions of £5400, made by over

two hundred persons, in sums ranging from £25 (a half share) to

£400. Within the next few weeks these may have been materially

increased.(54*) It may perhaps be presumed that the original

deposit of five per cent of the subscriptions was paid in at this

time as required. At the meeting in May it was directed that the

first instalment of one quarter should be completed within one

month,(55*) and this constituted the original capital. Before

Penn left London letters to the "Emperor of Canada" were

prepared, with a view to establishing friendly relations for

trade.(56*) Its first president, Nicholas More, was honored with

provincial offices: in May, 1683, he became secretary of the

council; a year later speaker of the assembly; and in August,

1684, one of the five provincial judges.(57*) A number of

artisans were imported as "servants to ve Society."(58*) A

tannery and a grist mill were erected in 1683, a saw mill and a

"glass house" in 1684. At first the English cargoes in which

considerable sums were invested were profitably disposed of.(59*)

    Penn continued his favor and interest. He wrote a committee

of the society in London in August, 1783:



"I am sure, I have not turned my back upon any offer, that tended

to its prosperity; and though I am ill at projects, I have

sometimes put in for a share with her officers, to countenance or

advance her interest:... I... assure you, that I am heartily

inclined to advance your just interest, and that you will always

find me Your kind cordial friend."



And he seconded the urging of the officers in Pennsylvania that

some thousands of grapevines, "with some able Vinerons," be sent

out from France, and Frenchmen for establishing the linen

manufacture.(60*)

    Genuine prosperity, however, never was realized. The

Pennsylvania assembly failed to ratify the charter, to the

disappointment of the London members. Claypoole, the treasurer,

wrote Penn April 1, 1683:(61*)



"we are likely to suffer both in our stock and reputation when it

comes among the people. I am afraid they will say they are all

cheated, for the charter or Patent which thou signed was a great

inducement to many to subscribe and to others to pay in their

money... get all things done in relation to the company to answer

our engagements, and the people's expectations, if the charter be

uneasy let it be mended if it cannot be mended lay it aside, and

make another for a charter there must be, or the company cannot

subsist."



The proprietary charter seems not to have been regarded as

sufficient, for later suits were brought against officers of the

company rather than against the company itself, and its lands

were held by trustees.

    The president, More, proved impossible to get along with, was

replaced in 1684 by Benjamin Chambers, and in his capacity as

judge fell into disgrace, without yet being clear of the

society's business.(62*) The Indian trade failed to develop as

had been expected. Goods were sold on trust, and the society

found itself unable to collect on them. As early as May, 1684,

the condition of its affairs was such that the secretary wrote

that the society had neither money nor credit, and added: "I am

so weary of the Society's business that I will get clear as soon

as I can."(63*) Penn wrote earnestly to the council, from

England, in 1686:



"The society is a great Reproach to ys Province, & in nothing

more then not sending an account of the debts & credr which I

stayd there so long & lett so often for, & saw effected. That

itself was mislay'd or lost or designedly kept back after all yt

pains, so yt my own credit, yt I saw it & ys totall of debt 6000

lbs. odd hundred & ye credt 9000 lb. odd hundred pounds, was all

they had to rest upon, & certainly merchands & traders yt trust

in themselves, but their books, had little reason to give me that

respect pray call the President or chief officer before you on my

complaint, order him to transmitt a faithful account. I writt to

them to transmitt ye govermt of it hether, wch would serve the

Province, content the present rich members here, & encourage

others to come in for fresh stock can only save it with fresh and

other methods."(64*)



The society in the province became involved in acrimonious

disputes and exhausting litigation. Early in 1687 Penn felt

impelled to write Thomas Lloyd:



"This quarrel about the society has made your great guns heard

hither: I blame nothing, nor the society here, to be sure; but I

could wish Dr. Moore and P.[atrick] R.[obinson] could have been

softened, and that J. Cl.[aypoole] had been more

composed...."(65*)



    Active operations were soon suspended. Efforts, seconded by

Penn, continued to be made by stockholders in England to have an

accounting made by the officers, and the affairs of the society

were several times before the provincial council.(66*) The

efforts were long in vain. By 1704 the society was referred to as

"ye old Pensilvania Compa."(67*) In 1721, however, the assembly

passed a bill providing for its dissolution and the distribution

of its assets; and in 1723, when Governor Keith had satisfied

himself that such measures would operate with justice, an act

appointing trustees for this purpose was approved.(68*) Thus,

after an existence extending over a period of forty years, the

company came to an end.

    Finally must be mentioned the College of William and Mary,

which enjoys the distinction of being the only colonial college

to be incorporated directly by royal charter. The agitation for a

college in Virginia had begun almost with the founding of the

colony and had continued sporadically throughout the seventeenth

century. It was not until the last decade of the century,

however, that the movement became effective, then largely through

the energetic efforts of Rev. James Blair. This gentleman,

commonly known as "commissary Blair" because of his office in the

Established Church, was sent to England in 1691, to seek a

charter from the crown, with the warm support of Governor

Nicholson and the House of Burgesses.(69*) In England he

encountered some opposition, chiefly on financial grounds, and a

great deal of inertia. However, after spending nearly three years

and some £360 he left for Virginia in 1693 with a charter from

William and Mary and financial support to boot.(70*)

    The college did not fulfil all the high expectations which

had been aroused, but it succeeded in maintaining its corporate

existence and serving to some extent the educational needs of

Virginia to the end of the colonial period.

    Numerous other colonial requests from the colonies for crown

chapters failed. Increase Mather sought one for Harvard, by

vigorous exertions extended over several years. Similarly Samuel

Davies exerted himself on behalf of the New Jersey College at

Princeton, Eleazar Wheelock for his Indian school (later

Dartmouth College), and George Whitefield for the orphan school

which he wished erected into Bethesda College.(71*) Petitions for

charters for companies to deal in naval stores, particularly by

the Byfield and Dudley groups, met with a like fate early in the

eighteenth century.(72*)

    Charters direct from the crown were sought partly to attract

financial support from England, partly to secure a standing which

would better bear attacks in the colonies and in England, partly

to secure the counsel of more experienced and wiser English

heads. William Smith, a New York lawyer, writing to Eleazar

Wheelock's agent there, March 30, 1767, remarked:



"An incorporated body will not only acquire rights maintainable

by law in the courts of justice, but command the favor of the

government, who without that sanction, may at such distance from

the crown oppress the undertaking a thousand ways and utterly

destroy it."(73*)



    The reasons for failure to secure such charters were various.

Opposition from the colonies was sometimes a factor, as in the

case of the naval stores companies. Unwillingness to move unless

the wheels were oiled with more liberality than colonial

petitioners were in a position to do played a part. Eleazar

Wheelock wrote, April 7, 1769, telling of his failure to get a

charter for his school, that the board of trust told him that



"Experience... has fully taught them that by means of an

incorporation, such designs became jobs, and are soon ruined

thereby. They choose to hold the monies collected there in their

own hands for this purpose...."(74*)



In the main, however, it was probably the pressure of other

business, the caution against taking unnecessary steps, and mere

inertia that prevented the granting of more charters for local

American corporations.

    In some cases not a charter but an order for a charter was

all that was requested. William Smith, for instance, advised in

1767 with reference to Wheelock's Indian school:



"A petition should be proffered to his majesty, for a mandamus to

the governor and council and all subordinate persons, to pass a

charter according to a form annexed in hoc verba, under the great

seal of the province; and at the same time a standing instruction

should be procured to the governor and secretary for Indian

Affairs, to aid countenance and protect the corporation in the

execution of the powers and privileges granted to them by the

charter, as they will answer to the x x x x x at their

peril."(75*)



It is not clear that any request of this nature was granted.

    In all, then, there seem to have been active in the territory

of the thirteen colonies prior to the Revolution more than a

dozen corporations, each of which possessed one or more charters

granted in England, most of them by the crown, and several more

with charters from other European states. Most of them were

concerned with trade, colonization, and government, three,

however, with evangelistic effort, one primarily with trade, and

one with higher education. The large majority were dominated by

business motives. These were perhaps least successful, though the

lack of a common basis of comparison makes such an assertion of

little weight. At all events none of the business corporations

had a continuous active existence of more than a score of years

and all ended in discouragement; while six of the other eight

survived as corporations to the Revolution. Three of these

survivors had from the beginning maintained the seat of the

corporation in America, while the other three -- the missionary

societies -- conducted their operations from a British base. As a

class these corporations were among the most important of those

active in the American colonies.







NOTES:



1. Hazard, State Papers, i, 42-43.



2. Richard Hakluyt, The Principal Navigations, Voyages,

Traffiques, and Discoveries of the English Nation, ed. by Edmund

Goldsmid (Edinburgh, 1885-90), xiii, 358.



3. Hazard, State Papers, i, 42-43.



4. See list of members of this expedition in ibid., i, 40-41.



5. Hazard, State Papers, i, 42-45. Apparently the only evidence

of this corporation now extant is the paragraph in Hakluyt's

Voyages and the indenture of 1589, printed by Hakluyt (ed. 1589,

p. 815) and reprinted by Hazard.



6. Cf. W. R. Scott, The Constitution and Finance of English,

Scottish and Irish Joint Stock Companies to 1720 (Cambridge,

Eng., 1910-12), ii, 244-245, contra. Different writers have had

various interpretations of these documents.



7. See esp. the account in Scott, Joint Stock Cos., ii, 246-258,

266-289; Alexander Brown, The First Republic in America (New

York, 1898), and documents in Alexander Brown, The Genesis of the

United States (Boston, 1890); Channing, Hist. of the U. S., i,

157-226; Osgood, Amer. Cols. in the Seventeenth Century, i,

23-97; Mag. of Amer. Hist., xxix, 371; "Discourse of the Old

Company," 1625, urging a new charter, in Va. Mag. of Hist. and

Biog., i, 155-167, 287-309 (1893-94); and L. D. Scisco, "The

Plantation Type of Colony," in Amer. Hist. Rev., viii, 260-270

(1903).



8. Hazard, State Papers, i, 50-58.



9. Ibid., i, 58-81, esp. 64.



10. Thomas Smythe, Richard Hakluyt, and others of Raleigh's

corporation were members. Smythe was at the same time governor of

the Muscovy and East India companies, treasurer of the Virginia

Company, and a member of the Levant Company. Cheyney, English

Conditions Surrounding the Settlement in Va., 514.



11. Brown, Genesis of the U. S., i, 362.



12. Cheyney, English Conditions Surrounding the Settlement in

Va., 511-512, 527; G. L. Beer, Origins of the British Colonial

System (New York, 1908), 29.



13. Scott, Joint Stock Cos., iii, 466-467.



14. Charter in Hazard, State PaPers, i, 103-1 18, esp. 107. 



15. See ibid., i, 298-304, ii, 597-605 ; Scott, Joint Stock Cos.,

ii, 303-304; Miller Christy, in Amer. Hist. Rev., iv, 685-702

(July, 1899). 



16. For its history, see Scott, Joint Stock Cos., ii, 301-306;

Osgood, Amer. Cols., i, 98-103, 239-255; Amer. Antiq. Soc. Proc.,

1867, pp. 97-131.

 

17. Cf. also C. M. Andrews and F. G. Davenport, Guide to the

Manuscript Materials for the History of the United States to

1783, in the British Museum, in Minor London Archives and in the

Libraries of Oxford and Cambridge (Washington, 1908), 21, 32, 33,

283, 395, for various proposals which bore no fruit. 



18. Scott, Joint Stock Cos., ii, 317-318. 



19. Scott, Joint Stock Cos., ii, 261-262. Cf. ibid., 263-297,

passim. 



20. Ibid., ii, 325. 



21. Ibid., ii, 328-330.



22. Ibid., ii, 228-237; George Bryce, The Remarkable History of

the Hudson's Bay Company (London, 1900). 



23. Scott, Joint Stock Cos., ii, 379. The fact that monopoly

privileges were granted explains the presence of an act of

Parliament. Henry Elking, A View of the Greenland Trade and

Whale-fishery (London, 1722). 



24. Charter in Poore, Charters.and Consts., i, 369-377. 



25. For its history, see Jones, Hist. of Ga., vol. i, esp. chaps.

4, 5, 27; and "A Brief Account of the Establishment of the Colony

of Georgia under Gen. James Oglethorpe, Feb. 1, 1733," reprinted

in Peter Force, Tracts... (Washington, 1835), i, No. II.



26. H. C. Murphy, Henry Hudson in Holland... (reprint, The Hague,

1909), treats briefly of the origin of the company and more fully

of Hudson's connection with it.



27. J. F. Jameson, Willem Usselinx, Founder of the Dutch and

Swedish West India Companies (New York, 1887), deals in detail

with its projection and promotion, though but slightly with its

American activities.



28. Ibid., esp. 31-35.



29. E. B. O'Callaghan, History of New Netherland... (New York,

1848), i, 70-85.



30. Cf. Jameson, Willem Usselinx, esp. 34-47, 54-76; O'Callaghan,

New Netherland, i, 71, 86-93, and Appendix A (the charter). G. M.

Asher, in his Bibliographical and Historical Essay....

(Amsterdam, 1854-67), pp. xviii-xix, compares it with the East

India Company, O'Callaghan with English colonizing companies.



31. O'Callaghan, New Netherland, bk. I, chaps. 2-6; J. R.

Brodhead, History of New York (New York, 1853), chaps. 5-20.



32. Jameson, Willem Usselinx, 93-100; Amandus Johnson, The

Swedish Settlement on the Delaware... (Philadelphia. 1901), i,

52-58. For the Swedish companies I rely largely on Johnson's

lengthy account. Cf. also Hazard, Register of Pa., iv, 373-374.



33. Charter in Hazard, State Papers, i, 635-636. See esp. account

in Vening, New England Company. This is probably the organization

referred to by Edward Randolph in a letter of March 26, 1684, to

the Archbishop of Canterbury, in which he says it was chartered

by letters patent about 1643 as "The Governor and Company for

Evangelizing the Indians in New England": Toppan, Edward

Randolph, iii, 287-291. See also Briggs, Amer. Presbyterianism,

97-99, xxxvi-xxxix; Hazard, State Papers, ii, 438, 453; John W.

Ford,... Correspondence.... of the New England Company....

(London, 1898); Pa. Mag. of Hist. and Biog., xxv, 134, 286;

Andrews and Davenport, Guide, 66, 70, 299, 330.



34. Vening (New England Company, 294) states that Sir Robert

Boyle was largely influential in securing this charter.



35. Briggs, Amer. Presbyterianism, 297-303; Chase, Dartmouth

College, i, 8; A Summary Account of the Rise and Progress of the

Society. (Edinburgh, 1783). Cf. Conn. Col. Recs., x, 97-98;

Andrews and Davenport, Guide, 66, 67.



36. Perry, Amer. Epis. Church, i, 197-205; C. F. Pascoe, Two

Hundred Years of the S. P. G., 1701-1900 (London, 1901).



37. Cf. William Smith, A Brief History... (1755), mentioned in

Andrews and Davenport, Guide, 292-293; Charles Evans, American

Bibliography... (Chicago, 1903- ), iii, 124, No. 7569.



38. Hazard, Register of Pa., i, 428-429 (1828).



39. Charter in Hazard, State Papers, i, 239-255. Cf. Scott, Joint

Stock Cos., ii, 312-315; Osgood, Amer. Cols., i, 128-223;

Channing, Hist. of U. S., i, 322-323. Cf. Emory Washburn,

"Transfer of the Colony Charter of 1628 from England to

Massachusetts," in Mass. Hist. Soc. Proc., 1st Series, iv,

154-167 (1859); Mellen Chamberlain, in Mass. Hist. Soc. Proc., 2d

Series, vii, 109-112 (1893); articles by Joel Parker and Charles

Deane, in ibid., 1869.



40. Charles Deane, "The Struggle to Maintain the Charter of King

Charles the First, and its Final Loss in 1684," in Winsor,

Memorial History of Boston (Boston, 1980), i, 329-382. The 1691

charter is in Poore, Charters and Consts., i, 942-954.



41. Hazard, State Papers, i, 539-540; R. I. Col. Recs., i,

143-144. The petition seems to have called for "a free Charter of

Civil Incorporation and Government."



42. Cf. A. M. Eaton, "The Right to Local Self-Government," in

Harvard Law Rev., 1900, esp. xiii, 570-573.



43. Hazard, State Papers, ii, 612-623.



44. Ibid., ii, 597-605. Cf. N. P. Mead, Connecticut as a

Corporate Colony (Lancaster, Pa., 1906).



45. Poore, Charters and Consts., vol. ii, "Rhode Island."



46. A good account of the history of this company is given in

Judge S. E. Baldwin's Amer. Bus. Corps. before 1789, pp. 257-262.

Its articles, published in London, 1692, are reprinted in the Pa.

Mag. of Hist. and Biog., v, 37-50 (1881).



47. An abstract of the charter is in Scharf and Westcott, Hist.

of Phila., i, 89.



48. Penn to Robert Turner, 25th 6th mo., 1681, in Armstrong,

Hist. Soc. of Pa., Memoirs, i, 212-213.



49. Pa. Mag. of Hist. and Biog., v, 39. The comment is highly

significant as to the typical trading corporations of the day.

Penn is said to have aided in drafting the charter and

constitution: Scharf and Westcott, Hist. of Phila., i, 85.



50. Pa. Col. Recs., i, 40 (No. 31).



51. Hazard, Register of Pa., i, 394-397; letters of James

Claypoole, treasurer, in R. B. Graff, Genealogy of the Claypoole

Family of Philadelphia (Philadelphia, 1893), 23, 26-32.



52. Pa. Arch., i, 44; Baldwin, Bus. Corps., 260-262; Penn to the

committee, Aug. 16, 1683, in Robert Proud, The History of

Pennsylvania... (Philadelphia, 1797), i, 264.



53. Pa. Mag. of Hist. and Biog., v, 39, 47.



54. Ibid., xi, 175-180. Cf. Art. IV. £25 was the minimum

subscription permitted, but five men might subscribe together in

one man's name. James Claypoole, the treasurer, wrote his brother

in this month: "wee have about £8000 subscribed, and do expect it

will bee made up £10000 the 1/2 of wch we take in at present: and

ye other 1/2 as wee shall have occasion next year or

afterwards...": Graff, Claypoole Family, 31.



55. Hazard, Register of Pa., i, 394.



56. Ibid., i, 397, ix, 112.



57. Pa. Col. Recs., i, 73, 105, 119, 121.



58. Cf. Pa. Mag. of Hist. and Biog., viii, 328, 339, 439.



59. Baldwin, Bus. Corps., 262.



60. Proud, Hist. of Pa., i, 264.



61. Graff, Claypoole Family, 38.



62. Claypoole to Penn, April 1, 1683; Proud, Hist. of Pa., i,

295-298; Proprietor v. Moore, in Pennypacker, Pa. Colonial Cases,

39-48; Pa. Col. Recs., i, 135-137, 139-141, 145-146, 153.



63. Baldwin, Bus. Corps., 262, quoting Claypoole's MSS. Letter

book.



64. Pa. Mag. of Hist. and Biog., xxxiii, 308-309.



65. Proud, Hist. of Pa., i, 298-299, quoting also letter of June

6, 1687, along the same line; Pa. Col. Recs., i, 112, 146-147,

149, 189; Pennypacker, Pa. Colonial Cases, 86-88.



66. Pa. Col. Recs., ii, 136-137, 160; Penn-Logan Correspondence,

ii, 108.



67. See letter of Penn to governor and council, Dec. 15, 1703:

Pa. Col. Recs., ii, 136-137.



68. Ibid., iii, 138-139; Pa. Charters and Acts, i, 91-95.



69. P. A. Bruce, Institutional History of Virginia in the

Seventeenth Century (New York, 1910). esp. i, 380-401. Bruce says

Nicholson was the "chief promoter and chief supporter." The house

of Burgesses voted £200 for expenses and drew up an address to

the king and queen.



70. Bruce, loc. cit.; Doyle, Eng. Cols., i, 270-272; Tiffany,

Prot. Epis. Church, 33-35; Perry, Amer. Epis. Church, i, 115 122;

Va. Mag. of Hist. and Biog., esp. vii, 165, 391 (1899-1900); L.

G. Tyler, Williamsburg (Richmond, 1907), 110-124; and for both

history and charter, Hist. of the College, 1693-1870.



71. Diary of Samuel Davies (MSS.); Shirley, Dartmouth College

Causes, 21-27; infra, 82.



72. E. L. Lord, Industrial Experiments in the British Colonies of

North America (Baltimore, 1898). 6-7, 15-39; Hist. Soc. of Pa.

Memoirs, iv, 255, 347, 352, 382 (1850); Ashurst to Winthrop,

Sept. 9, 1704, in Hinman, Letters..., 318-319; Andrews and

Davenport, Guide, 399, 402.



73. Shirley, Dartmouth College Causes, 24.



74. Ibid., 27.



75. Ibid., 24.





Chapter 3



Public Corporations with American Charters



    With the exception of the few which have just been discussed,

all of the corporations which were active in the territory which

was to become the United States may be said to have been American

in origin and charter as well as in other important respects. In

considering these distinctly American corporations, numerous as

they are, some classification is desirable. Such a

classification, however, is difficult to make. The law of the

period, even as presented by Blackstone on the eve of the

Revolution, did not differentiate the various types; and the

charters do not admit of ready grouping in all cases, even when

they are accessible. For convenience, nevertheless, we may

somewhat arbitrarily set off the public corporations from the

private ones, applying a distinction then unrecognized. Within

the group of public corporations we may attempt to distinguish

the corporate boroughs and cities from the "corporate towns" of

lesser dignity, and to notice separately such miscellaneous

public corporations as those charged with administering poor

relief or public education. And among the private corporations it

is possible to distinguish particularly those which were

organized for religious, charitable, educational, and business

purposes.

    Of the public corporations the chartered municipalities which

were known as "boroughs" and "cities" belong first in order of

prominence.(1*) As we have seen, most of the proprietary grants

and the commissions to royal governors, not to mention other

colonial documents, bear indications that the growth of these

institutions and lesser corporate towns in America was looked

upon as a matter of course.(2*) In treating of these corporations

the difficulty of terminology is serious. In Virginia, for

example, the boroughs were merely election districts from which

burgesses were sent to the colonial assembly. they do not seem to

have been corporate entities.(3*) In the same colony some of the

first settlements were named "James City," "Charles City,"

"Henrico City," and so forth;(4*) but there seems to be no

evidence that they were ever accorded corporate privileges. In

Pennsylvania, furthermore, where the corporate borough has since

become an important unit of local government, the borough charter

of Chester (1701), while it grants certain powers of

self-government, seems to lack entirely the "words sufficient in

law" which were necessary to create a corporation; and the

charter of Bristol (1720) is only slightly more definite.(5*) So

far as the distinction between corporate boroughs and corporate

cities is concerned, indeed, the difficulty of classification may

be neglected. Even in England, where a city was generally a

borough which sewed as the seat of a bishop, the line was not

sharply drawn;(6*) and in America, where this mark of distinction

was not available, no more can be truly said than that the city

was, or was expected to be, of greater importance than the

borough.

    The first of the score or more incorporated boroughs and

cities was chartered in Maine by the proprietor, Sir Ferdinando

Gorges, in 1641. "The Planters and Inhabitants of Acomenticus"

were ordained into "one bodie politique and corporate... by the

name of the Maior Aldermen and ---- (7*) of the Towne of

Acomenticus within the Province of Maine...." To the mayor and

aldermen was given power not only to hold courts, build

fortifications, etc., but to make and execute "such by lawes

orders and ordinances as are accustomed to be made in Townes

Corporate in England," as should be "wholesome and necessary" and

"consonant vnto the Lawes orders and ordinances vsed in England;"

and further "to make as many free Burgesses of the said towne as

they shall think fitt, and to disfranchise any of them for iust

and reasonable Cause...."(8*)

    A year later (March 1, 1641-42), specifically reciting the

"Citties Burroughes and Townes" section of his charter, Gorges

made a new grant for the erection of a "Cittie or Towne,"

"Corporacon," or "Incorporacon," by the name of Gorgeana,(9*)

whose mayor, twelve aldermen, and twenty-four common councilmen

should constitute a body corporate. It appears that, whether or

not their limits were precisely coextensive, the new "Citty"

supplanted the older "corporate Towne," and thus the first

American city was formally established.

    Unfortunately the city hardly justified the dignity which was

thus thrust upon it, though it seems to have operated under its

charter for a time. In 1652 it was one of the settlements rudely

annexed to the Massachusetts Bay by the commissioners sent from

Boston, and it was at that time reduced in form to the level of

the ordinary (unincorporate) Massachusetts town, with the simple

name of York.(10*)

    The second American municipality was New York.(11*) In 1650,

while the province was under Dutch control, a committee of the

States-General recommended a municipal government for New

Amsterdam;(12*) and in 1652 it was accorded privileges similar to

those enjoyed by the "free cities" of Holland.(13*) When the

English came into possession, Governor Nichols revoked (1665) the

earlier form of government and proclaimed that the officials

henceforth "shall be knowne and call'd by the name & Style of

Mayor Aldermen & Sherriffe, according to the Custome of England

in other his Maties Corporacons;" and by a supplementary

commission ordered that the inhabitants of Manhattan Island

should "bee for ever accounted, nominated and Established, as one

Body Politique and Corporate."(14*) Except for the period of the

Dutch reoccupation, 1673-74,(15*) this proclamation remained the

basis of the city's privileges until 1686. In 1683 the mayor and

aldermen petitioned the governor, Dongan, for a confirmation of

their "ancient privileges," with certain additional ones, and he

communicated the request to the Duke of York.(16*) It is to be

presumed that at least he received no unfavorable response,

despite James's jealousy of municipal corporations, for three

years later (1686) he issued a formal charter of incorporation

which elaborately expressed the details of the municipal

government.(17*) The validity of this charter was brought in

question, inasmuch as James, though he had been a year on the

throne when the charter was issued, had neglected to provide his

governor with a new seal appropriate to his more exalted

position, and Dongan accordingly had to use the out-of-date

instrument.(18*) Finally, in 1730, Governor Montgomery issued a

charter which quieted all these uncertainties, established the

validity of acts under the Dongan charter, and continued the

government in much the same form.(19*)

    The province of New York boasted two other municipalities

with seventeenth century charters. The Dutch burghers of Albany

received a charter from Governor Dongan in 1686, a few months

after he had issued the one for New York; and despite the same

danger because of the inadequate seal, the charter remained the

foundation of the government there down to the Revolution.(20*)

Ten years later (1696) the inhabitants of the little village of

Westchester secured from Governor Fletcher a charter which

constituted them a borough or city.(21*) Fletcher's successor,

Bellomont, protested vigorously against the extravagant nature of

this charter, saying that although the "city" consisted of only

about twenty houses, it enjoyed greater privileges than any other

town in America.(22*) The Lords of Trade admitted that the

charter looked extravagant in some particulars;(23*) but it seems

to have survived the agitation against it.(24*)

    The third city in America, in order of chronological

sequence, was the seat of government in the province of Maryland,

which Lord Baltimore incorporated as St. Mary's City in

1667.(25*) The town was never large. In 1678 Lord Baltimore

himself described it as containing no more than thirty houses,

and those far apart.(26*) In 1694, when the "capital" was removed

to embryonic Annapolis, the importance of St. Marys was

practically wiped out. It continued to be represented in the

assembly, however, until 1708, when the sheriff of the county

reported that he could find no inhabitants upon whom to serve the

writ of election.(27*) It is hardly hazardous to assume that the

corporation, whatever it had become, had been virtually extinct

for some time.

    The two remaining municipal charters of the seventeenth

century were granted by William Penn to Philadelphia and

Germantown. Shortly before Penn returned to England in 1684, to

defend his rights against Lord Baltimore, a committee of the

council was appointed to draw up a borough charter for

Philadelphia;(28*) and if the preambles of the later charters are

to be trusted, some sort of a borough government was then

established. In 1691 Penn issued a formal city charter, which

apparently went into effect, but lost its force when, in 1692,

Penn was temporarily ousted from the control of his province by

reason of the turn in English politics.(29*) In 1701, however, he

issued a new one, similar in the main to the charter of 1691, and

this continued in force till the Revolution.(30*)

    The proprietor also granted a borough charter to the settlers

of Germantown, dated in London, 1689, which formally "passed the

seals"(31*) in the province in 1691. This charter survived the

change in government which disturbed the Philadelphia government,

but it aroused little enthusiasm among the German inhabitants of

the borough, and in 1707, when it was found impossible to fill

the offices provided for by its terms, it was formally

surrendered.(32*)

    During the seventeenth century, therefore, seven different

incorporated boroughs and cities were chartered in America. In

the eighteenth, prior to the Revolution, more than twice that

number were added. All of these were south of New England, whose

lone representative in the earlier period had been ill-fated

Gorgeana; but each of the other colonies, except Georgia, counted

at least one of the number.

    Of these eighteenth century municipal corporations, New York

contributed only one. This was the "Borough town of Schenectady,"

whose charter passed the seals on Oct. 23, 1765, in the face of

strenuous opposition by the Albany authorities.(33*) It is not

certain that the charter ever went into effect.(34*) During the

succeeding years there was some agitation for a new charter, and

the council, in 1767 and 1770, took some steps, though apparently

inconclusive ones, in this direction.(35*) At all events, there

seem to be no satisfactory records of corporate activity there

until the legislature newly incorporated the town in 1798.(36*)

    In Pennsylvania three new boroughs were established, though

the corporate character of two of them is not beyond question.

Lancaster was clearly incorporated a borough, in 1742, by charter

from the governor: there is a cLause specifically creating the

grantees a body corporate and politic; the customary general

powers of a corporation are specifically conferred; and a section

is added providing for construing the charter "most favorably and

beneficially for the said corporation."(37*)

    The grant erecting "The Borough of Bristol" is less definite,

but is probably to be regarded as creating a true corporation.

This grant was sought in 1718, when the minutes of the provincial

council record a petition of the inhabitants



"requesting that for Relating their Streets and Preserving the

better Order among the Inhabitants, The sd. town might be Erected

into a Borough by Charter of Incorporation, which Request being

considered of by the Board, It is their unanimous opinion that

the sd Town be Erected into a Burrough accordingly, and the

Persons Petitioning are Directed to apply to the Attorney General

for suitable Draught for that Purpose."(38*)



The draft was next read, apparently, only after the lapse of more

than a year, and was not agreed to in council till July 19,

1720.(39*) On Nov. 14, 1720, the governor issued the formal

patent, in the name of the crown.(40*) The preamble recites the

petition to



 "William Keith, Esq., with our royal approbation governor of

said province of Pennsylvania, for our letters patents under the

great seal of our said province of Pennsylvania, to erect the

said town into a borough, and to incorporate the freeholders and

inhabitants of the same with perpetual succession... as also to

grant such immunities and privileges as may be thought necessary

for the well ordering and ruling thereof."



There is no question, therefore, as to whether incorporation was

requested. The charter does not in so many words confer corporate

powers, though it does provide at some length for the government

of the borough. The concluding section, however, may perhaps be

broad enough to support a claim of corporate powers:



"And further we have, and by these presents do, for us and our

successors. give, grant, ratify and confirm, unto the said

Burgesses, Constables and Inhabitants of the said town of

Bristol, and to their successors, from henceforth, all lawful

privileges, immunities, franchises, powers and jurisdictions,

hereinbefore granted, or that are hereby intended to be given or

granted unto the said Burgesses, Constables, and Inhabitants of

the town of Bristol aforesaid, as if the said powers,

authorities, liberties, immunities, privileges and franchises

were herein or hereby more fully expressed, according to the

intent and meaning of these presents."



Finally it should be remarked that after the Revolution the state

legislature passed "An Act to establish the ancient Corporation

of the Borough of Bristol in the County of Bucks," in which the

town seems clearly to be regarded as a corporation.(41*)

    The charter granted to Chester was given by Penn himself,

under date of Oct. 31, 1701, -- the day before his final

departure from the province.(42*) This document apparently served

as the model for the Bristol "draught," and it likewise lacks

unmistakable incorporating clauses or sections, although the

charter given by Penn to the Philadelphians in the same year

contains such clauses in much the customary form.(43*) There is

no such concluding section in the Chester document, moreover, to

correspond to the one quoted from the Bristol charter. In the

post-Revolutionary act erecting Chester into a borough there is

no mention of the earlier incorporation.(44*) Nevertheless,

Chester was almost certainly regarded as a truly corporate

borough, and its title might have been maintained.

    Governor Keith granted at least one other charter besides

that of Bristol, as appears from a three-page leaflet published

in Philadelphia in 1724. Its introduction runs thus:



    "Newcastle upon Delaware, May 28. 1724. This being the

anniversary of his Majesty's birthday, Sir William Keith... came

to the Court-House,... and after having caused the King's Charter

to be publish'd for erecting the same into a body corporate and

politick, wvith many valuable privileges, by the name of the City

of Newcastle, he made the following speech to the

Corporation."(45*)



The town was small, and the corporation probably died a natural

death before many years and was forgotten.

    Five of these eighteenth century municipalities were

chartered by the royal governors of New Jersey.(46*) The first

three, termed "cities," included the respective capitals of East

and West Jersey, -- Perth Amboy (1718)(47*) and Burlington (1732)

-- and the town of New Brunswick (1730). The later ones,

Elizabeth (1740) and Trenton (1746), were called "boroughs." But

as usual the variation in "style and title" was of no

significance.(48*) With one exception all of these charters

outlived the colonial period. That of Trenton aroused opposition

almost immediately, apparently from inhabitants of the district

which had been erected into the borough. This opposition promptly

crystallized into a bill to "vacate" the charter, which passed

the lower house of the assembly. The council, however, refused to

countenance such a method of