[Footnote 1:  The legislation against trusts, as it existed up to 1900, will be found at the back of vol.  II of the “Reports of the United States Industrial Commission.”]

It would perhaps be possible for Congress to pass an act forbidding any corporation to carry on its business outside of the State where it is chartered, unless, of course, it got charters from other States; certainly the States themselves might do so.  This remedy also has never been tried, and hardly, in Congress, at least, been suggested.  Yet it were a more constitutional and far safer thing to do than to cut the Gordian knot by a Federal incorporation act, which will forever securely intrench the trusts against State power.  Even if New Jersey or the Island of Guam goes on with its lax corporation laws, permitting its creatures to do business all over the land without proper regulation, this power could thus be instantly taken away from it by such an act of Congress, even if the States themselves remained unready or unwilling to act.  Then no corporation could be “chartered in New Jersey to break the laws of Minnesota,” even if Minnesota permitted it.

Trusts started as combinations and ended as corporations.  They began as State corporations, subject both to State and Federal control and regulation; they may end as Federal corporations subject to no control except by Congress.  It is too early yet to predict the result, but one assertion may be hazarded, that just as the original Sherman Act against trusts compelled the formation of trusts, so this proposed Federal legislation will compel the formation of Federal trusts, by all but the most local of business corporations.

As to public-service corporations, both the legislation and the principle on which it rests are, of course, quite different.  There is no serious difference of opinion that the stock should be paid up in actual money at par nor that dividends at the expense of the public should not be paid on watered stock.  More and more the States are putting this sort of legislation into effect.  There is also the general provision discussed in a former chapter that the rates or charges of all such corporations may be regulated by law or ordinance; and by far the most notable trend of legislation in this particular has been that franchises of corporations should be limited in time and should be sold at auction to the highest bidder.  Thus, by a California law of 1897, all municipal franchises must be sold for not less than three per cent. of the gross receipts and after a popular vote or referendum on the question.  It has been matter of party platform for some years that all franchises should thus be submitted to the local referendum.  That is, all exclusive franchises whereby rights in the streets, or other rights of the public, are given away to a corporation organized for purposes of gain.  In Louisiana, street railway franchises may only be granted on petition of a majority of the abutters, and must be sold at auction for the