Under the inter-state commerce clause, a corporation conducting, as all large companies do, both a state and an inter-state business, is subject to several supplementary jurisdictions.  It is subject, of course, primarily to the laws of the state under which it is organized, and to the laws of the same state regulating its own particular form of industrial operation.  It is subject, also, to any conditions which the legislatures of other states may wish to impose upon its business,—­in so far as that business is transacted within their jurisdictions.  Finally, it is subject to any regulation which the central government may impose upon its inter-state transactions.  From the standpoint of legal supervision, consequently, the affairs of such a corporation are divided into a series of compartments, each compartment being determined by certain arbitrary geographical lines—­lines which do not, like the boundaries of a municipality, correspond to any significant economic division.  As long as such a method of supervision endures, no effective regulation of commerce or industry is possible.  A corporation is not a commercial Pooh-Bah, divided into unrelated sections.  It is an industrial and commercial individual.  The business which it transacts in one state is vitally related to the business which it transacts in other states; and even in those rare cases of the restriction of a business to the limits of a single state, the purchasing and selling made in its interest necessarily compete with inter-state transactions in the same products.  Thus the Constitutional distinction between state and inter-state commerce is irrelevant to the real facts of American industry and trade.

In the past the large corporations have, on the whole, rather preferred state to centralized regulation, because of the necessary inefficiency of the former.  Inter-state railroad companies usually exercised a dominant influence in those states under the laws of which they had incorporated; and this influence was so beneficial to them that they were quite willing for the sake of preserving it to subsidize the political machine and pay a certain amount of blackmail.  In this way the Pennsylvania Railroad Company exercised a dominant influence in the politics of Pennsylvania and New Jersey; the New York Central was not afraid of anything that could happen at Albany; the Boston and Maine pretty well controlled the legislation of the state of New Hampshire; and the Southern Pacific had its own will in California.  Probably in these and other instances the railroads acquired their political influence primarily for purposes of protection.  It was the cheapest form of blackmail they could pay to the professional politicians; and in this respect they differed from the public service corporations, which have frequently been active agents of corruption in order to obtain public franchises for less than their value.  But once the railroads had acquired their political influence, they naturally used it for their own purposes.  They arranged that the state railroad commissioners should be their clerks, and that taxation should not press too heavily upon them.  They were big enough to control the public officials whose duty it was to supervise them; and they were content with a situation which left them free from embarrassing interference without being over-expensive.