the ground that they affected commerce, but that they did not regulate it.

Now, if the States can operate in that sphere of things which affect commerce then Congress can not operate in that sphere because it is beyond the line of regulation; and, of course, if Congress should undertake, under the guise of regulating commerce, to invade the powers of the States or to go beyond the line of regulation, any such act would be unconstitutional. For instance, take the case where many years ago Congress passed a law as a sort of adjunct to the taxing power to prohibit the sale of oil that did not test more than a certain amount. The Supreme Court of the United States set that statute aside. They said that that was an invasion; that that was an attempt on the part of Congress to exercise á police power in respect to the oils that were sold in the States. Now, a statute such as you state, in my judgment, would not be a regulation of commerce, but it would be passing over that line of regulation into that sphere of things that should have been commerce, which would be beyond the power of Congress.

Senator BRANDEGEE. Are you clearly of the opinion that it would be within the power of Congress to say that a corporation chartered by a State, which already had its securities outstanding, should not continue to engage in commerce among the States unless it should buy up or otherwise dispose of all of the securities that it had outstanding that had not been issued for cash?

Mr. FARRAR. I think Congress has the power to say to a corporation which is purely a fictitious being, " You can not come within the sphere of my sovereignty. You can do what you please within the sphere of the sovereignty which created you, but you can not come within the sphere of my sovereignty and exercise any of the powers that that other sovereignty has given you unless you come up to the standard which I establish for your existence"; and therefore if Congress should be of the opinion that a corporation was stuffed full of watered stock they could say, "You can not come within the sphere of interstate commerce at all until you squeeze the water out of that stock or until you adjust the securities to the valuation of the property and the capital that you actually have got.

The ACTING CHAIRMAN. That is all I care to ask. Senator Newlands, do you desire to ask any questions?

Senator NEWLANDS. Judge Farrar, I understood you to say that in your judgment Congress had no constitutional power to pass a Federal incorporation act for private profit?

Mr. FARRAR. That is my personal opinion; and I say I am backed

Senator NEWLANDS. You would not apply that to railways?

Mr. FARRAR. Oh, no, sir. I draw the distinction between a publicservice corporation or a banking association, which are practically instrumentalities of the Government, and a mere private corporation, such as for trade and commerce. The one is under the absolute regulation of the Government, and performs a function which the Government itself can perform. The other is a mere business for the private individual in the conduct of private trade.

Senator NEWLANDS. Therefore, you do not believe in the power of the National Government to create corporations for interstate transportation?

Mr. FARRAR. None on earth; and that power has been affirmed. I wrote a paper on that question some years ago and suggested that the broadest power in the Constitution of the United States was the postal power. I wrote President Roosevelt a letter on the subject, which some of the constitutional lawyers who edit newspapers in this country violently attacked, and I took the liberty to come back at them with a pamphlet on the subject; and I would like to submit that pamphlet to you, if you have never seen it.

Senator NEWLANDS. I thank you.

Senator BRANDEGEE. What is the title of it?

Mr. FARRAR. It is "The Post-Road Power in the Federal Constitution, and its Availability for Creating a System of Federal Transportation for Corporations."

Senator POMERENE. He refers to the McCulloch case and the Osborn case on the first page of the pamphlet, and, possibly, it ought to be put into the record.

Mr. FARRAR. I have given you the title of it.

The ACTING CHAIRMAN. You mean the reference to those cases?

Senator BRANDEGEE. The reference to those cases is on the first page. I suggest that they be put in where they belong, so that they can be readily found.

Senator NEWLANDS. It is a contention that I have made for a good many years myself in the Senate.

Senator BRANDEGEE. You can have that printed as a public docu

ment.

Mr. FARRAR. I believe I have knocked down every lawyer who undertook to take the other side of the proposition, after he read the authorities gathered in that document."

The ACTING CHAIRMAN. The pamphlet referred to will be inserted in the record.

(The pamphlet referred to is as follows:)

THE POST-ROAD POWER IN THE FEDERAL CONSTITUTION AND ITS AVAILABILITY FOR CREATING A SYSTEM OF FEDERAL TRANSPORTATION CORPORATIONS. Forenote. A draft of the within paper was prepared to be read before the American Bar Association at Portland, Me., at its August meeting, but the executive committee could not give it place on account of the crowded condition of the previously arranged program. It is now given to the public and to the profession, as my answer to the criticisms made upon a letter written by me to President Roosevelt in April, suggesting the use of the post-road clause of the Federal Constitution by creating Federal postroad corporations as an available means to bring about a Federal control of transportation, and a drastic control of transportation corporations, coupled with their full protection from the destructive action of their enemies within and without. (Edgar Howard Farrar, Sept. 9, 1907.)

The object of this paper is to demonstrate that, under the express grant of power made in the Constitution of the United States "to establish post offices and post roads," the Congress may organize a system of national post-road corporations as instrumentalities of the Federal Government to construct and operate post roads, with the incidental power to deal in transportation of persons and property, inasmuch as transportation is of the essence of the govern mental function, to assist in the performance of which these corporations are created.

The right of the Federal Government to create corporations as an incident to the grants of power and function made to it in the Constitution, and as a necessary and proper means to enable it to exercise these powers and functions, was settled in the great cases of McCulloch v. State of Maryland (4 Wheat., 316), and Osborn v. U. S. Bank (9 Wheat., 738), which affirmed the constitutionality of the charter of the Second Bank of the United States.

The authority of those cases has never been shaken nor diminished. On the contrary, the principles therein ar nounced have been approved and restated

again and again by the courts of the Nation, and the Congress has acted upon them in using its powers to charter corporations.

Upon these principles rests the whole system of national banks. In regard to these corporations, the Supreme Court of the United States in Farmers' Bank v. Dearing (91 U. S., 29), said:

"The constitutionality of the act of 1864 is not questioned. It rests on the same principle as the act creating the Second Bank of the United States. The reasoning of Secretary Hamilton and of the court in McCulloch v. Maryland, and in Osborn v. U. S. Bank, therefore applies. The national banks organized under the act are instruments designed to be used to aid the Government in the administration of an important branch of the public service. They are means appropriate to that end. Of the degree of the necessity which existed for creating them, Congress is the sole judge."

Under its war power the Congress created a corporation called "The National Home for Disabled Volunteer Soldiers," and in Butler v. National Home, etc. (144 U. S., 64), it was held that such corporation could remove a suit against it to the Federal court on the principle settled in the Pacific Railroad removal cases (115 U. S., 1), that every suit by or against a Federal corporation is one arising under the Constitution and laws of the United States. Pitching its power to act upon three distinct grants in the Constitution, the power to regulate commerce among the States, the power to establish post offices and post roads and the war power, the Congress has chartered three great transcontinental systems of railroad, the Union Pacific Railroad, the Northern Pacific Railroad, and the Texas & Pacific Railroad.

In California v. Pacific Railroad Co. (127 U. S., 39), speaking of these corporations and deciding that the franchises of the Union Pacific Co. were, as Federal franchises, beyond the power of the State of California to tax, the Supreme Court of the United States said:

"It can not at the present day be doubted that Congress under the power to regulate commerce among the several States, as well as to provide for postal accommodations and military exigencies, had authority to pass these laws. The power to construct, or to authorize individuals or corporations to construct, national highways and bridges from State to State is essential to the complete control and regulation of interstate commerce. Without authority in Congress to establish and maintain such highways and bridges, it would be without authority to regulate one of the most important adjuncts of commerce. This power in former times was exerted to a very limited extent, the Cumberland or National Road being the most notable instance. Its exertion was but little called for, as commerce was then mostly conducted by water, and many of our statesmen entertained doubts as to the existence of the power to establish ways of communication by land. But since, in consequence of the expansion of the country, the multiplication of its products and the invention of railroads and locomotion by steam, land transportation has so vastly increased, a sounder consideration of the subject has prevailed and led to the conclusion that Congress has plenary power over the whole subject. Of course, the authority of Congress over the Territories of the United States, and its power to grant franchises exercisable therein, are, and ever have been, undoubted. But the wider power was very freely exercised, and, much to the general satisfaction, in the creation of the vast system of railroads connecting the East with the Pacific, traversing States as well as Territories, and employing the agency of State as well as Federal corporations." (See Pacific Railroad removal cases, 115 U. S., 1, 14, 18.)

This language of Mr. Justice Bradley, speaking for the whole court, has been twice quoted and affirmed, first by Mr. Justice Harlan speaking for the whole court in Cherokee Nation v. Kansas Railway Co. (135 U. S., p. 658), a case which will be further discussed below, and second by Mr. Justice Gray, speaking for the whole court in Luxton v. North River Bridge Co. (153 U. S., p. 533), affirming the constitutionality of the act of the Congress of July 11, 1890, incorporating the North River Bridge Co., authorizing it to locate, construct, and maintain a bridge and its approaches over the Hudson River between the eity of New York and the State of New Jersey, and to exercise the power of eminent domain for that purpose in the courts of the United States.

It will be noted that the Congress in chartering this company followed the precedent laid down in the Pacific Railroad acts of incorporation and pitched its action on the commerce, the postal, and the war powers.

Whatever may have been the early opinion of lawyers, dissenting judges, politicians, and statesmen of the strict constructionist school, it is now settled

beyond controversy that the Federal Government has the power of eminent domain to be exercised in its own courts for all the purposes of the grants made to it in the Constitution, that it may delegate this power to corporations created by it or to State corporations selected by it as its agents, and that this power may be exercised without the consent or permission of the States.

This power was not used or declared until a late date in the history of the Republic, and was established in Kohl v. United States (91 U. S., 367), which was a proceeding by the United States in the circuit court of the United States to condemn land in the city of Cincinnati for a Federal court building. The court said:

"It has not been seriously contended during the argument that the United States Government is without power to appropriate lands or other property within the State for its own uses and to enable it to perform its proper functions. Such an authority is essential to its independent existence and perpetuity. These can not be preserved if the obstinacy of a private person, or if any other authority, can prevent the acquisition of the means or instruments by which alone governmental functions can be performed. The powers vested by the Constitution in the General Government demand for their exercise the acquisition of lands in all the States. These are needed for forts, armories, and arsenals, for navy yards and lighthouses, for customhouses, post offices, and courthouses, and for other public uses. If the right to acquire property for such uses may be made a barren right by the unwillingness of property holders to sell, or by the action of a State prohibiting a sale to the Federal Government, the constitutional grants of power may be rendered nugatory, and the Government is dependent for its practical existence upon the will of a State, or even upon that of a private citizen. This can not be. No one doubts the existence in the State governments of the right of eminent domain-a right distinct from and paramount to the right of ultimate ownership. It grows out of the necessities of their being, not out of the tenure by which lands are held. It may be exercised, though the lands are not held by grant from the Government, either mediately or immediately, and independent of the consideration whether they would escheat to the Government in case of a failure of heirs. The right is the offspring of political necessity; and it is inseparable from sovereignty, unless denied to it by its fundamental law. (Vattel, c. 20, 34; Bynk, lib. 2, c. 15; Kent's Com., 338-340; Cooley on Const. Lim., 584 et seq.) But it is no more necessary for the exercise of the powers of a State government than it is for the exercise of the conceded powers of the Federal Government. That government is as sovereign within its sphere as the States are within theirs. True, its sphere is limited. Certain subjects only are committed to it; but its power over those subjects is as full and complete a is the power of the States over the subjects to which their sovereignty extends. The power is not changed by its transfer to another holder.

"But, if the right of eminent domain exists in the Federal Government, it is a right which may be exercised within the States, so far as is necessary to the enjoyment of the powers conferred upon it by the Constitution. In Ableman v. Booth (21 How., 523) Chief Justice Taney described in plain language the complex nature of our Government, and the existence of two distinct and separate sovereignties within the same territorial space, each of them restricted in its powers, and each, within its sphere of action, prescribed by the Constitution of the United States, independent of the other. Neither is under the necessity of applying to the other for permission to exercise its lawful powers. Within its own sphere, it may employ all the agencies for exerting them which are appropriate or necessary, and which are not forbidden by the law of its being. When the power to establish post offices and to create courts within the States was conferred upon the Federal Government, included in it was authority to obtain sites for such offices and for courthouses, and to obtain them by such means as were known and appropriate. The right of eminent domain was one of those means well known when the Constitution was adopted. and employed to obtain lands for public uses. Its existence, therefore, in the grantee of that power ought not to be questioned. The Constitution itself contains an implied recognition of it beyond what may justly be implied from the express grants. The fifth amendment contains a provision that private property shall not be taken for public use without just compensation. What is that but an implied assertion that, on making just compensation, it may be taken? * **

"It is true, this power of the Federal Government has not heretofore been exercised adversely; but the nonuser of a power does not disprove its existence.

If the United States have the power it must be complete in itself. It can neither be enlarged nor diminished by a State. Nor can any State prescribe the manner in which it must be exercised. The consent of a State can never be a condition precedent to its enjoyment. Such consent is needed only, if at all, for the transfer of jurisdiction. and of the right of exclusive legislation after the land shall have been acquired."

In U. S. v. Fox (94 U. S., 315) the court, while maintaining the power of a State to regulate the tenure of real estate, and consequently holding void a bequest of real estate to the United States, reaffirmed the doctrine of the Kohl case.

United States v. Jones (109 U. S., 513) was a proceeding by the United States in a State court, under the authority of an act of the Congress, to determine the value of lands damaged by the improvement of the Fox River by the Government. The court held that the power to take private property for public uses in the exercise of the right of eminent domain is an incident of Sovereignty, belonging to every independent government and requiring no constitutional recognition; that it exists in the Government of the United States; and that that Government may delegate to a tribunal, created under the laws of a State, the power to fix the amount of compensation to be paid by the United States for private property taken by them in the exercise of their right of eminent domain.

Van Brocklin v. State of Tennessee (117 U. S., 151) involved the question as to the power of a State to tax lands acquired by the United States within the limits of a State without the State's consent; and in the course of the decision that no such power exists, the court restates and reaffirms the Kohl case and states that the power of eminent domain may be exercised "with or without the concurrent act of the State in which the land is situated" (p. 154).

Fort Leavenworth R. R. Co. v. Lowe (114 U. S., 525) involved the right of a State to tax a railroad built through a Government reservation over which the State had ceded her political jurisdiction to the United States, with the express retention in the act of cession of the right to tax the property and franchises of such corporations located on the reservation. The court held that such retention was valid as it did not interfere with the use of the property as a military post. The doctrine of the Kohl case is restated and affirmed, and this language is used (p. 530):

"It would seem to have been the opinion of the framers of the Constitution that, without the consent of the States, the new Government would not be able to acquire lands within them, and therefore it was provided that when it might require such lands for the erection of forts and other buildings for the defense of the country or the discharge of other duties devolving upon it and the consent of the States in which they were situated was obtained for their acquisition, such consent should carry with it political dominion and legislative authority over them. Purchase with such consent was the only mode then thought of for the acquisition by the General Government of title to lands in the States. Since the adoption of the Constitution this view has not generally prevailed. Such consent has not always been obtained, nor supposed necessary, for the purchase by the General Government of lands within the States. If any doubt has ever existed as to its power thus to acquire lands within the States, it has not had sufficient strength to create any effective dissent from the general opinion. The consent of the States to the purchase of lands within them for the special purposes named is, however, essential under the Constitution to the transfer to the General Government, with the title, of political jurisdiction and dominion. Where lands are required without such consent the possession of the United States, unless political jurisdiction be ceded to them in some other way, is simply that of an ordinary proprietor. The property in that case, unless used as a means to carry out the purposes of the Government, is subject to the legislative authority and control of the States equally with the property of private individuals. Where therefore lands are acquired in any other way by the United States within the limits of a State than by purchase with her consent, they will hold the lands subject to this qualification: That if upon them forts, arsenals, or other public buildings are erected for the uses of the General Government, such buildings, with their appurtenances, as instrumentalities for the execution of its powers, will be free from any such interference and jurisdiction of the State as would destroy or impair their effective use for the purposes designed. Such is the law with reference to all instrumentalities created by the General Government. Their exemption from State control is essential to the independence and sovereign authority of the United States within the sphere of their delegated powers. But when not used