As the development of industries proceeded, the evils of unlimited competition began to be felt, and managers of industries which suffered most began to devise methods by which those evils could be mitigated. Before the war some efforts at combination had been made in the anthracite coal business and in the telegraph and railroad service in some sections.[1] After the crisis of 1873, renewed efforts were made to avoid the evils of unrestricted competition. As a consequence a dread of monopolies began to be felt, and manifested itself in the legal restrictions which were embodied in constitutions and laws.
The first combinations to be attacked were the railroads and telegraph lines, because these were more apparent than the capitalistic monopolies that were being formed. Railroad and telegraph companies were always corporations, and always acquired privileges under the public right of eminent domain. Trade combinations were frequently not corporations, and were so little the creatures of the state that the right of state interference was not so clearly perceived. There has never been any doubt as to the right of the state to keep corporations, which are its creatures, under strict surveillance. It is a principle of law that corporations can engage only in the activities and enjoy the privileges expressly defined in their charters,[2] and cannot consolidate without the express sanction of the state. This sanction may be granted by a general law, by the charters of the corporations combining, by a special law authorizing consolidation, or by a special law ratifying an unauthorized consolidation. The states of Maine, Vermont, Massachusetts, Rhode Island, Connecticut, Delaware, Maryland, North Carolina, Virginia, Mississippi, Tennessee, Kentucky and Oregon have no general laws authorizing consolidation. In these states, at least, nearly all consolidations of corporations, since public opinion would prevent special permission, would be illegal.
The right of the state to regulate, under its police powers, all matters that affect public policy is also recognized. Several of
