| THE STATE IN THE MARYLAND ECONOMY, 1776-1807 113
creation of public corporations of a charitable -or educational
nature like the " free schools " of Maryland, established in the
seventeenth and eighteenth centuries.
Maryland businessmen involved in certain types of enter-
prise found the corporation better suited to their needs than
the partnership or joint-stock company."" Promoters of trans-
portation improvements were interested in the legal provision
of eminent domain which was often inserted in corporate
charters. Bankers and insurance writers or associations, be-
cause of their comparatively greater capital risks, desired cor-
porate charters that could provide them with limited liabil-
ity. l°5
Incorporation under English law was considered a special
privilege: corporations were always created by " letters pat-
ent" from the Crown.'°e During the Revolution when the
American states became soverign, the power of granting cor-
porate privileges was implicitly assumed .107 In undertaking
interstate projects both before and after 1783 Maryland pre-
ferred to exercise its sovereign right of incorporation through
concurrent charters from each state concerned than to rely
upon the central government's power of incorporation.'°g
All of Maryland's business incorporations in this period
were by special act'°s During more than one-half century of
lo' In this article " business corporation " will be used in the broad
sense of
any corporation formed with a profit motive and will include financial
corpora-
tions, although today they are not usually thought of as a business
corporations.
101 Davis, 1, 5, lists features common to all corporations in the
eighteenth cen-
tury: its juridical nature as a " person;' its immortality, its distinct
name by
which it could sue and be sued, its perpetual succession, its ability to
hold prop-
erty as its own, its limited liability, and its well-defined constitution.
But more
recent writers, Oscar and Mary Handlin, " Origins of the American Business
Corporation;' Journal of Economic History, V (1945) and Shaw Livermore.
Early American Land Companies, Their Influence on Corporate Development
(New York, 1939) p. 226, disagree with Davis on the establishment of limited
liability as a common feature of eighteenth-century corporations. In a
matter
of immortality, many Maryland charters were issued for only a specified num-
her of years.
'°° Davis, 1, 5-6, 11, 329.
'°°1bid, 11, 8-9. Usually this power was not mentioned in the state consti-
tutions because of its " implied inclusion in legislative powers " and
because " its
significance was not yet recognized."
'°e See the Potomac Company 1784 bi-state incorporation with Virginia, and
the Chesapeake and Delaware Canal, 1799, involving Maryland, Pennsylvania,
and Delaware incorporations.
lo° There was no general incorporation law in Maryland until 1852.
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