The extent of the power of the States in the exercise of their police powers to control the operations of domestic corporations as well as the strictness with which the charter grants are to be construed, is exhibited in the case of the Northwestern Fertilizing Co. v. Hyde Park,33 decided in 1878. Here a charter had been granted giving the corporation the right for fifty years to establish and maintain at a designated place chemical and other works for the purpose of manufacturing and converting dead animals and other animal matter into agricultural fertilizers and other chemical products. Under this charter the company was organized, land purchased, and factories established. After some years, however, the village of Hyde Park grew up around these works, and the continued maintenance of the factory caused great discomfort to the villagers, and an ordinance was passed by the village in the exercise of police power granted it by the State, forbidding the carrying of any offal or otherwise offensive or unwholesome matter through the village. As this was the only means through which the factory could obtain its raw material, the ordinance was disobeyed, and upon arrest and conviction of certain of its employees for so doing, the company filed a bill alleging that the obligation of the charter contract of the State with the company had been impaired, and praying that further prosecutions be enjoined. The Supreme Court of the State, upon appeal, dismissed the bill, whereupon a writ of error was taken to the Supreme Court of the United States. That tribunal upheld the validity of the ordinance in question, saying: "That a nuisance of a flagrant character existed, as found by the court below, is not controverted. We cannot doubt that the police power of the State was applicable and adequate to give an effectual remedy. That power belonged to the States when the federal Constitution was adopted. They did not surrender it, and they all have it now. It extends to the entire property and business within their local jurisdiction. Both are subject to it in all proper cases. It rests upon the fundamental principle that everyone shall so use his own as not to wrong and injure another. To regulate and abate nuisances is one of its ordinary functions. The adjudged cases showing its exercise where corporate franchises were involved are numerous. . . . The charter was a sufficient license until revoked; but we cannot regard it as a contract guaranteeing it, in the locality originally selected, exemption for fifty years from the exercise of the police power of the State, however serious the nuisance might become in the future, by reason of the growth of population around it. The owners had no such exemption before they were incorporated, and we think the charter did not give it to them." 34

32 Justices Harlan and Field filed dissenting opinions.

33 97 U. S. 659; 24 L. ed. 1036.

The efficacy of the police power to alter or destroy charter contract rights was again illustrated in Stone v. Mississippi,"35 decided in 1880. In this case the plaintiff in error had been granted in 1867 the right to issue and vend lottery tickets. By the Constitution of the State, adopted in 1869, the legislature was forbidden to authorize any lottery, and an information was filed by the Attorney-General of the State against Stone and his associates to show by what warrant or authority they exercised the franchise or privilege of issuing and vending lottery tickets. Upon error to the federal Supreme Court, it was held that the original grant of authority would not prevail against the subsequent exercise of the State's police power, the court saying: "The question is, therefore, directly presented, whether, in view of these facts, the legislature of a State can, by the charter of a lottery company, defeat the will of the people, authoritatively expressed, in relation to the further continuance of such business in their midst. We think it cannot. No legislature can bargain away the public health or the public morals. The people themselves cannot do it, much less their servants. The supervision of both these subjects of governmental power is continuing in its nature, and they are to be dealt with as the special exigencies of the moment may require. Government is organized with a view to their preservation, and cannot divest itself of the power to provide for them. For this purpose, the largest legislative discretion is allowed, and the discretion cannot be parted with any more than the power itself. . . . The contracts which the Constitution protects are those that relate to property rights, not governmental. It is not always easy to tell on which side of the line which separates governmental from property rights a particular case is to be put; but in respect to lotteries there can be no difficulty. They are not, in the legal acceptance of the term, mala in se, but as we have just seen, may properly be made mala prohibita. They are a species of gambling. and wrong in their influences. They disturb the checks and balances of a well ordered community. Society built on such a foundation would almost of necessity bring forth a population of speculators and gamblers, living on the expectation of what, 'by the casting of lots, or by lot, chance, or otherwise,' might be 'awarded' to them from the accumulations of others. Certainly the right to stop them is governmental, to be exercised at all times by those in power at their discretion. Anyone, therefore, who accepts a lottery charter, does so with the implied understanding that the people, in their sovereign capacity and through their properly constituted agencies, may resume it at any time when the public good shall require, and this whether it be paid for or not. All that one can get by such a charter is a suspension of certain governmental rights in his favor, subject to withdrawal at will. He has, in legal effect, nothing more than a license to continue on the terms named for the specified time, unless sooner abrogated by the sovereign power of the State. It is a permit, good as against existing laws, but subject to future legislative and constitutional control and withdrawal."

34 A dissenting opinion was filed by Justice Strong. 35 101 L. S. 814; 25 L. ed. 1079.