What is PUBLIC AND PRIVATE?

A public corporation is one created by the state for political purposes and to act as an agency in the administration of civil government, generally within a particular territory or subdivision of the state, and usually invested, for that purpose, with subordinate and local powers of legislation; such as a county, city, town, or school district. These are also sometimes called “political corporations.” People v. McAdams, 82 111. 356; Wooster v. Plymouth, 62 N. H. 208; Goodwin v. East Hartford, 70 Conn. 18, 38 Atl. 876; Dean v. Davis, 51 Cal. 409; Regents v. Williams, 9 Gill & J. (Md.) 401, 31 Am. Dec. 72; Ten Eyck v. Canal Co., 18 N. J. Law, 200, 37 Am. Dec. 233; Toledo Bank v. Bond, 1 Ohio St. 622; Murphy v. Mercer County, 57 N. J. Law, 245, 31 Atl. 229. Private corporations are those founded by and composed of private individuals, for private purposes, as distinguished from governmental purposes, and having no political or governmental franchises or duties. Santa Clara County v. Southern Pac. R. Co. (C. C.) 18 Fed. 402; Swan v. Williams, 2 Mich. 434; People v. McAdams, 82 111. 361; McKim v. Odom, 3 Bland (Md.) 418; Rundle v. Canal Co., 21 Fed. Cas. 6. The true distinction between public and private corporations is that the former are organized for governmental purposes, the latter not. The term “public” has sometimes been applied to corporations of which the government owned the entire stock, as in the case of a state bank. But bearing in mind that “public” is here equivalent to “political,” it will be apparent that this is a misnomer. Again the fact that the business or operations of a corporation may directly and very extensively affect the general public (as in the case of a railroad company or a bank or an insurance company) is no reason for calling it a public corporation. If organized by private persons for their own advantage,

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