LEGAL AND POLITICAL DEVELOPMENT 

 essential for the proper conduct of modern un- 

 dertakings, is theoretically impossible under this 

 constitution. Practically, however, the provision 

 regarding stockholders' liability has proved inef- 

 fective. Though it has doubtless deterred capital 

 from investment in the State, it has not restrained 

 reckless finance or protected honest creditors. 



In spite of its defects, the second constitution 

 of California is instructive to one interested in the 

 larger problems of legal development. The crea- 

 tion of a State Railroad Commission with the power 

 of fixing rates was an innovation in American law. 

 That the commission failed of practical result was 

 due in large part to the fact that the office was elec- 

 tive, and the commissioners for the most part incom- 

 petent. It served, nevertheless, as a guide for future 

 legislation, not only in the Pacific States, but 

 throughout the nation. But the most revolutionary 

 feature of the new constitution was its fundamental 

 theory. It recognizes the written constitution as 

 a means of direct legislation. The original theory 

 of the federal and early State constitutions is re- 

 pudiated, and from a negative instrument defining 

 the powers of the departments of government, the 

 constitution developed into a code of law adopted 

 directly by the people. That the people came to 

 regard it as such a code is apparent from the fact 

 that between 1898 and 1911, one hundred and one 

 amendments were made. Since then the initiative 

 and referendum have become a part of the funda- 

 mental law. The line between constitutional amend- 

 ment and referendum or initiative law is shadowy, 

 and will doubtless become even more vague. In 

 effect, it may be said that California, as well as 

 Oregon and Washington, are living under a system 

 of government far removed from that of New' Eng- 

 land. The earlier period of legal development had 

 been marked by independence of thought in the 

 field of private law, the more modern period by 

 the same characteristics in the field of public law. 



In the latest phase of the development of her 

 law, California has passed out of the economic 

 stage of the wheat farmer into the stage of inten- 

 sive cultivation of the soil, of the irrigated farm. 

 Horticulture and dairying have become more im- 

 portant than agriculture and mining, while the dis- 

 covery of petroleum has served to develop many 

 new industries. A marked tendency towards urban 

 growth has come with improved means of trans- 

 portation. A more complex state of society has 

 been evolved, and with it have come new and 

 different problems. 



274 



