Municipal Corporations.--Not all grants by a State constitute
"contracts" within the sense of article I, section 10. In his Dartmouth
College decision Chief Justice Marshall conceded that "if the act of
incorporation be a grant of political power, if it creates a civil
institution, to be employed in the administration of the government,
* * *, the subject is one in which the legislature of the State may act
according to its own justment," unrestrained by the
Constitution[1625]--thereby drawing a line between "public" and
"private" corporations which remained undisturbed for more than half a
century.[1626] It has been subsequently held many times that municipal
corporations are mere instrumentalities of the State for the more
convenient administration of local governments, whose powers may be
enlarged, abridged, or entirely withdrawn at the pleasure of the
legislature.[1627] The same principle applies, moreover, to the property
rights which the municipality derives either directly or indirectly from
the State. This was first held as to the grant of a franchise to a
municipality to operate a ferry, and has since then been recognized as
the universal rule.[1628] As was stated in a case decided in 1923: "The
distinction between the municipality as an agent of the State for
governmental purposes and as an organization to care for local needs in
a private or proprietary capacity," while it limits the legal liability
of municipalities for the negligent acts or omissions of its officers or
agents, does not, on the other hand, furnish ground for the application
of constitutional restraints against the State in favor of its own
municipalities.[1629] Thus no contract rights are impaired by a statute
removing a county seat, even though the former location was by law to be
"permanent" when the citizens of the community had donated land and
furnished bonds for the erection of public buildings.[1630] Likewise a
statute changing the boundaries of a school district, giving to the new
district the property within its limits which had belonged to the former
district, and requiring the new district to assume the debts of the old
district, does not impair the obligation of contracts.[1631] Nor was the
contracts clause violated by State legislation authorizing State control
over insolvent communities through a Municipal Finance Commission.[1632]

Public Offices.--On the same ground of public agency, neither
appointment nor election to public