874
Opinion of Souter, J.
legislative power," and that Georgia's legislative sovereignty was limited by the Federal Constitution's bar against laws impairing the obligation of contracts. Id., at 135-136.
The impetus for the modern unmistakability doctrine was thus Chief Justice Marshall's application of the Contract Clause to public contracts. Although that Clause made it possible for state legislatures to bind their successors by entering into contracts, it soon became apparent that such contracts could become a threat to the sovereign responsibilities of state governments. Later decisions were accordingly less willing to recognize contractual restraints upon legislative freedom of action, and two distinct limitations developed to protect state regulatory powers. One came to be known as the "reserved powers" doctrine, which held that certain substantive powers of sovereignty could not be contracted away. See West River Bridge Co. v. Dix, 6 How. 507 (1848) (holding that a State's contracts do not surrender its eminent domain power).20 The other, which surfaced somewhat earlier in Providence Bank v. Billings, 4 Pet. 514 (1830), and Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 11 Pet. 420 (1837), was a canon of construction disfavoring implied governmental obligations in public contracts. Under this rule that "[a]ll public grants are strictly construed," The Delaware Railroad Tax, 18 Wall. 206, 225 (1874), we have insisted that "[n]othing can be taken against the State by presumption or inference," ibid., and that "neither the right of taxation, nor any other power of sovereignty, will be held . . . to have been surrendered, unless
20 See also Stone v. Mississippi, 101 U. S. 814 (1880) (State may not contract away its police power); Butchers' Union Slaughter-House & Live-Stock Landing Co. v. Crescent City Live-Stock Landing & Slaughter-House Co., 111 U. S. 746 (1884) (same); see generally Griffith, Local Government Contracts: Escaping from the Governmental/Proprietary Maze, 75 Iowa L. Rev. 277, 290-299 (1990) (recounting the early development of the reserved powers doctrine). We discuss the application of the reserved powers doctrine to this case infra, at 888-889.
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