History of corporations in the US

[Votto]

Hmmm...

I thought this would have been an interesting conversation.

I think that states should resume the power they once had, both from the federal government and corporations.

In fact, you might argue that once you surrender to one, the other will also subdue you.

 

[Bfgrn]

Addre

For 100 years after the American Revolution, legislators maintained tight control of the corporate chartering process. Because of widespread public opposition, early legislators granted very few corporate charters, and only after debate.

It is true there were few corporate charters, but that does not mean all manufacturing was done under the auspices of a charter. Only a small percentage of manufacturing in America was performed by chartered corporations.

Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow.

States also limited corporate charters to a set number of years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets were divided among shareholders.

You should have noticed these charters were on the state level, and so it should be evident the purpose of the corporate charter system was to limit the size and scope of corporations.

Do you think a modern day corporation should be constrained to within the borders of a state?

After the nation’s founding, corporations were granted charters by the state as they are today. Unlike today, however, corporations were only permitted to exist 20 or 30 years and could only deal in one commodity, could not hold stock in other companies, and their property holdings were limited to what they needed to accomplish their business goals. And perhaps the most important facet of all this is that most states in the early days of the nation had laws on the books that made any political contribution by corporations a criminal offense. When you think about it, the regulations imposed on corporations in the early days of America were far harsher than they are now. That is hardly proof that the founding fathers supported corporations. In fact its quite the opposite. The corporate entity was so restrictive that many of America’s corporate giants set up their entities to avoid the corporate restrictions. For example, Andrew Carnegie set up his steel company as a limited partnership and John D. Rockefeller set up his Standard Oil company as a trust which would later be rightfully busted up into smaller companies by Theodore Roosevelt.

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[saveliberty]

...and then they discovered corporations could be taxed....