Precursor of US corporations
These companies had proven profitable in the past with trading companies. The risk was small, but the returns could take years.
The joint stock companies wanted to get rich quick through the discovery and mining of gold and silver and used indentured servants and slaves to operate these enterprises
But the colonists quickly discovered that the real gold in America was the land. Land was scarce in Europe.
The land that produced tobacco, rice, timber, and later cotton and other crops.
Colonial America was anti-corporatist
The Declaration of Independence freed Americans not only from Britain but also from the tyranny of British corporations.
Americans remained deeply suspicious of corporate power for the next 100 years.
Early US corporations were "artificial, invisible, intangible," mere financial tools. They were chartered by individual states, not the federal government, which meant they could be kept under close local scrutiny.
These corporations were automatically dissolved if they violated their charter.
Railroad magnate J. P. Morgan even understood that corporations must never become so big that they "inhibit freedom to the point where efficiency [is] endangered."
Only two hundred or so corporations operated in the US by the year 1800. They weren't allowed to participate in the political process. They couldn't buy stock in other corporations.
In 1832, President Andrew Jackson vetoed a motion to extend the charter of the corrupt and tyrannical Second Bank of the United States, and was widely applauded for doing so.
That same year the state of Pennsylvania revoked the charters of ten banks for operating contrary to the public interest.
Even the enormous industry trusts which protected member corporations from external competitors were no match for the state. By the mid-1800s, antitrust legislation was widely in place.
In the early history of America, the corporation played an important but subordinate role. The people -- not the corporations -- were in control.
Then US corporations became powerful
What happened? How did corporations gain power and eventually start exercising more control than the individuals who created them?
The shift began in the latter part of the nineteenth century.
The turning point was the Civil War. Corporations made huge profits from procurement contracts and took advantage of the disorder and corruption of the times to buy legislatures, judges and even presidents.
Corporations became the masters and keepers of business.
Lincoln warned that "corporations have been enthroned . . . . An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people . . . until wealth is aggregated in a few hands . . . and the republic is destroyed."
President Lincoln's warning went unheeded. Corporate power continued to increase. State charters could no longer be revoked.
Corporate profits were no longer be limited. Corporate economic activity could be restrained only by the courts, and in hundreds of cases judges gave corporations minor legal victories which empowered corporations.
























