Abstract: Conflicted Meanings of Corporation before the Dartmouth Decision (1819)

David L. Chappell


Pauline Maier posed a startling question in her 1993 article, "Revolutionary Origins of the American Corporation." Why did the new United States host an unprecedented contagion of incorporations--in which the number of corporate charters quickly dwarfed the number in England and other modern states? The usual explanation in American economics texts for the growth corporations in the U.S. (still casually echoed by historians and legal scholars) has been that incorporation removed financial barriers to industrialization: the legal privilege of incorporation uniquely enabled disparate strangers to pool capital and reduce risk with limited liability. Yet as Maier noted, the first modern industrial revolution, England’s, did not in fact rely on corporations as the U.S. did. The data suggest that well into the 19th century -- even in highly commercialized and industrializing states like Pennsylvania -- the predominant purpose of incorporation was not commerce but municipal government. A full solution to Maier’s mystery requires appreciation and analysis of the meanings of the highly contested and elastic word "corporation" --and equivalent and cognate terms-- in rapidly changing contexts, long before what we think of as modern manufactures and the Age of Revolution. This paper will begin to outline some of the highlights of those meanings, mainly by zeroing in on the first recognizably English lawgivers and codifiers, William the Conqueror, Ranulf de Glanvill, and Henry Bracton. Ultimately, inventory and analysis of the usages of "corporation" (and other terms that were interchangeable with it) will not only help unravel Maier's mystery but perhaps shed new light on a modern nation that prides itself on its individualism, and yet seems to demand an unusually high concentration of collective power in "private" as well as public institutions. The investigation may suggest a new perspective on how corporations above all serve, perhaps inadvertently, to obscure shifts in the line between private and public. From this may emerge a picture of the North’s peculiar institution playing an unexpected role in shaping constitutional development as much as slavery did.