Abstract: Early U.S. Business Corporations as Republics

Robert E. Wright


Early U.S. business corporations were numerous. Over 22,000 were chartered by special acts of incorporation between 1790 and 1860 and some thousands more formed in the last few decades of the antebellum period under general incorporation laws. Total authorized capitalization was on the order of $4.5 billion. Ultimately, about 131,000 entrepreneurs chose the corporate over other business forms, and at least several hundred thousand investors purchased corporate equities and bonds instead of other assets. They did so, I argue in my forthcoming book, <em>Corporation Nation: Rise and Demise of the American Economic Juggernaut</em>, because early U.S. corporations were, for the most part, well-governed republics, not "democracies" as some scholars have suggested. Republics contain numerous checks against rent-seeking and self-dealing, not just voting rights. This brief roundtable paper describes some of those early checks and their eventual abandonment.