By What Authority:

Summer 1999

By What Authority

Corporate Insurrection Against Democracy Disclosed In Pamphlet

Learn from Ohioans—Go and Do Likewise

POCLAD encourages people to look into the history of corporate usurpations in their respective states. The Ohio Committee on Corporations, Law and Democracy recently did just that, publishing Citizens Over Corporations: A Brief History of Democracy in Ohio and Challenges to Organizing in the Future.

This 52-page pamphlet offers a basis for rethinking strategies that challenge corporate governance, today's reality which "is neither inevitable nor irreversible," according to Greg Coleridge of the Ohio Committee. We can offer only a few teasers from the pamphlet's many treasures, so do yourself a favor — get copies at once. (Ordering information below.)

These Ohio activists made important discoveries during their study:

"...while [people] were education on single issues, researching areas of science and technology, and organizing mostly around local, state and federal regulatory agencies, corporations were focusing in constitutional arenas. There, they lobbied for the property and civil rights of human persons. ...writing state corporation codes and amending state constitutions to define giant business corporations as private- essentially beyond the authority of "We the People." (Therein lie the roots of the current corporate manipulation of out Social Security program. See this issue's feature article.)

On the Ohio Constitution of 1803:

"...perhaps the most democratic state constitution yet adopted. ...Ohio's new legislature, like other state legislatures, possessed the power to create and define corporations. Making certain the corporations were legislatively defined kept corporations closer to the people than if the responsibilities for controlling them were left to the courts."

A Sampling of "defining rules applied to incorporated companies during the first decade of the 19th Century includes:

In the early decades of statehood, the people equated corporate violations of their "defining rules" with rebellion and would have none of it. Charters were revoked and companies dissolved for wrongful assumption of authority.

"Ohio's General Assembly passed a quo warranto act in 1838. ...when subordinate entities like corporations acted beyond their authority, or ultra vires, they were guilty of rebellion and must be terminated."

Recognizing that a charter was a legislative act and not a contract, it was the Ohio legislature, not the court that in 1842 repealed the incorporating act of the German Bank of Wooster, instructing that:

"It shall be the duty of the court of common pleas...or any judge of the supreme restrain said bank, its officers, agents and servants or assignees, from exercising any corporate rights, privileges, and franchises...and force the bank commissioners to close the bank..."

The people, however, were in constant struggle to keep property from walking away with everything. Over time, hundreds of "special" pieces of legislation were passed benefiting one or more corporations and the courts were making law that protected property and contract above all. Even the Constitution of 1802 had proven ineffective in maintaining the power of the majority over the minority with wealth. Growing anti-corporate sentiment among Ohioans brought on a second Constitutional Convention.

"The 1851 Constitution addressed the problem of "special laws" benefiting corporations by agreeing that 'the General Assembly shall pass no special act conferring corporate powers.' ...Most significant are Sections 2 and 3 (of Article XIII) which reinforce the notion that corporate powers and identity exist only to the extent provided by the law."

Labor resisted property's claim to illegitimate authority, knowing very early that "privileges given to corporations were privileges denied to workers."

"In 1825 the journeymen printers of Cincinnati formed Ohio's first trade union, the Franklin Typographical Society." ...In 1827, canal building "workers in Canton, Columbus, Cincinnati and Zanesville formed political parties to gain a voice for working people against the political voice of the wealthy and corporations." However, "while large segments of the public were translating their increasing wealth into bribing state legislators, then...pushing for reduced legislative powers to charter and control corporations. Corporations rewrote the laws governing their creation."

On regulating corporate behavior, rather than controlling corporate natures:

"For the most part regulatory agencies did not seek to control, only to regulate corporations. Gradually these agencies began to assume powers of legislatures, courts and the public."

A law banning any involvement of corporations in the electoral process remained on Ohio's books until 1981.

"Any corporation engaged in business in this state which directly or indirectly pays, uses, offers, advises, consents or agrees to pay or use the corporations money or property for or in aid of a political party, committee or organization or for or in aid of a candidate for political office, or for a nomination thereto... shall upon conviction (of a violation of this section), be fined not less than five thousand dollars. Whoever, being an officer, stockholder, attorney or agent of such a corporation (which violated this section)... shall be fined not more than one thousand dollars, or imprisoned not more than one year, or both"

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