By What Authority:

May 2015

POCLAD Article


by Mike Ferner and Virginia Rasmussen

PNS (POCLAD News Service) – U.S. Health and Human Services director, Sylvia Mathews Burwell, today announced plans for a National Day of Observance to mark the birthday of the oldest person in the United States.

“May 10, 1886 is a day we simply cannot overlook,” Burwell noted. “On that little-noted day, without fanfare, an American was born who has surpassed all others in longevity, changed the very direction of our nation and the character of our culture. We’re celebrating, of course, the birth of Corporate P. Hood.”

Well…maybe not celebrate exactly, but remember for sure. For that was the day on which the U.S. Supreme Court’s Santa Clara County v Southern Pacific Railroad decision marked the formal beginning of the concept we now call “corporate personhood.”

Corporate P. Hood was a long time a-borning, its gestation taking place in the womb of the U.S. judicial system. As this artificial “person” has had a most profound influence, we would do well to know the story of its birth.

Before the 1886 Santa Clara case, corporate attorneys had tried any number of times to shoehorn their clients into constitutional protections intended for actual human beings only to be rebuffed by the courts.

You may have noticed that several of these cases involve railroads, which is not surprising since they were by far the most politically powerful industry of that period. In 1886, the Supreme Court’s Chief Justice, Morrison Waite, was a former railroad attorney from Toledo, Ohio. As Gustavas Myers noted in The History of the Supreme Court of the United States, “All except two of the Justices now constituting the (Waite) Supreme Court of the United States had been active railroad attorneys or railroad stockholders, directors or legislative railroad lobbyists.”

The following quote by Justice Hugo Black will be familiar to many of our readers:

"Of the cases in this court in which the Fourteenth Amendment was applied during the first fifty years after its adoption, less than one-half of one percent invoked it in protection of the Negro race, and more than fifty percent asked that its benefits be extended to corporations."

These words affirm that POCLAD and Move to Amend are not just pursuing an obscure, intellectual exercise. We are engaged in a life and death struggle of great consequence, a struggle for the rights of human beings and indeed all life on the planet.

Consider just these few examples of how corporate power now rules our lives. You can make up your own list from this timeline.

And of course, Buckley v Valeo (1976), First National Bank of Boston v Bellotti (1977) and Citizens United (2010) decreed that money is the same thing as constitutionally protected speech, regardless of the effect on elections.

Every birthday celebration obviously requires parents, and Corporate P. Hood’s progenitors can be found in Trustees of Dartmouth College v Woodward (1819).

This Supreme Court case related to an educational institution, but more importantly for our purposes, the Court used it to grant constitutional protections to corporations!

Former POCLAD principal, Peter Kellman, writing in the March, 2000 issue of  By What Authority picks up the story in the political context of that day and New Hampshire’s new governor, William Plumer, an ally of Thomas Jefferson.

According to Plumer, “...a republican form of government requires an educated populace.” These republicans wanted to provide a college education for their children and believed the content of that education should be determined by a public process, not a private one.

However, colleges during that period were mainly private schools such as Yale, Harvard and Dartmouth -- holdovers from colonial days. Their purpose was to perpetuate the monarchy and class structure of the British Empire, impose Christianity on Native populations, train local clergy to keep the new converts in line, and educate the children of the elite.

Dartmouth College had been chartered by the King of England in 1769 as an Indian Charity School "with a view to spreading the knowledge of the great Redeemer among their savage tribes." The college soon evolved into a school "to promote learning among the English, and be a means to supply a great number of churches... with a learned and orthodox ministry."

In 1816, Plumer introduced legislation to change Dartmouth from a private college run by a board of self-perpetuating trustees to a public university, stating: "Whereas knowledge and learning generally diffused through a Community are essential to the preservation of free Government...extending the opportunities and advantages of education is highly conducive to promote this end..."

The legislation passed, and renamed Dartmouth University was now under new, publicly appointed trustees mandated to set up public colleges around the state.

Plumer argued that the royal charter given to Dartmouth College in pre-revolutionary, colonial times “emanated from royalty and contained principles…hostile to the spirit and genius of free government.”

The old trustees sued, losing the first round in the New Hampshire Supreme Court which ruled the legislature was correct, stating:

“...because it is a matter of too great moment, too intimately connected with the public welfare and prosperity, to be thus entrusted in the hands of a few. The education of the rising generation is a matter of the highest public concern, and is worthy of the best attention of every legislature.”

The former trustees did not want to see the purpose of their college redirected and sought to protect the investment they had made in establishing the college. Therefore, represented by Dartmouth alum, Daniel Webster, they appealed to the U.S. Supreme Court, which reversed the New Hampshire ruling.

“As a result,” Kellman wrote, “the corporate form was given Constitutional protection ...”

Beyond the effects on education in a period still fired by the revolution, the justices in the Dartmouth case “found” corporations in the constitution by equating the Dartmouth College charter (royally-bestowed in this case, but after 1787 granted by state legislatures) to mere contracts between equal parties. Formerly, in New Hampshire or any state, the chartering of a corporation did not result in that corporation becoming an equal partner to the state. To the contrary, the state remained sovereign over that corporate entity it created.

It was Justice Joseph Story who did most of the “finding” of a contract within the charter of a corporation. He considered that even though a “corporation is established by the government and its objects and operations partake of a public nature (insurance, canals, banks, turnpikes…) they are private, as much so as if the franchise were vested in a single person.

“In the case of Dartmouth College, the mere act of incorporation by New Hampshire should not change the charity from a private to a public one.  The lands and property were held not for use and benefit of all the people of the state, but, as the royal charter declared, “for the use of Dartmouth College… for the promotion of piety and learning, not at large, but in that college.”

Story went on to signal that state legislatures had no prerogative to use the vague notion of “general welfare” as a justification for regulating corporations.  General welfare, the common good, was the cumulative product of individual effort and the contractual relationships between those individuals. Story put business corporations under the banner of individualism and, as such, they received the many protections of private property rights.

He also held that judges who are trained in the science of law and not self-interested politicians should shape corporate law.  Story and the Court therefore joined forces in the struggle over regulation of business corporations.

So, sure enough, the Supreme Court concluded that “after mature deliberation” the charter was, in fact, a contract, the obligations of which cannot be impaired without violating the Constitution of the U.S (Article 1, Section 10).

And to this day, the corporate charter is viewed as a mere contract and the rights legally invested in it cannot be changed or withdrawn by any later statute unless the legislature has previously reserved that power for itself.

If the ins and outs of this story are enough to make you say, “My head hurts, Brian… ,” don’t despair. “Dartmouth” still makes two things perfectly clear: 1) the conflict between public and private interests has been ongoing since the nation was founded and 2) “The law” is not something handed to us on stone tablets, but evolves in service to the interests of those who have the power to make it stick.

That’s why this democracy business is so damn important.

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