How corporations came to be viewed as "people"

[Bengalzona]

An interesting article I found:

https://www.theatlantic.com/business/archive/2018/03/corporations-people-adam-winkler/554852/

Quote:'Corporations Are People' Is Built on an Incredible 19th-Century Lie

Somewhat unintuitively, American corporations today enjoy many of the same rights as American citizens. Both, for instance, are entitled to the freedom of speech and the freedom of religion. How exactly did corporations come to be understood as “people” bestowed with the most fundamental constitutional rights? The answer can be found in a bizarre—even farcical—series of lawsuits over 130 years ago involving a lawyer who lied to the Supreme Court, an ethically challenged justice, and one of the most powerful corporations of the day.

That corporation was the Southern Pacific Railroad Company, owned by the robber baron Leland Stanford. In 1881, after California lawmakers imposed a special tax on railroad property, Southern Pacific pushed back, making the bold argument that the law was an act of unconstitutional discrimination under the Fourteenth Amendment. Adopted after the Civil War to protect the rights of the freed slaves, that amendment guarantees to every “person” the “equal protection of the laws.” Stanford’s railroad argued that it was a person too, reasoning that just as the Constitution prohibited discrimination on the basis of racial identity, so did it bar discrimination against Southern Pacific on the basis of its corporate identity.

The head lawyer representing Southern Pacific was a man named Roscoe Conkling. A leader of the Republican Party for more than a decade, Conkling had even been nominated to the Supreme Court twice. He begged off both times, the second time after the Senate had confirmed him. (He remains the last person to turn down a Supreme Court seat after winning confirmation). More than most lawyers, Conkling was seen by the justices as a peer.

It was a trust Conkling would betray. As he spoke before the Court on Southern Pacific’s behalf, Conkling recounted an astonishing tale. In the 1860s, when he was a young congressman, Conkling had served on the drafting committee that was responsible for writing the Fourteenth Amendment. Then the last member of the committee still living, Conkling told the justices that the drafters had changed the wording of the amendment, replacing “citizens” with “persons” in order to cover corporations too. Laws referring to “persons,” he said, have “by long and constant acceptance … been held to embrace artificial persons as well as natural persons.” Conkling buttressed his account with a surprising piece of evidence: a musty old journal he claimed was a previously unpublished record of the deliberations of the drafting committee.

Years later, historians would discover that Conkling’s journal was real but his story was a fraud. The journal was in fact a record of the congressional committee’s deliberations but, upon close examination, it offered no evidence that the drafters intended to protect corporations. It showed, in fact, that the language of the equal-protection clause was never changed from “citizen” to “person.” So far as anyone can tell, the rights of corporations were not raised in the public debates over the ratification of the Fourteenth Amendment or in any of the states’ ratifying conventions. And, prior to Conkling’s appearance on behalf of Southern Pacific, no member of the drafting committee had ever suggested that corporations were covered.

There’s reason to suspect Conkling’s deception was uncovered back in his time too. The justices held onto the case for three years without ever issuing a decision, until Southern Pacific unexpectedly settled the case. Then, shortly after, another case from Southern Pacific reached the Supreme Court, raising the exact same legal question. The company had the same team of lawyers, with the exception of Conkling. Tellingly, Southern Pacific’s lawyers omitted any mention of Conkling’s drafting history or his journal. Had those lawyers believed Conkling, it would have been malpractice to leave out his story.

When the Court issued its decision on this second case, the justices expressly declined to decide if corporations were people. The dispute could be, and was, resolved on other grounds, prompting an angry rebuke from one justice, Stephen J. Field, who castigated his colleagues for failing to address “the important constitutional questions involved.” “At the present day, nearly all great enterprises are conducted by corporations,” he wrote, and they deserved to know if they had equal rights too.

Rumored to carry a gun with him at all times, the colorful Field was the only sitting justice ever arrested—and the charge was murder. He was innocent, but nonetheless guilty of serious ethical violations in the Southern Pacific cases, at least by modern standards: A confidant of Leland Stanford, Field had advised the company on which lawyers to hire for this very series of cases and thus should have recused himself from them. He refused to—and, even worse, while the first case was pending, covertly shared internal memoranda of the justices with Southern Pacific’s legal team.

The rules of judicial ethics were not well developed in the Gilded Age, however, and the self-assured Field, who feared the forces of socialism, did not hesitate to weigh in. Taxing the property of railroads differently, he said, was like allowing deductions for property “owned by white men or by old men, and not deducted if owned by black men or young men.”

So, with Field on the Court, still more twists were yet to come. The Supreme Court’s opinions are officially published in volumes edited by an administrator called the reporter of decisions. By tradition, the reporter writes up a summary of the Court’s opinion and includes it at the beginning of the opinion. The reporter in the 1880s was J.C. Bancroft Davis, whose wildly inaccurate summary of the Southern Pacific case said that the Court had ruled that “corporations are persons within … the Fourteenth Amendment.” Whether his summary was an error or something more nefarious—Davis had once been the president of the Newburgh and New York Railway Company—will likely never be known.

Field nonetheless saw Davis’s erroneous summary as an opportunity. A few years later, in an opinion in an unrelated case, Field wrote that “corporations are persons within the meaning” of the Fourteenth Amendment. “It was so held in Santa Clara County v. Southern Pacific Railroad,” explained Field, who knew very well that the Court had done no such thing.

His gambit worked. In the following years, the case would be cited over and over by courts across the nation, including the Supreme Court, for deciding that corporations had rights under the Fourteenth Amendment.

Indeed, the faux precedent in the Southern Pacific case would go on to be used by a Supreme Court that in the early 20th century became famous for striking down numerous economic regulations, including federal child-labor laws, zoning laws, and wage-and-hour laws. Meanwhile, in cases like the notorious Plessy v. Ferguson (1896), those same justices refused to read the Constitution as protecting the rights of African Americans, the real intended beneficiaries of the Fourteenth Amendment. Between 1868, when the amendment was ratified, and 1912, the Supreme Court would rule on 28 cases involving the rights of African Americans and an astonishing 312 cases on the rights of corporations.

The day back in 1882 when the Supreme Court first heard Roscoe Conkling’s argument, the New-York Daily Tribune featured a story on the case with a headline that would turn out to be prophetic: “Civil Rights of Corporations.” Indeed, in a feat of deceitful legal alchemy, Southern Pacific and its wily legal team had, with the help of an audacious Supreme Court justice, set up the Fourteenth Amendment to be more of a bulwark for the rights of businesses than the rights of minorities.

[GMDino]

(03-06-2018, 01:09 PM)Bengalzona Wrote: An interesting article I found:

https://www.theatlantic.com/business/archive/2018/03/corporations-people-adam-winkler/554852/

NPR did a segment on this last week or the week before.  Fascinating stuff.

Although it just leads me to believe people always put money in front of other people and our generation is just as crappy as the rest.  

[Dill]

(03-06-2018, 01:09 PM)Bengalzona Wrote: An interesting article I found:

https://www.theatlantic.com/business/archive/2018/03/corporations-people-adam-winkler/554852/

When I hear people insisting corporations are people cuz they are "made up of people," I ask if corporations can get married and have children. Can they serve in the Military?

That was a great read, B-zona. :andy: :andy:

“Civil Rights of Corporations.” Indeed, in a feat of deceitful legal alchemy, Southern Pacific and its wily legal team had, with the help of an audacious Supreme Court justice, set up the Fourteenth Amendment to be more of a bulwark for the rights of businesses than the rights of minorities.

[SunsetBengal]

(03-06-2018, 01:13 PM)GMDino Wrote: NPR did a segment on this last week or the week before.  Fascinating stuff.

Although it just leads me to believe people always put money in front of other people and our generation is just as crappy as the rest.  

Anytime anyone mentions NPR, my mind goes right to those SNL skits from way back when.  You know the ones, "Pete's Schweaty Balls".  

But honestly, this is a great piece of little known history, that I was completely unaware of.  Just goes to show that Lawyers and Businessmen were just as crooked and unscrupulous back then, as they are today.  Awesome share, Bengalzona!

[Belsnickel]

Good article on this. I had learned about this in a poli sci class some time ago. The number of precedents that exist in our governmental framework that are based on bullshit like this is astounding. There are a lot of quirks like this and others that are interesting to learn about.

[SunsetBengal]

(03-06-2018, 09:27 PM)Belsnickel Wrote: Good article on this. I had learned about this in a poli sci class some time ago. The number of precedents that exist in our governmental framework that are based on bullshit like this is astounding. There are a lot of quirks like this and others that are interesting to learn about.

Do you find it odd, that no one has ever made any serious push to make these things widely known, or to propose correcting them?

Back at that time, the percentage of mostly agrarian and lay people likely weren't as politically engaged, as they are today.  So, I could understand the lack of any serious "outrage" from the public, at that time.

[Belsnickel]

(03-06-2018, 09:37 PM)SunsetBengal Wrote: Do you find it odd, that no one has ever made any serious push to make these things widely known, or to propose correcting them?

Back at that time, the percentage of mostly agrarian and lay people likely weren't as politically engaged, as they are today.  So, I could understand the lack of any serious "outrage" from the public, at that time.

One thing that I have learned in studying government and how it works is that our country has a habit of romanticizing the past. Once something becomes a precedent or a tradition it is held onto like a death grip.

I'm against progress for the sake of progress, especially when it is unfettered. But the way in which we hold onto these things is one of the reasons, in my opinion, that we have a lot of the problems in our government that we have.

As for people learning about it, well, it's not as sexy a topic as the more controversial stuff so it doesn't get any attention.

[ballsofsteel]

This reminds me of the book "The Creature from Jekyll Island" by Edward Griffin.

[Dill]

(03-06-2018, 09:37 PM)SunsetBengal Wrote: Do you find it odd, that no one has ever made any serious push to make these things widely known, or to propose correcting them?

Back at that time, the percentage of mostly agrarian and lay people likely weren't as politically engaged, as they are today.  So, I could understand the lack of any serious "outrage" from the public, at that time.

I think one could argue that "agrarians" in the late 19th century were as political as they are now.

The difference is that they had a better understanding of who the real "elites" were.  Think of the Populist Party.

[Belsnickel]

(03-07-2018, 11:40 AM)Dill Wrote: I think one could argue that "agrarians" in the late 19th century were as political as they are now.

The difference is that they had a better understanding of who the real "elites" were.  Think of the Populist Party.

Well, the issue is that movements like the Populist Party were crushed by the elites as they used racial lines to divide us. It happened with the Populists and led to the Jim Crow era. It happened after the civil rights movement. Both times we saw all of the poor come together to fight the elites and then they broke it up and caused the races to fight each other.

[mallorian69]

(03-06-2018, 08:35 PM)Dill Wrote: When I hear people insisting corporations are people cuz they are "made up of people," I ask if corporations can get married and have children. Can they serve in the Military?

That was a great read, B-zona. :andy: :andy:

“Civil Rights of Corporations.” Indeed, in a feat of deceitful legal alchemy, Southern Pacific and its wily legal team had, with the help of an audacious Supreme Court justice, set up the Fourteenth Amendment to be more of a bulwark for the rights of businesses than the rights of minorities.

Well corporations can merge which is basically a marriage and they can spin off subsidiaries which are kinda like children. There are also companies that have taken over jobs that the military used to do for itself such as providing security and logistics so in a sense they do serve in the military. Just saying.

[Dill]

(03-07-2018, 05:54 PM)mallorian69 Wrote: Well corporations can merge which is basically a marriage and they can spin off subsidiaries which are kinda like children. There are also companies that have taken over jobs that the military used to do for itself such as providing security and logistics so in a sense they do serve in the military. Just saying.

Still a metaphor though, right?  They can also "die" and be "born," but not with gender. And they can't vote as a person.   When people marry they are still legally two people with separate votes (at least in the U.S.).

And civilian contractors serve the military, but are not IN it. Corporations may "die," but for their country? Cover a grenade to save their buddies?

Another way to look at this--what can corporations do that people can't?--like exist primarily on a piece of paper, and in more than one country at the same time. They can also be legally "owned" and inherited.

[fredtoast]

The industrial revolution and the rise of corporate power changed everything.

That is one of the biggest reasons we can't look at "the intent of the framers" when interpreting the Constitution. It was drafted in a totally different age. Back then "limited government" meant more freedom for the citizens. Today "limited government" means more citizens being oppressed and exploited by the power of corporations.

[Dill]

(03-07-2018, 06:30 PM)fredtoast Wrote: The industrial revolution and the rise of corporate power changed everything.

That is one of the biggest reasons we can't look at "the intent of the framers" when interpreting the Constitution.  It was drafted in a totally different age.  Back then "limited government" meant more freedom for the citizens.  Today "limited government" means more citizens being oppressed and exploited by the power of corporations.

Well said.  Classical liberalism was revolutionary vis a vis feudal monarchies. By 1890 it was the corporate status quo and a check on government protections.

[Belsnickel]

(03-07-2018, 06:40 PM)Dill Wrote: Well said.  Classical liberalism was revolutionary vis a vis feudal monarchies. By 1890 it was the corporate status quo and a check on government protections.

So, correct me if I am wrong, but what you seem to be saying is that progressive movements were aimed at insuring the citizens retained the liberties that classical liberalism had worked to enshrine, but in an atmosphere where corporate interests thrived. Something that classical liberals were unable to account for in their establishment of our republic as the industrial revolution had not been dreamed up.

Or something along those lines.

[Dill]

(03-07-2018, 08:08 PM)Belsnickel Wrote: So, correct me if I am wrong, but what you seem to be saying is that progressive movements were aimed at insuring the citizens retained the liberties that classical liberalism had worked to enshrine, but in an atmosphere where corporate interests thrived. Something that classical liberals were unable to account for in their establishment of our republic as the industrial revolution had not been dreamed up.

Or something along those lines.

Not just "progressive" movements.

Fred said it better, but yes.  And I would go a step further and add that, in the U.S., strict adherence to tenets of classical liberalism (like freedom of contract, right to private property, and limited government) was used to deprive many of all but the legal formality of inalienable rights during the last quarter of the 19th century.  (The problem appears earlier in England, Germany and France.)  As you well know, the struggle for and against government protection, the role of government in market and private life, continues today.

Classical liberals of '76 (Jefferson, Madison, Adam Smith) were understandably unable to foresee child labor, "neighborhood effects" like pollution, 13-story buildings with no fire escape, and the willingness of unscrupulous meat packers to can and sell already rotten beef, etc.  In 1790 they were rightly focused on the problem of majority "factions" capturing the government; the massive wealth of a Rockefeller or Morgan, and the power it brought private individuals, they could not envision. (Imagine the powerful German government negotiating massive state loans with J.P. Morgan, a "mere" private citizen.)

Post Civil War, the new "social" or "progressive" liberals invoked the state's duty to protect citizens and secure their freedoms in order to challenge the classical liberals' appeal to freedom from government. That is where we stand today, with new liberals (or "far leftists" as they are laughably called) battling old liberals over budgets and policy.