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Corporate personhood

The neutrality of this article is disputed.

Corporate personhood is a term to describe United States law that allows
corporations to have "inalienable rights" (sometimes called constitutional
rights) just like (human) persons. The choice of the word "person" in
"personhood" arises from the way the 14th Amendment to the United States
Constitution was worded and from earlier legal usage of the word person.

In the United States of America all natural persons (actual human beings)
are recognized as having inalienable rights. These rights are recognized,
among other places, in the United States Bill of Rights and the Fourteenth
Amendment.

Corporate constitutional rights effectively invert the relationship between
the government and the corporations. Recognized as persons, corporations
lose much of their status as subjects of the government. Although artificial
creations of their owners and the governments, as legal persons they have a
degree of immunity to government supervision. U.S. corporations are endowed
with the court-recognized right to influence both elections and the
law-making process.

The History of Corporate Personhood

Corporations were detested by the colonial rebels in 1776 when the
Declaration of Independence severed the States from Great Britain. There had
been only a few corporations in colonial America, but they had been very
powerful. The Dutch West India Company had founded New York. Corporations
had effectively governed Virginia, Maryland and North and South Carolina.
The political history of the colonies up until 1776 was largely one of
conflict between citizens trying to establish rule by elected government and
the corporations or King ruling through appointed governors.

The new nation or confederation of 13 sovereign states had few native
business corporations. The corporations that survived the revolution were
mainly non-profit institutions such as colleges (Dartmouth College v.
Woodward 17 U.S. 518 1819). There was not a single bank in the United States
until 1780. Most of that first bank's stock was owned by the confederate
(what we would later call Federal) government, and the bank's charter was
revoked in 1785. "The agrarian charges were numerous... the bank was a
monstrosity, an artificial creature endowed with powers not possessed by
human beings and incompatible with the principles of a democratic social
order." (Hammond, Bray , Banks and Politics in America from the Revolution
to the Civil War (Princeton: Princeton University Press, 1991), pp. 48-54)
By 1790 four banks had been granted corporate charters by states, but these
banks were not originally purely private institutions. They served as
financial institutions for the states that chartered them. (Ibid. 65-67)

The federal Constitution of 1788 did not mention corporations at all. But in
the late 1700s and early 1800s corporations began to be chartered by the
states. This was not without opposition. Thomas Jefferson said, "I hope we
shall crush in its birth the aristocracy of our moneyed corporations which
dare already to challenge our government in a trial of strength, and bid
defiance to the laws of our country."

Like the banks, other early corporations were closely supervised by the
state legislatures that granted their charters. When the United States
Supreme Court in Dartmouth College v. Woodward 17 U.S. 518 1819, ruled that
Dartmouth's charter granted in 1769 by King George III was a contract and
could not be revoked by the New Hampshire legislature, a public outcry
ensued. State courts and legislatures, supported by the people, declared
that state governments had an absolute right to amend or repeal a corporate
charter. (Richard L Grossman and Frank T. Adams, Taking Care of Business,
Citizenship and the Charter of Incorporation.

Until 1886 corporations were not considered persons. It was clear what they
were: artificial creations of their owners and the state legislatures. They
were regulated and taxed. They could sue and be sued. They were subject to
all of the laws of the land as well as any restrictions placed in their
charters. But from 1819 until 1886 the wealthiest business people sought to
use the Federal government, particularly the courts, to get their
corporations out from under the control of the states and their citizens.

During the 1800s the United States went through an enormous economic
expansion, sometimes called the Industrial Revolution, but that term is
misleading. The United States expanded geographically by grabbing native
American Indian territories formerly claimed by France, Great Britain, and
Mexico. The population exploded. Farm production exploded, and international
trade exploded, with U.S. grain feeding both growing U.S. cities and Europe.
Manufacturing in the U.S., protected by tariffs from British competition,
also progressed rapidly. The favored form for large businesses became the
corporation. And as these corporations came to dominate business life, they
also began to dominate America's politicians, lawyers, courts and culture.

The Civil War accelerated the growth of manufacturing and the power of the
men who owned the corporations. After the war corporations began a campaign
to throw off the legal shackles that had held them in check. The systematic
bribing of Congress was instituted by Mark Hanna, sugar trust magnate Henry
Havemeyer, and Senator Nelson Aldrich and their associates. (Jonathan
Shepard Fast and Luzviminda Bartolome Francisco, Conspiracy For Empire, Big
Business, Corruption and the Politics of Imperialism in America, 1876-1907
(Quezon City, Foundation for Nationalist Studies, 1985), p. 92-97) Most
Supreme Court judges who were appointed were former corporate lawyers.

In 1886 the supreme court justices were Samuel F. Miller, Stephen J. Field,
Joseph P. Bradley, John M. Harlan, Stanley Matthews, William B. Woods,
Samuel Blatchford, Horace Gray, and chief justice Morrison. R. Waite. These
men subjected African Americans to a century of Jim Crow discrimination,
particularly in the Civil Rights Cases 109 US 3 1883; they made corporations
into a vehicle for the wealthy elite to control the economy and the
government; they vastly increased the power of the Supreme Court itself over
elected government officials. In all fairness, Justice Harlan dissented from
the infamous decision Plessy v. Ferguson 163 U.S. 537 1896, which, as he
said, effectively denied the protection of the 14th Amendment to the very
group of people (former slaves and their descendants) for whom it was
designed.

In 1868 the 14th Amendment to the United States Constitution had become law.
Section 1 of that Amendment states:

SECTION 1. All persons born or naturalized in the United States, and subject
to the jurisdiction thereof, are citizens of the United States and of the
State wherein they reside. No State shall make or enforce any law which
shall abridge the privileges or immunities of citizens of the United States;
nor shall any State deprive any person of life, liberty, or property,
without due process of law; nor deny to any person within its jurisdiction
the equal protection of the laws.

"The one pervading purpose... [of the 14th Amendment] was the freedom of the
slave race, the security and firm establishment of that freedom, and the
protection of the newly-made freeman and citizen from the oppression of
those who had formerly exercised unlimited dominion over him." That is
exactly what Justice Samuel F. Miller said in 1873 in one of the first
Supreme Court opinions to rule on the 14th Amendment. (83 U.S. 36, 81 (1873))

But the wealthy, powerful men who owned corporations wanted more power for
their corporations. Their lawyers came up with the idea that corporations,
which might be said to be groups of persons (though one person might in turn
belong to (own stock in) many corporations), should have the same
constitutional rights as persons themselves. If they could get the courts to
agree that corporations were persons, they could assert that the States,
which had chartered the corporations, would then be constrained by the 14th
Amendment from exercising power over the corporations.

Beginning in the 1870s corporate lawyers began asserting that corporations
were persons with many of the rights of natural persons. It should be
understood that the term "artificial person" was already in long use, with
no mistake that corporations were claiming to have the rights of natural
persons. "Artificial person" was used because there were certain
resemblances, in law, between a natural person and corporations. Both could
be parties in a lawsuit; both could be taxed; both could be constrained by
law. In fact the corporations had been called artificial persons by courts
in England as early as the 16th century because lawyers for the corporations
had asserted they could not be convicted under the English laws of the time
because the laws were worded "No person shall..."

The need to be freed from legislative and judicial constraints, combined
with the use of the word "person" in the U.S. Constitution and the concept
of the "artificial person," led to the argument that these "artificial
persons" were "persons" with an inconsequential "artificial" adjective
appended. If it could be made so, if the courts would accept that
corporations were among the "persons" talked about by the U.S. Constitution,
then the corporations would gain considerably more leverage against legal
restraint.

These arguments were made by corporate lawyers at the State level, in court
after court, and many judges, being former corporate attorneys and usually
at least moderately wealthy themselves, were sympathetic to any argument
that would strengthen corporations. There was a national campaign to get the
legal establishment to accept that corporations were persons. This cumulated
in the Santa Clara decision of 1886, which has been used as the precedent
for all rulings about corporate personhood since then.

Though it is not yet clear who hatched this plan or where the campaign
began, the early cases mainly concerned railroads. In the late 1800s
railroads were the most powerful corporations in the country. Most of the
nation's farmers were dependent on them to haul their produce; even the
manufacturing corporations were at their mercy when they needed coal, iron
ore, finished iron, or any other materials transported. That the lawyers for
the railway corporations had planned a national campaign to make
corporations full, unqualified legal persons is demonstrated by the Supreme
Court making several decisions in which this was an issue in 1877. In four
cases that reached the Supreme Court (94 U.S. 155, 94 U.S. 164, 94 U.S. 179,
94 U.S. 180 (1877)) it was argued by the railroads that they were protected
by the 14th Amendment from states regulating the maximum rates they could
charge. In each case the Court did not render an opinion as to whether
corporations were persons covered by the 14th Amendment. Bypassing that
issue, they said that the 14th Amendment was not meant to prevent states
from regulating commerce.

Similarly, in 1877, in Munn v. Illinois 94 U.S. 113 1876, the Supreme Court
decided that the 14th Amendment did not prevent the State of Illinois from
regulating charges for use of a business's grain elevators, ignoring the
question of whether Munn & Scott was a person. Later, in Northwestern Nat
Life Ins. Co. v. Riggs 203 U.S. 243 1906, having accepted that corporations
are people, the court still ruled that the 14th Amendment was not a bar to
many state laws that effectively limited a corporations right to contract
business as it pleases.

Calling silence a victory, from 1877 to 1886 corporate lawyers assumed that
corporations were persons, and their opponents argued that they were not. In
Santa Clara County v. Southern Pacific Railroad Company (118 U.S. 394
(1886)), at the lower court levels the question of whether corporations were
persons had been argued, and these arguments were submitted in writing to
the Court. However, before oral argument took place, Chief Justice Waite
announced: "The court does not wish to hear argument on the question whether
the provision in the Fourteenth Amendment to the Constitution, which forbids
a State to deny to any person within its jurisdiction the equal protection
of the laws, applies to these corporations. We are all of the opinion that
it does."

It is not half as strange that the Supreme Court judges would render such an
opinion, given their allegiance to the propertied class, as the way that
they rendered it. The Supreme Court judges generally preferred to write
long-winded, complex opinions; look at any Supreme Court opinion of the time
(or any time) and you'll see that. This question had never been covered in a
Supreme Court decision; it had been avoided. Here was the perfect chance for
any of nine Supreme Court judges to make his place in history. All declined.
No one wanted to explain how an amendment about ex-slaves had converted
artificial entities into the legal equivalent of natural persons.

This opinion without explanation, given before argument had even been heard,
became the law of the United States of America. No state or federal
legislature passed it or even discussed; no Amendment to the Constitution
was deemed necessary; the citizens were simply informed that they had a
mistaken view about corporations, if they were informed at all. Future
Supreme Courts refused to even consider the question, preferring to build on
it, though occasionally future justices would try to raise the question again.

Was the 14th Amendment about corporations? One of the 1886 judges, Samuel F.
Miller, had not thought so in 1872, only 6 years after the Amendment had
become law, when the court was "called upon for the first time to give
construction to these articles." In the Slaughterhouse Cases 83 U.S. 36
1872, he stated (quoted at length because it is important not only to the
question of corporate personhood, but to the question of civil rights):

The most cursory glance at these articles discloses a unity of purpose,
when taken in connection with the history of the times, which cannot
fail to have an important bearing on any question of doubt concerning
their true meaning. Nor can such doubts, when any reasonably exist, be
safely and rationally solved without a reference to that history, for
in it is found the occasion and the necessity for recurring again to
the great source of power in this country, the people of the States,
for additional guarantees of human rights, additional powers to the
Federal government; additional restraints upon those of the States.
Fortunately, that history is fresh within the memory of us all, and its
leading features, as they bear upon the matter before us, free from doubt.

The institution of African slavery, as it existed in about half the
States of the Union, and the contests pervading the public mind for
many years between those who desired its curtailment and ultimate
extinction and those who desired additional safeguards for its security
and perpetuation, culminated in the effort, on the part of most of the
States in which slavery existed, to separate from the Federal
government and to resist its authority. This constituted the war of the
rebellion, and whatever auxiliary causes may have contributed to bring
about this war, undoubtedly the overshadowing and efficient cause was
African slavery.

...

They [Negroes] were in some States forbidden to appear in the towns in
any other character than menial servants. They were required to reside
on and cultivate the soil without the right to purchase or own it. They
were excluded from many occupations of gain, and were not permitted to
give testimony in the courts in any case where a white man was a party.
It was said that their lives were at the mercy of bad men, either
because the laws for their protection were insufficient or were not
enforced.

These circumstances, whatever of falsehood or misconception may have
been mingled with their presentation, forced upon the statesmen who had
conducted the Federal government in safety through the crisis of the
rebellion, and who supposed that, by the thirteenth article of
amendment, they had secured the result of their labors, the conviction
that something more was necessary in the way of constitutional
protection to the unfortunate race who had suffered so much. They
accordingly passed through Congress the proposition for the fourteenth
amendment, and they declined to treat as restored to their full
participation in the government of the Union the States which had been
in insurrection until they ratified that article by a formal vote of
their legislative bodies.

...

We repeat, then, in the light of this recapitulation of events, almost
too recent to be called history, but which are familiar to us all, and
on the most casual examination of the language of these amendments, no
one can fail to be impressed with the one pervading purpose found in
them all, lying at the foundation of each, and without which none of
them would have been even suggested; we mean the freedom of the slave
race, the security and firm establishment of that freedom, and the
protection of the newly made freeman and citizen from the oppressions
of those who had formerly exercised unlimited dominion over him.

It has been argued that the men who wrote the 14th Amendment
specifically meant for the word person to be a loophole which you could
drive a giant corporation through. Apparently in one of the railroad
cases an attorney who had been on the committee that drafted the
amendment waived a paper before the court claiming that it documented
such; but the paper was not entered as evidence, nor apparently was it
shown to anyone, nor was it saved. However, careful research has shown
that, John A. Bingham the member of Congress who is known to have been
chiefly responsible for the phraseology of Section One when it was
drafted by the Joint Committee in 1866, had, during the previous decade
and as early as 1856-1859, employed not one but all three of the same
clauses and concepts he later used in Section One. More important
still, Bingham employed these guarantees specifically and in a context
which suggested that free Negroes and mulattoes rather than
corporations and business enterprise unquestionably were the persons'
to which he then referred.

(Graham, Howard Jay, Everyman's Constitution, State Historical Society of
Wisconsin, 1968. See also Graham, Howard Jay, "The Conspiracy Theory of the
Fourteenth Amendment," The Yale Law Journal, Vol. 47: 341, 1938)

Before the Supreme Court determined that corporations were persons and hence
had constitutional rights female citizens had decided that the Fourteenth
Amendment should be interpreted to give them the right to vote. In Minor v.
Happersett the Supreme Court ruled that "women" were not persons for the
purposes of the Fourteenth Amendment.

The moral and legal depravity of the Supreme Court during this period
(though of course they saw their job as securing the property of those of
their class), and the absurdity of treating corporations as persons with
natural and constitutionally recognized rights, is illustrated by the
deterioration of the legal position of the former slaves and their
descendants during this time. A series of Supreme Court judgements (92 U.S.
214 (1875), 92 U.S. 542 (1875), 106 U.S. 629 (1882), and, in particular, the
infamous Civil Rights Cases 109 U.S. 3 1883) of cases where men classified
as Negroes sought the protection of the 14th Amendment narrowed the scope of
that protection. Finally, in the infamous Plessy v. Ferguson 163 U.S. 537
1896 decision, the Supreme Court ruled that a man who was 1 part slave by
ancestry and 7/8 of white/free ancestry could be forced to sit in a
"separate but equal" section of a passenger train. In effect this decision
declared people with non-European ancestors to not be persons with
constitutional rights. The decision would not be overruled by a future
Supreme Court, not even by Brown v. Board of Education of Topeka 347 US 483
1954; it would take Title II of the Civil Rights Act of 1964 to overturn it.

Only justice John M. Harlan dissented in Plessy v. Ferguson. Of the justices
who had ruled that corporations were people in Santa Clara County v.
Southern Pacific, three were still justices and rules that natural persons
of the wrong skin color were not persons in Plessy v. Ferguson. These
infamous three were Stephen J. Field, Samuel Blatchford, and Horace Gray.

Two Supreme Court judges, Hugo Black and William O. Douglas, later rendered
opinions attacking the doctrine of corporate personhood. Quoted here is most
of justice Black's opinion:

But it is contended that the due process clause of the Fourteenth
Amendment prohibits California from determining what terms and
conditions should be imposed upon this Connecticut corporation to
promote the welfare of the people of California.

I do not believe the word "person" in the Fourteenth Amendment includes
corporations. "The doctrine of stare decisis, however appropriate and
even necessary at times, has only a limited application in the field of
constitutional law." This Court has many times changed its
interpretations of the Constitution when the conclusion was reached
that an improper construction had been adopted. Only recently the case
of West Coast Hotel Company v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 108
A.L.R. 1330 [[[1931]]], expressly overruled a previous interpretation
of the Fourteenth Amendment which had long blocked state minimum wage
legislation. When a statute is declared by this Court to be
unconstitutional, the decision until reversed stands as a barrier
against the adoption of similar legislation. A constitutional
interpretation that is wrong should not stand. I believe this Court
should now overrule previous decisions which interpreted the Fourteenth
Amendment to include corporations.

Neither the history nor the language of the Fourteenth Amendment
justifies the belief that corporations are included within its
protection (303 U.S. 77, 86). The historical purpose of the Fourteenth
Amendment was clearly set forth when first considered by this Court in
the Slaughter House Cases, 16 Wall. 36, decided April, 1873-less than
five years after the proclamation of its adoption. Mr. Justice Miller,
speaking for the Court, said:

     Among the first acts of legislation adopted by several of the
     States in the legislative bodies which claimed to be in their
     normal relations with the Federal government, were laws which
     imposed upon the colored race onerous disabilities and burdens,
     and curtailed their rights in the pursuit of life, liberty, and
     property to such an extent that their freedom was of little value,
     while they had lost the protection which they had received from
     their former owners from motives both of interest and humanity.

     These circumstances, whatever of falsehood or misconception may
     have been mingled with their presentation, forced ... the
     conviction that something more was necessary in the way of
     constitutional protection to the unfortunate race who had suffered
     so much. (Congressional leaders) accordingly passed through
     Congress the proposition for the fourteenth amendment, and ...
     declined to treat as restored to their full participation in the
     government of the Union the States which had been in insurrection,
     until they ratified that article by a formal vote of their
     legislative bodies. (16 Wall. 36, at page 70.)

Certainly, when the Fourteenth Amendment was submitted for approval,
the people were not told that the states of the South were to be denied
their normal relationship with the Federal Government unless they
ratified an amendment granting new and revolutionary rights to
corporations. This Court, when the Slaughter House Cases were decided
in 1873, had apparently discovered no such purpose. The records of the
time can be searched in vain for evidence that this amendment was
adopted for the benefit of corporations. It is true (303 U.S. 77, 87)
that in 1882, twelve years after its adoption, and ten years after the
Slaughter House Cases, supra, an argument was made in this Court that a
journal of the joint Congressional Committee which framed the
amendment, secret and undisclosed up to that date, indicated the
committee's desire to protect corporations by the use of the word
"person." Four years later, in 1886, this Court in the case of Santa
Clara County v. Southern Pacific Railroad, 118 U.S. 394, 6 S.Ct. 1132,
decided for the first time that the word "person" in the amendment did
in some instances include corporations. A secret purpose on the part of
the members of the committee, even if such be the fact, however, would
not be sufficient to justify any such construction. The history of the
amendment proves that the people were told that its purpose was to
protect weak and helpless human beings and were not told that it was
intended to remove corporations in any fashion from the control of
state governments. The Fourteenth Amendment followed the freedom of a
race from slavery. Justice Swayne said in the Slaughter Houses Cases,
supra, that: "By "any person" was meant all persons within the
jurisdiction of the State. No distinction is intimated on account of
race or color." Corporations have neither race nor color. He knew the
amendment was intended to protect the life, liberty, and property of
human beings.

The language of the amendment itself does not support the theory that
it was passed for the benefit of corporations.

The first clause of section 1 of the amendment reads: "All persons born
or naturalized in the United States, and subject to the jurisdiction
thereof, are citizens of the United States and of the State wherein
they reside." Certainly a corporation cannot be naturalized and
"persons" here is not broad enough to include "corporations."

The first clause of the second sentence of section 1 reads: "No State
shall make or enforce any law which shall abridge the privileges or
immunities of citizens of the United States." While efforts have been
made to persuade this Court to allow corporations to claim the
protection of his clause, these efforts have not been successful.

The next clause of the second sentence reads: "Nor shall any State
deprive any person of life, liberty, or property, without due process
of law." It has not been decided that this clause prohibits a state
from depriving a corporation of "life." This Court has expressly held
that "the liberty guaranteed by the 14th Amendment against deprivation
without due process of law is the liberty of natural, not artificial
persons." Thus, the words "life" and "liberty" do not apply to
corporations, and of course they could not have been so intended to
apply. However, the decisions of this Court which the majority follow
hold that corporations are included in this clause in so far as the
word "property" is concerned. In other words, this clause is construed
to mean as follows:

     Nor shall any State deprive any human being of life, liberty or
     property without due process of law; nor shall any State deprive
     any corporation of property without due process of law.

The last clause of this second sentence of section 1 reads: "Nor deny
to any person within its jurisdiction the equal protection of the
laws." As used here, "person" has been construed to include
corporations. (303 U.S. 77, 89) Both Congress and the people were
familiar with the meaning of the word "corporation" at the time the
Fourteenth Amendment was submitted and adopted. The judicial inclusion
of the word "corporation" in the Fourteenth Amendment has had a
revolutionary effect on our form of government. The states did not
adopt the amendment with knowledge of its sweeping meaning under its
present construction. No section of the amendment gave notice to the
people that, if adopted, it would subject every state law and municipal
ordinance, affecting corporations, (and all administrative actions
under them) to censorship of the United States courts. No word in all
this amendment gave any hint that its adoption would deprive the states
of their long-recognized power to regulate corporations.

The second section of the amendment informed the people that
representatives would be apportioned among the several states
"according to their respective numbers, counting the whole number of
persons in each State, excluding Indians not taxed." No citizen could
gather the impression here that while the word "persons" in the second
section applied to human beings, the word "persons" in the first
section in some instances applied to corporations. Section 3 of the
amendment said that "no person shall be a Senator or Representative in
Congress," (who "engaged in insurrection"). There was no intimation
here that the word "person" in the first section in some instances
included corporations.

This amendment sought to prevent discrimination by the states against
classes or races. We are aware of this from words spoken in this Court
within five years after its adoption, when the people and the courts
were personally familiar with the historical background of the
amendment. "We doubt very much whether any action of a State not
directed by way of discrimination against (303 U.S. 77, 90) the negroes
as a class, or on account of their race, will ever be held to come
within the purview of this provision." Yet, 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 1 per cent invoked it
in protection of the negro race, and more than 50 per cent. asked that
its benefits be extended to corporations.

If the people of this nation wish to deprive the states of their
sovereign rights to determine what is a fair and just tax upon
corporations doing a purely local business within their own state
boundaries, there is a way provided by the Constitution to accomplish
this purpose. That way does not lie along the course of judicial
amendment to that fundamental charter. An amendment having that purpose
could be submitted by Congress as provided by the Constitution. I do
not believe that the Fourteenth Amendment had that purpose, nor that
the people believed it had that purpose, nor that it should be
construed as having that purpose.

B Hugo Black, dissenting, Connecticut General Life Insurance Company v.
Johnson (303 U.S. 77, 1938)

Justice Black was not alone in his questioning of the legitimacy of
corporate personhood. Justice Douglas, dissenting in Wheeling Steel Corp. v.
Glander 337 U.S. 562 1949, gave an opinion similar to, but shorter than, the
one quoted above, to which Justice Black concurred.
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