The Corporation and the Twentieth Century

form could be (or could have been) had purely through contract. Contracts create rights in personam, that is, against specific named individuals. By contrast, the creation of corporate person implies many aspects of rights in rem, that is, rights in perpetuity against an indefinite number of unidentified individuals. So the construction of corporate personhood through private ordering would require some noncontractual elements of law, notably the law of trusts at the very least (Hansmann and Kraakman 2000a).

35. Anderson and Tollison (1983) claim that limited liability provisions were in fact enforceable in English law in the eighteenth century, even though they were little used because limited liability conferred few transaction-cost benefits in a world of closely held companies with face-to-face transactions. Whether the law ought to enforce claims of limited tort liability as against merely contractual liability—that is, limited liability against “involuntary” creditors—is a complex ques- tion; but that is not the same question as whether corporate law, unaided by a monarch or a leg- islature, could or did permit limited tort liability in addition to limited contractual liability.

36. The quote is from Getzler and Macnair (2005, p. 272). See also Anderson and Tollison (1983). Ron Harris (1994) has argued that the Bubble Act itself—actually initiated before the bursting of the South Sea Bubble—was but one manifestation of a general hostility to incorpo- ration during this period.

37. DuBois (1938, p. 217).

38. Handlin and Handlin (1945).

39. Wright (2011, p. 225).

40. Sylla et al. (1987).

41. Wallis (2005). Of course, taxpayers would retain a contingent liability in the event the

venture failed.

42. Maier (1993, p. 54). In this period, state charters did not distinguish among governmental,

nonprofit, or commercial corporations. The language of “public interest” was identical in all.

43. Charles River Bridge v. Warren Bridge, 36 U.S. 420 (1837). On this see Lamoreaux (2014)

and Kutler (1971).

44. See Lamoreaux (2014) and Hilt (2015).

45. Hollander (1964).

46. McCurdy (1978). The tide would turn back during the New Deal, and the Court would

become unwilling to use the so-called Dormant Commerce Clause to restrict state-level protec- tion of local special interests. It is significant that in its fight against state laws requiring all au- tomobiles to be sold through independent local dealerships, Tesla Motors today is reluctant to use the tactics that had been successful for Singer in the nineteenth century, fearing that the precedent set today could go against them (Crane 2016).

47. Freyer (1979).

48. Munn v. Illinois, 94 U.S. 113 (1877).

49. McCraw (1984, p. 57).

50. Wabash, St. Louis & Pacific Railway Company v. Illinois, 118 U.S. 557 (1886).

51. Congress was in fact well on its way to railroad legislation before the Wabash case was

decided (Kolko 1965, p. 33; Poole and Rosenthal 1993, p. 838).

Notes to Chapter 2 559

52. Kolko (1963, p. 6).

53. Lardner (1850, p. 218).

54. Indeed, the railroads were the first great example of federal industrial policy (White 2011,

pp. 17–37).

55. Kolko (1965, chapter 1). For a contemporary account see Adams (1878). “In no other

industry,” wrote Herbert Hovenkamp (1991, p. 1039), “have attempts at both legal and illegal cartelization been so persistent, widespread, systematic, or ultimately doomed to failure.”

56. Hilton (1966, pp. 90–93).

57. Hilton (1966, pp. 88–89); Kolko (1965, pp. 8–10); MacAvoy (1965, chapter 4).

58. Which apparently was true in 1905 (Dewey 1935, p. 8). In his 1901 novel The Octopus,

Frank Norris tells of plows waiting on a siding in fictional Bonneville, California. Although the plows are destined for Bonneville, and are even pointed out to their owner, they cannot be unloaded but must first be shipped to San Francisco and back (Norris 1901, pp. 66–67).

59. Adams (1878, p. 124).