Message-ID: <199604082005.NAA15721@sonic.Sonic.NET> Date: Mon, 8 Apr 1996 13:05:00 -0700 From: Mark Harrington <mailto:markh@SONIC.NET> Subject: Fixing Corporations To: Multiple recipients of list DEVEL-L <mailto:DEVEL-L@AMERICAN.EDU>
I hope this is of interest, I realize it is a bit "off-list" but thought it dove-tailed appropriately with recent posts regarding Monsanto's "sustainable development" policies.Cheers, Mark
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> Subject: rachel-weekly: Rachel #488: Fixing Corporations, Part 1
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> =======================Electronic Edition========================
> . .
> . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #488 .
> . ---April 4, 1996--- .
> . HEADLINES: .
> . FIXING CORPORATIONS, PART 1 .
> . ========== .
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>
> FIXING CORPORATIONS--PART 1: LEGACY OF THE FOUNDING PARENTS
>
> by Jane Anne Morris[1]
>
> The people who founded this nation didn't fight a war so that
> they could have a couple of "citizen representatives" sitting in
> on meetings of the British East India Company. They carried out
> a revolution in order to be free of oppression: corporate,
> governmental, or otherwise; and to replace it with democratic
> self-government.
>
> It seems that things have slipped a little. Today, as soon as
> any group or movement puts together a coherent critique of the
> role of corporations, tongues start clucking. Politicians,
> mainstream reformers, degreed experts, and media commentators
> fall all over each other in an effort to dismiss such clear,
> practical, focused thinking as mere "conspiracy theories" cooked
> up by unbalanced "crackpots."
>
> They forget that 17th century political philosopher Thomas Hobbes
> called corporations "worms in the body politic."[2] Adam Smith
> condemned them for their effect in curtailing "natural
> liberty."[3] And most of the so-called "founding fathers" of this
> nation shared an opinion of corporations that today would earn
> them the label "lunatic fringe" from the same mainstream
> tongue-cluckers.[4]
>
> Those who won independence from England hated corporations as
> much as they hated the King. For it was through state-chartered
> corporations that the British government carried out some of its
> most pernicious oppression. Governments extending their power by
> means of corporations, and corporations themselves taking on the
> powers of government, are not new problems.
>
> Because they were well aware of the track record of
> government-chartered corporations, and because they guarded their
> freedom so jealously, citizens of the newly independent United
> States of America chartered only a handful of corporations in the
> several decades after independence.[5]
>
> On those few occasions when states did charter a corporation,
> "the powers which the corporation might exercise in carrying out
> its purposes were sparingly conferred and strictly construed."[6]
>
> But inevitably, the generation that had fought against injustices
> perpetrated by corporations like the British East India Company
> and the Hudson Bay Company was followed by others whose memories
> of corporate oppression were less vivid. Still, the warnings
> against corporations continued.
>
> On the eve of his becoming Chief Justice of Wisconsin's Supreme
> Court, Edward G. Ryan said ominously in 1873,
>
> "[There] is looming up a new and dark power... the enterprises of
> the country are aggregating vast corporate combinations of
> unexampled capital, boldly marching, not for economical conquests
> only, but for political power.... The question will arise and
> arise in your day, though perhaps not fully in mine, which shall
> rule --wealth or man [sic]; which shall lead --money or
> intellect; who shall fill public stations --educated and
> patriotic freemen, or the feudal serfs of corporate
> capital...."[7]
>
> The feudal serfs of corporate capital made a lot of headway
> during the next fifteen years. But in 1888 President Grover
> Cleveland echoed Justice Ryan's sentiments:
>
> "Corporations, which should be the carefully restrained creatures
> of the law and the servants of the people, are fast becoming the
> people's masters."[8]
>
> Well into the twentieth century corporate excesses were
> acknowledged and condemned by some pretty prominent persons.
> Louis D. Brandeis, a multimillionaire (from his own law practice
> and astute investments) by the time he became a Supreme Court
> Justice in 1916, referred to corporations as "the Frankenstein
> monster which States have created by their corporation laws."[9]
>
> Far from being "radical," harsh criticism of corporations has a
> long, respectable, and mainstream political lineage. Now that
> you know you're in good company, let's dream a little. Imagine
> what grassroots environmental activism would be like if
> corporations were restructured to be responsive to the people and
> to serve the public interest.
>
> What if...
>
> ** corporations were required to have a clear purpose, to be
> fulfilled but not exceeded.[10]
>
> ** corporations' licenses to do business were revocable by the
> state legislature if they exceeded or did not fulfill their
> chartered purpose(s).[11]
>
> ** the state legislature could revoke a corporation's charter for
> a particular reason, or for no reason at all.[12]
>
> ** the act of incorporation did not relieve corporate management
> or stockholders/owners of responsibility or liability for
> corporate acts.[13]
>
> ** as a matter of course, corporation officers, directors, or
> agents could be held criminally liable for violating the law.[14]
>
> ** state (not federal) courts heard cases where corporations or
> their agents were accused of breaking the law or harming the
> public.[15]
>
> ** directors of the corporation were required to come from among
> stockholders.[16]
>
> ** corporations had to have their headquarters and meetings in
> the state where their principal place of business was located.[17]
>
> ** corporation charters were granted for a specific period of
> time, like 20 or 30 years (instead of being granted "in
> perpetuity," as is now the practice.)[18]
>
> ** corporations were prohibited from owning stock in other
> corporations in order to prevent them from extending their power
> inappropriately.[19]
>
> ** corporations' real estate holdings were limited to what was
> necessary to carry out their specific purpose(s).[20]
>
> ** corporations were prohibited from making any political
> contributions, direct or indirect.[21]
>
> ** corporations were prohibited from making charitable or civic
> donations outside of their specific purposes.[22]
>
> ** state legislatures set the rates that corporations could
> charge for their products or services.[23]
>
> ** all corporation records and documents were open to the
> legislature or the state attorney general.[24]
>
> ALL OF THESE PROVISIONS WERE ONCE LAW IN THE STATE OF WISCONSIN.
> And similar ones in most other states.
>
> There is no reason why grassroots activists can not insist that
> we once again impose similar laws to direct corporate actions.
> But because education and media corporations are silent about the
> power of the sovereign people literally to dictate terms to
> corporations, we instead spend our time fighting in regulatory
> agencies and courts where the odds are against us from the get-go.
>
> Much activism today concerns itself with struggling to induce
> government agencies to enforce their own laws, or exerting
> superhuman efforts to close gaping loopholes in existing laws.
> When we're not doing that, we're perhaps trying to add an
> obviously toxic chemical to a list of prohibited substances. Or
> maybe we're trying to coax a corporation that profited greatly
> from poisoning our air and water to pay for even a small portion
> of the cleanup costs.
>
> One reason that we the sovereign people don't know our own
> strength is that too often we think of corporations and business
> as more or less synonymous. But corporations are not simply big
> businesses. You don't need a corporate charter to sell apples on
> the corner, or to operate a widget factory. Individuals, sole
> proprietorships, partnerships and other business forms can do
> business without obtaining a corporate charter from a state.
> Corporations are a special case.
>
> A corporate charter granted by a state gives special privileges
> not possessed by other businesses. And in return, the state
> retains the power to alter, amend, or repeal said charter. The
> legislature of a state thus possesses not only the power to grant
> charters but to revoke them. This power is laid out in what is
> called the "reserved power clause," and is explicitly spelled out
> in the laws or constitution of almost every state. Corporations
> are all set up by states to serve a "public need" and act "in the
> public interest." This is a long-established doctrine.
>
> The corporation, insofar as it is a legal entity, is a creation
> of the state... It is presumed to be incorporated for the benefit
> of the public.[25]
>
> Corporations are instrumentalities of the state, not independent
> entities. How have we strayed so far from this notion?
>
> Next week, we will outline some of the legal doctrines that were
> built up as obstacles to the sovereign people's ability to direct
> corporate actions. Then we will explore the potential of
> specific provisions --similar to the ones enumerated above --that
> we can add to state constitutions, corporation laws, or corporate
> charters themselves, to reclaim our historic right to make
> corporations serve the public interest.
>
> ===============
> [1] Jane Anne Morris is a corporate anthropologist working on
> corporation issues as part of Democracy Unlimited of Wisconsin
> Cooperative. [Join them: 29 E. Wilson, Ste. 201, Madison WI
> 53703; phone (608) 255-6629; fax (608) 255-6643]. She is author
> of NOT IN MY BACK YARD: THE HANDBOOK (San Diego: Silvercat
> Publications [(888) 299-9119], 1994).
>
> [2] Thomas Hobbes (1588-1679), English philosopher.
>
> [3] In his WEALTH OF NATIONS (1776), Adam Smith was concerned
> that people's liberty was being encroached upon through the use
> of corporations to restrain competition and establish monopolies.
>
> [4] A discussion of this and related issues can be found in
> TAKING CARE OF BUSINESS: CITIZENSHIP AND THE CHARTER OF
> INCORPORATION, a pamphlet by Richard L. Grossman and Frank T.
> Adams, 1993, available for $4 from Charter, Ink., P.O. Box 806,
> Cambridge, MA 02140.
>
> [5] See note 3.
>
> [6] Justice Louis Brandeis in Liggett v. Lee, 1933, 288 U.S. 517.
>
> [7] Alfons J. Beitzinger, EDWARD G. RYAN: LION OF THE LAW
> (Madison: The State Historical Society of Wisconsin, 1960), pgs.
> 115-116. From an 1873 address to the graduating class of the
> University of Wisconsin Law School.
>
> [8] Grover Cleveland, "Fourth Annual Message to Congress, 3 Dec.
> 1888," in MESSAGES AND PAPERS OF THE PRESIDENTS Vol. 8, pgs.
> 773-4 (James D. Richardson, editor, 1989)
>
> [9] On personal finances, see Melvin I. Urofsky, LOUIS D.
> BRANDEIS AND THE PROGRESSIVE TRADITION (Boston: Little, Brown &
> Co., 1981), pg. 9; Brandeis, Liggett v. Lee, 288 U.S. 517 (1933).
>
> [10] Wis. G.L. 1864, Ch. 166, Sec. 7; Wis. R.S. 1878, Sec. 1767.
>
> [11] See the "reserved power" clause.
>
> [12] Wis. A.G. Op. (1913), Vol. 2 p. 169.
>
> [13] Act of Aug. 21, 1848, Wis. Laws, p. 148 (Gen. Incorp. for
> Plank Roads).
>
> [14] State ex rel. Kropf v. Gilbert, 251 N.W. 478 (1934).
>
> [15] Dudley O. McGovney, "A Supreme Court Fiction: Corporations
> in the Diverse Citizenship Jurisdiction of the Federal Courts,"
> HARVARD LAW REVIEW Vol. 16 (May 1943), pgs. 853-898, 1090-1124,
> 1225-1260.
>
> [16] Wis. R.S. 1878, Sec. 1776; Wis. Stat. 1931, 180.13.
>
> [17] Wis. G.L. 1864, Ch. 166, Sec. 9.
>
> [18] Wis. G.L. 1864, Ch. 166, Secs. 4,33.
>
> [19] Wis. R.S. 1878, Sec. 1775.
>
> [20] Wis. R.S. 1849, Ch. 54 Sec. 7; Wis. G.L. 1864, Ch. 166,
> Secs. 6, 15.
>
> [21] And it was a felony to do so. Wis. State 1953, Ch.
> 346.12-346.15.
>
> [22] For example, Wis. G.L. 1864, Ch. 166, Sec. 7. See also the
> author's, "America Needs a Law Prohibiting Corporate Donations,"
> in SYNTHESIS/REGENERATION 9: A MAGAZINE OF GREEN SOCIAL THOUGHT,
> Winter 1996.
>
> [23] Stone v. State of Wisc., 94 U.S. 181 (1876).
>
> [24] Wis. R.S. 1849, Ch. 54, Sec. 22.
>
> [25] U.S. Supreme Court Justice Henry Billings Brown, in Hale v.
> Henkel (1905) 201 U.S. 43, 74-5.
>
> Descriptor terms: reforming corporations; history; controlling
> corporations;
>
>
>