Evolution of the Corporation in the United States: Stabilization Policies and Vested Interests
AbstractThe development of transportation and communication infrastructures, improvements in productive technology and the significant increase in the granting of corporate charters in the nineteenth century involved changes in the financial and legal institutions supporting production for large-scale markets. The evolution of the corporation under the circumstances of the widening of markets reflects the role of the legal system in disputes between public and private interests. <br /><br />
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From the earliest characterization of the corporation as an entity created by a contract between the State and its incorporators and bound by its charter to the adoption of general incorporation statutes, the tension between public power and private power persisted. When the doctrine of ultra vires frustrated financial demands for mergers to stabilize prices, the formation of monopolies under general incorporation statutes was confronted by federal antitrust law and state regulation of business. Stabilization in a period of industrial abundance meant antitrust law would be restrained and state regulation would be limited.<br /><br />
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This paper will examine the court decisions deeming the corporation to be a person with regulation of it limited by the due process requirements of the Fourteenth Amendment and creating the Rule of Reason in antitrust law. Such examination involves John R. Commons' stages of capitalism, particularly the age of abundance and the search for stability related to Banker Capitalism. The benefit of public stabilization policies for the vested financial and business interests will be explained.