The Historical Spectator.

A Great Jealousy of Corporations

A summary of the activity of the Illinois legislature in 1833 mentions that bills for incorporating companies always face stiff oppo­sition. The economic theories on which that oppo­sition is based are so foreign to our modern thinking that it would be diffi­cult to find any legislator of either party who would sub­scribe to them today. If, dear reader, you hear someone spouting that America has always been the land of free-market capi­talism, you may now smugly assert that you know better.

Several companies have been incor­porated at this session, for manu­fac­turing purposes. These bills were much opposed, and long discussed. There has always been in this state, a great jealousy of corpora­tions. It has been well con­tended, that by the aggre­gation of a large capital in the hands of a few indi­viduals, they acquire advan­tages over the individual trader, which enables them to oppress him, and control the market. This doctrine may be carried too far; for some purposes, corpora­tions are necessary and bene­ficial, and they should be confined to such cases. There is also, in this country, a great repug­nance against allowing such companies to accumu­late large possessions in real estate; or giving them any powers under which they might carry on any of the operations properly belonging to a bank, especially lending money, or issuing paper for general circula­tion, as in lieu of money. The charters granted at this session have been strictly guarded in these, and other respects. They are limited as to the amount of real estate which they may hold, and prohibited from issuing paper for general circula­tion; they may trade only to the amount of the capital stock actually paid in, and for any debts con­tracted above that amount, the individual stock­holders are personally liable.

“Notes on Illinois,” in the Western Monthly Magazine, May, 1833.