The Rise of the American Business Corporation

Critical Events in the Ethics of U.S. Corporation History

“…In addition, many of the individual state governments realized the economic and social advantages of railroads and made their incorporation statutes very amenable to railroad expansion. As a consequence, railroad corporations proliferated in the U.S. during the mid-1800s, interrupted only by the American Civil War in the 1860s (Bakan, 2004;Bernheim, 1937;Tedlow, 1991). In the last 70 years of the 1800s, railroad track mileage in the nation expanded from 40 miles in 1830 to 30,000 miles in 1860 to around 200,000 by 1900.…”

“…With appropriate permission from the emperor, a collegium could be formed by three or more persons. In many ways similar to the modern corporation, the collegium could adopt bylaws, hold property, sue and be sued, and survive changes in ownership (Tedlow, 1991). Collegia did not have formal charters filed with the Roman government, and shareholders were not issued stock certificates, although their names were recorded by the collegia.…”

“…In attempts to establish a profitable community in Jamestown in North America, for example, the managers of the Virginia Company convinced the British sovereign of the value of a unique plan: many imprisoned beggars and petty criminals of England were forcibly shipped to Jamestown with the promise that they would have their freedom with the completion of 7 years of service to the company. Most of these forced Americans died, and the stockholders in the Virginia Company enjoyed virtually no profit from their investment (Craven, 1997;Tedlow, 1991).…”

“…Accordingly, guilds frequently controlled prices and quantities of output of members. As a result, the proliferation of guilds frequently resulted in improved product quality and higher prices (Micklethwait and Wooldridge, 2003;Tedlow, 1991).…”

“…This continued corporate existence is evident in three types of organizations: religious communities, professional guilds, and municipalities. Each of these categories of communities were attracted to the corporate form for simple reasons: appointment or election of a hierarchy of qualified individuals accountable to members, continuous existence beyond the life spans of individual members, collective ownership of assets and property, and the power of a collective voice of the membership in representing the interests of the group to those outside the group (Micklethwait and Wooldridge, 2003;Owens, 1951;Tedlow, 1991). With professional guilds, much of the focus of the organization was assurance of a degree of quality control associated with the goods and services offered by guild members.…”