"Renaissance Thinking About the Issues of Our Day"
Excerpt from Unequal Protection : The Theft of Human Rights
The first thing to understand is the difference between the natural person and the fictitious person called a corporation. They differ in the purpose for which they are created, in the strength which they possess, and in the restraints under which they act.
Man is the handiwork of God and was placed upon earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy.
There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing about the hereafter. '
A corporation has no rights except those given it by law. It can exercise no power except that conferred upon it by the people through legislation, and the people should be as free to withhold as to give, public interest and not private advantage being the end in view.
-- William Jennings Bryan
address to the Ohio 1912 Constitutional Convention
Part of the American Revolution was about to be lost, a century after it had been fought.
At the time, probably only a very few of the people involved realized that what they were about to witness could be a counterrevolution that would change life in the United States and, ultimately, the world, over the course of the following century.
In 1886, the Supreme Court met in the U.S. Capitol building, in what is now called the Old Senate Chamber. It was May, and while the northeastern states were slowly recovering from the most devastating ice storm of the century just three months earlier, Washington DC was warm and abloom.
In the Supreme Court's chamber, a gold gilt eagle stretched its six-foot wingspan over his head as United States Chief Justice Morris Remick Waite glared down at the attorneys for the Southern Pacific Railroad and the county of Santa Clara, California. Waite was about to pronounce judgment in a case that had been argued over a year earlier at the end of January, 1885.
The Chief Justice had a square head with a wide slash of a mouth over a broom-like shock of bristly graying beard that shot out in every direction. A graduate of Yale University and formerly a lawyer out of Toledo, Ohio, Waite had specialized in defending railroads and large corporations. In 1846 Waite had run as a Whig for Congress from Ohio but lost, finally being elected as a Republican State Representative in 1849. After serving a single term, he'd gone back to litigation on behalf of the biggest and most wealthy clients he could find, this time joining the Geneva Arbitration case suing the British government for helping to outfit the Confederate Army with the warship the Alabama. He and his delegation won an astounding $15.5 million for the United States in 1871, bringing him national attention in what was often referred to as the Alabama Claims case.
In 1874, when Supreme Court Chief Justice Salmon P. Chase died, President Ulysses S. Grant had real trouble selecting a replacement, in part because his administration was embroiled in a railroad bribery scandal. His first two choices withdrew; his third was so patently political it was certain to be rejected by the Senate; three others similarly failed to pass muster. On his seventh try, he nominated attorney Waite.
Waite had never before been a judge in any court, but he passed Senate confirmation, instantly becoming the most powerful judge in the most powerful court in the land. It was a position and power he relished and promoted, even turning down the 1876 Republican nomination for President to stay on the Court and to serve as a member of the Yale [University] Corporation.
Standing before Waite and the other Justices of the Supreme Court this spring day were three attorneys each for the railroad and the county.
The Chief Legal Advisor for the Southern Pacific Railroad was again S. W. Sanderson, a former judge, huge, aristocratic bear of a man, over six feet tall, with neatly combed gray hair and an elegantly trimmed white goatee. For over two decades, Sanderson had become a rich man litigating for the nation's largest railroads: artist Thomas Hill included a portentous and dignified Sanderson in his famous painting The Last Spike about the 1869 meeting of the rail lines of the Union Pacific and Central Pacific Railroads at Promontory Summit, Utah.
The lead lawyer for Santa Clara County, California was Delphin M. Delmas, a Democrat who later went into politics and by 1904 was known as 'the silver-tongued Orator of the West' when he was elected a delegate to the Democratic National Convention from California. While Waite and Sanderson had spent their lives serving the richest men in America, Delmas had always worked on behalf of local California governments and, later, as a criminal defense attorney. For example, he passionately and single-handedly argued before the California legislature for a law to protect the remaining redwood forests.
Fiercely defensive about the 'rights of natural persons,' Delmas was a fastidious, unimposing man, known to wear 'a frock coat, gray-striped trousers, a wing collar and an Ascot tie,' whose 'voice thrummed with emotion' and was nationally known as 'the master dramatist of America's courtrooms..' He had a substantial nose and a broad forehead only slightly covered in its center with a wispy bit of thinning hair. In the courtroom he was a brilliant dramatist, as the nation would learn in 1908 when he successfully defended Harry K. Thaw for murder in what was the most sensational case of the first half of the century, later made into the 1955 movie The Girl in the Red Velvet Swing.
The case about to be decided in the Old Senate Chamber before Justice Waite's Supreme Court was about the way Santa Clara County had been taxing land and rights-of-way of the Southern Pacific Railroad. Claiming the taxation was improper, the railroad had refused for six years to pay taxes levied by Santa Clara County, and the case had ended up before the Supreme Court, with Delmas and Sanderson making the main arguments before the court.
Although the case on its face was a simple tax case, having nothing to do with due process or human rights or corporate personhood, the attorneys for the railroad nonetheless used much of their argument time to press the issue that the railroad was a 'person' and should be entitled to human rights under the Fourteenth Amendment.
The mystery of 1886 and Chief Justice Waite
In the decade leading up to this May day in 1886, the railroads had lost every Supreme Court case that they had brought seeking Fourteenth Amendment rights. I've searched dozens of histories of the time, representing a wide variety of viewpoints and opinions, but only two have made a serious attempt to answer the question of what happened that fateful day - and their theories clash.
No laws were passed by Congress granting that corporations should be treated the same under the constitution as living, breathing human beings, and none have been passed since then.
It was not a concept drawn from older English law.
No court decisions, state or federal, held that corporations were 'persons' instead of 'artificial persons.'
The Supreme Court did not rule, in this case or any case, on the issue of corporate personhood.
In fact, to this day there has been no Supreme Court ruling that could explain why a corporation - with its ability to continue operating forever, a legal agreement that can't be put in jail and doesn't need fresh water to drink or clean air to breathe - should be granted the same Constitutional rights our Founders explicitly fought for, died for, and granted to the very mortal human beings who are citizens of the United States, to protect them against the perils of imprisonment and suppression they'd experienced under a despot king.
But something happened in 1886, even though nobody to this day knows exactly what or why.
That year Sanderson decided to again sue a government agency that was trying to regulate his railroad's activity. This time he went after Santa Clara County, California. His claim, in part, was that because a railroad was a 'person' under the constitution, local governments couldn't 'discriminate' against it by having different laws and taxes in different places. In 1885, the case came before the Supreme Court.
In arguments before the court in January, 1885, Sanderson asserted that 'corporate persons' should be treated the same as 'natural (or human) persons.'
He said, 'I believe that the clause [of the Fourteenth Amendment] in relation to equal protection means the same thing as the plain and simple yet sublime words found in our Declaration of Independence, 'all men are created equal.' Not equal in physical or mental power, not equal in fortune or social position, but equal before the law.'
Sanderson's fellow lawyer for the railroads, George F. Edmunds, added his opinion that the Fourteenth Amendment leveled the field between artificial persons (corporations) and natural persons (humans) by a 'broad and catholic provision for universal security, resting upon citizenship as it regarded political rights, and resting upon humanity as it regarded private rights.'
But that wasn't actually what the case was about - that was just a minor point.
The railroad was being sued by the county for back taxes. The railroad claimed six different defenses. The specifics are not important, because the central concern is whether the court ruled on the Fourteenth Amendment issue. As will be shown below, the Supreme Court's decision clearly says it did not. But to put the railroad's complaint in perspective, consider this:
On property with a $30 million mortgage, the railroad was refusing to pay taxes of about $30,000. (That's like having a $10,000 car and refusing to pay a $10 tax on it ... and taking the case to the Supreme Court.)
One of the railroad's defenses was that when the state assessed the value of the railroad's property, it accidentally included the value of the fences along the right-of-way. The county, not the state, should have assessed the fences. So the railroad withheld all its taxes.
Yes, this is an exceedingly picayune distinction. All the tax was still due to Santa Clara County; the railroad didn't dispute that. But they said the wrong assessor assessed the fences - a tiny fraction of the whole amount - so they refused to pay any of the tax, and they fought it all the way to the U.S. Supreme Court.
And as it happens, the Supreme Court of the United States agreed:
...the entire assessment is a nullity, upon the ground that the state board of equalization included ... property [the fences] which it was without jurisdiction to assess for taxation...
The Court rejected the county's appeal, and that was the end of it. Except for one thing.
One of the railroad's six defenses involved the Fourteenth Amendment. As it happens, since the case was decided based on the fence issue, the railroad didn't need those extra defenses, and none of them was ever decided by the court. But one of them - related to the Fourteenth Amendment - still crept into the written record, even though the Court specifically did not rule on it.
Here's how the matter unfolded. First the railroad's defense.
The treatment that the railroad claimed was unfair
In the Fourteenth Amendment part of their defense, the railroad said:
That the provisions of the constitution and laws of California ... are in violation of the fourteenth amendment of the constitution, in so far as they require the assessment of their property at its full money value, without making deduction, as in the case of railroads [that are only] operated in one county, and of other corporations, and of natural persons, for the value of the mortgages ...(Emphasis added)
The italic portions say, in essence, 'The state is taxing us railroads on the whole value of our property, instead of deducting our mortgage the way people do. That's not fair. Nobody else gets taxed that way.'
The implication, of course, is that the state has no right to decide that corporations get different tax rates than humans. And the railroad was using the former slaves' Equal Protection clause (the Fourteenth Amendment) as its shield.
The legal difference between 'artificial' and 'natural persons'
In the Supreme Court, cases are typically decided a year after arguments are presented, allowing the Justices time to research and prepare their written decisions. So it happened that on January 26th, 1885 (a year before the 1886 decision was handed down), Delphin M. Delmas, the attorney for Santa Clara County, made his case before the Supreme Court in exquisitely persuasive language:
The defendant claims [that the state's taxation policy]'violates that portion of the Fourteenth Amendment which provides that no state shall deny to any person within its jurisdiction the equal protection of the laws. ' In defending the provisions of our Constitution, permit me, in the first place, to reply to this attack made upon it, which, if tenable, would place the organic law of California in a position ridiculous to the extreme. ' If this be so, it is safe to say that there is hardly a State in this Union whose revenue system is not in danger of overthrow. '
The shield behind which [the Southern Pacific Railroad] attacks the Constitution and laws of California is the Fourteenth Amendment. It argues that the amendment guarantees to every person within the jurisdiction of the State the equal protection of the laws; that a corporation is a person; that, therefore, it must receive the same protection as that accorded to all other persons in like circumstances. '
To my mind, the fallacy, if I may be permitted so to term it, of the argument lies in the assumption that corporations are entitled to be governed by the laws that are applicable to natural persons. That, it is said, results from the fact that corporations are [artificial] persons, and that the last clause of the Fourteenth Amendment refers to all persons without distinction.
The defendant has been at pains to show that corporations are persons, and that being such they are entitled to the protection of the Fourteenth Amendment. ' The question is, Does that amendment place corporations on a footing of equality with individuals?
Blackstone says, 'Persons are divided by the law into either natural persons or artificial. Natural persons are such as the God of nature formed us; artificial are such as are created and devised by human laws for the purposes of society and government, which are called corporations or bodies politic.'
This definition suggests at once that it would seem unnecessary to dwell upon, that though a corporation is a person, it is not the same kind of person as a human being, and need not of necessity - nay, in the very nature of things, cannot - enjoy all the rights of such or be governed by the same laws. When the law says, 'Any person being of sound mind and of the age of discretion may make a will,' or 'any person having arrived at the age of majority may marry,' I presume the most ardent advocate of equality of protection would hardly contend that corporations must enjoy the right of testamentary disposition or of contracting matrimony.
The equality between persons spoken of in the Fourteenth Amendment obviously means equality between persons of the same nature or class, and not quality between persons whose very natures are absolutely dissimilar - equality between human beings, if the rights of natural persons are involved; equality between corporations of the same class, if the rights of artificial persons are involved. The whole history of the Fourteenth Amendment demonstrates beyond dispute that its whole scope and object was to establish equality between men - an attainable result - and not to establish equality between natural and artificial beings - an impossible result.
The evolution of the Fourteenth Amendment began with the first Civil Rights Bill, which provided that -
''All persons born in the United States'are hereby declared to be citizens of the United States and such citizens of every race and color'shall have the same right in every state and territory in the United States to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sue, hold, and enjoy real and personal property, and to the full and equal benefit of all laws and proceedings for the security of person and property as is enjoyed by WHITE citizens.'
That this law was intended to establish equality between men in their individual capacity, and had no reference to equality between men and corporations, is too plain for argument. The law took the rights of a white citizen as the standard of measurement, and simply commanded that the rights of all other citizens, whatever their race or color, should be equal to his. '
At this point, Delmas cut right to the heart of the issue. Sanderson had before made his claim of the 'secret committee' of Congress that helped write the fourteenth amendment and meant for it to equalize corporate persons and human persons. Delmas, if his performance before the Supreme Court was consistent with his later well-documented performances in criminal courtrooms, would have been trembling in righteous indignation as he said:
Could Congress have by any possibility meant to confer upon artificial persons the same rights in the respects enumerated as were enjoyed by white citizens? Could it, for instance, have meant that a corporation should have the same right to 'give evidence' as a white citizen? And as to contracts, may not the state, which creates corporations, impose certain limitations upon their right or power to make contracts? ' Under this leveling statute was it intended to abolish the right of a state to impose terms and limits upon its own creatures? '
It is certain that this law has never been so understood or interpreted by any State. And if it is now so to be interpreted, what, I ask, is to become of the vast mass of legislation in all the States by which taxes, licenses, and exactions are demanded from corporations where none whatever is demanded from white citizens? '
'As of the broad meaning and generous scope of the Fourteenth Amendment, I yield my fullest assent. Standing in this presence, I would not attempt to dwarf the proportions of that historic provision by seeking to restrict its beneficent operation to a particular class or race. No. The law is as broad as humanity itself.
Wherever man is found within the confines of this Union, whatever his race, religion, or color, be he Caucasian, African, or Mongolian, be he Christian, infidel, or idolater, be he white, black, or copper-colored, he may take shelter under this great law as under a shield against individual oppression in any form, individual injustice in any shape. It is a protection to all men because they are men, members of the same great family, children of the same omnipotent Creator.
In its comprehensive words I find written by the hand of a nation of sixty millions in the firmament of imperishable law the sentiment uttered more than a hundred years ago by the philosopher of Geneva, and re-echoed in this country by the authors of the Declaration of the Thirteen Colonies, proclaim to the world the equality of man.
And realizing the dream of the poet, the philosopher, and the philanthropist, it may be that this great statute is destined to usher in the dawn of that era when national antipathies and animosities shall be appeased, national boundaries and barriers obliterated, and, under a system of universal justice, man shall be allowed to claim from man, in all climes and in all countries, equal protection, equal security, and equal rights.
What, then, must a State of this Union do in order to bear its share in carrying out the behests of this great commandment, that all men shall be equal - shall receive the equal protection of the laws? The State must see to it that no man, no class, no order of men are granted privileges, immunities, distinctions that are denied upon the same terms to others; that no rank or superiority is accessible to one which is not upon equal conditions within the reach of all; that no badge of invidious discrimination or humiliating inferiority is affixed to any, the humblest member of the commonwealth.
The State must see to it that the avenues leading to happiness are left equally open to all; that whatever pursuit is lawful for one is lawful equally for all; that whatever hopes aspirations, ambitions are licit for the most exalted shall be equally licit for the most humble; that into whatever paths leading to profit, place, or honor one man may venture to tread, all may upon an equal footing venture.
To attain and accomplish all these ends in all the states is, I conceive, in some degree, the object of the Fourteenth Amendment. Its mission was to raise the humble, the down-trodden, and the oppressed to the level of the most exalted upon the broad plane of humanity - to make man the equal of man; but not to make the creature of the State - the bodiless, soulless, and mystic creature called a corporation - the equal of the creature of God. '
Therefore, I venture to repeat that the Fourteenth Amendment does not command equality between human beings and corporations; that the state need not subject corporations to the same laws which govern natural persons; that it may, without infringing the rule of equality, confer upon corporations rights, privileges, and immunities which are not enjoyed by natural persons; that it may, for the same reasons, impose burdens upon a corporation, in the shape of taxation or otherwise, which are not imposed upon natural persons'
I have now done. I am conscious of having occupied no inconsiderable portion of the time allotted by the court for the argument - not longer, I hope, however, than the importance of the questions at issue warrants. In saying this I am not unmindful of the propensity of counsel to magnify their causes. Self-complacency is ever ready to whisper exaggerated notions of the magnitude of our undertakings. Yet I cannot but think that the controversy now debated before your Honors is one of no ordinary importance. It is important to the people of California, not only on account of the very large amount [of tax money] at state, but more, for that it involves the validity of their laws and Constitution. It is important to the many States'menaced by the same attack. It is important to every State of this Union whose sovereign attribute of taxation is here challenged.
A year and five months passed, while the Supreme Court debated the issues in private. And then came the afternoon of May 10, 1886, the fateful moment for the fateful words of the Supreme Court, upon which hung much of the future of the United States and, later, much of the world.
Chief Justice Waite re-writes the Constitution (or does he?)
According to the record left us, here's what seems to have happened.
For reasons that were never recorded, moments before the Supreme Court was to render its decision in the now infamous Santa Clara County v. Southern Pacific Railroad Company case, Chief Justice Waite turned his attention to Delmas and the other attorneys present.
As railroad attorney Sanderson and his two colleagues watched, Waite told Delmas and his two colleagues that: 'The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a state to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are of the opinion that it does.'
He then turned to Justice Harlan who delivered the court's opinion in the case.
In the written record of the case, the court recorder noted: 'The defendant corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.'
This written statement, that corporations were 'persons' rather than 'artificial persons,' with an equal footing under the Bill of Rights as humans, was not a formal ruling of the court, but was reportedly a simple statement by its Chief Justice, recorded by the court recorder.
There was no Supreme Court decision to the effect that corporations are equal to natural persons and not artificial persons.
There were no opinions issued to that effect, and therefore no dissenting opinions on this immensely important constitutional issue.
There was no public debate of the issue among the justices, and no discussion in open court.
The written record, as excerpted above, simply assumed corporate personhood without any explanation why. The only explanation provided was the court recorder's reference to something he says Waite said, which essentially says, 'that's just our opinion' without providing legal argument.
In these two sentences (according to the conventional wisdom), Waite weakened the kind of democratic republic the original authors of the Constitution had envisioned, and set the stage for the future worldwide damage of our environmental, governmental, and cultural commons. The plutocracy that had arisen with the East India Company in 1600, and been fought back by America's Founders, had gained a tool that was to allow them, in the coming decades, to once again gain control of most of North America, and then the world. Ironically, of the 307 Fourteenth Amendment cases brought before the Supreme Court in the years between his proclamation and 1910, only 19 dealt with African Americans: 288 were suits brought by corporations seeking the rights of natural persons.
Supreme Court Justice Hugo Black pointed out, fifty years later, 'I do not believe the word 'person' in the Fourteenth Amendment includes corporations. ' Neither the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protection.'
Sixty years later, Supreme Court Justice William O. Douglas made the same point, writing that, 'There was no history, logic or reason given to support that view [that corporations are legally 'persons'].'
There was no change in legislation, and President Grover Cleveland had not issued a proclamation that corporations should be considered the same as natural persons. The U.S. Constitution does not even contain the word 'corporation,' and has never been amended to contain it, because the Founders wanted corporations to be regulated as close to home as possible, by the states, so they could be kept on a short leash - presumably so nothing like the East India Company would ever again arise to threaten the entrepreneurs of America.
But as a result of this case, for the past hundred-plus years corporate lawyers and politicians have claimed that Chief Justice Waite turned the law on its side and reinvented America's social hierarchy.
'But wait a minute,' many legal scholars have said over the years. Why would Waite say, before arguments about corporations being persons, that the court had already decided the issue - and then allow Delmas and Sanderson to argue the point anyway?
Or, alternately, why would he say such a thing after arguments were already made? By all accounts he was rational and a capable Justice, so it wouldn't make sense that he'd do that.
What really happened?
Several theories have been advanced. But first, let's look at what the Supreme Court decision actually said in the 1886 Santa Clara case.
What the Court actually said about personhood
The Supreme Court generally tries to stay out of a fight. If a case can be thrown out, or decided on simpler grounds, there's no need to complicate things by issuing a new decision. And in this case, the Court's decision specifically mentioned this: (Emphasis added)
These questions [regarding the Constitutional amendment] belong to a class which this court should not decide unless their determination is essential to the disposal of the case …
It continued, saying that the question of 'unless it's essential to the case' depended on how strong the other defenses were:
Whether the present cases require a decision of them depends upon the soundness of another proposition, upon which the court ..., in view of its conclusions upon other issues, did not deem it necessary to pass.
In other words, because of other issues (who should assess the fences), the Court wasn't even going to consider whether to rule on the Fourteenth Amendment corporate personhood issue.
The decision then identifies the fence issue, and concludes that there's nothing left to decide:
. . . If these positions are tenable, there will be no occasion to consider the grave questions of constitutional law upon which the case was determined ....As the judgment can be sustained upon this ground, it is not necessary to consider any other questions raised by the pleadings …
So what actually happened? Why have people said, for all these years, that in 1886 the Waite court in the Santa Clara case decided that corporations were persons under the Fourteenth Amendment?
It turns out that the court said no such thing, and it can't be found in the ruling.
It was in the headnotes!
This apparent contradiction - lawyers and corporations and authors and courts saying for over a hundred years that the Supreme Court had decided corporations are person, when the opinion itself does not say that and in fact explicitly says it didn't rule on constitutional issues - sent me to the law library in the Vermont Supreme Court building. Librarian Paul Donovan found for me Volume 118 of United States Reports: Cases adjudged in The Supreme Court at October Term 1885 and October Term 1886 published in New York in 1886 by Banks & Brothers Publishers, and written by J. C. Bancroft Davis, the Supreme Court's Reporter.
What I found in the book, however, were two pages of text that are missing from the online and official version. They were not part of the decision. They weren't even written by the Supreme Court justices, but were a quick summary-of-the-case commentary by Court Reporter J. C. Bancroft Davis. He wrote commentaries like these for each case, 'adding value' to the published book, from which he earned a royalty.
And there it was, in the notes. The very first sentence of Davis's note reads: 'The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.'
That sentence was followed by three paragraphs of small print that summarized the California tax issues of the case. In fact, the notes by Davis, further down, say, 'The main - and almost only - questions discussed by counsel in the elaborate arguments related to the constitutionality of the taxes. This court, in its opinion passed by these questions (italics added), and decided the cases on the questions whether under the constitution and laws of California, the fences on the line of the railroads should have been valued and assessed, if at all, by the local officers, or by the State Board of Equalization''
In other words, the first sentence of 'The defendant Corporations are persons'' has nothing to do with the case and wasn't the issue that the Supreme Court decided on.
Two paragraphs later, Davis notes, perhaps in an attempt to explain why he'd started his notes with that emphatic statement, that: 'One of the points made and discussed at length in the brief of counsel for defendants in error was that 'Corporations are persons within the meaning of the Fourteenth Amendment to the Constitution of the United States.' Before argument Mr. Chief Justice Waite said: 'The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.''
A half-page later, the notes ended and the actual decision, delivered by Justice Harlan, begins - which, as noted earlier, explicitly says that the Supreme Court is not, in this case, ruling on the constitutional question of corporate personhood under the Fourteenth Amendment or any other Amendment.
I paid my seventy cents for copies of the pages from the fragile and cracking 1886 book, and walked down the street to the office of attorney Jim Ritvo, a friend and wise counselor. I showed him what I'd found and said, 'What does this mean?'
He looked it over and said, 'It's just headnotes.'
'Headnotes? What are headnotes?'
He smiled and leaned back in his chair. 'Lawyers are trained to beware of headnotes because they're not written by judges or justices, but are usually put in by a commentator or by the book's publisher.'
'Are they legal? I mean, are they the law or anything like that?'
'Headnotes don't have the value of the formal decision,' Jim said. 'They're not law. They're just a comment, by somebody who doesn't have the power to make or determine or decide law.'
'In other words, these headnotes by court reporter J.C. Bancroft Davis, which say that Waite said corporations are persons, are meaningless?'
Jim nodded his head. 'Legally, yes. They're meaningless. They're not the decision or a part of the decision.'
'But they contradict what the decision itself says,' I said, probably sounding a bit hysterical.
'In that case,' Jim said, 'you've found one of those mistakes that so often creep into law books.'
'But other cases have been based on the headnotes' commentary in this case.'
'A mistake compounding a mistake,' Jim said. 'But ask a lawyer who knows this kind of law. It's not my area of specialty.'
So I called Deborah Markowitz, Vermont's Secretary of State and one very bright attorney, and described what I'd found. She pointed out that even if the decision had been wrongly cited down through the years, it's now 'part of our law, even if there was a mistake.'
I said that I understood that (it was dawning on me by then), and that I was hoping to have some remedies for that mistake in my book, but just out of curiosity, 'What is the legal status of headnotes?'
She said, 'Headnotes are not precedential,' confirming what Jim Ritvo had told me. They are not the precedent. They are not the law. They're just a comment, with no legal status.
So how did it come that Court Reporter J.C. Bancroft Davis wrote that corporations are persons in his headnotes? And why have a hundred years of American - and, now, worldwide - law been based on them?
Here are the main theories that have been advanced regarding what happened:
The Republican conspiracy theory that empowered FDR
In the early 1930s, the stock market had collapsed and the world was beginning a long and dark slide into the Great Depression and eventually to World War II. Millions were out of work in the United States, and the questions on many people's mind were, 'Why did this happen? Who is responsible?'
The teetering towers of wealth created by American industrialists during the late 1800s and early 1900s were largely thought to have contributed to or caused the stock market crash and ensuing Depression. In less than a hundred years, corporations had gone from being an obscure legal fiction used to establish colleges and trading companies, to standing as the single most powerful force in American politics.
Many working people felt that corporations had seized control of the political agenda, capturing Senators, Congressmen, the Supreme Court, and even recent Presidents in the magnetic force of their great wealth. Proof of this takeover could be found in the Supreme Court decisions of the 1908-1914 era, when the Supreme Court, often citing corporate personhood, struck down minimum wage laws, workmen's compensation laws, utility regulation, and child labor laws - every kind of law that a people might institute to protect its citizenry from abuses.
Unions and union members were the victims of violence from private corporate armies and had been declared 'criminal conspiracies' by both business leaders and politicians. It seemed that corporations had staged a coup, seizing the lives of American workers - the majority of voters - as well as the elected officials who were supposed to represent them. And this was in direct contradiction of the spirit expressed by the founders of the country.
It was in this milieu that an American history book first published in 1927, but largely ignored, suddenly became a hot topic. In The Rise of American Civilization, Columbia history professor Charles Beard and woman's suffrage movement activist Mary Beard suggested that the rise of corporations on the American landscape was the result of a grand conspiracy that reached from the boardrooms of the nation's railroads all the way to the Supreme Court.
They fingered two Republicans: former Senator (and railroad lawyer) Roscoe Conkling; and former Congressman (and railroad lawyer) John A. Bingham. The theory, in short form, was that Conkling, when he was part of the Senate committee that wrote the Fourteenth Amendment back in 1868, had intentionally inserted the word 'person' instead of the correct legal phrase 'natural person' to describe who would get the protections of the Amendment. Bingham similarly worked in the House of Representatives to get the language passed.
Once that time bomb was put into place, Conkling and Bingham left elective office to join in litigating on behalf of the railroads, with the goal of exploding their carefully worded amendment in the face of the Supreme Court.
Thus 'Republican lawmakers,' the Beards said, conspired in advance to give full human constitutional rights to corporate legal fictions. 'By a few words skillfully chosen,' they wrote, 'every act of every state and local government which touched adversely the rights of [corporate] persons and property was made subject to review and liable to annulment by the Supreme Court at Washington.'
Oddly, this conspiracy theory was widely accepted because the supposed conspirators themselves had said, very publicly, 'We did it!'
Earlier, in an 1882 case pitting the railroads against San Mateo County, Conkling testified (as a paid witness for the railroads) that he'd slipped the 'person' language into the amendment to ensure that corporations would one day receive the same civil rights Congress was giving to freed slaves. Bingham made similar assertions when appropriate during his turns as a paid witness for the railroads. As a result of these assertions, through the late years of the 1800s both were the well-off darlings of the railroads, basking in the light of their successful appropriation of human rights for corporations.
When the Beards' book was widely read in the early 1930s, it gave names and faces to the villains who had turned control of America over to what were then called the 'Robber Barons' of industry.
Conkling, Bingham, and Justice Waite were all dead by the time of the Great Depression, and all judged guilty by the American public of pulling off the biggest con in the history of the new republic.
The firestorm of indignation that swept the country helped set the stage for Franklin D. Roosevelt's New Deal, using legislative means and packing the Supreme Court to turn back the corporate takeover - at least in part - and returning to average working citizens some of the rights and benefits they felt had been stolen from them in 1886.
It was widely accepted that Conkling and Bingham had pulled off this trick successfully, purposefully saying 'person' instead of 'natural person' or 'citizen' when they helped write the Fourteenth Amendment, and corporate personhood was a fait accompli. It was done, and couldn't be undone. The Supreme Court, confronted with the reality of the language of the Fourteenth Amendment, had been forced to recognize that corporations were persons under the US Constitution because of the precedent of the 1886 Santa Clara case.
Senator Henry Cabot Lodge apparently ratified the coup on January 8, 1915, when he unwittingly promulgated Conkling's myth in a speech to the Senate about the 1882 San Mateo case cited above.
'In the case of San Mateo County against Southern Pacific Railroad,' Lodge said, 'Mr. Conkling introduced in his arguments excerpts from the Journal [of the Senate committee writing the Fourteenth Amendment], then unprinted, to show that the fourteenth amendment did not apply solely to Negroes, but applied to persons, real and artificial of any kind. It was owing to this, undoubtedly, that the [Supreme] Court extended it to corporations.'
The journal Lodge referenced is the secret journal that never existed.
Nonetheless, it was a done deal, conventional wisdom suggested, and the Supreme Court had been forced to acknowledge the reality of corporate personhood - or, some suggested, had gone along with it because Waite and the other justices were corrupt stooges of the railroads but wielded the majority vote. In either case, it had been the intent of at least some of the legislators (Conkling and Bingham) who drafted the Fourteenth Amendment that corporations should have the constitutional rights of natural persons.
Or maybe not?
The Republican conspiracy theory collapses
In the 1960s, author, attorney, and legal historian Howard Jay Graham came across a previously unexamined treasure in the personal papers of Chief Justice Waite, which had been gathering dust among the J. C. Bancroft Davis Papers on file with the Library of Congress.
In Waite's private correspondences with Davis (his former Recorder of the Court's Decisions), Graham made a startling discovery: the entire thing had been a mistake.
What had vexed legal authorities for nearly eighty years was why Waite would say 'The Court does not wish to hear argument'' when the arguments were already finished. Further, why wasn't there any discussion of this explosive new doctrine of corporate personhood in the Court's ruling or in dissents? It was as if they said it, and then forgot they'd mentioned it. And complicating the situation further, if the Court had arrived at a huge Constitutional decision with sweeping implications, why did the decision say it was based on a technicality about fences?
It just didn't seem to add up.
Looking over Waite's personal papers, Graham found a note from J. C. Bancroft Davis, the Supreme Court's Reporter, to Waite. At one point in the arguments, Waite had apparently told Sanderson to get beyond his arguments that corporations are persons and get to the point of the Santa Clara County tax case. Court reporter Davis, apparently seeking to clarify that, wrote to Waite:
In opening the Court stated that it did not wish to hear argument on the question whether the Fourteenth Amendment applies to such corporations as are parties in these suits. All the Judges were of opinion that it does.
Please let me know whether I correctly caught your words and oblige.
Waite wrote back:
I think your mem. in the California Railroad Tax cases expresses with sufficient accuracy what was said before the argument began. I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision. (Emphasis added.)
Graham notes in an article first published in the Vanderbilt Law Review that Waite explicitly pointed out to court reporter Davis that the constitutional question of corporate personhood was not included in their decision.
According to Graham, Waite was instead saying 'something to the effect of, 'The Court does not wish to hear further argument on whether the Fourteenth Amendment applies to these corporations. That point was elaborately covered in 1882 [in the San Mateo case], and has been re-covered in your briefs. We all presently are clear enough there. Our doubts run rather to the substance [of the case ... the fence issue]. Assume accordingly, as we do, that your clients are persons under the Equal Protection Clause. Take the cases on from there, clarifying the California statutes, the application thereof, and the merits.''
In my opinion, Waite was saying something to the effect of, 'Every judge and lawyer knows that corporations are persons of the artificial sort - corporations have historically been referred to as 'artificial persons,' and so to the extent that the Fourteenth Amendment covers them it does so on a corporation-to-corporation basis. But we didn't rule on the railroad's claim that corporations should have rights equal to human persons under the Fourteenth Amendment, so I leave it up to you if you're going to mention the debates or not.'
Another legal scholar and author, C. Peter Magrath, was going through Waite's papers at the same time as Graham for the biography he published in 1963 titled Morrison R. Waite: Triumph of Character. In his book, he notes the above exchange and then says, 'In other words, to the Reporter fell the decision which enshrined the declaration in the United States Reports. Had Davis left it out, Santa Clara County v. Southern Pac. R. Co. would have been lost to history among thousands of uninteresting tax cases.'
It was all, at the very best, a mistake by a court reporter. There never was a decision on corporate personhood.
'So here at last,' writes Graham, ''now for then,' is that long-delayed birth certificate, the reason this seemingly momentous step never was justified by formal opinion.' He adds, in a wry note for a legal scholar, 'Think, in this instance too, what the United States might have been spared had events taken a slightly different turn.'
Graham's conspiracy theory
In Everyman's Constitution, Howard Jay Graham suggests that if there was an error made on the part of the court Reporter J. C. Bancroft Davis - as the record seems to show was clear - it was probably the result of efforts by Supreme Court Justice Stephen J. Field.
Field was very much an outsider on the court, and despised by Waite. As Graham notes, 'Field had repeatedly embarrassed Waite and the Court by close association with the Southern Pacific proprietors and by zeal and bias in their behalf. He had thought nothing of pressuring Waite for assignment of opinions in various railroad cases, of placing his friends as counsel for the road in upcoming cases, of hinting at times he and they should take, even of passing on to such counsel in the undecided San Mateo case 'certain memoranda which had been handed me by two of the Judges.''
Field had presidential ambitions, and was relying on the railroads to back him. He'd publicly announced on several occasions that if he were elected President he'd enlarge the size of the Supreme Court to 22 so he could pack it with 'able and conservative men.'
Field also thought poorly of Waite, calling him upon his appointment 'His Accidency' and 'that experiment' of Ulysses Grant. Waite didn't have the social graces of Fields, who was often described as a 'popinjay,' and even though he'd been a lawyer for the railroads and others, the record appears to show that Waite did his best to be a truly impartial Chief Justice during his tenure, eventually literally working himself to death.
But Field was a grandstander, who served on the Ninth Circuit Court of Appeals of California at the same time he was a Justice of the Supreme Court of the United States. It was often his 'corporations are a person' decisions in California cases that led them to reappear before the U.S. Supreme Court - no accident on Field's part - including the San Mateo case in 1882 and the Santa Clara County case in 1886.
And when the justices did not decide (contrary to what Court Reporter Davis published months after the decision) that constitutional issues were involved in the Santa Clara County v. Southern Pacific Railroad case, Justice Field was incensed. In his concurring opinion to the Santa Clara case, even though he's agreeing with the finding that fence posts should have a different tax rate than railroad land, he's clearly upset that the issue of corporate personhood was not addressed or answered in the case. He wrote:
[The court had failed in] its duty to decide the important constitution questions involved, and particularly the one which was so fully considered in the Circuit Court [where Field was also the judge], and elaborately argued here, that in the assessment, upon which the taxes claimed were levied, an unlawful and unjust discrimination was made'and to that extent depriving it [the railroad 'person'] of the equal protection of the laws. At the present day nearly all great enterprises are conducted by corporations' [a] vast portion of the wealth 'is in their hands. It is, therefore, of the greatest interest to them whether their property is subject to the same rules of assessment and taxation as like property of natural persons'whether the State'may prescribe rules for the valuation of property for taxation which will vary according as it is held by individuals or by corporations. The question is of transcendent importance, and it will come here and continue to come until it is authoritatively decided in harmony with the great constitutional amendment (Fourteenth) which insures to every person, whatever his position or association, the equal protection of the laws; and that necessarily implies freedom from the imposition of unequal burdens under the same conditions.
In Everyman's Constitution, Graham documents scores of additional attempts by Supreme Court Justice Field to influence or even suborn the legal process to the benefit of his open patrons, the railroad corporations. Field's personal letters, revealed nearly a century after his death, show that his motivations, in addition to wealth and fame, were Presidential aspirations - he wrote about his hopes that in 1880 and 1884 the railroads would finance his rise to the Presidency, which may explain his zeal to please his potential financiers in 1882 in the San Mateo case and the 1886 Santa Clara case.
So, this conspiracy theory goes, after the case was decided - without reference to corporations being persons and without anybody on the court except Field agreeing with Sanderson's railroad arguments that they were persons under the Fourteenth Amendment - Justice Field took it upon himself to make sure the court's record was slightly revised: it wouldn't be published until J.C. Bancroft Davis submitted his manuscript of the Court's proceedings (titled 'United States Reports') to his publisher, Banks & Brothers in New York, in 1887, and not released until Waite's death in 1888 or later.
After all, Waite's comments to reporter Davis were a bit ambiguous - although he was explicit that no constitutional issue had been decided. Nonetheless, Recorder Davis, with his instruction from Waite that Davis, himself, should 'determine whether anything need be said'in the report,' may well have even welcomed the input of Field. And since Field, acting as the judge of the Ninth Circuit in California, had already and repeatedly ruled that corporations were persons under the Fourteenth Amendment, it doesn't take much imagination to guess what Field would have suggested Court Recorder Davis include in the transcript, perhaps even offering the language, curiously matching his own language in previous lower court cases.
Graham and McGrath, two of the preeminent scholars of the twentieth century (Graham on this issue, and McGrath also Waite's biographer), both agree that this is the most likely scenario. At the suggestion of Justice Field, almost certainly unknown to Waite, 'a few sentences' were inserted into Davis's final written record 'to clarify' the decision. It wasn't until a year or more later, when Waite was fatally ill, that the lawyers for the railroads safely announced they had seized control of vital rights in the United States Constitution.
The Hartmann theory
Court recorders had a very different role in the 19th Century than court reporters do today.
It wasn't until 1913 that the Stenograph machine was invented to automate the work of court reporters. Prior to that time, notes were kept in a variety of shorthand forms, both institutionalized and informal. Thus, the memory of the reporter, and his (in the 19th century nearly all were men) understanding of the case before him, was essentially to a clear and informed record being made for posterity.
Being a recorder for the Supreme Court was also not simply a stenographic or recording position. It was a job of high status and high pay. Although the Chief Justice in 1886 earned $10,500 a year, and the Associate Justices earned $10,000 per year, the Recorder of the Court could expect an income over $12,000 per year, between his salary and his royalties from publishing the United States Reports. And the status of the job was substantial, as Magrath notes: 'In those days the reportership was a coveted position, attracting men of public stature who associated as equals with the justices''
Prior to his appointment to the Court, John Chandler Bancroft Davis was a politically active and ambitious man. A Harvard educated attorney, Davis held a number of public service and political appointment jobs ranging from Asst. Secretary of State for two Presidents to Minister of Germany to Court of Claims Judge.
This was no ordinary court reporter, in the sense of today's professionals who do their jobs with clarity and precision but completely uninvolved in the cases or with the parties involved. He was a political animal, well educated and traveled, and well connected to the levers of power in his world, which in the 1880s were principally the railroads.
In 1875, while Minister to Germany, Davis even took the time to visit Karl Marx, transcribing in their conversations one of what was considered one of the era's clearest commentaries about Marx. But Davis also left out part of what Marx said - Davis apparently viewed himself as both reporter and editor. In late 1878, a second reporter tracked down Marx and asked about Davis' omission. Here's an excerpt from that second article, as it appeared in the January 9, 1879 issue of The Chicago Tribune:
During my visit to Dr. Marx, I alluded to the platform given by J.C. Bancroft Davis in his official report of 1877 as the clearest and most concise exposition of socialism that I had seen. He said it was taken from the report of the socialist reunion at Gotha, Germany, in May, 1875. The translation was incorrect, he said, and he [Maarx] volunteered correction, which I append as he dictated...'
Marx then proceeds to give this second reporter an entire Twelfth Clause about state aid and credit for industrial societies, and suggests that Davis had cooperated with Marx in producing a skewed record in recognition of the times and place where the discussion was held.
I own twelve books written by Davis, which give an insight into the status and role he held as Recorder for the Court. In his Mr. Sumner, the Alabama Claims and Their Settlement, published by Douglas Taylor in New York in 1878, my frayed, disintegrating copy is filled with Davis's personal thoughts and insights on a testimony before Congress. The book, first published as an article in The New York Herald by Davis, says such things as, 'Like Mr. Sumner's speech in April 1869, this remarkable document would have shut the door to all settlement, had it been listened to. To a suggestion that we should negotiate for the settlement of our disputed boundary and of the fisheries, it proposed to answer that we would negotiate only on condition that Great Britain would first abandon the whole subject of the proposed negotiation. I well remember Mr. Fish's astonishment when he received this document.'
He summarizes with extensive commentary such as, 'I add to the foregoing narrative that Mr. Motley's friends were (perhaps not unnaturally) indignant at his removal, and joined him in attributing it to Mr. Sumner's course toward the St. Domingo Treaty'' He indirectly references his own time as Envoy to Germany when he writes, 'They apparently forgot that the more brilliant, the more distinguished, and the more attractive in social life an envoy is, the more dangerous he may be to his country when he breaks loose from his instructions and communicates socially to the world and officially...'
As you can see, Davis was fond of flowery writing, and thought well of himself.
And then I realized what I was reading. It related to the famous 1871 Geneva Arbitration Case, led by attorney Morrison Remick Waite, which won over $15 million for the US Government from England for their help of the Confederate army during the Civil War. Going to another book by Davis that I'd purchased while researching this book, published in 1903 and titled A Chapter in Diplomatic History, I discovered that Davis had been quite active in the Geneva Arbitration Case.
During the negotiations with England, he writes, 'I answered that I was very sorry at the position of things, but that the difficulty was not of our making; that I would carry his message to Lord Tenterden, but could hold out little hope that he would adopt the suggestion; and that, in my opinion, the Arbitrators should take up the indirect claims and pass upon them while this motion was pending.
'That evening I saw Lord Tenterden,' Davis continues, 'and told him what had taken place between me and Mr. Adams and the Brazilian arbitrator' About midnight he came to me to say that he had told Sir Roundell Palmer what had passed between him and me, and that Sir Roundell had made a minute of some points which would have to be borne in mind, should the Arbitrators do as suggested. He was not at liberty to communicate these points to me officially; but, if I chose to write them down from his dictation, he would state them. I wrote them down from his dictation, and, early the next morning, convened a meeting of the counsel and laid the whole matter before them.'
That Davis was playing more than just the role of a stenographer in this case was indisputable. And the case?
It was, again, the Alabama Claims or Geneva Settlement case, which had made Morrison Remick Waite's career. Checking the University of Virginia's law school, I found the following notes on the Geneva Arbitration case: 'The United States' case was argued by former Assistant Secretary of State Bancroft Davis, along with lawyers Caleb Cushing, William M. Evarts, and Morrison R. Waite, under the direction of Secretary of State Hamilton Fish and Secretary of Treasury George Boutwell' (italics added).
Waite and Davis had worked side-by-side on one of the most famous cases in American history (at the time), both in Geneva, Switzerland, and before the United States Congress. And all this a full 15 years before Davis was to put his pen to his understanding of the Santa Clara County v. Southern Pacific Railroad case when it came before the Supreme Court which Waite was now Chief Justice of and for which Davis was the head Recorder.
Searching for traces of Davis on the Internet, I found an autograph for sale - it was a letter by President Ulysses Grant, signed by Grant, and also signed by Grant's Acting Secretary of State - J. C. Bancroft Davis.
And looking through the records of the City of Newburgh, New York, where Davis once lived, the Orange County New York Directory of 1878-9 lists the following note about one of that city's distinguished citizens:
'The Newburgh and New York Railroad Company was organized December 14th, 1864, the road was completed September 1st, 1869. J.C. Bancroft Davis was elected President of the Board of Directors'[on] August 1st, 1868.'
Given his distinguished background, and his having worked with James Taylor and Jay Cooke of the railroads in late 1860s, it's hard to imagine that Davis would insert 'corporations are persons' into the record of a Supreme Court proceeding without understanding full well its importance and consequences, even if he was encouraged to do so by Justice Field.
So here is the fourth and final possibility: John Chandler Bancroft Davis undertook to rewrite that part of the United States Constitution himself, for reasons that to this day are still unknown, but probably not inconsistent with his own personal political worldview and affiliation with the railroads, and that he did it with the encouragement of Fields.
Waite was so ill that he missed the entire session of 1885 Court, was very weak and sick in 1886 and 1887, and died in March of 1888: in all probability he never knew what Davis had written in his name.
Regardless how it happened - whether it was a simple error by Davis, or Davis was bending to pressure from Fields, or if Davis simply took it upon himself to use the voice of the Supreme Court to modify the United States Constitution - the fact is that an amendment to the Constitution which had been written by and passed in Congress, voted on and ratified by the states, and signed into law by the president, was radically altered in1886 from the intent of its post-Civil War authors.
And the hand on the pen that did it was that of J. C. Bancroft Davis.
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