Dubofsky, Melvyn, 1934-||Schneider, Robert W.
M.A. (Master of Arts)
Department of History
Corporations--Illinois; Corporation law--Illinois
This paper discusses the development of manufacturing corporations during the early statehood period in Illinois. The period extends from 1821 when the first charter was granted to 1870 and the ratification of Illinois’ third constitution. The 1870 constitution is the document under which the state is operating today. The main difficulty in researching this problem was the very secretive manner in which the General Assembly operated during the nineteenth century. Most real debate took place behind closed doors and was not recorded. All that remains are the laws as finally passed and signed by the governor. Because of this it was necessary to rely heavily on contemporary newspapers for answers to questions of why the General Assembly took the actions that they took. The first part of the paper is concerned with special acts of incorporation. During the early period a special law was the only way that one could obtain a corporation charter. Since each special law included some description of the corporation, it was possible to trace the development of manufacturing corporations with respect to several factors. An examination was made of liability of stockholders, duration of charter, types of products, and size of corporation. In each of the categories the expected long range trend was found. The early corporations operated under unlimited liability, were given charters that lasted a specific number of years, manufactured many different types of products, and were quite small. The later corporations had limited liability, perpetual succession, manufactured more specialized products, and were much larger. Nevertheless within any given year corporations with vastly different powers and privileges were found. Because of the lack of evidence it was impossible to prove the cause of these inconsistencies, but I offered an opinion that the powers and privileges that one received was related in some way to the amount of money one was willing to spend on lobbyists. The paper also examines the concept of rhythms of growth. In this case the long term versus short term study was also necessary in order to find any meaningful patterns. The assumption was made that there is some relation between general economic growth and the number of manufacturing concerns incorporated by the state. I found that until 1865 there was a slow but steady growth in Illinois. After 1865 this growth accelerated considerably. Eighty per cent of the charters issued between 1821 and 1872 occurred after 1865. The second part of the paper discusses the development of general laws of incorporation. The importance of general laws are obvious when one considers the large number of corporations that are chartered in a growing industrial state. In addition to being more efficient, general laws give equal treatment to all. Illinois was one of the first states in the United States to have a general law for Incorporation of manufacturing companies. It was also one of the first states to have a constitutional provision making special acts of incorporation illegal. However, for a number of reasons these laws were not enforced, and the first general law that was effectively used came after the constitution which was ratified in 1870. As was the case with special laws, the conclusions reached were more a matter of opinion than conclusively proved. Yet there was some evidence that the system of special laws of incorporation was too profitable to too many people, and could not be easily changed.
Ahlquist, John Otto, "Illinois manufacturing corporations, 1821-1870" (1966). Graduate Research Theses & Dissertations. 3460.
iv, 56 pages
Northern Illinois University
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