120 years of American law based on an error

9 Oct

We speak with Thom Hartmann, author of “Unequal Protection” about how a 19th-century court reporter changed the course of corporate law.

Q: Thom, at a screening of [This Land is Your Land] in New York you told the audience afterwards that while researching your book, you discovered that corporations were given the rights of persons due to an error in an 1886 Supreme Court case. Your discovery of this “error” really interested us.

TH: After the fact, I discovered that it wasn’t a unique discovery. That Howard J. Graham had discovered it some years earlier and I called Richard Grossman all excited. And he said, “Oh you hadn’t read Everyman’s Constitution?”

Q: Don’t you hate when that happens?

TH: Yes, and it took me the better part of a year to find a copy of the book. As far as I know there’s not a single copy of it for sale in the United States, it’s been out of print since the ’70s, or the ’60s.

Q: And nobody else talked about this?

TH: I gave a talk at the Vermont Law School and there were a bunch of professors and students. They will tell you that conventional wisdom is that in the Santa Clara vs. Southern Pacific Railroad case in 1886, the Supreme Court ruled that corporations were persons. That historic separation where we have human beings who have “rights”, and then over here we have all these various forms of associations that have “privileges”: corporations, churches, governments, unions, guilds. That the court for whatever reason, uniquely plucked corporations out of this pile and dropped it over here with human beings. Now churches still don’t have rights, unions still don’t have rights, but corporations got rights in 1886 in that case. That’s what they’ll tell you. And I’ve read several books that said this, books that were concerned about the rise of corporate power in America and around the world. So I just took it to be true. And when I got to that point in a book I was writing about the history of democracy in America, it seemed that was a real turning point. I thought, well, just for the sake of historical accuracy, I ought to read the case.

I walked down to the Supreme Court building here in Montpelier and asked the law librarian if I could see the 1886 Santa Clara County vs. The Southern Pacific Railroad case. I started right at the very beginning of the case itself and I read it, and it was all about fence posts and how they were taxed and who taxes them, and at the very end it says, “The majority of opinion rules that the state assessor should have assessed the value of the fence post, not the county assessor,” and therefore they’re ruling in favor of the railroads. I went back to the librarian and I said, “I’m not finding what I’m looking for here, maybe I got the wrong case. I thought this was the case where corporations became persons.” And he said, “Well did you read the head note?” So I flip back to the beginning and the first sentence says, “Corporations are persons under the 14th amendment and are entitled to equal protection under the law.” I’m thinking, whoa! Where did this come from? This is not in the ruling!

I made a copy of it and walked into the office of Jim Ritvo, who is a friend and an attorney here in Montpelier, and I said, “Jim, I gotta show you something. It’s the 1886 Santa Clara vs. Southern Pacific Railroad case.” He said, “Oh, the one where corporations became persons?” I laid it out on his desk and I said, “Now look at this, and now look at this last sentence here in the ruling, and now look at this in the head note.” And he goes, “Holy cow.” Well, actually, a little more expletive than that, and I said, “What is it?” He said, “It’s a mistake.” I said, “A mistake?!” And he said, “Yeah, it’s a mistake.” I said, “But 120 years of American law is built on this mistake, corporations have risen up and taken over our political parties because of this mistake, the World Trade Organization exists because of this mistake?” I came home and I called our Secretary of State, who’s an attorney and understands Constitutional law, Deborah Markowitz. One of the nice things about living in a small state is you can call the Attorney General’s office and she’ll answer the phone. I said, “I’d like to talk to you about the 1886 Santa Clara Country vs. Southern Pacific Railroad case.” She said, “Oh, the one where corporations became persons?” I told her what I found and she was, like, “Whoa!”

Now at this point, I’m thinking, I’ve got the key to the kingdom here, right? This is the lynchpin. We can pull this out and the whole edifice will collapse. All I have to do is tell people. I asked her, “Does this mean that there is no such thing as corporate personhood, and that the clerk lied about it and all these following cases have been based on a lie in the head note?” And she said, “No, unfortunately. The court has ruled many times citing that case, and because the court can quote Donald Duck, it doesn’t matter what they quote, it doesn’t matter what they cite, it matters what they rule and once the court ruled later on that corporations were persons because they said they had ruled in 1886 that corporations were persons, then it became the law”. So anyhow, we see the situation now, where as a result of this mistaken interpretation, or this lie by the court reporter, a number of changes have happened to the landscape of democracy in America.

Q: It’s really remarkable that nobody has used this or paid attention to it to any degree.

TH: I know. I would say on the one hand, perhaps nobody’s had an incentive to. People tend to trust the legal system, even people in law school–attorneys. You know, “This has been conventional wisdom, this is the way it’s always been taught. This is what we’ve always believed, it must be so”. It just turns out that it was not.

I was curious– who was this law clerk, this court reporter who wrote the head note? It turns out his name was John Chandler Bancroft Davis. J.C. Bancroft Davis. He was the Assistant Secretary of State in the Grant administration, an administration that was so corrupted by the railroad bribery scandals that Grant himself wanted to run for a third term and his own Republican party would not re-nominate him. And Davis had been the president of the board of directors of the Newburg and New York Railroad and he was the son of the former governor of Massachusetts-a man of wealth and breeding, as they would say back in those days. In the John Chandler Davis collection in the National Archives, you can find a hand written note from Davis, the court reporter, to Waite, the Chief Justice, saying, “Did I correctly understand you to say that corporations are persons?” And Waite replied that both sides agreed that corporations were persons, but that they were artificial persons. And that therefore they shouldn’t have protection under the 14th amendment. And apparently to kind of move things along, Waite had said, “We all agree corporations are persons, that’s not what this case is about.” You know, because sure, they can own property, they are artificial persons. But anyhow, Davis sends this note to Waite saying, “Did I catch you correctly saying that corporations are persons?” And Waite replies in his own hand on his letterhead, “I leave it to you whether you want to mention it or not, in as much as we chose not to rule on a Constitutional issue in the case.” In other words, the Chief Justice says to the court reporter, “We did not rule that corporations have rights under the 14th Amendment.” And Davis ignored that and wrote it into the head note.

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