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When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century

Published online by Cambridge University Press:  01 September 2008

ERIC HILT
ERIC HILT*
Affiliation:
Assistant Professor, Department of Economics, Wellesley College, Wellesley, MA 02481, and Faculty Research Fellow, NBER. E-mail: ehilt@wellesley.edu.
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Abstract

This article analyzes the ownership structures and governance institutions of New York's corporations in the 1820s, using a new dataset collected from the records of the state's 1823 capital tax, and from the corporate charters. In contrast to Berle and Means's account of the development of the corporation, the results indicate that many firms were dominated by large shareholders, who were represented on the firms' boards, and held sweeping power to utilize the firms' resources for their own benefit. To address this problem, many firms configured their voting rights in a way that curtailed the power of large investors.

“… we complain of directors considering themselves the company, when they are merely the agents.”1

Type
ARTICLES
Information
The Journal of Economic History , Volume 68 , Issue 3 , September 2008 , pp. 645 - 685
Copyright
Copyright © The Economic History Association 2008

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