Journal of Economic History


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


a1 Assistant Professor, Department of Economics, Wellesley College, Wellesley, MA 02481, and Faculty Research Fellow, NBER. E-mail:


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.”


I would like to acknowledge the helpful comments of three anonymous referees, the editor (Jeremy Atack), Leah Boustan, Stanley Engerman, Carola Frydman, Zorina Khan, Naomi Lamoreaux, Petra Moser, Antoinette Schoar, John Wallis, and seminar participants at UCLA, Yale, Harvard, Columbia, UNC Chapel Hill, MIT Sloan, Oxford, Duke, Stanford, the NBER Summer Institute, the Economic History Association annual meetings, and the Cliometrics Society conference. Elira Kuka and Jaree Pinthong provided superb research assistance.