Part 1: Legacy Of The Founding Parents
The people who founded this nation didn't fight a war so that
they could have a couple of "citizen representatives" sitting in
on meetings of the British East India Company. They carried
out a revolution in order to be free of oppression: corporate,
governmental, or otherwise; and to replace it with
It seems that things have slipped a little. Today, as soon as
any group or movement puts together a coherent critique of
the role of corporations, tongues start clucking. Politicians,
mainstream reformers, degreed experts, and media
commentators fall all over each other in an effort to dismiss
such clear, practical, focused thinking as mere "conspiracy
theories" cooked up by unbalanced "crackpots."
They forget that 17th century political philosopher Thomas
Hobbes called corporations "worms in the body politic."
Adam Smith condemned them for their effect in curtailing
"natural liberty." And most of the so-called "founding
fathers" of this nation shared an opinion of corporations that
today would earn them the label "lunatic fringe" from the
same mainstream tongue-cluckers.
Those who won independence from England hated
corporations as much as they hated the King. For it was
through state-chartered corporations that the British
government carried out some of its most pernicious
oppression. Governments extending their power by means of
corporations, and corporations themselves taking on the
powers of government, are not new problems.
Because they were well aware of the track record of
government- chartered corporations, and because they
guarded their freedom so jealously, citizens of the newly
independent United States of America chartered only a
handful of corporations in the several decades after
On those few occasions when states did charter a
corporation, "the powers which the corporation might
exercise in carrying out its purposes were sparingly
conferred and strictly construed."
But inevitably, the generation that had fought against
injustices perpetrated by corporations like the British East
India Company and the Hudson Bay Company was followed
by others whose memories of corporate oppression were
less vivid. Still, the warnings against corporations continued.
On the eve of his becoming Chief Justice of Wisconsin's
Supreme Court, Edward G. Ryan said ominously in 1873,
"[There] is looming up a new and dark power... the
enterprises of the country are aggregating vast corporate
combinations of unexampled capital, boldly marching, not for
economical conquests only, but for political power.... The
question will arise and arise in your day, though perhaps not
fully in mine, which shall rule --wealth or man [sic]; which
shall lead --money or intellect; who shall fill public stations
--educated and patriotic freemen, or the feudal serfs of
The feudal serfs of corporate capital made a lot of headway
during the next fifteen years. But in 1888 President Grover
Cleveland echoed Justice Ryan's sentiments:
"Corporations, which should be the carefully restrained
creatures of the law and the servants of the people, are fast
becoming the people's masters."
Well into the twentieth century corporate excesses were
acknowledged and condemned by some pretty prominent
persons. Louis D. Brandeis, a multimillionaire (from his own
law practice and astute investments) by the time he became
a Supreme Court Justice in 1916, referred to corporations as
"the Frankenstein monster which States have created by
their corporation laws."
Far from being "radical," harsh criticism of corporations has
a long, respectable, and mainstream political lineage. Now
that you know you're in good company, let's dream a little.
Imagine what grassroots
environmental activism would be like if corporations were
restructured to be responsive to the people and to serve the
ALL OF THESE PROVISIONS WERE ONCE LAW IN
THE STATE OF WISCONSIN. And similar ones were in effect in most
- corporations were required to have a clear purpose, to be
fulfilled but not exceeded.
- corporations' licenses to do business were revocable by
the state legislature if they exceeded or did not fulfill their
chartered purpose (s).
- the state legislature could revoke a corporation's charter
for a particular reason, or for no reason at all.
- the act of incorporation did not relieve corporate
management or stockholders/owners of responsibility or
liability for corporate acts. 
- as a matter of course, corporation officers, directors, or
agents could be held criminally liable for violating the
- state (not federal) courts heard cases where corporations
or their agents were accused of breaking the law or harming
- directors of the corporation were required to come from
- corporations had to have their headquarters and meetings
in the state where their principal place of business was
- corporation charters were granted for a specific period of
time, like 20 or 30 years (instead of being granted "in
perpetuity," as is now the practice.)
- corporations were prohibited from owning stock in other
corporations in order to prevent them from extending their
power inappropriately. 
- corporations' real estate holdings were limited to what
was necessary to carry out their specific purpose(s).
- corporations were prohibited from making any political
contributions, direct or indirect.
- corporations were prohibited from making charitable or
civic donations outside of their specific purposes.
- state legislatures set the rates that corporations could
charge for their products or services.
- all corporation records and documents were open to the
legislature or the state attorney general.
There is no reason why grassroots activists can not insist
that we once again impose similar laws to direct corporate
actions. But because education and media corporations are
silent about the power of the sovereign people literally to
dictate terms to corporations, we instead spend our time
fighting in regulatory agencies and courts where the odds are
against us from the get-go.
Much activism today concerns itself with struggling to induce
government agencies to enforce their own laws, or exerting
superhuman efforts to close gaping loopholes in existing
laws. When we're not doing that, we're perhaps trying to add
an obviously toxic chemical to a list of prohibited substances.
Or maybe we're trying to coax a corporation that profited
greatly from poisoning our air and water to pay for even a
small portion of the cleanup costs.
One reason that we the sovereign people don't know our
own strength is that too often we think of corporations and
business as more or less synonymous. But corporations are
not simply big businesses. You don't need a corporate
charter to sell apples on the corner, or to operate a widget
factory. Individuals, sole proprietorships, partnerships and
other business forms can do business without obtaining a
corporate charter from a state. Corporations are a special
A corporate charter granted by a state gives special
privileges not possessed by other businesses. And in return,
the state retains the power to alter, amend, or repeal said
charter. The legislature of a state thus possesses not only the
power to grant charters but to revoke them. This power is
laid out in what is called the "reserved power clause," and is
explicitly spelled out in the laws or constitution of almost
every state. Corporations are all set up by states to serve a
"public need" and act "in the public interest." This is a long-
The corporation, insofar as it is a legal entity, is a creation of
the state... It is presumed to be incorporated for the benefit
of the public.
Corporations are instrumentalities of the state, not
independent entities. How have we strayed so far from this
Next week, we will outline some of the legal doctrines that
were built up as obstacles to the sovereign people's ability to
direct corporate actions. Then we will explore the potential
of specific provisions -- similar to the ones enumerated
above --that we can add to state constitutions, corporation
laws, or corporate charters themselves, to reclaim our
historic right to make corporations serve the public interest.
by Jane Anne Morris
 Jane Anne Morris is a corporate anthropologist working
on corporation issues as part of Democracy Unlimited of
Wisconsin Cooperative. [Join them: 29 E. Wilson, Ste. 201,
Madison WI 53703; phone (608) 255-6629; fax (608)
255-6643]. She is author of NOT IN MY BACK YARD:
THE HANDBOOK (San Diego: Silvercat Publications
[(888) 299- 9119], 1994).
 Thomas Hobbes (1588-1679), English philosopher.
 In his WEALTH OF NATIONS (1776), Adam Smith
was concerned that people's liberty was being encroached
upon through the use of corporations to restrain competition
and establish monopolies.
 A discussion of this and related issues can be found in
TAKING CARE OF BUSINESS: CITIZENSHIP AND
THE CHARTER OF INCORPORATION, a pamphlet by
Richard L. Grossman and Frank T. Adams, 1993, available
for $4 from Charter, Ink., P.O. Box 806, Cambridge, MA
 See note 3.
 Justice Louis Brandeis in Liggett v. Lee, 1933, 288 U.S.
 Alfons J. Beitzinger, EDWARD G. RYAN: LION OF
THE LAW (Madison: The State Historical Society of
Wisconsin, 1960), pgs. 115-116. From an 1873 address to the
graduating class of the University of Wisconsin Law School.
 Grover Cleveland, "Fourth Annual Message to Congress,
3 Dec. 1888," in MESSAGES AND PAPERS OF THE
PRESIDENTS Vol. 8, pgs. 773-4 (James D. Richardson,
 On personal finances, see Melvin I. Urofsky, LOUIS D.
BRANDEIS AND THE PROGRESSIVE TRADITION
(Boston: Little, Brown & Co., 1981), pg. 9; Brandeis, Liggett
v. Lee, 288 U.S. 517 (1933).
 Wis. G.L. 1864, Ch. 166, Sec. 7; Wis. R.S. 1878, Sec.
 See the "reserved power" clause.
 Wis. A.G. Op. (1913), Vol. 2 p. 169.
 Act of Aug. 21, 1848, Wis. Laws, p. 148 (Gen. Incorp.
for Plank Roads).
 State ex rel. Kropf v. Gilbert, 251 N.W. 478 (1934).
 Dudley O. McGovney, "A Supreme Court Fiction:
Corporations in the Diverse Citizenship Jurisdiction of the
Federal Courts," HARVARD LAW REVIEW Vol. 16 (May
1943), pgs. 853-898, 1090-1124, 1225-1260.
 Wis. R.S. 1878, Sec. 1776; Wis. Stat. 1931, 180.13.
 Wis. G.L. 1864, Ch. 166, Sec. 9.
 Wis. G.L. 1864, Ch. 166, Secs. 4,33.
 Wis. R.S. 1878, Sec. 1775.
 Wis. R.S. 1849, Ch. 54 Sec. 7; Wis. G.L. 1864, Ch.
166, Secs. 6, 15.
 And it was a felony to do so. Wis. State 1953, Ch.
 For example, Wis. G.L. 1864, Ch. 166, Sec. 7. See also
the author's, "America Needs a Law Prohibiting Corporate
Donations," in SYNTHESIS/REGENERATION 9: A
MAGAZINE OF GREEN SOCIAL THOUGHT, Winter
 Stone v. State of Wisc., 94 U.S. 181 (1876).
 Wis. R.S. 1849, Ch. 54, Sec. 22.
 U.S. Supreme Court Justice Henry Billings Brown, in
Hale v. Henkel (1905) 201 U.S. 43, 74-5.
Part II: Corporations for the Seventh Generation
In view of the historic provisions noted above that used to govern
corporations, their representatives must be
pleased that at least in this country, boycotts and divestment
strategies are considered radical, and "dialoging" is the
preferred mode of interaction. The rest of this paper is an
exploration of ways to restructure today's corporation so that
citizen activist efforts to eliminate corporate wrongs can amount
to more than just a few hard-won needles in a corporate haystack.
As we saw last week, corporations are a special form of business
entity given a state charter and certain privileges in exchange
for being subject to the will of the sovereign people as
expressed through state legislatures.
Over the last half a dozen generations, corporation
representatives have managed to set up barriers to insulate the
corporation from citizen influence. Several trends have made it
more difficult to direct the corporation towards serving the
public interest it was created to serve. Among them:
cover of the U.S. Constitution's "commerce" clause as
interpreted by the U.S. Supreme Court, federal regulatory
agencies have usurped many of the powers once exercised regularly
by state legislatures. Today's corporations are ideally suited
to wage battles on the regulatory front, because it is so
difficult for citizens' groups to match their resources. (In
many ways, the late 19th century ascendance of the "commerce"
argument is an eerie foreshadowing of today's NAFTA and GATT
- Through a series of leveraged expansions of the "diversity
clause" of the U.S. Constitution (allowing "citizens" from two
different states to be heard in federal court instead of the
presumably more biased courts of either's home state), the U.S.
Supreme Court "deemed" corporations "citizens" and thus gave them
nearly unrestricted access to federal courts. This saved
corporations the trouble of defending themselves in the courts of
the state where they actually cause the harms.
- In 1886 the
U.S. Supreme Court decreed that corporations are "persons" under
the 14th amendment, thus granting them protection under the Bill
of Rights. Such guarantees of free speech, due process, and
equal protection under the law were long considered to apply to
human persons. This ruling gave corporations unprecedented
"rights" to question almost any law applied to them, and
frustrated the ability of the people to direct corporate action
in service of the public good.
- Stockholders, who used to really run corporations, have seen
their power dramatically reduced. Today the powerful corporate
manager class is insulated from stockholder influence by a
variety of stock voting tricks and governance structures that
they themselves set up. They are protected from most liability
by state corporation codes and lax laws and enforcement. And
they write their own paychecks.
In order to have a world that we would not be ashamed to bequeath
to the Seventh Generation, we must make two major changes in the
governance of the corporation. First, we must remove obstacles
to citizen control of the corporation. Second, we must reinstate
provisions such as those enumerated above (in Part I) once governing
corporations, and add others that are particularly suited to our
"Model" provisions can become part of 1) state constitutions, 2)
state corporation codes and/or 3) the actual corporate
"charters," which are the documents states give to corporations
to formally bring them into existence. A program to institute
such changes would include areas such as the following.
This is just a sampling of some of the options open to us.
Priorities might include working to revoke corporate charters, to
end the privileges granted corporations under the judicial
"corporate personhood" doctrine, and to prohibit political
contributions. Most of the obstacles we face are in the arena of
judge-made law, but historic legislation and constitutional
provisions offer us a solid body of favorable precedents. Much
debate lies ahead. But it is high time we shifted the
controversy from whether we control corporations to how we do so.
- People's power over corporations.
- We the people can demand that state legislatures, the most
direct expression of the people's will, use their "reserved
power" to revoke the charters of errant domestic corporations.
(A domestic corporation is one chartered in that state.) The
people of Delaware and a few other states with "easy" chartering
policies would have a more exciting time than the rest of us
here, since the overwhelming majority of offending (U.S)
multinational corporations are chartered there.
- In other states, citizens can demand that their attorneys
general (or whatever agent is specified in their state laws and
constitutions) revoke the permission of errant foreign
corporations to do business in their state. (A foreign
corporation is one chartered in another state in the U.S. Those
chartered in other countries are called alien corporations.) Such
actions have already been initiated against Weyerhaeuser, WMX
(formerly Waste Management, Inc.), and CSX corporations. (See
- Annul "rights" given corporations by judge-made law. We can
work for state constitutional amendments that underline
corporations' status as subservient to the people and the
legislatures, and assert that corporations are not legal
constitutional "persons" and thus are not protected by the Bill
of Rights of the U.S. Constitution.
- Re-open corporate affairs to legislative scrutiny. At one
time, all corporate records and affairs were open to legislatures
or other designated state officials so that state governments, on
behalf of the people, could monitor and evaluate corporate
actions. We can reinstate such provisions in state corporation
- Reinstate stockholder/owner control over corporate management
and policy. For decades, concerned stockholders have attempted
to curb some of the worst excesses of corporate policies, only to
find their efforts thwarted by corporate management. We can
modify states' corporation codes to return a modicum of control
of corporations to their putative owners, the stockholders. Some
basic provisions might include a) a one stockholder, one vote
policy, b) prohibitions against issuing non-voting stock, c)
removal of obstacles to stockholders' access to information,
initiation of policies, and removal of unsatisfactory corporate
- Give state courts clear authority to hear all corporation
cases. State courts, more sensitive to local needs and conditions
and more accessible to citizens, once heard most corporation
cases. During the last years of the nineteenth century, numerous
unsuccessful attempts were made at the federal level to reinstate
this practice. Both federal legislation and federal
constitutional amendments were proposed. Either one would do the
- Reinstate historic limits on corporations. State corporation
codes and/or corporate charters can be amended to include
provisions such as the following:
- Require corporations to
have a specific purpose, with a penalty of charter revocation if
said purpose is either not fulfilled or is exceeded. This would
include a prohibition on the kind of "look how ethical we are!"
advertising that currently dissipates stockholders' dollars and
discombobulates public perceptions.
- Require a percentage of
stockholders to live within the chartering state.
corporations from owning stock in other corporations.
corporate charters for only a specific term of existence, perhaps
ten or twenty years.
- Limit real estate holdings to that
necessary for corporate purposes.
- Prohibit any and all
political donations by corporations.
- Prohibit all civic,
charitable, or educational donations not specifically provided
for in the corporate purpose.
- Impose strict liability for all
corporate officers and/or stockholders.
- Initiate new limits on corporate activities. We can add
provisions (to state codes, charters, and/or constitutions) that:
- Forbid corporations from doing business under pseudonyms or
- Require corporations to use earth-friendly materials in all
stages of operations, and to list all ingredients.
- Prohibit corporations from buying up patents for the purpose
of preventing others from exploiting them.
- Require every corporate document to be signed by a human being
who thereby takes responsibility for the veracity of statements
and the soundness of judgments therein.
- Require a corporation to pay for periodic health, safety, and
environmental audits by independent experts selected by workers
and affected communities.
- Require that in the event of bankruptcy, corporate management
pay and perks be withheld until all other debts and creditors are
paid, starting with workers and small businesses.
- Require 95% recycling.
- Prohibit corporations from seeking or accepting "incentive"
packages from any government entity.
- Establish a maximum ratio (like 1:5) between compensation of
the lowest-paid worker and the highest-paid executive.
- Establish a process similar to "recall" procedures for elected
officials, so that citizens can initiate revocation referendums
for corporate charters (in the case of domestic corporations) and
for certificates of authority (that allow foreign corporations to
do business in one's state).
- Require uniformity of health benefits within each corporation
for all corporation employees (from CEOs to wage-laborers).
The sky's the limit. What are we waiting for?
 Jane Anne Morris is a corporate anthropologist working on
corporation issues as part of Democracy Unlimited of Wisconsin
Cooperative. [Join them: 29 E. Wilson, Ste. 201, Madison WI
53703; phone (608) 255-6629; fax (608) 255-6643]. She is author
of NOT IN MY BACK YARD: THE HANDBOOK (San Diego: Silvercat
Publications [(888) 299-9119], 1994).
 U.S. Const. Art. I, Sec. 8.
 An excellent discussion of the difficulties of relying on a
regulatory strategy to actually regulate corporate action can be
found in Christopher D. Stone, WHERE THE LAW ENDS: THE SOCIAL
CONTROL OF CORPORATE BEHAVIOR (NY: Harper & Row, 1975.]
 U.S. Const. Art. III Sec. 2.
 See note 15 in REHW #488.
 Santa Clara County v. Southern Pac. R.R., 118 U.S. 394.
 A discussion of the historical process of taking power from
stockholders and giving it to a largely independent corporate
management can be found in Adolf A. Berle, Jr., "Historical
Inheritance of American Corporations," in Edmond N. Cahn, editor,
SOCIAL MEANING OF LEGAL CONCEPTS (New York: NYU School of Law,
1950), pgs. 189-218.
 CORPORATE CRIME REPORTER, Vol. 9 No. 25 (June 28, 1995).
RACHEL'S ENVIRONMENT & HEALTH WEEKLY #488 & #489
---April 11, 1996---
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: email@example.com