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Mark C. Jepson
Theories of capitalist classformation presuppose that the historical triumph of the business corporation over the individual proprietorship in major industries derived from either the increasing capital requirements, or the increasing organizational complexity, of industrial development. Similarly, economic historians of the Pennsylvania anthracite mine industry argue that the corporate imperative originated in the economic requirements of mining and transporting coal. In this study, I challenge both the theoretical and empirical forms of the argument which reduce the rise of the corporation and the decline of the individual enterprise to industrial requirements. Instead, I employ an historical comparison of the anthracite industry’s three commercial districts to show how classformation, whether by corporations or by individual proprietors, resulted from political class struggles. Specifically, IJind that the strugglesfor corporate charterprivileges in the state legislature determined the pattern of class formation in anthracite mining. The finding
Political Power and Social Theory Political Power and Social Theory, Volume 16,342 Copyright 0 2003 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 019%8719/doi:10.1016/S0198-8719(03)16001-2
MARK C. JEPSON
is significant, first, for underscoring the extra-economic origins of class formation, and, secondly, for revealing the historically contingent quality of class formation.
Unless you becomemore watchful in your States and check the spirit of the monopoliesand their thirst to exclusiveprivileges,you will, in the end, find that the most importantpowers of Governmenthave been given or bartered away and the control of your dearest interests have been passedinto the hands of these corporations. - 1837 FarewellAddress President AndrewJackson
Originating and Central Questions
Not long after the House of Morgan consolidated the anthracite coal mining industry into a single "community of interest," a federal commission appointed to study the anthracite coal strike of 1902 pronounced, "there is probably no commodity entering into human consumption which possesses so much the character of a natural monopoly as the anthracite coal of Pennsylvania" (quoted in Aurand, 1971, p. 15). Like all such statements made after the fact, questions about historical possibilities or alternate outcomes are pre-empted by the very fact itself. Few have questioned the inevitability of monopoly in anthracite mining precisely because of the prevailing belief that individual proprietorship perished from natural causes (i.e. market forces). From a general theoretical perspective, this study investigates the question of how, and to what extent, politics influences capitalist class formation. More specifically, how can individual proprietors, whether in trade, industry, or agriculture, resist corporate development through political struggle? The central empirical question is, therefore, not why corporate concentration had to happen in anthracite mining, but why, for almost five decades, individual enterprise reigned supreme as the business model of the anthracite coal industry in the largest and most productive district of the industry, at a time, no less, when the other districts were undergoing rapid corporate development and concentration? How did political struggle determine these divergent paths of development and forms of class relations.'?
One Industry, Two Patterns of Class Formation
While rapidly expanding urban coal markets ensured the development of Pennsylvania's anthracite coal fields in the early nineteenth century, they did not
Entrepreneurs or Corporations
1 I J
I I I
.,S r s
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Anthracite Mining Fields and Commercial Districts. Source: Shegda (1952, p. 11).
determine how, or by whom, the fields would be developed. From the first "official" shipment in 1820,1 the anthracite coal trade was geographically divided into the Schuylkill, Lehigh, and Wyoming districts. The map above (Fig. 1) depicts both the anthracite trade districts and the anthracite mining regions they encompassed. The three commercial districts developed close together in time and place, and, to a great extent, employed the same methods to produce the same product for the same markets. For the present analysis, the most important difference between the districts was summed up in 1833 by Schuylkill journalist George Taylor (1833, p. 3): "The Schuylkill Mines are worked by individuals in their individual capacity [whereas the] Lehigh and Lackawanna [Wyoming] mines are owned and worked exclusively by incorporated companies." In other words, the Schuylkill district
MARK C. JEPSON
was developed by individual proprietors, and both the Lehigh and the Wyoming districts were developed by corporate monopolies. The coal trade of both the Lehigh and the Wyoming districts operated under a single, all-inclusive, management. The separate branches of the trade were, from the very beginning, integrated into a single corporate structure, and carried on by separate corporate "departments," whose various expenditures were totaled and then subtracted from coal sales receipts at the end of each season. "The Lehigh Coal and Navigation Company," submits a prominent canal historian (Patton, 1987, p. 15), was "the first vertically integrated company of its type in America .... The Delaware and Hudson Company, like the Lehigh, was a multi-functional enterprise which mined anthracite, transported coal by means of waterway and gravity railroad, and marketed the coal in New York City." The Lehigh Coal and Navigation Company's (hereafter LCNC) monopoly of the Lehigh coal trade lasted for 17 years (1821-1837), while the Delaware and Hudson Coal Company's (hereafter DHCC) monopoly of the Wyoming coal trade lasted for 21 years (1829-1850). Even after the two monopolies were broken, most of the coal in these districts continued to be produced by the top producers. During this time, the average output of each of these highly-capitalized corporate firms exceeded 100,000 tons per year, or ten times the average individual output of Schuylkill's one-hundred operators. While a handful of corporate competitors gradually entered the Lehigh and Wyoming districts after 1840, individuals were completely locked out of the Lehigh trade, and never produced more than 5% of the output of the Wyoming anthracite trade. 2 In contrast, the Schuylkill Navigation Company's [hereafter SNC] distinguishing characteristic was its narrow field of enterprise. Of the three corporations, the SNC was the consummate canal company, confined to one of the four branches comprising the Schuylkill coal trade. While the SNC also enjoyed a monopoly over the Schuylkill coal traffic in the earliest decades of the anthracite coal trade, the other three branches - the land business, the shipping business, and the mining business - were developed by different segments of individual proprietors, which were themselves internally segmented. By the end of the 1830s, roughly two dozen local and absentee interests controlled the land business, 258 independent shippers, or "boatmen," hauling coal in 600 vessels, conducted the shipping business (Cushing, 1836, p. 32; Jones, 1908, pp. 131,135), and no less than 100 individual proprietors, comprised of master colliers, marginal petty producers, "fly-by-night" outfits, and speculators, managed the mining business (Anthracite Commission, 1834, pp. 270, 272; Taylor, 1855, pp. 362, 393). 3 In all, between 350 and 400 separate going concerns engaged in the Schuylkill coal trade in an average season prior to the Civil War, and probably more in good years. Despite what one authority has called the "grossest inefficiencies" and "distressing economic practices,"
and access to capital. pp. and therefore have different and even conflicting class interests? In this analysis. Theoretical and Empirical Rationale In the remainder of this paper. Indeed. and "unlike independents elsewhere. p. not in market forces. 1961. The emphasis on politics defies the market bias held by economic historians of U. or rather between the capitalist class and the working class. 6-7) words. they may have specificpolitical economic . class segments are differentiated by their relatively distinct locations in the process of production and appropriation of surplus value. 58. as a class. I support two propositions that challenge the orthodoxies of two otherwise rival theoretical traditions. and responsibilities can result in unequal economic opportunities in the form of market access and control. and that property rights are not uniformly distributed among capitalists. Following Roy (1997. supplying roughly two-thirds of the nation's anthracite between 1825 and 1865. those relationships are embodied in the rights.Entrepreneurs or Corporations 7 this diverse class of entrepreneurs managed to produce vast amounts of coal. The first proposition is that the historical arrangement described above originated in "political" struggle. they stood at its [the anthracite industry's] productive center" (Yearly. The second convention that I challenge holds that class struggle must take place between classes. With individual proprietors at the "productive center. and cultivate distinct and hostile class interests and identities that lead to the formation of class segments.S. 64). The important point to make is that while hundreds of individual proprietors came and went very quickly. Variations in property rights. property. 271). or between segments of the same class can be conceived as class struggle. pp. Are class interests and class struggle rooted in the dichotomous condition of having and not having property. In Zeitlin's (1980. and responsibilities enforced by the state. such disparities in property within the capitalist class can foster perceptions of unfair competition. entitlements." the Schuylkill District dominated the anthracite coal trade for forty years. entitlements. or can different segments of capitalists have different relationships to the ownership of the means of production. I define class in terms of property relations: "If class is defined as peoples' historically constructed relationship to the means of production. I show that property relations can vary among property owners. individual proprietors. industry in general. and of the anthracite industry in specific. As A consequence." The relevant question here is whether or not conflict within classes. proved to be quite resilient. that is.
8 M A R K C." The economies of scale and increasing productivity yielded by technology endowed the corporation with a "powerful competitive advantage" over less-efficient "small traditional enterprise" (Ibid. the defenders of individual proprietorship conceived of these property distinctions in stark moral terms that assailed the emerging set of corporate property rights as unfair privileges. unless they were chartered by the state government. It was no accident. have the inherent potential for developing a specific variant of intraclass consciousness and common action in relation to other segments of the class. individuals presumably become incapable of satisfying the necessary requirements . The political task of legalizing property relations . therefore. While Schuylkill's individual proprietors and their corporate rivals were. 8).. since unlike individuals. necessarily implicates the state in this struggle. and continued to flourish in those sectors and industries characterized by new and advancing technology and expanding markets. In the final analysis. corporations could not exercise property rights. to persuade state legislators to recognize and routinize their property relations as law.. grew. therefore. p. capitalists. As I shall show.was especially crucial to the corporation. "first appeared. Class segments. as owners of the means of production. it is conspicuously absent in the study of business class formation. they were also distinct segments of capitalists. that the individual producers' political campaign against the corporation was focused on defeating charter petitions at the State House in Harrisburg. the class struggle was a political struggle between individuals and corporations over the legalization of their distinct property relations. J E P S O N requirements and concrete interest in contradiction to those of other segments of the class . therefore. Alfred Chandler (1977. says Chandler (1977. p. The corporation.in the early anthracite trade were class struggles. 5 As industrial capitalism develops. Efficiency Theory and Class Formation While the concept of politics holds a central place in the study of working-class formation. I propose that the intra-class political struggles . 244).. These are not mere quantitative distinctions. with distinct conceptions of property.of endowing them with the force of law . Most notable among business historians and economists.between individual entrepreneurs and corporations .. 6. let alone exist. 1990) argues that the large corporation replaced individual proprietorship as the dominant mode of business ownership in the United States because corporate enterprise is more efficient than individual enterprise. in violation of individual property rights. The practical goal of politics was. 4 To conceive of the intra-class struggle between individual producers and corporations as a political struggle.
All three possessed extensive anthracite deposits that could be mined by quarry." In fact. Anthracite historians (e. A comparison of the Schuylkill. The steep inclinations and frequent undulations of the strata and eons of erosion. Another version of efficiency theory attributes the differences in class formation in anthracite mining to differing transportation costs. slope. and removed by simple "cottage industry" procedures (i. individual or corporate) originated independently of either the character of the coal strata. the geological and technological constraints on class formation were not as rigid as such conventional wisdom suggests. social historian Anthony Wallace (1987. 1990.e. essential for the commercial . Miller & Sharpless.. was geology . or the method of mining. 1977. But the abundance of easily accessible surface deposits in all three districts kept anthracite mining within the reach of individual capital in the first four decades of the trade (i. as a result.. Aurand. Roberts.g. 1901. t974.. Yearly.7 More specifically. and better managed corporations. Palladino. and Wyoming districts reveals that the patterns of ownership (i. "The Schuylkill region seems to have been marked by nature for individual enterprise. As long ago as 1836. opportunities for low cost extraction abounded in all three regions prior to 1840. and must necessarily succumb to better equipped. and of mining in general. 1914. 1820-1860). studies of anthracite development. opened the mines to capital-poor individuals.e. according to this view. Binder.. 1974. had produced many outcrops where coal could be mined cheaply and on a small scale. by and large. variations in the pattern of mine ownership are typically explained by variations in the cost of mining and shipping coal. the development of heavily capitalized corporations was. Schaefer. when the Schuylkill coal trade was still in its infancy. In time. p. most accounts of the early anthracite trade attribute the success of individual proprietorship in Schuylkill to its unique geology. Jones. underscore the significance of capital and technology. Despite certain geological variations. the technical requirements of pursuing the coal veins deep into the earth would limit the access of capital-poor producers. 1961) have uniformly embraced this outlook by attributing Schuylkill's atypical pattern of mine ownership to the district's favorable geology.Entrepreneurs or Corporations 9 of large scale production and distribution. Lehigh. Given the need for capital-intensive improvements in transportation. and. undercutting). or shaft. better financed. In one form or another this naturalistic view of anthracite mine development has stood unchallenged for over a century and a half. an article in the North American Review stated.e. which required only crude and inexpensive technology to mine. Accordingly. Most recently.."8 Consistent with econornistic explanations for the rise of the corporation. 6 Empirical studies of anthracite development have. embraced this "efficiency" model of corporate development. drift. 1985. 70) proclaimed: "The reason for the presence of so many small collieries [in Schuylkill].
after the success of the Erie Canal. demonstrates that corporations would and could finance anthracite canals without additional state concessions. Just the opposite was true.10 MARK C. The subsequent construction of the Morris Canal. Corporate interest in both the Delaware and North Branch canals was strong before and after the state decided to develop them as "public works "'13 The lesson of these public and private works is that the development of both mines and canals was possible without special corporate privileges or monopoly protection. JEPSON development of these remote mining districts. considered necessary to induce capitalists to invest their capital on the risky canal projects. 12 The development of the Pennsylvania State canal system between 1826 and 1834. Contrary to the conventional wisdom. and much more extensiveprivilegeswould no doubt have been conferredby the state. the state did not undertake these projects for the want or timidity of private capital. Moreover. Capital. and the Union Canal by companies confined to the canal business by their charters. the Delaware and Raritan Canal. or to own or operate boats on its canal. . The Assembly's "extraordinary relinquishment of sovereignty. 9 The unprecedented concession of both mining and shipping privileges to the LCNC and DHCC (in 1822 and 1825. 11 The Commission (1834." asserted the Pennsylvania Anthracite Coal Commission of 1834. respectively) was. would have been scared off by the "howling wilderness" unless the state provided it with adequate security. had they been deemedessentialto the accomplishmentof the object.Few other men or other companies could have been found willing to commence the work upon less favorableterms. The fact that the SNC was able to raise the capital to construct the Schuylkill Canal is proof that special corporate privileges were not needed to attract investors. by this logic. was an inducement scarcelycommensuratewith the magnitudeand hazard of the enterprise. 195) concluded that mining privileges were not considered necessary to attract capital: "Had similar privileges been considered necessary to ensure the completion of the work. particularly the North-Branch of the Pennsylvania Canal and the Delaware Canal. therefore. the tacit assurance of monopoly. even if such privileges invariably resulted in regional mining and shipping monopolies. p. that is. private investment poured into canal construction throughout the northeastern United States. the SNC was not permitted to engage in the coal trade.I° Unlike the LCNC and the DHCC. they would no doubt have been conferred b y t h e Legislature upon the Schuylkill Navigation Company?' The Legislature's economic justification for granting unlimited corporate privileges to the LCNC and the DHCC was founded on the myth that the mineral riches in the Lehigh and Wyoming districts would not have been developed had the companies been restricted to the canal business. provided yet another model of anthracite canal development.
and by making the separate branches economically dependent upon each other. the Schuylkill Navigation Company's failure to win multiple charter privileges resulted in a segmented industrial structure that opened the mines to individual operators. the political struggles for corporate privileges (property rights) by the three canal companies established two very different constellations of property relations. Whereas the struggles of the first phase involved the creation of property relations. By limiting the products and services firms can produce. In the Schuylkill District. such segmented relations significantly limit the organizational structure and size of firms.e. all sought to defend their nascent class regimes by defeating the charter petitions of mining companies in the state legislature. The LCNC and the DHCC monopolies.individual proprietorship in the Schuylkill District and corporate monopoly in the Lehigh and the Wyoming districts . mining. ANALYSIS Phase One of Class Formation: The Canal Companies' Political Struggles for Corporate Privileges If economic necessity. referred to here as "industrial segmentation" That is. and shipping privileges) from the Legislature allowed them to monopolize the coal trade by creating economic barriers to entry. then corporations are free to exploit their greater capital resources to buy-out. in the form Of mining and transportation costs. property relations which limit producers from operating in more than one branch of industry must first be established. In the first phase (1815-1825). or keep out individual competitors. I find that the key political struggles that produced the divergent patterns of class formation in the early anthracite trade .occurred in two historical phases. was not the decisive factor in either the chartering of the canal companies or the formation . Moreover. land-holding. for individuals to succeed against corporations. the LCNC's and the DHCC's success in winning multiple charter privileges (i. and the markets in which firms can enter. In the Lehigh and the Wyoming districts. I argue that the emergence of individual proprietors in industry requires a particular configuration of property relations. force-out.Entrepreneurs or Corporations Argument 11 As a general proposition. segmentation of industry increases the individual's chances of entry by limiting capital requirements. If no limits are imposed on the sphere of economic activity. the struggles of the second phase (1825-1860) involved their preservation. 14 In the empirical analysis that follows. and Schuylkill's individuals.
and Schuylkill counties opposed the petition (Powell. 81). But White's plan to improve the fiver faced very determined opposition from all sides. "although citizens from these counties believed in the value of the project. had requested mining and shipping fights in the original charter petition. "passed into the hands of others with their own plans. 1960. Josiah White. 1952. but because it was denied them. White turned his ambitions east to the Lehigh District. 33). they did not want it to be controlled by Josiah White. and the merchants who bought their goods. Thus. White and his associates formed the Lehigh Navigation Company to undertake improvements on the Lehigh River. became staunch opponents of White's improvements. like the jagged teeth of a prehistoric monster" (Korson. p. 43). Whereas the Schuylkill Canal was destined to become a "major thoroughfare. p. but not broken. White's latest scheme to convert the Lehigh into a coal highway was more "chimerical" than threatening (Jones. p. But rather than petition the Legislature for a corporate charter. Montgomery. JEPSON of classes in the early anthracite mines. In fact. but only because the company had by then. 1908. 1992. The reason the SNC did not have the same unlimited privileges as the LCNC and the DHCC. as Powell (1978. Even the chairman of the legislative committee which awarded the new company "sole jurisdiction of the river Lehigh. White met no political opposition. 34). As early as 1811. was not because it did not want them. The genesis of class formation in the anthracite mining can be traced to a single political decree: The Pennsylvania Legislature's rejection of the SNC's original charter petition in 1813. 81) observes. "Gentlemen. The seeming futility of the Lehigh improvements worked to White's advantage in the state legislature.. Bitter. and was virtually ignored by farmers and merchants (Hansell. you have .. the old Lehigh Coal Mine Company had already lost $30." the Lehigh River flowed through more remote and unsettled country. White had alienated farmers in these rich agricultural counties of southeastern Pennsylvania by charging a fiftycent toll on each boat passing through his locks on the Schuylkill River (Shegda. Local representatives from Berks. To some members. Moreover. This time. then what was? The crucial difference between the chartering of the SNC and the chartering of the LCNC and the DHCC was not capital requirements or capital scarcity.12 MARK C." and abandoned the request for landholding and mining privileges. In August of 1818. "after three years of political bickering. They feared that White would attempt to make the river a private thoroughfare." pitting "many competing and influential interests. p." In 1815. and extort even higher tolls by monopolizing the traffic. Chester. p.000 trying to clear the river of the "sharp slabs of slate and rock" which "jutted out the channel. the company's founder. but politics. White only requested the right to make improvements on the fiver and charge tolls as compensation. 1978. The farmers." the legislature finally incorporated the Schuylkill Navigation Company." was said to have joked. p. 10).
16 The specter of commercial isolation and decline aroused a "popular movement" in Pennsylvania. did the Pennsylvania Legislature charter the New York-based DHCC with unlimited corporate privileges? The charter of the DHCC was originally granted with the expectation that Pennsylvanian's would benefit from the Delaware and Hudson Canal. But securing a charter in Harrisburg would require more than winning the support of the provincials." by building a vast network of canals which would rival the Erie Canal. and gave the merchants. The expectation was not unreasonable. then. a merchant and state senator from Philadelphia. which supplied the LCNC with the political momentum it needed to obtain its unprecedented corporate charter in 1822. why. Philadelphian's expected the new canal to flow south to Philadelphia along the Delaware River. ushered in a new and more permissive era of corporate chartering. One key provision of the DHCC's Pennsylvania charter reduced the canal tolls allowed by its New York charter. Samuel Breck. delivered several shipments of coal to Philadelphia along the same route. 15 With creditors pressuring the company. and their political representatives. p. 194). in the DHCC's charter petition to the Pennsylvania Legislature. But the costs of operating the mine and the canal far exceeded the revenue from coal sales and canal freight. eight years before. and the funds he solicited from a small group of Philadelphia investors. since the company's founders had. and private investors fearing that they would be held legally obligated for the companies mounting liabilities. Under the pretext of Keystone economic sovereignty. in 1825. incorporation promised limited liability protection and an infusion of fresh capital. called upon the city's mercantile class to rally "in defense of our property. On the verge of financial ruin." and to "counter-act these threatened evils. farmers. the attitude of Pennsylvania legislators towards chartering had changed from hostile to liberal in the decade following his first charter petition for the SNC. Indeed. Fortunately for White. The following year. 1978. Using his own savings. White was forced to go back to the Legislature in 1822. No charter could win approval from the legislature without the political support of the powerful Philadelphia delegation. p.Entrepreneurs or Corporations 13 our permission to ruin yourselves (Anthracite Commission. and legislators of Lucerne County reason to believe that the Delaware and Hudson would operate as a public highway over which they could affordably ship their commodities to ports on the eastern seaboard (Powell. 126). In exchange for their support. 1834. the company gave every indication that it would construct a slackwater navigation on the Delaware River. Philadelphia capitalists. and request a corporate charter. just as the SNC had done . The catalyst for this new attitude was the completion of the Erie Canal in 1817. If the spirit of state protectionism truly guided chartering at this time. White managed to complete the forty-six mile Lehigh Canal and to open the Summit Hill Mine in two years.
14 MARK C. or the division of mining. Unlike its mine-owning rivals. their dominant interests were in developing their own mines and marketing their own coal. "In the true sense. pp. JEPSON on the Schuylkill River." observed Jones (1908. the Delaware and Hudson was never a canal company. and profited chiefly from the sale of coal. not in collecting tolls on independent canal traffic. and canal operations into separate branches. By keeping the true destination of the canal a secret. 118. at regular rates of tolls. the Delaware and Hudson Canal was to be a private highway and almost all of its traffic company coal bound for New York City. until the canal reached the Hudson River. In the end. and instead continued digging eastward into New York State. 187). 1836. p. p. the DHCC succeeded in avoiding a political backlash in Harrisburg that could have jeopardized its charter privileges (Powell. In 1836. p. since they did not have to build their own transportation facilities. and built its bottom line solely on canal traffic and the tolls it generated. 249) described the Schuylkill Canal as "an open highway. One year into construction. both the LCNC and DHCC were mining companies. rail. the SNC left the development of Schuylkill's mining business to independent operators. as well as canal companies. The Effect of Political Struggle on Property Relations and Economic Opportunity So what is the significance of the politics of chartering for class formation in early anthracite mining? The charters of the canal companies were crucial because they legally defined the property relations that determined the scope of industrial operations and control in the mines. Unlike the SNC. 127). the first seventeen miles of the Delaware and Hudson Canal did extend eastward from the company's mines at Carbondale to the Delaware River. however. 90).''17 Segmentation. the company abandoned the plan of constructing a slackwater navigation down the Delaware River to Philadelphia. Forbidden by its charter from possessing land or mines. 1978. But the fact that the managers and engineers of the DHCC refused to disclose the actual route of the canal to the public during its construction suggests that the company had never intended for the canal to serve Philadelphia. the SNC was compelled "to invite tonnage from every quarter and from every source" (Anthracite Commission. made it affordable for individuals to ship coal to market. a writer for the North American Review (XII. In short. but . Company officials claimed that they had changed the route because the Philadelphia coal market was already served by the Lehigh and Schuylkill canals. To be sure. 1834. 109 miles from its Pennsylvania head waters. boating. the promise of regional economic growth and prosperity was never fulfilled. For the local commercial interests of Pennsylvania's northeastern counties. free to all the world.
the purpose of the canals was. 19 The "strong inducement" to "monopolize the trade" was transparent to the State Senate's Anthracite Commission (1834.e. Herein lies the historical significance of the charter struggles: Had the SNC succeeded in its political bid to mine and ship coal. ''18 Opening their waterways to independent coal producers and allowing the traffic to flow freely would have invited harmful competition against their own coal and undercut coal prices." Likewise. Phase Two of Class Formation: The Intra-Class Political Struggle Against Corporate Charters As necessary as the SNC's failed struggle for mining and shipping privileges was to the entry and ascendancy of individual proprietors in Schuylkill. instead. privatized its waters. But if the promiscuous character of chartering posed a threat to the incipient class situation of the individual mine operators. 2° While the two monopolies eventually "contracted" out some of their mines. a coal company operating a canal. 195): If they [canal companies] believe they can realize a greater profit by engaging themselves in a particular branchof trade than by relyingupon tolls accruingfrom the produceof others engaged in the same business. the terms of the contracts subordinated the contractors to the control of the giant firms. and probably would have. at any time. boatmen. 86). p. The economic benefits (i. Consequently. they could. nothing about the SNC's limited charter barred mining corporations from entering the Schuylkill district. p. As the LCNC and D H C C had already demonstrated. erected a corporate monopoly of the district. 1835. it too could have. if petitioners could amass enough votes in the state legislature. As long as the D H C C and the LCNC possessed a stake in the mines. fortuitous outcomes with no permanent standing in law or custom.Entrepreneurs or Corporations 15 "more exactly. access to prime lands through affordable transportation) accruing from the SNC's charter limitations were not specifically intended for individuals. no separate class segments of landholders. obtain corporate charters with practically no legal limits on their economic activity. They will not be willing to furnish upon equal terms facilities to their competitors of the same trade. and endeavor to monopolizeit. it also . and blocked access to individual mine operators. they will of course embark in the trade. or mine proprietors emerged in the Lehigh and the Wyoming districts because the L C N C and the DHCC denied canal access to non-company coal. to keep the coal supply "under a padlock" (Hazard's XVI. nor allow them upon even ground 'to plough with their own oxen'. the Lehigh Coal and Navigation Company built the Lehigh Canal "for the purpose mainly of transporting their own coal to market. as another contemporary observer decried. they were.
Taylor's "treatise. A mine operator himself. In fact. In effect. the LCNC and the D H C C also had to resort to politics to protect their corporate monopolies. and hundreds of thousands of dollars in stock (Bowen. must in the end prevail over and drive the less favored from the field and become sole master of the trade . and served as the paper's editor-in-chief for the next four decades. or the economic instability it caused in the market. being placed in a more advantagedposition. accused Schuylkill's remaining chartered coal companies of conspiring to swindle their stockholders and ruin individual producers. trading in thousands of acres of coal lands. the failure of four of the seven Schuylkill's chartered coal companies in under five years not only verified the excesses of particular companies. and directlytends to create a monopoly the favored party. Though just seven in number. Barman purchased the ailing Miners's Journal in 1829. the Delaware. and the Little Schuylkill coal companies were singled out for censure in a popular pamphlet written in 1833 by George Taylor. the most intolerable aspect of incorporation was not corporate speculation. As I shall now show. 1852. 22 Only because they survived their counterparts. but validated the view that the corporate enterprise was intrinsically unqualified to carry on the mining trade. the corporate land and mining firms speculated on a much larger scale than the more numerous individual speculators." entitled The Effects of Incorporated Coal Companies Upon the Coal Trade of Pennsylvania.. Schuylkill's proprietors had to struggle to guard their nascent class position against corporate encroachment in the State Assembly at Harrisburg. the North American. Even with their immense economic leverage. "The grant of exclusive privileges" Taylor objected. 176-178).16 MARK C. For individual operators. the charter legally favored the worst managed and least economical producers with an unfair competitive advantage... The Ideological Foundation: The "Republican" Conception of Property 21 The first stirrings of anti-corporate sentiment in Schuylkill were aroused in the late 1820s by allegations of fraud and mismanagement against the district's "foreign" mining corporations. - No one in Schuylkill assailed mining corporations more than Benjamin Bannan. but rather the special protection against this instability afforded to corporations by their charter privileges. At the core . is an infringementupon the right of all who are excluded. a writer for the Schuylkill Miners' Journal. and they may one and all engagein the trade to the fullest extent of their means and pleasure. JEPSON made resistance to corporate chartering possible. the state legislature became an arena for political struggle between charter petitioners and their opponents. Let the [coal companies] lay aside their corporate power and become subject to the liabilities and responsibilities of individuals. pp.
break down all individual competition. how distant and uninformed management led to extravagance.Entrepreneurs or Corporations 17 of Bannan's anti-corporate thought was the Republican mistrust and resentment of privilege. twenty-five unequivocally opposed chartered coal companies in Schuylkill. which would provealike fatally destructiveof our commerceand our liberties. 1834.. and our political next" (Miners Journal. 250). the 1833 resolution adopted by the State Senate which established the Anthracite Commission was. waste. rooted in Pennsylvania's recent colonial p a s t y In what would be the first of hundreds of anti-corporate editorials. It is part of their general system t o .. concurring fully with the [anti-corporate] views above expressed" (Ibid. .. as the preface to the final report acknowledged. . 1838). August28. a monied aristocracywouldrise up amongus by the unequaldistributionof wealth. as Schuylkill's arch-rivals... Moreover.. received from individual coal dealers. p. Should we affordany countenanceor encouragementto institutions of this cast. What is more. the LCNC and the DHCC came to exemplify the indivisibility of corporations and monopolies. and how charter privileges unfairly shielded corporations from the volatility of the coal market. and corruption. For all practical purposes. the inappreciable blessing of our free and happy governmentwould be perverted.. Bannan laid the ideological foundation for subsequent attacks: They [corporations]are of exotic growth. 24 Amplified by the national ascent of Jacksonian populism. 1830). [and] swallow up all who come within the vortex of their operations" (Ibid. all corporations were monopolies. 185). Bannan further vilified mining corporations in the minds of operators by erasing any distinction between corporations and monopolies. and the three dissenting opinions were lodged by representatives of the district's mining corporations. but. the report admitted to excluding "many other communications. In more or less disparaging terms. and ours is an uncongenial soil for their transplantation .. made on behalf of himself. and fellow operators. In fact.. the mine operators' replies to the Commission's survey left no doubt that they had closed their ranks and formed a sharp line of opposition: Of the twenty-eight responses contained in the final report. Samuel Lewis' statement.. Schuylkill's early speculative ventures provided Bannan with ample ammunition to demonize corporations.. since they were "nearly always fatal to individual efforts . p.our moralrights wouldbe first invaded. the local outcries against corporate privilege resounded in Harrisburg. the operators restated Taylor's criticisms of mining corporations: Namely.. prompted by a "memorial of sundry coal dealers in the county of Schuylkill" (Anthracite Commission. Burd . The ideological task of conjoining the two was made easy by the fact that both companies controlled almost all anthracite production outside of Schuylkill. for want of space... January 31. how the preoccupation with stock prices resulted in irregular production and market instability.
Under the doctrine. That they framed their anti-corporate message in Republican rhetoric was to be expected. Whig or democrat.. and no politician. 76). it drew heavily on Pennsylvania's heritage of Democratic Republicanism. p. It is evidentlyin their interest that there shouldbe as few competitors in the market as possible.. It is evident that the theory flourished long after there was any hope of it being accepted by the legislature or judiciary . was typical of the responses submitted by the individual proprietors: The influence of incorporated companies with mining and trading privileges.. 77). Pennsylvania legislators enacted no laws upholding a Republican conception of property. since Republican thought dominated the political discourse of the nineteenth century (Babb. Their affairs are generally managed by a distant board of directors. and as they have never been known to be over scrupulous about the means employed to attain their ends. manufacturing. the extension of corporate privileges in trades customarily worked by individuals symbolized the collaboration between government and powerful private interests under British rule. many of whom are ignorant of the wants and capabilities of the countrythey operate in . Republicanism would continue to animate the populist struggles and movements by small business owners. every weapon that can be wielded by a powerful monied aristocracy. could be found who was not a staunch advocate of the Republican doctrine (Hartz. [of] anti-charter dogma." Given the widening rift between political rhetoric and political . From the 1830s onward. Attacks on corporate avarice were a routine aspect of Pennsylvania politics in the early nineteenth century. farmers. but under no circumstances. will be used to attain their object" (Ibid. and Samuel Brooke.)Y While the Schuylkill mine operators' fierce opposition to mining corporations was motivated by their economic interests. into the next century. JEPSON Patterson. 1042)... even though interest pressures in the state dictated an expansion of charter policy . 1996. pp. is more inimical than beneficial to the general prosperity of a country. or curtailing the development of the private corporation.. At best. p. 69.." recognizes Hartz (1948.. 26 By the end of the 1830s. and even industrial workers.18 MARK C. The pursuit of a rigorous anti-charter policy was an impossible political adventure. the political sway of republican tradition had begun to wane. Frederick Hass.. but surrendered the sovereignty of the people to a new corporate aristocracy. such as banking and insurance. but as a theory of capitalist property relations it was rapidly being replaced by corporatism. when those with close ties to the colonial government received special property rights from the crown. 1948. the corporation was viewed as a necessary evil that should be confined to a few chosen fields requiring extraordinary amounts of capital. and its glorification of individual enterprise. "made it an excellent polemic for orators and politicians. Such charters not only violated the property rights of individuals. The "intense egalitarianism...
after thirty-five legislators had taken an early leave of absence. come out against the incorporation of mining companies (Taylor. political victory eluded the individual mine operators. p. most significantly.27 Once again. The Individual Proprietors' Anti-Corporate Political Struggles The first significant display of class militancy by Schuylkill's individual operators was a legal challenge to the right of Schuylkill's mining corporations to operate in Pennsylvania under their out-of-state charters. the individual operators sent a delegation to Harrisburg to rally the "large majority" of legislators who had. "a clause incorporating the Companies. p. Then. during the session. since it challenged the legislature's tradition of denying charters solely for mining purposes. and. 1961. 16). Under the supposition that they had each performed "yeoman services . 89). At a large meeting held at Pottsville in January of 1833. the mine operators' delegation was quickly dispatched to the capital. To ensure that this tradition was upheld. 89). whereby legal title to the property was held by Pennsylvania trustees for the benefit of the companies. however. Fearing the forfeiture of their property. applied to all corporations. Schuylkill's operators would have to do more than appeal to the moral sanctity of individual enterprise to resist corporate mining in the anthracite trade. where it "vigorously supported" an "Act Relating to "the Escheat of lands held by Corporations without the License of the Commonwealth" (Yearly. just three days before the end of the 1832-1833 session. the 6th of April" (Ibid. With the votes of those 23 members who had been absent for the passage of the charters. a petition drafted by a committee of the operators called upon the legislature to dispossess the companies of their coal lands for violating the state's statutes of mortmain.). the very tradition which had. including those chartered by Pennsylvania. after all. The move was bold. by referring to another act. the companies bided their time.Entrepreneurs or Corporations 19 reality in Harrisburg. and passed through both branches of the legislature on one and the same day. both the Delaware and the North American companies had evaded the law by holding their lands under deeds of trust. Undeterred by the numbers. "partly on the grounds that their stock had passed into the hands of Pennsylvanians" (Yearly. 1833. was inserted in a library bill as an amendment. and the opposing delegation of mine operators had returned to Schuylkill. Up to then. which forbid the transfer or sale of Pennsylvania real estate to non-residents. p. 1961. Schuylldlt's coal corporations moved swiftly to head-off the proprietors' attack by applying to Pennsylvania for charters. the bill became law. When word of the vote reached Schuylkill. compelled the companies to obtain out-of-state charters in the first place.
1961. and to close their concerns. 217) reassured individual proprietors that the companies would lose their corporate privileges at the end of this period: "They have yet four years to prosecute their business in their corporate capacities. their struggles in the state legislature nevertheless weakened and marginalized the three companies. the charters of the North American and Delaware companies expired in five years.. JEPSON in exploiting the virgin fields" (Ibid. and be allowed to either discontinue or pursue the business upon equal grounds with other operators. once and for all. a critical test of the operators' resolve to defend their domain. 29 The "Offerman Affair" was a watershed in the struggle against mining corporations because it represented the first serious break in the ranks of the mine operators. p. they were able to convert their coal districts into antimonopoly petition mills. and a fellow member of the Pottsville elite. the individuals composing the companies be placed in possession of their lands.20 MARK C. as it rather persistently did. 90). even against one of Schuylkill's original master colliers. politics was their only recourse. the outlook for Offerman's petition was not encouraging. banned mining corporations in Schuylkill." By far. p. had always fought against charter petitions in the legislature. Indeed. Schuylkill's representative in the House. The matter gained particular notoriety and symbolism from the fact that the petitioner was himself a respected individual proprietor who had served as the first vice-president of the Coal Mining Association of Schuylkill County. Offerman first needed to have it sponsored in the state legislature by local representatives. moreover. 28 While the individual operators were unsuccessful in their attempts to rid the district of the companies. the legislature granted the sole waivers to the provisions of the Act to the Delaware and North American companies." The political struggles of 1833. the element of betrayal embodied by the Offerman petition brought to bear the utmost wrath and reprisal against a local operator "foolhardy enough to tamper with the taboo of incorporation" (Yearly. The Anthracite Commission (1834." states Yearly (1961. In a legislature riven by sectional strife and lacking a fixed charter policy. the most lengthy and contentious of these attempts was executed in 1838 by one John Offerman. "During the thirties. which. 89). When the occasion arose to squelch such bills of incorporation. and Charles Frailey. The dominance of individual proprietorship was still contingent on the chartering process. and. as crucial as they were in securing a foothold. But since both Daniel Krebs. Schuylkill's state senator. p. 30 If the corporate petition stood any chance of passage. "they spent thousands of dollars lobbying in Harrisburg in order to check the infiltration of charter-seekers into the Legislature. p. Frailey's . and thus vulnerable to politics. Their charters will then expire. did not produce a sweeping law. 85). In contrast to the ten to thirty year charter duration granted to manufacturing companies.
The executive veto killed the bill but not the petition.. the petition was bundled with ten other petitions in an omnibus charter bill. the Governor's office. the bill's chief sponsor." Since no place or person in Schuylkill was known by that name. who had little or nothing to gain by supporting the colliers' parochial cause. he was sent on to Harrisburg to oppose them. however. February 7. first introduced it in 1836 under the disguise of the "Cataract Company." Benjamin Bannan recollected. None exercised the veto authority against special acts of incorporation more vigorously than Governor Joseph Rimer (1835-1838). who denounced the legislature's enthusiasm for chartering as "ruinous" (Ibid. the third bill contained only the single petition. Pitted against their own representatives. 1838). when the bnndle of eleven petitions reached his desk on the final day of the 1837 session. In the following session. Frailey introduced the petition for a third time at the beginning of the next session. 1838). So earnest and sincere in his opposition was he believed to be. each one playing off all the arts of stratagem and surprise that ingenuity can invent or fraud devise" (Miners' Journal.. was further removed from the system of mutual patronage which had turned the legislature into a "charter mill" (Hartz. 66). Since all ten of the other petitions were also re-introduced as individual bills. Given this voting record. the coalition which had pushed the vetoed omnibus bill through the legislature was kept intact. 1948. his expenses paid. instead of being introduced as a bill itself. the Miners' Journal exposed the identity of the petitioners." This time. Senator Frailey. in order to divide the attention and elude the vigilance of their opponents. "they have returned to the attack severally. Thus. the colliers were put in the awkward position of having to win political support from representatives of other counties. and time compensated for by the voluntary contributions of individuals (Miner's Journal. the bill was expected to pass unnoticed through the legislature. As with the first bill. Krebs' had also shown himself to be an "irreconcilable opponent of coal companies" (Ibid. February 17 and February 21. "Defeated in solid column. and defeated the scheme.Entrepreneurs or Corporations 21 anti-corporate views. Before the bill reached a vote. p. but this time the proposed company was called the Offerman Rail Road and Mining Company. 1838). Frailey resurrected the bill under the new name of the "Buck Ridge Rail Road and Mining Company. February 10. p. were a matter of public record." Bannan mocked.. like Offerman's. "previously proclaimed his opposition in county meetings .. The practice of exchanging local favors through "log-rolling" was routinely employed to counter opposition from rival sections. Fortunately for the individual colliers. . "He had. mine operators were caught off-guard when both Frailey and Krebs announced their support for Offerman's charter petition. Rimer returned the whole lot to the legislature unsigned.. in this region. 65).
or roughly half of Schuylkill's eligible voters. generally speaking.. February 3. The colliers organized a wave of meetings in several townships to protest what Bannan now called the "hydra-headed monster" (Ibid. Despite the mine operators' enormous effort to defeat Offerman's charter petition in the legislature. JEPSON Deprived by Frailey and Krebs of political representation in Harrisburg. Clearly frustrated by the legislature's ploy to wear down his resistance to coal corporations by submitting eleven bills instead of one. 1838). In the ten days between January 31 and February 9. at Schuylkill Haven on February 6. at Port Carbon on February 8. 1838.. the Governor returned the bill to incorporate the Offerman company to the Senate with a stern message enumerating his objections to coal corporations: The incorporationof companiesof any kind to accomplishobjectswithin the reach of private enterprise. Schuylkill's mine laborers sponsored three meetings of their own at Pottsville. Bolstered by the inter-sectional political alliance. and know full well that these companies have for their object the depression. January 31. unequivocally. February 7. andthe ten petitions that accompanied it. Minersville. At the Pottsville meeting. 1838). and unanimously expressed. eight separate meetings were held in protest of the revised charter bill. and Port Carbon on February 5 (Ibid. and on February 7. 1838. Schuylkill's mine operators decided to flood the legislature with petitions.and pro. March 7. It seems no matter how much they petitioned the legislature. is a departurefrom the good old and safe rule of legislation of Pennsylvania. this time one-by-one. realized a better competence for their labor from individual colliers than from the companies located in Schuylkill county.. February 10. February 14). the operators could not undo the deal bartered by their own representatives.." assured Bannan. 31 "Public opinion. 1838).. the miners echoed their employers' remonstrance that "coal companies are entirely subversive of individual enterprise. In an unusual show of sofidarity." and they also declared that the colliers' struggle embraced their own interests: "The Miners and Labourers have. passed through the legislature once again. The mining of coal. In total. February 7.fitablypursuedby thousands . Fralley and Krebs pushed the measure through their respective political bodies. the Offerman Bill.. February 21. 1838). is a businessnow well understood.. 1838).. in a great measure. February 10. the Offerman petition had found its way back to Governor Rituer. than in opposition to the increase in coal companies in this region" (Ibid. February 7. The individual colliers held meetings at Pottsville on January 31. who once again served as the individual proprietors' last line of defense against mining corporations..22 MARK C.. and at New Caste on February 9 (Ibid. of the honest wages of a large number of the inhabitants of Schuylkill county" (Ibid. By April of 1838. the petitions drafted by the eight meetings gathered 3000 signatures (Ibid. "in no instance on any question has been more fully.. negotiated in large part by Frailey.
In the end. 1838).. I fear would be the effect of the general incorporation of coal companies" (Issued April 5. If anything..000.. would form a dangerous interference in the active and flourishing coal trade of Schuylkill county" (Ibid.. the Governor's deepening intransigence to incorporation posed a challenge to the sectional interests which traditionally guided the conduct of state legislators. the legislative grant of the mine charter proved to he a pyrrhic victory.32 which had historically ruled .. Privileges of this kind. and traversed by rail roads. warned the Governor. "contemplates the formation of a company for mining and dealing in coal in a region already opened by individual enterprise. 23 The Offerman Bill. The override of Ritner's veto of the Offerman bill was a clear indication that the political careers of Pennsylvania legislators were becoming dependent on corporate interests.). p. I feel the utmost repugnance against any project that may have the influence of crippling or monopolizing the great coal trade of Pennsylvania which. January 31. Having already overturned Rimer's veto of a bill incorporating the Stafford Coal Company in Luzerne County.. his staunch anti-corporate stance was unpopular with the legislature. it turned out. and succumbed to bankruptcy in 1842 (Luther. and in which the coal trade is fully established . in particular. or by some plan to dispose of a particular tract of land to great advantage . and especially with the powerful pro-corporate Philadelphia delegation. p. Offerman had squandered his personal fortune and lost the backing of his New York creditors (Yearly. The law authorizing and regulating limited partnerships presents all the opportunity for the investment of capital. After nearly a year of battling back and forth with the legislature and the Governor... 1881. and which increasingly demanded greater and easier access to corporate charters from local representatives. who... Reprinted in the Miners' Journal.. Bannan praised.. Offerman. 91). Fortunately for the individual operators. the legislature was not dissuaded by the Governor's anti-charter proclamation. whose rights and interests will be injured by the exercise of corporate powers and competition . 1838). the Offerman affair held a final irony: The protracted and bitter struggle to obtain the right to organize a mining corporation had robbed Offerman of the means to finance his venture. But while the Governor became a champion among Schuylkill's individual mine operators. April 25. wielded by the combined influence of corporations. In short. securing charters for influential constituents was becoming a requirement of office. 1838. without risk to the remainder of the owners of property .. and that Schuylkill was fast becoming an isolated pocket of anti-corporate resistance. backed by a capital of $350. The desire to form local companies is generally produced by the mere spirit of speculation.Entrepreneurs or Corporations of private citizens. 1961. Most of the credit for ruining Offerman was given to Governor Ritner.. "has proved himself to be the sword and the shield of the rights of the Colliers" (Miners' Journal. never exercised his costly corporate privileges. 51).
and Pennsylvania's eastern counties. 1840). and the infusion of capital it promised. Given their fierce and relentless six-month campaign against Porter. October 17. which depended on Philadelphia capital to develop local industry. and retum to office loyal representatives who would kill charter bills in the legislature. Krebs. Frailey and Krebs. Thus. with Offerman bankrupt and Frailey reformed. where the Schuylkill Canal and most of the coal lands were controlled by Philadelphians. however. Even in Schuylkill. and no one left in Harrisburg to veto charter petitions on their behalf. 250). whose jurisdiction was confined to Schuylkill County. June 16 of 1838). 33 For Schuylkill's tenant mine operators. which placed strict limits on the number and the powers of corporate charters. Krebs apparently regarded his re-election as a lost cause. . Thus. By 1838. Ritner's cautious approach to incorporation. the Pennsylvania gubematorial race of 1838 became a referendum on chartering. With Ritner gone. March 10. That Ritner's successor. the individual operators now faced the prospect of a hostile and vindictive Governor. April 14. JEPSON over the less-populated sections of the state through a divide and conquer strategy. when Ritner narrowly lost his bid for re-election. Frailey's Senate district spanned several counties. none dared to submit a charter petition after Offerman. ran for re-election and won. observed no significant distinction between corporate enterprise and individual enterprise was cause for even greater alarm in Schuylkill (Hartz. which frequently included harsh attacks on his character (Miners' Journal. the populist Whig and Democratic coalition that had swept Ritner into office was already losing ground to forces more supportive of business incorporation. support for Ritner was divided. 1948. in the 1840s and 1850s) expressed the concern that the district could not retain its pre-eminent position in the anthracite trade without incorporation of the mines. p. however. diluting the political power of Schuylkill's colliers. March 17. David Porter. the long and bitter struggle apparently discouraged the Senator from ever sponsoring another mining charter.. who increasingly viewed incorporation as a way to raise capital and minimize liability. Schuylkill's local political bulwark was partially restored. Unlike. the individual operators could take some satisfaction in the fact that they had lost the battle but won the war against mining corporations.e. With the election of John Weaver to the State Assembly (Ibid. Frailey. Although a small minority of Schuylkill's individual operators increasingly (i. While Frailey's political career survived the Offerman ordeal. opposed the interests of both Philadelphia capitalists.34 the mine operators lost their last and most faithful defender against mine incorporation in the state capital.24 MARK C. before they reached Porter's desk. and opted to forego what would have undoubtedly been an uphill and vicious political fight. the mine operators now desperately needed to follow through on their pledge to unseat the local turncoats.
To some extent. Toll. or Tribute to some incorporated company" (quoted in Powell. however. farmers and merchants in the northern counties occasionally criticized the company for its monopoly of the Lehigh River trade. pp. the representatives of Northampton County bordering the Delaware River called upon the friends of free navigation to act. From their inception. But the expectations of an alternate route were disappointed. 128. For the next two years.Entrepreneurs or Corporations The LCNC and the DHCC Defend Their Monopolies 25 The LCNC and the DHCC also fought many difficult political battles in defense of their class regimes. p. the protests against the LCNC subsided while the state constructed the Delaware Canal. "or we shall be like the people of Germany.e. would not yield the lowest possible tolls on traffic. 266)." notes Jones (1908. 18-19). 1978. both companies were heavily in debt. or forced the monopolies to open their canals to rival coal u'affic." By 1824. During the first four years of the LCNC's operation. mines and canals). "was that the privileges were so extended that they ought never to have been granted." Merchants in both Philadelphia and the northeastern counties feared that the continued control of this vital north-south trade corridor by a single company. which could only be obtained through monopoly protection. In 1824. the companies claimed. was a thin veil for the financial problems that forced the LCNC and the DHCC into a struggle to preserve their corporate monopolies. 162n31). entitled them to a reasonable return on their investments. however.. and by the early 1830s. insists Shegda (1952. Both monopolies insisted that they had performed a vital public service by investing several million dollars towards the state's "internal improvements" (i. and would either inhibit commerce or divert it away from Philadelphia to more accessible eastern markets. and pressured by creditors and stockholders to combat the threat of competition and low coal prices. Between 1826 and 1830. not be able to pass our doors. therefore. This "public" benefit. inhabitants from throughout the Delaware Valley organized meetings. 128). p. pp. without being obliged to pay Tax. The unlimited charters of both companies legally entitled them to deny access to their canals through prohibitive routing and exorbitant tolls. The only hope for new companies was. and ratified petitions urging the legislature to stop the LCNC from blockfing the commerce between the northern and southern regions of the state (Ibid. The rhetoric of mercantilism. but. the political struggle against economic rivals had already been won at the time the LCNC and the DHCC were incorporated. the merchants of the eastern counties along the Delaware were once again petitioning the legislature to dissolve the . if the legislature either awarded similar unlimited privileges to them. "the attitude of the public toward the enterprise. and especially a company encumbered by heavy financial liabilities. "the charges were not very serious.
" the Senate Committee on Corporations investigated the matter and submitted its report in February of 1832. 21). because as they say they can send their goods cheaper and with much less embarrassment by the Hudson and Delaware canal and Carbondale. and it's founder. In response to the pleas for toll relief. pp." (Report of the Committee of the People of Nescopeck Valley. the BMRCC and its sectional allies once again appealed to the legislature for relief. A majority of the Committee sided with the memorialists' complaint that the LCNC abused its charter privileges by charging excessive tolls. Citizen conventions were held at Allentown in May of 1832. and threatened to award carrying privileges to the new company if the LCNC did not reduce it tolls. dismissed the protests 'as "agitations by Philadelphia men. 1833. (Ibid. "citizens" throughout the eastern portion of the state once again organized "conventions" to protest the tolls on the Lehigh Canal (Jones. 180). 1908. A committee appointed by the residents of Nescopeck Valley. 1908. p. the state should charge the LCNC the same tolls to use the adjoining state-owned Delaware Canal. which acted as "an actual prohibition on all coal which is not owned by the Lehigh Coal and Navigation Company themselves" (Ibid. have and are deserting the Philadelphia market and have actually made large purchases in the city of New York the present fall. 278). notorious land jobbers and speculators" (quoted in Hansell. The LCNC refused to reduce its tolls.. The Committee recommended that if the LCNC refused to lower its toils. Frustrated by the Senate's reluctance to act on the Committee's recommendation. Determined to break the defiant monopoly. Josiah White. . at a meeting held in the city of Conyngham on July 4. The owners of coal beds could not work their mines because the onerous tolls would advance the price of the commodity in the market so that it could not compete with coal from Schuylkill or the company's coal from the Mauch Chunk mine" (Ibid. 21).Anthracite Commission Report. 278-279). 100). 1834. 35 In the fall of 1833. pp.26 MARK C... p. p. and at Easton the following December to protest the LCNC's "oppressive" toll policy and "infamous" corporate privileges (Jones. 1992. than by the Delaware and Manch Chunk [Lehigh] canal. In response to the numerous "memorials. the legislature voted to grant a mining charter to the Beaver Meadow Railroad and Coal Company (hereafter BMRCC). and reiterated the familiar complaint that the LCNC's tolls discouraged investment and trade: No man would be foolish enough to invest money in canal or rail road stock while a company governed by such a system held in their possession and under their sole control the outlet of the counla'y to market. The hike would have more than tripled the company's cost of sending coal down the Delaware Canal to Philadelphia. alerted the State Senate that "the merchants of Wilkesbarre. a committee of the Conyngham Convention condemned the legislature for granting the LCNC a charter that awarded it exclusive jurisdiction of the Lehigh River.. 179. JEPSON LCNC's monopoly of the Lehigh River trade. p.).
After Clinton's death in 1828. local "raftsmen" on the Lackawaxen and Delaware rivers complained that the damning of the rivers for the new canal obstructed their way. 1968. the unrelenting agitation by the sectional interests to the north and the south of the Lehigh Canal had finally begun to turn the political tide against the LCNC in the Legislature. As of January of 1829. 4° a conflict of interest prevented the New York legislature from breaking-up the DHCC monopoly. its monopoly was the object of attack. and fraud.S. and future U.a detailed five-part series indicting the DHCC for mismanagement. the State of New York had loaned the DHCC a total of $800. 57). and. the DHCC formed an equally close association with his successor. 39 Despite growing consumer opposition to high coal prices. and so reduced the water level that rafting became impossible.04 to $0. The bitter political battles of the early 1830's had forced the LCNC to relinquish its monopoly. 1993. the resolution to make the tolls for LCNC coal on the Delaware Canal equal to the tolls on the Lehigh Canal was introduced as a bill in the Senate. 36 As a result of the new toll policy. To be sure. Better known as the father of the Erie Canal. excess. lobbied diligently for the DHCC's first state loan. and to open its waters to independent coal producers.). From the moment the DHCC began mining and shipping coal in 1829. Fearing that the proposed three-fold increase in tolls on the Delaware Canal might plunge their struggling company into bankruptcy. the DHCC's monopoly came under attack from the New York City press. In the two years following the reduction. as head of the New York Canal Commission. In a petition submitted to the legislature in 1829. and by the end of the decade. the managers of the LCNC at long last yielded to the fundamental demand of its foes by reducing the toll on coal from $1. The enemies of the DHCC's monopoly of the Wyoming coal trade were no less numerous and no less determined than the enemies of the LCNC's monopoly. p. Martin Van Buren.78 per ton for the following season (Ibid. and the favorable terms under which it was made (Lowenthal. 110). p.000. Clinton also helped the DHCC obtain its New York charter in 1823. which complained that the DHCC was using its monopoly to exploit consumers. the United States Gazette of Philadelphia printed . chief among them was Governor DeWitt Clinton. the DHCC sent a portion of the canal's first anthracite shipment . One year after it was proposed by the majority of the Senate Committee on Corporations.Entrepreneurs or Corporations 27 By January of 1834. 38 The following year. As a token of its appreciation. the BMRCC finally raised sufficient capital to complete work on its rail line to the Lehigh Canal. corporate investment flowed into the undeveloped fields of the Lehigh coal district. president.under the pseudonym "Algonquin" . the development of mutual interests between the DHCC and the New York legislature began with mutual friends. 17 additional firms had requested charters to open mines in the Lehigh District (Hoffman. and thus had acquired a strong financial stake in the prosperity of the company. 37 That same year.
had been organized by the BMRCC's Philadelphia promoters and the merchants and farmers from the towns and countryside neighboring the canal. financing for the railroad fell through and a decade passed before interest in the line was revived. in the Lehigh District. the new company's situation resembled that of the Beaver Meadow Railroad and Coal Company in the Lehigh district. In order to market their coal. the DHCC obtained . 21). south to Pennsylvania's Delaware Valley (LeRoy. Despite the public fanfare. after only one year of operation. Hone's relationship with the Council worsened after he evidently refused to relinquish his seat on the company's board of managers. was the absence of an urban-rural political coalition. The new engineers for the Erie threw out the original survey of the route. The first attempt to break the DHCC's monopoly by actually entering the field was made by the Wallenpaupuck Improvement Company. "Fortunately for the D&H. and in December 1826. 3). JEPSON to Albany for use by the Governor and the company's friends in the Legislature (LeRoy. 41 It would be five years before another company seriously challenged the DHCC dominion of the Wyoming coal trade. 1925. 1950. 56).28 MARK C. Suspecting a conflict of interest. p. The crucial difference. which had been so instrumental in pressuring the state legislature to help the BMRCC overcome the financial hurdles erected by the LCNC. p. in the New York community" (The Delaware and Hudson Company. The DHCC also coveted close political ties with New York City. New York's Common Council forced Hone to resign as president of the company after just one year in office. all of whom stood to gain from lower tolls on the Lehigh Canal. In November of 1835. "it had access to financial resources that the provincials could not match. 54). the Erie Railroad held a ground-breaking ceremony for a line stretching from the Erie canal. Conspicuously absent were the "public conventions" and "citizen memorials." states Lowenthal (1993. the destination of most of its coal. both companies needed to build feeder lines to the canals. 1950. the monopoly still held the confidence of local commercial interests. the association between the company and the city became official. the president of the DHCC. Since twelve of the DHCC's original thirteen managers were "persons of prominence and high standing. p. the company was favorably situated within the city's power structure. and decided to build the railroad along the course of the Delaware and Hudson Canal. p. 33). which caused the Wallenpaupuck to fail where the BMRCC bad succeeded. p. Upon learning of the new route. who expected the canal to create a trade boom for the region. however. chartered that same year.. incorporated by the state of Pennsylvania in April of 1830. With the election of Philip Hone. he chose to resign as mayor rather than sever his ties with the DHCC (Ibid. In every respect except one. whose owners opposed opening their waters to rival concems.. to the office of mayor in 1825." Evidently." which..
" and did not become a rival can'ier to the DHCC until after the Civil War. the corporation "ultimately" prevailed over the individual proprietorship as the dominant form of business enterprise in the anthracite industry. and particularly on the absence of corporate development in the mines of the Schuylkill District. citizens of Wayne County in the northeast corner of Pennsylvania made "strenuous efforts" to convince the Erie to consider a route passing through their county. As a testament to the DHCC's political sway over the region. for it was only "a matter of time" before they were compelled to succumb to corporate mining. it was promptly rejected. "every proposal favoring the Erie was voted down. When the proposal was put before a visiting delegation of the legislature. Sensing opportunity. Charles Dimmick. 54). and further contend that it is an exception that proves the rule. who also happened to be an attorney for the DHCC (Ibid. the route which the Erie was ultimately compelled to undertake was twenty miles longer and of a much steeper grade than the route that was defeated (Ibid. despite historical variations in particular industries. and as the veins of the district's prized red ash were depleted." adds LeRoy (1950. however. ." As it turned out.). that corporate development in large industry was inevitable. Critics of the political explanation would undoubtedly claim that the Schuylkill case is merely an exception to the rule.).Entrepreneurs or Corporations 29 an injunction from a sympathetic local judge which prohibited the railroad from building it (Ibid. That the DHCC had loaded the political dice against the Erie. So while corporate development may have been delayed in Schuylkill by the individual proprietors political resistance. the DHCC had "'packed' the meetings with its employes [sic] and their friends" (Ibid. extending eastward through the Lackawaxen Valley to the Susquehanna River (Ibid. the first object of this analysis has been to show how the politics of chartering had an independent and paramount effect on the extent and pattern of corporate development in early anthracite mining. 42 CONCLUSION The Myth of Corporate Efficiency: The Political Annihilation of Individual Enterprise As stated in the introduction. 14 years after its ground-breaking ceremony. When the Erie Railroad was finally opened for traffic in 1849. "At each meeting called by these far-seeing citizens. p.). was further revealed by the corporate ties of Wayne County's own state senator. and any other intruder.). From this evolutionary perspective. As more and more collieries dipped below the water level in the 1840s.). it was "still not a serious competitor. three decades after its inception. Schuylkill's operators were fighting a lost cause.
Moreover. but not because of superior efficiency. Schuylkill began to lose its natural advantages over rival districts. p. Given the operators unflagging opposition to incorporation. was reminiscent of the speculative schemes that plagued Schuylkill in the latter twenties. were they doomed to become the victims of the superior efficiency of mining corporations? Are the economic historians correct in their presupposition that capital for mine improvements obtained through incorporation was necessary for survival? Considering the dire geological and economic trends.00 per ton below the going price was not a consequence of cost-savings from greater mine economy. Secondly. "Trapped by their own ideological peculiarities. hide losses.30 MARK C. economic and geologic surveys of the anthracite mining regions unanimously confirm that the industry. Lackawanna and Westem Railroad. and sell stock allowed them to unload coal at a loss over a longer period of time than individuals. First. he submits." The economists' preoccupation with capital requirements is something of a red herring. the combination of mining and carrying rights allowed the coal corporations to coerce smaller producers along the line to sell their coal directly to them below market price. I have found no evidence of lower production costs for the corporate operations. blinded them to the increasingly harsh realities of anthracite mining. Moreover. Yearly (1961) contends that S chuylkill's individual operators' dogmatic adherence to individual enterprise. Luther (1881. in particular. As before. the pattern of corporate price-cutting in the 1850s. 92). they became "victims of their own initial success." decries Yearly (1961. the companies involved endeavored to parlay their corporate privileges into competitive gain in two ways. and the political opposition to corporate chartering it fostered. increasing inter-district competition from highly-capitalized and more efficient mining corporations supposedly depressed coal prices at a time when the individual colliers' production costs were rising. JEPSON so the argument goes. was naturally averse to factory methods and machine mining. as a whole. were irrational. Coal corporations in rival districts were indeed a threat to Schuylkill's individual colliers. Delusions of superiority and myths of Republicanism. and the fact that most were worked by contractors and lessees using the same methods to dig coal as Schuylkill's individuals suggests that variations in costs between the districts were negligible. sometimes as much as $1. used its multiple privileges to extend its control at the expense of Schuylkill's producers: . their financial capacity to string out loans. p. The contentious corporate practice of dumping thousands of tons of coal onto the market. 62) explains how the Delaware. especially by the giant mining and carrying companies in the Wyoming District. Rather. As one who was relatively close to the scene. The efficiency theory of corporate development is predicated upon the assumption that corporations in competing fields produced coal more cheaply than Schuylkill's individuals. and more decisfve in the latter period.
the abuse of these privileges by the LCNC and the D H C C in the 1820s had deterred the Legislature from extending can'ying and land owning privileges to other corporations.. . At this point." says Yearly (1961. In the exercise of its privilegeto both mine and transport coal that companythreatened destruction to individual enterprise in the Schuylkillregion. 162). the Pennsylvania and Reading Railroad. "opened with a full-scale assault by the Lehigh Company and the great New York mining-carrying companies of the Lackawanna region on Schuylkill markets. 1881.. they poured coal into the tidewater yards at greatly reduced prices. The low prices at which these sales of coal were made . The events that followed were predictable.Entrepreneurs or Corporations 31 To obtain a monopolyin the market. Given the companies' advantage of being both miners and carriers . consequently. adding the tolls .. By these periodical forced sales the mining interest as a specialty. Schuylkill's own carrier. p. therefore. to which the product of the mines was made entirely tributary.its capital and the productof thousands of operativeshave been disregarded and sacrificed. . only exacerbated the shift in market share to the rival non-union districts. For the giant railroad companies to exercise control over the mines. It was an act of cutthroat competition aimed at destroying what remained of Schuylkill's dwindling productive leadership... 68).made a subservientauxiliaryof a transportation companyand of its stockjobbing operations. though their market share declined steadily for the next ten years. the dominant corporations in the Lehigh and Wyoming distriCtS effectively resisted the Workingmen's Benevolent Association's campaign to organize miners and limit production (Luther. The other coal companies and individual operators in the Lackawannaregion could not pay the prescribed toll on the railroad and deliver coal at Elizabethport in competitionwith the companywithout sustaining a heavy loss.amounted virtually in the reduction in the rate of transportation on the company's coal. when the Delaware. and placed the corporation at a decided economic advantage over Schuylkill's producers. decided to take matters into its own hands by petitioning the state legislature for landholding rights. Ironically. they first had to secure the legal right to own coal lands from the legislature. p.. once again. The crucial fact missing from this explanation is that the "privilege to both mine and transport coN" was a political creation." That Schuylkill's individual producers were able to withstand the concerted corporate attack on their markets is a testament to their own efficiency. the Legislature tacitly endorsed the railroads' seizure of the mines. But. Since Schuylkill was still the only district where the mining and transportation . the beleaguered colliers yielded the burden of rescuing the trade to the miners' union. By allowing the holding companies to operate. .always below the cost of production. was to sell their coal to the companyat any price they were offered. and their only alternative. Lackawanna. "The year 1851. The union suspensions in Schuylkill between 1868 and 1870. and Weste m Railroad circumvented the ban by creating separately chartered land-holding subsidiaries. The political fire wall between these branches of the trade remained firm until 1850. the profiton the carriage of the coal becamethe main object. After a brief wartime boom ended in depression.
shows that opposition to corporations a s such was insignificant" (Callender. whenever they were called for by individuals. when the property relations that had dominated the Lehigh and the Wyoming districts from the 1820s were finally imposed in Schuylkill in the 1860s. or is the early anthracite industry merely an interesting historical fluke? After all. p. JEPSON branches were legally segmented. anti-corporate sentiment in nineteenth century America. The readiness with which the legislatures of all the states created corporations for all sorts of purposes. Franklin Gowen. the deviant case of Schuylkill suggests that corporate development is. or opposing segments. In the final analysis. Gowen used the new legal privilege to destroy the union and to buy-out the majority of the moribund producers. a political contingency. it was annihilated politically by the state legislature at the behest of railroad corporations. essentially. first. the absence of political resistance to expanding incorporation) should not be interpreted as the absence of politics.e. popular anti-corporate sentiments "do not appear to have had much influence in determining legislation. 1902. market competition).32 MARK C. to show how and to what extent the dominant theory fails to explain the empirical exception. 436). protested that landholding carriers in rival districts had an unfair advantage. individual enterprise in Schuylkill did not die from natural causes (i. in many cases granting the privilege of limited liability. The rapid expropriation of Schuylkill's master colliers after the Civil War demonstrated in dramatic fashion how unlimited corporate charters were inimical to the entry and survival of individual proprietors. p. 156). the Legislature broke its forty-year covenant with the individual operators by caving-in to the Reading's demand for mining privileges. After Gowen reportedly bought the necessary votes. 1963. why were there not more cases like Schuylkill? Why did the issue of expanding incorporation in industry not create deep or lasting fissures. Although the ascendancy of the corporation in industry was not typically met by militant political opposition from . to incorporate new variables into the explanation (Lipset. But even if this political argument holds for Schuylkill. the result was the same.e. I would only suggest that the relative absence of political conflict between individuals and corporations (i. not an economic necessity. Over the next five years. The present analysis goes further by proposing an alternate explanation for class formation in industry. in the capitalist class? At this point. Theoretical Significance of the Deviant Case The dual purpose of the deviant case analysis is. Given the strong undercurrent of Republican. the president of the Reading. and secondly. That is. is it a valid explanation for other cases. That is.
or be ruined by the those who did. and of the business lobbying and graft that the newspapers of the day rumored to be rampant in Harrisburg is. Empirical evidence of the back-room deals. the definition of economic realism had been reduced to two alternatives: incorporate. With legislatures serving as "charter mills. p. elusive. 44 Were corporate petitioners on the historical sidelines.Entrepreneurs or Corporations 33 individual entrepreneurs. Nelson (1975. 72-73) claims that "the primary force to privatize corporations was not the corporations themselves. the maxim that "capitalists do not have to govern in order to rule" is apt." the record suggests that lawmakers were willing to do the bidding of corporate interests without direct pressure from capitalists. For individual entrepreneurs. 54) adds that laws of incorporation had. and political resistance became irrational and futile. corporate business interests are viewed as passive beneficiaries of the independent political process. Sponsoring the charter petitions of their constituents was simply rational politics." On the other side. the old "mercantilist" image of the corporation as an aristocratic and monopolistic . or public opinion. while the politicians and judges legislated and ruled on their behalf? While it seems implausible that capitalists were in absentia during the so-called "market revolution." From the latter perspective. a political argument for class formation subsumes not only political struggles against corporate development. Sellers (1991. then. With respect to corporate chartering. for obvious reasons. state legislators did not have to be bribed or cajoled to support individual charters and general laws of incorporation because they had already been convinced that economic development and corporate development were indivisible. pp. corporate development became a requirement of economic development. by 1830. p. Capitalists and their representatives in the legislature had to act politically to change the laws to privatize the corporation. But the political apathy of individual entrepreneurs can not be attributed entirely to a sense of helplessness. 43 On the one side. Under the new economic rationality." the economic consequences for unchartered firms was clear. but also political activity in favor of corporate development. Pennsylvania's expanding charter policy in the 1830s and 1840s was not simply a spontaneous expression of market forces. capitalist interests." In the same vein. Roy (1997. 46) claims that "wholesale bribery" of state legislatures by corporate petitioners "fueled the chartering process. become "a tool by which those interest groups which had emerged victorious in the competition for control of law-making institutions could seize most of society's wealth for themselves and enforce their seizure upon the losers. the overwhelming political support for chartering in state legislatures must have made the corporation look like an unstoppable juggernaut to individual entrepreneurs." but "the advocates of laissez-faire. In either event. After 1840. For the corporate political campaign to succeed.
and Walker (1924. the new laws represented a bridge from the past to the present. the new laws unleashed the forces of corporate concentration in U. Throughout the decade. After the LCNC's monopoly ended in 1837. . In effect. The populist ideological justification that bestowed moral legitimacy on the new institution bore little resemblance to economic reality. combining for over 80% of the total. they allowed individuals to leave behind their individual enterprises and to enter the new corporate world with a sense of expanding (not lost) opportunity. 14). p. mass incorporation of business was expected to increase economic growth and competition. and Western Railroad in 1857. January 14. the three giants each controlled at least 25% of production. time and again. And yet. In the Wyoming District. despite the economic harm invariably wreaked on small business by deregulation. General acts of incorporation were hailed as egalitarian and democratic measures. 1860). only three other corporate producers opened mines in the Lehigh District in the ensuing decade (Hoffman. As with all laissez faire deregulation schemes. 235). 111). Philosophically. historically. Hartz's (1948) seminal study of the ideological component of corporate development in nineteenth century Pennsylvania reveals how the corporation was redefined in "populist" terms. Lackawanna. big business has. 2. been capable of invoking the laissez faire doctrine to mobilize the petite bourgeoisie behind the politics of deregulation. p. 1851. See Jones (1908. the shipment of 365 tons by the Lehigh Coal and Navigation Company to Philadelphia marked the beginning of regular shipments of anthracite coal. Miners' Journal (January 11. the Pennsylvania Coal Company replaced the DHCC as the number one producer in 1853. p. and as much as 39%. Incorporation promised to create a more equal economic playing field by giving thousands of small businesses access to capital and legal protections previously denied to all but a few large companies. the regular collection of statistics. Culturally. In the second half of the nineteenth century. 1856. not just the rich and powerful. p. 1968. and thereby rescue small business from monopoly. January 12. which extended corporate privileges to all. Jones (1914. While preceded by many others. Indeed.S. industry with a vengeance. as well as. NOTES 1. the new laws of incorporation represented a triumph of economic liberalism because they bestowed property rights upon thousands of small business owners. the consequences of eliminating legal restrictions on corporate activity have been anything but egalitarian. JEPSON institution had to be revised to appease the Republican convictions of independent producers. individual proprietors were led to believe that the extension of corporate property rights to themselves was in keeping with their Republican concept of property.34 MARK C. 12). only to be superseded by the Delaware.
and the vast size of bituminous coal deposits (spanning seven states). defect) overrode the incentives to cooperate. i. politics has no independent effect. 1983. the methods that both types of individual proprietors employed to mine coal were indistinguishable." typically made up 20% of the total number of producers. Schuylkill's individual mine operators were not alone.e. A neoinstitutional explanation for class formation. 68). by rail carriers. 106.e. petty proprietors and craft workers in many trades protested the rise of the business corporation (Babb. For much of the nineteenth century. depending on coal prices. Robinson and Briggs (1990). shifts the theoretical focus away from the effects of intra-firm efficiency (i. or "master colliers. and longevity of operation. Meyer & Rowan. What distinguishes the struggles of Schuylkill's producers from most other producerist protests is that they succeeded politically. 1961. 1996). 1833. Bowman employs °'game theory" . then. 7). Powell & DiMaggio. digging a single drift with a few partners or hired hands. 7. I have singled-out efficiency theory for criticism because it is the dominant theoretical framework for empirical studies of industrial development in the United States.e. The sheer number and differing sizes of coal producers doomed cooperation.a variant of neoinstitutionalism . Bowman attributes the atypical pattern of . ruinous competition and chronic over-production) among operators in bituminous coal mining. petty producers probably produced no more than one-quarter of the district's annual production in the pre-Civil War period. 4. since there were always plenty of operators willing to dump cheap coal on each other's markets. and Williamson (1981). regularity. While petty producers and master colliers differed greatly in terms of the scale. In the last two decades. and changed hands frequently. p. 1985. and for mining. The capitalist cooperation and concentration that characterized most industries in the early twentieth century were thwarted by "natural" causes. 1977.to explain capitalist class organization (or rather disorganization. in particular. 65-66. p.the inevitable ascendancy of the large corporation over the individual entrepreneur. sometimes consisting of several "colliery establishments" employing one-hundred miners or more. Anti-corporate attitudes were prevalent in nineteenth century America. cost reduction) and inter-firm competition to the stabilizing effects of the market institution (see DiMaggio & Powell. Small producers were also likely to be working miners. The typical petty producer produced less than 10. North (1981). 5. the "evolution of cooperation" presupposed by neoiustitutionalism is far from inevitable. But while the two theories recognize different mechanisms for class formation. Petty individual proprietors made up the other 70-80% of Schuylkill's mine operators.000 tons annually (Taylor." master colliers did not actually dig coal themselves. Within the class of individual coal proprietors. they predict essentially the same outcome . While all colliers were customarily referred to as "miners. and by government agencies to organize mine operators (i. large producers. Much like anthracite scholars. Similar arguments for technological determinism are advanced by Hounshell (1984). Piore and Sabel (1984). and serve merely as a mechanism by which the corporation evolves. While relatively numerous. Under a truly contingent conception of political struggles.e. Attempts by miners' unions. efficiency theory has come under intensive criticism from "neoinstitutional" theory. Most small mines operated on a very irregular basis. Master colliers generally managed very large mine operations.Entrepreneurs or Corporations 35 3. and were part of what has become known as the ideology of producerism. For both theories. 6. regulate production and control prices) all failed because the incentives to compete (i. 1991). and accounted for 50-60% of the region's annual coal shipments (Davies. pp. such as regional differences in the quality of coal. Yearly. One seeming exception is a study by Bowman (1989).
claimed the Commission. p. "The Pennsylvania Anthracite Industry. 1984. "The Coal Trade of Pennsylvania. 13. 242-250) and Max Weber (1984. would have remained for many years perhaps a barren waste" (Hazard's XIII. and set up an accounting for the group as a whole. so as to admit a safe and easy passage for loaded boats. 1833. and diversity) in bituminous mining to the peculiarities of geology. instability. "presented an insurmotmtable barrier. pp. 10. and furnishing one of the best markets in Pennsylvania. After three decades of reasonably profitable operation. and vessels. p. 115-203). 8. Entitled. arks.e. On the Morris and Raritan canals see Jerome Cranmer. 194). on the right of the Schuylkill Navigation Company to make another Lock and Canal for the use of the Navigation at the Fairmount Dam. Weber argued that the gradual separation of mine owners (i. which they should think most fit and convenient to make a complete slack-water navigation from one end to the river to the other. January 1836 (p. locks. Like any pyramid scheme. The companycould not procure the requisitecapital to carry on the coal trade.." Pennsylvania History 47..is no longer a matter of doubt in Pennsylvania. 6). JEPSON capitalist class formation (competition. and set up any damns. published in 1830. the state sold both canals to private interests (Powell. "Improvements Without Public Funds: The New Jersey Canals. 1769-1976. That a greater capital is requiredfor mining than can easily be collectedin a copartnery. whereas the public stockholders have to wait for the company . this country. the "mining association") and mine laborers (i. and the inducements of mining privileges. to empowerit to hold coal lands. 248). "Opinion of Counsel. and bid defiance to individual enterprise. the process of driving small producers from the tin mines of Cornwall and Saxony lasted between four and five centuries because of the enforcement of pre-capitalist mining codes enacted by associations of free miners under the auspices of local lords. 1980." but not to "a powerful and adventurous company. or by means of such collateral sluices and locks as they might devise for the purpose" (Schuylkill Navigation Company. erect. In a pamphlet entitled Coal Corporations.. 53). relations on class formation. the investors on the ground floor are made whole by the sale of the stock to the public. 11. 188).. 9. and founditself compelledto make a new applicationto the legislaturein 1822. The LCNC's simply did it in reverse." reprinted in Hazard's XLII." printed by Hazard's XI." in Canals in American Economic Development (1961. the working miners' guild had been transformed into a corporation of non-workers which "took a hand in hiring and paying workers as well as meeting of the advances and costs for the shafts. Like Dobb." (Weber. p. up as well as down the river. 14. now filled with active and enterprising population. For Dobb. pp.. 15. The "towering" mountains of the Wyoming region.e. The practice of petitioningfor a charter with a capitalization far in excess of the funds needed to conduct the mining business was not uncommon. pp. Case studies of medievat mining communitiesby Maurice Dobb (1947.This point is completelysettledby the Lehigh Coal and NavigationCompany. the "mining community") in medieval mining communities was set into motion when free miners began violating their own egalitarian codes in the late thirteenth century.36 MARK C. 1834.. advocates of incorporation argued. The charter itself stated that the SNC was authorized "to make. 12. 178-191) provide rare insight into the effects of property. p. Without an act of incorporation. or any other devises whatsoever. By the end of the sixteenth century.
p. Selling their own coal remained their chief business (Delaware and Hudson Company.000 of its $250. 1840. 1925. 165).000 on 200 acres of land. "Report of the Managers to the [LCNC] Stockholders. 11. 25. They also priced would-be competitors out by setting prohibitive tolls on coal. 1830). Chap. 21.000 in capital stock to New York investors (Yearly. the map is accurate or the conscience creditable is a separate question. p. June 6. 1829. see Delaware and Hudson Company (1925. November 21. Bishop (1907. disguises for ulterior motives. 130-131. 76). 1830. 20. February 19. company records clearly show that the LCNC and the DHCC operated as coal companies. 39).000 of stock allowed under their charter (Ibid. p. in any particular case. most distinctively. and Shegda (1952.). Hoffman (1968. p. The problem with most of these early mining corporations is that they were not in business long enough to produce dividends. 131). p. p. denouncing corporations to an equal or less or extent. 18. maps of problematic social reality and matrices for the creation of collective conscience. 24. For instance. and adjoining rail lines. p. August 28. toll rates became a crucial component of a corporate policy to block canal access. Both the LCNC and the DHCC eventually entered the coal shipping business. September 25. phatic expression of group solidarity . For similar anti-corporate editorials by Bannan. and proceeded to sell $80. After just four seasons in the field. p." Also see Sketch of the Internal Improvements Already Made by Pennsylvania (1818). 1952. 1831. August 14. Whether.Entrepreneurs or Corporations 37 to yield dividends. 1830. The Delaware and Hudson and the Lehigh Companies are monopolies to the fullest extent while Schuylkill is open to the enterprise of all" (Miner's Journal." 22.they are. 106). but when combined with exclusive legal control of both the commercial shipping business and the commercial shipping route. 1830. February 13. In addition to Breck's pamphlet. After investing between $6." in Hazards XI (1833. in the middle of their own coal lands. and the tolls on non-company coal quickly became their largest source of tolls. See Bartlett (1919. On the mining contracts let by the LCNC and the DHCC. In the LCNC's case. Essentially. The location and tolls of the Schuylkill canal were much more favorable..000 more for mining and canal boats. the agents returned to New York to sell the remaining $170.. 1961. p. 154). pp. May 2. 107) and Klein (1940. Hoffman. 23. February 27. the LCNC and DHCC located the canal headwaters. "In no instance is the vast discrepancy between incorporated monopolies and individuals more strikingly developed than in the different locations of the coal business. the agents of Little New York Company spent $6. For the first two decades of operation. let alone coal. 111). 170) mentions that "numerous articles were published in the newspapers or were circulated in pamphlet form for the purpose of impressing upon the public the need of a canal to compete with New York. 4) on Pennsylvania's early political culture. 1829. My usage of ideology follows Geertz's (1973. The bottom line of both companies was determined chiefly by the receipts from coal sales as opposed to receipts from canal tolls. Toll rates by themselves were probably not sufficient to open or close the mines to individual proprietors. the Little New York ceased operations. pp. 19. but still constituted only a small percentage of their total revenues. . cited in Hartz (1948. see Miners' Journal May 30. Twenty other individual operators signed their names to a total of nine statements.000 and $8.projections of unacknowledged fears. 1840. the only trade routes out of the Lehigh and the Wyoming districts were too costly to reach and too costly to use. While all three canal companies enjoyed state-sanctioned carrying monopolies in their regions. 16. the company's first dividends were paid in 1836. 20) definition: "Whatever else ideologies may be . 17. fourteen years after it was incorporated. 1830.
in any case. p. Offerman..e. especially after the massive influx of Irish immigrants after 1840. 90). though lawfully incorporated or constituted." 30.550 votes and Rimer 126. Bannan used the Miners' Journal to advance the Whig Party platform. As a farmer himself. and those for the mere purpose of promoting objects within the sphere of individual enterprise has happily been adopted and pursued by the legislature of this state with few exceptions. "An Act Relating to the escheat of lands held by corporations. where strong anti-corporate attitudes. 32. by conferring on them extraordinary privileges and exempting them from the ordinary personal liabilities. Offerman was then one of the most zealous and uncompromising opponents of all Coal Companies. Porter received 133. is not only inconsistent with the dictates of sound political economy. purchase lands within this state. however. where individual wealth was seldom great" (United States Gazette. furnish the slxongest evidence in favor of the wisdom of the general course of policy (Reprinted in Bishop. The State Senate's Committee on Corporations ostensibly upheld the inviolability of individual enterprise by outlining the general criteria for incorporation in 1820: The incorporation of associations to carry on business within the reach of individual capital. p.029. can. p. 44-56). pp. see Gudelunas (1985. 34. 187). Section 2 and Section 3) to the law. without incurring the forfeitures of said lands to this commonwealth.. or names of any person or persons whomsoever for its use.. 248-297). remained a democratic stronghold. in fact. who argued that "coal could not be furnished in sufficient quantities by individuals .. unless said purchase be sanctioned and authorized by an act of legislature thereof. 31." ("Laws of Pennsylvania. pp. JEPSON 26. 1907. 28. "Mr. had been the chief sponsor of George Taylor's anti-corporate pamphlet. While the proposed "Offerman Railroad and Mining Company" bore his name." Hazard's XI. Denied direct access to Schuylkill's booming anthracite trade by Pennsylvania's protective legislature. directly or indirectly. Rimer personified the yeoman heritage animating the Whig movement. 27. To some effect. The sound distinction in the incorporating of companies to accomplish works of great public utility.g. The core of both Porter and Frailey's support resided in the newer townships in the western end of the county. and who always proclaimed to be the true followers of Jefferson." Hazard's XI (1833. The delegation's leading advocate of the eleven charter bills in the House was John Spackman. 1838). 1833. 294). The Whigs were essentially a sect of the Democratic party.38 MARK C. 29. 294). but at open war with the principles of free government. the Central Bank) in 1834.that corporations were indispensably necessary in this country. New York capitalists relied on local individuals to act on their behalf (Yearly. Regarding the increasing effect of ethno-religious divisions on voting patterns in Schuylkill County. either in its corporate name. Offerman had previously transferred ownership and control of the venture to the Delafield banking interests of New York City. without the license of the commonwealth. The waivers were actually amendments (e. Based on the 1840 census of individual townships reported by Rupp (1844. 1838) recalled. 33. Schuylkill. March 25. A subscriber to the Miners' Journal (January 31. no corporation either of this state or any other state. 1961. ". p. and the instances of departure from this wholesome discrimination. so . who revolted against Jackson's "executive tyranny" (i. the former carried Schuylkill by less than 100 votes.
p. consumers responded to the high coal prices by forming the "New York Association of Consumers of Fuel.00 a ton in 1830 (Miners' Journal.000 asking-price for the Lehigh Canal (Bishop. 38. Reminiscent of Algonquin. signed by "Investigator" (reprinted in the Miners' Journal. entitled "Exposition of the Objects and Views of the Delaware and Hudson Canal Company. 1940. 17-18) and Wakefield (1965. 71). 110). and could scarcely afford the $3. 1839. 213).00 a ton in 1829 to $3. 273). See LeRoy (1950. the state of New York chartered the Hudson and Delaware Railroad Company to construct a railroad linking New York City to the Lackawaxen Valley. p. September 26. the most incorrigible speculators whoever partook of the public bounty. 42. 64. but the location is not given (Jones. a convention of citizens of the northern counties met in Conyngham. "Your pledge was that you would bring to market better and cheaper coal than had ever been brought before.000. A third convention met in December. pp. October 5. But. p. the price of its coal in New York City was still $8. July 20. November 21. Suspecting that the toll reduction for 1834 would not lead to a permanent change in toll policy. the proposed cartier was a memory. 1952. 1831). 1829). 196) urged the legislature to accept the LCNC's offer to purchase the canal. while in July. the company failed to secure financing for the project. The Hudson and Delaware's New York charter and "detailed prospectus" gave every appearance of a serious contender (Delaware and Hudson Company. April 2. and the political momentum for a state buy-out had dissipated (Shegda. 1839. In 1831.000. As Investigator charged. In another less notable attempt to break the DHCC's control of the Wyoming District. p. 1907. like its predecessors. 74). the promoters of the Jefferson Railroad Company managed to sneak a charter bill through the legislature in 1851. two other widely circulated pamphlets attacked the DHCC. and so will all of our citizens. 1839). The raftsmen remained free to carry on the river trade.. 40." 39. The second represented the views of the Philadelphia backers of the Morris Canal (Bogen. pp. . 1832).. 41. Sixteen years later. pp. 1950. the state of Pennsylvania had amassed a deficit approaching $25. p. 35. 37. in 1867. but when the season opened in 1830. The first pamphlet was actually an anonymous letter..Entrepreneurs or Corporations 39 prevalent in Pottsville. but competition from the canal boats subsequently drove them from the region. p. the Erie Railroad purchased the rights from the Jefferson Railroad Company to consmact part of the same route it had originally proposed twenty years earlier (LeRoy. If the experience of 1830 does not bring you to a sense of justice to that public from which you have received such unexampled aid. 1908. both alleged that the weak financial position of the DHCC would invariably force the company to keep coal prices high. The company had publicly vowed to reduce the retail price of its anthracite from $8. a convention was held in Allentown to the south of the Canal. In May of 1832. After eight years of building the largest public works project in the nation. 36. never developed (Miners' Journal. 61). By the time the Commission presented its recommendation in March of 1834. at the heart of the DHCC's corporate territory. I shall consider you. That same April of 1830. 1925. p.00 a ton (Jones. criticism of the LCNC had subsided. 21). 68-69)." whose stated purpose was to "adopt measures to ensure the regular supply of fuel at fair prices" (Miners' Journal. Reprinted in the Miners' Journal. In 1832. 1908. 1829. August 10. but by the summer of 1830. Neither of these pledges are yet redeemed . the Anthracite Commission (1834. March 10.000.
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