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Berle, Adolf A., Jr. Power without property, a new development in American political economy. New York, Harcourt Brace, 1959. 184 p.

On voting powers of stockholders see especially pp. 62-76 and 104-110.

Cushing, Harry A. Voting trusts, a chapter in modern. corporate history. New York, Macmillan, 1927. 257 p. Provides a useful survey of the development of voting trusts, particularly among railroad corporations during periods of reorganization, in the 19th and early 20th century.

Dewing, Arthur Stone. The financial policy of corporations.

5th edition. New York, Ronald Press, 1953. 2 vols. See Chapter 4, "Fundamental rights of the corporation stockholder", pp. 74-106, especially footnotes on pp.

75-77.

Florence, P. Sargant. The logic of British and American industry, a realistic analysis of economic structure and government. 3rd edition. London, Routledge and Kegan Paul, 1972. 413 p.

See especially Chapter 5, Sec. 2, "The Shareholders' Actual Part in Government, Law and Reality", pp. 211–221, and Sec. 3, "Government by Bloc-holder", pp. 221-241. Gordon, Robert Aaron. Business leadership in the large corporation. Washington, Brookings, 1945. 369 p. Deals with "the relation between active entrepreneurship and the 'control' allegedly exercised by large stockholders, bankers, and others." Especially relevant here are chapters 8, "The Role of the Stockholder", pp. 156-188, and 9, "The Influence and Leadership Activities of Financial Groups", pp. 189-221.

Harbrecht, Paul P. Pension funds and economic power. New York, Twentieth Century Fund, 1959. 328 p. Discusses voting rights by banker trustees and related issues on pp. 115–121, 248–250.

Henderson, Carter F. and Albert C. Lasher. 20 million careless capitalists. Garden City, N. Y., Doubleday, 1967. 287 p.

Numerous references in index to votes and voting, largely related to proxy fights. Alexander Hamilton's views

on stockholder voting in connection with the establishment of the Bank of New York, are given on pp. 30-31. Herman, Edward S. and Carl F. Safanda. Proxy voting by commercial bank trust departments. Banking Law Journal, v. 90, February 1973: 91-115.

department personnel and customers; approximately 300 Based largely on interviews with past and present trust during the period 1969-1972. individuals representing sixty-five banks were interviewed

Hetherington, J. A. C. Fact and legal theory: shareholders, managers, and corporate social responsibility. Stanford Law Review, v. 21, January 1969: 248-292. Article deals largely with the relationship between managers and shareholders.

Hurst, James Willard. The legitimacy of the business corporation in the law of the United States, 1780-1970. Charlottesville, University Press of Virginia, 1970. 191 pages.

A significant broad-gauged study. On voting rights see especially pp. 49-50 concerning the development of the concept of proportionality of shares; on the role of stockholder and the institutional investor, pp. 85-100. Livingston, J. A. The American stockholder. Philadelphia, J. B. Lippincott, 1958. 290 p.

A popularly written book, with frequent references to limitations of stockholder power, including voting rights. Manne, Henry G. Some theoretical aspects of share voting. Columbia Law Review, v. 64, December 1964:1427– 1445.

Makes comparisons between corporate voting procedures and political voting procedures. Ralph Nader's Conference on Corporate Accountability. Corporate power in America. Edited by Ralph Nader and Mark J. Green. New York, Grossman, 1973. 309 p.

See especially chapter 6, "Corporate Democracy: Nice Work if You Can Get It" by John J. Flynn, pp. 94–110. Ratner, David L. The government of business corpora

tions: critical reflections on the rule of "one share, one vote." Cornell Law Review, v. 56, November 1970: 1-56.

A critical evaluation of the "one share-one vote" principle, almost universal in United States corporate practice today, contrasted to the "one man, one vote" rule in governmental affairs.

Author concludes that . . "the rule of 'one share, one vote' represents an aberration in historical development, is widely departed from in other countries, facilitates trafficking in control and the development of unhealthy conglomerates, is vesting increasing power in the hands of financial managers who have neither the desire nor the ability to exercise it, inhibits democratic decision making on important social and economic issues, and is of dubious constitutionality." (p. 44).

Shonfield, Andrew. Modern capitalism, the changing balance of public and private power. London, Oxford University Press, 1965. 456 p.

Discusses the limited role of stockholders in corporate management, and particularly the role of large banks in Germany in voting shares of stockholders held in trust. See especially pp. 246-250, 378.

Stevens, W. II. S. Stockholders' voting rights and the centralization of voting control. Quarterly Journal of Economics, v. 40, May 1926: 353-392.

Stevens, W. H. S. Voting rights of capital stock and shareholders. Journal of Business of the University of Chicago, v. 11, October 1938: 311-348.

The author recommends: 1. "The elimination of all purely nonvoting issues and more general use of share-forshare voting rights. 2. The further development of strong variable voting controls where there are two or more classes of stock, such controls to become effective promptly upon failure either to observe reasonably conservative standards of management or to produce revenues. 3. The extension of the voting proxy system to all corporations regardless of whether there is more than one class of stock or not and possible future inauguration of mail balloting." Timberg, Sigmund. Corporate fictions: logical, social and international implications. Columbia Law Review, v. 46, July 1946: 533–580.

One "fiction" discussed is "that the controlling group will is the will of the stockholders." pp. 561-562.

Attachment A

From: SNEED, EARL. THE STOCKHOLDER MAY VOTE AS HE PLEASES: THEORY AND FACT; UNIVERSITY OF PITTSBURGH LAW Review, v. 22, October 1960, pp. 23-24 Early in the history of business corporations, there existed the rule of absolute equality in stockholder voting. Neither the amount of investment nor the number of shares made any difference; each shareholder had one vote. This concept came from the English political philosophy which held that since each man was equally interested in good government, each man should have an equal voice in managing that government. An analogy was drawn between municipal and business corporations and the latter inherited per capita voting.2

Courts upheld this rule on the ground that it was best for the public interest.3 The contrary plan of one vote for each share was condemned because it encouraged speculation and monopoly, lessened the rights of the smaller stockholders, depreciated the value of their shares, and threw the whole government of the corporation into the hands of a few capitalists. Similar beliefs led legislatures to place quantitative restrictions on voting strength. Sometimes a maximum of ten or twenty votes was prescribed. Or a complicated formula was evolved giving less and less voting weight for each share as the size of the holdings increased. Whatever the plan, the evident purpose was to keep corporate control from crystallizing in the hands of the minority in number.

The policy of voting equality was comparatively shortlived. By various devices stockholders secured voting related to the sum ventured. Before an election, a power stockholder, desiring to cast more votes than the common law or the special charter would permit, would transfer shares to friends who would vote as the real owner directed. Such schemes soon became unnecessary. Corpo

11 MORAWETZ, PRIVATE CORPORATIONS § 476, at 449 (2d ed. 1886).

2 Williston, History of the Law of Business Corporations Before 1800, 2 HARV. L. REV. 105, 156 (1888).

The cases are collected in 63 A.L. R. 1106 (1929).
Taylor v. Griswold, 14 N.J.L. 222, 240 (Sup. Ct. 1834).

5 The schemes of proportionate voting adopted by the Virginia and West Virginia legislatures in the 1860's are detailed in State ex rel. Dewey Portland Cement Co. v. O'Brien, 96 S.E. 2d 171, 174 (W. Va. 1956). The line of Pennsylvania statutes is traced in Note, The Right of Holders of “Non-Voting" Shares to Vote on Increases of Capital Stock: Pennsylvania and Other State Constitutions, 95 U. PA. L. REV. 203, 212 (1946).

See 2 J. S. DAVIS, ESSAYS IN THE EARLIER HISTORY OF AMERICAN CORPORATIONS 324 (1917).

7 Williston, supra note 2, at 157.

8

rations exercising quasi-public functions, such as bridge and road operations, became few in number in comparison to corporations fulfilling purely private functions and public interest in the internal affairs of business corporations waned as did the public fear of corporations. The legislatures capitulated to the demands of those who sought voting strength in proportion to the risk taken. As early as 1886 it was generally provided by statute, or by the articles, that each share should have one vote." The end of stockholder voting equality meant recognition of the fact that the private corporation is basically and fundamentally a profit-making device. While managers of such corporations may be motivated by ambition, creative impulse, and prestige more than personal profit," it is safe to assume that stockholders, on average and with insignificant exceptions, enter into the corporate venture for the cold, hard purpose of making a profit.12 In such a situation, the amount of control granted to each stockholder should be related to the sum invested.

10

If the principle of apportioning voting power commensurate with pecuniary interest is accepted, then the theory of self-interest in stockholder voting emerges with clarity and considerable validity.

Attachment B

FROM: HURST, JAMES WILLARD. THE LEGITIMACY OF THE BUSINESS CORPORATION IN THE LAW OF THE UNITED STATES, 1780-1970. CHARLOTTESVILLE, UNIVERSITY PRESS OF VIRGINIA, 1970. pp. 85-88.

The stockholder's legitimating role was probably never as the legend would have it, in those cases where a sizable body of shareholders pooled assets to create a large enterprise of complex operations. Nicholas Biddle ran the Second Bank of the United States through tight inside control, while the generality of the bank's shareholders acquiesced. In the second half of the nineteenth century the great railroad-the original model of the large industrial corporation-was invariably the creation of some strong, closely centered leadership, which set objectives. and made decisions quite free of influence from most stockholders. A determining factor was size; in big firms the practical pressures and opportunities for insider autonomy produced similar results in the nineteenth and twentieth centuries. On the other hand, the character of investors shifted in the twentieth century in directions which peculiarly reinforced the withdrawal of stockholders from such superintendence as would legitimate those in fact controlling large corporations. Investment in corporate debt and equity securities was still relatively uncommon into the late nineteenth century; in December 1886 issues listed on the New York Stock Exchange included only sixty railroads, four express companies, nine miscellaneous corporations, and seventeen inactive stocks, and

The classic recital of the change from public fear to public cajolery of corporations is the famous dissent of J. Brandeis in Louis K. Liggett Co. v. Lee, 288 U.S. 517, 541 (1933). See also DODD, AMERICAN BUSINESS CORPORATIONS UNTIL 1860, 393-95 (1954). 1 MORAWITZ, op. cit. supra note 1, at 449.

10 VEBLEN, ABSENTEE OWNERSHIP AND BUSINESS ENTERPRISE 84 (1923). See also DRUCKER, THE CONCEPT OF THE CORPORATION 3 (1946); Berle, For Whom Corporate Managers Are Trustees, 45 HARV. L. REV. 1365 (1932). Cf. BERLE, THE 20TH CENTURY CAPITALISTIC REVOLUTION 54-56, 132-33, 166-69 (1954). Corporate policies are now influenced by considerations other than monetary, e.g., national defense, foreign relations, and community responsibilities, such as support for education.

112 DEWING, FINANCIAL POLICY OF CORPORATIONS 743 (5th ed. 1953); Dodd, Is Effective Enforcement of the Fiduciary Duties of Corporate Managers Practicable? 2 U. CHI. L. REV. 194 (1935).

12 Dodge v. Ford Motor Co., 204 Mich. 459, 170 N.W. 668 (1919).

altogether the array included shares of less than a dozen industrial corporations. Investors in corporate shares were likely to be businessmen looking for outlets for their surplus earnings, who, while attracted by the limitedcommitment opportunities which the corporate form allowed, had an entrepreneur's concern with the profit possibilities and records of the companies into which they put money. In contrast, as the roster of corporate shareholders rapidly expanded from 1900-especially in the 1920's and after World War II-more and more investors were salaried, wage-earning, and professional people, whose concern was not with short-term profit but with assured income and long-term appreciation. This was not an entrepreneurial-minded style of investment. Those of this mind were even less likely than their nineteenthcentury predecessors to measure corporation management by short-term profits or to care to spend time or energy in close scrutiny of corporate operations.

Still another change in investment practice affected the place of shareholders in the governance of large corporations. Through the mid-twentieth century increasing millions of individuals invested in corporate securities at second remove by buying life and casualty insurance, creating trusts in care of bank trust departments, purchasing mutual fund shares, and becoming participants in industrial pension funds set up through collective bargaining. By the 1960's the great institutional investors were the largest buyers of corporation bonds and, in response to a steady march of inflation, became substantial buyers of stock. As the number of institutional investors increased, some prophets said that these investors, moved by their stakes and informed by their expertise, would begin to play in earnest the supervisory roles of the legendary stockholder. But through the 1960's the record showed little to bear out the prophecies. The size of their assets commanded respect when institutional investors sought information; by their probing they introduced some fresh surveillance into corporate affairs. Nonetheless, the institutional investors generally behaved as individuals did; like individuals, they expressed dissatisfaction with the government of a corporation by selling out rather than by voting their shares for new men or different decisions. On rare occasions institutional investors cast their weight for a change in top management; rarer was evidence of their influence brought to bear on particular issues of corporation policy. This abdication of the stockholder's supervisory role perhaps derived from traditions of trusteeship; institutional investors were trustees, and fiduciary standards dictate that the trustee should not by his own decisions put the assets in his charge at business risk. A more powerful restraining influence was implied in the rapid increase in the size of such institutional holdings. These stakes gave opportunity and occasion for intervening in the affairs of the corporation whose shares were held, but they also carried a heavy moral, and in some outcomes perhaps a legal, responsibility for exercising such control as the shareholding might allow. Already under responsibility to those for whose benefit they held shares, professional fund managers did not seem anxious to incur further responsibility to their fellow shareholders in the companies in which they invested. At bottom, the position seemed unstable. Institutional investors' demand pressed hard on the supply of corporate securities. As their holdings became larger relative to supply, the possibility loomed that they might find themselves unable to resolve their dissatisfactions with corporate performance by selling out, lest they so dislocate the shares market as to cause unacceptable capital losses.

Thus, weakness bred from the strength of their investment positions might force them to be active rather than passive shareholders. But as of the 1960's such a development was speculative. Meanwhile the relative passivity of these big investors underlined the general failure of shareholding to supply the steady surveillance by which stockholders were supposed to legitimate the power wielded in business corporations.

[From the Cornell Law Review, November 1970, Vol. 56, No. 1] THE GOVERNMENT OF BUSINESS CORPORATIONS: CRITICAL REFLECTIONS ON THE RULE OF “ONE SHARE, ONE VOTE”* (By David L. Ratner†)

[Copyright 1970-71 by Cornell University]

Business corporations are the dominant institutions in American society. The decisions of their managers shape our present and future lives. The processes by which the selection of those managers, and the decisions they make, are ratified or legitimized, are therefore of central importance. Scholars have devoted thought to these processes but there has been almost no effort to relate that thought to existing or potential legal mechanisms for control.

This article is a tentative effort to cross that gap by relating scholarly analysis of corporate government to a particular legal datum-the rule of "one share, one vote." I have not attempted to erect a new framework, but have rather made a series of thrusts at the rule from different

points of view, followed by an extremely preliminary consideration of alternatives. If the thrusts are welldirected, the subsequent erection of a new framework can be undertaken with more confidence about the footing.

Overture: Games People Play

There are three games of Corporations. They are played by different people, on different boards, and with different rules. Corporations I is played on a board with fifty squares, called States. The players are called Corporation Lawyers, and they form themselves into teams, called Bar Association Committees. There are two types of pieces used in the game small pieces called Businessmen and large pieces called Corporations. The large pieces are carefully designed by the Corporation Lawyers to look just like the Businessmen, except of course that they are much larger. Within the States there are obstructions which sometimes prevent the large pieces from moving in the direction that the Corporation Lawyers want to move them. The object of the game is to change the rules in each State to eliminate Corporation Laws. (Actually it consists of substituting the obstructions. This process is called Modernizing the nineteenth-century ideas for eighteenth-century ideas, but since the game became popular in the nineteenth century the term Modernizing is still used.) The Corporation Lawyers who are proficient at this game win large amounts

of money, but since all the teams are on the same side, it is not a very interesting game to watch.

Corporations II is not played on a board, but with a large box called a Corporation. Inside the box are piles of

*The initial work on this article was done in the summer of 1966 under a research grant from Cornell University.

† Professor of Law, Cornell University. A.B. 1952, L.L.B. 1955, Harvard University, consultant to Subcommittee on Budgeting, Management and Expenditures.

money. One group of players is inside the box. They are called Insiders. The Insiders are allowed to take money, but there are rules as to how much money they can take, or how fast or how far they can go, on any one move. There are a few small holes cut in the box through which players outside the box can watch the Insiders. If an outside player thinks he sees one of the Insiders make an illegal move, he shouts "Breach of Fiduciary Duty!" An outside player who shouts this is called a Strike Suiter. Since the rules are not written down, a referee has to be called in to see whether the move was really illegal. If the move was legal, the Insider can keep the money. If the move was illegal, the Insider must put the money back on the pile, and the referee then pays half of it to the Strike Suiter. (Under the old rules, the Insider could pay half to the Strike Suiter and keep the other half, without calling in the referee, but this is no longer permitted.) This game is a lot more fun to watch than the first game.

Corporations III is also played with a large open box, called The Corporation. The box is kept in a luxuriously appointed gaming hall, colloquially called a Think Tank, which is always found in an area with a very nice climate and many recreation facilities. Inside the box are piles of money, and pieces of different shapes and sizes with such names as Workers, Shareholders, and Creditors. There is also a group of players inside the box called Corporate Managers, who move the money and the pieces around in some pattern. The other group of players, called Scholars, are outside the box. They come into the gaming hall after tennis, or swimming, or skin diving, and watch the activities of the Corporate Managers. Then they sit around a table and try to guess what rules the Corporate Managers are following in making their moves. The Scholars who make the cleverest guesses are invited back to play another round at the expense of the gaming hall. Nobody is allowed to watch the game while it is being played, but the guesses made by the Scholars are usually reported in special books with paper covers, which some people read.

I

Historical and Comparative Views

A. An Excursion into Antiquity

The Corporation textbooks do not say much about the development of the rule of one vote per share in business corporations. According to Ballantine, "[a]t common law

...

.. each member [of a corporation] was entitled to one vote, and no more," but this "rule was adopted with respect to public corporations and private corporations not having a capital stock, and at a time when joint stock corporations were unknown. . . . It is generally expressly provided... by a statute or by by-laws, that stockholders shall have one vote for each share held by them." 1 This explanation does not tell us much, and what it does tell us is misleading. The problem of shareholder voting was recognized at the earliest stages of the development of business corporations in England, 400 years ago, and a variety of approaches were developed in response to economic and social needs over the succeeding years.

Through the early part of the seventeenth century, the charters of the joint stock companies, each of which was specially granted by the King, generally made no special provision for the relationship of shares to voting rights,

1 H. BALLANTINE, MANUAL OF CORPORATE LAW AND PRACTICE § 171, at 573 (1930).

leaving this to the by-laws. However, the charter of the Mines Royal in 1568 provided for one vote for each quarter of a share, the total capital being divided into twenty-four shares. Since the project was a joint venture of Englishmen and Germans, between whom there was some "friction and suspicion," this provision was presumably inserted to assure continued English control of the operation, regardless of the number of German shareholders.

The charter of the Mineral and Battery Works, also granted in 1568, had voting provisions similar to those of the Mines Royal. By 1574 it had produced an alleged abuse of fiduciary duty by a controlling stockholder who acquired between one-fifth and one-quarter of the shares and used his voting power, together with allegedly fraudulent accounts, to procure a reduction in the rent that he and two other stockholders paid for property they leased from the company.

Not surprisingly, in the companies whose charters did. not specify the manner of voting, controversies arose when the result of the election would differ depending on whether each shareholder had one vote or one vote for each share. A principal issue in the controversy between the Smythe and Sandys factions for control of the Virginia and Somers Island Companies between 1618 and 1625 was whether voting should be by ballot, in which case each member would have one vote, or by a poll in which members would be entitled to one vote for each share. And in 1637,when the members of the Merchant Adventurers, on a vote by ballot, refused to accept the man "recommended" by King Charles I as the company's deputy in Rotterdam, "the King in Council ordered that, in future, no company should use a ballot-box in the conduct of its business." 8

By the latter part of the seventeenth century, it became more common to specify voting rights in the charter and three distinct patterns emerged. As Scott

describes it:

On the one side, there were a number of com-
panies in which there was no limitation, for
instance in the White Paper Makers, the Salt-
petre company, that for digging Mines and the
Hampstead Aqueducts each share entitled the
holder to one vote. On the other hand, while
there was no undertaking which followed what
is said to have been the method of a regulated
company, namely the decision of controverted
questions by a poll of persons, the Bank of
England approached near to this rule, since it
was decreed that no member should have more
than one vote. The difference lay in the fact that
those, who owned less than £500 stock, had no
voting-power. Similarly in the Million Bank

21 W. SCOTT, THE CONSTITUTION AND FINANCE OF ENGLISH, SCOTTISH AND IRISH JOINT-STOCK COMPANIES TO 1720, at 162-63 (1912).

SELECT CHARTERS OF TRADING COMPANIES 1530-1707, at 14-15 (Selden Soc'y ed. 1913). See also 1 W. SCOTT, supra note 2, at 163. SELECT CHARTERS OF TRADING COMPANIES 1530-1707, supra note 3, at xciv.

A return made in 1571 showed that 14 shares were owned by 22 Englishmen, and the remaining 10 shares by an unspecified number of Germans. 2 W. SCOTT, supra note 2, at 387.

1 id. at 58-59. "When one recollects the amount of discussion that has centred round 'controlling interests'... in recent years, it is not uninstructive to notice how soon the evil manifested itself." Id. at 59.

7 2 id. at 266-88. Sandys also tried to introduce the ballot box at the election of the East India Company in 1619. Id. at 106.

8 1 id. at 228 (footnote omitted). It is tempting to infer from this incident an historical affinity of autocrats for the "one share, one vote" rule.

£300 of stock entitled the holder to one vote and no one might have more than one. In the Royal Lustring company 10 shares (£250) conferred a single vote, which in this case also was the maximum allowed to each member. There was a third group which aimed at a compromise between the extreme tendencies. Like the Bank of England, £500 stock in the Greenland company gave a right to one vote, £1,000 stock to two, the latter being the maximum for any person. According to the constitution of Barbon's land bank, £300 stock qualified for two votes, £500 stock for three votes, £1,000 stock for five votes the latter being the maximum. In the company for smelting Iron with Pit-coal the maximum was four votes, in the Scots Linen manufacture five votes. In some cases, where no express maximum is mentioned, there was still a limit to the votes of any shareholder, arising out of the restriction which limited the amount of stock or shares that might be subscribed for or owned by a member. Thus in the Bank of Scotland each £1,000 Scots carried one vote, subject to the proviso that no one might take up more than £20,000 Scots; and in the society of White writing and printing Paper, while each five shares gave a vote, the maximum holding was 20 shares. The final step in this tendency, as it existed in the seventeenth century, was made by the charter of the Old East India company (1698), which introduced a sliding scale, but not a uniformly progressive one."

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In America, there were very few business corporations or joint stock companies in existence before the Revolution." One of the few was William Penn's Free Society of Traders in Pennsylvania, chartered in England in 1682, in which shareholders not resident in Pennsylvania were restricted to one vote, while those who owned at least 1,000 acres of inhabited land in the province were allowed two votes for two shares and three votes for six shares or more.12

More than 300 private corporations for business purposes were chartered in the United States between the Revolution and 1801,13 of which two-thirds were transportation or water companies or otherwise of a "quasi-public

character." The charters evidenced the same variations as English companies of the same period:

Voting rights were usually not mentioned in water company charters, where the rule of one vote for each proprietor may have been general Id. at 340-41 (footnotes omitted).

10 A. DUBOIS, THE ENGLISH BUSINESS COMPANY AFTER THE BUBBLE ACT 1720-1800, at 288 (1938). For specific examples see id. at 316-17 nn. 48-50.

2 J. DAVIS, ESSAYS IN THE EARLIER HISTORY OF AMERICAN CORPORATIONS 4 (1917).

12 1 id. at 42.

13 2 id. at 8.

14 Baldwin, Private Corporations, in Two CENTURIES' GROWTH OF AMERICAN LAW 1701-1901, at 261, 276 (1901).

through this period; in Massachusetts bridge
charters, which were notably free; and in oc-
casional other charters, such as the congressional
charter to the bank of North America (1781).
From the outset, however, most charters spec-
ified voting rights. These were usually limited in
one way or another. A maximum of ten votes, or
sometimes twenty, was common, and well-nigh
universal in case of turnpike companies. Higher
maxima were common in insurance companies.
Frequently a complicated system was drawn up
giving less and less weight per share as the size
of the holdings increased. Alexander Hamilton,
arguing for such a scheme in his report on the
"National bank," said:

A vote for each share renders a com-
bination between a few principal stock-
holders, to monopolize the power and
benefits of the bank, too easy. An equal
vote to each stockholder... allows not
that degree of weight to large stock-
holders which it is reasonable they
should have, and which, perhaps, their
security, and that of the bank, require.
A prudent mean is to be preferred.
The tendency was, however, for these limitations
to be relaxed toward a simple vote per share basis.
This was done, probably invariably, at the re-
quest of the corporations, probably under pres-
sure from those who were or would be large
holders. And voting rights of one per share were
specified in occasional charters, notably in those
of the Bank of North America (Pennsylvania
charter, 1782), the Massachusetts Bank (1784),
the New Jersey manufacturing society (1791),
and the New Haven Insurance Company
(1797).15

The restrictions on voting rights were at least in part attributable to widespread public concern that grants of power to corporations and those who controlled them would weaken democratic government.16 This concern may have been reinforced by the "tendency to concentration of ownership" already apparent at the end of the eighteenth century, particularly in the more promising enterprises.17 The nineteenth century saw the gradual substitution of general incorporation laws for private acts of incorporation. The early general incorporation laws, however, showed the same variations as the special laws that preceded them.

New York's general law for manufacturing corporations, enacted in 1811, specified that "each stockholder shall be entitled to as many votes as he owns shares of the stock of the said company. " 18 and the Connecticut and

Michigan statutes of 1837 followed the same pattern,19 while New Jersey provided for one vote per share unless otherwise specified. 20 However, New York's 1807 general incorporation law for turnpike companies specified one vote for every share up to ten, and one vote for every five shares above that," a provision which appears to have

15 2 J. DAVIS, supra note 11, at 323-24, quoting M. CLARK & D. HALL, BANK OF THE UNITED STATES 28 (1832) (emphasis in original) (footnotes omitted).

16 2 J. DAVIS, supra note 11, at 304. 17 Id. at 302.

18 Act of March 22, 1811, ch. 67, § 3, [1811] N. Y. Laws 112. 19 Act of June 10, 1837, ch. 63, § 9, [1836-37] Conn. Pub. Acts 49;

Act of March 22, 1837, No. 121, § 3, [1837] Mich. Laws 285. 20 Act of Feb. 25, 1846, § 11, [1846] N.J. Laws 66.

21 Act of March 13, 1807, ch. 38, [1807] N. Y. Laws 104.

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