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Tuesday, March 29, 2011

Wall St. Stands at the Pinnacle of 5,000 Years of Human Exploitation



As powerful as Wall Street appears to be, its abuse of power has so eroded the economic, social, and environmental foundations of its own existence that its fate is sealed.

In an earlier day, our rulers were kings and emperors. Now they are corporate CEOs and hedge fund managers. Wall Street is Empire’s most recent stage. Its reign will mark the end of the tragic drama of a 5,000 year Era of Empire.

Imperial historians would have us believe that civilization, history, and human progress began with the consolidation of dominator power in the first great empires that emerged some 5,000 years ago. Much is made of their glorious accomplishments and heroic battles.

Rather less is said about the brutalization of the slaves who built the great monuments, the racism, the suppression of women, the conversion of free farmers into serfs or landless laborers, the carnage of the battles, the hopes and lives destroyed by wave after wave of invasion, the pillage and gratuitous devastation of the vanquished, and the lost creative potential.

Nor is there mention that most all the advances that make us truly human came before the Era of Empire—including the domestication of plants and animals, food storage, and the arts of dance, pottery, basket making, textile weaving, leather crafting, metallurgy, architecture, town planning, boat building, highway construction, and oral literature.

As the institutions of Empire took root, humans turned from a reverence for the generative power of life to a reverence for hierarchy and the power of the sword. The wisdom of the elder and the priestess gave way to the arbitrary rule of often ruthless kings. Social pathology became the norm and society’s creative energy focused on perfecting the instruments of war and domination. Priority in the use of available resources went to military, prisons, palaces, temples, and patronage.

Great civilizations were built and then swept away in successive waves of violence and destruction. War, trade, and debt served as weapons of the few to expropriate the means of livelihood of the many and reduce them to slavery or serfdom. Whole empires were subjected to the delusional hubris and debaucheries of psychopathic rulers.

If much of this sounds familiar, it is because in the face of the democratic challenge, the dominator cultures and institutions of Empire simply morphed into new forms.

The ideals of the American Revolution heralded the possibilities of a new era of equality and popular democratic rule, but it was a more modest beginning than we have been taught to believe. Once the former colonies gained their freedom from British rule and declared themselves the United States of America, their new leaders put aside the pronouncement of the Declaration of Independence that all men are created equal and enjoy a natural right to life, liberty, and the pursuit of happiness—and set about securing their own power.

The king was gone, but the Constitution they drafted with a promise to “secure the Blessings of Liberty” for “We the People of the United States” effectively limited political participation to white male property owners and secured the return of escaped slaves to their designated owners. Colonial expansion followed soon after as the new nation expropriated by armed force all of the Native and Mexican lands between themselves and the distant Pacific Ocean.

Global expansion beyond U.S. territorial borders followed. The United States converted cooperative dictatorships into client states by giving their ruling classes a choice between aligning themselves with U.S. economic and political interests for a share in the booty or being eliminated by assassination, foreign-financed internal rebellion, or military invasion. Following World War II, when the classic forms of colonial rule became unacceptable, international debt became a favored instrument for forcing poorer nations to open to foreign corporate ownership and control.

Most of the economic, social, and environmental pathologies of our time—including sexism, racism, economic injustice, violence, and environmental destruction—originate in the institutions of Empire. The resulting exploitation has reached the limits that the social fabric and Earth’s natural systems will endure.

As powerful as Wall Street appears to be, its abuse of power has so eroded the economic, social, and environmental foundations of its own existence that its fate is sealed. We the People have a choice. We can allow Wall Street to maintain its grip until it brings down the whole of human civilization in irrevocable social and environmental collapse. Or we can take control of our future and replace the Wall Street economy with the values and institutions of a New Economy comprised of locally owned businesses devoted to serving their communities by investing in the use of local resources to produce real goods and services responsive to local needs.

Either way, Wall Street’s days are numbered. Ours need not be.

David Korten wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.

David Korten is a former economist with USAID, author of "When Corporations Rule the World," and an associate of the International Forum on Globalization.

Sunday, March 27, 2011

Are there too many psychopaths in Corporate America?




Montague Ullman, M, D.

In psychiatry there is a diagnostic entity variously known as psychopath, sociopath and antisocial personality disorder. The central feature of this disorder is the failure to develop any ethical standards of social behavior, The concept of "do unto others as you would have them do unto you" is foreign to the psychopath. That remarkable advice is replaced by "do unto others as it pleases you regardless of consequences." We do not know for sure the cause of such behavior, whether it is genetic in origin, the result of early developmental trauma, or a combination of the two. The outstanding feature is that the psychopath has a natural talent for using and exploiting others and does so with such skill that true motives remain concealed by ingratiating ways and apparent normality. At some point the bubble bursts and the victim awakens to the reality that they have been taken.

In a democratic society government is supposed to serve the needs of every member of that society. There are two models for such societies, Both involve capitalism. The social democratic societies, such as in Scandinavia, temper the profit motive so as to restrict the massive inequities and ensure that health, education, security and opportunity is available to all. They do this by a system of taxation that succeeds in narrowing the gap between the haves and the have-nots so that a significant proportion of the population is not in trouble.

In the United States where capitalism is given a much freer rein there is the possibility of the profit motive getting so out of hand that those on top are enriched at the expense of those left behind, That is "wild capitalism". The recent run of failures of formerly very profitable corporations are a prime example of that, and how painful it is for those who are ultimately victimized by it. Victimhood is the characteristic feature of psychopathy.

A corporation has been endowed with personhood by the Supreme Court. It is not a person but it is run by persons. If the ethical standards of those at the top fail to maintain a certain level of social responsibility, the result is the insidious onset of corporate psychopathic behavior. A few get very rich and the others wake up one day to find themselves abandoned by the institution they trusted. We now have to take into account the corporation as a psychopathic entity outfitting all prior attempts on the part of governmental regulating agencies to control its behavior. A reactionary government succumbing to corporate power colludes in this happening by weakening regulatory controls, In his book "The Corporation", Joel Bakan offers a thorough account of corporate psychopathy,

The damage in human terms resulting from psychopathic behavior, individual or corporate, leaves a destructive trail behind. The individual psychopath contaminates whatever circle he moves in. Corporate psychopathy contaminates the government which is responsible for setting certain ethical limits to corporate behavior. Excessive lobbying and financial largesse influences those who make the laws and those who have the responsibility for executing the laws.

The title of Hervey Cleckley's classic volume, "The Mask of Sanity," says it all. The psychopath is someone who seems comfortable with himself and his surroundings, often of superior intelligence, capable of turning on the charm said generally creating a positive impression. The problem is it's all fake. There is no genuine empathy, no sense of responsibility or concern for anyone but himself. We are no witnessing large scale corporate and political corruption being unmasked. Money churned out by corporate psychopathy has influenced legislative and executive functions to the point where the former has surrendered its unique power to declare war and the latter to begin a war based on falsehoods fed to the American public.

The analogy between the individual psychopath and the corporation behaving as a psychopathic entity is limited but frighteningly meaningful. I will discuss the analogy to the extent to which it conforms to the current diagnostic criteria of the American Psychiatric Association as noted in the Diagnostic and Statistical Manual (DSM-IV, 1994). The term psychopathy has been replaced by Antisocial Personality Disorder. The criteria will be noted in their relevance to the notion of corporate psychopathy.

The listing of the criteria is preceded by the following statement.

There is a pervasive pattern of disregard for and violation of the rights of others occurring since the age of 15 years as indicated by three or more of the following: (criteria)

Comment: This, of course, does not literally apply to a corporation. Corporations do have a beginning with the incorporation followed by a growth period which then leads to a successful or unsuccessful maturity. The temptation to skirt the law may occur at any time. Early indications involve looking for loopholes in the law, setting up phoney offshore subsidiaries and courting political power to ease regulatory restrictions.

The Diagnostic Criteria

1. failure to conform to social norms with regard to lawful behavior as indicated by repeatedly performing acts that are grounds for arrest.

Comment: This is true for some psychopaths but not all. Many of them manage to live a long and parasitic life, never see a day in prison and die quietly of old age. Corrupt corporations reach positions of great power and they do this by going beyond social norms. They seek out loopholes in the law, incorporate offshore, curry favor with politicians, manipulate stock shares and engage in illegal accounting practices. In their drive for power and profit they pursue a path where when caught, those at the top still walk away with fabulous sums while the workers and the shareholders are left holding a very empty bag.

2. deceitfulness as indicated by repeated lying, use of aliases or conning others for personal profit or pleasure.

Comment : Conning others speaks to the heart of psychopathy. Lying consciously or unconsciously is the instrument by means of which a psychopath establishes a beachhead with his prey. It comes packaged in various ways - charm, wit, good looks and cunning. His individual goal is money, love or power. Corrupt corporations are out for money and power and maneuver the agencies of government in pursuit of their goals. Love is an irrelevant emotion as this plays out.

3. impulsivity or failure to plan ahead

Comment: The Iraq War is a case in point when corporate psychopathy influences the political structure.

4. irritability and aggressiveness as indicated in repeated physical fights or assaults

Comment: This is characteristic of psychopaths who pursue a career in crime. There is aggression and fighting in the world of corporate psychopathy but this is acted out in the court to save or expand one's own turf.

5. reckless disregard for safety of self or others

Comment: Again the relevance of corporate psychopathy to the political structure has played a role in the Iraq war, a war that has resulted in the loss of thousands of lives.

6. reckless disregard for safety of self or others consistent with irresponsibility as indicated by repeated failure to sustain consistent work behavior or honor financial obligations

Comment: When the word safety is used here in a more general sense, e.g. financial security, it is relevant to corporate psychopathy. Once greed takes over honesty goes out the window. Accounting becomes cover-up. Stock maneuvering enriches the executives at the expense of the workers and shareholders. When corrupt companies fail, workers lose.

7. lack of remorse as indicated by being indifferent to or rationalizing having hurt, mistreated or stolen from another

Comment: The lack of genuine remorse is another basic feature of psychopathy. The corporation as an entity cannot feel remorse but the people who run it can, at least to some extent, in their personal lives and on rare occasions when the law catches up with them and confronts them with the tragic consequences of their actions. The fact that a corporation may have taken a psychopathic course does not mean that the individuals responsible are psychopaths, although there may be an occasional one among them. They are, however, in an emotionally compromising and awkward place. On the one hand, they have participated in the creation of a psychopathic entity that wreaks havoc on people and the environment. On the other hand, at home in their private lives they are no different than the rest of us except for their high lifestyle. The only residue of psychopathy in their personal lives is their enjoyment of ill-gotten gains. A more stark example of this is the emotional compartmentalization of the concentration camp guard who is very much the psychopath at his job and the family man at his home.

I have briefly sketched the extent to which the concept of corporate psychopathy fits into the current diagnostic criteria of anti-social personality. The diagnosis rests on meeting at least three of the criteria. I have developed the correspondence based on meeting six of the seven (1,2,3,5,6,7). The concept of corporate psychopathy fits snugly into these six.

The criteria as noted in the manual do not go far enough in capturing the essence of psychopathy, As R.D. Hare and others have pointed out, they are attuned to a certain segment of the criminal population and do not sufficiently emphasize the personality traits of the psychopath, traits which enable them to pursue a psychopathic way of` life quite well within the accepted bounds of society.

It is often the case that psychopaths are gifted with a natural talent for ingratiating themselves. They walk among us wearing "the Mask of Sanity". Impervious to genuine feeling, lacking in empathy they manage to get what they want from others and tragically on occasion manipulate an entire nation.

They are to be found at every level of the social strata including the professions, the business world and most unfortunately the political world as well, Corporate psychopathy is a plague that wreaks havoc on people, on the environment and on the moral status of the nation that tolerates it. Unlike genuine infectious disorders, a chronic phase precedes the acute one. It extends over the period when the corporation reaps extravagantly large profits. The acute phase is ushered in when the financial maneuverings can no longer keep the corporation afloat. It ends up in a trip to the morgue leaving precious little to salvage.

Corrupt corporations feed on money and power, The former comes in part from the U.S. Treasury and ultimately from the general public. To maintain this flow they seek power. The government is where the power is. Individual psychopaths rely on their personality and manipulativeness to get what they need from another person. Psychopathic corporations face a more complex task. They have to influence all three branches of our government, the legislative, the judiciary and the executive, to go along with survival tactics motivated by greed rather than the welfare of the public. Corporations have been in business a long time and have succeeded admirably. We have created a new generation of robber barons but this time they are playing for much higher stakes. The pathological fallout is no longer limited to our own borders. Their reach extends globally, involving us politically, environmentally and militarily with countries rich and poor. Illness knows no geographical limits.

The Legislative Branch

The members of the Congress are prime targets for corporate bribery. Lobbying is one thing. Lobbying backed by generous financial contributions is another. Recent legislation, for example, designed to lower the cost of drugs does more to insure the continuing huge profits of the drug companies. To restrain corporate greed it would have been better to control drug prices than to leave many with the choice between feeding a family or buying needed drugs. Pharmaceutical companies do not only bribe legislators, they also find ways that amount to bribery to influence the physician's choice of drugs.

Legislators are also pressured to favor corporate power over the protection of the environment. We have failed to come to terms with global warming under pressure from the coal and oil industry. Our public lands, long a treasured heritage, are under siege by oil and gas interests, as are our forests by the lumber industry. Added to this is the need for more effective monitoring of the industrial pollution of air and water.

The Judiciary

Individual psychopaths are small-time pickpockets compared to the huge sums of money that corrupt corporations manage to remove from the pockets of each of us. The ultimate victim is the public at large. We buy what they are selling. The individual psychopath when he is caught in a criminal act goes to jail. The criminal corporation goes to court, and until recently most often civil court rather than criminal court. In the case of the former, fines are levied which may or may not have the desired effect (there are recidivists). Criminal offenders receive sentences not commensurate with the damage they have done. The complex nature of corporate crime makes it more difficult to litigate. Lower level officials are often the ones that are scapegoats. Finally, there are insufficient prosecutory resources to thoroughly handle every referral.

Individual psychopaths are untreatable. Nor do we know much about the prevention. The prognosis is not quite as bad in the case or corporate psychopathy. Some are so mortally wounded that sudden death occurs. For some a radical overhaul may be a successful treatment. Jail is simply an isolation word to temporarily prevent the illness from spreading. Prevention is the only approach to a cure. We know the causative virus is greed. An effective serum awaits the day when we succeed (if ever) in separating money from politics. We face the choice of closing our eyes to the very infectious nature of the virus and the plague it has produced, or radically rooting it out by seriously investing our resources in manufacturing that serum.

The government as it is now functioning is not in a position to prepare the services necessary to immunize the public. Each of us is faced with the task of creating our own antibodies by getting closer to an awareness of the extent to which we have been infected and do what is necessary to usher in wiser leaders,

The Executive Branch

We are profoundly ignorant of the etiology and prevention of psychopathy in the individual. This is not so in the case of corporate psychopathy. Deregulation, the money trail to power, and our materialistic concentration all pave the way to unmitigated greed. Legal penalties retard or stop the illness in individual cases of corporate psychopathy but do not get at the root of the problem. In the light of the legislative failure at prevention, our only hope resides in an executive branch that has insight into the scope and nature of the illness and the way both government and our lifestyle has contributed to its existence, Of the three branches of government, the executive can be the most important in initiating a program of prevention. The world knows the price that society has paid for leaders that are poseurs or "strong men". Finding the proper leader who could initiate a genuine effort at prevention is a daunting one. We need a leader who has the courage to look into a magic mirror that reveals all the ways these malignant organisms have worked their way into the avenues of government and into the lives of the citizenry it is there to protect. He or she would have to have the foresight and vision of our Founding Fathers, the honesty of Abe Lincoln and the capacity of a war president like F.D.F in keeping the country united instead of splitting it into two hostile factions.

Although the virus responsible for corporate psychopathy has been endemic at least since Theodore Roosevelt's time, it has now risen to epidemic proportions. We are dealing with a virus that ravages people and the environment and has caused a palpable degree of moral fallout. Robert Hare, in his book, Without Conscience, refers to this latter change as resulting in a "camouflage society." He cites the role of corporate power as fostering a cultural atmosphere "where egocentricity, lack of concern for others, superficiality, style over substance, being cool, manipulativeness and so forth are tolerated and even valued. Even more important is the reality that the ullman* linkage of corporate psychopathy to political power is a recipe for totalitarianism.

Our country is more divided along party lines than it has been in a long time. If we, the people, can come together in the recognition of this deepening illness in our midst, we can more effectively strive to eliminate it. Instead of a politically divided Supreme Court, we are in need of a Mayo Clinic of last resort. After all, doctors don't work along party lines in their efforts at healing.

Saturday, March 26, 2011

Why Health Care Markets Can Never Work

Dissident Voice: a radical newsletter in the struggle for peace and social justice

Why Health Care Markets Can Never Work

Suppose I want to buy a used car, and imagine there’s no Cars.com or Craig’s List, and professional used car salesmen are the normal way to buy. So I go to a dealer ask him about maybe a 1998 Honda, thinking that’s what I can afford.

“Oh, no,” says the dealer. “That would be totally wrong for you. You need a 2009 Lexus.”

“But I can’t afford that. I’ve only got $4000.”

“Look. If you don’t get that Lexus, you could die. Or have a terrible accident. Or at the very least, you would have to stop driving after two or three years. Yes, it’s expensive. But this is your future we’re talking about.”

“Well, I guess you’re the expert. If I really need it, I’ll sign the papers and worry about paying for it later.”

Of course this conversation would be insane. The seller can’t decide what the buyer pays for. That would be the ultimate sellers’ market, in which prices would spiral endlessly upward, and everyone would be driving around in much more car than they needed or could afford. Soon, many buyers would go bankrupt and stop driving entirely, and the system of car-based transportation would collapse. Besides, nobody would allow a car salesman’s opinion to override their own in the first place.

But substitute “doctor” for “car dealer” and “treatment” for “Lexus,” and you have the exact situation that exists in American medicine now. The sellers – physicians, hospitals, drug companies, medical equipment makers – tell the buyers – us and our insurance providers – what we need. We can say no, but the professionals are the experts. They know far more than we do. (Or at least we think they do.) Sometimes they bully and threaten (“You could die!”) So the sellers have more input into the final purchase decision than the buyers do. And as a result, costs are spiraling upward, people are being over-treated and going bankrupt, and the system is collapsing.

Markets are good for things like cars. The buyer looks for what he wants. When he finds something close, the seller makes an offer and the buyer decides whether the price is acceptable. Eventually they agree on a price, or they don’t, in which case there’s no sale.

But healthcare is completely different. The sellers are in control. They’re steering purchase decisions. With or without “health care reform,” it makes no difference. Prices will keep going up; unnecessary services will keep proliferating. Individuals, companies, and governments will continue to be bankrupted. Millions will be denied care for lack of funding. And free market advocates will keep saying the market is the answer to our healthcare crisis.

Our society can decide that everyone is entitled to appropriate medical care, or not. But we can’t provide care to any except the very rich under this topsy-turvy anti-system. Costs will continue to spiral if sellers set the prices and make the purchasing decisions. Eventually we will run out of money, and eventually came about twenty years ago in the US. We’ve been paying medical bills on credit ever since.

A sellers’ market can’t control costs. Instead, costs should be controlled, as they are in Europe, with rational, evidence-based decisions on what treatments are effective and affordable, and what they should cost. Of course, such a system will be open to corruption and abuse, but, unlike the present system, at least we would have a chance to do things rationally.

Alternatively, we can deny care to ever-larger sections of the population who can’t pay the escalating prices. Either way, we should stop pretending that the ultimate seller’s market will fix itself. It can’t.

David Spero RN writes books, columns, and blogs about the social dimensions of health. He edited the paper Green Consensus for the California Greens. He can be reached at: david@www.art-of-getting-well.com. Read other articles by David, or visit David's website.

This article was posted on Saturday, March 26th, 2011 at 8:01am and is filed under Health/Medical.

Tuesday, March 22, 2011

The Corporate Conquest of America


Chapter Two: The Corporate Conquest of America

by: Thom Hartmann, Berrett-Kohler Publishers | Book Excerpt

The Corporate Conquest of America
(Image: Lance Page / t r u t h o u t)

The legal rights of the...defendant, Loan Company, although it be a corporation, soulless and speechless, rise as high in the scales of law and justice as those of the most obscure and poverty-stricken subject of the state.

- Excerpt from the judge’s ruling in Brannan v. Schartzer, 25 Ohio Dec. 491 (1915)

While corporations can live forever, exist in several different places at the same time, change their identities at will, and even chop off parts of themselves or sprout new parts, the chief justice of the U.S. Supreme Court, according to its reporter, had said that they are “persons” under the Constitution, with constitutional rights and protections as accorded to human beings. Once given this key, corporations began to assert the powers that came with their newfound rights.

  • First Amendment. Claiming the First Amendment right of all “persons” to free speech, corporate lawsuits against the government successfully struck down laws that prevented corporations from lobbying or giving money to politicians and political candidates.1
  • Fourth Amendment. Earlier laws had said that a corporation had to open all its records and facilities to our governments as a condition of being chartered. But now, claiming the Fourth Amendment right of privacy, corporate lawsuits successfully struck down such laws. In later years they also sued to block Occupational Safety and Health Administration (OSHA) laws allowing for surprise safety inspections of the workplace and stopped Environmental Protection Agency (EPA) inspections of chemical factories.2
  • Fourteenth Amendment: Claiming Fourteenth Amendment protection against discrimination (granting persons equal protection), the J. C. Penney chain store successfully sued the state of Florida, ending a law designed to help small, local business by charging chain stores a higher business license fee than that for locally owned stores.3

This chapter is part of an exclusive Truthout series from Thom Hartmann, America's No. 1 progressive radio host and bestselling author of 21 books. We are publishing weekly installments of the bestseller, "Unequal Protection: How Corporations Became 'People' - and How You Can Fight Back." Please join us as Hartmann explores the evolution of corporate personhood, gaining insight into the nature of democracy. To read more chapters, click here.

Women Ask, “Can I Be a ‘Person,’ Too?”

Interestingly, during the era of the Santa Clara decision granting corporations the full protections of persons under the Constitution, two other groups also brought cases to the Supreme Court, asking for similar protections. The first group was women. This was a movement with a fascinating history, its roots in the American Revolution itself.

In March 1776 thirty-two-year-old Abigail Adams sat at her writing table in her home in Braintree, Massachusetts, a small town a few hours’ ride south of Boston. The war between the American colonists and their opponents—the governors and the soldiers of the East India Company and its British protectors—had been going on for about a year. A small group of the colonists gathered in Philadelphia to edit Thomas Jefferson’s Declaration of Independence for the new nation they were certain was about to be born, and Abigail’s husband, John Adams, was among the men editing that document.

Also See Thom Hartmann's Video:

Abigail had a specific concern. With pen in hand, she carefully considered her words. Assuring her husband of her love and concern for his well-being, she then shifted to the topic of the documents being drafted, asking John to be sure to “remember the Ladies, and be more generous and favourable to them than [were] your ancestors.”4

Abigail knew that the men drafting the Declaration and other documents leading to a new republic would explicitly define and extol the rights of men, but not of women, and she and several other well-bred women were lobbying for the Constitution to refer instead to persons, people, humans, or “men and women.” Her words are well-preserved, and her husband later became president of the United States, so her story is better known than those of most of her peers.

By late April, Abigail had received a response from John, but it wasn’t what she was hoping for. “Depend upon it,” the future president wrote to his wife, “[that] we know better than to repeal our Masculine systems.”

Furious, Abigail wrote back to her husband, saying, “If perticular [sic] care and attention is not paid to the Ladies, we are determined to foment a Rebellion...”

All of Abigail’s efforts were ultimately for nothing. Richard Henry Lee of Virginia introduced on June 7, 1776, a resolution that the colonies be free and independent states governed solely by free men, based on a document written by Thomas Jefferson and edited by John Adams and Benjamin Franklin. Adams played a strong role in the heated debate over the following month, which concluded with a vote to adopt the gender-specific language of Lee’s resolution on July 2, 1776. Congress formalized it two days later as the Declaration of Independence.

Adams, Jefferson, Hamilton, and the other men of the assembly explicitly demanded rights for male citizens—and not for female citizens—when they crafted the Declaration. “Men” was not a generic reference to humans; the authors meant humans of the male gender. They wrote: “We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness—That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed...”

The men had won. Among the earliest laws of the Colonies were several legislating that men had power over women:5

  • A married woman was not allowed to make out a will because she was not allowed to own land or legally control anything else worthy of willing to another person.
  • Any property a woman brought into the marriage became her husband’s at the moment of marriage, and would revert to her only if he died and she did not remarry. But even then, she would get only one-third of her husband’s property, and what third that was and how she could use it were determined by a male, court-appointed executor, who would supervise for the rest of her life (or until she remarried) how she used the third of her husband’s estate she “inherited.”
  • When a widow died, the executor would either take the property for himself or decide to whom it would pass; the woman had no say in the matter because she had no right to sign a will. Women could not sue in a court of law except under the same weak procedures allowed for the mentally ill and children, supervised by men.
  • If the man of a family household died, the executor would decide who would raise the wife’s children and in what religion. She had no right to make those decisions and no say in such matters. If the woman was poor, it was a virtual certainty that her children would be taken from her.
  • It was impossible in the new United States of America for a married woman to have legal responsibility for her children, control of her own property, own slaves, buy or sell land, or even obtain an ordinary license.

Women Work for, Then Against, the Fourteenth Amendment

After the American Revolution, educated women picked up Abigail Adams’s chant and began to quietly foment her “rebellion.” They wrote poems and seemingly innocuous letters to the editors of newspapers, speaking indirectly about their demands for equal rights. Word spread. By the early 1800s, women’s voices were getting louder, and many were demanding an amendment to the Constitution to give equal rights to women or prohibit discrimination against women.

But women didn’t gain any legislative successes until 1868, and that turned out to be a Pyrrhic victory. It was the Fourteenth Amendment, passed after the Civil War, which guaranteed due process of law to all “persons.” Oddly, when it was being drafted in 1866, suffragettes Susan B. Anthony and Elizabeth Cady Stanton had argued strongly against it because it was the first time the word male was used in the Constitution or any constitutional amendments.

The Fourteenth Amendment has two provisions, one guaranteeing due process of law to all persons and the other defining how lines would be drawn to decide how representation was to be apportioned in the House of Representatives. Section 2 includes the phrase “the proportion which the number of such male citizens shall bear to the whole number of male citizens.”

Stanton wrote in 1866, “If the word ‘male’ be inserted [in this amendment] it will take a century to get it out again.”6

Despite Stanton’s objections to its sexually discriminatory language, the Fourteenth Amendment was passed and ratified by enough states to become law. And Stanton was off in her prediction by only two years: the Equal Pay Act of 1963 and the Civil Rights Act of 1964 required equal pay for women and men and prohibited discrimination against women by any company with more than twenty-four employees.

Women Test the Fourteenth Amendment

In an attempt to test the Fourteenth Amendment, Susan B. Anthony went to her local polling station and cast a vote on November 1, 1872. Justifying her vote on the grounds of the Fourteenth Amendment, on November 12 Anthony wrote, “All persons are citizens—and no state shall deny or abridge the citizen rights...”

Six days later, however, she was arrested for voting illegally. The judge, noting that she was female, refused to allow her to testify, dismissed the jury, and found her guilty. Lacking the resources available to huge corporations, she was unable to repeatedly carry her cause to the Supreme Court as the railroads customarily did, and that judge’s decision stood.

One year later, in the 1873 Bradwell v. Illinois decision, the Supreme Court ruled that women were not entitled to the full protection of persons under the Fourteenth Amendment. Justice Joseph P. Bradley wrote the Court’s concurring opinion, which minced no words: “The family institution is repugnant to the idea of a woman adopting a distinct and independent career from that of her husband. So firmly fixed was this sentiment in the founders of the common law that it became a maxim of that system of jurisprudence that a woman had no legal existence separate from her husband, who was regarded as her head and representative in the social state...”

Corporations had full legal existence and the constitutional rights of persons, but women could derive these rights only through their husbands. They didn’t even exist as legal entities separate from their husbands. And the Supreme Court said that the Fourteenth Amendment didn’t apply to them, even though the amendment explicitly said “persons.”

Women didn’t get the vote until 1920, and the Equal Rights Amendment that says, simply and entirely, “Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex,” has been introduced into Congress every year since 1923 but has never passed, blocked in every case by male legislators.

Freed Slaves Ask, “Can I Be a ‘Person,’ Too?”

The second group to petition the Supreme Court to be recognized as persons under the Fourteenth Amendment were the people for whom it was passed: freed slaves and their descendants. But ten years after giving corporations full rights of personhood, the Supreme Court ruled in Plessy v. Ferguson that any person more than “1⁄8th Negro” was not legally entitled to full interactions with white “persons.”

Justice Henry B. Brown delivered the near-unanimous (one dissenter) opinion of the Court, which established nearly a century of Jim Crow laws, saying, “Gauged by this standard we cannot say that a law which authorizes or even requires the separation of the two races in public conveyances is unreasonable, or more obnoxious to the Fourteenth Amendment than the acts of Congress requiring separate schools for colored children in the District of Columbia, the constitutionality of which does not seem to have been questioned, or the corresponding acts of state legislatures.”7

Court reporter J. C. Bancroft Davis, in the headnote he wrote as commentary to the Plessy v. Ferguson case, said that the case had come about when Plessy, “being a passenger between two stations within the State of Louisiana, was assigned by the officers of the [railroad] company to the coach used for the race to which he belonged, but he insisted upon going into a coach used by the race to which he did not belong.”

Davis then quotes the Fourteenth Amendment and says afterward, “The object of the amendment was undoubtedly to enforce the absolute equality of the two races before the law, but in the nature of things it could not have been intended to abolish distinctions based upon color, or to enforce social, as distinguished from political equality, or a commingling of the two races upon terms unsatisfactory to either.”

This institutionalization of segregation by the 1896 Plessy case prompted U.S. Supreme Court Justice Hugo Black to note in 1938, “Of the cases in this Court in which the Fourteenth Amendment was applied during the first fifty years after its adoption, less than one-half of one percent invoked it in protection of the Negro race, and more than fifty percent asked that its benefits be extended to corporations.”8


1. First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978).

2. Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978).

3. Liggett v. Lee, 288 U.S. 517 (1933).

4. The correspondence between Abigail Adams and John Adams is available at http:// www.masshist.org/digitaladams/aea/letter.

5. For more on this subject see http://lcweb2.loc.gov/ammem/awhhtml/awlaw3/prop erty_law.html.

6. Quoted in Sharada Rath, Women in Public Administration of the American States: A Study of their Administrative Values (New Delhi: M.D. Publications, 1998), 41.

7. Plessy v. Ferguson, 163 U.S. 537 (1896).

8. Connecticut General Co. v. Johnson, 303 U.S. 77 (1938).

Thom Hartmann is America's No. 1 progressive radio host, as well as the New York Times bestselling, four-time Project Censored Award-winning author of 21 books in print, in 17 languages on 5 continents.

Copyright Thom Hartmann and Mythical Research, Inc. Truthout has obtained exclusive rights to reprint this content. It may not be reproduced, and is not covered by our Creative Commons license.

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Monday, March 21, 2011

March Madness for Corporate Tax Dodgers


Top seeds in the Tax Haven Tourney: banks and power companies

The small companies and public didn't have a chance in the early rounds. Now it's down to a few formidable corporate teams, the Cheat 16:

- General Electric made $10.3 billion in 2009, but received a $1.1 billion tax rebate.

- Forbes said about Bank of America in 2010: "How did they not pay any taxes on $4.4 billion in income?"

- Oil giant Exxon made a $45 billion profit in 2009, but paid no taxes in the United States.

- Citigroup had 4 quarters of billion-dollar profits in 2010, but paid no taxes.

- Wells Fargo made $12 billion but purchased Wachovia Bank to claim a $19 billion tax credit.

- Hewlett Packard's U.S. income tax rate was 4.3% in 2008 and 2.3% in 2009.

- Verizon's 10.5% tax rate, according to Forbes, is due to its partnership with Vodafone, the primary target in UK Uncut's protests against tax evaders.

- Chevron's tax rate was 1% in 2008.

- Boeing, which just won a $30 billion contract to build 179 airborne tankers, got $124 million back from the taxpayers in 2010.

- Over the past 5 years Amazon made $3.5 billion and paid taxes at the rate of 4.3%.

- Carnival Cruise Lines paid 1% in taxes on its $11.5 billion profit over the past 5 years.

- Koch Industries is not publicly traded, so their antics are kept private. But they benefit from taxpayer subsidies in ranching and logging.

- In 2008 CorporateWatch said Rupert Murdoch's Newscorp paid "astoundingly low taxes" because of tax havens.

- Google "cut its taxes by $3.1 billion in the last three years by shifting its money around foreign countries.

- Merck, the second-largest drugmaker in the U.S., last year brought more than $9 billion from abroad without paying any U.S. tax.

- Pfizer, the largest drugmaker in the U.S., erased $10 billion in taxes with an "accounting treatment."

All the above has been documented by US Uncut Chicago members on PayUpNow.org .

Who's projected for the Final Frauding Four?

Best Defense: Google uses a game plan called a "Double Irish Defense," which moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Best Offense: GE's 2010 SEC 10-K tax filing boldly states: "At December 31, 2010, $94 billion of earnings have been indefinitely reinvested outside the United States...we do not intend to repatriate these earnings.."

Most Steals: Citigroup: 427 tax haven subsidiaries

Best Trash talk: A General Electric spokeswoman: “G.E. pays many other taxes including payroll taxes on the wages of our employees, property taxes, sales and use and value added taxes."

Most game-ending bailouts: Bank of America received $45 Billion in tax payer bailout funds in 2008 and 2009. In 2009 the company earned a pretax income of $4.4 billion, but claimed a $1.9 Billion tax benefit from the government.

Teams with the most reserves:
General Electric: $77 billion
Google: $24 billion
That's 2 companies holding $101 billion that could be invested in jobs.

Tax Haven Tourney Champion? GE is the Duke of Tax Avoidance.

Paul Buchheit

Paul Buchheit is a faculty member in the School for New Learning at DePaul University, author of UsAgainstGreed.org and RappingHistory.org, and the editor of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Sunday, March 20, 2011

Collaboration against Democracy US Chamber of Commerce and US Supreme Court

Dissident Voice: a radical newsletter in the struggle for peace and social justice

Collaboration against Democracy

US Chamber of Commerce and US Supreme Court

A few days over a year ago, or to be more precise on January 21, 2010, the US Supreme Court handed over what little was left of this nation’s pretensions to democracy on a silver platter to the Big Banks and the US Chamber of Commerce. The case was titled Citizens United v. Federal Elections Commission and the Court’s decision removed all limits on corporate campaign contributions. Elections are now a sham proceeding at every level US government. The vast majority of the American people who no longer participate in the electoral charade are the smartest among us. The willfully ignorant and delusional still cling desperately to their faux-alternative Democratic politician or their Tea Party Republican politician with the tin-foil hat.

The Big Banks are running the show. Not the banks, there are 956 of those operating in the US and 950 of them lost money last year. Its the Big Banks headed by Goldman Sachs and JP Morgan Chase and the six of those made so much money last year that the banking industry as a whole turned a handsome profit. Goldman Sachs, the top campaign contributor to Barack Obama, decided that he rather than John McCain would take over for George W. Bush in January 2009 and also dictated that there would be essentially no changes in the direction of the United States. And the transformation has been seamless.

The Big Banks count on their partners in the US Chamber of Commerce to share the load of governance. The Chamber’s far-right wing embodied by the Koch brothers has generated the Tea Party, the working class shock troops that are necessary if fascism, a term that describes the corporate-state, is to actually function in the US. And the Chamber launders the money of the Chinese, German, Japanese, Indian, Saudi and other foreign corporate entities seeking to advance their interests in the US political arena. After demonstrating the extent of their control in the elections of 2010, Chamber President Thomas Donohue assured a nervous and shellacked-feeling Barack Obama that he would be allowed a second term in the role he enjoys so, President of the United States. “The chamber has not, does not and will not participate in presidential politics,” Donohue told reporters. “And it is not our intention to participate in any activity to weaken the president for his re-election. We are not seeking any activity that would limit the president’s ability to advance his own re-election.” Obama then genuflected to the bosses, bringing JP Morgan Chase’s William J. Daley and General Electric’s Jeff Immelt into his Administration.

Just who are the corporate “people” whose free speech rights the US Supreme Court established in the Citizens United Decision and who are now unleashed to do as they please. Let’s look at some snapshots from the Chamber’s Annual Picnic last year.

Over there in pavilion eight, why it’s the murders of Nataline Sarkisyan and thousands of other Americans who must go without basic life-saving medical care for the sake of CIGNA HealthCare profits. And look in the next pavilion over the murders of 29 mineworkers at the Upper Big Branch Mine in southern West Virginia, Massey Energy Co., when basic safety concerns were set aside for profits sake. There in three pavilions in close proximity, the criminal corporate syndicate of BP, Halliburton and Transocean that executed the crime of the century beginning with the murders of 11 oil workers on the Deepwater Horizon and ending with the poisoning death of the Gulf of Mexico. Not far away, the five corporate media giants, Newscorp (Fox), Time Warner (CNN), General Electric and Comcast (NBC, MSNBC), Disney (ABC) and Viacom (CBS and MTV), that helped the Obama Administration bury the crime in a massive PR blitz.

And there were the Chambers foreign guests in happier times, like the fellows from Tokyo Electric Power Company (TEPCO), who were happily operating their General Electric designed nuclear reactors at Fukushima Daiichi despite warnings, according to Wikileaks, from the International Atomic Energy Commission and even US diplomats that the flaunting of safety concerns invited catastrophe. But ignoring the warnings was good for business so the catastrophe is upon us all multiplied to the tenth power. The world’s third largest economy is mortally wounded and it is not out of the question that Japan is now destroyed and will have to be evacuated. The only hope for Japan rests on the shoulders of TEPCO workers who are volunteering for suicide missions against the ongoing nuclear reactor meltdowns to give their working class brothers and sisters the chance to survive into a civilized future, the chance to deal with those corporate ghouls who profited from cutting corners and falsifying reports.

Then Saudi Aramco was there too. The state owned national oil company of Saudi Arabia stands watch over the heart of global capitalism. Who knew then that in a few months they would send their troops in the guise of the Gulf Cooperation Council into neighboring Bahrain in a vain attempt to hold back the revolutionary human tsunami sweeping across the Middle East. Soon Saudi oil will be as difficult to extract as Libyan oil is now and then?

Well then the Supreme Court decision in Citizens United v. Federal Elections Commission will be placed where it belongs in history–on the compost heap of American’s backyard food gardens.

Paul A. Moore is a teacher at Miami Carol City Senior High School. He can be contacted at: Pmoore1953@aol.com. Read other articles by Paul, or visit Paul's website.

This article was posted on Saturday, March 19th, 2011 at 8:00am and is filed under Banks/Banking, Energy, Obama.

Saturday, March 19, 2011

Former Goldman Sachs Banker Revving Up Smear Campaign Against Elizabeth Warren



Former Goldman Sachs Banker Revving Up Smear Campaign Against Elizabeth Warren

Is a former Goldman banker using the Wall Street Journal to defame the consumer watchdog?

Wall Street Journal editorial writer who has been closely involved with the paper's recent attacks on Elizabeth Warren is a former Goldman Sachs banker. The same editorial writer, Mary Kissel, is readying another piece critical of Warren and the new consumer agency, according to a source familiar with the coming article.

Like most major newspapers, the Journal does not disclose the authors of its editorials. Kissel recently appeared on the John Batchelor radio show as a representative of the Journal's editorial board do discuss Warren, and repeated the main arguments used in the editorials.

The editorials paint both Warren and the new Consumer Financial Protection Bureau as an immensely powerful, unaccountable organization. The nascent agency is assuming the consumer protection duties currently exercised by regulators at the Federal Reserve and the Office of the Comptroller of the Currency.

The author, Mary Kissel, worked for Goldmanbetween 1999 and 2002 as a fixed income research and capital markets specialist.

Kissel is listed on the Journal's website as a member of the editorial staff and her bio includes her time at Goldman Sachs and notes that she worked for the company in both New York and London.

On Wednesay, Warren testified before a House subcomittee, providing 34 pages of written answers while submitting to two-and-a-half hours of aggressive questioning from congressional Republicans, who deployed talking points similar to those used in the recent Journal editorials.

"There has definitely been an uptick in attacks on her and on the agency over the past few weeks, it's hard to imagine it hasn't been well-coordinated by somebody," said a source close to Warren. "The smear campaign by The Wall Street Journal's editorial board this week includes the most unfactual and outrageous hit pieces on her yet. If it's true that the author of the editorials and Goldman Sachs coordinated on them, they should both be exposed and called to account."

The headline of Thursday's Journal editorial is "President Warren's Empire," which goes on to say, "The consumer bureau is essentially a bureaucratic rogue. We'd like to see Congress kill the agency entirely. But at the very least Congress should remove it from the Fed, make it part of the Treasury and subject it to annual appropriations."

Bank regulators are not subject to the Congressional appropriations process, because the budgeting game allows banks to lobby against the funding of their own regulator. The only financial regulator subject to this process was the agency charged with overseeing Fannie Mae and Freddie Mac during the housing bubble, which proved unable to rein in risk-taking at the mortgage giants as they poured lobbying cash into Congress.

In a recent interview, Rep. Randy Neugebauer (R-Texas) acknowledged that the House GOP's efforts to curtail funding for the CFPB were essentially an effort to prevent the agency from conducting consumer protection regulation.

On Wednesday, the Journal accused Warren and the CFPB of "extorting billions of dollars from private mortgage servicers" in the agency's role as an advisor in negotiations to settle allegations of widespread fraud in the foreclosure process. The editorial also argues that "Ms. Warren is already using the Consumer Financial Protection Bureau to tell banks how and to whom to lend money."

The foreclosure process is in disarray, and even Republican state Attorneys General say that banks have broken the law with improper foreclosures. Consumer advocates have accused banks of levying heavy, improper fees against borrowers, driving them into foreclosure, while other borrowers have been foreclosed on without missing any mortgage payments. Banks have also physically broken into the homes of borrowers in order to pursue foreclosures.

Warren has publicly criticized Goldman in testimony before Congress and during on-air interviews with CNBC and Bloomberg. When Warren chaired the Congressional Oversight Panel for the Troubled Asset Relief Program, she told Sen. Chuck Grassley (R-Iowa) during a hearing that Goldman had not provided her panel with key documents pertaining to the bailout of AIG, from which Goldman reaped over $11 billion. She also said that the Wall Street giant should be investigated for wrongdoing pertaining to the sale of mortgage derivatives during the housing bubble. Goldman eventually settled with the SEC for $550 million over allegations that it defrauded investors.

Kissel declined to comment for this article, and the Journal did not respond to an email requesting comment. Goldman Sachs did not return a call requesting comment.

Thursday, March 17, 2011

War On Unions Goes Viral, Wisconsin is Patient Zero

The ITT List

Friday, March 11, 2011

War On Unions Goes Viral, Wisconsin is Patient Zero

by Lindsay Beyerstein, Media Consortium blogger

In a shocking move, Republicans in the Wisconsin state Senate convened in the Capitol on Wednesday night to pass a union-busting bill without a quorum. The bill passed the State Assembly on Thursday afternoon, and Gov. Scott Walker signed it into law this morning. The Democratic state senators have returned from exile. Now, activists are shifting their attention to recall campaigns, court challenges, and even a general strike.

Madison Firefighters Union President Joe Conway was in the Capitol on Wednesday night to witness what he called “a criminal act by the Republicans” and “game changer for everyone.” Conway called for a general public strike.

John Nichols of the Nation describes the procedural move the Republicans used to pass the bill without a quorum, on what he calls “one of the most remarkable days in American political history”:

After weeks of intense debate inside and outside the Capitol, and at a point when most Wisconsinites thought a compromise was in the offering, Republican legislative leaders suddenly announced that they would pass the most draconian components of Governor Scott Walker’s budget repair bill – including a move to strip public employees of their collective bargaining rights.

At this point, the 14 Senate Democrats were still in exile in Illinois, attempting to deny the Republicans the quorum they needed to pass the bill. Under Wisconsin law, the state Senate only needs a quorum to pass non-fiscal legislation. So, the Republicans ostensibly stripped out all the fiscal language from the bill and passed it hastily, without hearings or debate, in the dead of night.

Budgetary hypocrisy

Micah Uetricht and George Warner of Campus Progress call this “non-fiscal” dodge the height of hypocrisy. For weeks, Walker has justified stripping unions of their bargaining rights as a measure needed to balance the budget. The bill clearly affects the state’s budget, arguably making it a fiscal bill in disguise, and possibly opening the door to a court challenge. If it is a financial bill after all, then the state Senate didn’t have the power to pass it without a quorum.

Uetricht and Warner also note that the South Central Federation of Labor, the labor council that represents unions in the Madison area, with a combined membership of 45,000 workers, voted in February to begin preparations for a general strike.

The Progressive’s Matthew Rothschild, who was at the Capitol, estimates that 15,000 people converged there as word spread that the bill had been passed. Cries of “General Strike!” rang out in the Capitol on Wednesday night.

As I reported in Working In These Times, the Senate Republicans may have violated Wisconsin’s strict open meetings law, which requires 24 hours’ notice for meetings, unless there’s some kind of emergency that prevents organizers from getting the word out earlier, in which case, a minimum of 2 hours’ notice is still required. The Senate was in emergency session, but nobody is claiming that there was any kind of real-life emergency that prevented the Republicans from notifying the public in a timely manner.

Andy Kroll of Mother Jones notes that the bill would allow the state to fire public employees who join a strike, walk-out, sit-in, or make a coordinated effort to call in sick.

Here’s more news from Wisconsin:

  • In a special comment on GritTV, host Laura Flanders asks if it’s time for the first U.S. general strike since 1909.
  • Peter Rothberg of the Nation asks whether the time has come for a general strike.
  • David Moberg of Working In These Times explores the history, and possible future, of general strikes in America.
  • Jessica Pieklo of Care2 writes about Madison as a birthplace of the labor movement.
  • Jeff Leys of truthout argues that the Madison could once again become the crucible for a powerful progressive movement.
  • Public News Service argues that Walker’s government is staging a power grab at the expense of local control, a value Republicans supposedly hold dear.
  • State Rep. Kelda Hellen Roys tells The UpTake that last night’s vote was illegal because the original bill wasn’t even drafted when it was voted on.
  • At TAPPED, Pima Levy argues that the strategy that Republicans in Wisconsin used to pass the bill was similar to that used by federal Democrats to pass the Affordable Care Act. After the U.S. Senate Democrats lost their filibuster-proof majority, they passed a “budget neutral” version of the bill, which bypassed the filibuster. She predicts that the Wisconsin GOP will face a significant backlash.

Wisconsin isn’t the only state waging war on the collective bargaining rights of public employees. Ohio’s Republican governor and Republican-controlled legislature are poised to restrict the collective bargaining rights of 350,000 public servants. Michigan seems poised to pass a “hostile takeover” bill that would give the Republican governor unchecked power to declare cities bankrupt and appoint a manager who could cancel union contracts. In Indiana, state House Democrats are boycotting the legislature in an attempt to derail anti-union legislation.


Michigan’s Republican-controlled state senate passed and sent back to the state house a “hostile takeover” bill that would give the governor the power to declare cities insolvent and appoint a city manager, who in turn, could cancel collective bargaining agreements and sell off city property without anyone else’s approval, Adele Stan notes in AlterNet. Hundreds of pro-union demonstrators rallied in the state capital of Lansing on Tuesday to protest the measure.

Eartha Jane Melzer reports in the Michigan Messanger that the bill is on the fast track to passage, despite raising serious constitutional questions about the limits of executive power. “This is a takeover by the right wing and it’s an assault on democracy like I’ve never seen,“ Michigan State AFL-CIO president Mark Gaffney said.


Republicans in Indiana have had their sights set on public sector unions since they took the General Assembly in 2010. Huge crowds gathered in Indianapolis on Thursday in support of union rights. This was the 18th day of uninterrupted union protests outside the state House. Police estimated a turnout of 8,000. Democratic lawmakers, who had fled the state to prevent the passage of an anti-collective bargaining bill, said they had no plans to return.


About 3,200 people gathered at the Statehouse in Ohio to protest a bill that would severely limit the collective bargaining rights of some 350,000 public workers including teachers, firefighters, and police. Democrats say they will fight to recall the bill if it is signed into law. Mark Miller of Change.org summarizes the key provisions of the bill, SB 5, which recently passed the state Senate. Ohio Democrats are trying to stall the progress of the legislation by demanding public hearings. Unlike their counterparts in Indiana and Wisconsin, they don’t have enough seats to deny the Republicans a quorum by leaving the state.

The public sector is the last bastion of high union density in the United States because public sector workers have historically been protected from the kind of union-busting tactics that are routine in the private sector. If the public sector unions are destroyed, the U.S. labor movement will die with them. The very future of the middle class is at stake.

This post features links to the best independent, progressive reporting by members of The Media Consortium. It is free to reprint. Follow us on Twitter. For the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

posted by Lindsay Beyerstein, Media Consortium blogger

Tuesday, March 15, 2011

Unequal Protection Under the Law When Corporations Take Over


Unequal Protection, Part I: Corporations Take Over

by: Thom Hartmann, Berrett-Kohler Publishers | Serialized Book

Unequal Protection, Part I: Corporations Take Over
(Image: Lance Page / t r u t h o u t)

Chapter 1: The Deciding Moment?

The first thing to understand is the difference between the natural person and the fictitious person called a corporation. They differ in the purpose for which they are created, in the strength which they possess, and in the restraints under which they act.

Man is the handiwork of God and was placed upon earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy.

There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing about the hereafter....

—William Jennings Bryan, in his address to the
Ohio 1912 Constitutional Convention

This chapter is part of an exclusive Truthout series from Thom Hartmann, America's No. 1 progressive radio host and bestselling author of 21 books. We are publishing weekly installments of the bestseller, "Unequal Protection: How Corporations Became 'People' - and How You Can Fight Back." Please join us as Hartmann explores the evolution of corporate personhood, gaining insight into the nature of democracy. To read more chapters, click here.

Part of the American Revolution was about to be lost a century after it had been fought. At the time probably very few of the people involved realized that what they were about to witness could be a counterrevolution that would change life in the United States and, ultimately, the world over the course of the following century.

In 1886 the Supreme Court met in the U.S. Capitol building, in what is now called the Old Senate Chamber. It was May, and while the northeastern states were slowly recovering from the most devastating ice storm of the century just three months earlier, Washington, D.C., was warm and in bloom.

In the Supreme Court's chamber, a gilt eagle stretched its 6-foot wingspan over the head of Chief Justice Morrison Remick Waite as he glared down at the attorneys for the Southern Pacific Railroad and the county of Santa Clara, California. Waite was about to pronounce judgment in a case that had been argued over a year earlier, at the end of January 1885.

Supreme Court Chief Justice
Morrison Remick Waite

(November 29, 1816–
March 23, 1888)

The chief justice had a square head with a wide slash of a mouth over a broomlike shock of bristly graying beard that shot out in every direction. A graduate of Yale University and formerly a lawyer out of Toledo, Ohio, Waite had specialized in defending railroads and large corporations.

In 1846 Waite had run for Congress as a Whig from Ohio but lost before being elected as a state representative in 1849. After serving a single term, he had gone back to litigation on behalf of the biggest and wealthiest clients he could find, this time joining the Geneva Arbitration case suing the British government for helping outfit the Confederate Army with the warship Alabama. He and his delegation won an astounding $15.5 million (close to $200 billion in today's dollars) for the United States in 1871, bringing him national attention in what was often referred to as the Alabama Claims case.

In 1874, when Supreme Court Chief Justice Salmon P. Chase died, President Ulysses S. Grant had real trouble selecting a replacement, in part because his administration was embroiled in a railroad bribery scandal. His first two choices withdrew, his third was so patently political that it was certain to be rejected by the Senate, and three others similarly failed to pass muster. On his seventh try, Grant nominated attorney Waite.

Waite had never before been a judge in any court, but he passed Senate confirmation, instantly becoming the most powerful judge in the most powerful court in the land. It was a position and a power he relished and promoted, even turning down the 1876 Republican nomination for president to stay on the Court and to serve as a member of the Yale [University].

Standing before Waite and the other justices of the Supreme Court that spring day were three attorneys each for the railroad and the county.

The chief legal adviser for the Southern Pacific Railroad was S.W. Sanderson, a former judge. He was a huge, aristocratic bear of a man, more than 6 feet tall, with neatly combed gray hair and an elegantly trimmed white goatee. For more than two decades, Sanderson had made himself rich, litigating for the nation's largest railroads. Artist Thomas Hill included a portentous and dignified Sanderson in his famous painting The Last Spike about the 1869 transcontinental meeting of the rail lines of the Union Pacific and Central Pacific railroads at Promontory Summit, Utah.

The lead lawyer for Santa Clara County was Delphin M. Delmas, a Democrat who later went into politics and by 1904 was known as "the Silver tongued Orator of the West" when he was elected a delegate from California to the Democratic National Convention. Whereas Waite and Sanderson had spent their lives serving the richest men in America, Delmas had always worked on behalf of local California governments and, later, as a criminal defense attorney. For example, he passionately and single-handedly argued pro bono before the California legislature for a law to protect the nation's last remaining redwood forests.

Fiercely defensive about “the rights of natural persons,” Delmas was a fastidious, unimposing man, known to wear "a frock coat, gray-striped trousers, a wing collar and an Ascot tie," whose "voice thrummed with emotion," and he was nationally known as the master dramatist of America's courtrooms. He had a substantial nose and a broad forehead only slightly covered in its center with a wispy bit of thinning hair. In the courtroom he was a brilliant lawyer, as the nation would learn in 1908 when he successfully defended Harry K. Thaw for murder in what was the most sensational case of the first half of the century, later made into the 1955 movie The Girl in the Red Velvet Swing, starring Ray Milland and Joan Collins (Delmas was played by Luther Adler).

Attorney Delphin M. Delmas
(April 14, 1844– August 1, 1928)

The case about to be decided in the Old Senate Chamber before Justice Waite's Supreme Court was about the way Santa Clara County had been taxing the land and rights-of-way owned by the Southern Pacific Railroad. Claiming the taxation was improper, the railroad had refused for six years to pay any taxes levied by Santa Clara County, and the case had ended up before the Supreme Court, with Delmas and Sanderson making the main arguments.

Although the case on its face was a simple tax matter, having nothing to do with due process or human rights or corporate personhood, the attorneys for the railroad nonetheless used much of their argument time to press the issue that the railroad corporation was, in fact, a "person" and should be entitled to the same right of equal protection under the law that was granted to former slaves by the Fourteenth Amendment.

The Mystery of 1886 and Chief Justice Waite

In the decade leading up to this May day in 1886, the railroads had lost every Supreme Court case that they had brought seeking Fourteenth Amendment rights. I've searched dozens of histories of the time, representing a wide variety of viewpoints and opinions, but only two have made a serious attempt to answer the question of what happened that fateful day—and their theories clash.

No laws were passed by Congress granting corporations the same treatment under the Constitution as living, breathing human beings, and none has been passed since then. It was not a concept drawn from older English law. No court decisions, state or federal, held that corporations were or should be considered the same as natural persons instead of artificial persons. The Supreme Court did not rule, in this or any other case, on the issue of corporate personhood.

In fact, to this day there has been no Supreme Court ruling that explicitly explains why a corporation—with its ability to continue operating forever, its being merely a legal agreement that can't be put in jail and doesn't need fresh water to drink or clean air to breathe—should be granted the same constitutional rights our Founders fought for, died for, and granted to the very mortal human beings who are citizens of the United States, to protect them against the perils of imprisonment and suppression they had experienced under a despot king.

But something happened in 1886, even though nobody to this day knows
exactly what or why.

That year Sanderson decided to again defy a government agency that
was trying to regulate his railroad’s activity. This time he went after Santa Clara County, California. His claim, in part, was that because a railroad corporation was a "person" under the Constitution, local governments couldn’t discriminate against it by having different laws and taxes in different places. It was a variation on the Fourteenth Amendment argument made by civil rights advocates in the 1960s that if a White man could sit at a Woolworth’s lunch counter, a Black man should receive the same privilege. In 1885 the case came before the Supreme Court.

In arguments before the Court in January 1885, Sanderson asserted that corporate persons should be treated the same as natural (or human) persons. He said, "I believe that the clause [of the Fourteenth Amendment] in relation to equal protection means the same thing as the plain and simple yet sublime words found in our Declaration of Independence, 'all men are created equal.' Not equal in physical or mental power, not equal in fortune or social position, but equal before the law."1

Sanderson's fellow lawyer for the railroads, George F. Edmunds, added his opinion that the Fourteenth Amendment leveled the field between artificial persons (corporations) and natural persons (humans) by a "broad and catholic provision for universal security, resting upon citizenship as it regarded political rights, and resting upon humanity as it regarded private rights."

But that wasn't actually what the case was about—that was just a minor point. The county was suing the railroad for back taxes, and the railroad refused to pay, claiming six different defenses. The specifics are not important because the central concern is whether the Court ruled on the Fourteenth Amendment issue. As will be shown below, the Supreme Court's decision clearly says it did not. But to put the railroad's complaint in perspective, consider this:

● On property with a $30 million mortgage, the railroad was refusing to pay taxes of about $30,000. (That's like having a $10,000 car and refusing to pay a $10 tax on it—and taking the case to the Supreme Court.)

● One of the railroad's defenses was that when the state assessed the value of the railroad's property, it accidentally included the value of the fences along the right-of-way. The county, not the state, should have assessed the fences, so the tax being paid in Santa Clara County was different— unequal—from the tax paid in other counties that did their own assessment instead of using the state's. To make their point (and to make the case a bigger deal), the railroad withheld all its taxes from the county.

All the tax was still due to Santa Clara County; the railroad didn't dispute that. But it said that the wrong assessor assessed the fences—a tiny fraction of the whole amount—so it refused to pay any of the tax and fought it all the way to the U.S. Supreme Court.

And as it happens, the Supreme Court of the United States (SCOTUS) agreed: "the entire assessment is a nullity, upon the ground that the state board of equalization included...property [the fences] which it was without jurisdiction to assess for taxation..."

The Court rejected the county's appeal, and that was the end of it. Except for one thing. One of the railroad's six defenses involved the Fourteenth Amendment. As it happens, because the case was decided based on the fence issue, the railroad didn't need those extra defenses, and the Court never ruled or commented in its ultimate decision on any of them. But one of them— related to the Fourteenth Amendment—still crept into the written record, even though the Court specifically did not rule on it.

Here's how the matter unfolded. First, the railroad's defense.

The Treatment That the Railroad Claimed Was Unfair

In the Fourteenth Amendment part of its defense, the railroad said:

That the provisions of the constitution and laws of California...are in violation of the Fourteenth Amendment of the Constitution, in so far as they require the assessment of their property at its full money value, without making deduction, as in the case of railroads [that are only] operated in one county, and of other corporations [that operate in only one county], and of natural persons [who can physically reside in only one county], for the value of the mortgages... [Italics added.]

The italic portions say, in essence, "The state is taxing us in a different way from how it taxes other corporations and real live human beings. That's not fair, and it violates our corporate right to equal protection that is the same as all other 'persons' under the tax laws."

The implication, of course, is that the state has no right to decide that corporations get different tax rates than humans. And the railroad was using the former slaves' equal protection clause (the Fourteenth Amendment) as its shield.

The Legal Difference Between Artificial and Natural Persons

In the Supreme Court at that time, cases were typically decided a year after arguments were presented, allowing the justices time to research and prepare their written decisions. So it happened that on January 26, 1885 (a year before the 1886 decision was handed down), Delphin M. Delmas, the attorney for Santa Clara County, made his case before the Supreme Court. I searched for the better part of a year for copies of the arguments made in the case—the Supreme Court kept no notes—and finally discovered, in an antiquarian book shop in San Francisco, a copy of Speeches and Addresses by D. M. Delmas.2 It was a hardbound collection of Delmas's speeches and his Santa Clara County arguments before the Supreme Court, which he had personally paid to self publish in 1901. It's incredibly rare to have such a time-machine look back into the past, and—even more exciting—Delmas's arguments were as brilliant and persuasive as any of the words that Erle Stanley Gardner ever put into the mouth of Perry Mason.

"The defendant claims [that the state's taxation policy]...violates that portion of the Fourteenth Amendment which provides that no state shall deny to any person within its jurisdiction the equal protection of the laws," Delmas said, standing before the assembled justices while reading from the notes he would later self-publish. He added that such an argument, "if tenable, would place the organic law of California in a position ridiculous to the extreme."

Winding himself up into full-throated outrage, Delmas rebuked the railroad's lawyers with a pure and honest fury:

The shield behind which [the Southern Pacific Railroad] attacks the Constitution and laws of California is the Fourteenth Amendment. It argues that the amendment guarantees to every person within the jurisdiction of the State the equal protection of the laws; that a corporation is a person; that, therefore, it must receive the same protection as that accorded to all other persons in like circumstances....

To my mind, the fallacy, if I may be permitted so to term it, of the argument lies in the assumption that corporations are entitled to be governed by the laws that are applicable to natural persons. That, it is said, results from the fact that corporations are [artificial] persons, and that the last clause of the Fourteenth Amendment refers to all persons without distinction.

This was the crux of the argument that the railroad had been putting forth and on which, in the Ninth Circuit Court in California, Judge Stephen J. Field had kept ruling. Because the Fourteenth Amendment says no "person" can be denied equal protection under the law, and corporations had been considered a type of person (albeit an artificial person) for several hundred years under British common law, the railroad was now trying to get that recognition under American constitutional law.

Delmas said: "The defendant has been at pains to show that corporations are persons, and that being such they are entitled to the protection of the Fourteenth Amendment....The question is, Does that amendment place corporations on a footing of equality with individuals?"

He then quoted from the bible of legal scholars—the book that the Framers of our Constitution had frequently cited and referenced in their deliberations in 1787 in Philadelphia—Sir William Blackstone's 1765 Commentaries on the Laws of England: "Blackstone says, 'Persons are divided by the law into either natural persons or artificial. Natural persons are such as the God of nature formed us; artificial are such as are created and devised by human laws for the purposes of society and government, which are called corporations or bodies politic.'"3

Delmas then moved from quoting the core authority on law to pleading common sense. If a corporation was a "person" legally, why couldn't it make out a will or get married, for example?

This definition suggests at once that it would seem unnecessary to dwell upon, that though a corporation is a person, it is not the same kind of person as a human being, and need not of necessity—nay, in the very nature of things, cannot—enjoy all the rights of such or be governed by the same laws. When the law says, "Any person being of sound mind and of the age of discretion may make a will," or "any person having arrived at the age of majority may marry," I presume the most ardent advocate of equality of protection would hardly contend that corporations must enjoy the right of testamentary disposition or of contracting matrimony.

It's about real human people, Delmas said. Any idiot who looked at the history or purpose of the Fourteenth Amendment could figure that out: "The whole history of the Fourteenth Amendment demonstrates beyond dispute that its whole scope and object was to establish equality between men—an attainable result—and not to establish equality between natural and artificial beings—an impossible result."

As a good liberal California Democrat (as distinct from the southern Democrats), Delmas was furious. He'd spent much of his life fighting for the little guy, agreed strongly with the Radical Republicans (who had mostly become Democrats a decade earlier) about civil rights, and knew—as did anybody who read the newspapers of that era—the history of the Fourteenth Amendment.

The railroad lawyer Sanderson had before made a claim that a "secret committee" of Congress that helped write the Fourteenth Amendment had meant for it to equalize corporate persons and human persons. Delmas, if his performance before the Supreme Court was consistent with his later well documented performances in criminal courtrooms, would have been trembling in righteous indignation as he said that the Fourteenth Amendment "is as broad as humanity itself ":

Wherever man is found within the confines of this Union, whatever his race, religion, or color, be he Caucasian, African, or Mongolian, be he Christian, infidel, or idolater, be he white, black, or copper-colored, he may take shelter under this great law as under a shield against individual oppression in any form, individual injustice in any shape. It is a protection to all men because they are men, members of the same great family, children of the same omnipotent Creator.

In its comprehensive words I find written by the hand of a nation of sixty millions in the firmament of imperishable law the sentiment uttered more than a hundred years ago by the philosopher of Geneva, and re-echoed in this country by the authors of the Declaration of the Thirteen Colonies: Proclaim to the world the equality of man.

Speaking of the "object of the Fourteenth Amendment," Delmas said it straight out:

Its mission was to raise the humble, the down-trodden, and the oppressed to the level of the most exalted upon the broad plain of humanity—to make man the equal of man; but not to make the creature of the State—the bodiless, soulless, and mystic creature called a corporation—the equal of the creature of God....

Therefore, I venture to repeat that the Fourteenth Amendment does not command equality between human beings and corporations...

In closing his argument, Delmas had to add a punctuation mark. This could be, he suggested, one of the most important Supreme Court cases in the history of the United States because if corporations were given the powerful cudgel of human rights secured by the Bill of Rights, their ability to amass wealth and power could lead to death, war, and the impoverishment of actual human beings on a massive scale.

"I have now done," he said. "Yet I cannot but think that the controversy now debated before your Honors is one of no ordinary importance."

A year and five months passed while the Supreme Court debated the issues in private. And then came the afternoon of May 10, 1886, the fateful moment for the fateful words of the Court, upon which hung much of the future of the United States and, later, much of the world.

Chief Justice Waite Rewrites the Constitution (or Does He?)

According to the record left to us, here's what seems to have happened. For reasons that were never recorded, moments before the Supreme Court was to render its decision in the now-infamous Santa Clara County v. Southern Pacific Railroad case, Chief Justice Waite turned his attention to Delmas and the other attorneys present.

As railroad attorney Sanderson and his two colleagues watched, Waite told Delmas and his two colleagues, "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a state to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are of the opinion that it does." He then turned to Justice John M. Harlan, who delivered the Court's opinion.

In the written record of the case, the court reporter noted, "The defendant corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws."

This written statement, that corporations were persons rather than artificial persons, with an equal footing under the Bill of Rights as humans, was not a formal ruling of the court but was reportedly a simple statement by its chief justice, recorded by the court reporter.

There was no Supreme Court decision to the effect that corporations are equal to natural persons and not artificial persons. There were no opinions issued to that effect and therefore no dissenting opinions on this immensely important constitutional issue.

The written record, as excerpted above, simply assumed corporate personhood without any explanation why. The only explanation provided was the court reporter's reference to something he says Waite said, which essentially says, "that's just our opinion" without providing legal argument.

In these two sentences (according to the conventional wisdom), Waite weakened the kind of democratic republic the original authors of the Constitution had envisioned, and he set the stage for the future worldwide damage of our environmental, governmental, and cultural commons. The plutocracy that had arisen with the East India Company in 1600 and had been fought back by America's Founders had gained a tool that was to allow it, in the coming decades, to once again gain control of most of North America and then the world.

Ironically, of the 307 Fourteenth Amendment cases brought before the Supreme Court in the years between Waite's proclamation and 1910, only 19 dealt with African Americans: 288 were suits brought by corporations seeking the rights of natural persons.

Supreme Court Justice Hugo Black pointed out fifty years later, "I do not believe the word 'person' in the Fourteenth Amendment includes corporations.... Neither the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protection."4

Sixty years later Supreme Court Justice William O. Douglas made the same point, writing, "There was no history, logic or reason given to support that view [that corporations are legally 'persons']."5

There was no change in legislation, and then-president Grover Cleveland had not issued a proclamation that corporations should be considered the same as natural persons. To the contrary President Cleveland, the only Democrat to serve as president during the Robber Baron Era, in his December 3, 1888, State of the Union address, said,

The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor. As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people's masters.6

The U.S. Constitution does not even contain the word corporation and has never been amended to contain it because the Founders wanted corporations to be regulated as close to home as possible, by the states, so they could be kept on a short leash—presumably so nothing like the East India Company would ever again arise to threaten the entrepreneurs of America.

But as a result of this case, for the past one hundred–plus years corporate lawyers and politicians have claimed that Chief Justice Waite turned the law on its side and reinvented America's social hierarchy.

"But wait a minute," many legal scholars have said over the years. Why would Waite say, before arguments about corporations being persons, that the court had already decided the issue—and then allow Delmas and Sanderson to argue the point anyway? Alternatively, why would he say such a thing after arguments had already been made? By all accounts Waite was a rational and capable justice, so it wouldn't make sense that he would do either of those things.

Several theories have been advanced about what really happened. But first, let's look at what the Supreme Court decision actually said in the 1886 Santa Clara case.

What the Court Actually Said About Personhood

The Supreme Court generally tries to stay out of a fight. If a case can be thrown out or decided on simpler grounds, there's no need to complicate things by issuing a new decision. And in this case, the Court's decision specifically mentioned this: "These questions [regarding the constitutional amendment] belong to a class which this court should not decide unless their determination is essential to the disposal of the case..." (Italics added.)

It continued, saying that the question of "unless it is essential to the case" depended on how strong the other defenses were. "Whether the present cases require a decision of them depends upon the soundness of another proposition, upon which the court...in view of its conclusions upon other issues, did not deem it necessary to pass." In other words, because of other issues (who should assess the fences), the Court wasn't even going to consider whether to rule on the Fourteenth Amendment issue of corporate personhood.

The decision then identifies the fence issue and concludes that there's nothing left to decide because they're basing their ruling entirely on California law and the California Constitution. "If these positions are tenable, there will be no occasion to consider the grave questions of constitutional law upon which the case was determined...as the judgment can be sustained upon this ground, it is not necessary to consider any other questions raised by the pleadings..." So what actually happened? Why have people said, for all these years, that in 1886 the Waite Court in the Santa Clara case decided that corporations were persons under the Fourteenth Amendment? It turns out that the Court said no such thing, and it can't be found in the ruling.

It Was in the Headnote!

William Rehnquist, then the chief justice of the U.S. Supreme Court, was seriously irritated. It was April 1978, and the previous November a case had been argued before the Court in which the First National Bank of Boston asserted that, because it was a corporate "person," it had First Amendment free-speech rights with regard to political speech, that money was the same as speech (since a corporation doesn't have a mouth but it does have a checking account), and that therefore the laws that the good citizens of Massachusetts had passed to prevent corporations from throwing money around in political or advocacy campaigns should be thrown out.

Rehnquist and his clerks knew what every graduate of an American law school knew—that in 1886 the U.S. Supreme Court had ruled that the Fourteenth Amendment gave corporations the same, or very nearly the same, access to the Bill of Rights as human beings had.

The Court's majority had written their opinion on First National Bank of Boston v. Bellotti, delivered by Justice Lewis F. Powell and concurred to by Justices Warren Burger, Potter Stewart, Harry Blackmun, and John Paul Stevens. It opened with a quick summary of the issues:7

Appellants, national banking associations and business corporations, wanted to spend money to publicize their views opposing a referendum proposal to amend the Massachusetts Constitution to authorize the legislature to enact a graduated personal income tax.

They brought this action challenging the constitutionality of a Massachusetts criminal statute that prohibited them and other specified business corporations from making contributions or expenditures "for the purpose of...influencing or affecting the vote on any question submitted to the voters, other than one materially affecting any of the property, business or assets of the corporation.

The majority opinion then cut right to the chase: "The portion of the Massachusetts statute at issue violates the First Amendment as made applicable to the States by the Fourteenth."

Rehnquist, however, was both a curmudgeon and a conservative. In both cases, he believed that the protections from government power offered by the Bill of Rights should extend to only humans (particularly white humans; he had made much of his early career as a Republican partisan in Arizona, challenging the voting status of Blacks and Latinos at the polls from 1958 to 1964.)8

Thus, when the bank argued before the Court—and five Justices agreed with it—that the Massachusetts law in question "violates the First Amendment, the Due Process and Equal Protection Clauses of the Fourteenth Amendment," Rehnquist was off ended, and his tone showed through in his choice of language for his solitary dissent, so provocative that the other dissenting justices did not even join in with it.

He started out by directly challenging his own understanding of Santa Clara:

This Court decided at an early date, with neither argument nor discussion, that a business corporation is a "person" entitled to the protection of the Equal Protection Clause of the Fourteenth Amendment. Santa Clara County v. Southern Pacific R. Co., (1886). Likewise, it soon became accepted that the property of a corporation was protected under the Due Process Clause of that same Amendment. See, e.g., Smyth v. Ames, (1898).

But that decision—as Rehnquist noted, made "with neither argument nor discussion" but merely proclaimed by the chief justice from the bench— was wrong, Rehnquist believed. "Early in our history [in 1819]," he wrote,

Mr. Chief Justice Marshall described the status of a corporation in the eyes of federal law: "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of creation confers upon it, either expressly, or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created."

Restating that concept in his own words, Rehnquist continued in his dissent:

It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere.

Furthermore, it might be argued that liberties of political expression are not at all necessary to effectuate the purposes for which States permit commercial corporations to exist. So long as the Judicial Branches of the State and Federal Governments remain open to protect the corporation's interest in its property, it has no need, though it may have the desire, to petition the political branches for similar protection. Indeed, the States might reasonably fear that the corporation would use its economic power to obtain further benefits beyond those already bestowed. I would think that any particular form of organization upon which the State confers special privileges or immunities different from those of natural persons would be subject to like regulation, whether the organization is a labor union, a partnership, a trade association, or a corporation....

The free flow of information is in no way diminished by the Commonwealth's decision to permit the operation of business corporations with limited rights of political expression. All natural persons, who owe their existence to a higher sovereign than the Commonwealth, remain as free as before to engage in political activity.

But Rehnquist had lost. He quoted a fellow justice, Byron White, who also dissented from the ruling, saying,

The interest of Massachusetts and the many other States which have restricted corporate political activity...is not one of equalizing the resources of opposing candidates or opposing positions, but rather of preventing institutions which have been permitted to amass wealth as a result of special advantages extended by the State for certain economic purposes from using that wealth to acquire an unfair advantage in the political process....

And then he turned to other matters. There were other cases to decide. The bank had won.

How We All Got It Wrong

Chief Justice Rehnquist was laboring under a misconception that was quite common over the past hundred years. In 2003, when the first edition of this book came out, I was invited to address about two hundred students and faculty at a New England law school. I asked for a show of hands "among those of you who know that in 1886 in the Santa Clara County versus Southern Pacific Railroad case, the U.S. Supreme Court declared that corporations were entitled to constitutional rights?" Every hand in the room went up. (And then they got an earful.)

When I first began research for this book, I read a lot of histories of America and commentaries on corporate power. Many referenced this 1886 case, and all said that the Supreme Court ruled in that case that corporations should get the same protections under the Constitution as do human beings. In 1993 Richard L. Grossman and Frank T. Adams wrote, in Taking Care of Business:9

Another blow to citizen constitutional authority came in 1886. The Supreme Court ruled in Santa Clara County v. Southern Pacific Railroad that a private corporation was a natural person under the U.S. Constitution, sheltered by the Bill of Rights and the 14th Amendment.

"There was no history, logic or reason given to support that view," Supreme Court Justice William O. Douglas was to write sixty years later.

But the Supreme Court had spoken. Using the 14th Amendment, which had been added to the Constitution to protect freed slaves, the justices struck down hundreds more local, state and federal laws enacted to protect people from corporate harms. The high court ruled that elected legislators had been taking corporate property "without due process of law."

David C. Korten, a dear friend, one of the smartest guys on the planet on these topics, and the author of the groundbreaking book When Corporations Rule the World, wrote in 1997, "The idea that corporations should enjoy the rights of flesh and blood persons—including the right of free speech—grew out of a U.S. Supreme Court decision in 1886 that designated corporations as legal persons entitled to all the rights and protections afforded by the Bill of Rights of the U.S. Constitution."

Even www.encyclopedia.com still, in 2010, says:

Q. When did the Supreme Court hold that corporations were persons?

A. In 1886, the Supreme Court held that corporations were "persons" for the purposes of constitutional protections, such as equal protection.

When I began writing this book, I was operating on the assumption that Justices Douglas and Rehnquist were right and that all the various histories I'd read—histories all the way back to the 1930s—which asserted that the Court had ruled in favor of corporate personhood in the Santa Clara case were right. And as I was finalizing work on the first draft of this book, I decided I probably should read the Santa Clara case in its original version.

At the time (2002), I lived just a few blocks from the Vermont state capitol complex and knew that that state had an old and very, very far-reaching law library. When Vermont joined the Union in 1791, it was already an independent republic (this was true of only Vermont and Texas). It issued its own coins and had its own legislature and constitution. It had its own capitol building and its own Supreme Court—and its own Supreme Court law library.

So, on a snowy winter day, I bundled up and walked the six blocks from my home to the Vermont Supreme Court building, in search of the original version of the decision that transformed this nation.

In the warmth of the granite block building, librarian Paul Donovan found for me Volume 118 of United States Reports: Cases Adjudged in the Supreme Court at October Term 1885 and October Term 1886, published in New York in 1888 by Banks & Brothers Publishers and written by J. C. Bancroft Davis, the Supreme Court's reporter.

What I found in the book, however, were two pages of text that are missing from the copies of the decision I could find online on the Supreme Court's Web site, which is the official version. They were not part of the decision. They weren't even written by the Supreme Court justices but were a quick summary of- the-case commentary by Davis. He wrote commentaries like these for each case, "adding value" to the published book, from which he earned a royalty.

And there it was, in the notes.

The very first sentence of Davis's note reads, "The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws."

Court reporter J. C. Bancroft Davis

That sentence was followed by three paragraphs of small print that summarized the California tax issues of the case. In fact, the notes by Davis, farther down, say,

The main—and almost only—questions discussed by counsel in the elaborate arguments related to the constitutionality of the taxes. This court, in its opinion passed by these questions [italics added], and decided the cases on the questions whether under the constitution and laws of California, the fences on the line of the railroads should have been valued and assessed, if at all, by the local officers, or by the State Board of Equalization...

In other words, the first sentence of "The defendant Corporations are persons..." has nothing to do with the case and wasn't the issue on which the Supreme Court decided.

Two paragraphs later, perhaps in an attempt to explain why he had started his notes with that emphatic statement, Davis remarks:

One of the points made and discussed at length in the brief of counsel for defendants in error was that "Corporations are persons within the meaning of the Fourteenth Amendment to the Constitution of the United States." Before argument Mr. Chief Justice Waite said: "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

A half-page later, the notes ended and the actual decision, delivered by Justice Harlan, begins—which, as noted earlier, explicitly says that the Supreme Court is not, in this case, ruling on the constitutional question of corporate personhood under the Fourteenth Amendment or any other amendment.

I paid my 70 cents for copies of the pages from the fragile and cracking book and walked down the street to the office of attorney Jim Ritvo, a friend and wise counselor. I showed him what I had found and said, "What does this mean?"

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He looked it over and said, "It's just a headnote."

"Headnote? What's a headnote?"

He smiled and leaned back in his chair. "Lawyers are trained to beware of headnotes because they're not written by judges or justices but are usually put in by a commentator or by the book's publisher."

"Are they legal? I mean, are they the law or anything like that?"

"Headnotes don't have the value of the formal decision," Jim said. "They're not law. They're just a comment by somebody who doesn't have the power to make or determine or decide law."

"In other words, this headnote by court reporter J. C. Bancroft Davis, which says that Waite said corporations are persons, is meaningless?"

Jim nodded his head. "Legally, yes. It's meaningless. It's not the decision or a part of the decision."

"But it contradicts what the decision itself says," I said, probably sounding a bit hysterical.

"In that case," Jim said, "you've found one of those mistakes that so often creep into law books."

"But other cases have been based on the headnote's commentary in this case."

"A mistake compounding a mistake," Jim said. "But ask a lawyer who knows this kind of law. It's not my area of specialty."

So I called Deborah L. Markowitz, Vermont's secretary of state and one very bright attorney, and described what I had found. She pointed out that even if the decision had been wrongly cited down through the years, it's now "part of our law, even if there was a mistake."

I said I understood that (it was dawning on me by then) and that I was hoping to have some remedies for that mistake in my book, but, just out of curiosity, "What is the legal status of headnotes?"

She said, "Headnotes are not precedential," confirming what Jim Ritvo had told me. They are not the precedent. They are not the law. They're just a comment with no legal status.

In fact, I later learned that in the years since Santa Clara the Supreme Court has twice explicitly ruled that headnotes in cases have no legal standing whatsoever. The first was United States v. Detroit Timber and Lumber Company (1905), and the second was Burbank v. Ernst (1914). In the Detroit Timber case— in the Court's official decision and not in its headnote—the majority of the justices concurred that headnotes are "simply the work of the reporter...prepared for the convenience of the profession in the examination of the records."

So how did it come about that court reporter J. C. Bancroft Davis wrote that corporations are persons in his headnote? And why have one hundred years of American—and now worldwide—law been based on it? Here are the main theories that have been advanced regarding what happened.

The Republican Conspiracy Theory That Empowered FDR

In the early 1930s, the stock market had collapsed and the world was beginning a long and dark slide into the Great Depression and eventually to World War II. Millions were out of work in the United States, and the questions on many people's minds were Why did this happen? and Who is responsible?

The teetering towers of wealth created by American industrialists during the late 1800s and the early 1900s were largely thought to have contributed to or caused the stock market crash and the ensuing Depression. In less than one hundred years, corporations had gone from being a legal fiction used to establish colleges and trading companies to standing as the single most powerful force in American politics.

Many working people felt that corporations had seized control of the country's political agenda, capturing senators, representatives, the Supreme Court, and even recent presidents in the magnetic force of their great wealth. Proof of this takeover could be found in the Supreme Court decisions in the years between 1908 and 1914, when the Court, oft en citing corporate personhood, struck down minimum-wage laws, workers' compensation laws, utility regulation, and child labor laws—every kind of law that a people might institute to protect its citizenry from abuses.

Unions and union members were the victims of violence from private corporate armies and had been declared "criminal conspiracies" by both business leaders and politicians. It seemed that corporations had staged a coup, seizing the lives of American workers—the majority of voters—as well as the elected officials who were supposed to represent them. And this was in direct contradiction of the spirit expressed by the Founders of this country.

It was in this milieu that an American history book first published in 1927, but largely ignored, suddenly became a hot topic. In The Rise of American Civilization, Columbia University history professor Charles A. Beard and women's suffragist Mary Beard suggested that the rise of corporations on the American landscape was the result of a grand conspiracy that reached from the boardrooms of the nation's railroads all the way to the Supreme Court.10

They fingered two Republicans: former senator (and railroad lawyer) Roscoe Conkling and former congressman (and railroad lawyer) John A. Bingham. The theory, in short, was that Conkling, when he was part of the Senate committee that wrote the Fourteenth Amendment back in 1868, had intentionally inserted the word person instead of the correct legal phrase natural person to describe who would get the protections of the amendment. Bingham similarly worked in the House of Representatives to get the language passed.

Congressman (and railroad lawyer)
John A. Bingham
(January 21, 1815–
March 19, 1900)

Senator (and railroad lawyer)
Roscoe Conkling
(October 30, 1829–
April 18, 1888)

Once that time bomb was put into place, Conkling and Bingham left elective office to join in litigating on behalf of the railroads, with the goal of exploding their carefully worded amendment in the face of the Supreme Court.

Thus "Republican lawmakers," the Beards said, conspired in advance to give full human constitutional rights to corporate legal fictions. "By a few words skillfully chosen," they wrote, "every act of every state and local government which touched adversely the rights of [corporate] persons and property was made subject to review and liable to annulment by the Supreme Court at Washington."

This conspiracy theory was widely accepted because the supposed conspirators themselves had said, very publicly, "We did it!" Earlier, in an 1882 case pitting the railroads against San Mateo County, California, Conkling testified (as a paid witness for the railroads) that he had slipped the "person" language into the amendment to ensure that corporations would one day receive the same civil rights Congress was giving to freed slaves. Bingham made similar assertions when appropriate during his turns as a paid witness for the railroads. As a result of these assertions, through the late years of the 1800s both Congressman (and railroad lawyer) were the well-off darlings of the railroads, basking in the light of their successful appropriation of human rights for corporations.

When the Beards’ book was widely read in the early 1930s, it gave names and faces to the villains who had turned control of America over to what were then called the Robber Barons of industry. Conkling, Bingham, and Justice Waite were all dead by the time of the Great Depression, and all were judged guilty by the American public of pulling off the biggest con in the history of the republic.

The firestorm of indignation that swept the country helped set the stage for Franklin D. Roosevelt’s New Deal, using legislative means and packing the Supreme Court to turn back the corporate takeover—at least in part—and returning to average working citizens some of the rights and the benefits they felt had been stolen from them in 1886.

It was widely accepted that Conkling and Bingham had pulled off this trick successfully—purposefully using person instead of natural person or citizen when they helped write the Fourteenth Amendment—and corporate personhood was a fait accompli. It was done, and it couldn’t be undone. Confronted with the reality of the language of the Fourteenth Amendment, the Supreme Court had been forced to recognize that corporations were persons under the U.S. Constitution because of the precedent of the 1886 Santa Clara case.

Senator Henry Cabot Lodge apparently ratified the coup on January 8, 1915, when he unwittingly promulgated Conkling's myth in a speech to the Senate about the 1882 San Mateo case:

In the case of San Mateo County against Southern Pacific Railroad, Mr. Conkling introduced in his arguments excerpts from the Journal [of the Senate committee writing the Fourteenth Amendment], then unprinted, to show that the Fourteenth Amendment did not apply solely to Negroes, but applied to persons, real and artificial of any kind. It was owing to this, undoubtedly, that the [Supreme] Court extended it to corporations.

The journal Lodge referenced is the secret journal that never existed. Nonetheless, it was a done deal, conventional wisdom suggested, and the Supreme Court had been forced to acknowledge the reality of corporate personhood —or, some suggested, had gone along with it because Waite and the other justices were corrupt stooges of the railroads but wielded the majority vote. In either case, it had been the intent of at least some of the legislators who draft ed the Fourteenth Amendment (Conkling and Bingham) that corporations should have the constitutional rights of natural persons.

The Republican Conspiracy Theory Collapses

In the 1960s author, attorney, and legal historian Howard Jay Graham came across a previously unexamined treasure in the personal papers of Chief Justice Waite, which had been gathering dust at the Library of Congress.

In Waite's private correspondence with J. C. Bancroft Davis (his former recorder of the Court's decisions), Graham made a startling discovery: the entire thing had been a mistake.

What had vexed legal authorities for nearly eighty years was why Waite would say, "The Court does not wish to hear argument..." when the arguments were already finished. Further, why wasn't there any discussion of this explosive new doctrine of corporate personhood in the Court's ruling or in its dissents? It was as if they said it and then forgot they had said it. Complicating the situation further, if the Court had arrived at a huge constitutional decision with sweeping implications, why did the decision say it was based on a technicality about fences? It just didn't seem to add up.

Looking over Justice Waite's personal papers, Graham found a note from Davis to Waite. At one point in the arguments, Waite had apparently told railroad lawyer Sanderson to get beyond his arguments that corporations are persons and get to the point of the case. Court reporter Davis, apparently seeking to clarify that, wrote to Waite, "'In opening, the Court stated that it did not wish to hear argument on the question whether the Fourteenth Amendment applies to such corporations as are parties in these suits. All the judges were of opinion that it does.'

"Please let me know whether I correctly caught your words and oblige."

Waite wrote back, "I think your mem. in the California Rail Road Tax cases expresses with sufficient accuracy what was said before the argument began. I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision." (Italics added.)

With thanks to Michael Kinder, who found this in the J. C. Bancroft Davis collection of personal papers in the National Archives in Washington, D.C., where they had been sitting, largely unnoticed, for almost a century, the actual letters are reproduced on the following pages.

Court reporter J. C. Bancroft Davis’s memo to Chief Justice Morrison Remick Waite

Davis’s memo to Chief Justice Waite (continued)

Chief Justice Waite’s reply to Davis

Chief Justice Waite’s reply to Davis (continued)

Graham notes in an article first published in the Vanderbilt Law Review that Waite explicitly pointed out to court reporter Davis that the constitutional question of corporate personhood was not included in their decision. According to Graham, Waite was instead saying,

something to the effect of, "The Court does not wish to hear further argument on whether the Fourteenth Amendment applies to these corporations. That point was elaborately covered in 1882 [in the San Mateo case], and has been re-covered in your briefs. We all presently are clear enough there. Our doubts run rather to the substance [of the case...the fence issue]. Assume accordingly, as we do, that your clients are persons under the Equal Protection Clause. Take the cases on from there, clarifying the California statutes, the application thereof, and the merits."

In my opinion, Waite was saying something to the effect of, "Every judge and lawyer knows that corporations are persons of the artificial sort—corporations have historically been referred to as 'artificial persons,' and so to the extent that the Fourteenth Amendment covers them, it does so on a corporation- to-corporation basis. But we didn't rule on the railroad's claim that corporations should have rights equal to human persons under the Fourteenth Amendment, so I leave it up to you if you're going to mention the debates or not."

Another legal scholar and author, C. Peter Magrath, was going through Waite's papers at the same time as Graham for the biography he published in 1963 titled Morrison R. Waite: Triumph of Character. In his book he notes the above exchange and then says, "In other words, to the Reporter fell the decision which enshrined the declaration in the United States Reports. Had Davis left it out, Santa Clara County v. Southern Pac. R. Co. would have been lost to history among thousands of uninteresting tax cases."

It was all, at the very best, a mistake by a court reporter. There never was a decision on corporate personhood. "So here at last," writes Graham, "'now for then,' is that long-delayed birth certificate, the reason this seemingly momentous step never was justified by formal opinion." He adds, in a wry note for a legal scholar, "Think, in this instance too, what the United States might have been spared had events taken a slightly different turn."

Graham’s Conspiracy Theory

In Everyman’s Constitution, Howard Jay Graham suggests that if there was an error made on the part of court reporter J. C. Bancroft Davis—as the record seems to show was clear—it was probably the result of efforts by Supreme Court Justice Stephen J. Field.11

Supreme Court Justice Stephen J. Field
(November 4, 1816–April 9, 1899)

Field was very much an outsider on the Court and was despised by Waite. As Graham notes,

Field had repeatedly embarrassed Waite and the Court by close association with the Southern Pacific proprietors and by zeal and bias in their behalf. He had thought nothing of pressuring Waite for assignment of opinions in various railroad cases, of placing his friends as counsel for the railroad in upcoming cases, of hinting at times [of actions that] he and they should take, even of passing on to such counsel in the undecided San Mateo case "certain memoranda which had been handed me by two of the Judges.

Field had presidential ambitions and was relying on the railroads to back him. He had publicly announced on several occasions that if he were elected, he would enlarge the size of the Supreme Court to twenty-two so that he could pack it with "able and conservative men."

Field also thought poorly of Waite, calling him upon his appointment "His Accidency" and "that experiment" of Ulysses Grant. Waite didn't have the social graces of Field, who was often described as a "popinjay." And even though Waite had been a lawyer for the railroads, the record appears to show that he did his best to be a truly impartial chief justice during his tenure, eventually literally working himself to death from what was probably congestive heart failure in 1888.

But Field was a grandstander who served on the Ninth Circuit Court of Appeals of California at the same time he was a justice of the Supreme Court of the United States. It was often his "corporations are persons" decisions in California cases that led them to reappear before the U.S. Supreme Court—no accident on Field's part—including the San Mateo case in 1882 and the Santa Clara case in 1886.

And when the justices decided (contrary to what court reporter Davis published months after the decision) that constitutional issues were not involved in Santa Clara County v. Southern Pacific Railroad, Justice Field was incensed.

In his concurring opinion to the Santa Clara case, even though he agreed with the finding that fenceposts should have a different tax rate than railroad land, he was clearly upset that the issue of corporate personhood was not addressed or answered in the case.

Field wrote:

[The court had failed in] its duty to decide the important constitution questions involved, and particularly the one which was so fully considered in the Circuit Court [where Field was also the judge], and elaborately argued here, that in the assessment, upon which the taxes claimed were levied, an unlawful and unjust discrimination was made...and to that extent depriving it [the railroad "person"] of the equal protection of the laws.

At the present day nearly all great enterprises are conducted by corporations... [a] vast portion of the wealth...is in their hands. It is, therefore, of the greatest interest to them whether their property is subject to the same rules of assessment and taxation as like property of natural persons...whether the State... may prescribe rules for the valuation of property for taxation which will vary according as it is held by individuals or by corporations.

The question is of transcendent importance, and it will come here and continue to come until it is authoritatively decided in harmony with the great constitutional amendment (Fourteenth) which insures to every person, whatever his position or association, the equal protection of the laws; and that necessarily implies freedom from the imposition of unequal burdens under the same conditions.

In Everyman's Constitution Graham documents scores of additional attempts by Supreme Court Justice Field to influence or even suborn the legal process to the benefit of his open patrons, the railroad corporations. Field's personal letters, revealed nearly a century after his death, show that his motivations, in addition to wealth and fame, were presidential aspirations; he wrote about his hopes that in 1880 and 1888 the railroads would finance his rise to the presidency, which may explain his zeal to please his potential financiers in the 1882 San Mateo case and the 1886 Santa Clara case.

So, this conspiracy theory goes, after the case was decided—without reference to corporations being persons and without anybody on the court except Field agreeing with Sanderson's railroad arguments that they were persons under the Fourteenth Amendment—Justice Field took it upon himself to make sure the court's record was slightly revised: it wouldn't be published until J. C. Bancroft Davis submitted his manuscript of the Court's proceedings (titled United States Reports) to his publisher, Banks & Brothers in New York, in 1887 and not released until Waite's death in 1888 or later.

After all, Waite's comments to reporter Davis were a bit ambiguous— although he was explicit that no constitutional issue had been decided. Nonetheless, court reporter Davis, with his instruction from Waite that Davis himself should "determine whether anything need be said...in the report," may well have even welcomed the input of Field. And since Field, acting as the judge of the Ninth Circuit in California, had already and repeatedly ruled that corporations were persons under the Fourteenth Amendment, it doesn't take much imagination to guess that Field would have suggested that Davis include it in the transcript, perhaps even offering the language, curiously matching his own language in previous lower-court cases.

Graham and Magrath, two of the preeminent scholars of the twentieth century (Graham on this issue, and Magrath as Waite's biographer), both agree that this is the most likely scenario. At the suggestion of Justice Field, almost certainly unknown to Waite, "a few sentences" were inserted into Davis's final written record "to clarify" the decision. It wasn't until a year or more later, when Waite was fatally ill, that the lawyers for the railroads safely announced they had seized control of vital rights in the United States Constitution.

The Hartmann Theory

Court reporters had a very different role in the nineteenth century than they do today. It wasn't until 1913 that the stenograph machine was invented to automate the work of court reporters. Prior to that time, notes were kept in a variety of shorthand forms, both institutionalized and informal. Thus, the memory of the reporter and his (in the nineteenth century, nearly all were men) understanding of the case before him were essential to a clear and informed record being made for posterity.

Being a reporter for the Supreme Court was also not simply a stenographic or recording position. It was a job of high status and high pay. Although the chief justice in 1886 earned $10,500 a year, and the associate justices earned $10,000 per year, the reporter of the Court could expect an income of more than $12,000 per year, between his salary and his royalties from publishing United States Reports. And the status of the job was substantial, as Magrath notes in Waite's biography: "In those days the reportership was a coveted position, attracting men of public stature who associated as equals with the justices..."

Prior to his appointment to the Court, John Chandler Bancroft Davis was a politically active and ambitious man. A Harvard-educated attorney, Davis held a number of public service and political appointment jobs, ranging from assistant secretary of state for two presidents, to minister to the German Empire, to Court of Claims judge.

This was no ordinary court reporter, in the sense of today's professionals who do their jobs with clarity and precision but are completely uninvolved in the cases or with the associated parties. He was a political animal, well educated and traveled, and was well connected to the levers of power in his world, which in the 1880s were principally the railroads.

In 1875, while minister to Germany, Davis even took the time to visit Karl Marx, transcribing their conversations in what was considered one of the era's clearest commentaries about Marx. But Davis also left out part of what Marx said—Davis apparently viewed himself as both reporter and editor. In late 1878 a second reporter tracked down Marx and asked about Davis's omission. Here is an excerpt from that second article, as it appeared in the January 9, 1879, issue of the Chicago Tribune:

During my visit to Dr. Marx, I alluded to the platform given by J. C. Bancroft Davis in his official report of 1877 as the clearest and most concise exposition of socialism that I had seen. He said it was taken from the report of the socialist reunion at Gotha, Germany, in May 1875. The translation was incorrect, he said, and he [Marx] volunteered correction, which I append as he dictated...

Marx then proceeds to give this second reporter an entire Twelfth Clause about state aid and credit for industrial societies and suggests that Davis had cooperated with Marx in producing a skewed record in recognition of the times and the place where the discussion was held.

I own twelve books written by Davis, which give an insight into the status and the role he held as reporter for the Supreme Court. My frayed, disintegrating copy of Mr. Sumner, the Alabama Claims, and Their Settlement, published in 1878 by Douglas Taylor in New York, is filled with Davis's personal thoughts and insights on a testimony before Congress.

The book, first published as an article by Davis in the New York Herald on January 4, 1878, says such things as,

Like Mr. Sumner's speech in April 1869, this remarkable document would have shut the door to all settlement, had it been listened to. To a suggestion that we should negotiate for the settlement of our disputed boundary and of the fisheries, it proposed to answer that we would negotiate only on condition that Great Britain would first abandon the whole subject of the proposed negotiation. I well remember Mr. Fish's astonishment when he received this document.

Davis summarizes with extensive commentary, such as, "I add to the foregoing narrative that Mr. Motley's friends were (perhaps not unnaturally) indignant at his removal, and joined him in attributing it to Mr. Sumner's course toward the St. Domingo Treaty..."

He indirectly references his own time as envoy to Germany when he writes, "They apparently forgot that the more brilliant, the more distinguished, and the more attractive in social life an envoy is, the more dangerous he may be to his country when he breaks loose from his instructions and communicates socially to the world and officially..." As you can see, Davis was fond of flowery writing and thought well of himself.

And then I realized what I was reading. It related to the famous 1871 Geneva Arbitration case, led by attorney Morrison Remick Waite, which won more than $15 million for the U.S. government from England for its help of the Confederate army during the Civil War. Going to another book by Davis (which I had purchased while researching this book), published in 1903 and titled A Chapter in Diplomatic History, I discovered that Davis had been quite active in the Geneva Arbitration case.

During the negotiations with England, he writes:

I answered that I was very sorry at the position of things, but that the difficulty was not of our making; that I would carry his message to Lord Tenterden, but could hold out little hope that he would adopt the suggestion; and that, in my opinion, the Arbitrators should take up the indirect claims and pass upon them while this motion was pending.

That evening I saw Lord Tenterden and told him what had taken place between me and Mr. Adams and the Brazilian arbitrator....About midnight he came to me to say that he had told Sir Roundell Palmer what had passed between him and me, and that Sir Roundell had made a minute of some points which would have to be borne in mind, should the Arbitrators do as suggested. He was not at liberty to communicate these points to me officially; but, if I chose to write them down from his dictation, he would state them. I wrote them down from his dictation, and, early the next morning, convened a meeting of the counsel and laid the whole matter before them.

That Davis was playing more than just the role of a stenographer in this case was indisputable. And the case? It was, again, the Alabama Claims or Geneva Arbitration case, which had made Morrison Remick Waite's career. Checking the University of Virginia's law school library, I found the following notes on the Geneva Arbitration case: "The United States' case was argued by former Assistant Secretary of State Bancroft Davis, along with lawyers Caleb Cushing, William M. Evarts, and Morrison R. Waite, under the direction of Secretary of State Hamilton Fish and Secretary of Treasury George Boutwell."

Waite and Davis had worked side-by-side on one of the most famous cases in American history (at the time), both in Geneva, Switzerland, and before the U.S. Congress. And all this was a full fifteen years before Davis was to put his pen to his understanding of the Santa Clara County v. Southern Pacific Railroad case when it came before the Supreme Court of which Waite was now chief justice and for which Davis was the head court reporter.

Searching for traces of Davis on the Internet, I found an autograph for sale—it was a letter by President Ulysses Grant, signed by Grant, and also signed by Grant's acting secretary of state—J. C. Bancroft Davis. (Remember that Grant's own Republican Party refused to renominate him for the presidency because his administration was so wracked by railroad bribery and corruption scandals.)

Looking through the records of the City of Newburgh, New York, where Davis once lived, I found the Orange County, New York, Directory of 1878–1879, which lists the following note about one of that city's distinguished citizens. "The Newburgh and New York Railroad Company was organized December 14th, 1864, the road was completed September 1st, 1869. J. C. Bancroft Davis was elected President of the Board of Directors...[on] August 1st, 1868."

Given his distinguished background and his having worked with railroad tycoons James Taylor and Jay Cooke in the late 1860s, it's hard to imagine that Davis would insert "corporations are persons" into the record of a Supreme Court proceeding without understanding full well its importance and consequences, even if he was encouraged to do so by Justice Field.

So here is the fourth and final possibility: J. C. Bancroft Davis undertook to rewrite that part of the U.S. Constitution himself, for reasons that to this day are still unknown but probably not inconsistent with his personal political worldview and affiliation with the railroads and that he did it with the encouragement of Field.

Waite was so ill that he missed the entire 1885 session of the Court, was very weak and sick in 1886 and 1887, and died in March 1888. In all probability, he never knew what Davis had written in his name.

Whether it was a simple error by Davis, or Davis was bending to pressure from Field, or Davis simply took it upon himself to use the voice of the Supreme Court to modify the U.S. Constitution—the fact is that an amendment to the Constitution which had been written by and passed in Congress, voted on and ratified by the states, and signed into law by the president, was radically altered in 1886 from the intent of its post–Civil War authors.

And the hand on the pen that did it was that of court reporter J. C. Bancroft Davis, aided and in all probability even persuaded or bought off by the same railroad barons who, through the money and the power of their railroad corporations, owned Justice Stephen J. Field.

Chapter 1: The Deciding Moment?

1. Santa Clara County v. Southern Pacific Railroad Co., 118 U.S. 394 (1886), http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=118&invol=....

2. D. M. Delmas, Speeches and Addresses (San Francisco: A. M. Robinson, 1901). A first edition is in the library of the author. Delmas's quotations in this section come from this volume.

3. Blackstone, Book I, 123 (reference from Delmas; see note 2 above). Blackstone's Commentaries to the Constitution and Laws of the Federal Government of the United States (Philadelphia: Birch and Small, 1803).

4. Connecticut General Life Insurance Company v. Johnson, 303 U.S. 77 (1938).

5. Wheeling Steel Corp. v. Glander, 337 U.S. 562 (1949). Justice Douglas dissents. Regarding the ruling that corporations are given rights as persons under the Fourteenth Amendment, he said, "There was no history, logic or reason given to support that view nor was the result so obvious that exposition was unnecessary."

6. Grover Cleveland, State of the Union address, December 3, 1888, http://stateoftheunion address.org/category/grover-cleveland.

7. First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978).

8. Associated Press, "Rehnquist Challenged Minority Voters, 3 Say," Toledo Blade, July 26, 1986. The article asserts that Rehnquist "directed ballot security programs for Republicans in Phoenix from 1958 through 1964" and, according to three of his then-colleagues, was "a young eager beaver, a highly partisan Republican who was going to try and stop as many Democratic votes as he could." The eyewitnesses testified that "Justice Rehnquist 'approached a black gentleman and said: "Are you qualified to vote?" He (the black man) quietly left the line, and it happened again,' Mr. Pine recounted."

9. Richard L. Grossman and Frank T. Adams, Taking Care of Business: Citizenship and the Charter of Incorporation (S. Yarmouth, MA: Charter Ink, 1999), http://www.ratical.org/corporations/TCoB.txt.

10. Charles Beard and Mary Beard, The Rise of American Civilization (1927; Whitefish, MT: Kessinger, 2005).

11. Howard Jay Graham, Everyman's Constitution: Historical Essays on the Fourteenth Amendment, the "Conspiracy Theory," and American Constitutionalism (Madison: State Historical Society of Wisconsin, 1968).

Thom Hartmann is America's No. 1 progressive radio host, as well as the New York Times bestselling, four-time Project Censored Award-winning author of 21 books in print, in 17 languages on 5 continents.

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