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

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  • HILT, ERIC

Abstract

This article analyzes the ownership structures and governance institutions of New York's corporations in the 1820s, using a new dataset collected from the records of the state's 1823 capital tax, and from the corporate charters. In contrast to Berle and Means's account of the development of the corporation, the results indicate that many firms were dominated by large shareholders, who were represented on the firms' boards, and held sweeping power to utilize the firms' resources for their own benefit. To address this problem, many firms configured their voting rights in a way that curtailed the power of large investors.“… we complain of directors considering themselves the company, when they are merely the agents.†1

Suggested Citation

  • Hilt, Eric, 2008. "When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 68(3), pages 645-685, September.
  • Handle: RePEc:cup:jechis:v:68:y:2008:i:03:p:645-685_00
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    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N81 - Economic History - - Micro-Business History - - - U.S.; Canada: Pre-1913

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