Jepson, Mark–Entrepreneurs or Corporations. Divergent Patterns of Class Formation in the Early Anthracite Mining Trade, 1815-1860

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ENTREPRENEURS OR

CORPORATIONS: DIVERGENT

PATTERNS OF CLASS FORMATION I

THE EARLY ANTHRACITE MINING

TRADE, 18154860

Mark C. Jepson

ABSTRACT

Theories of capitalist class ormation presuppose that the historical triumph

of the business corporation over the individual proprietorship in major

industries derived from either the increasing capital requirements, or the

increasing organizational complexity, of industrial development. Similarly,

economic historians of the Pennsylvania anthracite mine industry argue that

the corporate imperative originated in the economic requirements of mining

and transporting coal. In this study, I challenge both the theoretical and

empirical forms of the argument which reduce the rise of the corporation and

the decline of the individual enterprise to industrial requirements. Instead,I employ an historical comparison of the anthracite industry’s three com-

mercial distr icts to show how class ormation, whether by corporations or by

individual proprietors, resulted from political class struggles. Specifically,

IJind that the strugglesfor corporate charterprivileges in the state legislature

determined the pattern of class formation in anthracite mining. The finding

Political Power and Social Theory

Political Power and Social Theory, Volum e 16,342

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3



4 M AR K C. JEPSON

i s s ign i f i can t , f i r s t , f or underscor ing the ex t ra -economic or ig ins o f c lass

form at ion , and , second ly , for revea ling the h i s tor ica l l y con t ingen t qua l i t y o f

c l a s s fo r m a t i o n .

Unless you becom emo re watchful in you r States and check the spirit of the m onopolies andtheir thirst to exclusiveprivileges, you will, in the end, find that the m ost important powers ofGovernmenthave been given or b artered away and the control of y our dearest interests havebeen passed nto the hands of these corporations.

- 1837 Farew ell AddressPresident Andrew Jackson

I N TRODUCT ION

O r i g i n a ti n g a n d C en t r a l Q u es t io n s

N o t l o n g a f t e r t h e H o u s e o f M o r g a n c o n s o l i d a te d t h e a n t h r a c it e c o a l m i n i n g

i n d u s t ry i n t o a s i n g le " c o m m u n i t y o f in t e re s t, " a f e d e ra l c o m m i s s i o n a p p o i n t e d

t o s t udy t he a n t h r a c i t e c oa l s t r i ke o f 1902 p r onounc e d , " t he r e i s p r oba b l y no

c o m m o d i t y e n t e r i n g i n t o h u m a n c o n s u m p t i o n w h i c h p o s s e s s e s s o m u c h t h e

c h a r a c t e r o f a n a tu r a l m o n o p o l y a s t h e a n t h ra c i te c o a l o f P e n n s y l v a n i a " ( q u o t e d

i n A ur a nd , 1971 , p . 15 ) . L i ke a l l s uc h s t a t e m e n t s m a de a f t e r t he f a c t , que s t i onsa b o u t h i s to r i c al p o s s i b il i ti e s o r a l t e r n a te o u t c o m e s a r e p r e - e m p t e d b y t h e v e r y f a c t

i t s e l f . F e w h a v e q u e s t i o n e d t h e i n e v i t a b i l i t y o f m o n o p o l y i n a n t h r a c i t e m i n i n g

p r e c i s e l y b e c a u s e o f t h e p r e v a i li n g b e l i e f t h a t i n d iv i d u a l p r o p r i e to r s h i p p e r i s h e d

f r o m na t u r a l c a us e s ( i. e. m a r ke t f o r c e s ).

F r om a ge ne r a l t he o r e t i c a l pe r s pe c t i ve , t h i s s t udy i nve s t i ga t e s t he que s t i on o f

how , a nd t o w h a t e x t e n t , po l i t i c s i n f l ue nc e s c a p i t a l is t c la s s f o r m a t i on . M or e s pe c i f -

i c a l l y , how c a n i nd i v i dua l p r op r i e t o r s , w he t he r i n t r a de , i ndus t r y , o r a g r i c u l t u r e ,

r e s i s t c o r p o r a t e d e v e l o p m e n t t h r o u g h p o l i t i c a l s t r u g g l e ? T h e c e n t r a l e m p i r i c a l

que s t i on i s , t he r e f o r e , no t w hy c o r po r a t e c onc e n t r a t i on ha d t o ha p pe n i n a n t h r a c i t em i n i n g , b u t w h y , f o r a l m o s t f iv e d e ca d e s , i n d i v i d u a l e n t e rp r i s e r e ig n e d s u p r e m e a s

t he bus i ne s s m od e l o f t he a n t h r a c i te c oa l i ndus t r y i n t he la r ge s t a nd m o s t p r oduc t i ve

d i s tr i c t o f t he i ndust r y , a t a ti m e , no l e s s, w h e n t he o t he r d i s t r ic t s w e r e und e r go i ng

r a p i d c o r p o r a t e d e v e l o p m e n t a n d c o n c e n t r a t i o n ? H o w d i d p o l i t i c a l s t r u g g l e

de t e r m i ne t he s e d i ve r ge n t pa t h s o f de v e l op m e n t a nd f o r m s o f c l a s s re la tions.'?

On e Indus try , Tw o Pat terns o f Class Format ion

W h i l e r a p i d l y e x p a n d i n g u r b a n c o a l m a r k e t s e n s u r e d t h e d e v e l o p m e n t o f

P e n ns y l va n i a ' s a n t h r a c i t e c oa l f i e ld s in t he e a r l y n i ne t e e n t h c e n t u r y , t he y d i d no t



E n t r e p r en e u r s o r C o r p o r a t i o n s 5

1 IIIJ" . ; n , '

J

%

V lr~ ' l l t

. , S r

s

Fig. 1. Anthracite Mining Fields and Commercial Districts. S o u r c e : Shegda (1952,

p. 11).

de t e r m ine how, o r by wh om , the f i e ld s wou ld b e de ve lope d . F r o m the f i r st " o f fi c i a l "sh ipm e n t i n 1820,1 the a n th r a c i t e c oa l t r a de wa s ge og r a p h ic a l ly d iv ide d in to t he

S c huy lk i l l , Le h ig h , a nd W yom ing d i s tr i ct s . Th e ma p a bov e (F ig . 1 ) de p ic t s bo th

the a n th r a c i t e t ra de d i s t ri c ts a nd the a n th r a c i t e m in ing r e g ions t he y e nc o m pa sse d .

T h e t h r e e c o m m e r c i a l d i st ri c ts d e v e l o p e d c l o s e t o g e t h e r in t i m e a n d p l a c e, a n d ,

t o a g r e a t ex t e n t, e m p l o y e d th e s a m e m e t h o d s t o p r o d u c e t h e s a m e p r o d u c t

f o r the s a m e ma r ke t s .

F o r t he p r e se n t a na lys i s , t he m os t imp or t a n t d i f f e r e nc e be tw e e n the d i s t ri c ts

wa s sum m e d up in 1833 by S c huy lk i l l j ou r na l i s t G e or ge Ta y lo r ( 1833 , p . 3):

" The S c huy lk i l l Mine s a r e wor ke d by ind iv idua l s i n t he i r i nd iv idua l c a pa c i ty[ w h e r ea s t he ] L e h i g h a n d L a c k a w a n n a [ W y o m i n g ] m i n e s a r e o w n e d a n d w o r k e d

e xc lus ive ly by inc o r po r a t e d c omp a n ie s . " I n o the r wor ds , t he S c hu y lk i l l d i s t ri c t



6 MA RK C. JEPSON

w a s d e v e l o p e d b y i n d iv i d u a l p r o p r ie t o rs , a n d b o t h t h e L e h i g h a n d t h e W y o m i n g

d i s tr ic t s w e r e d e v e l o p e d b y c o r p o r a t e m o n o p o l i e s . T h e c o a l t ra d e o f b o t h

the Le h igh a nd the W yoming d i s t r i c t s ope r a t e d unde r a s ing l e , a l l - i nc lu s ive ,m a n a g e m e n t . T h e s e p ar a te b r a n c h e s o f t h e t ra d e w e r e , f r o m t h e v e r y b e g in n i n g ,

in t e g r a t e d in to a s ing l e c o r p o r a t e s t ruc tu r e , a nd c a r r i e d on by se pa r a t e c o r po r a t e

" de pa r tm e n t s , " w hos e va r ious e xpe nd i tu r e s we r e t o t a l e d a nd the n sub t r a c t e d f r om

c oa l s a l e s r e c e ip t s a t t he e nd o f e a c h se a son . " The Le h igh C oa l a nd Na v iga t ion

C ompa ny , " submi t s a p r omine n t c a na l h i s to r i a n ( P a t ton , 1987 , p . 15 ) , wa s " the

f ir st v e r ti c a ll y in t e g r a te d c o m p a n y o f i t s t y p e i n A m e r i c a . . . . T h e D e l a w a r e

a n d H u d s o n C o m p a n y , l ik e t h e L e h i g h , w a s a m u l t i - fu n c t i o n a l en t e r p ri s e w h i c h

m i n e d a n t hr a ci te , t r a n s p o r t ed c o a l b y m e a n s o f w a t e r w a y a n d g r a v i t y r ai lr o a d ,

a n d m a r k e t e d t h e c o a l i n N e w Y o r k C i t y . " T h e L e h i g h C o a l a n d N a v i g a t i o nC o m p a n y ' s ( h e r e a f t e r L C N C ) m o n o p o l y o f th e L e h i g h c o a l tr a d e la s te d f o r 1 7

y e a r s ( 1 8 2 1 - 1 8 3 7 ) , w h i l e t h e D e l a w a r e a n d H u d s o n C o a l C o m p a n y ' s ( h e r e a f t e r

D H C C ) m o n o p o l y o f th e W y o m i n g c o a l tr ad e l a st ed f o r 2 1 y e a r s ( 1 8 2 9 - 1 8 5 0 ) .

E v e n a f t e r t h e t w o m o n o p o l i e s w e r e b r o k e n , m o s t o f th e c o a l i n t h e s e d i st ri ct s

c o n t i n u e d t o b e p r o d u c e d b y t h e t o p p r o d u c e r s . D u r i n g t h i s t i m e , t h e a v e r a g e

o u t p u t o f e a c h o f t h e s e h i g h l y - c a p i t a li z e d c o r p o r a te f i rm s e x c e e d e d 1 0 0 ,0 0 0 t o n s

pe r ye a r , o r t e n t ime s the a ve r a ge ind iv idua l ou tpu t o f S c huy lk i l l ' s one - hundr e d

o p e r a to r s . W h i l e a h a n d f u l o f c o r p o r a te c o m p e t i t o rs g r a d u a l l y e n t e r ed t h e L e h i g h

a n d W y o m i n g d i s t ri c ts a f t e r 1 8 4 0, i n d i v id u a l s w e r e c o m p l e t e l y l o c k e d o u t o f t h eL e h i g h t r ad e , a n d n e v e r p r o d u c e d m o r e t h a n 5 % o f t h e o u t p u t o f t h e W y o m i n g

anthrac i te t r ade . 2

I n c on t ra s t , t he S c huy lk i l l Na v iga t ion C o m pa n y ' s [ he r e a f t e r S NC ] d i s t i ngu i sh -

ing c ha r a c t e r is t i c wa s i t s na r r ow f i e ld o f e n t e rp r i s e . O f t he t h r e e c o r po r a t ions , t he

S N C w a s t h e c o n s u m m a t e c a n a l c o m p a n y , c o n f in e d t o o n e o f t h e f o u r b r a n c h e s

c o m p r i s i n g t h e S c h u y l k i l l c o a l t r a d e . W h i l e t h e S N C a l s o e n j o y e d a m o n o p o l y

ove r t he S c h uy lk i l l c oa l t r a ff i c i n t he e a r l ie s t de c a de s o f t he a n th r a c i te c oa l t r a de ,

the o the r th r e e b r a nc he s - t he l a nd bus ine s s , t he sh ipp ing bus ine s s , a nd the min ing

bus ine s s - we r e de ve lop e d by d i f f e r e n t s e gm e n t s o f i nd iv idua l p r op r i e to r s , wh ic hw e r e t h e m s e l v e s i n t e rn a l l y s eg m e n t e d . B y t h e e n d o f t h e 1 8 3 0s , r o u g h l y t w o d o z e n

loc a l a nd a b se n te e i n t e re s t s c on t r o l l e d the l a nd bus ine s s , 258 in de pe nde n t sh ip -

pe r s , o r " boa tm e n , " ha u l ing c o a l in 600 ve s se l s , c ondu c te d the sh ipp ing bus ine s s

( C ush ing , 1836 , p . 32 ; Jone s , 1908 , pp . 131 ,135 ) , a nd no l e ss t ha n 100 ind iv idua l

p r op r i e to r s , c om pr i se d o f m a s t e r c o l li e r s , ma r g ina l pe t ty p r oduc e r s , " f l y - by - n igh t "

ou t f i t s , a nd spe c u la to r s , ma na ge d the min ing bus ine s s ( An th r a c i t e C ommiss ion ,

1834, pp . 270 , 272; T aylor , 1855, pp . 3 62 , 393) . 3 In a l l , be t w een 350 and 4 00

se pa r a te go ing c onc e r n s e nga g e d in t he S c hu y lk i l l c oa l t r a de in a n a ve r a ge s e a son

p r i o r t o th e C i v i l W a r , a n d p r o b a b l y m o r e i n g o o d y e a r s . D e s p i t e w h a t o n e a u t h o r it yha s c a l l e d the " g r os se s t i ne f f i c i e nc i e s " a nd " d i s t r e s sing e c o no m ic p r a c t i c e s ,"



Entrepreneurs or Corporations 7

t h i s d i v e r s e c l a s s o f e n t r e p r e n e u r s m a n a g e d t o p r o d u c e v a s t a m o u n t s o f c o a l ,

a nd " un l i ke i nde pe nde n t s e l s e w he r e , t he y s t ood a t i t s [ t he a n t h r a c i t e i ndus t r y ' s ]

p r od uc t i ve c e n t e r " ( Y e a rl y , 1961, pp . 58 , 64 ). T he i m por t a n t po i n t t o m a ke i s t ha tw h i l e h u n d r e d s o f i n d i v id u a l p r o p r i e t o r s c a m e a n d w e n t v e r y q u i c k ly , i n d i v id u a l

p r op r i e t o r s , a s a c la s s , p r ov e d t o be qu i t e r e s il i en t . W i t h i nd i v i dua l p r op r i e t o r s a t

t he " p r o duc t i ve c e n t e r, " t he S c hu y l k i l l D i s t r ic t dom i na t e d t he a n t h r a c i t e c oa l t r a de

f o r f o r t y y e a r s , s u p p l y i n g r o u g h l y t w o - t h i rd s o f t h e n a t i o n ' s a n t h r a c i te b e t w e e n

1825 a nd 1865 .

Theoretical and Empirical Rationale

I n t h e r e m a i n d e r o f t hi s p a p e r , I s u p p o r t t w o p r o p o s i t io n s t h a t c h a l l e n g e t h e

o r t hod ox i e s o f t w o o t he r w i s e r i va l t he o r e t i c a l tr a d i ti ons . T he f i r s t p r op os i t i on i s

t ha t t he h i s to r i c a l a r r a n ge m e n t de s c r i be d a bo ve o r i g i na t e d i n " po l i t i c a l " s tr ugg l e ,

n o t i n m a r k e t f o r c e s . T h e e m p h a s i s o n p o l i t i c s d e f i e s t h e m a r k e t b i a s h e l d b y

e c o no m i c h i s t o r i a ns o f U . S . i ndus t r y i n ge ne r a l , a nd o f the a n t h r a c i t e i ndus t r y i n

s pe c i f i c . T he s e c ond c onve n t i on t ha t I c ha l l e nge ho l d s t ha t c l a s s s t r ugg l e m us t

t a k e p l a c e between c l a s s e s , o r r a t he r be t w e e n t he c a p i t a l is t c l a s s a nd t he w o r k i ng

c l a ss . F o l l ow i ng R oy ( 1997 , p . 271 ) , I de f i ne c l a s s in t e r m s o f p r ope r t y r e la t ions :

" I f c l a s s is de f i ne d a s pe op l e s ' h i s t o r i c a ll y c ons t r uc t e d r e l a t i ons h i p t o t he m e a ns

o f p r odu c t i on , t ho s e re l a t i ons h i p s a r e e m bo d i e d i n the r igh t s , e n t it l e m e n t s , a nd

r e s pons i b i l i t i e s e n f o r c e d by t he s t a t e , t ha t i s , p r ope r t y . " T he r e l e va n t que s t i on

h e r e i s w h e t h e r o r n o t c o n f l ic t w i t h i n c l a ss e s , o r b e t w e e n s e g m e n t s o f th e s a m e

c l a s s c a n be c onc e i ve d a s c l a s s s t r ugg l e . A r e c l a s s i n t e r e s t s a nd c l a s s s t r ugg l e

r o o t e d i n t h e d i c h o t o m o u s c o n d i t io n o f h a v i n g a n d n o t h a v i n g p r o p e r t y , o r c a n

d i f f e r e n t s e gm e n t s o f c a p i t a l i s t s ha ve d i f f e r e n t r e l a t i ons h i p s t o t he ow ne r s h i p

o f t h e m e a n s o f p r o d u c t io n , a n d t h e r e f o r e h a v e d i f f e re n t a n d e v e n c o n f l ic t in g

c las s in te res t s?

I n t h i s a na l y s i s , I s how t ha t p r ope r t y r e l a t i ons c a n va r y a m ong p r ope r t y

ow ne r s , a nd t ha t p r ope r t y r i gh t s a r e no t un i f o r m l y d i s t r i bu t e d a m ong c a p i t a l i s t s .

V a r i a t i ons i n p r ope r t y r i gh t s , e n t i t l e m e n t s , a nd r e s pons i b i l i t i e s c a n r e s u l t i n

u n e q u a l e c o n o m i c o p p o r t u n i ti e s i n th e f o r m o f m a r k e t a c c e s s a n d c o n t ro l , a n d

a c c e s s t o c a p i t a l . I nde e d , s uc h d i s pa r i t i e s i n p r ope r t y w i t h i n t he c a p i t a l i s t c l a s s

c a n f o s t e r pe r c e p t i ons o f un f a i r c om p e t i t i on , a nd c u l t i va t e d is t inc t a nd h os t i le

c l a s s i n t e r e s t s a nd i de n t i t i e s t ha t l e a d t o t he f o r m a t i on o f c l a s s s e gm e n t s . I n

Z e i t l i n ' s ( 1980 , pp . 6 - 7 ) w or ds , c l a s s s e gm e n t s

are differentiated by their relatively distinct locations in the process of production andappropriation of surplus value. As A consequence, they m ay have specific political econom ic



8 MA RK C. JEPSON

requirements and concrete interest in contradiction to those of other segments of the class .. ..

Class segments, therefore, have the inherent potential for developing a specific variant of

intraclass consciousness and commo n action in relation to other segments of the class.

I p r opo se tha t t he in t ra - c la s s po l i t i c a l st r ugg les - be tw e e n ind iv idua l e n t r e p r e ne u r s

a nd c o r po r a t ions - i n t he e a r ly a n th r a c i t e t r a de we r e c l a s s s t r ugg le s . W hi l e

S c hu y lk i l l ' s i nd iv idua l p r op r i e to r s a nd the i r c o r po r a t e r iva ls we r e , a s o wne r s o f

the m e a ns o f p r oduc t ion , c a p i t a li s ts , t he y w e r e a l so d i s t i nc t s e gme n t s o f c a p i ta l is t s ,

w i th d i s t i nc t c onc e p t ions o f p r ope r ty . Th e se a r e no t me r e qua n t i t a t i ve d is t i nc tions .

As I sha ll show, the de f e n de r s o f i nd iv idua l p r op r i e to r sh ip c onc e ive d o f t he se p r op -

e r ty d i s t inc t ions in s t a r k mor a l t e r ms tha t a s sa i l e d the e me r g ing se t o f c o r po r a t e

p r op e r ty r igh t s a s un f a i r p r iv i le ge s , i n v io l a t ion o f i nd iv idua l p r ope r ty r igh ts . 4

To c onc e iv e o f t he in t r a -c l a s s s t r ugg le be twe e n ind iv idua l p r oduc e r s a nd c o r po -

ra t ions as a po l i t ica l s t ruggle , neces sa r i ly impl ica tes th e s ta te in th is s t ruggle . In the

f inal a na lys i s , t he c l a s s s t r ugg le wa s a po l i t i c a l s t r ugg le be tw e e n ind iv idua l s a n d

c o r po r a t ions ove r t he l e ga l i z a t ion o f t he i r d i s t inc t p r ope r ty r e l a t ions . T he p r a c t i c a l

goa l o f po l i t i cs w a s , t he r e f o r e , to pe r su a de s t a te l e g i s la to r s t o r e c og n iz e a nd

r ou t in i z e the i r p r ope r ty r e la t ions a s l a w . Th e po l i t i c a l ta sk o f l e ga l i z ing p r o pe r ty

r e la t io n s - o f e n d o w i n g t h e m w i t h t h e f o r c e o f l a w - w a s e s p e c i a l l y c r u c ia l to t h e

c o r po r a t ion , s inc e un l ike ind iv idua l s , c o r po r a t ions c ou ld no t e xe r c i se p r ope r ty

r igh t s, l e t a lone e x i s t, un le s s t he y w e r e c ha r t e r e d by the s t a te gove r nm e n t . I t wa sno a c c ide n t , t he r e f o r e , t ha t t he ind iv idua l p r oduc e r s ' po l i t i c a l c a mpa ign a ga ins t

the c o r po r a t ion wa s f oc use d on de f e a t ing c ha r t e r pe t i t i ons a t t he S ta t e House

in Har r i sburg .

E f f ic i e n c y T h e o r y a n d C l a s s F o r m a t i o n

W hi le the c o nc e p t o f po l it i c s ho lds a c e n t r a l p l a c e in the s tudy o f wor k ing - c l a s s

f o r ma t ion , i t i s c onsp ic u ous ly a bse n t i n t he s tudy o f bus ine s s c l a s s f o r ma t ion . M os t

no ta b le a m ong bus ine s s h i s to r i a ns a nd e c onom is t s , A l f r e d C h a nd le r ( 1977 , 1990)

a r gue s tha t t he l a rge c o r po r a t ion re p la c e d ind iv idua l p r op r i e to r sh ip a s t he d om i -

n a n t m o d e o f b u s i n es s o w n e r s h i p i n t h e U n i t e d S t at es b e c a u s e c o r p o r a t e e n t e r p ri s e

i s mor e e f f i c ie n t t ha n ind iv idua l e n t e r p r is e . Th e c o r po r a t ion , s a ys C h a nd le r ( 1977 ,

p . 8 ) , " fi r s t a ppe a r e d , g r ew , a nd c on t inu e d to f lou r i sh in those se c to rs a nd indus t r ie s

c h a r a c t er i z e d b y n e w a n d a d v a n c i n g t e c h n o l o g y a n d e x p a n d i n g m a r k e t s ." T h e

e c o n o m i e s o f s c a le a n d i n c re a s i n g p r o d u c t i v it y y i e ld e d b y t e c h n o l o g y e n d o w e d

the c o r po r a t ion w i th a " po we r f u l c om pe t i t i ve a dva n ta ge " ov e r l e s s - e f fi c i e n t " sm a l l

t r a d i ti ona l e n t e r p r i s e " ( Ib id . , p. 6 , 244) . 5 As indus t r ia l cap i ta l i sm deve lo ps , in -d i v id u a l s p r e s u m a b l y b e c o m e i n c a p a b l e o f s a t is f y in g t h e n e c e s s a r y r e q u i r e m e n t s



En tr e p r e n e u rs o r Co r p o r a t io n s 9

of l a rge s ca l e p roduc t i on and d i s tr i bu ti on , and mu s t neces sa r i l y succumb to be t t e r

equ ipped , b e t t e r f i nanced , and be t t e r ma nag ed co rpo ra ti ons . 6

Em pi r i ca l s t ud ies o f an th rac i t e deve lopm en t have , by an d l a rge , em braced t h i s" e f f ic i e n c y " m o d e l o f c o r p o ra t e d e v e l o p m e n t .7 More speci f ica l ly , var ia t ions in

the pa t te rn o f mine ow nersh ip a re t yp i ca l l y exp l a ined by va r i a ti ons i n the cos t

o f min ing an d sh ipp ing coa l . Accord ing ly , m os t accoun t s o f t he ea r ly an th rac i te

t rade a t t r ibute the success of indiv idua l propr ie torsh ip in Sch uylk i l l to i ts uniqu e

geology. As long ago as 1836, when the Schuylk i l l coal t rade was s t i l l in i t s

infancy , an ar t i c le in the N o r t h A m e r i c a n R e v i e w s t at ed , " The S chuy lk i ll r eg ion

seems to have been m arked by na tu re fo r i nd iv idua l en te rp ri s e." 8 Co ns i s t en t wi th

econornis t ic explanat ions for the r i se of the corporat ion , s tudies of an thraci te

deve lopmen t , and o f min ing i n genera l , undersco re t he s i gn i f i cance o f cap i t a land technology. Anthraci te h i s tor ians (e .g . Aurand, 1974; Binder , t974; Jones ,

1914; Mil ler & Sharpless , 1985; Pal ladino, 1990; Roberts , 1901; Schaefer, 1977;

Yearly , 1961) h ave un i fo rm ly em braced t h is ou t l ook by a t tr i bu ti ng S chu y lk i l l 's

a typ i ca l pa t t e rn o f mine ownersh ip t o t he d i s t r i c t ' s f avo rab l e geo logy , wh ich

requ i red on ly c rude and i nexpens ive t echno logy to m ine , and , a s a r esu l t, open ed

the m ines t o cap i t a l-poor i nd iv idua l s . In one fo rm o r ano the r t h is na tu ra l is t ic v i ew

of an th rac i te mine deve lopm en t has s t ood uncha l l enged fo r over a cen tu ry and a

hal f . M ost recent ly , socia l h i s tor ian An tho ny W al lace (1987, p . 70) procla imed:

" T h e r e a s o n f o r t h e p r e s e n c e o f s o m a n y s m a l l c o ll ie r ie s [in S c h u y l k i l l ] . . . w a sgeo lo gy . . . . Th e s t eep i nc l i na t ions and f requen t undu la t i ons o f the s t r a ta and eons

o f e ro s io n , h a d p r o d u c e d m a n y o u t c r op s w h e r e c o a l c o u l d b e m i n e d c h e a p l y a n d o n

a sm al l scale . "

In f ac t , t he g eo log i ca l and t echno log i ca l cons t ra in t s on c l as s fo rm at ion were no t

as r ig id as such con ven t iona l w i sdom sugges ts . A c om par i son o f t he S chuy lk i l l,

Leh igh , and W yom ing d i s tr ic t s r evea ls t ha t t he pa t t e rns o f ow nersh ip ( i.e . i nd iv id -

ua l o r co rpo ra t e ) o r i g ina t ed i ndepend en t ly o f e i t he r t he charac t e r o f t he coa l s tr ata ,

o r t he m etho d o f min ing . D esp i t e ce r t a in geo log i ca l va r ia t ions , oppor tun i t ie s fo r

low co s t ex t rac t ion abo unde d i n a l l t h ree r eg ions p r io r t o 1840 . A l l th ree posses sed

extens ive an thra ci te depos i t s that cou ld be m ined b y quarry , dr i ft , slope, or shaf t,

and rem ove d by s imp le " co t t age i nd us t ry" p rocedures ( i.e . undercu t t ing ) . In t ime ,

t he t echn i ca l requ i reme n t s o f pu rsu ing t he c oa l ve ins deep i n to t he ea r th wou ld

l imi t the acces s o f cap i t a l -poor p roducers . B u t t he abundanc e o f eas i l y acces s ib le

su r face depos i ts i n a l l th ree d i s t ri c ts kep t an th rac i t e m in ing w i th in the r each o f

indiv idu al capi ta l in the f irs t fou r decades o f the t rade ( i .e . 1820-186 0) .

An o ther v e r s ion o f e f f i c i ency t heo ry a t tr ibu t es t he d i f f e rences i n c l ass fo rm a-

t i on i n an th rac i t e min ing t o d i f f e r i ng t r anspor t a t i on cos t s . G iven t he need fo r

cap i t a l - i n t ens ive improvemen t s i n t r anspor t a t i on , t he deve lopmen t o f heav i ly

cap i t a li zed co rpo ra t i ons was , acco rd ing t o t h i s v i ew, e s sen t i a l fo r t he com m erc i a l



10 MA RK C. JEPSON

d e v e l o p m e n t o f t h e s e r e m o t e m i n i n g d i s tr ic t s. 9 T h e u n p r e c e d e n t e d c o n c e s s i o n o f

b o t h m i n i n g a n d s h i p p i n g p r i v i le g e s t o t h e L C N C a n d D H C C ( in 1 8 2 2 a n d 1 8 2 5 ,

r e s pe c t i ve l y ) w a s , t he r e f o r e , c ons i de r e d ne c e s s a r y t o i nduc e c a p i t a l i s t s t o i nve s tt he i r c a p i t a l on t he r i s ky c a na l p r o j e c t s , e v e n i f s uc h p r i v i l e ge s i nva r i a b l y r e s u l t e d

i n r e g i o n a l m i n i n g a n d s h i p p i n g m o n o p o l i e s . T h e A s s e m b l y ' s " e x t r a o r d i n a r y

r e l i n q u i s h m e n t o f s o v e r e i g n t y , " a s s e r t e d t h e P e n n s y l v a n i a A n t h r a c i t e C o a l

C o m m i s s i o n o f 1 8 3 4, w a s a n

inducement scarcelycommensuratewith the m agnitude and haz ard of the en terprise. Few o thermen or other companies could have been found willing to comm ence the work upon lessfavorable erms, and mu ch more extensiveprivileges would no doub t have been con ferred bythe state, had they been deem edessential o the accomplishm entof the ob ject.I°

U n l i k e th e L C N C a n d t he D H C C , t h e S N C w a s n o t p e r m i t t ed t o e n g a g e in t h e c o al

t r a de , o r to ow n o r ope r a t e boa t s o n i t s c a na l . 11 T h e C om m i s s i o n ( 1834 , p . 195 )

c onc l ude d t ha t m i n i ng p r i v i l e ge s w e r e no t c ons i de r e d ne c e s s a r y t o a t tr a c t c a p i ta l :

" H a d s i m i l a r p r i v i l e g e s b e e n c o n s i d e r e d n e c e s s a r y t o e n s u r e t h e c o m p l e t i o n o f

t he w o r k , t h e y w o u l d n o d o u b t h a v e b e e n c o n f e r r ed b y t h e L e g i sl a tu r e u p o n t h e

S c h u y lk i ll N a v i g a t io n C o m p a n y ? '

T h e L e g i s l a t u r e ' s e c o n o m i c j u s ti f ic a t io n f o r g r a n t in g u n l i m i t e d c o r p o r a t e

p r i v il e g e s t o th e L C N C a n d t h e D H C C w a s f o u n d e d o n t h e m y t h t h at th e m i n e r a l

r i c h e s in t h e L e h i g h a n d W y o m i n g d i s tr ic t s w o u l d n o t h a v e b e e n d e v e l o p e d h a dt he c om pa n i e s be e n r e s t r i c t e d t o the c a na l bus i ne s s . C a p i t a l, by t h i s l og i c , w ou l d

h a v e b e e n s c a r e d o f f b y t h e " h o w l i n g w i l d e r n e s s " u n l e s s t h e s t a t e p r o v i d e d i t

w i t h a d e qua t e s e c u r i t y ; t ha t i s , t he t a c i t a s s u r a nc e o f m on opo l y . J u s t t he oppo s i t e

w a s t r ue . T he f a c t t ha t t he S N C w a s a b l e t o r a i s e t he c a p i t a l t o c ons t r uc t t he

S c h u y l k i l l C a n a l i s p r o o f t h a t s p e c i a l c o r p o r a t e p r i v i le g e s w e r e n o t n e e d e d t o

a t t r a c t i nve s t o r s. M o r e ove r , a f t e r t he s uc c e s s o f t he E r i e Ca n a l , p r i va t e i nve s t m e n t

pou r e d i n t o c a na l c ons t r uc t i on t h r oughou t t he no r t he a s t e r n U n i t e d S t a t e s . T he

s u b s e q u e n t c o n s t r u c t io n o f th e M o r r i s C a n a l , th e D e l a w a r e a n d R a r i ta n C a n a l , a n d

t h e U n i o n C a n a l b y c o m p a n i e s c o n f i n e d t o t h e c a n a l b u s i n e s s b y t h e i r c h a r t e r s ,

d e m o n s t r a t e s t h a t c o r p o r a t io n s w o u l d a n d c o u l d f in a n c e a n t h ra c i te c a n a l s w i t h o u t

a dd i t i ona l s t a t e c onc e s s i ons . 12 T h e d e ve l op m e n t o f t he P e nn s y l va n i a S t a t e c a na l

s y s t e m b e t w e e n 1 8 2 6 a n d 1 8 34 , p a rt i cu l a r ly t h e N o r t h - B r a n c h o f th e P e n n s y l v a n i a

C a n a l a n d t h e D e l a w a r e C a n a l , p r o v i d e d y e t a n o t h e r m o d e l o f a n t h r a c i t e c a n a l

d e v e l o p m e n t . C o n t r a r y t o t h e c o n v e n t i o n a l w i s d o m , t h e s t a t e d i d n o t u n d e r t a k e

t he s e p r o j e c t s f o r the w a n t o r t i m i d i t y o f p r i va t e c a p it a l . Co r p o r a t e i n t e r e s t i n

b o t h t h e D e l a w a r e a n d N o r t h B r a n c h c a n a l s w a s s t r o n g b e f o r e a n d a f t e r t h e s t a te

d e c i d e d t o d e v e l o p t h e m a s " p u b l i c w o r k s " '1 3 T h e l e s s o n o f t h e s e p u b l i c a n d

p r i v a te w o r k s i s t h a t t h e d e v e l o p m e n t o f b o t h m i n e s a n d c a n a l s w a s p o s s i b l ew i t h o u t s p e c i a l c o r p o r a t e p r i v i le g e s o r m o n o p o l y p r o t e c ti o n .




Argument

As a genera l p ropos i t i on , I a rgue t ha t t he emergence o f i nd iv idua l p rop r i e to r sin i ndus t ry r equ i res a pa r t icu l a r con f igu ra t i on o f p roper ty r e l a t ions , r e fe r red t o

here as " i ndus t r i a l s egmen ta t i on" Tha t i s , fo r i nd iv idua l s t o succeed aga ins t

co rpo ra t i ons , p roper ty r e l a t i ons wh ich l im i t p roducers f rom opera t i ng i n more

than o ne b ranc h o f i ndus t ry m us t f i r st be es t ab li shed . By l im i t ing t he p roduc t s

and se rv ices f i rms can p roduce , a nd t he ma rke t s i n wh ich f i rms can en t e r , such

segm en ted re l a t ions s i gn i fi can t ly lim i t t he o rgan i za t iona l s t ruc tu re an d s ize o f

f i rms . Moreover , s egmen ta t i on o f i ndus t ry i nc reases t he i nd iv idua l ' s chances

o f en t ry by l im i t i ng cap i t a l r equ i remen t s , and by mak ing t he s epara t e b ranches

econ om ica l l y depend en t upon ea ch o the r. I f no l im i t s a re imp osed on t he sphereo f economic ac t i v i t y , t hen co rpo ra t i ons a re f r ee t o exp lo i t t he i r g rea t e r cap i t a l

r esou rces t o buy -ou t , fo rce -ou t , o r keep ou t i nd iv idua l comp et it o r s . 14

In the em pi r ica l analys i s that fo l lows , I f ind that the key pol i t i ca l s t ruggles that

p rodu ced t he d ive rgen t pa tt e rns o f c l a s s fo rm at ion in t he ea r ly an th rac i te t r ade

- i nd iv idua l p rop r i e to r sh ip i n t he S chuy lk i l l D i s t r ic t and co rpo ra t e mo nop o ly

in t he Leh igh and t he W yo m ing d is t ri c ts - occu r red i n two h i s to ri ca l phases .

In the f i rs t phase (1815-1825) , the pol i t i ca l s t ruggles for corporate pr iv i leges

(p roper ty r i gh t s ) by t he t h ree cana l compan ies e s t ab l i shed two ve ry d i f f e ren t

cons te l la t ions of proper ty re la t ions . In the Schuylk i l l Dis t r ic t , the Schuylk i l lNav iga t i on Company ' s f a i l u re t o win mul t i p l e cha r t e r p r i v i l eges r esu l t ed i n a

segm en ted i ndus t r i a l s truc tu re t ha t ope ned t he m ines t o i nd iv idua l opera to r s . In

t h e L e h i g h a n d t h e W y o m i n g d i st ri ct s, th e L C N C ' s a n d t h e D H C C ' s s u c c e s s

in winning mul t ip le char ter pr iv i leges ( i . e . l and-hold ing , mining , and sh ipping

pr iv i l eges ) f rom the Leg i s l a tu re a l l owed them to monopo l i ze t he coa l t r ade by

crea t i ng economic ba r r i e r s t o en t ry . W hereas t he s t rugg l es o f t he f i r s t phase

invo lved t he c rea t i on o f p roper ty r e l a t i ons , t he s t rugg l es o f t he s econd phase

( 1 8 2 5 - 1 8 6 0 ) i n v o l v e d t h e ir p re s e rv a t io n . T h e L C N C a n d t h e D H C C m o n o p o l i e s ,

and S chu y lk i l l 's i nd iv idua l s , a l l sough t t o de fe nd t he i r nascen t c l a ss r eg imes b ydefea t i ng t he char t e r pe t i t ions o f min in g com pan ies i n t he s t a t e l eg is l a tu re .

A N A L Y S I S

Phase One of Class Formation: The Canal Companies' Political

Struggles for Corporate Privileges

I f econom ic neces s it y , i n t he fo rm O m in ing and t r anspor t a t ion cos ts , was no t t hedec i s ive f ac to r i n e i t he r t he char t e r i ng o f t he cana l co mp an ies o r t he fo rm at ion



12 MA RK C. JEPSON

of c l a s se s i n t he ea r ly an th r ac it e mines , t hen w ha t w as? T h e c r uc i a l d i f fe r ence

be tween the cha r t e ring o f the SN C and the cha rt e ring o f t he L C NC and the DH CC

was no t capi ta l r equi rem ents or capi ta l scarc ity , but pol i t ics . The genes is o f c lassformat ion in the anthrac i te mining can be t raced to a s ingle pol i t ica l decree :

T he Penn sy lvan ia L eg i s l a tu r e 's r e jec t ion o f t he SN C' s o r ig ina l cha rt e r pe t it i on

in 1813 . T he r ea son the SN C d id no t have the same un l imi t ed p r iv i leges a s the

L C N C a n d t h e D H C C , w a s n o t b e c a u se i t d id n o t w a n t th e m , b u t b e ca u s e i t w a s

den ied them. I n f ac t , t he com pan y ' s f ounde r , Jos i ah Wh i t e , had r eques t ed m in ing

and sh ipp ing f igh t s i n t he o r ig ina l cha r te r pe ti ti on . Bu t W hi t e ' s p l an to impr ove

the f i ve r f a ced ve r y de t e r mined oppos i t i on f r om a l l s i de s . L oc a l r epre sen ta t ive s

f r om B e r ks , Ches t e r, M on tgom er y , and S chuy lk i l l coun t i e s opposed the pe t i ti on

(Powel l , 1978, p . 81). As ear ly as 1811, W hi te had a l iena ted fa rm ers in these r ichagr i cu l tu ra l coun t ie s o f sou theas t e rn Pennsy lvan ia by cha r g ing a f i f t y ce n t t o l l

on each b oa t pa ss ing th r ough h i s l ocks on the Schuy lk i l l R ive r ( Shegda , 1952,

p . 34). T he f a r mer s , and the mer chan t s w ho bo ught t he i r goods , becam e s t aunch

opponen t s o f Whi t e ' s impr ovement s . T hey f ea r ed tha t Whi t e would a t t empt t o

m ake the r ive r a p r iva te t hor oug hf a r e , and ex to r t even h ighe r to l l s by m onop ol i z ing

the t ra ff ic . Thu s , as Po wel l (1978, p . 81) observes , "a l th ou gh c i tizens f rom these

coun t i e s be l ieved in t he va lue o f t he p r o j ec t, t he y d id n o t wan t i t to be con t r o l led

by Jo s iah W hi te . " In 1815, "a f te r three years o f pol i t ica l b icker ing," the legis la ture

f ina l ly i ncor por a t ed the Schuy lk i l l Nav iga t ion Company , bu t on ly because thecom pany had by then , "pa ssed in to t he hands o f o the r s w i th t he ir own p l ans ," and

abando ned the r eques t f o r l andho ld ing and min ing p r iv i leges .

Bi t te r, but no t broken, W hi te turned his am bi t ions eas t to the Le high Dis t r ic t .

I n Augus t o f 1818 , Whi t e and h i s a s soc i a t e s f o r med the L eh igh Naviga t ion

Company to unde r t ake impr ovement s on the L eh igh R ive r . Bu t r a the r t han

pe t i t ion the Legis la ture for a corpora te char te r , Whi te only reques ted the r ight

to ma ke im pr ovem ent s on the f i ve r and cha r ge to l l s as com pensa t ion . T h i s t ime ,

W hi t e m e t no po l i t ic a l oppos i ti on . Wh er ea s t he S chuy lk i l l Cana l w as de s t ined to

becom e a "m a jor t hor oughf a r e ," p i t ti ng " m any com pe t ing and in f luen t i a l i n te r -e s ts ," t he L eh igh R ive r f l owed th r ough mo r e r emo te and unse t t l ed coun t r y , and

was vi r tua l ly igno red by fa rmers an d mercha nts (Hanse l l , 1992, p . 43). M oreover ,

t he o ld L eh igh Co a l M ine C om pan y had a l r eady los t $30 , 000 t r y ing to c l ea r t he

r iver o f the " sha r p s l abs o f s la t e and r ock" which " ju t t ed ou t t he ch an n e l . . , l i ke

the jagged tee th of a prehis tor ic monste r" (Korson, 1960, p . 33) . The seeming

f u t i l it y o f t he L eh ig h imp r ovem ent s wor ked to W hi t e ' s advan tage in t he s t a t e

l eg is l atu r e. T o som e mem ber s , W hi t e ' s l a t e s t s cheme to conve r t the L eh igh in to a

coa l h igh wa y was m or e " ch imer i ca l " t han th r ea t en ing ( Jones, 1908 , p . 10) . E ven

the cha i r man o f t he l eg is l a ti ve com m i t t ee which awar ded the new co m pany " so l eju r i sd i c t ion o f t he ri ve r L eh igh , " was sa id to have joked , "G en t l eme n , you have



E ntrepreneurs or C orpora t ions 13

our pe r mis s ion to r u in you r se lve s ( An th r a c i t e C om m iss ion , 1834 , p . 194 ). Us ing

h i s ow n sa v ings , a nd the f unds he so l i c i t e d f r om a sma l l g r oup o f P h i l a de lph ia

i n v es t o rs , W h i t e m a n a g e d t o c o m p l e t e th e f o r t y - s ix m i l e L e h i g h C a n a l a n d t o o p e nt h e S u m m i t H i l l M i n e i n t w o y e a r s. B u t t h e c o s ts o f o p e r a t in g t h e m i n e a n d t h e

c a na l f a r e xc e e d e d the re ve n ue f r om c o a l s a le s a nd c a n a l fr e igh t. On the ve r ge o f

f ina nc ia l ru in , W h i t e w a s f o r c e d to go ba c k to t he Le g i s l a tu r e i n 1822 , a nd r e qu e s t

a c o r p o r a t e c ha r t e r. 15 W i th c r e d i to r s p r e s su r ing the c om pa ny , a nd p r iva t e i nve sto r s

f e a r i n g t h a t t h e y w o u l d b e h e l d l e g a l l y o b l i g a t e d f o r t h e c o m p a n i e s m o u n t i n g

l i ab i l it i es , i nc o r po r a t ion p r om ise d l imi t e d l i a b i l it y p r o t e c t ion a nd a n in f us ion o f

f resh capi ta l.

F o r tuna t e ly f o r W hi t e , t he a t t i t ude o f P e nnsy lva n ia l e g i s l a to r s t owa r ds c ha r -

t e r ing ha d c h a ng e d f r o m h os t i l e to l i be r a l i n t he de c a d e f o l low ing h is f ir s t c ha r t e rpe t i t i on f o r t he S NC . The c a t a ly s t f o r t h i s ne w a t t i t ude wa s the c omple t ion o f

the E r i e C a na l i n 1817 . Th e f o l lowing ye a r , S a m ue l B r e c k , a me r c h a n t a nd s t a te

se na to r f r om P h i l a de lph ia , c a l l e d upon the c i t y ' s me r c a n t i l e c l a s s t o r a l l y " in

de f e ns e o f ou r p r ope r ty , " a nd to " c ou n te r - a c t t he se t h r e a t e ne d e v i ls , " by bu i ld ing

a va s t ne tw or k o f c a na l s w h ic h wo u ld r iva l the E r i e C a na l . 16 Th e spe c t e r o f

c o m m e r c i a l is o l a ti o n a n d d e c l i n e a r o u s e d a " p o p u l a r m o v e m e n t " i n P e n n s y l v a n ia ,

w h i c h s u p p l i e d t h e L C N C w i t h t h e p o l i t i c a l m o m e n t u m i t n e e d e d t o o b t a i n i t s

u n p r e c e d e n t e d c o r p o r a t e c h a rt e r i n 1 8 22 . U n d e r t h e p r e t ex t o f K e y s t o n e e c o n o m i c

sove r e ign ty , P h i l a de lph ia c a p i ta l is t s , a nd the i r po l i t ic a l r e p r e se n ta t ive s , u sh e r e din a ne w a n d m or e pe r m is s ive e r a o f c o r po r a t e c ha r t er ing .

I f t he sp i r it o f s t a te p r o t e c t ion i sm t r u ly g u ide d c ha r t e r ing a t th i s t ime , w hy , t he n ,

i n 1 8 25 , d i d t h e P e n n s y l v a n i a L e g i s la t u r e c h a r t e r t h e N e w Y o r k - b a se d D H C C w i t h

u n l i m i t e d c o r p o r a t e p ri v i le g e s ? T h e c h a r te r o f t h e D H C C w a s o r i g in a l ly g r a n t e d

w i t h t h e e x p e c t a t i o n t h a t P e n n s y l v a n i a n ' s w o u l d b e n e f i t f r o m t h e D e l a w a r e a n d

H u d s o n C a n a l. O n e k e y p r o v i s i o n o f t h e D H C C ' s P e n n s y l v a n i a c h a r t e r r e d u c e d

the c a na l t o l l s a ll owe d b y i ts N e w Yor k c ha rt e r, a nd ga ve the me r c ha n t s , f a r me r s ,

a n d l e g i s l a t o r s o f L u c e r n e C o u n t y r e a s o n t o b e l i e v e t h a t t h e D e l a w a r e a n d

H u d s o n w o u l d o p e r a t e a s a p u b li c h i g h w a y o v e r w h i c h t h e y c o u l d a f f o r d a b ly sh i p

the i r c ommodi t i e s t o po r t s on the e a s t e r n s e a boa r d ( P owe l l , 1978 , p . 126 ) . B u t

s e c u r in g a c h a r t e r in H a r ri s b u r g w o u l d r e q u i r e m o r e t h a n w i n n i n g t h e s u p p o r t o f

the p r ov inc i a l s . No c ha r t e r c ou ld w in a pp r ova l f r om the l e g i s l a tu r e w i thou t t he

po l i t i c a l suppor t o f t he powe r f u l P h i l a de lph ia de l e ga t ion . I n e xc ha nge f o r t he i r

suppor t , P h i l a de lph ia n ' s e xp e c t e d the ne w c a na l t o f low sou th to P h i l a de lph ia

a long the De la wa r e R ive r . The e xpe c t a t i on wa s no t un r e a sona b le , s i nc e the

c o m p a n y ' s f o u n d e r s h a d , e i g h t y e a r s b e f o r e , d e l iv e r e d s e v er a l s h ip m e n t s o f c o a l

to P h i l a de lph ia a long the s a me r ou te . I nde e d , i n t he DHC C 's c ha r t e r pe t i t i on to

t h e P e n n s y l v a n i a L e g i s l a t u r e , t h e c o m p a n y g a v e e v e r y i n d i c a t i o n t h a t i t w o u l d

c o n s t r u c t a s l ac k w a t e r n a v i g a ti o n o n t h e D e l a w a r e R i v e r, j u s t a s t h e S N C h a d d o n e



14 MA RK C. JEPSON

on the S c h uy lk i l l R ive r. To be su r e , t he f i rs t s e ve n te e n m i l e s o f t he De la w a r e a nd

H u d s o n C a n a l d i d e x t e n d e a s t w a r d f r o m t h e c o m p a n y ' s m i n e s a t C a r b o n d a l e t o

t h e D e l a w a r e R i v er . O n e y e a r i n t o c o n s t ru c t i o n , h o w e v e r , th e c o m p a n y a b a n d o n e dt h e p l a n o f c o n s t r u c t i n g a s l a c k w a t e r n a v i g a t i o n d o w n t h e D e l a w a r e R i v e r t o

P h i l a de lph ia , a nd in s t e a d c on t inue d d igg ing e a s twa r d in to Ne w Yor k S ta t e ,

u n t i l th e c a n a l r e a c h e d t h e H u d s o n R i v e r, 1 0 9 m i l e s f r o m i ts P e n n s y l v a n i a h e a d

w a t e rs . C o m p a n y o f fi c ia l s c l a i m e d t h a t t h e y h a d c h a n g e d t h e r o u t e b e c a u s e t h e

P h i l a de lph ia c oa l ma r k e t wa s a l r e a dy se r ve d by the Le h igh a nd S c huy lk i l l c a na l s.

B u t t h e f a c t th a t th e m a n a g e r s a n d e n g i n e e r s o f th e D H C C r e f u s e d to d i s c l o s e

the a c tua l r ou te o f t he c a na l t o t he pub l i c du r ing i t s c ons t r uc t ion sugge s t s t ha t t he

c o m p a n y h a d n e v e r in t e n d e d f o r t h e c a n a l t o s e r v e P h il a d el p h ia . B y k e e p i n g t h e

t r ue de s t ina t ion o f the c a na l a s e c r e t , t he DH C C suc c e e d e d in a vo id ing a po l i t i c a lba c k la sh in Ha r r i sbu r g tha t c ou ld ha ve j e op a r d i z e d i t s c ha r t e r p r iv i l e ge s ( P owe l l ,

1978 , pp . 118 , 127 ) . I n t he e nd , t he De la wa r e a nd Hudson C a na l wa s to be a

p r i v at e h i g h w a y a n d a l m o s t a l l o f i ts t r af fi c c o m p a n y c o a l b o u n d f o r N e w Y o r k

C i ty. F o r t he l oc a l c om m e r c i a l in t e r e s ts o f P e n nsy lv a n ia ' s no r the a s t e r n c oun t i e s ,

t h e p r o m i s e o f r e g i o n a l e c o n o m i c g r o w t h a n d p r o s p e r i t y w a s n e v e r f u lf il le d .

The Effect of Political Struggle on Property Relations

and Economic Opportunity

S o w ha t i s t he s ign i f ic a nc e o f t he po l i ti c s o f c ha r t e r ing f o r c l as s f o r m a t ion in e a r ly

a n t h ra c i te m i n i n g ? T h e c h a r t e rs o f t h e c a n a l c o m p a n i e s w e r e c r u c i al b e c a u s e

the y l e ga l ly de f ine d the p r op e r ty r e la t i ons t ha t de t e r m ine d the s c o pe o f i ndus t r i a l

ope r a t ions a nd c on t r o l i n t he mine s . F o r b idde n by i t s c ha r t e r f r om posse s s ing

l a n d o r m i n e s , t h e S N C l e f t t h e d e v e l o p m e n t o f S c h u y l k i l l' s m i n i n g b u s i n e s s t o

inde p e nde n t ope r a to r s , a nd b u i l t it s bo t tom l ine so l e ly on c a n a l t ra f fi c a nd the t o l l s

i t ge ne r a t e d . Un l ike i t s mine - owning r iva l s , t he S NC wa s c ompe l l e d " to i nv i t e

t o n n a g e f r o m e v e r y q u a r t e r a n d f r o m e v e r y s o u r c e " ( A n t h r a c i t e C o m m i s s i o n ,

1834, p . 187) . In 1836, a wr i te r for the North American Review (XI I , 1836, p . 249)

de sc r ibe d the S c huy lk i l l C a na l a s " a n ope n h ighwa y , f r e e t o a l l t he wor ld , a t

r e gu la r r a t e s o f to l ls . '17 S e gm e n ta t ion , o r t he d iv i s ion o f min ing , r a il , boa t ing , a nd

c a na l ope r a t ions i n to s e pa r a te b r a nc he s , m a de i t a f fo r da b le f o r ind iv idua l s t o sh ip

c oa l t o m a r ke t , s i nc e the y d id no t ha v e to bu i ld t he i r ow n t r a nspo r t a t i on f a c il i ti e s .

U n l i k e th e S N C , b o t h t h e L C N C a n d D H C C w e r e m i n i n g c o m p a n i e s , a s w e l l as

c a na l c om pa n ie s , a nd p r o f i t e d c h i e f ly f r om the s a l e o f c oa l. I n sho r t , t he i r dom ina n t

i n te r es t s w e r e i n d e v e l o p i n g t h e i r o w n m i n e s a n d m a r k e t in g t h e i r o w n c o a l , n o t

in c o l l e c t ing to l l s on inde pe nde n t c a na l t r a f f i c . " I n t he t r ue s e nse , " obse r ve d

J o n e s ( 1 9 0 8 , p . 9 0 ), t h e D e l a w a r e a n d H u d s o n w a s n e v e r a c a n a l c o m p a n y , b u t




" m o r e e x a c t l y , a c o a l c o m p a n y o p e r a t i n g a c a n a l . " L i k e w i s e , t h e L e h i g h C o a l

a n d N a v i g a t i o n C o m p a n y b u il t t h e L e h i g h C a n a l " f o r t h e p u rp o s e m a i n l y o f

t r a n s p o r ti n g t h e ir o w n c o a l t o m a r k e t. '1 8 O p e n i n g t h e ir w a t e r w a y s t o i n d e p e n d e n tc o a l p r o d u c e r s a n d a l l o w i n g t h e t r af fi c to f l ow f r e e l y w o u l d h a v e i n v i te d h a r m f u l

c o m p e t i t i o n a g a i n s t t h e ir o w n c o a l a n d u n d e r c u t c o a l p ri c e s. A s l o n g a s th e D H C C

a n d t h e L C N C p o s s e s s e d a st a k e in th e m i n e s , t h e p u r p o s e o f t h e c a n a ls w a s , a s

a n o t h e r c o n t e m p o r a r y o b s e r v e r d e cr ie d , t o k e e p t h e c o a l s u p p l y " u n d e r a p a d l o c k "

(Hazard ' s X V I , 1 8 3 5 , p . 8 6 ). 19 T h e " s t r o n g i n d u c e m e n t " t o " m o n o p o l i z e t h e t r a d e "

w a s t r a n s p a r e n t t o t h e S ta t e S e n a t e ' s A n t h r a c i t e C o m m i s s i o n ( 1 8 3 4 , p . 1 9 5 ) :

If they [canal comp anies] believe they can realize a greater profit by engaging themselves in a

particular branch of rade than by relyingupon tolls accruing from the produce o f others engagedin the same business, they will of cou rse embark in the trade, and endeavor to m onopo lize t.

They will not be willing to furnish upon equal terms facilities to their competitors of the same

trade, nor allow them upon even grou nd 'to p lough with their own oxen'.

C o n s e q u e n t l y , n o s e p a r a t e c la s s s e g m e n t s o f l a n d h o l d e rs , b o a t m e n , o r m i n e

p r o p ri e to r s e m e r g e d i n th e L e h i g h a n d t h e W y o m i n g d i st ri ct s b e c a u s e t h e L C N C

a n d t h e D H C C d e n i e d c a n a l a c c e ss t o n o n - c o m p a n y c o a l. 2° W h i l e t h e t w o

m o n o p o l i e s e v e n t u a l l y " c o n t r a c t e d " o u t s o m e o f t h e ir m i n e s , t h e te r m s o f t h e

c o n t r a c t s s u b o r d i n a t e d t h e c o n t r a c t o r s t o t h e c o n t r o l o f th e g i a n t f i rm s . H e r e i n l i e s

t h e h i s to r i c a l s i g n i fi c a n c e o f t h e c h a r t e r s t ru g g l e s : H a d t h e S N C s u c c e e d e d i n i tsp o l i t i c a l b i d t o m i n e a n d s h i p c o a l , i t t o o c o u l d h a v e , a n d p r o b a b l y w o u l d h a v e ,

p r i v a ti z e d i ts w a t e r s , e r e c t e d a c o r p o r a t e m o n o p o l y o f th e d i s tr ic t, a n d b l o c k e d

a c c e s s t o in d i v i d u a l m i n e o p e r a to r s .

Ph ase Two of Class Formation: The Intra-Class Polit ical

Strugg le Ag ain st Corporate Charters

A s n e c e s s a r y a s t h e S N C ' s fa i l ed s t ru g g l e f o r m i n i n g a n d s h i p p i n g p r i v i le g e s

w a s t o t h e e n t r y a n d a s c e n d a n c y o f i n d iv i d u a l p r o p r ie t o r s i n S c h u y l k i ll , n o t h i n g

a b o u t t h e S N C ' s l i m i t e d c h a r t e r b a r r e d m i n i n g c o r p o r a t i o n s f r o m e n t e r i n g t h e

S c h u y l k i l l d is t ri c t. T h e e c o n o m i c b e n e f i t s (i .e . a c c e s s t o p r i m e l a n d s t h r o u g h

a f f o r d a b l e tr a n s p o r ta t io n ) a c c r u i n g f r o m t h e S N C ' s c h a r t e r l im i t a ti o n s w e r e n o t

s p e c i f i c a l l y i n t e n d e d f o r i n d i v i d u a l s ; t h e y w e r e , i n s te a d , f o r t u i t o u s o u t c o m e s w i t h

n o p e r m a n e n t s t a n d in g i n l a w o r c u s t o m . A s t h e L C N C a n d D H C C h a d a l re a d y

d e m o n s t r a t e d , i f p e t i t i o n e r s c o u l d a m a s s e n o u g h v o t e s in t h e s t a te le g i s la t u r e ,

t h e y c o u l d , a t a n y t i m e , o b t a i n c o r p o r a t e c h a r t e r s w i t h p r a c t i c a l l y n o l e g a l l i m i t s

o n t h e ir e c o n o m i c a c ti v it y . B u t i f t h e p r o m i s c u o u s c h a r a c t e r o f c h a rt e r in g p o s e d

a t h r e a t t o th e i n c i p i e n t c l a s s s i t u a t i o n o f t h e i n d i v i d u a l m i n e o p e r a t o r s , i t a l s o



1 6 M A R K C . J E P S O N

m a d e r e s i s t a n c e t o c o r p o r a t e c h a r t e r i n g p o s s i b l e . A s I s h a l l n o w s h o w , t h e s t a t e

l e g is l at u r e b e c a m e a n a r e n a f o r p o li ti c a l s t r u g g l e b e t w e e n c h a r t e r p e ti ti o n e r s

a n d t h e i r o p p o n e n t s . S c h u y l k i l l ' s p r o p r i e t o r s h a d t o s t r u g g l e t o g u a r d t h e i rn a s c e n t c l a s s p o s i t i o n a g a i n s t c o r p o r a t e e n c r o a c h m e n t i n t h e S t a t e A s s e m b l y

a t H a r ri sb u r g . E v e n w i t h th e ir i m m e n s e e c o n o m i c le v e ra g e , th e L C N C a n d t h e

D H C C a l s o h a d t o re s o r t to p o li ti c s t o p r o t e c t th e i r c o r p o r a t e m o n o p o l i e s .

The Ideological Foun dation: The "Republican" Conception o f Property 21

T h e f ir s t s t ir r in g s o f a n t i - c o r p o r a t e s e n t i m e n t i n S c h u y l k i l l w e r e a r o u s e d i n t h e

l at e 1 8 2 0 s b y a l l e g a ti o n s o f f r a u d a n d m i s m a n a g e m e n t a g a i n s t t h e d i st r ic t 's

" f o r e i g n " m i n i n g c o r p o r a t io n s . T h o u g h j u s t s e v e n i n n u m b e r , t h e c o r p o r a t e l a n d

a n d m i n i n g f i r m s s p e c u l a t e d o n a m u c h l a r g e r s c a l e t h a n t h e m o r e n u m e r o u s

i n d i v id u a l s p e c u l a to r s , t r a d i n g i n t h o u s a n d s o f a c r e s o f c o a l la n d s , a n d h u n d r e d s

o f t h o u s a n d s o f d o l la r s in s t o c k ( B o w e n , 1 8 5 2 , p p . 1 7 6 - 1 7 8 ) . I n f a c t, t h e fa i lu r e

o f f o u r o f th e s e v e n S c h u y l k i l l ' s c h a r t e re d c o a l c o m p a n i e s i n u n d e r f i v e y e a r s n o t

o n l y v e r i f ie d t h e e x c e s s e s o f p a r ti c u l a r c o m p a n i e s , b u t v a l i d a te d t h e v i e w t h a t th e

c o r p o r a t e e n t e r p r i s e w a s i n t r in s i c a l l y u n q u a l i f i e d t o c a r r y o n t h e m i n i n g t r ad e . 2 2

O n l y b e c a u s e t h e y s u r v i v e d t h ei r c o u n te r p a r ts , t h e N o r t h A m e r i c a n , t h e

D e l a w a r e , a n d t h e L it tl e S c h u y l k i l l c o a l c o m p a n i e s w e r e s i n g l e d o u t f o r c e n s u r e

i n a p o p u l a r p a m p h l e t w r i t te n i n 1 8 3 3 b y G e o r g e T a y l o r, a w r it e r f o r t h e S c h u y l k i l l

Miners ' Journal. T a y l o r ' s " t r e a t i s e , " e n t i t l e d The Effects o f Incorporated Coal

Companies Up on the Coal Trade of Pennsylvania, a c c u s e d S c h u y l k i l l ' s r e m a i n i n g

c h a r t e r e d c o a l c o m p a n i e s o f c o n s p i r i n g t o s w i n d l e t h ei r s t o c k h o l d e r s a n d r u i n

i n d i v id u a l p r o d u c e r s . F o r i n d i v i d u a l o p e r a t o rs , t h e m o s t i n t o le r a b l e a s p e c t o f

i n c o r p o r a t i o n w a s n o t c o r p o r a t e s p e c u l a ti o n , o r th e e c o n o m i c i n st a b il it y i t c a u s e d

i n t h e m a r k e t , b u t r a t h e r t h e s p e c i a l p r o t e c t i o n a g a i n s t t h i s i n s t a b i l i t y a f f o r d e d

t o c o r p o r a t i o n s b y t h e i r c h a r t e r p r i v i l e g e s . I n e f f e c t , t h e c h a r t e r l e g a l l y f a v o r e d

t h e w o r s t m a n a g e d a n d l e a st e c o n o m i c a l p r o d u c e r s w i th a n u n f a ir c o m p e t i t i v e

a d v a n t a g e . " T h e g r a n t o f e x c l u s iv e p r i v i le g e s " T a y l o r o b j e ct e d ,

is an infringemen tupon the right of all who are excluded, and directly ends to create a mon opoly

- the favored party, being placed in a mo re advantaged position, must in the end p revail overand drive the less favored from the field and becom e sole master of the trade . . . . Let the[coal compa nies] lay aside their corporate pow er and becom e subject to the liabilities and

responsibilities of individuals, and they ma y one an d all eng age n the trad e to the fullest extentof their m eans and pleasure.

N o o n e i n S c h u y l k il l a ss a il ed m i n i n g c o r p o r a ti o n s m o r e t h a n B e n j a m i n B a n n a n .

A m i n e o p e r a t o r h i m s e l f , B a r m a n p u r c h a s e d t h e a i li n g M iners 's Journal i n 1 8 2 9 ,

a n d s e r v e d a s t h e p a p e r ' s e d i t o r - in - c h i e f f o r t h e n e x t f o u r d e c a d e s . A t t h e c o r e



En t r e p r e n e u r s o r C o r p o r a t i o n s 17

o f B a n n a n ' s a n t i -c o r p o r a t e t h o u g h t w a s th e R e p u b l i c a n m i s t r u s t a n d r e s e n t m e n t

o f p ri v il e g e , r o o t e d in P e n n s y l v a n i a ' s r e c e n t c o lo n i a l p a s t y I n w h a t w o u l d b e

t he f i rs t o f hund r e ds o f a n t i - c o r po r a t e e d i t o r ia l s , Ba nn a n l a i d t he i de o l og i c a lf ounda t i on f o r s ubs e que n t a t t a c ks :

They [corporations]are o f exotic growth, and o urs is an uncongenial soil for th eir transplanta-tion .... Should we affordany countenance or encouragement o institutions of this ca st. ., theinappreciable blessing of our free and happy governmentwould be perverted, a m onied aris-tocracy would rise up amo ngus b y the unequal distribution of w ealth, wh ich would prove alikefatally destructiveof our commerceand our liberties - our m ora l rights would be first invaded,and our political nex t" (Miners Journal, August 28, 1830).

B a n n a n f u r t h e r v il if ie d m i n i n g c o r p o r a t i o n s i n th e m i n d s o f o p e r a t o rs b y e r a s in g

a n y d i s t in c t io n b e t w e e n c o r p o r a t i o n s a n d m o n o p o l i e s . F o r a l l p r a c t ic a l p u r p o s e s ,a l l c o r p o r a t i o n s w e r e m o n o p o l i e s , s in c e t h e y w e r e " n e a r l y a l w a y s f a t a l to i n d i-

v i d u a l e f f o rt s . . . . I t i s p a r t o f th e i r g e n e r a l s y s t e m t o . . . b r e a k d o w n a ll in d i v i d u al

c o m p e t i t i o n . . . [ an d ] s w a l l o w u p a l l w h o c o m e w i t h in t h e v o r te x o f t h e ir o p e r a -

t i ons " ( I b i d . , J a nua r y 31 , 1838 ) . S c huy l k i l l ' s e a r l y s pe c u l a t i ve ve n t u r e s p r ov i de d

B a n n a n w i t h a m p l e a m m u n i t i o n t o d e m o n i z e c o r p o r a t i o n s , b u t , a s S c h u y l k i l l ' s

a r c h -r iv a l s, th e L C N C a n d t h e D H C C c a m e t o e x e m p l i f y t h e in d i v is ib i li ty o f

c o r p o r a t i o n s a n d m o n o p o l i e s . T h e i d e o l o g i c a l t a s k o f c o n j o i n i n g t h e tw o w a s m a d e

e a s y b y t h e f a c t t h at b o t h c o m p a n i e s c o n t r o l le d a l m o s t a ll a n t h r ac i te p r o d u c t i o n

ou t s i de o f S c huy l k i l l . 24

A m p l i f i e d b y t h e n a t i o n a l a s c e n t o f J a c k s o n i a n p o p u l i s m , t h e l o c a l o u t c r i e s

a ga i n s t c o r po r a t e p r i v i l e ge r e s ounde d i n H a r r i s bu r g . I n f a c t , t he 1833 r e s o l u t i on

a d o p t e d b y t h e S t a t e S e n a t e w h i c h e s t a b l i s h e d t h e A n t h r a c i t e C o m m i s s i o n w a s ,

a s t h e p r e f a c e t o t h e f i n a l r e p o r t a c k n o w l e d g e d , p r o m p t e d b y a " m e m o r i a l o f

s u n d r y c o a l d e a l e rs i n th e c o u n t y o f S c h u y l k i l l" ( A n t h r a c it e C o m m i s s i o n , 1 8 34 ,

p . 1 85 ). M o r e o v e r , t h e m i n e o p e r a t o r s ' r e p l ie s to t h e C o m m i s s i o n ' s s u r v e y l e f t

n o d o u b t t h a t t h e y h a d c l o s e d t h e ir r a n k s a n d f o r m e d a s h a r p l i n e o f o p p o s i t io n :

O f t h e t w e n t y - e i g h t r e s p o n s e s c o n t a i n e d i n t h e f in a l re p o r t, t w e n t y - f i v e u n e q u i v -

oc a l l y oppos e d c ha r t e r e d c oa l c om pa n i e s i n S c huy l k i l l , a nd t he t h r e e d i s s e n t i ng

o p i n i o n s w e r e l o d g e d b y r e p r e s e n t a t i v e s o f t h e d i s t r i c t ' s m i n i n g c o r p o r a t i o n s .

W h a t i s m o r e , f o r w a n t o f s p a c e , t h e r e p o r t a d m i t t e d t o e x c l u d i n g " m a n y o t h e r

c o m m u n i c a t i o n s . . , r e c e i v e d f r o m i n d i v i d u a l c o a l d e a l e r s , c o n c u r r i n g f u l l y w i t h

t h e [ a n t i -c o r p o r a te ] v i e w s a b o v e e x p r e s s e d " ( I b i d . , p. 250) .

I n m o r e o r l e ss d i s p a r a g i n g t e r m s , th e o p e r a t o rs r e s t at e d T a y l o r ' s cr i ti c is m s o f

m i n i n g c o r p o r a t io n s : N a m e l y , h o w t h e p r e o c c u p a t i o n w i th s t o c k p r i c e s r es u l te d

i n i r r e g u l a r p r o d u c t i o n a n d m a r k e t i n s t a b i l i t y ; h o w d i s t a n t a n d u n i n f o r m e d

m a n a g e m e n t l e d t o e x t r a v a g a n c e , w a s t e , a n d c o r r u p t i o n ; a n d h o w c h a r t e r

p r i v i l e ge s un f a i r l y s h i e l de d c o r po r a t i ons f r om t he vo l a t i l i t y o f t he c oa l m a r ke t .

S a m u e l L e w i s ' s t a te m e n t , m a d e o n b e h a l f o f h i m s e l f , a n d f e ll o w o p e r a t o r s, B u r d




P a t te r s o n , F r e d e r i c k H a s s , a n d S a m u e l B r o o k e , w a s t y p i c a l o f th e r e s p o n s e s

s u b m i t te d b y t h e i n d iv i d u a l p r o p r i e t o r s :

The influence of incorporated compan ies with m ining and trading privileges, is mo re inimical

than beneficial to the general prosperity of a country. Their affairs are g enerally manag ed by

a d istant board of d irectors, m an y of who m are ignorant of the wan ts and capabilities of thecou ntry hey operate in .. .. It is evidently n their interest that there shouldbe as few com petitors

in the market as possible, and as they have never been kno wn to b e over scrupulous about the

means em ployed to attain their ends, every weapon that can be wielded by a po werful mo niedaristocracy, will be used to attain their ob ject" ( I b i d . )Y

W h i l e t h e S c h u y l k i l l m i n e o p e r a t o r s ' f ie r c e o p p o s i t io n t o m i n i n g c o r p o r a t i o n s w a s

m o t i v a t e d b y t h e ir e c o n o m i c in t er e st s, i t d r e w h e a v i l y o n P e n n s y l v a n i a ' s h e r i ta g e

o f D e m o c r a t i c R e p u b l i c a n i s m , a n d i t s g l o ri f ic a t io n o f i n d i v id u a l e n t er p r is e .T h a t t h e y f r a m e d t h e i r a n t i - c o r p o r a t e m e s s a g e i n R e p u b l i c a n r h e t o r i c w a s t o

b e e x p e c t e d , s i n c e R e p u b l i c a n t h o u g h t d o m i n a t e d t h e p o l it ic a l d i s c o u r s e o f t h e

n i n e t e e n t h c e n t u r y ( B a b b , 1 9 9 6 , p . 1 0 4 2 ) . A t t a c k s o n c o r p o r a t e a v a r i c e w e r e a

r o u t i n e a s p e c t o f P e n n s y l v a n i a p o l i ti c s i n t h e e a r l y n i n e te e n t h c e n t u ry , a n d n o

p o li ti ci an , W h i g o r d e m o c r a t , c o u l d b e f o u n d w h o w a s n o t a s t au n c h a d v o c a t e o f

t h e R e p u b l i c a n d o c t r i n e ( H a r t z , 1 9 4 8 , p . 7 7 ) . U n d e r t h e d o c t r i n e , t h e e x t e n s i o n

o f c o r p o r a t e p r iv i le g e s i n tr a d e s c u s t o m a r i l y w o r k e d b y i n d i v i d u a ls s y m b o l i z e d

t h e c o l l a b o r a t i o n b e t w e e n g o v e r n m e n t a n d p o w e r f u l p r i v a t e i n t e r e s t s u n d e r

B r i t i s h r u l e , w h e n t h o s e w i t h c l o s e t i e s t o t h e c o l o n i a l g o v e r n m e n t r e c e i v e d

s p e c ia l p r o p e r t y r i g h t s f r o m t h e c r o w n . S u c h c h a r te r s n o t o n l y v i o la t e d t h e

p r o p e r t y r i g h ts o f i n d iv i d u a ls , b u t s u r r e n d e r e d t h e s o v e r e i g n t y o f t h e p e o p l e t o

a n e w c o r p o r a t e a r is t o c ra c y . A t b e s t, t h e c o r p o r a t i o n w a s v i e w e d a s a n e c e s s a r y

e v i l t h a t s h o u l d b e c o n f i n e d t o a f e w c h o s e n f i e l d s r e q u i r i n g e x t r a o r d i n a r y

a m o u n t s o f c ap i ta l , s u c h a s b a n k i n g a n d i n s u r a n c e , b u t u n d e r n o c i r c u m s t a n c e s ,

m a n u f a c t u r i n g . 26

B y t h e e n d o f t h e 1 8 3 0 s , t h e p o l it ic a l s w a y o f r e p u b l i c a n t r a d it io n h a d b e g u n

t o w a n e . R e p u b l i c a n i s m w o u l d c o n t i n u e t o a n i m a t e t h e p o p u l i s t s t r u g g l e s a n d

m o v e m e n t s b y s m a l l b u s i n e s s o w n e r s , f ar m e r s , a n d e v e n i n d u st ri a l w o r k e r s , i n to

t h e n e x t c e n t u r y , b u t a s a t h e o r y o f c a p i t a l is t p r o p e r t y r e l a t i o n s i t w a s r a p i d l y

b e i n g r e p l a c e d b y c o r p o r a t is m . F r o m t h e 1 8 3 0 s o n w a r d , P e n n s y l v a n i a l eg i s la t o rs

e n a c t e d n o l a w s u p h o l d i n g a R e p u b l i c a n c o n c e p t i o n o f p r o p e r ty , o r c u rt a il in g

t h e d e v e l o p m e n t o f th e p ri v a te c o r p o r a t io n . T h e " i n t e n s e e g a l i t a r i a n i s m . . . [ o f ]

a n t i - c h a r t e r d o g m a , " r e c o g n i z e s H a r t z ( 1 9 4 8 , p p . 6 9 , 7 6 ) , " m a d e i t a n e x c e l l e n t

p o l e m i c f o r o r a t o r s a n d p o l i t i c i a n s , e v e n t h o u g h i n t e r e s t p r e s s u r e s i n t h e s t a t e

d i c t a te d a n e x p a n s i o n o f c h a r t e r p o l i c y . . . . I t i s e v id e n t t h a t t h e th e o r y f l o u ri s h e d

l o n g a f te r t h e re w a s a n y h o p e o f i t b e i n g a c c e p t e d b y t h e l e g is l a tu r e o r j u d i -

c i a r y . . . . T h e p u r s u i t o f a r i g o r o u s a n t i- c h a r te r p o l i c y w a s a n i m p o s s i b l e p o l i t ic a la d v e n t u r e . " G i v e n t h e w i d e n i n g r i f t b e t w e e n p o l i t i c a l r h e t o r i c a n d p o l i t i c a l



Entrepreneurs o r C orporations 19

rea l i t y i n Har r i sbu rg , S c huy lk i l l ' s opera to r s wou ld have t o do m ore t han appea l

t o t he mora l s anc t i t y o f i nd iv idua l en t e rp r i s e t o r e s i s t co rpo ra t e min ing i n t he

anthraci te t rade .

T h e In d i v i d u a l P r o p r i e t o r s ' A n t i - C o r p o r a t e P o l i ti c a l S t r u g g l e s

Th e f i rs t s ign i f i can t d i sp l ay o f c l a s s m i l i tancy by S chu y lk i l l 's i nd iv idua l opera to r s

was a l ega l cha l l enge t o t he r i gh t o f S ch uy lk i l l ' s m in ing co rpo ra t i ons t o opera t e

in P en nsy lvan i a unde r t he i r ou t -o f - st a t e cha r te r s . A t a l a rge m ee t i ng he ld a t

P o t t sv i ll e in J anu ary o f 1833 , a p e t i ti on d ra f t ed by a com m i t t ee o f t he opera to r s

ca l l ed upon t he l eg i s l a t u re t o d i spos ses s t he compan i es o f t he i r coa l l ands fo rv io l a t i ng t he s t a t e ' s s t a t u t es o f mor tmain , wh ich fo rb id t he t r ans fe r o r s a l e o f

P en nsy lvan i a r ea l e s t a t e to non- res iden t s. Up t o then , bo th t he De l aw are and t he

N o r t h A m e r i c a n c o m p a n i e s h a d e v a d e d t h e la w b y h o l d i n g t h e ir l an d s u n d e r d e e d s

o f t ru s t, w hereb y l ega l t it le t o t he p roper ty w as he ld b y P e nnsy lva n i a tru s tees fo r

t he benef i t o f the c omp an ies .

F ea r ing t he fo r fe i t u re o f the i r p roperty , S ch uy l l d l t ' s coa l co rpo ra t i ons mo ved

swi f t l y t o he ad -o f f t he p rop r i e to r s' a t t ack by ap p ly ing t o P ennsy lvan i a fo r cha r t er s ,

" pa r t l y on t he g rounds t ha t t he i r s t ock had pas sed i n to t he hands o f P enn sy lvan i an s"

(Year ly , 1961, p . 89). Th e m ove w as bold , s ince i t chal lenged the leg i s la ture ' s t ra-d i t ion o f de ny ing char t e r s so l e ly fo r min ing pu rposes ; t he ve ry t r ad i t ion wh ich h ad ,

af ter a ll , com pe l led the com pan ies to obta in o ut -of-s ta te char ters in the f i r s t p lace .

To ensu re t ha t t h is t r ad i t i on was up he ld , t he i nd iv idua l opera to r s s en t a de l ega t i on to

Har r i sbu rg t o r a l l y the " l a rg e m ajo r i t y" o f l eg is l a to r s w ho had , du r ing t he s es s ion ,

com e ou t aga ins t t he i nco rpo ra t i on o f min ing com pan ies (Tay lo r, 1833 , p . 16 ).

Un de t e r red by t he nu mb ers , t he com pan i es b ided t he i r t ime . Th en , j u s t t h ree

days be fo re t he en d o f t he 1832-1833 ses sion , a f t e r t h i r ty - f i ve l eg is l a to r s had

t aken an ea r l y leave o f absence , and t he oppos ing de l ega t i on o f mine opera to r s

had re tu rned t o S chuy lk i l l , " a c l ause i nco rpo ra t ing t he Com pan ies , by r e fe r r i ngto ano the r ac t , was i n se r t ed i n a li b ra ry b il l a s an ame ndm en t , and pas sed t h rou gh

bo th b ranches o f t he l eg i s l a t u re on one and t he s ame day , t he 6 th o f Apr i l "

( Ibid. ) . W hen wo rd o f t he vo t e r eached S chuy lk i l l , t he mine opera to r s ' de l ega t i on

was qu i ck ly d i spa t ched t o t he cap it a l, where i t " v igo rou s ly suppor t ed" an " Ac t

Re l a t i ng t o " the Esche a t o f l ands he ld b y C orpora t ions wi thou t the L i cense o f

t he Co m m on w ea l t h " (Yearly , 1961 , p . 89 ). W i th the vo t es o f those 23 m em bers

who had been absen t fo r t he pas sage o f t he cha r t e r s , t he b i l l became l aw, and ,

mos t s i gn i f i can t l y , app l i ed t o a l l co rpo ra t i ons , i nc lud ing t hose char t e red by

P e n n s y l v a n i a .27 Onc e aga in , however , po l it ica l v i c to ry e lude d t he i nd iv idua l m ineopera to r s . Und er t he suppos i t i on tha t t hey had each pe r fo rm ed " ye om an se rv i ces



20 MA RK C. JEPSON

in e xp lo i t i ng the v i r g in f i e ld s" ( I b i d . , p. 85) , the leg is la ture gran ted the so le wa ive rs

t o t h e p r o v i s io n s o f th e A c t t o t h e D e l a w a r e a n d N o r t h A m e r i c a n c o m p a n i e s . 28

W hi l e t he ind iv idua l ope r a to r s we r e unsuc c e ss f u l i n t he i r a t t e mp t s t o r id t hed i s t r i c t o f t he c ompa n ie s , t he i r s t r ugg le s i n t he s t a t e l e g i s l a tu r e ne ve r the l e s s

we a ke ne d a nd ma r g ina l i z e d the th r e e c ompa n ie s . I n c on t r a s t t o t he t e n to th i r ty

ye a r c ha r t e r du r a t ion g r a n te d to ma nuf a c tu r ing c ompa n ie s , t he c ha r t e r s o f t he

N o r t h A m e r i c a n a n d D e l a w a r e c o m p a n i e s e x p i r e d in f i v e y e a r s. T h e A n t h r a c i te

C o m m i s s i o n ( 1 8 3 4, p . 2 1 7 ) r e a s s u r e d i n d i v i d u a l p r o p r i e to r s t h a t th e c o m p a n i e s

w o u l d l o s e t h e i r c o rp o r a t e p ri v il e g e s a t t h e e n d o f t h is p e r i o d : " T h e y h a v e y e t

f ou r ye a r s t o p r ose c u te the i r bus ine s s i n t he i r c o r po r a t e c a pa c i t i e s , a nd to c lo se

the i r c onc e r ns . The i r c ha r t e r s w i l l t he n e xp i r e , t he ind iv idua l s c ompos ing the

c o m p a n i e s b e p l a c e d i n p o s s e s s i o n o f t h e i r l a n d s , a n d b e a l l o w e d t o e i t h e rd i sc on t inue o r pu r sue the bus ine s s upo n e qua l g r ound s w i th o the r ope r a to r s . "

Th e po l i t ic a l s t rugg le s o f 1833 , a s c r uc i a l as t he y we r e in s e c u r ing a f oo tho ld , d id

no t p r odu c e a swe e p ing l a w , wh ic h , o nc e a nd f o r a ll , ba nn e d m in ing c o r po r a t ions

in S c huy lk i l l. The do m ina nc e o f i nd iv idua l p r op r i e to r sh ip wa s s ti ll c on t inge n t on

the c ha r t e r ing p r oc e s s , a nd thus vu lne r a b le to po l i t i c s . I n a l e g i s l a tu r e r ive n by

se c t iona l s t r i fe a nd l a c k ing a f ixe d c ha r t e r po l i cy , po l i ti c s wa s the i r on ly r e c ou r se .

" Du r ing the th i r t ie s , " s ta t e s Ye a r ly (1961 , p . 89 ) , " the y spe n t t housa nds o f do l l a r s

lobb y ing in Ha r r i sbu r g in o r de r t o c he c k the in f i lt r a tion o f c ha r t e r -se e ke r s i n to the

Le g i s l a tu r e . W he n the oc c a s ion a r ose to sque lc h suc h b i l l s o f i nc o r po r a t ion , a si t ra the r pe r s i s t e n t ly d id , t he y we r e a b le to c onve r t t he i r c oa l d i s t r ic t s i n to a n t i-

m o n o p o l y p e t i t i o n m i l ls . "

B y f ar , t h e m o s t l e n g t h y a n d c o n t e n t i o u s o f th e s e a t t e m p t s w a s e x e c u t e d in 1 8 38

b y o n e J o h n O f f e r m a n . T h e m a t t e r g a i n e d p a r ti c u l a r n o t o r i e t y a n d s y m b o l i s m f r o m

the f a c t tha t t he pe t i t ione r wa s h im se l f a re spe c te d ind iv idua l p r op r i e to r wh o ha d

se r ve d a s t he f i r s t v i c e - p r e s ide n t o f t he C oa l Min ing Assoc ia t ion o f S c huy lk i l l

C oun ty . 29 Th e " O f f e r m a n Af f a i r " wa s a wa te r she d in the s t r ugg le a ga ins t min ing

c o r po r a t ions be c a use i t r e p r e se n te d the f i r st s e rious b r e a k in the r a nks o f t he m ine

ope r a to r s , a nd , mo r e ove r , a c ri t ic a l te s t o f t he ope r a to r s ' r e so lv e to de f e nd the i r

doma in , e ve n a ga ins t one o f S c huy lk i l l ' s o r ig ina l ma s te r c o l l i e r s , a nd a f e l low

m e m b e r o f t h e P o t ts v i l le e l it e . I n d e e d , t h e e l e m e n t o f b e t r a y a l e m b o d i e d b y t h e

Of f e r ma n pe t i t i on b r ough t t o be a r t he u tmos t wr a th a nd r e p r i s a l a ga ins t a l oc a l

o p e r a t o r " f o o l h a r d y e n o u g h t o t a m p e r w i t h t h e t a b o o o f in c o r p o r a t i o n " ( Y e ar ly ,

1961, p. 90) . 30

I f t h e c o r p o r a t e p e t it i o n s t o o d a n y c h a n c e o f p a ss a g e , O f f e r m a n f ir st n e e d e d

to ha ve i t sponso r e d in the s t a t e l e g i s l a tu r e by loc a l r e p r e se n ta t ive s . B u t s inc e

bo th D a n ie l Kr e bs , S c huy lk i l l ' s r e p r e se n ta t ive in the House , a nd C ha r l e s F r a i l ey ,

S c huy lk i l l ' s s t a t e s e na to r , ha d a lwa ys f ough t a ga ins t c ha r t e r pe t i t i ons in thel e g i s l a tu r e , t he ou t look f o r Of f e r ma n ' s pe t i t i on wa s no t e nc our a g ing . F r a i l e y ' s




a n t i - c o r po r a t e v i e ws , li ke Of f e r m a n ' s , we r e a ma t t e r o f pub l i c r e c o r d . " H e ha d , "

B e n j a m i n B a n n a n r e c o l l e c t e d , " p r e v i o u s l y p r o c l a i m e d h i s o p p o s i t io n i n c o u n t y

m e e t ings . . . . S o e a r ne s t a nd s inc e r e i n h i s oppos i t i on wa s he be l i e ve d to be , i n th i sr e g ion , he wa s s e n t on to Ha r r i sbu r g to oppo se the m, h i s e xpe nse s pa id , a nd t ime

c o m p e n s a t e d f o r b y t h e v o l u n t a r y c o n t ri b u t io n s o f in d i v id u a l s ( M i n e r ' s J o u r n a l ,

F e b r u a r y 7 , 1 8 3 8) . K r e b s ' h a d a l so s h o w n h i m s e l f t o b e a n " i r re c o n c i l a b l e

o p p o n e n t o f c o a l c o m p a n i e s " ( Ib id . , F e br ua r y 17 a nd F e b r ua r y 21 , 1838) . G ive n

t h is v o t i n g r e c o r d , m i n e o p e r a to r s w e r e c a u g h t o f f - g u a r d w h e n b o t h F r a i l e y a n d

K r e b s a n n o u n c e d t h e i r s u p p o r t f o r O f f e r m a n ' s c h a r te r p e ti ti o n .

S e n a to r F r a i le y , the b i l l ' s c h i e f sponso r , f ir st i n t r oduc e d i t in 1836 und e r t he

d i s g u is e o f t h e " C a t a r a c t C o m p a n y . " S i n c e n o p l a c e o r p e r s o n i n S c h u y l k i l l

w a s k n o w n b y t h a t n a m e , t h e b il l w a s e x p e c t e d t o p a s s u n n o t i c e d t h r o u g h t h el e g i s la tu r e . B e f o r e t he b i l l r e a c he d a vo te , how e ve r , t he M i n e r s ' J o u rn a l e x p o s e d

the ide n t i t y o f t he pe t it i one r s , a nd de f e a t e d the s c he m e . I n t he f o l lowing se s s ion ,

F r a i le y r e s u r re c t e d t h e b il l u n d e r t h e n e w n a m e o f t h e " B u c k R i d g e R a i l R o a d a n d

M in ing C om pa ny . " Th i s t ime , i n s t e a d o f be ing in t r oduc e d a s a b i ll it s e lf , t he pe t i -

t i on wa s bu nd le d w i th t e n o the r pe t i t i ons i n a n omnibu s c ha r t e r b i ll . The p r a c t i c e o f

e x c h a n g i n g l o c a l f a v o rs t h r o u g h " l o g - r o l li n g " w a s r o u t i n e l y e m p l o y e d t o c o u n t e r

opp os i t i on f r o m r iva l s e c t ions . P i t t e d a ga ins t t he i r ow n r e p r e se n ta t ive s , t he c o l l i e r s

w e r e p u t i n t h e a w k w a r d p o s i ti o n o f h a v i n g t o w i n p o l it ic a l s u p p o r t f ro m r e p r e s e n -

t a t ive s o f o the r c oun t i e s , who h a d l i t t le o r no th ing to ga in b y supp or t ing the c o l l i e r s '

pa r oc h ia l c a use .

F o r tuna t e ly f o r t he i nd iv idua l c o l l i e r s , t he Gove r no r ' s o f f i c e , wa s f u r the r

r e m o v e d f r o m t h e s y s t e m o f m u t u a l p a t r o n a g e w h i c h h a d t u r n e d t h e l e g is l at u re

in to a " c ha r t e r mi l l " ( Ha r t z , 1948 , p . 65 ) . Non e e xe r c i s e d the ve to a u tho r i t y

a g a in s t s p e c ia l a c ts o f i n c o r p o r a t io n m o r e v i g o r o u s l y t h an G o v e r n o r J o s e p h

R i m e r ( 1 8 3 5 - 1 8 3 8 ) , w h o d e n o u n c e d t h e l e g i sl a t u re ' s e n th u s i a s m f o r c h a rt e r in g

a s " r u i n o u s " ( Ib id . , p . 66 ) . Thus , w he n the bnnd le o f e l e ve n pe t i t i ons r e a c he d

h i s de sk o n the f i nal da y o f t he 1837 se s s ion , R ime r r e tu r ne d the who le l o t t o t he

l e g i s la tu r e uns igne d .

The e xe c u t ive ve to k i l l e d the b i l l bu t no t t he pe t i t i on . F r a i l e y in t r oduc e d the

pe t i t i on f o r a t h i r d t ime a t t he be g inn ing o f t he ne x t s e s s ion . A s w i th t he f ir s t b i ll ,

t he t h i r d b il l c on ta ine d o n ly the s ing le pe ti t ion , bu t t h is t ime the p r opo se d c om pa n y

w a s c a l le d t h e O f f e r m a n R a i l R o a d a n d M i n i n g C o m p a n y . S i n c e a ll te n o f t h e

o the r pe t i t ions w e r e a l so r e - in t r odu c e d a s i nd iv idua l b i ll s , t he c oa l i t i on wh ic h ha d

push e d the ve toe d omnibu s b i l l t h r ough the l e g i s la tu r e wa s k e p t in t a ct . " De f e a t e d

in so l id c o lumn , " B a nn a n m oc k e d , " the y ha ve r e tu r ne d to t he a t t a c k se ve ra l ly , i n

o r de r t o d iv ide the a t t e n t ion a nd e lude the v ig i l a nc e o f t he i r oppo ne n t s , e a c h o ne

p la y in g o f f a ll the a r t s o f s t r a t a ge m a nd su r p r i s e t ha t i nge nu i ty c a n inve n t o r f r a ud

d e v i s e " ( M i n e r s ' J o u r n a l , F e br ua r y 10 , 1838) .



22 MA RK C. JEPSON

D e p r i v e d b y F r a i l e y a n d K r e b s o f p o l i t i c a l r e p r e s e n t a t i o n i n H a r r i s b u r g ,

S c huy lk i l l ' s mine ope r a to r s de c ide d to f l ood the l e g i s l a tu r e w i th pe t i t i ons . The

c o l li e rs o r g a n i z e d a w a v e o f m e e t i n g s i n s e v e ra l to w n s h i p s t o p r o t e s t w h a t B a n n a nn o w c a l l e d t h e " h y d r a - h e a d e d m o n s t e r " ( I b i d . , Ja nua r y 31 , 1838) . I n t he t e n

da ys be twe e n Ja nua r y 31 a nd F e b r ua r y 9 , 1838 , e igh t s e pa r a t e me e t ings we r e

he ld i n p r o t e s t o f t he r e v i se d c ha r t e r b i l l . The ind iv idua l c o l l i e r s he ld me e t ings

a t P o t t s v il l e o n J a n u a r y 3 1 , a n d o n F e b r u a r y 7 , a t P o r t C a r b o n o n F e b r u a r y 8 ,

a t S c h u y l k i l l H a v e n o n F e b r u a r y 6 , a n d a t N e w C a s t e o n F e b r u a r y 9 ( I b i d . ,

F e b r ua r y 3 , F e b r ua r y 7 , F e b r ua r y 10, F e b r ua r y 14).

I n a n unusua l show o f so f ida r i t y , S c huy lk i l l ' s mine l a bo r e r s sponso r e d th r e e

m e e t i n g s o f t h e i r o w n a t P o t ts v i ll e , M i n e rs v i ll e , a n d P o r t C a r b o n o n F e b r u a r y

5 ( I b i d . , F e br ua r y 7 , 1838 , F e b r ua r y 10 , 1838) . A t t he P o t t sv i l l e me e t ing , t hem i n e r s e c h o e d t h e i r e m p l o y e r s ' r e m o n s t r a n c e th a t " c o a l co m p a n i e s a r e e n t i re l y

subve r s ive o f i nd iv idua l e n t e r p r i s e , " a nd the y a l so de c l a r e d tha t t he c o l l i e r s '

s t ru g g l e e m b r a c e d t h e i r o w n i n t e re s ts : " T h e M i n e r s a n d L a b o u r e r s h a v e , g e n e r a ll y

spe a k ing , r e a l i z e d a be t t e r c ompe te nc e f o r t he i r l a bo r f r om ind iv idua l c o l l i e r s

t h a n f r o m t h e c o m p a n i e s l o c a t e d i n S c h u y l k i l l c o u n t y , a n d k n o w f u l l w e l l t h a t

the se c ompa n ie s ha ve f o r t he i r ob j e c t t he de p r e s s ion , i n a g r e a t me a su r e , o f t he

h o n e s t w a g e s o f a la r g e n u m b e r o f th e i n h a b it a n ts o f S c h u y l k i l l c o u n t y " ( I b i d . ,

F e b r ua r y 7 , 1838) . In t o t a l, t he pe t i t ions d r a f t e d by the e igh t me e t ings ga the r e d

3000 s igna tu re s ( I b i d . , F e b r u a r y 2 1 , 1 8 3 8 ), o r r o u g h l y h a l f o f S c h u y l k i l l ' s e li g i b levo te r s . 31 " P ub l i c op in ion , " a s su r e d B a nna n , " in no in s t a nc e on a ny que s t ion ha s

b e e n m o r e f u ll y , u n e q u i v o c al ly , a n d u n a n i m o u s l y e x p r e s s e d , t h a n i n o p p o s i t io n

to t he i nc r e a se in c oa l c om pa n ie s i n t h i s r e g ion " ( I b i d . , Ma r c h 7 , 1838) .

D e s p i t e t h e m i n e o p e r a t o r s ' e n o r m o u s e f f o r t t o d e f e a t O f f e r m a n ' s c h a r t e r

pe t i t i on in t he l e g i s l a tu r e , F r a l l e y a nd Kr e bs pushe d the me a su r e t h r ough the i r

r e spe c t ive po l i t i c a l bod ie s . B o l s t e r e d by the i n t e r - s e c t iona l po l i t i c a l a l l i a nc e ,

n e g o t i a t ed i n l a r g e p a rt b y F r a il e y , t h e O f f e r m a n B i l l, a n d t h e t e n p e t it i o n s th a t

a c c ompa n ie d i t , pa s se d th r ough the l e g i s l a tu r e onc e a ga in , t h i s t ime one - by - one .

I t s e e ms no ma t t e r how muc h the y pe t i t i one d the l e g i s l a tu r e , t he ope r a to r s

c o u l d n o t u n d o t h e d e a l b a r t e r e d b y t h e i r o w n r e p r e s e n t a t i v e s . B y A p r i l o f

1 8 3 8 , th e O f f e r m a n p e t i ti o n h a d f o u n d i ts w a y b a c k t o G o v e r n o r R i tu e r, w h o

onc e a ga in s e r ve d a s t he i nd iv idua l p r op r i e to r s ' l a s t l ine o f de f e n se a ga ins t

min ing c o r po r a t ions . C le a r ly f r u s t r a t e d by the l e g i s l a tu r e ' s p loy to we a r down

h i s r e s i s ta nc e to c oa l c o r po r a t ions by subm i t t ing e l e ve n b il l s in s t e a d o f one , t he

G o v e r n o r r e t u r n e d t h e b il l to i n c o r p o r a t e t h e O f f e r m a n c o m p a n y t o t h e S e n a t e

wi th a s t e r n me ssa ge e nu m e r a t ing h i s ob j e c t ions to c oa l c o r po r a t ions :

The incorporationof com paniesof any kind to accomplishobjects within the re ach of privateenterprise, is a departure from the goo d old and safe rule o f legislation of Pennsylvania ...The m ining of co al .., is a business now well understood,and pro fitablypursuedby thousands




of p r i va t e c i t i z e ns , w hose r i gh t s a nd i n t e re s t s w i l l be i n j u re d by t he e xe rc i s e o f c o rpo ra t e

p o w e r s a n d c o m p e t i t i o n . . . . T h e l a w a u t h o r iz i n g a n d r e g u l a t in g l i m i t e d p a r tn e r s h i p s p r e se n t s

a l l th e o p p o r t u n i t y f o r t h e i n v e s t m e n t o f c a p i ta l , w i t h o u t r i sk t o t h e r e m a i n d e r o f t h e o w n e r so f p r o p e r t y . . . . T h e d e s i r e t o f o r m l o c a l c o m p a n i e s i s g e n e r a ll y p r o d u c e d b y t h e m e r e s p i r it

o f s p e c u l a t io n , o r b y s o m e p l a n t o d i s p o s e o f a p a r t i c u la r t ra c t o f l a n d t o g r e a t a d v a n t a g e . . . .

I f e e l t h e u t m o s t r e p u g n a n c e a g a i n s t a n y p r o j e c t t h a t m a y h a v e t h e i n f l u e n c e o f c r i p p l in g o r

m o n o p o l i z i n g th e g r e a t c o a l t r a d e o f P e n n s y l v a n i a w h i c h , I f e a r w o u l d b e t h e e f f e c t o f t h e

ge ne ra l i nc o rpora t i on o f c oa l c ompa n i e s " ( I s sue d A pr i l 5 , 1838 . Re pr i n t e d i n t he Mine r s '

Journal, Apri l 25 , 1838) .

T he Of f e r man Bi l l , i n pa r t i cu l a r , wa r ned the Gove r nor , " con templa t e s t he

f o r m a t ion o f a com pany f o r m in ing and dea l ing in coa l i n a reg ion a l r eady opened

by individu a l ente rpr ise , and t raversed by ra i l roads , and in w hich the coa l tr ade

i s f u l ly e st ab l ished . . . . P r iv il eges o f t h is k ind , w ie lded by the co m bined in f luenceo f c o r p o r a t i o n s , b a c k e d b y a c a p i t a l o f $ 3 5 0 , 0 0 0 . . . w o u l d f o r m a d a n g e r o u s

in t e r f e r ence in t he ac t ive and f lour i sh ing coa l t r ade o f Schuy lk i l l coun ty"

( Ib id . ) .

Hav ing a l r eady ove r tu r ned R im er ' s ve to o f a b i ll i ncor por a ting the S t a f fo r d Coa l

Co m pan y in L uz e r ne Coun ty , t he l eg i sl a tu r e was no t d i s suaded by the G ove r nor ' s

an t i -cha r t er p r oc l ama t ion . I f any th ing , t he G ove r nor ' s deep en ing in t rans igence

to incorpora t ion posed a cha l lenge to the sec t iona l in te res t s which t radi t iona l ly

gu ided the cond uc t o f s t a te l eg is l a to r s , and wh ich inc r ea s ing ly dem anded g r ea te r

and eas ie r access to corpora te char te r s f rom loca l r epresenta t ives . In shor t ,s ecur ing cha r t e r s f o r i n f luen t i a l cons t i t uen t s was becoming a r equ i r ement o f

of f ice . The over r ide of Ri tner ' s ve to of the Offe rman bi l l was a c lear indica t ion

tha t t he po l i t ic a l c a ree r s o f Pennsy lvan ia leg i s la to rs w e r e becom ing d ependen t on

cor por a te i n t e r es t s, and tha t Schuy lk i l l was f a s t becom ing an i so l a t ed pocke t o f

ant i -corpora te res i s tance .

For tuna te ly for the individua l opera tors , the Offe rman a f fa i r he ld a f ina l

i rony: The p rot rac ted an d bi t te r s truggle to obta in the r ight to organ ize a m ining

cor por a t ion had r obbed Of f e r m an o f t he me ans to f i nance h i s ven tu r e . Af t e r nea rly

a yea r o f ba t tl i ng back and f o r th w i th t he l eg is l a tu r e and the Go ve r nor, Of f e r m anhad squande r ed h i s pe r sona l f o r tune and los t t he back ing o f h i s New Yor k

credi to rs (Year ly, 1961, p. 91). In the en d, the legisla t ive gran t of the m ine cha r ter

prove d to he a pyr rhic v ic tory . Of fe rm an, i t turned ou t , never exerc ised his cos t ly

corpora te pr iv i leges , and suc cum bed to bankru ptcy in 1842 (Luther , 1881, p . 51).

M os t o f t he c r ed i t fo r r u in ing O f f e r man was g iven to G ove r nor R i tne r , who ,

Ban nan p r a i sed , "ha s p r oved h im se l f t o be t he swor d and the sh i e ld o f t he r igh t s

o f t he Col l i e r s " ( M i n e r s ' J o u r n a l , January 31, 1838) . But whi le the Governor

became a champion among Schuy lk i l l ' s i nd iv idua l mine ope r a to r s , h i s s t aunch

ant i -corpora te s tance was u npo pular w i th the legis la ture , and espec ia l ly wi th thepow er f u l p r o - cor por at e P h i l ade lph ia de l ega tion ,32 which had his tor ica l ly ru led



24 MA RK C. JEPSON

ove r t he l e s s - popu la t e d s e c t ions o f t he s t a t e th r oug h a d iv ide a nd c onq ue r s t ra t egy .

R i tne r ' s c a u t ious a pp r oa c h to i nc o r po r a t ion , wh ic h p l a c e d s t r ic t l imi t s on the num -

be r a nd the powe r s o f c o r po r a t e c ha r t e rs , oppo se d the i n t e re s t s o f bo th P h i l a de lph iac a p i t a l i s t s , who inc r e a s ing ly v i e we d inc o r po r a t ion a s a wa y to r a i s e c a p i t a l a nd

min imiz e l i a b i l i t y , a nd P e nnsy lva n ia ' s e a s t e r n c oun t i e s , wh ic h de pe nde d on

P h i l a de lph ia c a p i t a l t o de ve lop loc a l i ndus t r y . B y 1838 , t he popu l i s t W hig a nd

De m oc r a t i c c oa l i t i on tha t ha d sw e p t R i tne r i n to o f f i c e wa s a l r e a dy lo s ing g r oun d

to f o r c e s mo r e suppo r t ive o f bus ine s s i nc o r po r a t ion . Ev e n in S c huy lk i l l , wh e r e t he

S c h u y l k i l l C a n a l a n d m o s t o f th e c o a l l a n d s w e r e c o n t r o l l e d b y P h i l ad e l p h ia n s ,

supp or t f o r R i tne r wa s d iv ide d . 33

F o r S c h u y l k i l l ' s te n a n t m i n e o p e r a t o r s, h o w e v e r , th e P e n n s y l v a n i a g u b e m a t o r i al

r a c e o f 1 8 3 8 b e c a m e a r e f e r e n d u m o n c h a r t e r i n g . T h u s , w h e n R i t n e r n a r r o w l ylos t h i s b id f o r r e - e l e c t ion ,34 the m ine ope r a to r s l o s t t he i r la s t a nd m os t f a i t h f u l

de f e n de r a ga ins t mine inc o r po r a t ion in t he s t a t e ca p i ta l . Tha t R i tne r ' s suc c e s so r ,

Da v id P o r t e r , obse r ve d no s ign i f i c a n t d i s t i nc t ion be twe e n c o r po r a t e e n t e r p r i s e

a nd ind iv idua l e n t e r p r i s e wa s c a use f o r e ve n g r e a t e r a l a r m in S c huy lk i l l (Ha r t z ,

1948 , p . 250 ) . G ive n the i r f ie r c e a nd r e l e n t l e s s s ix - m on th c a m pa ign a ga ins t P o r t e r,

wh ic h f r e qu e n t ly i nc lude d ha r sh a t ta c ks on h i s c ha r a c t e r (M iners ' Journal, M a r c h

10, Ma r c h 17, Apr i l 14, June 16 o f 1838), t he ind iv idua l ope r a to r s now f a c e d the

p r osp e c t o f a hos t i l e a nd v ind ic t ive Go ve r no r .

W i th R i tne r gone , a nd no one l e f t i n Ha r r i sbu r g to ve to c ha r t e r pe t i t i ons ont h e ir b e h a lf , t h e m i n e o p e r a t o rs n o w d e s p e r a t e ly n e e d e d t o f o l l o w t h r o u g h o n t h e i r

p l e dg e to unse a t t he l oc a l tu r nc oa t s , F r a i l e y a nd K r e bs , a nd r e tu m to o f f i c e l oya l

r e p r e se n ta t ive s who wo u ld k i l l c ha r t e r b il l s i n t he l e g is l a tu re , be f o r e t he y r e a c h e d

P or t e r ' s de sk . K r e bs a p pa r e n t ly r e ga r de d h i s r e - e le c t ion a s a l o s t ca use , a nd o p te d

t o f o r e g o w h a t w o u l d h a v e u n d o u b t e d l y b e e n a n u p h i l l a n d v i c i o u s p o l i ti c a l fi g ht .

W i t h t h e e l e c ti o n o f J o h n W e a v e r t o t h e S t a te A s s e m b l y (Ibid., Oc tobe r 17, 1840) ,

S c h uy lk i l l ' s l oc a l po l i t i c a l bu lwa r k w a s pa r t i a l l y r e s to r e d . F r a i le y , howe ve r , r a n f o r

r e - e le c t i o n a n d w o n . U n l i k e, K r e b s , w h o s e ju r i s d i ct i o n w a s c o n f i n e d to S c h u y l k i l l

C oun ty , F r a i l e y ' s S e na te d i s t r i c t spa nne d se ve r a l c oun t i e s , d i l u t i ng the po l i t i c a l

powe r o f S c huy lk i l l ' s c o l l i e r s . W hi l e F r a i l e y ' s po l i t i c a l c a r e e r su r v ive d the

Of f e r m a n o r de a l , t he l ong a nd b i t t e r s t r ugg le a ppa r e n t ly d i s c ou r a ge d the S e na to r

f r o m e v e r s p o n s o r in g a n o t h e r m i n i n g c h a r te r . T h u s , w i t h O f f e r m a n b a n k r u p t a n d

F r a i l e y r e f o r me d , t he ind iv idua l ope r a to r s c ou ld ta ke s om e sa t i s f a c tion in t he f a c t

tha t t he y ha d lo s t t he ba t t l e bu t wo n the wa r a ga ins t m in ing c o r po r a t ions .

A l though a sma l l mino r i t y o f S c huy lk i l l ' s i nd iv idua l ope r a to r s i nc r e a s ing ly

( i . e . i n t he 1840s a nd 1850s ) e xp r e s se d the c onc e r n tha t t he d i s t r i c t c ou ld no t

r e t a in i t s p r e - e mine n t pos i t i on in t he a n th r a c i t e t r a de w i thou t i nc o r po r a t ion o f

the mine s , a nd the i n f us ion o f c a p i t al i t p r om ise d , no ne da r e d to su bm i t a c ha r t e rpe t i t i on a f t e r Of f e r m a n .




T h e L C N C a n d t h e D H C C D e f e n d T h e i r M o n o p o l i e s

T h e L C N C a n d t h e D H C C a l so f o u g h t m a n y d i f f ic u l t p o l it ic a l b at tl e s in d e f e n s eo f t he i r c l a s s r e g ime s . B o th monopo l i e s i n s i s t e d tha t t he y ha d pe r f o r me d a v i t a l

pub l i c s e r v i c e by inve s t ing se ve r a l mi l l i on do l l a r s t owa r ds the s t a t e ' s " in t e r na l

impr ove me n t s " ( i . e . mine s a nd c a na l s ) . Th i s " pub l i c " be ne f i t , t he c ompa n ie s

c l a ime d , e n t i t l e d the m to a r e a sona b le r e tu r n on the i r i nve s tme n t s , wh ic h c ou ld

o n l y b e o b t a i n e d t h r o u g h m o n o p o l y p r o t e c t i o n . T h e r h e t o r i c o f m e r c a n t i l i s m ,

how e ve r , wa s a t h in ve i l f o r the f ina nc ia l p r ob le m s tha t f o r c e d the LC N C a nd

t h e D H C C i n t o a s t r u g g l e t o p r e s e r v e t h e i r c o r p o r a t e m o n o p o l i e s . F r o m t h e i r

i n c e p ti o n , b o t h c o m p a n i e s w e r e h e a v i l y i n d e b t, a n d p r e s s u r e d b y c r e d it o r s a n d

s toc kho lde r s t o c om ba t t he th r e a t o f c om pe t i t i on a nd low c oa l p r i c e s.To som e e x te n t , the po l i t ic a l s t r ugg le a ga ins t e c ono m ic riva ls ha d a l r e a dy be e n

w o n a t t h e t i m e t h e L C N C a n d t h e D H C C w e r e i n c o r p o r a t e d . T h e u n l i m i t e d

c ha r t e r s o f bo th c ompa n ie s l e ga l ly e n t i t l e d the m to de ny a c c e s s t o t he i r c a na l s

t h r o u g h p r o h i b i t i v e r o u t i n g a n d e x o r b i ta n t to l ls . T h e o n l y h o p e f o r n e w c o m p a n i e s

wa s , t he r e f o r e , i f t he l e g i s l a tu r e e i the r a wa r de d s imi l a r un l imi t e d p r iv i l e ge s to

the m, o r f o r c e d the m ono po l i e s t o ope n the i r c a na ls t o r iva l c oa l u ' af fi c.

D u r i n g t h e f ir st f o u r y ea r s o f t h e L C N C ' s o p e r a t io n , f a rm e r s a n d m e r c h a n t s i n

t h e n o r t h e r n c o u n t i e s o c c a s i o n a l l y c r it i c iz e d t h e c o m p a n y f o r i ts m o n o p o l y o f t h e

Le h igh R ive r t r ade , bu t , in s i st s S h e gda ( 1952 , p . 266 ) , " the c ha r ge s we r e no t ve r yse r ious ." B y 1824 , howe ve r , " the a t t i tude o f t he pub l i c t owa r d the e n te r p r is e , "

no te s Jone s ( 1908 , pp . 1 8 - 19 ) , " wa s tha t t he p r iv i le ge s we r e so e x te nde d tha t

t h e y o u g h t n e v e r t o h a v e b e e n g r a n te d . " M e r c h a n t s i n b o t h P h i l a d e lp h i a a n d t h e

no r the a s t e r n c oun t i e s f e a r e d tha t t he c on t inue d c on t r o l o f t h i s v i t a l no r th - sou th

t r ad e c o r r i d o r b y a s i n g l e c o m p a n y , a n d e s p e c i a ll y a c o m p a n y e n c u m b e r e d b y

he a vy f ina nc ia l l i a b i l i t i e s , wou ld no t y i e ld the lowe s t poss ib l e t o l l s on t r a f f i c ,

a n d w o u l d e i t h e r in h i b i t c o m m e r c e o r d i v e r t i t a w a y f r o m P h i l ad e l p h i a t o m o r e

a c c e s s ib l e e a s te r n ma r ke t s . I n 1824 , t he re p r e se n ta t ive s o f Nor tha m pton C oun ty

bor de r ing the De la wa r e R ive r c a l l e d upon the f r i e nds o f f r e e na v iga t ion to a c t ,

" o r w e s h al l b e l i k e t h e p e o p l e o f G e r m a n y , n o t b e a b l e t o p a ss o u r d o o r s , w i t h o u t

b e i n g o b l i g e d to p a y T a x , T o l l, o r T r ib u t e to s o m e i n c o r p o r a te d c o m p a n y " ( q u o t e d

in P owe l l , 1978 , p . 128 ). F o r t he ne x t two ye a r s , i nha b i ta n t s f r om th r oug hou t t he

De la wa r e V a l l e y o r ga n iz e d m e e t ings , a nd r a t if i e d pe t i t ions u r g ing the l e g i s la tu r e

t o s t o p th e L C N C f r o m b l oc kfin g t h e c o m m e r c e b e t w e e n t h e n o r t h e r n a n d s o u t h e r n

r e g ions o f t he s t a t e (Ibid. , pp. 128 , 162n31) .

B e t w e e n 1 8 2 6 a n d 1 8 3 0 , t h e p r o t e s t s a g a i n s t t h e L C N C s u b s i d e d w h i l e t h e

s t a t e c ons t r uc t e d the De la wa r e C a na l . B u t t he e xpe c ta t ions o f a n a l t e r na t e r ou te

we r e d i sa ppo in te d , a nd by the e a r ly 1830s , t he me r c ha n t s o f t he e a s t e rn c oun t i e sa long the De la wa r e we r e onc e a ga in pe t i t i on ing the l e g i s l a tu r e to d i s so lve the



26 MA RK C. JEPSON

L C N C ' s m o n o p o l y o f th e L e h i g h R i v e r tr a d e . C i t i ze n c o n v e n t i o n s w e r e h e l d a t

A l l e n t o w n i n M a y o f 1 8 32 , a n d a t E a s t o n t h e f o ll o w i n g D e c e m b e r t o p r o te s t t h e

L C N C ' s " o p p r e s s i v e " t o l l p o l i c y a n d " i n f a m o u s " c o r p o r a t e p r i v i l e g e s ( J o n e s ,1908 , p . 21 ) . A c o m m i t t e e a ppo in t e d by the r e s ide n t s o f Ne s c op e c k Va lle y, a t a

m e e t i n g h e l d i n t h e c i t y o f C o n y n g h a m o n J u l y 4 , 1 8 33 , a l er t e d t h e S t a t e S e n a t e

tha t " the me r c h a n t s o f W i lke sba r r e , ha ve a nd a r e de se r ti ng the P h i l a de lph ia

m a r k e t a n d h a v e a c t u a l ly m a d e l a r g e p u r c h a s es i n t h e c i t y o f N e w Y o r k th e p r e s e n t

f al l, b e c a u s e a s t h e y s a y t h e y c a n s e n d t h e i r g o o d s c h e a p e r a n d w i t h m u c h l es s

e m b a r r a s s m e n t b y t h e H u d s o n a n d D e l a w a r e c a n a l an d C a r b o n d a l e , t h an b y t h e

D e l a w a r e a n d M a n c h C h u n k [ L e hi g h] c a n a l . . . " (Report of the Com mittee o f thePeople o f Nescopeck Valley,A n t h r a c i t e C o m m i s s i o n R e p o r t, 1 8 3 4, p p . 2 7 8 - 2 7 9 ) .

I n r e spon se to t he p l e a s f o r t o l l re l i e f , t he l e g i s l atu r e vo te d to g r a n t a min in gc h a r t er t o th e B e a v e r M e a d o w R a i l ro a d a n d C o a l C o m p a n y ( h e r e a ft e r B M R C C ) ,

a n d t h r e a t e n e d to a w a r d c a r r y in g p r iv i l e g e s t o t h e n e w c o m p a n y i f t h e L C N C d i d

no t r e du c e i t t o l ls . The L C N C r e f use d to r e duc e i ts t o ll s , a nd i t 's f ound e r , Jo s i a h

W hi t e , d i sm is se d the p r o t e s t s 'a s " a g i t a t ions by P h i l a de lph ia m e n , no to r iou s l a nd

jobb e r s a nd s pe c u la to r s " ( quo te d in Ha nse l l , 1992 , p . 100 ). D e te r m ine d to b r e a k

the de f i a n t monopo ly , t he B MR C C a nd i t s s e c t iona l a l l i e s onc e a ga in a ppe a l e d

to t he l e g i sl a tu r e f o r r e li e f . I n r e sponse to t he nu m e r ous " m e m or i a l s , " t he S e n a te

C o m m i t t e e o n C o r p o r a t i o n s i n v e s ti g a te d t h e m a t t e r a n d s u b m i t t e d i ts r e p o r t i n

F e b r u a r y o f 1 8 3 2 . A m a j o r it y o f th e C o m m i t t e e s id e d w i t h t h e m e m o r i a li s t s'c o m p l a i n t t h a t t h e L C N C a b u s e d i t s c h a r t e r p r i v i l e g e s b y c h a r g i n g e x c e s s i v e

to l l s , wh ic h a c t e d a s " a n a c tua l p r oh ib i t i on on a l l c oa l wh ic h i s no t owne d by

t h e L e h i g h C o a l a n d N a v i g a ti o n C o m p a n y t h e m s e lv e s " (Ibid.). T h e C o m m i t te e

r e c o m m e n d e d t h a t i f th e L C N C r e f u s e d t o l o w e r it s to i ls , t h e s t at e s h o u l d c h a r g e

t h e L C N C t h e s a m e t o l l s t o u s e t h e a d j o i n i n g s t a t e - o w n e d D e l a w a r e C a n a l .

T h e h i k e w o u l d h a v e m o r e t h a n t ri p l e d t h e c o m p a n y ' s c o s t o f s en d i n g c o a l d o w n

the De la w a r e C a na l t o P h i l a de lph ia . (Ibid., pp. 179, 180) .

F r u s t r at e d b y t h e S e n a t e ' s r e lu c t a n c e to a c t o n t h e C o m m i t t e e 's r e c o m m e n d a -

t ion , " c i t i z e ns" t h r ougho u t t he e a s t e r n po r t i on o f the s t a t e onc e a ga in o r ga n iz e d" c on ve n t ions" t o p r o t e s t t he t o l l s on the L e h ig h C a na l ( Jone s , 1908 , p . 21 ) . 35

I n t h e f a l l o f 1 8 3 3 , a c o m m i t t e e o f t h e C o n y n g h a m C o n v e n t i o n c o n d e m n e d t h e

l e g i s l a tu r e f o r g r a n t ing th e LC NC a c ha r t e r t ha t a wa r de d i t e xc lu s ive j u r i sd i c t i on

o f t h e L e h i g h R i v e r, a n d r e i t e ra t e d t h e f a m i l ia r c o m p l a i n t t h a t t h e L C N C ' s t o ll s

d i s c ou r a g e d inve s tme n t a nd t r ade :

No man would be foolish enough to invest money in canal or rail road stock while a company

governed by such a system held in their possession and under their sole control the outlet of the

counla'y to market. The owners of coal beds could not work their mines because the onerous

tolls would advance the price of the commodity in the market so that it could not compete with

coal from Schuylkill or the company's coal from the Mauch Chunk mine" ( I b i d . , p. 278).




By J a n u a r y o f 1 8 3 4 , th e u n r e l e n t i n g a g i t a t i o n b y t h e s e c t i o n a l in t e r e s ts t o th e n o r t h

a n d t h e s o u t h o f t h e L e h i g h C a n a l h a d f i n a l ly b e g u n t o t u r n t h e p o l i ti c a l ti d e a g a i n s t

t h e L C N C i n t h e L e g i s l a t u r e . O n e y e a r a f t e r i t w a s p r o p o s e d b y t h e m a j o r i t y o ft h e S e n a t e C o m m i t t e e o n C o r p o r a t i o n s , t h e re s o l u ti o n t o m a k e t h e to l ls f o r L C N C

c o a l o n t h e D e l a w a r e C a n a l e q u a l t o t h e t o ll s o n t h e L e h i g h C a n a l w a s i n t r o d u c e d

a s a b i l l i n t h e S e n a t e . F e a r i n g t h a t t h e p r o p o s e d t h r e e - f o l d i n c r e a s e i n t o l l s o n

t h e D e l a w a r e C a n a l m i g h t p l u n g e t h e i r s t r u g g l i n g c o m p a n y i n t o b a n k r u p t c y , t h e

m a n a g e r s o f th e L C N C a t l o n g l a s t y i e l d e d to t h e f u n d a m e n t a l d e m a n d o f it s f o e s

b y r e d u c i n g t h e to l l o n c o a l f r o m $ 1 . 0 4 t o $ 0 . 7 8 p e r t o n f o r t h e f o l lo w i n g s e a s o n

( Ib id . ) . 36 A s a re s u l t o f t h e n e w t o l l p o l i c y , c o r p o r a t e i n v e s t m e n t f l o w e d in t o t h e

u n d e v e l o p e d f i e l d s o f t h e L e h i g h c o a l d i s t r i c t . I n t h e t w o y e a r s f o l l o w i n g t h e

r e d u c t io n , t h e B M R C C f in a l ly r a i se d s u f f ic i en t c a p it a l t o c o m p l e t e w o r k o n i t sr a i l l i n e to t h e L e h i g h C a n a l , a n d b y t h e e n d o f t h e d e c a d e , 1 7 a d d i ti o n a l f i r m s h a d

r e q u e s t e d c h a r t e r s t o o p e n m i n e s i n th e L e h i g h D i s t r i c t ( H o f f m a n , 1 9 6 8 , p . 1 10 ).

T h e b i t te r p o l i ti c a l b a tt l e s o f t h e e a r l y 1 8 3 0 ' s h a d f o r c e d t h e L C N C t o r e l in q u i s h

i ts m o n o p o l y , a n d t o o p e n i ts w a t e r s t o i n d e p e n d e n t c o a l p r o d u c e rs .

T h e e n e m i e s o f th e D H C C ' s m o n o p o l y o f t h e W y o m i n g c o a l t ra d e w e r e n o le s s

n u m e r o u s a n d n o l es s d e te r m i n e d t h an t h e e n e m i e s o f t h e L C N C ' s m o n o p o l y . F r o m

t he m o m e n t t h e D H C C b e g a n m i n in g a n d s h ip p i n g c o al in 1 82 9, it s m o n o p o l y

w a s t h e o b j e c t o f a t t a c k . I n a p e t i t i o n s u b m i t t e d t o t h e l e g i s l a t u r e i n 1 8 2 9 , l o c a l

" r a f t sm e n " o n t he L a c k a w a x e n a n d D e l a w a r e r iv e r s c o m p l a i n e d t ha t th e d a m n i n go f t h e r i v e r s f o r t h e n e w c a n a l o b s t r u c t e d t h e i r w a y , a n d s o r e d u c e d t h e w a t e r

l e v e l th a t r a f t i n g b e c a m e i m p o s s i b l e . 37 T h a t s a m e y e a r , th e U n i t e d S t a te s G a z e t t e

o f P h i l a d e l p h i a p r in t e d - u n d e r t h e p s e u d o n y m " A l g o n q u i n " - a d et a il e d f iv e - p a r t

s e ri e s i n d ic t in g t h e D H C C f o r m i s m a n a g e m e n t , e x c e s s , a n d f r a u d . 38 T h e f o l l o w i n g

y e ar , t he D H C C ' s m o n o p o l y c a m e u n d e r a t ta c k f r o m t h e N e w Y o r k C i ty p r e ss ,

w h i c h c o m p l a i n e d t h a t th e D H C C w a s u s i n g i t s m o n o p o l y t o e x p l o it c o n s u m e r s . 39

D e s p i t e g r o w i n g c o n s u m e r o p p o s i t i o n t o h i g h c o a l p r i c e s, 4 ° a c o n f l ic t o f i n te r e st

p r e v e n t e d th e N e w Y o r k le g is la tu r e f r o m b r e a k i n g - u p t h e D H C C m o n o p o l y .

A s o f J a n u a r y o f 1 8 2 9 , th e S t a te o f N e w Y o r k h a d l o a n e d t h e D H C C a t o t a l o f

$ 8 0 0 , 0 0 0 , a n d t h u s h a d a c q u i r e d a s tr o n g f i n a n c i a l s ta k e in t h e p r o s p e r i t y o f t h e

c o m p a n y . T o b e s u r e , t h e d e v e l o p m e n t o f m u t u a l i n t e r e s t s b e t w e e n t h e D H C C

a n d t h e N e w Y o r k le g i s la t u r e b e g a n w i t h m u t u a l f r ie n d s , c h i e f a m o n g t h e m w a s

G o v e r n o r D e W i t t C l in t o n . B e t t e r k n o w n a s t h e f a t h e r o f t h e E r ie C a n a l , C l i n to n

a l s o h e l p e d t h e D H C C o b t a i n it s N e w Y o r k c h a r t e r i n 1 8 23 , a n d , a s h e a d o f th e

N e w Y o r k C a n a l C o m m i s s i o n , l o b b i e d d i l ig e n t ly f o r t h e D H C C ' s f i rs t s ta t e l o a n ,

a n d t h e f a v o r a b l e t e r m s u n d e r w h i c h i t w a s m a d e ( L o w e n t h a l , 1 9 93 , p . 5 7) . A f t e r

C l i n t o n ' s d e a t h i n 1 8 2 8 , t h e D H C C f o r m e d a n e q u a l l y c l o s e a s s o c i a t i o n w i t h

h i s s u c c e s s o r , a n d f u t u r e U . S . p r e s i d e n t , M a r t i n V a n Bu r e n . A s a t o k e n o f i t sa p p r e c i a t i o n , t h e D H C C s e n t a p o r t i o n o f t h e c a n a l ' s f i r s t a n t h r a c i t e s h i p m e n t



28 M A RK C . J E P S O N

t o A l b a n y f o r u s e b y t h e G o v e r n o r a n d th e c o m p a n y ' s fr i en d s i n t h e L e g i s l a t u re

(LeRoy, 1950 , p . 21) .

T h e D H C C a l so c o v e t e d c l o s e p o li t ic a l t ie s w i t h N e w Y o r k C i ty , th e d e s t i n a ti o no f m o s t o f it s c o a l. S i n c e t w e l v e o f t h e D H C C ' s o r i g i n a l th i r te e n m a n a g e r s w e r e

" p e r so n s o f p ro m i n e n c e a n d h i g h s t a n d i n g . . , i n th e N e w Y o r k c o m m u n i t y "

( T h e D e l a w a r e a n d H u d s o n C o m p a n y , 1 9 25 , p . 3 ), th e c o m p a n y w a s fa v o r a b l y

s i t ua t e d w i t h i n t he c i t y ' s pow e r s t r uc t u r e . W i t h t he e l e c t i on o f P h i l i p H one , t he

p r e s i d e n t o f th e D H C C , t o t h e o f fi c e o f m a y o r i n 1 8 25 , t h e a s s o c ia t io n b e t w e e n t h e

c o m p a n y a n d t h e c i t y b e c a m e o f f ic ia l. S u s p e c t i n g a c o n f li c t o f i n te r e st , h o w e v e r ,

N e w Y o r k ' s C o m m o n C o u n c i l f o rc e d H o n e t o r e si g n a s p re s id e n t o f t h e c o m p a n y

a f t e r j u s t o n e y e a r i n o f fi ce . H o n e ' s r e l a ti o n s h i p w i t h t h e C o u n c i l w o r s e n e d a f t e r

h e e v i d e n t l y re f u s e d t o r e li n q u i sh h i s s e a t o n t h e c o m p a n y ' s b o a r d o f m a n a g e r s ,a n d i n D e c e m b e r 1 8 2 6 , h e c h o s e t o r e s i g n a s m a y o r r a th e r t h a n s e v e r h i s ti e s w i t h

th e D H C C ( I b i d . , p. 33) .

T h e f ir st a t t e m p t t o b r e a k t h e D H C C ' s m o n o p o l y b y a c t u a l ly e n t e r in g t h e f i e ld

w a s m a d e b y t h e W a l l e n p au p u c k I m p r o v e m e n t C o m p a n y , i n co r p o r at e d b y t h e s ta te

o f P e n n s y l v a n i a i n A p r i l o f 1 8 3 0 . I n e v e r y r e s p e c t e x c e p t o n e, t h e n e w c o m p a n y ' s

s it u at io n r e s e m b l e d t h a t o f th e B e a v e r M e a d o w R a i l ro a d a n d C o a l C o m p a n y in t h e

L e h i g h d i st ri c t, c h a r t e r e d t h a t s a m e y e a r . I n o r d e r t o m a r k e t t h e ir c o a l, b o t h c o m p a -

n i e s n e e d e d t o b u i ld f e e d e r li n e s to t h e c a n a ls , w h o s e o w n e r s o p p o s e d o p e n i n g t h e i r

w a t e r s t o ri v a l c o n c e m s . T h e c r u c ia l d i ff e r en c e , w h i c h c a u s e d t h e W a l l e n p a u p u c k

t o f a il w h e r e t h e B M R C C b a d s u c c e e d e d , w a s t h e a b s e n c e o f an u r b a n - r u ra l

po l i t i c a l c oa l i t i on , w h i c h ha d be e n s o i n s t r um e n t a l i n p r e s s u r i ng t he s t a t e l e g i s -

l a tu r e t o h e l p t h e B M R C C o v e r c o m e th e f in a n c ia l h u r d l e s e r e c t ed b y t h e L C N C .

C o n s p i c u o u s l y a b s e n t w e r e t h e " p u b l i c c o n v e n t i o n s " a n d " c i t i z e n m e m o r i a l s , "

w h i c h , i n t h e L e h i g h D i s tr ic t , h a d b e e n o r g a n i z e d b y th e B M R C C ' s P h i l a d e lp h i a

p r o m o t e r s a n d t h e m e r c h a n t s a n d f a r m e r s f r o m t h e t o w n s a n d c o u n t r y s i d e

n e i g h b o r i n g t h e c a n al , a ll o f w h o m s t o o d t o g a i n f r o m l o w e r to l ls o n t h e L e h i g h

Ca na l . " F o r t una t e l y f o r t he D & H , " s t a t e s L ow e n t ha l ( 1993 , p . 56 ) , " i t ha d a c c e s s

t o f i na nc i a l r e s ou r c e s t ha t t he p r ov i nc i a l s c o u l d no t m a t c h . " E v i de n t l y , a f t e r on l y

o n e y e a r o f o p e r a t io n , t h e m o n o p o l y s ti ll h e ld t h e c o n f i d e n c e o f l o c a l c o m m e r c i a l

i n t e re s t s, w ho e xp e c t e d t he c a n a l t o c r e a t e a t r a de bo om f o r t he r e g i on . 41

I t w o u l d b e f i v e y e a r s b e f o r e a n o t h e r c o m p a n y s e r i o u s ly c h a l l e n g e d t h e D H C C

d o m i n i o n o f th e W y o m i n g c o a l tr a de . I n N o v e m b e r o f 1 8 3 5 , t h e E r ie R a i l r o a d

h e l d a g r o u n d - b r e a k i n g c e r e m o n y f o r a li n e s t re t c h in g f r o m t h e E r i e c a n al , s o u t h

t o P e nns y l va n i a ' s D e l a w a r e V a l l e y ( L e Roy , 1950 , p . 54 ) . D e s p i t e t he pub l i c

f a n f a r e , fi na nc i ng f o r t he r a il r oa d f e l l t h r oug h a nd a de c a d e pa s s e d b e f o r e i n t e r e s t

i n t he l i ne w a s r e v i ve d . T he ne w e ng i ne e r s f o r t he E r i e t h r e w ou t t he o r i g i na l

s u r v e y o f t h e r o u te , a n d d e c i d e d t o b u i l d t h e r a i lr o a d a l o n g t h e c o u r s e o f th eD e l a w a r e a n d H u d s o n C a n a l. U p o n l ea r n in g o f t he n e w r o u te , t h e D H C C o b t a in e d



Entrepreneurs or C orporations 29

a n i n j u n c t i o n f r o m a s y m p a t h e t ic l o c a l j u d g e w h i c h p r o h i b i te d t h e r a i l ro a d f r o m

bu i ld ing i t (Ibid.). S e n s i n g o p p o r t u n i ty , c i ti z e n s o f W a y n e C o u n t y i n t h e n o r t h ea s t

c o r n e r o f P e n n s y l v a n i a m a d e " s t re n u o u s e f f o r t s " t o c o n v i n c e t h e E r i e t o c o n s i d e ra r o u t e p a s s in g t h r o u g h t h e i r c o u n ty , e x t e n d i n g e a s tw a r d t h r o u g h t h e L a c k a w a x e n

V a l l e y t o t h e S u s q u e h a n n a R i v e r (Ibid.). W h e n t h e p r o p o s a l w a s p u t b e f o r e a

v i s i t ing d e l e ga t ion o f t he l e g is l a tu r e , howe ve r , i t wa s p r om pt ly r e j e c te d . " A t e a c h

me e t ing c a l l e d by the se f a r - s e e ing c i t i z e ns , " a dds Le R oy ( 1950 , p . 54 ) , " e ve r y

p r o p o s a l f a v o r i n g t h e E r i e w a s v o t e d d o w n . " A s i t t u r n e d o u t , t h e D H C C h a d

" ' p a c k e d ' t h e m e e t i n g s w i t h i t s e m p l o y e s [ s i c ] a n d t h e i r f r i e n d s " (Ibid.). T h a t

the DH C C ha d loa de d the po l i t i c a l d i c e a ga ins t t he E r i e , a nd a ny o the r in t r ude r ,

w a s f u r t h e r r e v e a l e d b y t h e c o r p o r a t e ti e s o f W a y n e C o u n t y ' s o w n s ta t e s e n at o r,

C h a r l e s D i m m i c k , w h o a l so h a p p e n e d t o b e a n a t t o rn e y f o r t h e D H C C (Ibid.). A sa t e s t a m e n t t o t h e D H C C ' s p o l i ti c a l s w a y o v e r th e r e g io n , t h e r o u t e w h i c h t h e E r i e

w a s u l t i m a t e l y c o m p e l l e d to u n d e r t a k e w a s t w e n t y m i le s l o n g e r a n d o f a m u c h

s t e e pe r g r a de tha n the r ou te t ha t wa s de f e a t e d (Ibid.). W h e n t h e E r i e R a i lr o a d w a s

f ina l ly ope ne d f o r t r af f ic in 1849 , 14 ye a r s a f t e r i ts g r o und- b r e a k ing c e r e m ony ,

i t wa s " s t i ll no t a s e r ious c o mp e t i to r , " a nd d id no t be c o m e a r iva l c a n ' ie r to t he

D H C C un t i l a f t e r t he C iv i l W a r, t h r e e de c a de s a f t e r it s i nc e p t ion . 42

C O N C L U S I O N

The M yth o f Corpora te E f fi ci ency: The Pol i ti ca l An n ih i la t ion

o f In d i v id u a l E n t e r p r is e

As s t a te d in t he i n t r oduc t ion , t he f i r s t ob j e c t o f t h is a na lys i s ha s b e e n to show

h o w t h e p o l it ic s o f c h a r te r in g h a d a n i n d e p e n d e n t a n d p a r a m o u n t e f f e c t o n t h e

e x te n t a nd pa t t e r n o f c o r po r a t e de ve lo pm e n t i n e a r ly a n th ra c i t e min ing , a n d

p a r t ic u l a r ly o n t h e a b s e n c e o f c o r p o r a t e d e v e l o p m e n t i n t h e m i n e s o f t h e S c h u y l k i l l

D i s t r i c t . C r i t i c s o f t he po l i t i c a l e xp la na t ion wou ld undoub te d ly c l a im tha t t he

S c hu y lk i l l c a se is m e r e ly a n e xc e p t ion to t he r u l e , a nd f u r the r c on te nd tha t i t i s a n

e xc e p t ion tha t p r ove s t he r u l e ; t ha t c o r po r a t e de v e lop m e n t i n l a rge indus t r y wa s

ine v i ta b l e , de sp i t e h i s to r i c a l va r i a t ions i n pa r t i c u l a r i ndus tr i es . S o w h i l e c o r po r a t e

d e v e l o p m e n t m a y h a v e b e e n d e l a y e d i n S c h u y l k i l l b y t h e i n d iv i d u a l p r o p ri e t o rs

po l i t i c a l r e s i s t a nc e , t he c o r po r a t ion " u l t ima te ly" p r e va i l e d ove r t he i nd iv idua l

p r op r i e to r sh ip a s t he dom ina n t f o r m o f bus ine s s e n t e r p r i s e i n t he a n th r a c i t e

indus t r y . F r o m th i s e vo lu t iona r y pe rspe c t ive , S c huy lk i l l ' s ope r a to r s we r e f i gh t ing

a l o s t c au s e , f o r it w a s o n l y " a m a t t e r o f ti m e " b e f o r e t h e y w e r e c o m p e l l e d t o

s u c c u m b t o c o r p o r a t e m i n in g . A s m o r e a n d m o r e c o l li e ri e s d i p p e d b e l o w t h e w a t e r

l e ve l in t he 1840s , a nd a s t he ve in s o f t he d i s t r ic t 's p r i z e d r e d a sh w e r e de p le t e d ,






To obtain a m onopo ly n the market, the profit on the carriage of he coal became he m ain object,

to w hich the product of the m ines was m ad e entirely tributary.. . By these periodical forced

sales the m ining interest as a specialty, ts capital and the pro duc t of housan ds of operatives havebeen disregarded and sacrificed- ma de a subservient auxiliary of a transportation company an d

of its stock obbing op erations. The low prices at which these sales of coal were made - always

below the cost of production, adding the tolls - amo unted virtually in the reduction in the rate

of transportation on the com pany's co al . . . The other coal companies and individual operators

in the Lackaw anna region could not pay the prescribed toll on the railroad and deliver coal at

Elizabethport in com petition with the c om pany without sustaining a heavy loss, and their only

alternative, therefore, was to sell their coal to the com pany at any price they w ere off ere d.. . In

the exe rcise of its privilege o both m ine and transport coal that com pany hreatened destruction

to individu al enterprise in the Schu ylkill region.

T h e c r u c i a l f a c t m i s s i n g f r o m t hi s e x p l a n a t i o n i s th a t th e " p r i v i l e g e t o b o t h m i n e a n dt r a n s p o r t c o N " w a s a p o li ti c a l c r e a ti o n . F o r t h e g i a n t r a i lr o a d c o m p a n i e s t o e x e r c i se

c o n t r o l o v e r th e m i n e s , t h e y f ir st h a d t o s e c u r e t h e l e g a l ri g h t t o o w n c o a l l a n d s f r o m

t h e le g i sl a tu r e . I r o n i c a ll y , th e a b u s e o f th e s e p r i v il e g e s b y t h e L C N C a n d t h e D H C C

i n t h e 1 8 2 0 s h a d d e t e r r e d t h e L e g i s l a t u r e f r o m e x t e n d i n g c a n ' y i n g a n d l a n d o w n i n g

p r i v il e g e s t o o t h e r c o r p o r a t i o n s . T h e p o l i ti c a l fi re w a l l b e t w e e n t h e s e b r a n c h e s o f

t h e t r a d e r e m a i n e d f i r m un t il 1 8 5 0 , w h e n t h e D e l a w a r e , L a c k a w a n n a , a n d W e s t -

e m R a i l r o a d c i r c u m v e n t e d t h e b a n b y c r e a t i n g s e p a r a t e l y c h a r t e r e d l a n d - h o l d i n g

s u b s id i a ri e s. B y a l l o w i n g t h e h o l d i n g c o m p a n i e s t o o p e r a te , t h e L e g i s l a tu r e t a c i t ly

e n d o r s e d t h e ra i l ro a d s ' s e i z u re o f t h e m i n e s , a n d p l a c e d t h e c o r p o r a t i o n a t a d e -

c i d e d e c o n o m i c a d v a n t a g e o v e r S c h u y l k i l l' s p r o d u c e rs . T h e e v e nt s t h at f o l l o w e d

w e r e p r e d i c t a b l e . " T h e y e a r 1 8 5 1 , " s a y s Y e a r l y ( 1 9 6 1 , p . 1 6 2 ) , " o p e n e d w i t h a

f u ll -s c a le a s s a u lt b y t h e L e h i g h C o m p a n y a n d t h e g r e a t N e w Y o r k m i n i n g - c a r ry i n g

c o m p a n i e s o f t h e L a c k a w a n n a r e g i o n o n S c h u y l k il l m a r k e ts . G i v e n th e c o m p a n i e s '

a d v a n t a g e o f b e i n g b o t h m i n e r s a n d c a r ri e rs . . . . t h e y p o u r e d c o a l in t o t h e t id e w a -

t er y a r d s a t g r e a t ly r e d u c e d p r i c e s. I t w a s a n a c t o f c u t t h r o a t c o m p e t i ti o n a i m e d a t

d e s t r o y i n g w h a t r e m a i n e d o f S c h u y l k i l l ' s d w i n d l i n g p r o d u c t i v e le a d e r s h ip . "

T h a t S c h u y l k i l l ' s in d i v i d u a l p r o d u c e r s w e r e a b l e to w i th s t a n d t h e c o n c e r t e d c o r -

p o r a t e a t t a c k o n t h e i r m a r k e t s i s a t e s t a m e n t t o t h e i r o w n e f f i c i e n c y , t h o u g h t h e i r

m a r k e t s h a r e d e c l i n e d s t e a d i l y f o r t h e n e x t te n y e a r s. A f t e r a b r i e f w a r t i m e b o o m

e n d e d i n d e p r e s s io n , t h e b e l e a g u e r e d c o l li e rs y i e l d e d t h e b u r d e n o f r e sc u i n g t h e

t r a d e to th e m i n e r s ' u n i o n . B u t , o n c e a g a i n , t h e d o m i n a n t c o r p o r a t i o n s i n th e L e h i g h

a n d W y o m i n g d istriC tS e f f e c t iv e l y r e s is t e d t h e W o r k i n g m e n ' s B e n e v o l e n t A s s o c i -

a t i o n ' s c a m p a i g n t o o r g a n i z e m i n e r s a n d l i m i t p r o d u c t i o n ( L u th e r , 1 8 8 1 , p . 68 ) .

T h e u n i o n s u s p e n s i o n s i n S c h u y l k i l l b e t w e e n 1 8 6 8 a n d 1 8 7 0 , c o n s e q u e n t l y , o n l y

e x a c e r b a t e d t h e s h i f t i n m a r k e t s h a r e t o t h e r i v a l n o n - u n i o n d i s tr ic t s. A t th i s p o i n t ,

S c h u y l k i l l 's o w n c a rr ie r , t h e P e n n s y l v a n i a a n d R e a d i n g R a i l ro a d , d e c i d e d t o ta k e

m a t t e r s i n t o it s o w n h a n d s b y p e t i t io n i n g t h e s t a te l e g i s la t u r e f o r la n d h o l d i n g r i g h t s .

S i n c e S c h u y l k i l l w a s s t i l l t h e o n l y d i s t r i c t w h e r e t h e m i n i n g a n d t r a n s p o r t a t i o n



32 MA RK C. JEPSON

b r a n c h e s w e r e l e g a ll y s e g m e n t e d , t h e p r e s i d e n t o f th e R e a d i n g , F r a n k l i n G o w e n ,

p r o t e s t e d tha t l a ndho ld ing c a r r ie r s i n r i va l d i s t ri c t s ha d a n un f a i r a dva n ta ge . A f t e r

G o w e n r e p o r t e d l y b o u g h t t h e n e c e s s a r y v o t e s , t h e L e g i s la t u r e b r o k e i ts f o r t y - y e a rc o v e n a n t w i t h t h e i n d i v id u a l o p e r a t o rs b y c a v i n g -i n t o t h e R e a d i n g ' s d e m a n d f o r

m in ing p r iv i l e ge s . Ove r t he ne x t f i ve ye a r s , Go we n use d the ne w l e ga l p r iv i l e ge to

d e s t r o y th e u n i o n a n d t o b u y - o u t th e m a j o r it y o f t h e m o r i b u n d p r o d u c e r s .

The r a p id e xp r op r i a t i on o f S c huy lk i l l ' s ma s t e r c o l l i e r s a f t e r t he C iv i l W a r

d e m o n s t r a t e d i n d r a m a t i c f a s h i o n h o w u n l i m i t e d c o r p o r a t e c h a rt e rs w e r e i n i m i c a l

to t he e n t r y a nd su r v iva l o f i nd iv idua l p r op r i e to r s . Tha t i s , whe n the p r ope r ty

r e la t io n s t h a t h a d d o m i n a t e d t h e L e h i g h a n d t h e W y o m i n g d i s tr ic t s fr o m t h e 1 8 2 0 s

we r e f i na lly im pose d in S c hu y lk i l l in t he 1860s , t he r e su l t wa s t he s a me . I n t he

f inal a na lys is , i nd iv idua l e n t e r p r i s e i n S c hu y lk i l l d id no t d i e f r o m na tu r a l c a u se s( i. e. ma r ke t c om pe t i t i on ) ; i t wa s a n n ih i l a t e d po l i t i c a l l y by the s t a t e l e g i s la tu r e a t

t he be he s t o f r a i lr oa d c o r po r a t ions .

Theoretical Significance o f the D evia nt Ca se

The dua l pu r pose o f t he de v ia n t c a se a na lys i s i s , f i r s t , t o show how a nd to

wha t e x t e n t t he domina n t t he o r y f a i l s t o e xp la in t he e mpi r i c a l e xc e p t ion ; a nd

se c ond ly , to i nc o r p o r a t e ne w va r i a b l e s i n to t he e xp la na t ion ( L ipse t , 1963 , p . 436 ) .T h e p r e s e n t a n a l y s is g o e s f u r t h e r b y p r o p o s i n g a n a l te r n a te e x p l a n a t i o n f o r

c l a s s f o r m a t ion in i ndus tr y . Tha t i s , the de v ia n t c a se o f S c hu y lk i l l sugge s t s t ha t

c o r po r a t e de ve lopme n t i s , e s se n t i a l l y , a po l i t i c a l c on t inge nc y , no t a n e c onomic

ne c e s s i t y . B u t e ve n i f t h i s po l i t i c a l a r gume n t ho lds f o r S c huy lk i l l , i s i t a va l id

e xp la na t ion f o r o the r c a se s , o r i s t he e a r ly a n th r a c i te i ndus t r y m e r e ly a n in t e r e s ti ng

h i s to r i c a l f l uke ? Af t e r a l l , popu la r a n t i - c o r po r a t e s e n t ime n t s " do no t a ppe a r t o

h a v e h a d m u c h i n f lu e n c e in d e t e r m i n i n g l e g i sl a ti o n . T h e r e a d i n e s s w i t h w h i c h t h e

l e g i sl a tu r e s o f a l l t he s t a t es c r e a t e d c o r po r a t ions f o r a ll so r t s o f pu r pose s , w he n-

e ve r the y w e r e c a l l e d f o r by ind iv idua l s , i n ma n y c a se s g r a n t ing the p r iv i l e ge o fl imi t e d l i a b il it y , shows tha t oppo s i t i on to c o r po r a t ions a s suc h wa s in s ign i f ic a n t "

(Ca llend er , 1902, p. 156) .

G i v e n t h e s t r o n g u n d e r c u r r e n t o f R e p u b l i c a n , a n t i - c o r p o r a t e s e n t i m e n t i n

n i n e t e e n th c e n t u r y A m e r i c a , w h y w e r e t h e r e n o t m o r e c a s e s l ik e S c h u y l k i l l ? W h y

d id the i s sue o f e xpa nd ing inc o r po r a t ion in i ndus t r y no t c r e a t e de e p o r l a s t i ng

f is su r es , o r oppos in g se gme n t s , i n t he c a p i t a l is t c l a s s? A t t h i s po in t , I wo u ld o n ly

sugge s t t ha t t he r e l a t ive a bse n c e o f po l i t i c a l c on f l i c t be tw e e n ind iv idua l s a nd

c o r po r a t ions ( i . e. t he a bse n c e o f po l i t i c a l r e s i s t a nc e to e xpa nd ing inc o r po r a t ion )

s h o u l d n o t b e i n t e r p r e te d a s t h e a b s e n c e o f p ol it ic s . A l t h o u g h t h e a s c e n d a n c y o f th ec o r po r a t ion in i ndus t r y wa s n o t t yp i c a l ly m e t by m i l i ta n t po l i ti c a l oppos i t i on f r om



En tr e p r e n e u rs o r Co r p o r a t io n s 33

ind iv idua l e n t r e p r e ne u r s , a po l i t i c a l a r gume n t f o r c l a s s f o r ma t ion subsume s no t

on ly po l i t ic a l s t r ugg le s a ga ins t c o r po r a t e de ve lopm e n t , bu t a l so po l i t ic a l a c t iv i t y

i n f a v o r o f c o r p o r a t e d e v e l o p m e n t . P e n n s y l v a n i a ' s e x p a n d i n g c h a r te r p o l i c y inthe 1830s a nd 1840s wa s no t s imp ly a spon ta ne o us e xp r e s s ion o f m a r ke t fo r c e s ,

capi ta l i s t in te res t s , o r publ ic op in ion . Capi ta l i s t s and the i r r epresenta t ives in the

l e g i s la tu r e ha d to a c t po l i t i c a l l y t o c ha nge the l a ws to p r iva t iz e t he c o r po r a t ion .

E m p i r i c a l e v i d e n c e o f th e b a c k - r o o m d e a ls , a n d o f th e b u s i n es s l o b b y i n g a n d

gr a f t t ha t t he ne wspa pe r s o f t he da y r umor e d to be r a mpa n t i n Ha r r i sbu r g i s ,

for ob viou s reason s , e lus ive . 43 On the one s ide , Se l le r s (1991, p . 46 ) c la im s

tha t " who le sa l e b r ibe r y" o f s t a t e l e g i s l a tu r e s by c o r po r a t e pe t i t i one r s " f ue l e d

the c ha r t e r ing p r oc e s s . " I n t he s a me ve in , Ne l son ( 1975 , p . 54 ) a dds t ha t l a ws

o f i n c o r p o r a t i o n h a d , b y 1 8 3 0 , b e c o m e " a t o o l b y w h i c h t h o s e i n t e r e s t g r o u p sw h i c h h a d e m e r g e d v i c t o r i o u s i n t h e c o m p e t i t i o n f o r c o n t r o l o f l a w - m a k i n g

i n s t i t u t i o n s c o u l d s e i z e m o s t o f s o c i e t y ' s w e a l t h f o r t h e m s e l v e s a n d e n f o r c e

the i r s e i z u r e upon the l o se r s . " On the o the r s ide , R oy ( 1997 , pp . 72 - 73 ) c l a ims

tha t " the p r ima r y f o r c e t o p r iva t i z e c o r po r a t ions wa s no t t he c o r po r a t ions

the mse lve s , " bu t " the a dvoc a te s o f l a i s se z - f a i r e . " F r om the l a t t e r pe r spe c t ive ,

c o r po r a t e bus ine s s i n t e r e s t s a r e v i e w e d a s pa s s ive be ne f i ci a r ie s o f t he i nde pe nde n t

pol i t ica l p rocess . 44

W e r e c o r po r a t e pe t i t i one r s on the h i s to r i c a l s ide l ine s , wh i l e t he po l i t i c i a ns

a n d j u d g e s l e g i sl a te d a n d r u l e d o n t h e i r b e h a l f ? W h i l e i t s e e m s i m p l a u s ib l e t h a tcapi ta l i s t s were i n a b s e n t i a dur ing the so - c a l l e d " ma r ke t r e vo lu t ion , " t he r e c o r d

sugge s t s t ha t la wm a ke r s w e r e w i l l i ng to do the b idd ing o f c o r po r a t e i n t e re s t s

w i th ou t d i r e c t p r e s su r e f r o m c a p i ta l is t s . A f t e r 1840 , s t a te l e g i s la to r s d id no t ha v e

to be b r ibe d o r c a jo l e d to supp or t ind iv idua l c ha r t e r s a nd ge ne r a l la ws o f i nc o r po -

r a ti o n b e c a u s e t h e y h a d a l re a d y b e e n c o n v i n c e d th a t e c o n o m i c d e v e l o p m e n t a n d

c o r po r a t e de ve lo pm e n t w e r e i nd iv i sib l e . S ponso r ing the c h a r t e r pe t i t ions o f t he i r

c ons t i t ue n t s wa s s imp ly r a t i ona l po l i t i c s . W i th r e spe c t t o c o r po r a t e c ha r t e r ing ,

the n , t he m a x i m tha t " c a p i t a li s t s do no t ha ve to go ve r n in o r de r t o r u l e " is a p t .

I n e i t he r e ve n t , t he ove r whe lming po l i t i c a l suppor t f o r c ha r t e r ing in s t a t e

l e g i s l a t u r e s m u s t h a v e m a d e t h e c o r p o r a t i o n l o o k l i k e a n u n s t o p p a b l e j u g g e r -

na u t t o i nd iv idua l e n t r e p r e ne u r s . W i th l e g i s l a tu r e s s e r v ing a s " c ha r t e r mi l l s , "

t h e e c o n o m i c c o n s e q u e n c e s f o r u n c h a r t e r e d f i r m s w a s c l e a r . F o r i n d i v i d u a l

e n t r e p r e n e u r s , t h e d e f i n i t i o n o f e c o n o m i c r e a l i s m h a d b e e n r e d u c e d t o t w o

a l t e r na t ive s : i nc o r po r a t e , o r be r u ine d by the t hose who d id . Unde r t he ne w

e c o n o m i c ra t io n a l it y , c o r p o r a t e d e v e l o p m e n t b e c a m e a r e q u i r e m e n t o f e c o n o m i c

de ve lop m e n t , a nd po l i t i c a l r e s i s t a nc e be c a m e i r ra t i ona l a nd f u t il e .

B u t t he po l i t i c a l a pa thy o f i nd iv idua l e n t r e p r e ne u r s c a n no t be a t t r i bu t e d e n t i re ly

to a s e nse o f he lp l e s sne s s . F o r t he c o r po r a t e po l i t i c a l c a mpa ign to suc c e e d , t he

o ld " m e r c a n t i l i s t " ima ge o f t he c o r po r a t ion a s a n a r is toc r a ti c a nd mo nop o l i s t i c



34 M A RK C . J E P S O N

i n s ti tu t io n h a d t o b e r e v i s e d to a p p e a s e t h e R e p u b l i c a n c o n v i c ti o n s o f i n d e p e n d e n t

p r o d u c e r s . H a r t z ' s ( 1 9 4 8 ) s e m i n a l s tu d y o f th e i d e o l o g i c a l c o m p o n e n t o f c o r p o r a t e

d e v e l o p m e n t in n i n e t e e n th c e n t u r y P e n n s y l v a n i a r e v e a ls h o w t h e c o r p o r a t io n w a sr e de f i ne d i n " p op u l i s t " t e r m s . I n e f f e c t, i nd i v i dua l p r op r i e t o r s w e r e l e d t o be l i e ve

t h a t th e e x t e n s i o n o f c o r p o r a t e p r o p e r t y r i g h ts t o t h e m s e l v e s w a s i n k e e p i n g w i t h

t h e i r R e p u b l i c a n c o n c e p t o f p r o p e r ty . G e n e r a l a c t s o f in c o r p o r a t i o n w e r e h a i l e d

a s e g a l i t a r i a n a n d d e m o c r a t i c m e a s u r e s , w h i c h e x t e n d e d c o r p o r a t e p r i v i l e g e s

t o a ll , n o t j u s t t h e r i c h a n d p o w e r f u l . I n c o r p o r a t i o n p r o m i s e d t o c r e a t e a m o r e

e q u a l e c o n o m i c p l a y i n g f ie ld b y g i v i n g t h o u s a n d s o f s m a l l b u s i n e ss e s a c c e s s t o

c a p i ta l a n d l e g a l p r o t e c t io n s p r e v i o u s l y d e n i e d t o a l l b u t a f e w l a r g e c o m p a n i e s .

P h i l o s o p h ic a l ly , t h e n e w l a w s o f in c o r p o r a t i o n r e p r e s e n t e d a t r iu m p h o f e c o n o m i c

l i b e r a l i s m b e c a u s e t h e y b e s t o w e d p r o p e r t y r i g h t s u p o n t h o u s a n d s o f s m a l lbus i ne s s ow ne r s . Cu l t u r a l ly , t he ne w l a w s r e p r e s e n t e d a b r i dge f r o m t he pa s t t o t he

p r e s e n t ; t he y a l l ow e d i nd i v i dua l s t o l e a ve be h i nd t he i r i nd i v i dua l e n t e r p r i s e s a nd

t o e n t e r th e n e w c o r p o r a t e w o r l d w i t h a s e n s e o f e x p a n d i n g ( n o t l o s t) o p p o r t u n it y .

A s w i t h a l l l a i s s e z f a i r e d e r e g u l a t i o n s c h e m e s , m a s s i n c o r p o r a t i o n o f b u s i n e s s

w a s e x p e c t e d t o i n c r e a s e e c o n o m i c g r o w t h a n d c o m p e t i t i o n , a n d t h e r e b y r e s c u e

s m a l l b u s i n e s s f r o m m o n o p o l y .

T h e p o p u l i s t i d e o l o g i c a l j u s ti f ic a t i o n t h a t b e s t o w e d m o r a l l e g i t i m a c y o n t h e n e w

i ns t i t u t i on bo r e l i t t l e r e s e m b l a nc e t o e c onom i c r e a l i t y . I n t he s e c ond ha l f o f t he

n i n e t ee n t h c e n tu r y , t h e n e w l a w s u n l e a s h e d t h e f o r c e s o f c o r p o r a t e c o n c e n t r a t i o ni n U . S . i ndus t r y w i t h a ve nge a nc e . I nde e d , h i s t o r i c a l l y , t he c ons e que nc e s o f

e l i m i na t i ng l e ga l r e s t r i c t i ons on c o r po r a t e a c t i v i t y ha ve be e n a ny t h i ng bu t e ga l i -

t ar ia n . A n d y e t , d e s p i te t h e e c o n o m i c h a r m i n v a r i a b ly w r e a k e d o n s m a l l b u s i n e ss

b y d e r e g u l a t io n , b i g b u s i n e ss h a s , t i m e a n d a g a in , b e e n c a p a b l e o f i n v o k i n g

t he l a i s s e z f a i r e doc t r i ne t o m ob i l i z e t he pe t i t e bourge o i s i e be h i nd t he po l i t i c s

o f de r e gu l a t i on .

NOTE S

1. While preceded by many others , the shipment of 365 tons by the Lehigh Coaland Navigation Co mp any to Philadelphia m arked the beginning of regular shipments o fanthracite coal, as well as, the regular collection of statistics. See Jones (1908, p. 12),Jones (1914 , p. 14 ), and W alker (1924, p. 235).

2. Miners' Journal (January 11, 1851, January 12, 1856, January 14, 1860). After theLC N C 's m ono po ly ended in 183 7, only three other corporate producers opened m inesin the Lehigh D istrict in the ensuing decade (Hoffman, 196 8, p. 11 1). In the W yom ingDistrict , the Pennsylvania Coal C om pany replaced the DH CC as the num ber one producerin 185 3, only to be superseded by the Delaware, Lackawanna, and W estern Railroad in1857. Through out the decade, the three giants each controlled at least 25% o f production,and as mu ch as 39%, combining for over 80% o f the total .



E ntrepreneurs or C orpora t ions 35

3 . W i th in th e c l a s s o f in d iv id u a l c o a l p ro p r i e to r s , l a rg e p ro d u c e r s , o r " m a s te r c o l l i e rs , "

t y p i c a l l y m a d e u p 2 0 % o f t h e t o t a l n u m b e r o f p r o d u c er s , a n d a c c o u n t e d f o r 5 0 - 6 0 % o f t h e

reg ion ' s annua l coa l sh ipm ents (Dav ies , 1985, p . 106 ; Year ly , 1961 , pp . 6 5 - 6 6 , 6 8 ). W h i l ea l l c o l l i e r s we re c u s to m a r i ly r e fe r re d to a s " min e r s , " m a s te r c o l l i e r s d id n o t a c tu a l ly d ig

c o a l t h e m s e l v e s. M a s t e r c o l l i e r s g e n e r a l ly m a n a g e d v e r y l a r g e m i n e o p e r a ti o n s , s o m e t i m e s

c o n s i s t in g o f s e v e ra l " c o l l i e ry e s t a b l i s h me n t s " e mp lo y in g o n e -h u n d re d min e r s o r mo re .

P e t t y i n d i v id u a l p r o p r i e to r s m a d e u p t h e o t h e r 7 0 - 8 0 % o f S c h u y l k i l l ' s m i n e o p e r a to r s .

W h i l e r e l a t i v e l y n u m e r o u s , p e t t y p r o d u c e r s p r o b a b l y p r o d u c e d n o m o r e t h a n o n e - q u a r te r

o f th e d i s t r i c t ' s a n n u a l p ro d u c t io n in th e p re -C iv i l W a r p e r io d . T h e ty p ic a l p e t ty p ro d u c e r

produced le ss than 10 ,000 tons annua l ly (Tay lor , 1833 , p . 7 ) . Smal l p roducers were a lsol ik e ly to b e w o rk in g m in e r s , d ig g in g a s in g le d r i f t w i th a f e w p a r tn e r s o r h i r e d h a n d s . M o s t

s ma l l m in e s o p e ra te d o n a v e r y i r r e g u la r b a s i s , d e p e n d in g o n c o a l p r ic e s , a n d c h a n g e d

h a n d s f r e q u e n t ly . Wh i le p e t ty p ro d u c e r s a n d ma s te r c o l l i e r s d i f f e re d g re a t ly in t e rms o f

th e s c a le , r e g u la r i ty , a n d lo n g e v i ty o f o p e ra t io n , th e me th o d s th a t b o th ty p e s o f in d iv id u a lp r o p r i e to r s e m p l o y e d t o m i n e c o a l w e r e i n d i s t in g u i s h ab l e .

4 . S c h u y lk i l l ' s i n d iv id u a l m in e o p e ra to r s we re n o t a lo n e . F o r mu c h o f th e n in e te e n th

c e n tu ry , p e t ty p ro p r i e to r s a n d c ra f t w o rk e r s in m a n y t r a d e s p ro te s t e d th e r i s e o f th e b u s in e s s

c o rp o ra t io n (B a b b , 1 99 6) . An t i - c o rp o ra te a tt i t u d e s we re p re v a le n t in n in e te e n th c e n tu ryA m e r i c a , an d w e r e p a r t o f w h a t h a s b e c o m e k n o w n a s t h e i d e o l o g y o f p ro d u c e r is m . W h a t

d i s t in g u i s h e s th e s t ru g g le s o f S c h u y lk i l l ' s p ro d u c e r s f ro m mo s t o th e r p ro d u c e r i s t p ro te s t s

i s th a t t h e y s u c c e e d e d p o l i t i c a l ly .

5 . S im i la r a rg u me n t s fo r t e c h n o lo g ic a l d e te rm in i s m a re a d v a n c e d b y H o u n s h e l l (1 9 84 ) ,

No r th (1 9 8 1 ) , P io re a n d S a b e l (1 9 8 4 ) , R o b in s o n a n d B r ig g s (1 9 9 0 ) , a n d W i l l i a ms o n (1 9 8 1) .

6 . In th e l a s t two d e c a d e s , e f f ic i e n c y th e o ry h a s c o m e u n d e r in t e n s iv e c r i t i c i s m f ro m

" n e o in s t i tu t io n a l " th e o ry . A n e o in s t i tu t io n a l e x p la n a t io n fo r c l a s s fo rm a t io n , s h i f ts t h e th e o -re t i c a l fo c u s a w a y f ro m th e e f fe c t s o f in t r a - f i rm e f f ic i e n c y (i .e . c o s t r e d u c t io n ) a n d in t e r -f i rm

c o m p e t i t io n to th e s t a b i l i z in g e f fe c t s o f th e ma rk e t in s t itu t io n (s e e D iM a g g io & P o w e l l ,

1 9 8 3 ; Me y e r & R o wa n , 1 9 7 7 ; P o we l l & DiMa g g io , 1 9 9 1 ) . B u t wh i l e th e two th e o r i e s

re c o g n iz e d i f f e re n t me c h a n i s m s fo r c l a s s fo rma t io n , th e y p re d ic t e s s e n t i a l ly th e s a m e o u t -

c o m e - th e in e v i t a b le a s c e n d a n c y o f th e l a rg e c o rp o ra t io n o v e r th e in d iv id u a l e n t re p re n e ur .

F o r b o th th e o r i e s , p o l i t i c s h a s n o in d e p e n d e n t ef fe c t, a n d s e rv e me re ly a s a m e c h a n i s m

b y wh ic h th e c o rp o ra t io n e v o lv e s . Un d e r a t ru ly c o n t in g e n t c o n c e p t io n o f p o l i t i c a l

s t ru g g le s , t h e " e v o lu t io n o f c o o p e ra t io n " p re s u p p o s e d b y n e o iu s t i tu t io n a l i s m i s f a r f ro min e v i t a b le .

7 . I h a v e s in g le d -o u t e f fi c i e n c y th e o ry fo r c r i t i c i s m b e c a u s e i t i s t h e d o min a n t th e o re t i c a l

f r a m e w o rk fo r e mp i r i c a l s tu d ie s o f in d u s t r i a l d e v e lo p m e n t in th e Un i t e d S ta t e s , a n d fo r min -

in g , in p a r ti c u la r . On e s e e min g e x c e p t io n i s a s tu d y b y B o wm a n (1 9 89 ). B o w ma n e m p lo y s

° 'g a me th e o ry " - a v a r i a n t o f n e o in s t i tu t io n a l i s m - to e x p la in c a p i t a l i s t c l a s s o rg a n iz a t io n

(o r r a th e r d i s o rg a n iz a t io n , i . e. ru in o u s c o m p e t i t io n a n d c h ro n ic o v e r -p ro d u c t io n ) a mo n g

o p e ra to r s in b i tu min o u s c o a l min in g . A t t e mp ts b y min e r s ' u n io n s , b y r a i l c a r r i e r s , a n d

b y g o v e rn m e n t a g e n c ie s to o rg a n iz e min e o p e ra to r s ( i .e . r e g u la t e p ro d u c t io n a n d c o n t ro l

p r i c e s ) a l l f a i l e d b e c a u s e th e in c e n t iv e s to c o m p e te ( i .e . d e fe c t ) o v e r ro d e th e in c e n t iv e s toc o o p e ra te . T h e c a p i t a l i s t c o o p e ra t io n a n d c o n c e n t ra t io n th a t c h a ra c te r i z e d mo s t in d u s t r i e s

in th e e a r ly twe n t i e th c e n tu ry we re th wa r te d b y " n a tu ra l " c a u s e s , s u c h a s r e g io n a l

d i f f e re n c e s in th e q u a l i ty o f c o a l , a n d th e v a s t s i z e o f b i tu min o u s c o a l d e p o s i t s ( s p a n n in g

s e v e n s ta t e s ). T h e s h e e r n u m b e r a n d d i f f e r in g s i z e s o f c o a l p ro d u c e r s d o o m e d c o o p e ra t io n ,s in c e th e re we re a lw a y s p le n ty o f o p e ra to r s w i l l in g to d u m p c h e a p c o a l o n e a c h o th e r ' s

ma rk e t s . M u c h l ik e a n th ra c i te s c h o la r s , t h e n , B o w ma n a t t r ib u te s th e a ty p ic a l p a t t e rn o f



36 MARK C. JEPSON

capitalist class formation (competition, instability, and diversity) in bituminous mining to

the peculiarities of geology.

8. Entitled, "The Coal Trade of Pennsylvania," reprinted in Hazard's XLII, January1836 (p. 248).9. In a pamphlet entitled Coal Corporations, published in 1830, advocates of

incorporation argued,

That a greater capital is required for mining than can easily be collected n a copartnery, s no

longer a matter of doubt in Pennsylvania.This point is completelysettled by the Lehigh Coal

and NavigationCompany... The company could not procure the requisite capital to carry onthe coal trade, and found itself compelled o make a new application o the legislature n 1822,

to empower it to hold coal lands.

10. The "towering" mountains of the Wyoming region, claimed the Commission,"presented an insurmotmtable barrier, and bid defiance to individual enterprise," but not

to "a powerful and adventurous company. .. Without an act of incorporation, and the

inducements of mining privileges, this country, now filled with active and enterprising

population, and furnishing one of the best markets in Pennsylvania, would have remained

for many years perhaps a barren waste" (Hazard's XIII, 1834, p. 194).11. The charter itself stated that the SNC was authorized "to make, erect, and set up

any damns, locks, or any other devises whatsoever, which they should think most fit and

convenient to make a complete slack-water navigation from one end to the river to the

other, so as to admit a safe and easy passage for loaded boats, arks, and vessels, up as well

as down the river, or by means of such collateral sluices and locks as they might devise

for the purpose" (Schuylkill Navigation Company, "Opinion of Counsel, on the right ofthe Schuylkill Navigation Company to make another Lock and Canal for the use of the

Navigation at the Fairmount Dam," printed by Hazard's XI, 1833, p. 53).

12. On the Morris and Raritan canals see Jerome Cranmer, "Improvements WithoutPublic Funds: The New Jersey Canals," in Canals in American Economic Development

(1961, pp. 115-203).13. After three decades of reasonably profitable operation, the state sold both canals

to private interests (Powell, "The Pennsylvania Anthracite Industry, 1769-1976,"

Pennsylvania History 47, 1980, p. 6).14. Case studies of medievat miningcommunitiesby Maurice Dobb (1947, pp. 242-250)

and Max Weber (1984, pp. 178-191) provide rare insight into the effects of property.

relations on class formation. For Dobb, the process of driving small producers from the

tin mines of Cornwall and Saxony lasted between four and five centuries because of theenforcement of pre-capitalist mining codes enacted by associations of free miners underthe auspices of local lords. Like Dobb, Weber argued that the gradual separation of mine

owners (i.e. the "mining association") and mine laborers (i.e. the "mining community") inmedieval mining communities was set into motion when free miners began violating their

own egalitarian codes in the late thirteenth century. By the end of the sixteenth century,the working miners' guild had been transformed into a corporation of non-workers which"took a hand in hiring and paying workers as well as meeting of the advances and costs for

the shafts, and set up an accounting for the group as a wh ole.. ." (Weber, 1984, p. 188).15. The practice of petitioningfor a charter with a capitalization far in excess of the funds

needed to conduct the mining business was not uncommon. The LCNC's simply did it inreverse. Like any pyramid scheme, the investors on the ground floor are made whole by thesale of the stock to the public, whereas the public stockholders have to wait for the company




to yield dividends. The problem with most of these early mining corporations is that theywere not in business long enough to produce dividends, let alone coal. In the LCNC's case,

the company's first dividends were paid in 1836, fourteen years after it was incorporated.16. In addition to Breck's pamphlet, Bishop (1907, p. 170) mentions that "numerousarticles were published in the newspapers or were circulated in pamphlet form for thepurpose of impressing upon the public the need of a canal to compete with New York."Also see Sketch of the Internal Improvements Already Made by Pennsylvania (1818), cited

in Hartz (1948, pp. 11, 131).17. While all three canal companies enjoyed state-sanctioned carrying monopolies in

their regions, the LCNC and DHCC located the canal headwaters, and adjoining rail lines,in the middle of their own coal lands. They also priced would-be competitors out by settingprohibitive tolls on coal. The location and tolls of the Schuylkill canal were much morefavorable. Toll rates by themselves were probably not sufficient to open or close the mines

to individual proprietors, but when combined with exclusive legal control of both the com-mercial shipping business and the commercial shipping route, toll rates became a crucialcomponent of a corporate policy to block canal access. Essentially, the only trade routesout of the Lehigh and the Wyoming districts were too costly to reach and too costly to use.

18. For the first two decades of operation, company records clearly show that theLCNC and the DHCC operated as coal companies. The bottom line of both companies wasdetermined chiefly by the receipts from coal sales as opposed to receipts from canal tolls.

19. Both the LCNC and the DHCC eventually entered the coal shipping business, and thetolls on non-company coal quickly became their largest source of tolls, but still constitutedonly a small percentage of their total revenues. Selling their own coal remained their chief

business (Delaware and Hudson Company, 1925, pp. 130-131; Hoffman, 1952, p. 111).

20. On the mining contracts let by the LCNC and the DHCC, see Delaware and HudsonCompany (1925, p. 165), "Report of the Managers to the [LCNC] Stockholders," in

Hazards XI (1833, p. 76), Hoffman (1968, p. 106), and Shegda (1952, p. 154).21. My usage of ideology follows Geertz's (1973, p. 20) definition: "Whatever else

ideologies may be - projections of unacknowledged fears, disguises for ulterior motives,phatic expression of group solidarity - they are, most distinctively, maps of problematicsocial reality and matrices for the creation of collective conscience. Whether, in any

particular case, the map is accurate or the conscience creditable is a separate quest ion. .. "22. For instance, the agents of Little New York Company spent $6,000 on 200 acres of

land, and proceeded to sell $80,000 of its $250,000 in capital stock to New York investors(Yearly, 1961, p. 39). After investing between $6,000 and $8,000 more for mining andcanal boats, the agents returned to New York to sell the remaining $170,000 of stockallowed under their charter (Ibid.). After jus t four seasons in the field, the Little New York

ceased operations.23. See Bartlett (1919, p. 107) and Klein (1940, Chap. 4) on Pennsylvania's early

political culture.24. "In no instance is the vast discrepancy between incorporated monopolies and

individuals more strikingly developed than in the different locations of the coal business.The Delaware and Hudson and the Lehigh Companies are monopolies to the fullest extentwhile Schuylkill is open to the enterprise of all" (Miner's Journal, August 28, 1830). Forsimilar anti-corporate editorials by Bannan, see Miners' Journal May 30, 1829, November

21, 1829, February 13, 1830, February 27, 1830, August 14, 1830, September 25, 1830,February 19, 1831, May 2, 1840, June 6, 1840.25. Twenty other individual operators signed their names to a total of nine statements,

denouncing corporations to an equal or less or extent.






prevalent in Pottsville, never developed (Miners' Journal, July 20, 1839, August 10, 1839,

October 5, 1839).

35. In May of 1832, a convention was held in Allentown to the south of the Canal,while in July, a convention of citizens of the northern counties met in Conyngham. A thirdconvention met in December, but the location is not given (Jones, 1908, p. 21).

36. Suspecting that the toll reduction for 1834 would not lead to a permanent change

in toll policy, the Anthracite Commission (1834, p. 196) urged the legislature to acceptthe LCNC's offer to purchase the canal. By the time the Commission presented its

recommendation in March of 1834, criticism of the LCNC had subsided, and the politicalmomentum for a state buy-out had dissipated (Shegda, 1952, p. 273). After eight yearsof building the largest public works project in the nation, the state of Pennsylvania hadamassed a deficit approaching $25,000,000, and could scarcely afford the $3,000,000

asking-price for the Lehigh Canal (Bishop, 1907, p. 213).

37. The raftsmen remained free to carry on the river trade, but competition from thecanal boats subsequently drove them from the region. See LeRoy (1950, pp. 17-18) and

Wakefield (1965, p. 71).38. Reprinted in the Miners ' Journal, September 26, 1829. In 1831, two other widely

circulated pamphlets attacked the DHCC. The first pamphlet was actually an anonymousletter, entitled "Exposition of the Objects and Views of the Delaware and Hudson CanalCompany, signed by "Investigator" (reprinted in the M iners ' Journal, April 2, 1831). Thesecond represented the views of the Philadelphia backers of the Morris Canal (Bogen,1940, p. 110). Reminiscent of Algonquin, both alleged that the weak financial position ofthe DHCC would invariably force the company to keep coal prices high. As Investigatorcharged, "Your pledge was that you would bring to market better and cheaper coal than had

ever been brought before. Neither of these pledges are yet redeemed ... . If the experienceof 1830 does not bring you to a sense of justice to that public from which you havereceived such unexampled aid, I shall consider you, and so will all of our citizens, the mostincorrigible speculators whoever partook of the public bounty."

39. The company had publicly vowed to reduce the retail price of its anthracite from$8.00 a ton in 1829 to $3.00 a ton in 1830 (Mine rs ' Journal, November 21, 1829), butwhen the season opened in 1830, the price of its coal in New York City was still $8.00 aton (Jones, 1908, p. 61).

40. In 1832, consumers responded to the high coal prices by forming the "New YorkAssociation of Consumers of Fuel," whose stated purpose was to "adopt measuresto ensure the regular supply of fuel at fair prices"

(Miners' Journal,March 10,

1832).41. That same April of 1830, the state of New York chartered the Hudson and Delaware

Railroad Company to construct a railroad linking New York City to the Lackawaxen Valley,at the heart of the DHCC's corporate territory. The Hudson and Delaware's New Yorkcharter and "detailed prospectus" gave every appearance of a serious contender (Delawareand Hudson Company, 1925, pp. 68-69), but by the summer of 1830, the proposed cartierwas a memory.

42. In another less notable attempt to break the DHCC's control of the WyomingDistrict, the promoters of the Jefferson Railroad Company managed to sneak a charter bil lthrough the legislature in 1851. But, like its predecessors, the company failed to secure

financing for the project. Sixteen years later, in 1867, the Erie Railroad purchased the rightsfrom the Jefferson Railroad Company to consmact part of the same route it had originallyproposed twenty years earlier (LeRoy, 1950, pp. 64, 74).




4 3 . I n 1 8 4 6 , t h e Doylestown Democrat c h a r a c t e r i z e d t h e c o r p o r a t e l o b b y i s t s i n

H a r r i s b u r g a s " h u n g r y c o r m o r a n t s " a n d " s m a l l p a r a s i t e s " ( q u o t e d i n H a r t z , 1 9 4 8 , p . 7 2 ) .

4 4 . H a r t z ( 1 9 4 8 ) a l s o h o l d s th i s v i ew .

A C K N O W L E D G M E N T S

M y t h a n k s t o t h e ed i t o rs o f Politi cal Power and Social Theory o r a c c e p t i n g t h i s

m a n u s c r i p t f o r p u b l i c a t i o n , a n d t o t h e r e v i e w e r s f o r t h e i r i n v a l u a b l e f e e d b a c k .

I a ls o w i s h t o th a n k P r o fe s so r M a u r ic e Z e i fl in a t U C L A , w h o s e c o m m e n t s a n d

c r i t i c is m s h a v e a l w a y s b e e n h o n e s t , il l u m i n a t i n g , a n d in s p i r a t io n a l . I d e d i c a t e t h i s

w o r k t o m y f a th er , w h o t a u g h t t h e t ru e m e a n i n g o f c l a s s s t r u g g le t o m e .

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Documents

Jepson, Mark–Entrepreneurs or Corporations. Divergent Patterns of Class Formation in the Early Anthracite Mining Trade, 1815-1860