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Seton Hall University Dissertations and Theses
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Seton Hall University Dissertations and Theses
2009
James Brooks Dill: Father of the Trusts
Elizabeth Ann Schiller
Seton Hall University
Follow this and additional works at: http://scholarship.shu.edu/dissertations
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Recommended Citation
Schiller, Elizabeth Ann, "James Brooks Dill: Father of the Trusts" (2009). Seton Hall University Dissertations and Theses (ETDs). Paper
901.
James Brooks Dill: Father of the Trusts
BY
Elizabeth Ann Schiller
A Thesis Submitted in
Partial Fulfillment of the
Requirements for the Degree of
Master of Arts
in History
at
Seton Hall University
June 2009
Table of Contents
Introduction
Part One
Part Two
Epilogue
Bibliography
Advisors
Thomas F. Rzenik, Ph.D.
Williamjames Hull Hoffer, J.D., Ph.D.
Committee Members
Mark Molesky, Ph.D.
Maxine Lurie, Ph.D.
Introduction
James Brooks Dill often expressed the belief that he lived during exceptional times. In
some ways, he was correct. Dill, though too often overlooked by historians, was both a
reflection of and a critical contributor to those times. Born in the middle of the nineteenth
century, Dill organized his life's work as a corporate lawyer around the defining transformations
in the American economy that occurred between then and his death in 1910. Possessing a
remarkable ability to quickly assess and respond to political, social, and economic change, he
exuded the opportunism and insistence on progress characteristic of a great businessman, in
addition to the caution and attention to technicalities that his legal training instilled in him. Like
other Progressives, he was practical above all else, but happily included political philosophy and
moral principles in his public statements when it served his purpose. Thanks to this foresight
and ideological flexibility, Dill served the trusts in multiple roles between 1890 and 1905. This
paper traces Dill's career from a behind-the-scenes policymaker and catalyst to publicist for
large-scale enterprise as a whole. By adopting the language of reformers in his publicity efforts,
James Brooks Dill successfully integrated his ideas into mainstream politics and helped secure
the status of the large corporation in the modem economy. As such, his story lends insight into
the origins of modem business law, the role of the individual in shaping policy, and the muchdisputed nature of the Progressive ~ r a . '
Like Dill's idol, Alexander Hamilton, the nature of state and national law in a federal
system was the primary political concern surrounding his work. In the second half of the
nineteenth century, business activity was increasingly national, although incorporation and
I
James Dill (1854 -1910) is mentioned in numerous works, but not yet the sole focus of a careful historical account.
For biographical entries, see The Americana, edited by Frederick Beach, hominent and Promssive Americans 11,
edited by Mitchell Hanison, and, more recently published, The Yale Bioeravhical Dictionan of American Law,
edited by Roger Newman.
regulation were handled by the states. Capitalizing on the weakness of federal regulation and the
disparity between states, Dill designed New Jersey's policies to be among the most permissive in
the country. Anticipating both businesses' and politicians' needs, he devised a plan that lifted
New Jersey out of crushing debt and incubated some of the largest and most influential industrial
trusts.
Always the opportunist, Dill went into business himself and founded the Corporation
Trust Company in 1892. In this pursuit, he profited immensely from helping companies comply
with the technicalities of the statutes he authored, while evading any restrictive purpose of those
laws. That same year, in what appeared to be a victory for the antitrust movement, the Supreme
Court of Ohio decided the trust agreement that created John Rockefeller's Standard Oil
Company was illegal. Because of Dill's maneuvering, Standard Oil and other influential trusts
not only weathered these antitrust efforts and the depression of 1893, they continued to grow.
The merger movement of the late nineteenth century would not have played out as it did without
Dill's work. Part One examines the framework Dill established to protect the trusts, in New
Jersey law and through the Corporation Trust Company.
With so many prominent companies organizing in New Jersey, the state also attracted the
nation's attention. Public opinion about Dill and his work reveals the mixed sentiments about
industry around the turn of the century. No one could deny that, as Dill liked to point out,
enterprise created unprecedented prosperity for many Americans. But large-scale industry also
concentrated economic power in new and firightening ways. Americans perceived a threat to the
individual autonomy at the core of democracy. As antitrust sentiment intensified across the
country, the consequences of Dill's actions became increasingly controversial.
Increasing fear of industrial combines meant that Dill needed to be an advocate not only
for those trusts he was paid to represent, but for the corporate form, generally. Part Two covers
the second phase of Dill's career, when he took on the role of publicist in political, professional,
educational, and popular circles. He took this facet of his job as seriously as his law practice and
business ventures. As with one particularly embarrassing moment during a testimony before the
Industrial Commission, he became extremely defensive when he was caught unprepared.
Cautious to avoid being cornered by his own words, he had the amusing habit of attributing his
own opinions to fictitious characters in stories he would tell.
Dill mastered the art of invoking politically stimng language, but that should not be
misinterpreted as genuine espousal of those ideas. Industry's advocates were not motivated by
any pure economic philosophy. They sought market flexibility and stability according to
whichever served their current interest. Enterprise championed competition and laissez-faire
until they were dominant, at which point influential companies preferred anti-competitive
practices and stability.
Dill applied these market principles to law and politics. When his incorporation policies
assured that New Jersey charters were the most desirable in the nation, he explicitly cautioned
against federal incorporation (even if, in some circles, he mentioned national corporation law
vaguely). When Delaware, New York, West Virginia, and South Dakota threatened to beat New
Jersey at its own game, Dill began to argue for optional federal incorporation.
Dill was frank about this practicality. He admitted to trying to manipulate public opinion
and successfully manipulating friends. In part because of this, though he embodied everything a
zealous advocate ought to be, he earned more respect outside of his profession than within it.
Colleagues in professional circles criticized Dill's vagueness and reliance on home-spun appeals
to American morality. This same equivocation that make's Dill's real feelings so difficult to
discern led Progressive politicians, most notably Theodore Roosevelt, to seek out his services for
their own political purposes. Dill was influential not in spite of his obvious contradictions, but
often because of them.
James Dill's legacy is no less complicated than his reputation while he was alive. The
discrepancy between his words and actions makes it impossible to extract meaning with only a
cursory study of his life and work. Unfortunately, that is all historians have yet to undertake.
In place of a careful study, politicized accounts have dramatized and distorted Dill's
story. Taming the Giant Comoration, by Ralph Nader, and In Defense of the Comoration, by
Robert Hessen, contain politically opposite, if equally presentist, commentaries on Dill and his
work. In The Speculation Economy, legal scholar Lawrence Mitchell described Dill as, "John
Wayne with a briefcase." Samuel Haber examined Dill's conspicuous absence from the
leadership of the American Bar Association in The Ouest for Authority and Honor in the
American Professions. 1750-1900.' While they do not explore how or why Dill earned both
respect and infamy, these accounts demonstrate that Dill's career is both historically significant
and politically relevant.
Though historians have largely ignored James Dill, they have advanced many arguments
as to the nature of Progressivism. In particular, historians have struggled with resolving
Progressivism's radical rhetoric and conservative consequences. Initial accounts of
Progressivism were written by historians who sometimes participated in reform movements and
certainly were sympathetic to them. These narratives emphasized the radical, grass-roots nature
Ralph Nader, Taming the Giant Comoration (New York: Norton, 1977); Robert Hessen, In Defense of the
Cornoration (Stanford: Hoover Press, 1979); Lamnce E. Mitchell, The Soeculation Economy: How Finance
Triumphed Over IndusQ (San Francisco: Berrett-Koehler, 2008); Samuel Haber, The Ouest for Authoritv and
Honor in the American Professions, 1750-1900 (Chicago: University of Chicago Press, 1991).
of reform. Benjamin Parke De Win's work, The Promessive Movement, demonstrates this
perspective. De Win stressed consensus among citizens who, he claimed, worked together to
protect their collective needs in industrial s ~ c i e t y .These
~
early accounts uncritically accepted
that government responded to reformers' demands at the expense of corporate interests.
In The Age of Reform, Richard Hofstadter took issue with Progressive historians' claims
that reform was a bottom-up movement. His debatably consensus retelling argued that
Progressive reform was the result of a middle-class effort to secure a place in society and
institutionalize their m~rality.~
The organizational synthesis came out of the later consensus
school and focused on larger trends and the actions of groups. Samuel P. Hays's work,
Response to Industrialism, is typical of this approach. He argued that modem society is the
result of the ways in which Americans reacted to the "wrenching social changes" brought on by
ind~strialism.~
Hays thought private economic might was dangerous because "no public agency
could restrain it."6 Though the focus of Hofstadter's and Hays's studies changed, they both
accepted Progressive historians' assumption that government was, or at least aimed to be, a
counterpoint to business interests. This oversight is part of why they failed to explain why
Progressivism ended as it did.
Revisionist historians were not content with that assumption. Undoubtedly influenced by
the zeitgeist of the 1960s, New Left historians attempted to fill the holes in existing narratives by
exploring alignment of powerful groups as a possible explanation for the discrepancy between
reform sentiment and conservative consequences. Gabriel Kolko advanced a novel thesis along
these lines in 1963 when he published The Triumph of Conservativism. He completely rejected
3
Benjamin Parke De Witt, The Promessive Movement: A Non-Partisan: Comnrehensive Discussion of Current
Tendencies in American Politics (New York: Macmillan, 1915).
Richard Hofstadter, The Ane of Reform (New York: Vintage Books, 1955).
5
Samual P. Hays, The Resuonse to Industrialism. 1885-1914 (Chicago: University of Chicago Press, 1957), 1.
Ibid., 112.
'
Progressive historians' argument that reform was led by grass-roots groups concerned with social
welfare. He suggested instead that businessmen led reform efforts in an attempt to secure their
continued dominance.' Martin Sklar presented a well-researched study in this same vein with
The Comorate Reconstruction of American Capitalism 1890-1916: The Market. the Law. and
u.
Sklar's extensive analysis of antitrust law highlights the influence of pro-corporate
interests on politics.8 Both Sklar and Kolko mention James Dill, but their national focus
prevents a thorough understanding of his work and its consequences? Incorporation, which any
serious study of the trust debates must address, was then and is still within the realm of state law.
Where Kolko and Sklar found a deliberate, almost conspiratorial effort, other historians
have dismissed the inconsistencies of Progressivism by arguing that there was no single
Progressive movement. In "An Obituary for 'The Progressive Movement,"' author Peter Filene
insists that historians who study the Progressive Era must avoid generalizations and embrace
complex agency. Filene, correctly, emphasized the mixed motives behind reform.1°
This study benefits from existing narratives as it attempts to offer new insights into
similar questions. Like Kolko, it was sparked by curiosity in "'what might have been."'"
This
paper does not discuss the very real strain of radical Progressive reform, not because the author
dismisses its genuine intent, but because it was not the movement that prevailed. Instead, this
paper pursues the contradictions between reformist language and the conservative legacy of
Progressivism. It asks: how could a period most famous for grass-roots reform and trust-busting
7
Gabriel Koko, The Triumvb of Consewativism:A Reinternretation of American Histow, 1900-1916 (New York:
Free Press. 1963).
,. 1-10.
Martin J. Sklar, The Cornorate Reconshvction of American Cavitalism. 1890-1916:the Market. the Law. and
Politics (New York: Cambridge University F'ress, 1988).
Koko, 64,69; Sklar, 335.
loPeter G. Filene, "An Obituary for 'The Progressive Movement,"' American Quarterly Vol. 22, No. 1 (Spring
1970), 20-22,33-34.
" Kolko,
1.
see the emergence of the modem corporate-capitalist economy? What was the role of law in
securing the dominance of the corporate form?
New Jersey corporation law must be part of that answer. DuPont, General Motors,
Standard Oil, and U.S. Steel all sought New Jersey charters during the merger movement
following the Sherman Antitrust Act of 1890. The state became notorious for its permissive
corporation laws that undermine national antitrust efforts.
James Brooks Dill was the mind behind these laws. His influence is too important to
have escaped careful historical examination for so long. This study seeks to provide a thorough
and historically-grounded analysis of his work in New Jersey. Set against the national debate
over trusts and incorporation, a personal study lends insight into motive and causation the way
more generalized, national accounts cannot. In doing so, it contributes to the understanding of
those works and offers one example against which to test their generalizations.
Whenever possible, this paper extracts Dill's story from his own words. Dill's defense of
New Jersey's policies before the Industrial Commission and publicity efforts in national political
and professional forums provide especially fruitful sources. These writings and speeches convey
carefully calculated sentiments and must be considered a performance. When his words are
assessed in relation to his actions and with an understanding of his personality, they reveal one
possible explanation for the inadequate patchwork of modem corporation law that emerged in
the period between 1890 and 1910.
This study suggests that personal ambition played a significant, but previously
underappreciated role in the creation of modem business law. The larger, more organized efforts
that some historians have attributed with these developments were simply not required.
Disorganized national politics and ineffectual law enforcement contributed to a political and
legal environment where ambitious men, like Dill, could shape state and national law as they
manipulated it to serve their immediate needs.
Part One
James Brooks Dill was born on July 25, 1854, at Spencerport, New York. His father,
James H. Dill, was a minister and his mother, Catherine Brooks Dill, came from a prominent
Connecticut family. The younger James was just five years old when his parents moved the
family to Chicago. They set up a home on Calumet Avenue so that his father could serve as
Reverend at the South Congregational church.'*
When the Civil War broke out, the elder James left his young family and volunteered to
serve as Chaplain of the 89" Illinois Infantry Division. Though he did not engage in combat, he
suffered from "exposure and privation" which led to his death in January of 1863. Dill's eightyear-old son saw his father for the last time thanks to the charity of a Mr. J. E. Bishop, who paid
to have James's remains brought home from ~ashville.'~
His father's death and physical
distance from his mother's family left James Brooks Dill isolated and serious from a very young
age.
Dill carried that experience with him when he left his mother to begin his educational
career. In 1868, he enrolled in the Oberlin Preparatory Academy. He was admitted to Yale
University four years later. There, Dill displayed a nearly obsessive dedication to his studies.
But he did not particularly value education as an end in itself. He worked to support himself
throughout his time at Yale and treated his education as a means to material advancement.
Nevertheless, he graduated with honors in 1876.14
Upon graduation from Yale, Dill headed to Philadelphia. For one year, he worked as a
teacher while studying at the law office of E. Cope Mitchell. He made such good use of that
12
13
l4
Mitchell C. Harrison, Prominent and Promssive Americans I1 (New York: Tribune, 1904), 71.
"The City," Chicago Tribune (January 3 1, 1863). 4;Harrison, 71.
Frederick Converse Beach, ed, The Americana (New York: The Americana Company, 191 l), 15.
year that when he subsequently enrolled in New York University Law School, he was admitted
to the senior class. He taught at Stevens Institute in Hoboken and studied at New York
University in the evenings. He was salutatorian of his class when he graduated in 1878."
For all his educational accomplishments, Dill did not earn enough at his first job to pay
for transportation to and from work.16 After being admitted to the bar in 1878, Dill took an
unsatisfyingjob with no promise of advancement. Preferring to work for himself, Dill set up a
private practice in a "cell-like, top-floor office."" An ambitious young man, Dill searched
fervently for the next big movement that would incite a change in law.18
Fortunately for Dill, he began his career during a transitional period in American society.
Urbanization, industrialization, and nationalization sped up in the 1870s and 1880s. Immigrants
moved into urban centers and were met by nativist prejudice and sickening living conditions.
The wealthiest industrialists and financiers grew exponentially richer, while swelling urban
masses endured corruption in city politics and concentration and abuse of economic might.
Middle class employment changed as small businesses disappeared- either bought out or shut
down by the newer, larger companies. Larger, bureaucratized corporations created white-collar
management jobs instead. Every aspect of life seemed to be growing larger and more impersonal.
Many Americans mourned the passing of traditional society. The opportunities for social
mobility and success based on individual efforts seemed to be narrowing. Allocation of power
became the key issue.lg
l5 Harrison, 71; Edward Q. Keashey, The Courts and Lawers of New Jersey, (New York: Lewis Historical
Publishing Company, 1912), 285-286.
16
Beach, ed., 15.
" "The Lawyer Who Earned Title of Being Father of the Trusts" The Wall Street Journal (December 28,1907), 6.
18
Beach, ed., 15.
19
Robert H. Wiebe, The Search for Order. 1877- 1920 (New York: Hill & Wang, 19-57), 12-13; Lawrence
Friedman, A Histow of American Law (New York: Touchstone, 2005), 253-255.
Individuals organized into interest groups to assert their position in society. Business
associations, labor unions, and other groups organized around shared economic interests were
especially important.20 Labor strikes and violent industry overreaction scared and divided
Americans. The conflict that pitted pro-corporate elements against laborers and middle class
groups had escalated past the point of easy reconciliation. Both sides needed lawyers.
Dill found his opportunity. Always hoping to advance his social status, he naturally sided
with the ruling minority. He accepted the belief, held by both pro-corporate interests and some
wistful Populists, that large-scale industrial development was inevitable.*' He hoped that
aligning himself with pro-corporate elements in society would propel his career alongside their
"irresistible c o u r ~ e . " ~
To work with the most powerful companies, Dill needed to prove that he could anticipate
corporations' needs. Instead of attracting businesses by tax exemptions or driving them out with
restrictive regulations and prohibitive fees, Dill proposed a calculated moderation. He devised a
plan that would allow for quick and easily obtained general incorporation charters, for a price.
Taxes would be set below those of other states. He hoped this would attract a large volume of
incorporations and, by extension, substantial profits to the state. Dill knew that if he could find a
cooperative politician, his arrangement would relieve his financial troubles and those of the state
who enacted it.
Dill initially proposed his plan to New York politicians, but no one took him seriously.
Having moved to East Orange in 1880 after his marriage to Mary Hansell, Dill turned to his new
home state. When he learned about New Jersey's debt problem, he hoped the state might be
Friedman, 254-255.
Jeremiah Jenks, The Trust Problem (New York: McClure, 1903), 23.
22
Andrew Camegie, "Popular Illusions About the Trusts" Century Magazine (May 1900) in The Gosoel of Wealth,
(New York: The Century Co., 1901), 102.
20
21
desperate enough to take chance on him. New Jersey also offered something New York did not:
access to businesses located in both New York City and ~hiladel~hia.'~
He believed that New
Jersey was the ideal place to execute his plan.
New Jersey earned a reputation for accommodating industry very early in American
national history. The state's location between New York and Pennsylvania provided ample
opportunity for the transportation business. Alexander Hamilton figured that out by 1791, when
he secured a charter for the Associate of New Jersey Company, which acquired unqualified
ownership of thirty-six tax-exempt square miles in what would later become the city of Paterson.
Hamilton joined with other investors to form the Society for Establishing U s e l l Manufactures,
designed to protect the interests of the Associates of New Jersey Company. The state seldom
enforced any boundaries separating business associations and governing bodies. The Society
exercised eminent domain over land and other property that it deemed necessary for the purpose
of the Associates of New Jersey Company's ferry business.24
The transportation industry continued to play a crucial role in New Jersey's development
during the economic expansion of the nineteenth century. In 1830, the New Jersey General
Assembly granted a special charter to the Camden and Amboy Railroad and Transportation
Company along with the Delaware and Raritan Canal Company. In exchange for a monopoly on
the route from Philadelphia to New York City, these Joint Companies provided at least $30,000
each year, enough to rn the state government. In addition to this direct contribution, rail
transportation encouraged other industries to develop in New ~ e r s e ~ . ~ '
23
Keasbev,
- . 286.
Lincoln StefFens, "New Jersey, A Traitor State," in The Shvgale for Self-Government (New York: Johnson
Reprint Corporation, 1968), 253; Maxine Lurie and Marc Mappen, eds., Encvclooedia of New Jersey (New
Brunswick: Rutgers University Press, 2004), 753.
2 5 ~ a x i nLurie,
e
A New Jersev Anthology (New Brunswick: Rutgers University Press, 2002), 11-12; Lurie and
Mappen, eds., 113.
24
New Jersey needed the Joint Companies' contribution so desperately because of another
long-standing state tradition. Aversion to taxes, dating back to the colonial period, made it
nearly impossible for the government to collect funds from its citizens. Whether the state was
loaning money at interest or granting special charters for a fee, they relied on businesses
operating within the state. Even though some citizens complained that the company had poor
service and inflated prices, politicians accepted the Joint Companies' monopoly status out of
necessity.26
In 1871, the Camden and Amboy Railroad forfeited its own privileged status when it
leased all of its property to the Pennsylvania Railroad. This began a trend of exploitation and
abandonment that left New Jersey residents feeling as if they were in a '"barrel tapped at both
ends."'27 In 1875, the state still had 2.5 million dollars of debt left over from the Civil
With the state's main source of revenue gone, and the political challenges associated with raising
taxes, New Jersey was desperate.
If Dill was the perfect lawyer to take on this challenge, Leon Abbett was the perfect
politician. Abbett, New Jersey's foremost Democratic leader, was as ambitious as Dill and even
more energetic. Like Dill, he was a New York attorney and a self-made man. He began his
career at the corporate law practice of prominent New York City attorney William J. Fuller.
Fuller encouraged Abbett's involvement in politics, which began in 1864 when he was elected to
represent his adopted hometown of Hoboken in the state general assembly. For the duration of
the Civil War, Abbett remained quiet on controversial issues, choosing to focus on making
connections. He aligned his views with the Copperhead wing of the Democratic Party and
Lurie, A New Jersev Antholom, 2-3.
27 Benjamin Franklin as quoted in Lurie, A New Jersev Antholopy, 1.
28
Christopher Grandy, The Economics of Multiole Governments: New Jersev Corporate Chartermongerin=. 18751929 (Berkeley: University of California, 1987), 49.
26
gained a reputation for extreme party loyalty.29 Democrats rewarded this loyalty in 1865 when
members chose Abbett as Chairman of the Democratic Assembly caucus, a position he held for
two years?0 In 1867 Abbett made a strategic move to Jersey City in hopes of expanding his base.
This paid off immensely; he was reelected to the general assembly for the next two years and
chosen as speaker by his fellow a~sembl~men.~'
The speakership positioned Abbett to make his mark in New Jersey politics. He aligned
himself with established interests, like the Camden and Amboy Railroad (still a New Jersey
company) and rising ones, most notably Jersey City's Irish Catholics. Abbett skillfully
politicized the issues that he knew were most important to his constituents. During his time as
president of the Jersey City Board of Education, Abbett successNly fought for Irish Catholics'
desire to neutralize the overtly Protestant nature of school prayer. He promised to continue this
attentiveness when he ran for the position of Hudson County state senator in 1874. Even though
standing up for Irish Catholics alienated the nativist faction of the Democratic Party, Abbett's
efforts paid off with a win.32 As senator, Abbett kept his campaign promise of home rule for
Jersey City, turning more of the state's Democratic leadership against him?3
In 1877, Abbett l e d the cost of factionalism. Even though he was regarded as New
Jersey's strongest candidate, Abbett's practice of representing multiple interests left him with too
many enemies.34 Democratic Party bosses undermined Abbett's effort to secure the nomination
for Governor. He stepped out of the spotlight after this personally devastating failure, made
F)
Paul A. Stellhorn and Michael J. Birkner, Eds., The Governors of New Jersey (Trenton: The Commission, 1982),
149; Richard Hogarty, Leon Abbett's New Jersey (Philadelphia: American Philosophical Society, 2001), 1-2.
'O "Leon Abbett is Dad," The New York Times (December 5, 1894), 5.
31
Stellhorn and Birkner, eds., 149.
" Stellhorn and Birkner, Eds., 150-15 1 .
33
"The Democratic Factions and Their Re-Districting Schemes- The New Charter for Jersey City," The New York
Times (January 22, 1878), 5.
'"'A Lively Time in Trenton," The New York Times (September 19, 1887), 1; "The Field in New Jersey," The New
York Times (September 8, 1877), 5.
worse by the illness and subsequent death of his wife, Mary Briggs, in 1879. After losing the
nomination in 1877, Abbett served as corporation counsel in Jersey City. The largest
corporations were still in transportation, but that was quickly diversifying. Abbett's work as
corporation counsel drew on his private practice expertise and allowed him to establish himself
as an authority on the economics of railroad policy and taxati~n.~'
Abbett's experience as corporation counsel would come in handy when he was
nominated for governor in 1 8 8 3 . ~He~ campaigned on the promise that he would tax railroads to
raise revenue for the state, which the railroad companies interpreted as being very hostile to
business. This was a huge political risk, but it resonated with voters. Abbett succeeded in
winning the governorship and immediately addressed corporate taxati~n.~'
In his Inaugural Address, Abbett called for "radical reform" of the current tax laws that
"impose unequal burdens." He questioned the validity of "contracts which exempt valuable
property from taxation" and attacked the state courts for upholding them. Beyond the question
of these contracts validity, it was politically expedient for Abbett to find a way to tax all
corporations. He explained the budget deficiency in his address and suggested there were only
two possible solutions. Rather than "place heavier burdens upon the farms, and homes, and
industries" of citizens, Abbett proposed that the treasury might be supplemented by taxing all
corporations "that are enjoying the advantages and privileges under our laws."38
Abbett did not waste time acting on his proposal. In April of 1884, he proposed measures
to increase state taxation of railroad and "miscellaneous" corporations that the Legislature
35
36
Stellhorn and Birher, Eds., 151-152.
The Jerseyman (September 2 l,1883), 2.
Hogarty, 2-3.
Leon Abbett, " I n a u g d Address" (January 15,1884).
''
enacted in April of 1884. In his second annual message to the General Assembly, Abbett
confidently exclaimed that his actions would "forever render a state tax unnecessary."39
Enacting this tax proved far simpler than getting companies to actually pay for what they
claimed was an "unjust burden." Abbett was very much the modem executive, but he did not
have the support or resources to cany out his plans. Companies simply did not accept the
estimates of the State Board of Assessors, and, if they paid at all, did so according to their own
calculations. At the time he delivered his second annual message in 1886, companies had
instigated 34 cases that were pending in the State Supreme Court. The Attorney General's office
was overwhelmed with "every possible constitutional and legal objection to the taxes." While
Abbett insisted that "the State has ample power to enforce its rights in reference to taxation," he
struggled to exercise this power throughout his three-year term?'
When Abbett's first term was over, he tried and failed to obtain a nomination for the US.
Senate. He immediately began working towards a second term as governor. From 1887 to 1889,
he worked as counsel for the liquor dealers' association, one of the largest sources of campaign
funding.4' Abbett knew that he would have to demonstrate a continued commitment to raising
revenue without directly taxing citizens."
Abbett's confrontations with corporate interests during his first term, and his subsequent
reliance on funding from the liquor dealers' association taught him that moneyed interests were
too powerful to upset. If he wanted succeed politically, he would have to work with businesses,
the more powerful, the better. This shift in Abbett's thinking prompted him to look for an
equally practical, grounded man.
39
"Governor's Message," True Democratic Banner (January 14, 1886), 1-2.
Ibid.
41
Sackett, 355-356; Stellhorn and Birkner, Eds., 153.
42
Hogany, 3-5.
In 1889, Abbett defeated Republican Edward B. Grubb easily. At his 1890 inaugural
address, Abbett affirmed his commitment to solving the State's financial dilemma. He attempted
to assure attendees, saying, "I still entertain the views expressed in 1884." He summarized the
problem by presenting the income of the previous year, $1,335,000, with the government's
minimal expenditures of $1,370,000. Abben chastised the Legislature for making
"appropriations for various purposes, without providing any means for payment thereof." This
time, when he vowed to collect revenue from corporations, he had help following through."
James B. Dill was establishing himself as a corporate lawyer when Abbett sought his
advice in the summer of 1890. Dill had already published a pamphlet entitled "Business
Companies: Their Formation and ~dvanta~es.""He told Abben about his plan for attracting a
large volume of corporations by streamlining applications for incorp0ration.4~
That same year, Dill, at Abbett's requests, began a study of New Jersey law. He
proposed to the governor ways in which existing statutes ought to be revised. The most
consequential for attracting corporations dealt with initial incorporation. Since railroads were
the first large-scale enterprises, incorporation law addressed their needs more directly.
"Miscellaneous" corporations had an uncertain legal status. Dill knew companies needed
security above all else. Even after New Jersey's General Incorporation Act in 1875, the process
for seeking incorporation was too time-consuming and not explained explicitly enough to attract
companies to the state. Dill suggested that plain, direct language, appealing to the businessman
rather than the lawyer or politician, would more effectively promote the policies of the ~tate.4~
Leon Abbett, "Inaugural Address'' (January 2 1, 1890).
Hogarty, 291-292.
45
Statement to Ofticers and Executive Committee of the Law Alumni of the New York University.
46
Edward Q. Keasbey, "New Jersey and the Great Corporations," (Address, American Bar Association, Buffalo,
N.Y., August, 28, 1899).
43
44
Aware of the animosity towards the trusts, Dill devised a way for New Jersey
corporations to avoid the trust form while still achieving equivalent levels of centralized control.
Refining an 1888 statute that permitted companies to own stock in other companies, Dill
engineered a way for corporations to pay for that stock by issuing their own stock. There were
no enforceable regulations as to how directors valued that stock. This revision made it even
easier for multiple companies to be effectively organized under one executive and a single board
of directors. These directors, Dill insisted, needed protection from liability except in the most
extreme cases of fraud before the flexibility of New Jersey law would attract them to the state.
Accepting these suggestions, the General Assembly permitted New Jersey corporations the same
concentration of power characteristic of the trust form, while shielding the company from that
stigma and directors from re~~onsibility.~'
In the early 1890s, the trust issue was not effectively dealt with in national politics.
Federal antitrust legislation relied on state enforcement, which set off a period of conflict
between strict and permissive states. New Jersey's policy of permissiveness had repercussions
far beyond the state borders.
The same year that Abbett began his second term, Congress enacted the Sherman
Antitrust Act. The Act represented what small business owners and moderate antitrust groups
wanted from government regulation: federal promotion of competition with freedom of contract
and minimal regulation. It did not make large-scale enterprise illegal, it only slightly limited the
ways a corporation might pursue growth. 48 The Sherman Antitrust Act stated:
" Edward Q. Keasbey, "New Jersey and the Great Corporations," (Address, American Bar Association, Buffalo,
N.Y., August, 28, 1899); Industrial Commission, Preliminary Report on Trusts andlndustrial Combinations,
(Washington: Government Printing Office, 1900), 11-12.
48 Sklar,34.
Every contract, combination in the form of trust or otherwise, or conspiracy, in
restraint of trade or commerce among the several States, or with foreign nations,
is declared to be illegal. Every person who shall make any contract or engage in
any combination or conspiracy hereby declared to be illegal shall be deemed
guilty of a felony.49
Penalties for violating the Sherman Antitrust Act were harsh. The court could fine "not
exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000" or imprison them
for up to 10 years.50 These ostensibly strict penalties were not a serious deterrent. In the years
immediately following the Sherman Antitrust Act, sporadic enforcement was left to the states.
In Ohio, antitrust reformers and small business owners took on the goliath: John D.
Rockefeller's Standard Oil Company. Standard Oil had become symbolic of the trust form, and
even businessmen acknowledged that it was almost certainly a monopoly.5' Soon after the
company was founded in Cleveland in 1870, Rockefeller immediate began buying up refineries
across the country. He consistently focused on the most productive and technologically
advanced.52 He acquired refineries all over the country and integrated wholesale distributors and
retail operations as well. In 1882, the trust was formally organized. By 1892, Standard Oil
Companies were in New Jersey, New York, Pennsylvania, Ohio, Indiana, Iowa, and
en tuck^.'^
There was no question as to the staggering amount of power that Rockefeller had. Still, the
break-up of the Standard Oil Company was particularly controversial. Public opinion was
finicky. Concern for the public good was the most common reason given for tolerance, if not
support, of the Standard Oil Trust. Businessmen insisted that the "tendency of consolidation is
-
49
-
Sherman Antitrust Act 5 1,15 U.S.C. $ 1 .
Ibid.
Carnegie, 96-97.
52 Charles R Moms, 'J3e Tvcoons (New Y o k Holt, 2006), 150-158.
53 T h e Big Oil Trust to Go," The New York Times (March 11, l892), 1.
50
51
to give better goods at lower prices to the consumer" and that industrial trusts "benefited the
buying public instead of oppressing it."54
In State v. Standard Oil Co., tried in 1892, the Supreme Court of Ohio ordered that the
trustees terminate the trust agreement. At the time of the ruling, Standard Oil's total holdings
were worth approximately $95,000,000.~~Some headlines victoriously reported that Standard
Oil had "surrendered to the law."56 But the dissolution of Standard Oil of Ohio did not mean the
end of this combination.
In the wake of the Supreme Court of Ohio's decision, Standard Oil only became more
concentrated. Rockefeller took as much time as permitted by law to disassemble the formal trust,
which allowed him to buy out any remaining independents, including the New-Jersey Oil
Once the trust was technically broken up, Standard Oil was incorporated under a
New Jersey charter, according to the laws Dill had authored.
The contrasts between Rockefeller's sober personality and his radically aggressive
business practices made Standard Oil symbolic for both pro-corporate elements demonstrating
industrial benevolence and antitrust elements pointing to the dangers of concentrated power. The
prominence of Rockefeller's Standard Oil Companies attracted significant attention to New
Jersey and to Dill. Always the opportunist, Dill had another scheme. This time he would not
only promote an open policy towards companies, but went into business himself, proactively
assisting combinations hoping to evade the laws of other states.
As other states began cracking down, more companies sought protection in New Jersey.
Since New Jersey law allowed companies to operate in other states, New Jersey incorporation
"Comment on the Market," The Wall Street Journal (August 1, l892), 2.
55 "The Big Oil Trusts to Go," The New York Times (March 1 1 , 1892), 1.
56 "That 'Surrender,"' The New York Times (March 15, 1892), 4.
57 ' L S ~ a l I o ~by
e dthe Standard," The New York Times (July 18, 1892), 5.
54
did not require a physical move. The ease of New Jersey incorporation already attracted over
1,600 companies by 1891.58
To assists companies not doing business in the state while profiting from this trend,
Abbett and Dill co-founded the Corporation Trust Company in 1892. At the time, Abbett was in
the last year of his second term as Governor and Dill had set up his own firm. According to a
statement by Dill's firm, Dill, Chandler & Seymour, the company was set up to "enable such
[foreign] companies to comply with the laws of the State of New Jersey as to have a local office,
and.. .it will financially guarantee the legality and non-liability of the stock."
Dill and Abbett surrounded themselves with savvy and well-connected men whom they
could trust would spin their work positively. Allen L. McDermott, Abbett's protCgC, was
President of the Corporation Trust Company's Board of Directors. He had studied law in
Abbett's office and began his political career under Abbett's close watch and protection.59
Henry S. White, a U.S. District Court Judge, sewed as Vice President. Henry Kelsey, another
prominent democrat, was also a director. Dill's firm, Dill, Chandler, 62 Seymour, provided
counsel.60
Businesses that operated outside of the state needed to get around the requirements for
New Jersey incorporation. The Corporation Trust Company provided them with a New Jersey
mailing address, safe deposit boxes, and use of a tiny room in their office in Jersey City. The
Corporation Trust Company maintained their clients' records and exercised near-total control
over what information they made available to the public. For even more convenience, this new
58
Hogarty, 291.
Sackett, 356.
M)
Hogarty, 291; "Will Look After Corporations: Object and Purpose of a Trust Company in New Jersey," The New
York Times (December 24, 1892), 8.
59
venture could provide agents to serve as dummy directors of client's corporations so that
physical presence in the state could be completely avoided. 61
The Corporation Trust Company flourished, but Dill knew he had to make sure New
Jersey's laws stayed competitive. He wrote the General Corporation Act of 1896 to replace the
Act of 1875. The Act of 1896 was Dill's most significant contribution to New Jersey law. He
revised it for the legislature periodically and published commentary on it throughout his career.
The General Corporation Act was not revolutionary in practice. New Jersey companies had been
acting however they pleased since the early 1890s. Dill wrote the Act of 1896 to better advertise
the laws of the state. He wrote in characteristically simple language and emphasized possibilities
for, rather than restrictions on, corporations. He continued to clarify the status of miscellaneous
corporations and provide security for companies seeking a New Jersey charter.
Clients of the Corporation Trust Company took full advantage of these services. To cite
just a few examples: Republic Iron and Steel held executive ofices in Chicago and had sales
offices in New
the American Tobacco Company had branches in Louisville and St.
American Steel Foundaries had plants in Pennsylvania, Ohio, and Illinois, and offices
in New York City and St. Louis;" American Smelting and Refining Company operated in
Colorado, Utah, and ~ e x i c o All
. ~ of
~ them operated under a New Jersey charter and were
associated, in name or office address, with the Corporation Trust Company.
Powerhl executives recognkd Dill as an ally. In Dill's private law practice, they called
upon him to arrange their most important deals. One of the most challenging negotiations Dill
After Corporations: Object and Purpose of a Trust Company in New Jersey," The New York Times
(December 24,1892), 8.
62 Republic Iron and Steel Company. Semi-Annual Report to the Stockholders (June 30,1902), 2.
63 The American Tobacco Company. Annual Report (December 3 1,1898), 2.
@AmericanSteel Foundaries. Annual Report (July 3 1, 1903), 3.
65 American Smelting and Refining Company. Annual Report (April 30, 1905), 4.
61 "Will Look
ever faced was between Henry C. Frick, of Frick Coke, and Andrew Camegie, of Camegie Steel.
They had previously been business partners and had a particularly messy falling out. The
personal tension between the two men carried over into business &airs and occasional stoked
rumors of scandal. After a meeting of the stockholders of the H. C. Frick Coke Company, the
New York Times reported that "every stockholder refused to talk" causing "a report that Andrew
Camegie had succeeded in supplanting H. C. Frick's Board of Directors with his own men."66
This heated situation between two aggressive, stubborn men required a mediator with Dill's
reserved, calculating personality.
When Frick and Camegie attempted to negotiate a merger, they each disagreed as to the
value of the other's stock. Dill "labored for days to bring representatives of the opposing interest
together." Dill's ability to compartmentalize his different roles helped him act in the "position of
arbitrator" rather than "counsel for either side."67 After a successful merger, Frick and Camegie
incorporated their new company under the laws of New Jersey.
As the architect of the New Jersey system, Dill's earliest work went largely unnoticed.
But he could not escape the scrutiny his clients faced for very long. His alliance with Abben and
later work with prominent businessmen pulled him into politics in a way he had not anticipated.
The merger wave that Dill facilitated in the wake of the Sherman Antitrust Act caused increasing
concern that industrial combinations were unstoppable. The preservation of Standard Oil under
New Jersey laws and the highly-publicized Frick-Camegie merger attracted national attention at
a time when the trust question was more hotly debated in national politics than ever before.
In order to continue this work, Dill no longer worked just for the companies he
represented; he had to become an advocate for the corporate form, generally. The reserved,
66 "The
67
Ibid.
Camegie-Frick Fight" The New York Times (January 10,1900), 1.
nonpartisan style that worked for Dill as a planner would not suffice in this new role. With New
Jersey's politicians and the country's most powerful businessmen depending on him, Dill
defended industrial combines in national forums.
Part Two
As fear about economic centralization mounted, the American public put aside their
aversion to federal intervention. Congress responded on June 18, 1898 by passing an act
creating the Industrial Commission. The Commission was charged with investigating business
and labor issues and reporting back to Congress. From its inception, the Industrial Commission
worked with corporations. Even the report of the investigation admits their foregone conclusion
that industrial combinations were a permanent part of economic life. Starting from this
understanding, the most the Industrial Commission could hope for was that combinations "power
for evil should be destroyed and their means for good preserved." For one of its first tasks, the
Industrial Commission conducted an investigation into the state and federal laws dealing with
industrial combinations. Over the course of eighteen months the Commission examined eleven
combinations according to the testimony of the companies' directors, agents, and attorneys. 68
Dill testified before the Industrial Commission on October 18, 1899. Jeremiah Jenks, an
influential theorist and professor of political economy, questioned Dill first. He immediately
focused in on the most far-reaching and insidious of New Jersey's laws, those that permitted
corporations to operate in states other than where their charter was granted. Dill insisted that
tramp corporations, as these businesses were called, would be impossible if New Jersey laws
were strictly enforced. He explained how the laws he authored required meetings to be held in
the state and insisted that this distinguished legitimate businesses from tramp corporations. Dill
continued his defense by pointing out that New Jersey law resembled many other states in
requiring that companies hold an office in the state. He left out that not only were these
technicalities nearly impossible to enforce, but also that he had personally helped numerous
68
Industrial Commission, Preliminary Report on Trusts and lndwtrial Combinations, (Washington: Government
Printing Office, 1900), 5.
business, including several of the combines under investigation, evade these requirements in
order to operate in states other than New ~ e r s e ~ . ~ ~
Representative L. F. Livingston, of Georgia, questioned Dill next. Livingston grew tired
of Dill steering the questioning away from the key issues, so he asked him outright:
Why is it, then, if the laws are such as you say, that 60 per cent of all the charters
taken out by syndicates, combines, and trusts are taken out in the State of New
Jersey? What is there in the law of New Jersey that induces the whole world to
go there for a charter?70
To veil his response, Dill answered Livingston with a story. He let an anonymous New York
banker answer for him,telling Livingston how this mysterious acquaintance once told him that,
'I, as a New York man, send my corporations to New Jersey for the same reason
that I deposit in the City National Bank, the reason being that the State of New
Jersey has a financial surplus in its treasury and, therefore, will not be driven to
squeeze my corporations to make up a deficiency.'
Unsatisfied, Livingston pressed further. "I want to be very candid with you; I want to understand
why it is." He expressed disbelief at Dill's claim that restrictions were strict, saying, "what
astonished me is to know that, with such restrictions.. .holding them down to honesty, they go
there readily." "
By this point, it became clear that Dill was not being forthright. John M. Farquhar, a
former Congressman from New York, decided to take a different approach. When he said to
Dill, "I should like to read you section 101 of the general corporation act of New Jersey," Dill
replied, as if amused, "Am I to be silenced with my own book?" Farquhar proceeded to quote
from New Jersey's so-called retaliatory laws at length. These statutes imposed the same fines,
taxes, and restrictions on companies incorporated elsewhere that were doing business in New
" Ibid., 1077-1079.
" Ibid., 1081.
" Ibid.,
1081.
Jersey. Though, as Dill points out, foreign companies were being treated similarly to domestic
corporations, Farquhar questioned how fair this could possibly be. Companies incorporated in
less-permissive states, such as Wisconsin, Illinois, and Ohio, had to comply with the laws of
their home states as well. Even Dill had to admit that under present law New Jersey corporations
were operating unregulated in many other states, but he put the responsibility on those states.
Referring to the retaliatory laws, he said, "If that law was passed in every State, we should hear
an end to the discu~sion."~~
Effectively, without similar laws in other states, this statute provided
even more incentive for companies to incorporate in New Jersey and punished them if they
wanted to do business in the state after incorporating elsewhere.
Farquhar quoted Dill's own writing to him again, this time reading from section 203
which outlined licensing fees and franchise taxes for various amounts of capital. Farquhar
accused Dill of "giving the great moneyed interests an advantage over those with less capital"
since the law outlined a sliding scale where larger amounts of capital paid a lower percentage in
taxes. Dill offered, imprecisely, "I will answer that by saying that when the statute was passed
we built the house for the boy" who has ''afterwards grown up." He continued, rambling, "New
Jersey is confronted by a new condition.. .what the legislature will do with the new situation, I do
not know. It is a boy's clothes that the man is now wearing."
The investigators were growing increasingly frustrated. Farquhar attempted to reason
with Dill, even if meant using his ridiculous comparisons. "My experience has always been that
if you buy a man's suit you have got to pay more for it than the boy's clothes; and I do not see
why the same reasoning does not apply to the State," he insisted. Representative Livingston,
thinking that Farquhar was confused, interrupted, "to put it for the sake of illustration, it is
Ibid., 1085-1086.
cheaper as wholesale than retail." To which Farquhar sharply replied, "that was the question I
was going to ask." Farquhar, determined to have his question answered, turned to Dill and
stated: "I want to know whether New Jersey discriminated in favor of great capital."73 To which
Dill had no choice but to reply, "She discriminated before she knew great capital to exist; a new
condition of affairs is confronting her."74
Clarke raised the issues of federal policy, asking Dill if he had considered the possibility
of federal law. Dill had not only considered federal law, he had addressed the subject just one
month prior at the Chicago Civic Federation's Conference on Trusts. Dill was the only member
of the business community who spoke out in favor of national law. Most businessmen were
initially hesitant to consider federal law, since it was the preferred instrument of reformers who
sought higher standards than those in permissive states. 75 Dill, as usual, was ahead of his time.
He firmly believed that federal law could provide an additional opportunity for already powerful
companies. Witnessing the consequences of the Sherman Antitrust Act, Dill hoped that national
standards would be just another option that companies with enough resources could choose from.
Better yet, Dill knew that if he could adopt the language of reformers and influence federal
policy, it was very likely that federal law would more closely resemble that of permissive states
than that of strict ones.
Careful to avoid revealing what exactly he thought federal law should be, Dill framed his
answer with Constitutional considerations in mind. He begin by pointing to history, saying,
I think that your commission is confronted to-day with the same situation that
existed in early times when the question of banks arose, even so far back as the
time of Alexander Hamilton. The question, as has been said here to-day, of
73
Ibid., 1086-1087.
" Ibid., 1087.
Melvin I.Urofsky, "Proposed Federal Incorporation in the Progressive Era," The American Journal ofLegal
History Vol. 25, No. 2 (April 1982): 165.
'7
corporations has, in my judgment, gone so far as to come under that clause of the
Constitution of the United States which refers to public welfare.
Dill concluded his answer to Clarke by expressing the opinion that it would be well within the
power of Congress to pass laws pertaining to national corporations. Livingston followed up,
asking Dill if they could regulate "the manner and methods of doing business in the States?" To
which Dill replied, "That is the only remedy for the existing condition." 76
Senator Mallory was dissatisfied with Dill's attempted analysis of the U.S. Constitution.
Mallory pointed out that "there are two parts of the Constitution in which the words 'general
welfare' are used. One is the preamble, and the other is the taxing clause." Mallory continued to
question how either could possibly be applicable. Mallory almost mockingly asked Dill if he
was of the opinion that the taxing clause gave Congress "power to do anything which, in its
judgment, is for the general welfare." Dill was cornered. "I was really candidly giving my
individual conviction," he said defensively. Dill, clearly flustered, proceeded to ramble on about
the First National Bank and railroad incorporation. Unsure as to where these disconnected
historical anecdotes were going, Mallory attempted to pin down Dill's argument once again.
Mallory asked if, as they relate to Constitutional interpretation and powers of the federal
government, Dill believed "commercial and economic forces rule." Dill answered that he did
believe that, and pointed to his previous example where New Jersey law changed in response to
business conditions. The Commission apparently accepted Dill's answer, as the debate turned to
the subject of stock transfer."
The investigation had its tense moments, but Dill maneuvered through the process with
his reputation unscathed. In reporting the conclusion of these investigations, the Industrial
"Industrial Commission, Preliminary Report on Trusts andlndustrial Combinations, (Washington: Government
Printing Office, 1900), 1087.
Ibid., 1087-1088.
"
Commission cited Dill's testimony on several occasions. When it called for publication of
reports as a means of protecting consumers, they were borrowing one of Dill's suggestions.
More importantly, by emphasizing transparency and accessibility of records, the Commission
was operating on the principle that consumers and stockholders were responsible for the business
practices of companies they supported. The only demand on business executives and operators,
making information available, also provided them with an opportunity to control their own
publicity. That control was Dill's foremost priority. Though Dill's unsophisticated, sometimes
senseless metaphors, circular reasoning, and questionable Constitutional interpretation clearly
exasperated his investigators, the investigation ended as well as he could have hoped.
Dill crossed paths with Professor Jenks again in December of 1899 at the twelfth annual
meeting of the American Economic Association. Founded in 1885, the Association was
committed to a scientific approach to political economy. The American Economic Association's
founding documents emphasized freedom of thought among its members, of which Dill was one,
and cautioned against economists serving as partisan advocates. But the organization's purpose
originated from a very specific reading of history. Based on a belief in "a progressive
development of economic conditions" the organization sought to discern "corresponding changes
in
The platform expressed the importance of economic policy for continued progress,
stating:
We regard the state as an education and ethical agency whose positive aid is an
indispensable condition of human progress. While we recognize the necessity of
individual initiative in industrial life, we hold that the doctrine of laissez-faire is
unsafe in politics and unsound in morals; and that it suggests an inadequate
explanation of the relations between the state and the citizens."
" The American Economic Association, American Economic Association Quarterly 3 (April 1910): 58.
79 Ibid., 57.
Recognizing that this audience would be critical of his work, Dill appealed to their concern for
morality and social justice while leading to a totally opposite conclusion about the role of the
government in the economy.
Dill's paper, entitled "Some Tendencies in Combinations Which May Become
Dangerous," identified the four primary hazards the public must guard against: excessive
capitalization, avoidance of publicity, evasive legislation, and stock speculation. Even as he
acknowledged that some industrial combinations "may" become dangerous, he reminded the
audience that government regulation was a more pressing threat to liberty. Dill cautioned against
"hysterical and unwise legislation," arguing that public pressure was the proper solution to each
of those situations. He emphasized the public's freedom as well the corporations'. "Let the
public exchange for true publicity, freedom fiom state surveillance as to unimportant details."80
He did not care to specify as to what freedoms the public had at stake.
According to Dill, overarching legislation was risky because, like the debates about trusts,
it often failed to distinguish between "corporations of integrity" and "those companies otherwise
situated." Echoing a statement he made before the Industrial Commission, Dill said, "there are
corporations and corporations." He insisted that risky tendencies existed "only in some of the
recent combinations.. .by no means in the majority of the aggregations of capital in corporate
form." Furthermore, these "isolated symptoms in the case of the few" posed as serious a threat
to beneficent corporations a s they did to public wellbeing.81
Since good corporations themselves were at risk of being driven out by the corrupt ones,
Dill insisted that they could be trusted to accurately report the value of their holdings, stock, and
"James B. Dill, "Some Tendencies in Combinations Which May Become Dangerous," Publications of the
American Economic Association Vol. 1, No. 1.3rd Series (February 1900): 177, 197.
Ibid.. 177-179.
other pertinent financial information. "Obliged by the force of a growling and enlightened
public opinion," self-preservation would demand that management "draw the line of demarcation,
in the plain sight of the public, between themselves and others." Exposing this information alone
would be enough to guard against excessive capitalization, from Dill's point of view. It would
also prevent stock speculati~n.~~
In addition to insisting that public vigilance was more effective than legislation, Dill
expressed a desire to protect the public against evasive legislation "which seeks to excuse
corporations from carrying on what are understood to be statutory duties as to publicity." His
comments on evasive legislation offer few examples of, and no solution to, these evasive laws.
Instead, Dill held up the laws of New Jersey as a model of ethical practices. The State's
requirement that books be accessible to stockholders was "sufficient publicity to answer the
requirements of a proper demand" because "what is known to many is accessible to all
interested." Companies with few stockholders presumably had little impact on public life, and as
such would be of little interest to the public. For corporations of a consequential size, "publicity
to all of the stockholders is practically publicity to the
If a company demonstrated the dangerous tendency of avoiding publicity, the public itself
was to blame. Dill chastised stockholders, saying, "If the public would refuse to buy stock in
any corporation unless they received with the stock a copy of the certificate of incorporation and
by-laws, they would then know what they were buying." The only "infallible safeguard," he
reiterated, was "an enlightened public opinion.. .based upon an honest desire to do what is
right."84 Dill repeatedly used flattery and moral pleading to convey to the public that they had
'"bid., 178-179.
83 Ibid., 187-188.
Ibid., 177, 189-195.
"
both the capacity and obligation to regulate business activity. In private, he thought very little of
the public and its opinions, but he was content to be Populist when it served his laissez-faire
needsa5
Contradicting what he expressed a month earlier in front of the Industrial Commission,
Dill's conclusion states, "a high moral standard is often better than police supervision, and the
proper aim should be to induce incorporated capital to voluntarily take this moral high ground
rather than attempt to force capital by strict supervision." He used the same example of the
national banks, this time attributing their distinction from state banks as defined by the higher
standards applied to them as far as publicity was concerned. Like a traveler who chooses to buy
a costlier train ticket in order "to be recognized as a man of means and standing," corporations
could be trusted to self-impose even expensive regulatory measures to preserve their reputations.
Challenging the American Economic Association's stance on laissez-faire, he declared, "These
matters regulate themse~ves."~~
Not surprisingly, Dill's colleagues at the meeting did not blindly accept his claims. In
response to his paper, the audience discussed everything from whether information from
companies was trustworthy to whether or not large-scale industry was an uplifting force in
society. Professor Edward Bemis called attention to the challenge of getting reliable information.
When profit is at stake for the corporation, "they do not inform the public in any real degree."
He brought up the example of railroads having secret rates and claimed "very little real
information on these matters is being revealed." Even municipal monopolies like gas and
electric companies were found to have reported false numbers. Bemis agreed that "if we cannot
secure [publicity] we cannot do anything else with the trust question" but expressed that Dill's
85
Lincoln Steffens, The Autobioxrauhv of Lincoln Steffens (New York: The Literary Guild, 1936), 192-194.
May Become Dangerous," 197-198.
86 Dill, "Some Tendencies in Combinations Which
33
proposed solution was only the beginning. Bemis recognized that without enforcement, public
opinion is useless. 87
Professor Lindsay was more confrontational when he said, "not all of us would agree to
Mr. Dill's proposition that the public is interested in the business of corporation^."^^
Furthermore, Lindsay pointed out that laws requiring publicity to stockholders were inadequate
to inform the general public. Stockholders were not objective parties. If, as Dill himself
acknowledged, they could not even fully understand the reports provided to them, there were
seriously problems with Dill's claim that stockholder reports led to better business practices.
Addressing the gas companies Bemis brought into the discussion, Professor Gray
developed their example as it related to public opinion. Defending the Gas Commission of
Massachusetts, he said "the commission cannot go forward any faster than it can carry the
legislature with it." Since "we cannot expect the legislature to act more wisely than the
temporary opinion of the average voter demands," Gray agreed with Dill and Bemis that
educating the public was crucial.89
Mr. Marburg considered whether or not it was relevant whether trusts were necessarily
monopolies. He used the example of the railroads, and examined the consequences of monopoly
status on prices. He questioned Dill's claim that status and honor would enforce good practices,
asserting, "The managers of industrial trusts will be more than human if they resist the
temptation to advance prices should the trust become a practical monopoly." Marburg advocated
for government intervention on a national level.90
" Ibid., 199-201.
" Ibid,200.
89
Ibid.,204-205.
90 Ibid.,206-207.
For all the disagreements as to details, when contrasted with Professor Dewey's opinion,
the continuities in the other men's thinking are clear. He was the only one to suggest that it was
worth examining the social utility of large-scale enterprise as a whole. He suggested that it was
worth considering legislation that would "check to a certain degree the rapid transformation" in
industry. He urged fellow members to "consider the possible dangers of too immediate rapid
changes."9'
Dewey's question provoked Professor Gardener, who countered with, "No one proposes
to throw obstacles in the way of the development of industry on a large scale so far as it takes
place in accordance with the interests of the public." Gardener insisted that the more practical
discussion must revolve around how that economic transformation might be directed and
controlled. Gardener believed that the example of the railroads taught policy makers "not to
allow the problem to work itself out." He accepted the existence of the corporate form and
accepted the regulation that it necessitated. He concluded, "The only question is in regard to the
road by which we shall reach the final result."92
Professor Sherwood, a self-proclaimed fatalist, similarly accepted the inevitability of the
trusts. He seconded Gardener's opinion that their primary aim should be to "seek for some
practical method to realize the good and avoid the evil" in combinations. He believed that
"conservative rational action by the government" was the only possible solution. While that was
yet to be accomplished, Sherwood partially accepted Dill's proposition, expressing the belief that
"publicity is the first thing we must have."93
Ibid.,208.
Ibid.,208-209.
93 Ibid.,209.
9'
Allen Ripley Foote summarized the discussion as such: "It appears to me that the
consensus opinion is that public opinion must be relied upon to correct the evils, feared or
experienced, from the organization of corporations and trusts." He continued, "All economists
of wide authority, all legislation and judicial opinions agree that.. .the force of free and
unrestricted competition must be relied upon as the most efficient means of safeguard public and
private welfare." This presented a problem. "Publicity and effective competition are
incompatible," according to Foote.
Foote's conclusion demonstrates a common perception among these men. They believed
they were witnessing a key transformation and their actions during this crucial time would
determine the trajectory of economic development. Dill, determined to make his mark, took
advantage of every opportunity to secure publicity for his own work.
Dill presented at the Annual Meeting of the American Academy of Political and Social
Sciences in April of 1900. He acknowledged that "it has not always been for the good of the
public at large that these large combinations have been created."94 Although the criticism
combinations provoked has "not always been without foundation," Dill cautioned against hasty
reaction. "The wise corporation lawyer," he said, "carefully weighs [criticisms]...from a
corporation's standpoint" so that he "profits by his suggestion."95
He emphasized, as he was prone to do, the distinction between "industrials true and
fictitious." These "wolves in sheep's clothing" must not turn the public against the "honest
corporations, honestly organized, managed, and conducted with a single eye to conduct a
legitimate industrial business." These "corporations of integrity" hoped for "public investigation
-
94
James Dill, "Industrials as Inveshnents for Small Capital" (Address, Annual Meeting of the American Academy
of Political and Social Sciences, Philadelphia, PA, April 20, 1900) in Annals of the American Academy of Political
and Social Science, Vol. 15, Supplement 13.
95 Ibid.
as between themselves and others, in order that their class may not be kept down to the level of
those corporations which are otherwise sit~ated.'"~
Dill stressed that this was a social good, in addition to a private one. Honest industry
provided "secure, interest-bearing investments in small denominations." He proposed that if the
working class invested even small savings in industry, the tensions between labor and capital
would cease. In this arrangement, the laborer "is a part of the corporation itse~f."~'
Naturally, Dill put responsibility for any abuse of economic might on the public. "People
are largely furnished with what they call for." "The promoter and financier" escaped blame,
since they simply were keeping an "eye to what the public will take." To illustrate the
importance of choosing investments, Dill resorted to a comparison that evoked an older, agrarian
world. An investor could only make a sound choice if "he exhibits the same care in the purchase
of industrials as he would in the purchase of a horse."98
Dill continued, empowering the public and attempting to convince them that their small
investments controlled the financial destiny of industrials. "When and if people discriminate
between the good and the bad and ostracize by refusing to invest in the bad," he assured, "the
false industrial will cease to be a profitable one." With corruption driven out, "corporations of
integrity" would flourish. He concluded, "of such corporations we may confidently assert they
are a lesser evil if we cannot agree that such corporations are a positive good."99
Dill's message about public responsibility was of little use in the rather narrow forum of
professional associations. Seeking out every possible avenue of influence, Dill also wrote for the
popular press. Public Policy published numerous pieces by Dill and propagated his addresses
Ibid.
Ibid.
" Ibid.
99 Ibid.
%
97
and writings published elsewhere. The Chicago-based magazine touted itself as "A Medium for
Diffusing Correct Economic Instruction on Questions of Public Policy." Allen Ripley Foote, the
editor of Public Policy, made no effort to mask the magazines pro-corporate bias, but it drew
from an eclectic range of perspectives compatible with industry's interest. The magazine quoted
socialists promoting industrial development as a means to a post-scarcity world alongside
executives of corporations who took staunch laissez-faire positions. This strange ideological
flexibility suggests that most contributors, like Dill, were more concerned with results than how
those ends were achieved.'''
In "The Labor Question from a Combination Aspect," which ran in December of 1900,
Dill argued that industries of scale best met the needs of the workingman. He suggested that
"only by the combination of capital, by the uniting of finances of the many into one hand, and
under one control, that it is practicable to provide the means, as well as the ways, for
manufacturing and for giving employment during the year to the laborer."lO'
According to Dill, large-scale enterprise not only changed the work of the laboring class,
but also "produced a professional revolution." Law, representative of all professions, "calls for
men not only of strong individuality, but men capable of intelligent, strong team work." Pointing
to his belief that his times were unique, Dill continued, "Abraham Lincoln, by his individual
effort...became able to rank with the educated men of the country," but "no man today.. .would
recommend that course." Colleges, with their "combination of instructors and educational
utilities" represented the advantages of cooperative efforts. Dill attributed this change to the
IW
lo'
PublicPolicy Vol. 3, No. 1 (July 7, 1900), 1.
Public Policy Vol. 3, No. 23 (December 8, 1900), 8.
38
upward slope of history, to "the growth, advancement and increase of business." Society
continued to move "toward incorporated unity as distinguished from individual efforts."'"
This was not a loss, according to Dill. Later that year, he wrote, "Individualism is not
dead." He went so far as to say that "the corporation problem of to-day" demands individualism
"which no other phase of social evolution has demanded." "The tendency to the centralization of
control" sorted men in a corporate meritocracy. Dill promised that those possessing character
and education need not fear they would become obsolete.'03 Dill's commentary on labor and the
professions, and his choice to address individualism in a consolidating society points to the fears
of opponents of the trusts.
As if the varied viewpoints Dill presented were not convoluted enough, he also
strategically leaked information to sources that would not likely be traced back to him. Dill's
unlikely friendship with Lincoln Steffens provided a chance for this stealthy publicity. His
selective empathy, as well as his self-control in hiding his opinions, proved especially useful for
this purpose.
Lincoln Steffens was an established journalist by 1901 when the editor of The Evening
Post sent him to speak with Dill. Steffens had heard about the tactics of James B. Dill, as
contemporaries reverently referred to him, and was eager to see the "wonder-worker" of an
attorney defend himself against the crimes his laws permitted. Expecting a serious and cold man,
Steffens was "trembling with fear" as he walked into Dill's office. He was surprised to find that
Dill was rather approachable, with a "rosy, round, happy face" and a "round little belly." He was
also surprised when Dill immediately brought up the controversy at hand, saying, "'I have been
tempted to send for you. The abuses of the Jersey trusts laws must be exposed and stopped."'
102
Public Policy Vol. 1, No. 5 (August 4, 1900), 4; Public Policy Vol. 1, No. 7 (August 18, 1900), 1
'03 Public Policy Vol. 1, No. 25 (December 22, 1900), 5.
39
Steffens was expecting a debate. He had gone in planning to be on the offensive but Dill's
confession made his carefully planned questions use1ess.l" According to Steffens, Dill was not
secretive about the fact that these laws allowed "plain financial crimes." His only request was
that Steffens not quote him directly. "It might be suspicious, to make me the authority for an
exposure of what I am the enabling founder of, but it is your duty to describe what is done under
these laws.""05 Steffens thought Dill was a genuine and remorseful man; he let his guard down.
The two men stayed in contact and each referred to the other as a friend.
When Steffens's article "New Jersey: A Traitor State" appeared in McClure's Magazine,
it attracted nationwide scorn for New Jersey's policies. In it, Steffens called New Jersey's
actions ''treason," elaborating with, "Jersey shows, plainer than any other State or city, how we
are all betraying one another." He saw the roots of this problem with Alexander Hamilton, who
sought privileges when exploiting the state for business purposes. Dill's laws were a
continuation of this problematic trend.'06 Steffens was proud that he brought exposure to this
problem and hoped that since Dill called it his "duty" the article had not upset their friendship.
The next time the two men spoke, Dill was especially jovial. Steffens held back and, as
usual, let Dill bring up the subject they were both thinking about. Dill responded to the article
with excitement and gratitude. Not because he was remorsefid, or because he shared Steffens's
hopes that New Jersey's chartermongering practices would come to an end. He enthusiastically
thanked Steffens for "advertising my wares and the business of the ~tate."'~'Now that other
states were also in the business of charter sales, New Jersey could use all the free publicity she
could get.
104
Steffens, The Autobiomvbv of Lincoln Steffens, 192-194,
Io5Ibid, 194.
106
Steffens, "New Jersey, A Traitor State," 210-214.
lo'Steffens, The Autobiom~hvof Lincoln Steffens, 195.
After learning that Dill had manipulated him, Steffens feelings towards his "jolly little
imp of a Santa Claus," became more cautious, but no less respectful. Steffens accepted that Dill
was unpredictable and that there was "no familiarity with him." In his autobiography he
reflected on his friend, writing, "I can see now that what I needed then is what the world needs
all the time, to find someone who was not sincere but intelligent. I found that man in James B.
Dill. Bless him." This should not be misinterpreted as forgiveness, which Steffens made a point
of withholding. He knew Dill did not care to have it, anyway. Instead, Steffens came to see Dill
as a victim. When Steffens found out that Dill had manipulated him for profit, he "finally came
to understand what corruption is and how it gets a man."'08
That corruption became evident in the next shift in Dill's thinking. Any presence of
ideological concerns was dropped completely as Dill was nearly beat at the game he created. In
"Trusts- Their Uses and Abuses," Dill demonstrated his usual defense of industrial combines,
crediting them with the country's "commercial supremacy." He also, as expected, blamed the
public and especially antitrust reformers for lamentable business practices. But this talk before
the Merchants' Club of Chicago also suggests a marked shift in his thinking. Dill openly
criticized New Jersey law and interstate charter competition. Just as the corporations he
represented turned to law to protect themselves from competition, Dill demanded national
legislation once other states attempted to "out-Jersey New ~ e r s e ~ . " ' ~
Dill had to admit that corporations had become "callous to public opinion." This was "a
mistake on the part of the corporation," he said but as usual found fault with antitrust measures
as well. "From the corporate point of view," he continued, "many of the criticisms passed upon
[bid, 192-195.
James Dill, "Trusts:Their Uses and Abuses" (Address, Merchants' Club of Chicago, Chicago, IL, November 9,
1901).
lo'
IW
corporations and much of the anti-corporation legislation are based upon a lack of understanding
of the situation." For example, those that "had as their aim the suppression of the movement
rather than the elucidation of the subject and the utilization of the force." Laws "enacted in
response to ill-advised popular clamor" forced "industrial corporation[s] to enter the field of
legislative competition." Once engaged in this competition, antitrust would-be reformers only
had themselves to blame a trust could "procure pro-corporate legislation.""0
By this point, New Jersey had serious rivals in the "competitive strife among States for
revenue from corporations." He chastised states who gave "express permission to their own
corporations to do in other States what such corporations are expressly prohibited from doing at
home." To prove he was genuine, not even New Jersey escaped criticism. Dill pointed to the
New Jersey law that permitted a company engage in "'constructing, maintaining, and operating
railroads, telephone, or telegraph lines outside of that State,"' but not in New Jersey. He
condemned the practice of passing laws to "increase State revenue" without regard to the
"integrity of legislation." New York was guilty of this ''paper liberality," as was Connecticut,
Maine, North Carolina, and South Dakota. Dill insisted that this "lack of any uniformity of
procedure and regulation" must be "dealt with only by legislation equally broad.. .national
legislation." To underscore how important this was, he continued, "the public welfare at present
more urgently requires a National Corporation Act than years ago it required a National Banking
~ct.""'
By 1902 when Dill spoke on "National Incorporation Laws for Trusts" before the
Seminary in Economics at Harvard University, these Hamiltonian aspirations consumed him. He
began his talk by quoting Hamilton: "'we are laboring hard to establish in this country principles
'lo
I"
Ibid.
Ibid.
more and more national, and free from all foreign ingredients, so that we may be neither 'Greeks
not Trojans,' but truly Americans."' Dill argued, "In this utterance [Hamilton] established a
precedent for the intelligent thought of to-day in regard to the advancement of corporate
legislation." He hoped that "The trend of affairs is to the establishment of principles more and
more national, and free from sectional ingredients." Citizens would be "neither Bostonians nor
New Yorkers, but truly Americans with respect to corporate measures.3,112
Apparently having deepened his understanding of Constitutional law since his testimony
before the Industrial Commission, Dill continued,
whenever in the history of this nation any force truly national, affecting or relating
to the welfare of the country, has been found to have outgrown the swaddling
clothes of the express powers of the Constitution, and, as a national force, on the
one hand to be entitled to the protection of national law, and on the other hand
properly subject to the uniformity and control of a federal law, the American
people have always overridden mere technicalities and have availed themselves of
the implied power of the Constitution.
A national incorporation act, Dill promised, would not infringe on "the powers of the state to
create local corporations." It would be "permissive, not mandatory," and apply to business
"which relates to trade with foreign countries or between
state^.""^
Dill may have championed liberal laws when they were primarily at his disposal. Still,
he ruthlessly condemned "interstate competition unfavorably affecting trade and commerce." He
took issue with the Supreme Court's support of or deferral to states' opinions about trusts. "The
controlling question" of state law, according to Dill, was "one of immediate financial returns, of
financial expediency and resulting political desirability." Dill feigned alarm over "the line of
demarcation between the so-called charter-granting states and the more conservative states.. .
112
James Dill, "National Incorporation Laws for Trusts" (Address, Harvard University Seminary on Economics,
Cambridge, M.A., March 10, 1902).
'I3Ibid.
rapidly being eradicated." AAer a caveat as to why New Jersey was not to blame, he continued
his criticism, "many states are willing to enrich their own coffers at the expense of the
advancement of the nation.7,114 He would know.
Dill suggested his solution: 'I view with favor the enactment of a National Incorporation
Act as distinguished from a control of state-created corporations." National legislation
represented "purer politics" and had the potential to be "formulated upon the good of the country
of a who~e.""~But Dill did not pretend for long that his sudden support for national
incorporation was motivated solely by social concerns.
Dill did not betray his commitment to large-scale enterprise. He explicitly stated, "it
should be optional with corporations, as in the case of the National Banking Act, to organize
under state acts if they so choose." Corporations who chose national incorporation would be
"protected from state attack" and "assured of the privileges and immunities guaranteed to natural
persons by the constitution of the United States." The only obligation corporations would have
to the states they operated in would be to pay taxes "upon the same basis as an individual." In
Dill's proposal, federal regulation was still limited. He continued to emphasize publicity,
suggesting "private publicity should be compulsory" and would lead to "a proper degree of
public publicity.""6
Dill turned the federal incorporation movement on its head. Thought to be the last resort
of Progressive reformers desperate to reign in business, Dill suggested that federal law could
provide both flexibility and security for large-scale enterprise; flexibility in having another
choice for where to obtain a charter, and security from state reform efforts according to the rights
"'Ibid.
'I6
Ibid.
Ibid.
of citizens under the U.S. Constitution. Though the means by which Dill sought corporations'
best interests changed, this demonstrates continuity with his previous work more than a dramatic
shift in his thinking.
With Dill's increasing notoriety, he did not have to wait long for an opportunity to
communicate his message in a national political forum. Theodore Roosevelt called on Dill to
write a portion of his Second Annual Message to Congress. Dill worked with Jeremiah Jenks, of
the American Economic Association, and Arthur Hadley, another prominent economist.'''
The address dealt with trusts first. Both the language and logic of the address clearly
show Dill's influence. Roosevelt read Dill's words, "Our aim is not to do away with
corporations; on the contrary, these big aggregations are an inevitable development of modern
industrialism, and the effort to destroy them would be futile." Dill's preoccupation with
publicity also worked its way into the speech when Roosevelt read, "publicity can do no harm to
the honest corporation," and implied that it would curb the evils of harmful corporations.
Roosevelt reminded Congress of all the benefits of the trusts: the nation's industrial supremacy,
material prosperity, and uplifting of the "plain people."''8
Roosevelt is often portrayed as the most principled and ambitious of the Progressive
trust-busting presidents.''g His request that Dill write his address proves that even he accepted
that government was powerless against large-scale industry. It also demonstrates how
professionals' opinions had changed since the beginning of Dill's career, and even since he
spoke at the American Economic Association. Men like Jenks and Hadley, who would have
taken issue with Dill's work just a few short years earlier, put aside their concerns for the details
"'Sklar, 335.
118
Theodore Roosevelt, "Second Annual Message," (Washington, D.C., December 2, 1902).
Comparing Theodore Roosevelt, .Woodrow Wilson, and William Howard Tafi, Martin Sklar identifies Roosevelt
as the furthest left, and the one most willing to intervene in business. See Sklar, 35,333-335.
119
of federal regulation. There was no longer any seriously viable opposition to large-scale
industry. The question now was how the rest of society would adapt. Dill had successfully
influenced mainstream political thought.
New Jersey's financial situation no longer demanded the laxity of legislation that
originally freed the state from debt. The treasury was running a significant surplus that allowed
the government to take stock in corporations, seemingly turning the tables on Dill and Abbett's
arrangement. At his Inaugural Address in 1905, Governor Edward C. Stokes began by
discussing "State Revenues and Business Companies." He could proudly say:
At the close of the last fiscal year the balance in the treasury amounted to
$2,940,918.98. The ordinary receipts for the same year amounted to
$4,302,370.61, of which nearly seventy-eight per cent., or $3,35 1,543.69, came
from railroads and the busiiess companies domiciled in our State. Of the entire
income of the government, not a penny was contributed directly by the people, yet
all of it was expended for their benefit and in their interest. The State is caring for
the blind, the feeble-minded and the insane, supporting our prisons and
reformatories, educating young generations, developing a magnificent railroad
system, maintaining the State government and courts ofjustice, all of which
would be a burden upon the taxpayers except for our present fiscal policy.
Stokes recognized that these social programs satisfied the state's Progressives. He correctly said
there was "little doubt that the public prefer the present method" to taking up the state's financial
wellbeing for themse~ves.'~~
Dill's plan had been a success.
120
Edward C. Stokes, "Inaugeral Address" (January 17, 1905).
46
Epilogue
Dill successfidly solved New Jersey's financial problems. He also achieved impressive
personal success. His time representing corporations' interests rewarded him handsomely. He
maintained a farm in Connecticut, a home in East Orange, and offices in Manhattan and
throughout New Jersey. But increasing controversy over his work compounded the stress from
physical ailments, proving too much for Dill. When Governor Stokes appointed Dill to the Court
of Errors and Appeals in July of 1905, he happily gave up his other business pursuits. He
traded a yearly income "never worth under a quarter and often as much as a half a million" for
$3,000 a year.L2LThe New York Times reported that some businessmen resented Dill's recent,
however limited, admissions of corruption. They contested Dill's appointment, wanting a judge
"less inclined to express his opinions."'22
Judicial work suited Dill. His opinions were finally his own. Because of his notoriety as
a corporation lawyer the press sensationalized any opinion he made against a corporation. His
judicial record as a whole was far from anti-corporate; like the rest of his work it is varied.
During Dill's time on the bench he had more time to more pursue hobbies, like breaking
records for length traveled in a motor-car. He continued to publish revised copies of The Statute
and Case Law of the State of New Jersey, which were routinely reviewed in the country's most
For the first time, he was spending more time with lawyers than
circulated law
businessmen, sewing on the Executive Committee of the Alumni Association of the New York
University Law School.
-
121
-
"The Lawyer Who Earned Title of Being Father of the Tmsts" Wall Street Journal (December 28,1907), 6 .
"James B. Dill A Judge of Errors and Appeals" The New York Times (July 7, 1905), 1.
lU James B. Dill. The Statute and Case Law of the State of New Jersev Relating, to Business Cornorations (Camden:
Sinnickson Chew & Sons, 1910).
122
The Alumni Association nominated Dill for an honorary Doctorate of Laws in January of
1910. At the time he was serving as president of the Executive Committee, so his nominators
knew him well. They praised Dill as "a fearless and learned Judge" and "one of the most active
workers in the interests of the ~ s s o c i a t i o n . "The
~ ~ ~Committee on Honorary Degrees supported
his nomination, rewarding the degree on June 8". 1 9 1 0 . ~ ~ ~
Soon after this recognition, heart trouble forced Dill to resign from the Court of Errors
and Appeals. While visiting his Connecticut residence, pneumonia complicated his already
fragile condition. He remained in his home at 83 Harrison Street, East Orange, from
Thanksgiving of 1910 until his death on December 2, 1 9 1 0 . l ~ ~
At the time of Dill's death, industrial trusts were still a hotly debated issue. Populist
sentiment had waned, and Progressive presidents accepted that the large-scale corporate form
was a fixture of the American economy. They equated large business enterprises with advanced
industrial civilization and political power on the world stage. Political debates in the 1910s
rarely addressed whether or not these businesses should have so much power. Reformers
focused, instead, on minimizing the negative social consequences of business activity.12'
There was still no consensus as to the best system of incorporation. At the federal level,
legislative action addressing incorporation proved too ~ontested.''~Congressional inaction
meant that any effort to reign in enterprise still relied on courts' interpretation of the Sherman
Act. In 1908 and 1909, federal courts ruled against Standard Oil of New Jersey and the
American Tobacco Company. These cases went to the Supreme Court, where, in 191I, the
'"Alumni Association of the New York University Law School to the Committee on Honorary Degrees, 1 1
January, 1910.
lZ5
New York University Law School, hogram 6om the Seventy-Eight Commencement.
126
"Ex-Judge J.B. Dill Dies In Jersey Home," The New York Times (December 3, 1910).
IZ7
Sklar, 334-339.
128
Urofsky, 181-183; Sklar, 369-370.
Court affirmed the lower courts' decisions. This time, Rockefeller did not have a plan like
Dill's, which had protected Standard Oil nineteen years earlier. He broke up the Standard Oil
Company of New ~ e r s e ~ . " ~
Though some of the companies Dill aided were eventually broken up, he left an indelible
mark on business law. Because other states, most notably Delaware, were so desperate to imitate
New Jersey's success, they used Dill's language almost exactly in their own incorporation laws.
In New Jersey, there was just one notable attempt to undo Dill's work. In 1912, Woodrow
Wilson proposed several antitrust measures to the state legislature, making him the first New
Jersey governor to radically depart from Dill's plan. He declared that the so-called Seven Sister
Acts would usher in "a new era in the business life of New Jersey." These regulatory measures,
passed in 1913, ended up costing the state far too much in revenue, and the legislature repealed
them in 1 9 2 0 . ' ~ ~
Dill's story reminds scholars of the Progressive Era that this outcome, though persistent,
was not inevitable. The organizational and technological developments that created the largescale industrial firm were not sufficient to sustain it. Industry relied heavily on the private
ambitions of all those who stood to gain from a corporatist economy. This supports Kolko's and
Sklar's revisionist theses, to a point. As they addressed, powerful businesses were very often
behind political developments that masqueraded as reform.
The personal focus of this study reveals nuances that more generalized accounts have
overlooked. It finds that the abstract interests Kolko and Sklar credited with agency were not a
unified group. Businessmen could not have achieved so much influence without support from
Standard Oil Co. ofNew Jersey v. UnitedStates, 221 S. Ct. 1 (191 1); Sklar, 370-374.
Lurie, A New Jersev Antholov, 21-22; "Wilson Says 'Honest Men Need Not Fear" The New York Times
(February 21, 1913), 12.
'29
members of other classes. Many of the men who assisted in these developments were lawyers,
part of the emerging professional class. They may have been acting in service to moneyed
interests, but they were primarily concerned advancing their own. The professional class was no
more unified than businessmen were. As Dill's work in professional circles demonstrates, there
was significant disagreement among lawyers, economists, and political scientists. In the case of
New Jersey incorporation laws, Dill's ambition came at the expense of other states. His shorttern goals, not a pro-corporate, conspiratorial agenda, drove his work.
Elements of Dill's work have survived a century of political and economic change. In
many ways, modem business law is an anomaly. Most Americans more willingly accept, and
expect, a more active federal government than they did in the nineteenth century. Yet, despite
cries for federal incorporation reemerging during the New Deal and the 1970s, incorporation is
still a state issue.
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