TY  - JOUR
AU  - Hilt,Eric
TI  - When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13093
PY  - 2007
Y2  - May 2007
UR  - http://www.nber.org/papers/w13093
L1  - http://www.nber.org/papers/w13093.pdf
N1  - Author contact info:
Eric Hilt
Wellesley College
Department of Economics
106 Central Street
Wellesley, MA 02481
Tel: 781/283-2986
Fax: 781/283-2177
E-Mail: ehilt@wellesley.edu
AB  - This paper analyzes the ownership and governance of the business corporations of New York State in the 1820s. Using a new dataset collected from the manuscript records of New York's 1823 capital tax, and from the charters of the corporations, I analyze the ownership structures of the firms, and investigate the degree to which ownership was separated from control at the time. In contrast to Berle and Means's account of the development of the corporation, the results indicate that many of the firms were dominated by large shareholders, who were represented on the firms' boards, and held sweeping power to utilize the firms' resources for their own benefit.  The oppression of minority shareholders was a significant problem in early corporate governance, and many of the firms configured their voting rights in a way that curtailed the power of large investors. A positive relationship between firm value and these voting rights configurations is found among the publicly-traded firms in the sample.
ER  -