Editors’ Note: This post from Johann Neem begins HistPhil‘s online forum marking the 200th anniversary of the Supreme Court case Dartmouth College v. Woodward, a landmark decision in shaping the legal landscape of U.S. civil society. In this forum, a corps of distinguished scholars reflect on the complex legacy of Dartmouth v. Woodward, in the contest of the development of American voluntarism and the broader understanding of the boundaries between private and public life.
On this, the two-hundredth anniversary of the U.S. Supreme Court’s Dartmouth College v. Woodward decision, how are we to understand the case, both in its historical context and in its significance for us today? Scholars past have tended to see the case as furthering the protection of business corporations. Albert Beveridge, in his 1919 four-volume biography of John Marshall, praised the chief justice for promoting U.S. enterprise: “It is undeniable and undenied that America could not have been developed so rapidly and solidly without the power which the law as announced by Marshall gave to industrial organization.” Others, such as Mark D. McGarvie, have made important arguments about the case’s centrality to the separation of church from state. This post will focus on another important context: the case’s significance for the legal development of a civil society composed of what we today call nongovernmental organizations (NGOs).
To understand this context, we must place ourselves back in the early nineteenth century, a time when American leaders presumed that corporations like Dartmouth were public. American law treated charters as grants of public authority to institutions founded for the state’s benefit. By 1819, however, in response to political challenges, elected leaders and jurists would redefine the meaning of charters and the institutions that they established. Churches, colleges, and other institutions would come to be seen as independent entities protected from the state by their charters. This also changed the meaning of corporate trusteeship, as the work of the late Peter Dobkin Hall emphasized.
For centuries, corporations had been suspect in Anglo-American thinking. Thomas Hobbes considered them akin to “worms in the entrails of a natural man” because they allowed a small group to mobilize capital and resources to achieve private goals. Leaders after the American Revolution were therefore reasonably cautious about allowing the proliferation of corporations that might weaken the people’s sovereign authority. However, state governments in the post-Revolutionary decades were relatively small and had very little bureaucratic capacity. To promote public goods, they needed to mobilize individuals with capital. Corporate charters were, as Oscar and Mary Flug Handlin wrote in their classic work, Commonwealth (1969), “extensions of state privilege” to individuals in return for a public service. Through corporations, the state tapped into private resources to provide such diverse goods as education, charity, and even colonies.
It was not just corporations that were considered public, however. Before the American Revolution, certain people were considered public. In a hierarchical world, individuals were not all equal before the law. They had different privileges and duties based on their rank or status. In colonial America, ranks were not well established, but status was. Certain men from certain families had, as an extension of their standing in their communities, a widely-accepted responsibility for the public good. They were public trustees. They did not gain their public responsibilities as a result of holding office but instead gained their offices as a result of their prior public standing. They carried it in their bodies. As Gordon S. Wood observed in his 1991 Radicalism of the American Revolution, “translating the personal, social, and economic power of the gentry into political authority was essentially what colonial politics was about.”
So long as some men had public authority because of who they were, corporations like Dartmouth could be considered public because of the people who ran them. That is why Dartmouth’s charter did not need to lay out specific clauses to ensure government oversight. After independence, although the governor was the only ex officio officer on Dartmouth’s Board of Trustees, all the trustees were officeholders or ministers of the tax-supported church. In other words, Dartmouth’s governing board was composed of men who carried public authority with them.
When the same men governed the institutions of church, state, and college, there was no reason to ask whether Dartmouth was a public institution. However, the Revolution raised this question. After independence, new kinds of people entered politics, citizens whose public authority came from being elected to office, not from birth or family. Moreover, Americans divided into competing parties, undermining any notion of a united elite. Instead, Federalists and Republicans competed for office by mobilizing voters and courting public opinion. In a democracy, public status came from the people’s election, not just because of one’s prior standing in the community. But, if a competing party was elected into power, then public institutions like Dartmouth could be left in the hands of the minority. What then?
That was the issue facing New Hampshire’s leaders when Jeffersonian Republicans came to power in 1816. Suddenly, Dartmouth and the state government were controlled by different factions. The same set of men no longer connected the state’s public authority to the college’s public standing. Whose college was it now? Did it belong to the state? If so, the charter needed updating to reflect the changing nature of officeholding in a democratic republic. Or did it belong to the trustees as now-private men who still had a legal right to carry out their public work through corporations like Dartmouth
Republicans determined that the charter needed to be updated to account for the fact that partisan elections made political authority contested. Republican Governor William Plumer in 1816 argued that the gap between state and college should be understood historically:
As it [Dartmouth’s charter] emanated from royalty, it contained, as was natural it should, principles congenial to monarchy. Among others, it established trustees, made seven a quorum, and authorized a majority of those present to remove any of its members which they might consider unfit or unacceptable, and the survivors to perpetuate to the board by themselves the electing of others to supply vacancies. This last principle is against the spirit and genius of a free government. Sound policy therefore requires that the mode of election should be changed, and that the trustees in the future should be elected by some other body of men.
This was not just partisan rhetoric. Governor Plumer understood that the college’s public status had once been determined by the fact that it was governed by public men. But now voters chose new public men in democratic elections. To keep the college a public institution required altering the charter. To Republicans, this was a conservative position—it conserved the public status of Dartmouth.
Republican legislators thus changed Dartmouth’s name to Dartmouth University, raised the number of trustees, and added a twenty-five-member Board of Overseers. They also named the senate president, speaker of the house, governor, council, and lieutenant-governor as ex officio members. The governor and council would fill vacancies on the Overseers. Dartmouth would be governed by men who gained their public standing through elections. The Federalist trustees, in order to maintain their control of Dartmouth College, responded by going to court to protect their legal and property rights as laid out in the charter.
Scholars focus on the U.S. Supreme Court’s 1819 decision. It is worth noting, therefore, that the New Hampshire supreme court offered a more historically-minded decision. In 1817, New Hampshire Chief Justice William Richardson ruled in favor of the Republicans. Dartmouth was a public college because of the charter’s original intent. Taking historical context into account, Richardson wrote that public corporations were “created for public purposes.” Thus, “the office of trustee of Dartmouth College is, in fact, a public trust, as much so as the office of governor, or of judge of this court.” Richardson did not deny that there could be private corporations, but determined that since Dartmouth had long been considered a public corporation, it should remain so.
Richardson’s decision was overturned by the U.S. Supreme Court when it determined that Dartmouth’s charter was a private contract protected by the U.S. Constitution. In his opinion, Chief Justice Marshall recognized that times had changed, and offered a different solution. In a democracy in which parties compete for power, minorities must have the legal capacity to form private institutions through which they can promote public goods. The Court cleared a space for people to form what would come to be known as nonprofit corporations. In a partisan environment, Marshall’s position ultimately earned bipartisan support, since members of both parties had a vested interest in protecting their institutions when their rivals came to power.
This last point needs emphasis. While the Supreme Court’s decision anachronistically redefined Dartmouth College as a private institution, it, as a result, extended legal protection to private nongovernmental organizations in civil society, something many state governments were also doing in response to similar controversies. When I first wrote about the Dartmouth College case in the late 1990s, western governments and philanthropists were investing heavily in the development of civil society in what were then considered, optimistically, the emerging democracies of the former Soviet Union. Western governments urged governments in the former Soviet bloc to pass laws granting their citizens the legal capacity to form NGOs. There was some success, but NGOs remain suspect and threatened throughout much of the world. It is not easy for governments to tolerate the proliferation of private organizations promoting their own agendas, often at odds with state leaders.
Thus, even if the Supreme Court’s 1819 decision did not fully account for the historical context in which Dartmouth’s charter had been issued, it helped establish the principle in the United States that citizens could form private corporations to promote public goods and ideas without fearing direct retribution by the state.
-Johann N. Neem
Johann N. Neem is Professor of History at Western Washington University. More detailed analyses of the argument above can be found in Creating a Nation of Joiners: Democracy and Civil Society in Early National Massachusetts (2008) and “Politics and the Origins of the Nonprofit Corporation,” Nonprofit and Voluntary Sector Quarterly (2003). Neem is also author of Democracy’s Schools: The Rise of Public Education in America (2017) and the forthcoming What’s the Point of College? Seeking Purpose in an Age of Reform.