Hostile Takeovers and Modern Corporations in Antebellum Georgia

One rarely uses the word “modern” when discussing Georgia during slavery, yet the state was already on the way to modern corporate organization and activities before the Civil War. Before 1848, incorporating a business required going to the state legislature to request private legislation that spelled out specific privileges granted in the corporation’s charter, the regulations by which the charter could be revoked, and an expiration date that allowed the legislature to examine the enterprise’s behavior before renewing the charter. Generally, business corporations provided a public need, such as constructing a mill or a bridge in exchange for a regulated monopoly in which the legislature dictated prices. Much of this changed in the 1830s, with the building of expensive canals and railroads, along with the expansion of banking. Yet these corporations did not always act for the public good. Although Augusta’s civic leaders opposed constructing the Georgia Railroad fearing a lessening of their economic reach, by 1840 Augusta leveraged control of the corporation to ensure domination of the countryside until the 1870s. Likewise, the legislature authorized organization of the Southern Mutual Insurance Company in Cuthbert in 1847, but a year later citizens of Athens packed the stockholders meeting and voted to move the company headquarters to their town, and to replace its officers with themselves. Yet, in 1847, Georgia’s legislature approved a general incorporation law for manufacturers to encourage cotton manufacturing to aid the state’s economy. They argued that easing the means of incorporating cotton factories was categorically different from incorporating banks, insurance companies and railroads. After passage of the law, manufacturers only needed to file paperwork at the county court house to incorporate a cotton factory. This paper will consider the consequences of modernizing manufacturing business organization and compare these consequences to other states that granted general incorporation charters.