Corporations Corporation law has traditionally been the domain of state legislatures and state courts, although nothing in the Constitution prohibits a federal role in corporate governance. The influence of the United States Supreme Court on corporation law until recently has therefore been decidedly secondary to that of the state courts, especially those of Delaware and New York. Nevertheless, before World War II, several Supreme Court decisions had momentous consequences for the place of corporations in American society. Since 1950, the Court has come to exercise an ever‐expanding influence on corporation law, due partly to the impact of securities regulation on corporate affairs and partly to an increasing nationalization of corporation law.

Dartmouth College v. Woodward (1819) marked the debut of the private profit‐making corporation because it extended the protection of the Contracts Clause of Article I, section 10 of the Constitution to corporate charters, treating them as contracts between the state and entrepreneurs. Dartmouth College prevented arbitrary state interference with charters, thereby giving some security to investors. Charles River Bridge v. Warren Bridge (1837) contributed a salutary counterpoise to Dartmouth College because of Chief Justice Roger B. Taney's insistence that states could reserve a right to amend the charter when they issued it. Taney refused to read implied grants of monopolies into charters, thereby establishing a creative balance between the demands of investors and the need for state regulatory power. In McCulloch v. Maryland (1819), Chief Justice John Marshall upheld the power of Congress to charter banking corporations as one of the implied powers that Alexander Hamilton had identified in his 1791 arguments on the constitutionality of the bill to charter the first Bank of the United States.

For a century after Charles River Bridge, the Supreme Court had little direct involvement with the law of corporations, except for the offhand dictum of Chief Justice Morrison R. Waite in Santa Clara County v. Southern Pacific Railroad (1886) that corporations were “persons” within the meaning of the Fourteenth Amendment's Equal Protection Clause. The Court's various substantive due process and freedom of contract decisions between 1890 and 1937 strengthened the hand of corporations in their dealings with employees, unions, consumers, and state legislatures. Another instance of constitutional protection for the corporate entity came in First National Bank v. Bellotti (1978), where the Court extended the First Amendment's protection to corporate political speech.

The expansion of various bodies of federal law after World War II has had an extensive impact on corporations. Because federal courts have exclusive jurisdiction of cases under the Securities Exchange Act of 1934 and concurrent jurisdiction with state courts over nearly all the remainder of federal securities statutes, the Supreme Court has had an immeasurable influence on the securities‐regulation domain of corporation law (e.g., the definition of insider trading in cases like Chiarella v. United States, 1980). In J. I. Case Co. v. Borak (1964), a proxy solicitation case, the Supreme Court created the implied private right of action and the role of “private attorney general,” greatly enhancing the enforceability of federal securities statutes. In a bankruptcy case, Taylor v. Standard Gas & Electric Co. (1939), the Court invented the so‐called Deep Rock doctrine, which subordinated the debt claims of a corporate shareholder to the claims of outside creditors.

Extensive criticism of state regulatory law, especially Delaware's, led to demands for federal corporation law—statutory, administrative, common law, or a combination of all three—in the 1960s and 1970s. The Supreme Court emphatically rebuffed attempts to accomplish this through expansion of the SEC's rule 10b‐5 prohibition of fraud in Santa Fe Industries v. Green (1977), thus reaffirming the primacy of the states in all aspects of corporate governance except securities regulation.

While eschewing responsibility for the law of corporations directly, the Court has considerably affected the development of that law in cases involving the rights of corporations or those who deal with them.

See also Capitalism; Private Corporation Charters.

Bibliography

Robert C. Clark , Corporate Law (1986).

William M. Wiecek

CARNEGIE CORPORATION OF NEW YORK

CARNEGIE CORPORATION OF NEW YORK, a private grant-making foundation, was created by Andrew Carnegie (1835–1919) in 1911 to "promote the advancement and diffusion of knowledge and understanding among the people of the United States." Capitalized with a gift of $135 million, the Carnegie Corporation has been influential in a number of areas, including education, race relations, poverty, and public policy. In 2001 the Carnegie Corporation had assets of around $2 billion, putting it in the top thirty of American foundations, making grants of around $60 million annually.

In 1889 Carnegie wrote "The Gospel of Wealth," in which he argued that wealth is a community trust, for the "man who dies rich dies disgraced." Carnegie's philanthropic activity became more systematic after his retirement in 1901, when he sold his steel companies to J. P. Morgan for $400 million. Carnegie set up a variety of philanthropic organizations, including the Carnegie Institute of Pittsburgh (1900), the Carnegie Institution of Washington (1902), the Carnegie Foundation for the Advancement of Teaching (1905–1905), the Carnegie Endowment for International Peace (1910), the Carnegie Corporation (1911), and several foundations in Europe. The Carnegie Corporation was his largest single endowment and was operated chiefly under his personal direction until his death. One of Carnegie's early interests was the establishment of free public libraries, a program he began in 1881 and continued through the corporation, building over 2,500 libraries. The corporation terminated the program in 1917 but supported library services for several decades thereafter.

In the mid–twentieth century the Carnegie Corporation, along with the Rockefeller and Russell Sage Foundations, shifted research funding away from independent institutes and bureaus into higher education, leading to the development of the research university. For example, after World War I the corporation reallocated resources away from advocacy groups, like social settlement houses, and instead began funding university-based sociology.

Under the presidency of Frederick P. Keppel (1923–1941), the corporation funded large-scale policy studies, including sociologist Gunnar Myrdal's study of racism, An American Dilemma (1944). After World War II, under John W. Gardner (1955–1965), the corporation experimented with funding liberal social movements and policy-related research. Gardner left the corporation to head the Department of Health, Education, and Welfare under President Lyndon Johnson, illustrating the ties between the corporation and the liberal policy establishment. Alan Pifer (1965–1982) continued this activist grant making, funding Common Cause and advocacy groups associated with Ralph Nader. The Carnegie Corporation provided major support for educational television, especially the children's show Sesame Street. In the 1970s the corporation joined with the Ford Foundation in providing significant funding for women's studies programs.

The Carnegie Corporation continued its program of activist grant making into the twenty-first century. It concentrated especially on education, electoral reform, international development, and peace studies.

BIBLIOGRAPHY

Carnegie Corporation of New York. Home page at http://www.carnegie.org.

Lagemann, Ellen Condliffe. The Politics of Knowledge: The Carnegie Corporation, Philanthropy, and Public Policy. Middletown, Conn.: Wesleyan University Press, 1989.

Rare Book and Manuscript Library, Columbia University. Home page at http://www.columbia.edu/cu/lweb/indiv/rare. Archive of Carnegie Corporation activities from 1911 to 1983.

Wall, Joseph Frazier. Andrew Carnegie. 2d. ed. Pittsburgh, Pa.: University of Pittsburgh, 1989.

Fred W.Beuttler

See alsoCarnegie Foundation for the Advancement of Teaching ; Carnegie Institution of Washington ; Philanthropy .

Carnegie Corporation of New York foundation established (1911) to administer Andrew Carnegie's remaining personal fortune for philanthropic purposes. Initially endowed with $125 million, the foundation received another $10 million from the residual estate. By 1999 its assets exceeded $1.5 billion. Carnegie directed the foundation's activities until his death in 1919; in accordance with his early interests he gave grants to public libraries and church organs. Following his death the trustees followed a more general policy leading to "the advancement and diffusion of knowledge and understanding." The foundation has financed many studies in its areas of main interest—U.S. education and underprivileged groups, such as the Myrdal Study on Race Relations in the United States. Andrew Carnegie also established the Carnegie Endowment for International Peace (1910), the Carnegie Foundation for the Advancement of Teaching (1905), and the Carnegie Hero Fund Commission (1904).

Bibliography: See F. Keppel, The Foundation (1989); A. A. Van Slyck, Free to All (1996).