The Charles River Bridge Case was one of the first legal cases in the United States relating to the power of corporations versus the good of a community. The precedent set in the case established that the government has the power to stop a corporation that is becoming too powerful in the interests of the greater good.
In 1785, the Charles River Bridge Company was chartered as a franchise corporation by the Massachusetts legislature to construct a bridge in between Boston and Charlestown, an area directly to the north of Boston across the Charles River. The investors of the company would provide capital to build the bridge, and in exchange the state would grant them the right to collect tolls for crossing the bridge for the next forty years. Due to the boost the bridge provided to the economies of Boston and Charlestown, this privilege was extended to seventy years in 1791.
In 1823, a group of Charlestown merchants petitioned the Massachusetts legislature to grant a charter for the Warren Bridge Company allowing for the construction of a second, toll-free bridge, as the forty-year-old Charles River Bridge was narrow and crowded as well as expensive. One petitioning merchant described the tolls as “burdensome, vexatious, and odious.” The Warren Bridge was completed in December 1828. The Charles River Bridge Company had requested an injunction to halt construction in March 1828, claiming that the existence of a second bridge breached the contract of the original 1785 charter. The Massachusetts courts refused to grant it, and the case went to the Supreme Court in 1830.
When the case was first heard in the Supreme Court in 1831, the justices divided on the issue, and no final decision was passed. For the next six years, absences and vacancies prevented further decisions. The Chief Justice, John Marshall, died in 1835, and when the case came back to be argued again in 1837, the newly appointed Chief Justice Roger B. Taney decided the case.
The new appointments to the Supreme Court did not bode well for the Charles River Bridge Company, since all of them had been appointed by Andrew Jackson, who was against special privileges for corporations. When the case was being reargued, Jackson had just closed the Second Bank of the United States, citing the uneven distribution of wealth and control it caused. The Charles River Bridge case was seen as a similar case of “ill-gotten, disproportioned wealth,” and the final ruling was to sustain the Massachusetts court’s action, and let the Warren Bridge continue as a toll-free bridge.
The impact of the Supreme Court decision affected much more than a petty squabble between bridge owners. Had the Charles River Company won the case, it would have set a dangerous legal precedent of antiquated franchise corporation monopolies preventing the success of newer corporations or public efforts using superior methods, thus working against the public good and instead for the interests of the few stockholders of the franchise corporations. Such a ruling would have been disastrous to the just-developing yet extremely important infrastructure network of railroads, turnpikes, and canals of the time.
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