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Chapter Six - The Deciding Moment

The Theft of Human Rights

The first thing to understand is the difference between the natural person and the fictitious person called a corporation. They differ in the purpose for which they are created, in the strength which they possess, and in the restraints under which they act.

Man is the handiwork of God and was placed upon earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy.

There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing about the hereafter. …

A corporation has no rights except those given it by law. It can exercise no power except that conferred upon it by the people through legislation, and the people should be as free to withhold as to give, public interest and not private advantage being the end in view.

-- William Jennings Bryan
address to the Ohio 1912 Constitutional Convention

Part of the American Revolution was about to be lost, a century after it had been fought.

At the time, probably only a very few of the people involved realized that what they were about to witness could be a counterrevolution that would change life in the United States and, ultimately, the world, over the course of the following century.

In 1886, the Supreme Court met in the U.S. Capitol building, in what is now called the Old Senate Chamber. It was May, and while the northeastern states were slowly recovering from the most devastating ice storm of the century just three months earlier, Washington DC was warm and abloom.

In the Supreme Court’s chamber, a gold gilt eagle stretched its six-foot wingspan over his head as United States Chief Justice Morris Remick Waite glared down at the attorneys for the Southern Pacific Railroad and the county of Santa Clara, California. Waite was about to pronounce judgment in a case that had been argued over a year earlier at the end of January, 1885.

The Chief Justice had a square head with a wide slash of a mouth over a broom-like shock of bristly graying beard that shot out in every direction. A graduate of Yale University and formerly a lawyer out of Toledo, Ohio, Waite had specialized in defending railroads and large corporations. In 1846 Waite had run as a Whig for Congress from Ohio but lost, finally being elected as a Republican State Representative in 1849. After serving a single term, he’d gone back to litigation on behalf of the biggest and most wealthy clients he could find, this time joining the Geneva Arbitration case suing the British government for helping to outfit the Confederate Army with the warship the Alabama. He and his delegation won an astounding $15.5 million for the United States in 1871, bringing him national attention in what was often referred to as the Alabama Claims case.

In 1874, when Supreme Court Chief Justice Salmon P. Chase died, President Ulysses S. Grant had real trouble selecting a replacement, in part because his administration was embroiled in a railroad bribery scandal. His first two choices withdrew; his third was so patently political it was certain to be rejected by the Senate; three others similarly failed to pass muster. On his seventh try, he nominated attorney Waite.

Waite had never before been a judge in any court, but he passed Senate confirmation, instantly becoming the most powerful judge in the most powerful court in the land. It was a position and power he relished and promoted, even turning down the 1876 Republican nomination for President to stay on the Court and to serve as a member of the Yale [University] Corporation.

Standing before Waite and the other Justices of the Supreme Court this spring day were three attorneys each for the railroad and the county.

The Chief Legal Advisor for the Southern Pacific Railroad was again S. W. Sanderson, a former judge, huge, aristocratic bear of a man, over six feet tall, with neatly combed gray hair and an elegantly trimmed white goatee. For over two decades, Sanderson had become a rich man litigating for the nation’s largest railroads: artist Thomas Hill included a portentous and dignified Sanderson in his famous painting The Last Spike about the 1869 meeting of the rail lines of the Union Pacific and Central Pacific Railroads at Promontory Summit, Utah.

The lead lawyer for Santa Clara County, California was Delphin M. Delmas, a Democrat who later went into politics and by 1904 was known as “the silver-tongued Orator of the West” when he was elected a delegate to the Democratic National Convention from California. While Waite and Sanderson had spent their lives serving the richest men in America, Delmas had always worked on behalf of local California governments and, later, as a criminal defense attorney. For example, he passionately and single-handedly argued before the California legislature for a law to protect the remaining redwood forests.

Fiercely defensive about the “rights of natural persons,” Delmas was a fastidious, unimposing man, known to wear “a frock coat, gray-striped trousers, a wing collar and an Ascot tie,” whose “voice thrummed with emotion” and was nationally known as “the master dramatist of America’s courtrooms..” He had a substantial nose and a broad forehead only slightly covered in its center with a wispy bit of thinning hair. In the courtroom he was a brilliant dramatist, as the nation would learn in 1908 when he successfully defended Harry K. Thaw for murder in what was the most sensational case of the first half of the century, later made into the 1955 movie The Girl in the Red Velvet Swing.

The case about to be decided in the Old Senate Chamber before Justice Waite’s Supreme Court was about the way Santa Clara County had been taxing land and rights-of-way of the Southern Pacific Railroad. Claiming the taxation was improper, the railroad had refused for six years to pay taxes levied by Santa Clara County, and the case had ended up before the Supreme Court, with Delmas and Sanderson making the main arguments before the court.

Although the case on its face was a simple tax case, having nothing to do with due process or human rights or corporate personhood, the attorneys for the railroad nonetheless used much of their argument time to press the issue that the railroad was a “person” and should be entitled to human rights under the Fourteenth Amendment.

The mystery of 1886 and Chief Justice Waite

In the decade leading up to this May day in 1886, the railroads had lost every Supreme Court case that they had brought seeking Fourteenth Amendment rights. I've searched dozens of histories of the time, representing a wide variety of viewpoints and opinions, but only two have made a serious attempt to answer the question of what happened that fateful day - and their theories clash.

No laws were passed by Congress granting that corporations should be treated the same under the constitution as living, breathing human beings, and none have been passed since then.

It was not a concept drawn from older English law.

No court decisions, state or federal, held that corporations were “persons” instead of “artificial persons.”

The Supreme Court did not rule, in this case or any case, on the issue of corporate personhood.

In fact, to this day there has been no Supreme Court ruling that could explain why a corporation - with its ability to continue operating forever, a legal agreement that can’t be put in jail and doesn’t need fresh water to drink or clean air to breathe - should be granted the same Constitutional rights our Founders explicitly fought for, died for, and granted to the very mortal human beings who are citizens of the United States, to protect them against the perils of imprisonment and suppression they’d experienced under a despot king.

But something happened in 1886, even though nobody to this day knows exactly what or why.

That year Sanderson decided to again sue a government agency that was trying to regulate his railroad’s activity. This time he went after Santa Clara County, California. His claim, in part, was that because a railroad was a “person” under the constitution, local governments couldn’t “discriminate” against it by having different laws and taxes in different places. In 1885, the case came before the Supreme Court.

In arguments before the court in January, 1885, Sanderson asserted that “corporate persons” should be treated the same as “natural (or human) persons.”

He said, “I believe that the clause [of the Fourteenth Amendment] in relation to equal protection means the same thing as the plain and simple yet sublime words found in our Declaration of Independence, ‘all men are created equal.’ Not equal in physical or mental power, not equal in fortune or social position, but equal before the law.”

Sanderson’s fellow lawyer for the railroads, George F. Edmunds, added his opinion that the Fourteenth Amendment leveled the field between artificial persons (corporations) and natural persons (humans) by a “broad and catholic provision for universal security, resting upon citizenship as it regarded political rights, and resting upon humanity as it regarded private rights.”

But that wasn’t actually what the case was about - that was just a minor point.

The railroad was being sued by the county for back taxes. The railroad claimed six different defenses. The specifics are not important, because the central concern is whether the court ruled on the Fourteenth Amendment issue. As will be shown below, the Supreme Court’s decision clearly says it did not. But to put the railroad’s complaint in perspective, consider this:

On property with a $30 million mortgage, the railroad was refusing to pay taxes of about $30,000. (That’s like having a $10,000 car and refusing to pay a $10 tax on it ... and taking the case to the Supreme Court.)

One of the railroad’s defenses was that when the state assessed the value of the railroad’s property, it accidentally included the value of the fences along the right-of-way. The county, not the state, should have assessed the fences. So the railroad withheld all its taxes.

Yes, this is an exceedingly picayune distinction. All the tax was still due to Santa Clara County; the railroad didn’t dispute that. But they said the wrong assessor assessed the fences - a tiny fraction of the whole amount - so they refused to pay any of the tax, and they fought it all the way to the U.S. Supreme Court.

And as it happens, the Supreme Court of the United States agreed:

...the entire assessment is a nullity, upon the ground that the state board of equalization included ... property [the fences] which it was without jurisdiction to assess for taxation...

The Court rejected the county’s appeal, and that was the end of it. Except for one thing.

One of the railroad’s six defenses involved the Fourteenth Amendment. As it happens, since the case was decided based on the fence issue, the railroad didn’t need those extra defenses, and none of them was ever decided by the court. But one of them - related to the Fourteenth Amendment - still crept into the written record, even though the Court specifically did not rule on it.

Here’s how the matter unfolded. First the railroad’s defense.

The treatment that the railroad claimed was unfair

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