1.3.3. New England (1833-1865): Economic Revolution and Instrumentalism

During the antebellum era, many American courts followed what legal historians later labeled an “instrumentalist” path:    they supported entrepreneurs who would develop resources and promote the industrial revolution, and gave less weight to traditional rights of landowners than predecessor courts had done.  New England courts generally were sympathetic to laws promoting economic development, but they worried that lawmakers might go too far in promoting development at the expense of established property rights and they did not hesitate to strike down laws that , in their view, crossed the line.    

Legal instrumentalism:  Mill dam laws

  • Stowell v. Flagg – Massachusetts, 1814 (11 Mass. 364); Jordan v. Woodward – Maine, 1855 (40 Me. 317); Olmstead v. Camp – Connecticut, 1866 (33 Conn. 532); Great Falls Mfg. Co. v. Fernald – New Hampshire, 1867 (47 N.H. 444); Tyler v. Beacher – Vermont, 1871 (44 Vt. 648)
  • Water mill dams provided power to run New England’s mills but often flooded upstream lands.  Mill dam laws prevented landholders from stopping the mill owners as long as the owners paid for damage caused by the flooding.  Several New England colonies passed such laws, which were essential in order to enable local farmers to grind their grain, but the laws troubled many judges because they seemed to benefit mill owners unfairly at the expense of upstream landowners. 
  • The concern became more pronounced when cotton mills and other large enterprises dependent on water power took advantage of the law, often using it to effectively control large stretches of rivers. 
  • In Stowell, Massachusetts Chief Justice Isaac Parker echoed this concern but held that because the state’s mill dam law had existed since colonial times and represented a deliberate policy choice of the legislature, the court would not disturb it. 
  • Forty years later, in Jordan, Maine’s supreme court allowed traditional water uses to continue but warned that in future, it would regard attempts of industrialists’ attempts to use the law with a skeptical eye.  In Tyler, Vermont’s supreme court went a step further, holding that by the late 19th century, most mills were simply a form of private enterprise and no longer served a genuinely public use. 
  • Connecticut and New Hampshire judges disagreed.  They interpreted their states’ mill dam laws broadly and celebrated use of the laws by industrialists.  The Fernald case opened the door to a new era in New Hampshire’s economy:  textile mills, most notably Manchester’s Amoskeag Manufacturing Co., dominated the state’s economy – and its rivers – well into the 20th century.

“No State of the Union is more interested than ours in the improvement of natural advantages for the application of water power to manufacturing purposes.  Nature has denied to us the fertile soil and genial climate of other lands, but by way of compensation has endowed us with unrivalled opportunities of turning our streams of water to practical account.  The present prosperity of the State is largely due to what has already been done towards developing these natural advantages.” – Justice __, in Fernald

Municipal subsidies for canals and railroads

City of Bridgeport v. Hoosatonuc Railroad Co. – Connecticut, 1843 (15 Conn. 475); In re Opinion of the Justices (Manufacturing Subsidy Case) – Maine, 1871 (58 Me. 590); Lowell v. City of Boston – Massachusetts, 1873 (111 Mass. 454)

  • Canal construction got underway in New England in the early 1800s; internal improvement projects increased and accelerated with the advent of railroads in the 1830s.  As the number of projects grew, the question arose:  could government funds be used to subsidize such projects?  Municipalities were eager to do so:  having a railroad often meant the difference between economic success and oblivion for counties, cities and villages.  But they were hampered by the fact that many projects were unsuccessful  and left their municipal backers with large losses that taxpayers had to bear.  They were also hampered by the fact that under the law, municipalities could only subsidize projects that were public in nature.
  • New England courts had little difficulty concluding that although railroads were private corporations, they were so intimately connected with the public that they could be subsidized.  Some courts believed the same principle should apply to other large economic enterprises, such as cotton mills and other manufactories, but most New England courts drew the line at transportation projects.  Maine’s supreme court was particularly vigilant about maintaining this line, and in the Lowell case Massachusetts’s justices followed suit, striking down a law that authorized municipal loans to victims of an 1872 fire that destroyed much of Boston so that the city could get back on its feet economically.
Vermont Central Railroad line -
Courtesy Wikimedia Commons

Building and controlling bridges

Proprietors of Charles River Bridge v. Proprietors of Warren Bridge – Massachusetts, 1829 (24 Mass. 344), affirmed, 36 U.S. 420 (1837); Proprietors of Piscataqua Bridge v. New Hampshire Bridge – New Hampshire, 1834 (7 N.H. 35); White River Turnpike Co. v. Vermont Central Railway Co. – Vermont, 1849 (21 Vt. 590)
  • Before the industrial revolution, states usually granted exclusive charters to transportation companies:  only one railroad, canal, or bridge could operate in a particular area.  As America grew and more transport was needed, established franchise owners fought to prevent new charters from being issued.   But during the Jacksonian era, most American courts moved away from the traditional presumption of exclusivity:  charters were now presumed not to be exclusive unless the legislature explicitly made them so.
  • The Charles River Bridge case was the primary vehicle for this change, not just for New England but for the nation as a whole.  Proprietors of the Charles River Bridge, which connected downtown Boston with the city’s northern suburbs, had spent large sums in the 1780s to build the bridge but had reaped much larger sums in tolls as their reward.   In 1828 the Massachusetts legislature authorized a rival company to build the Warren Bridge next to the old bridge in order to accommodate cross-river traffic.  Massachusetts’s supreme court divided equally as to whether the traditional presumption of exclusivity should be upheld or overturned.  Marcus Morton, the only Jacksonian Democrat on the court, argued that the presumption was contrary to “the principles of our free institutions”; ___ Putnam argued that “public credit would be paralyzed” if companies could not be sure how long their franchises would be exclusive.  The U.S. Supreme Court, in one of its most celebrated decisions of the early 19th century, sided with Morton and held that the old presumption could not stand in light of the increasing role state governments played in promoting public health and welfare. 
  • In the Piscataqua and White River cases, both decided after Charles River Bridge, New Hampshire and Vermont endorsed the new presumption but suggested that the holder of the first franchise should be compensated for any direct injury (such as physical damage to a bridge or highway) caused by the new franchise, although not for loss of profits.     
 Water mill, Kennebunk, Maine - courtesy Library of Congress and Wikimedia Commons

“I cannot help thinking that this statute was incautiously copied from the ancient colonial and provincial acts, which were passed when the use of mills, from the scarcity of them, bore a much greater value, compared to the land used for the purposes of agriculture, than at present.  But with this we have nothing to do.  As the law is, so we must declare it.” – Chief Justice Isaac Parker, in Stowell

“[I]t was neither the declared nor the actual purpose of the city to deal or speculate in the stock of the Rail-Road Company, but solely to aid in the construction of what was believed to be a great public improvement, which would result in direct advantage to the city, by directing the business of the interior from other channels, and securing it to Bridgeport.  … [I]f … the city became directly a stockholder in a corporation… this was only an incidental result of their efforts to give aid to the construction of the road for the interest of the city and its citizens.” – Justice __, in Hoosatonuc

“There is nothing of a public nature any more entitling the manufacturer to public gifts than the sailor, the mechanic, the lumberman, or the farmer.  Our government is based upon equality of rights.  All honest employments are honorable.  The State cannot rightfully discriminate among occupations.” – Justice John Appleton, in Manufacturing Subsidy Case

“[The presumption of exclusivity would] amount to an entire prohibition of all further internal improvement during their continuance. … [T]his construction is neither consonant with sound reason … nor with the principles of our free institutions.” – Justice Marcus Morton, in Charles River Bridge

 “[The old presumption promotes] a continued and increasing confidence in legislative contracts.  Men of capital and energy would embark their funds in enterprises of a public character, in the hope that their own fortunes might be advanced with the public prosperity.  The State would command the wealth and services of the people.  But let the reverse of this be suspected, and public credit will be paralyzed.” – Justice __ Putnam, in Charles River Bridge

Cases may exist where, owing to a change in the population, business, and intercourse of the country, the public interest may require the opening of new avenues within the rights of such exclusive grants, and in which the indiv right should be made subservient to the public use; but this may be done without a violation of the public faith.  Whatever the public require they are able to pay for – and it is not for the public interest that the grants of the government should be held good so long only as there is no desire to interfere with them – good while they are onerous to the grantee, and invalid when others may wish to participate in the benefits derived from them.” –Chief Justice Joel Parker, in Piscataqua Bridge