Deep South (1831-1861): Law and the Transportation Revolution

The Problem of State Subsidies

Stein v. City of Mobile – Alabama, 1854 (24 Ala. 591); Cotten v. Leon County CommissionersFlorida, 1856 (6 Fla. 610); Sadler v. Langham – Alabama, 1859 (34 Ala. 311)

  • After 1800, many state and local governments subsidized canals, turnpikes and other transportation projects in order to connect with national and international markets.  The subsidies accelerated when railroads appeared on the scene in the early 1830s; but the depression of 1837-40 bankrupted many railroads and left governments saddled with large debts and no means of recovery.  Lawmakers in some regions, particularly the Midwest, reacted by prohibiting further state and municipal subsidies, and a handful of courts held that governments could not finance railroads because railroads were private, not public companies.
  • Deep South states had no doubts about the legitimacy of subsidizing transportation projects.  Indeed, Georgia was one of a handful of states that experimented with direct ownership of railroads.  It constructed the Central Railroad of Georgia in the 1830s and in the process enabled the railroad’s northern terminus, Atlanta, to grow from a small town into the state’s metropolis.  Only a few challenges to railroad subsidies came before Southern courts – Stein and Cotten are the leading cases – and the challenges were uniformly rejected.
  • Another type of economic development law that became controversial in the early 1800s was “mill dam” laws, which overturned the common-law rule that water-mill operators could not build dams that flooded the lands of upstream neighbors, even if such a dam was essential to operate the mill.  Dams laws allowed mill owners to flood if they compensated owners of the flooded lands.  Opponents argued that this amounted to a taking of private property, which could only be done for a public purpose, and that water mills were not public concerns.  A few courts agreed, but most held that facilities for grinding grain were essential to the public and that as long as a mill offered its services to all comers, it was a public concern.  The majority rule prevailed in the Deep South, as exemplified by the Alabama’s supreme court’s decision in Sadler.    
“Certain uses and purposes … have been pronounced public, by well considered decisions, as railroads, turnpike-roads, public ferries, public grist-mills, etc.  All these, and perhaps many more, the court will judicially know are within the authority left in the legislature. … The State is probably interested in the encouragement of industrial pursuits; in reclaiming its waste lands; in leaving its citizens in position to perform public service.” – Justice George W. Stone, in Sadler  

Bridges and Monopolies in the Age of Jackson

Dyer v. Tuskaloosa Bridge Co. – Alabama, 1835 (2 Porter 296); Young v. Harrison – Georgia, 1849 (6 Ga. 130); Shorter v. Smith – Georgia, 1851 (9 Ga. 517)

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 (§§ _____). 

Southern courts wholeheartedly joined in this movement.  The Dyer and Young cases are leading examples.  In each case, Deep South courts rejected claims of ferry proprietors that when the legislature gave them their charters meant the charters to be exclusive.  Georgia’s Chief Justice Lumpkin was a leading expositor of the new philosophy:  in Shorter, he bluntly stated that the no-exclusivity rule was necessary to accommodate population growth and new economic conditions and that he, for one, was glad to see the old rule go. 

“We think the [state’s taxation] power extends to the employment of all those means and appliances ordinarily adopted, or which may be calculated, to develop the resources of the State, and add to the aggregate wealth and prosperity of the citizens … The will of a legal majority is not tyranny.  It is the good of the community to which we belong.” – Justice William Chilton, in Stein

“Surely it will not be seriously contended that … county authorities … shall be precluded from availing themselves of the benefits resulting from the most magnificent discovery of the age.” – Justice Charles Dupont, in Cotten

“The duty of the government is to protect the citizen in his occupation, not destroy it by setting up a rival interest. … [T]he assumption of unrestricted sovereignty in the imposition of taxes and disbursement of public money, has not foundation in American institutions, and is not fitted to American soil.” – Justice Thomas Baltzell (dissenting), in Cotten

“Notwithstanding the profound regrets expressed by Chancellor Kent at [the] overthrow [of the rule that bridge franchises are exclusive], … such a doctrine … is at war with the universally recognized principles of American constitutional law, and totally inapplicable to our local situation and change of circumstances. … [W]henever, owing to a change in the population, business, and intercourse of the country, the public interest requires the opening of new avenues … chartered rights … must yield and become subservient to the public good, provided, just compensation be made.” – Chief Justice Joseph Lumpkin, in Shorter