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  • 2019
  • Working Paper
  • HBS Working Paper Series

Voting Trusts and Antitrust: Rethinking the Role of Shareholder Rights and Private Litigation in Public Regulation, 1880s to 1930s

By: Naomi R. Lamoreaux and Laura Phillips Sawyer
  • Format:Print
  • | Language:English
  • | Pages:43
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Abstract

Scholars have long recognized that the states’ authority to charter corporations bolstered their antitrust powers in ways that were not available to the federal government. But they have also argued that the growth of large-scale enterprises operating in national and even international markets forced states to stop prosecuting monopolistic combinations out of fear of doing serious damage to their domestic economies. Our paper has revised this conventional view by focusing attention on the lawsuits that minority shareholders brought against their own companies in state courts of law and equity, especially suits that challenged the anticompetitive use of voting trusts. Historically judges had been reluctant to intervene in corporations’ internal affairs and had displayed a particular wariness of shareholders’ private actions. By the end of the 19th century, however, they had begun to revise their views and to see shareholders’ private actions as useful checks on economic concentration. Although the balance between judges’ suspicion of and support for shareholders’ activism shifted back and forth over time, the long-run effect was to make devices like voting trusts unsuitable for the purposes of economic concentration.

Keywords

Voting Trusts; Antitrust; Business and Shareholder Relations; Lawsuits and Litigation; History; United States

Citation

Lamoreaux, Naomi R., and Laura Phillips Sawyer. "Voting Trusts and Antitrust: Rethinking the Role of Shareholder Rights and Private Litigation in Public Regulation, 1880s to 1930s." Harvard Business School Working Paper, No. 19-109, May 2019.
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More from the Authors

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    Introduction

    By: Laura Phillips Sawyer and Herbert Hovenkamp
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    U.S. Antitrust Law and Policy in Historical Perspective

    By: Laura Phillips Sawyer
    • April 2019
    • Faculty Research

    A Note on U.S. Bankruptcy Law: Individuals, Firms, and Sub-State Entities

    By: Laura Phillips Sawyer
More from the Authors
  • Introduction By: Laura Phillips Sawyer and Herbert Hovenkamp
  • U.S. Antitrust Law and Policy in Historical Perspective By: Laura Phillips Sawyer
  • A Note on U.S. Bankruptcy Law: Individuals, Firms, and Sub-State Entities By: Laura Phillips Sawyer
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