Four California Railroad Lawyers in the Classical Era

for

Professor Robert W. Gordon History of American Law Spring 1994

Daniel W. Levy 39-09 Grant Stre Fair Lawn, NJ 07410 Tel: 201-796-8753 I. INTRODUCTION

Then, faint and prolonged, across the levels of the ranch, he heard the engine whi~tling for Bonneville. Again and again, at rapid intervals in its flying course, it whistled for road crossings, for sharp curves, for trestles; ominous notes, hoarse, bellowing, ringing with the accents of menace and defiance; and abruptly Presley saw again, in his imagination, the galloping monster, the terror of steel and steam, with its single eye, c ean, red, shooting from horizon to horizon; but saw it now these mbol of a vast power, huge, terrible, flinging the echo of its t un er over all the reaches of the valley, leaving blood and destruction in its path; the leviathan, with tentacles of steel clutching into the soil, the soulless Force, the iron-hearted Power, the monster, the Colossus, the Octopus.l

Frank Norris' 1901 novel recounts the story of relations between a group of squatters misled into believing that they would be sold land by the railroad for a low advertised price and the corporate directors. The settlers worked to make the land productive, and to locate sources of water. Eventually, the railroad ejected the squatters, but not before a showdown, and the death of five settlers and two federal marshals. The massacre at Mussel Slough in 1870 occurred at a moment w.h.en I popular antipathy towards railroads began to intensify.2 The incident is a~ a perfect example of a episode translated into a legal conflict that only inadequately captures the reality of the social conflict, and certainly contributes at most negligibly to its resolution. Norris' characterization of the railroad on three levels of abstraction als~) is ,/ appropriate and helpful as a description of the roles that railroad lawyers played in achieving the goals of their employer. On the first and most pragmatic level, the

lFrank Norris, THE OCTOPUS: A STORY OF CALIFORNIA 51 (Penguin Books, 1986) (1901). 2For a general retelling of the story of Mussel Slough and an assessment of its literary representations, see generally David J. Bederman, The Imagery of Injustice at Mussel Slough: Railroad Land Grants, Corporation Law, and "Great Conglomerate West," W. LEG. HIST., Summer/Fall 1988, at 237. oncoming train is the railroad's whistle, an unseen voice, an indication of a aroused body of wealth, a warning of fury to be unleashed upon those who obstruct it. The lawyer in this sense is the mere agent of the corporation. He is the person who makes the appropriate noises at the correct times translating the desires of his masters into a legal language that achieves results. He operates on the most basic, mundane and managerial front, administering to the details of the life of the company, oiling its economic and legal machinery. It is here I want to consider the ways in which four quite interesting personalities contributed to the principal railroad goals: minimization of the impact of potentially damaging regulations (maximum fares, taxes rates, issuance of stocks and bonds, controls on corporate forms, etc.), low-cost land a~quisition, preferential govern.ment treatment, labor force stability, limited shareholder liability, and the maintenance of the Central Pacific's monopoly. By far, however, the most important goal of the Central Pacific, reorganized in 1884 as the Southern Pacific Railroad,3 was solving the fiscal, legal, and public relations crises that its enormous debt to the federal government would create. . The goal in mind is to be able to describe the legal strategies that emerged over the corporation's early life, and to assess the importance of lawyers in it. What, I believe, this will require is a separation of the instances in which the legal results secured by lawyers in litigation matched the substantive ends of the corporation, from the instances in which the legal results that lawyers worked to achieve had /' very little to do with the ends desired by the corporation. Applying this distinction on the level of narrative, I want to ask how lawyers' work fit into story of the corporation, and more generally how lawyers were situated in the early development of California.

3Stuart Daggett, CHAPTERS ON THE HISTORY OF THE SOUTHERN PACIFIC 151-52 (1922). I will often refer to the Stanford's railroads as either the CPRR or the SPRR. Preliminary, the answer seems to be that Hall McAllister, Silas W. Sanderson, Creed Haymond, and Alfred A. Cohen, the gentlemen I have been investigating, were integrally wrapped up with the many of the social conflicts of the time period, .,/ 1850-1888, a number of which were engendered or exacerbated by the railroads. It may seem a truism to say that lawyers, as social actors, are implicated with social conflict. What I want to do in this essay is to describe the reasons why the proposition seems to apply more to these four lawyers than it might to elite corporate lawyers today. Por now, however, it is fair to introduce this essay simply by saying that, if the history of American law is a contest about how to set rights and entitlements, these four lawyers participated in that contest on a larger number of fronts than an elite corporate lawyer today would. Cohen, Haymond, McAllister, and Sanderson were involved in varying capacities in the tensions between capital and labor, between new immigrant arrivals from China and white workers who had emigrated from the East, between competing corporations often out to destroy or control one another, between corporations and a state struggling with their regulation, between individual citizens living in a boom-bust economy without well-established institutions to accommodate, for example, competing mining or riparian claims.4 Norris' second characterization of the railroad is suggested by his use of the phrases "galloping monster" and "cyclopean." The railroad here is a panoptic doer of the railroad's work that leaves nothing beyond its reach. As a lawyer, he may do the railroad's bidding in other fora available to him, not simply as a litigator, but rather as a legislator, as a judge, as a corporate advisor, or in some other capacity. This thought suggests another strand that I want to pursue: the career paths that

4Por a somewhat helpful study of the construction of legal doctrine and institutions in this context, see Gordon Morris Bakken, THE DEVELOPMENT OF LAW IN FRONTIER CALIFORNIA: CNIL LAW AND SOCIETY 1850-1890 (1985). Sanderson, Cohen, Haymond, and McAllister traced or created for themselves. The different responsibilities and roles that lawyers for the SPRR took upon themselves included: (1) the lawyer interested in substantive legal outcomes, mostly concerned with translating the corporation's desires into reality--either retained by the corporation or employed directly as in-house counsel; (2) the representative or spokesman who acts as the voice of the corporation before official bodies besides courts or, more interestingly, society generally; the man who "put things in a telling way before the people";5 (3) the well-placed agent or financial "mover" who puts the corporation in contact with sources of capital or helps arrange deals, specifically here, securing capital from Eastern or European financiers; (4) the lobbyist-lawyer, permanently involved with guaranteeing favorable legal treatment by the federal government in Washington.6 What I hope will emerge more clearly from sifting through the details of the activities and biographies are four distinct models of lawyering at a time when the California bar was being industrialized,7 at a time when national law schools began to be more prominent, at a time when law firms first began to be formed in larger numbers, at a time began to be organized, at a time when lawyer~~pecialize in greater number~jn California~ Those four models ',---

5Robert W. Gordon, Legal Thought and Legal Practice in the Age of American Enterprise, 1870-1920 in PROFESSIONS AND PROFESSIONAL IDEOLOGIES IN AMERICA 81 (Gerald Geison, ed., 1983). 6While I do not treat him as part of this biography, it is worth mentioning that the CPRR and SPRR since the late 1860's had retained permanent counsel in Washington. The activities of their DC lawyer-lobbyists, Richard Franchot and later an attorney Sherell, in particular the unaccounted for spending of large amount of cash, would become a source of controversy before the Pacific Railway Commission. Hearings Before the Pacific Railway Commission Testimony 24-25, 39 (1887) (statement of Collis P. Huntington, Vice-President, Southern Pacific Railroad). 7 See generally Gordon Morris Bakken, Industrialization and the Nineteenth Century California Bar in THE NEW HIGH PRIESTS (Gerald W. Gawalt, ed., 1986). 8Id. at 127, 143. are: the legal technocrat, the legal craftsman, the entrepreneurial lawyer, and the reform-minded lawyer. Looking at the growth of these coherent career paths historically may be able to suggest why it is that lawyers have achieved such prominence in the republic today, and why legal training is considered today to be general preparation for political office, diplomatic corps, civil service, corporate practice, administrative office, and a host of other sectors where it is not particularly obvious that lawyers would predominate. The last line of the Norris passage suggests a third level necessary for a coherent story of these four lawyers. The railroad here is a force without subjectivity or agency. The rampant destruction it engenders is more consequence than intended result. The force is neither objectively good nor bad; it is evil only if one is unlucky enough to not be on the train, compelled to confront what is left behind. Norris hints at this depersonalized view of the development of railroad power in the beginning of the novel, and returns to it at the end after the tragic murders at Mussel Slough, what Norris calls Rancho Los Muertos, have occurred. ~ "Believe this, young man," exclaimed Shelgrim, laying a thick powerful forefinger on the table to emphasize his words, "Try to believe this--to begin with--that Railroads builds themselves. Where there is a demand sooner or later there will be a supply. Mr. Derrick, does he grow his wheat? The Wheat grows itself. What does he count for? Does he supply the force? What do I count for? Do I build the Railroad? You are dealing with forces, young man, when you speak of Wheat and the Railroads, not with men. There is the Wheat, the supply. It must be carried to feed the People. There is the demand. The Wheat is one force, the Railroad, another, and there is the law that governs them--supply and demand. Men have only little to do in the whole business. Complications may arise, conditions that bear hard on the individual--crush him maybe--but the Wheat will be carried to feed the people as inevitably as it will grow. If you want to fasten the blame of the affair at Los Muertos on anyone person, you will make a mistake. Blame conditions, not men.9

9Norris, supra note 1 at 575-76. To me, this can be read as a passage about the lack of subjectivity and agency in building a corporation's power. I want to apply it to a biographical treatment of the railroad's lawyers, to "take seriously the intellectual and ideological components of practice,,,lO and ask how these four lawyers contributed to the development of classical legal language. Were they creatures of the era's ideological currents, inevitable products of their times? How much did they contribute to or resist those currents? Should in their cases we "blame conditions" or men? If "the main task of the legal elite [was] to show that the activities and goals of their clients.. .fit into a traditional, but continually self-renewing and self-transforming framework of justice,,,ll how successful were these four lawyers in deploying this discourse--as a set of ideological constructs and modes of analysis--to achieve the pragmatic ends of Leland Stanford and Collis P. Huntington, the two most powerful directors of the corporation? As professionals, how independent of the corporation did this legal thinking allow them to be? What kind of independence, if any, did they achieve? As a preliminary answer to the question of ideology, Stanford's lawyers, particularly McAllister and Sanderson, the most intellectually oriented of the four, were at the vanguard of doctrinal development and its application in the areas of corporate personality, shareholder liability/responsibility for corporate debts, and industrial organization. It was their work that was in large part responsible for the official acceptance, at least as a matter of legal precedent, of corporate personality, a

key legal doctr~ffording corporations rights as if they were individuals, conditioned the.Lochner era.. ------~ - What has been puzzling for me in connecting legal thinking and legal practice has been to understood how these lawyers viewed corruption and competition at a time when the spaces of competition were changing. In the late lOGordon, supra note 5 at 71. 11Id. at 81. 1880's it became clear to many that the directors of the SPRR had enriched themselves at the expense of the Federal government that had generously subsidized the construction of the transcontinental railroad in the mid 1860's. At the same time, economic competition no longer resembled the form it took during the Jacksonian era, but rather seems particularly oligopolistic.12 The classical legal tradition here seems devoid of much of the explanatory power it once had. One of the goals of this essay is to understand how these lawyers faced the challenges and contradictions to their thinking. As to the question of independence, we shall see that Haymond and Cohen underwent the most dramatic changes in their relationships with the Central Pacific. Both were considered at one point enemies of railroad interests, in roles as reformer, competitor, opposing counsel, or disgruntled employee. Sanderson, a justice on the California Supreme Court, would resign in 1870 and head the legal department of the corporation until his death. McAllister, while never employed by the corporation full time, was retained over a long period of time and ideologically his thinking matched up most closely with the language of corporate interests. In concluding, I hope to reevaluate what the conditions of independence for a lawyer might be: structural (where a lawyer exists in relation to the corporation), professional autonomy (how much one lawyer's livelihood was tied up with defending corporate interests), and ideological (how disharmonious a lawyer's interests were as compared to the corporation's).13 • Given the thematic ends of this essay, I should say that methodologically the general end of this essay is not argumentative or to produce a grand demonstration

12Id. at 78. 13See generally Robert W. Gordon, The Independence of Lawyers, 68 B.V.L. REV. 1 (1988). of any particular theory about lawyers at the height of the Classical era. Rather, the goal is historiographic: to weave together the strands and themes I mention above, ideology and legal doctrine, professional development, biography, corporate history, and social and economic development of California. The resulting tapestry will hopefully be a rich description of the context in which four lawyers, who all achieved their professional preeminence in the 1870's and 1880's lived, worked, and thought. 14

II. EARLY BIOGRAPHY, MIGRATION, AND ARRIVAL IN SAN FRANCISCO

Three of the four lawyers whom I introduce here were born in the Eastern part of the United States to parents very much members of an old political and economic elite uridergoing the first changes of industrialization. They were the sons of "Protestant back country gentry." Silas Woodruff Sanderson was born April 16, 1824 in Vermont.15 His early education took him south to Williams College in Massachusetts and Union College - in New York. He completed his studies at what would become Albany Law School and was admitted to the bar in 1849. He most likely would have been acquainted with or known of another Albany trained lawyer whose practice began in the mid-

14By way of caveat: While I have ferreted out as much biographical information about McAllister, Haymond, Sanderson, and Cohen as was possible using the holdings of the Stanford libraries, including the University Archives, I should mention that an authoritative biography would have required visits to the Bancroft Library (Berkeley), the California Historical Society, the Huntington Library (San Marino), the San Francisco Public Library, the California Historical Society (Sacramento), and the California State Railroad Museum. 15Robert W. Gordon, "The Ideal and the Actual in the Law": Fantasies and Practices of New York City Lawyers, 1870-1910 in THE NEW HIGH PRIESTS 50, supra note 7. J. Edward Johnson, Silas W. Sanderson, 25 CAL. ST. B.J. 105, 105 (1950). See also J. Edward Johnson, 1 HISTORY OF THE SUPREME COURT JUSTICES OF CALIFORNIA 1850- 190089-91 (1963). 1840's, Leland Stanford.16 He moved later to Florida where a brother lived, and finally arrived in Placerville, California in 1851. Like Stephen J. Field, who similarly attended Williams and migrated West in 1851,17 Sanderson attempted to enter into mining. Eventually he settled into the practice of law and became district attorney for EI Dorado County.18 Field similarly had abandoned mining for a career in law enforcement.19 Sanderson served from 1862 to 1863 in the California Assembly where he was a strong force for the pro- Union Democrats. In 1864, he was elected to a two year term on the California Supreme Court during which he served as Chief Justice. He ran for and was elected to a second term of ten years in 1866. Sanderson would eventually resign from the bench and accept a position as Solicitor General of the Central Pacific Railroad.20 Sanderson would never have another client. • Creed Haymond was born in Beverly, Virginia (now West Virginia) in 1836. Haymond's father was a state circuit court judge. When making rounds of the state, he brought his son along to observe the proceedings over which he presided.21 These early experiences would prove formative in Haymond's personality: he would acquire a broad view of human experience that would lead allow him to see

16George T. Clark, LELAND STANFORD 35 (1931). 17Carl Brent Swisher, STEPHEN J. FIELD: CRAFI'SMAN OF THE LAW (1930). 18Johnson, supra note 15 at 106. 19Field became A1calde--a title akin to mayor--of Marysville, California and, eventually entered into the private practice of law before being elevated to the bench in 1857. He served until he as named to the United States Supreme Court in 1863. Swisher, supra note 17. 20Id. at 107. See also Ellen M. Colton v. Leland Stanford, et. al., Deposition of S.W. Sanderson 1-4 (1883). 210scar T. Shuck, BENCH AND BAR IN CALIFORNIA 324 (1889). A similar biographical sketch of Haymond appears in Oscar T. Shuck, HISTORY OF THE BENCH AND BAR IN CALIFORNIA 580-83(1901). the need for the construction of legal institutions and the reform of older ones that no longer functioned. In 1852, he and a small group of boys crossed by overland route in approximately three and a half months to California, arriving near Marysville. Haymond, who had arrived in the state "possessed of some means ... engaged in mining, packing, merchandising, and dite on a large scale, in the northern part of Sierra County.,,22 He also for a time carried the mail for Wells, Fargo. In 1859, he began his study of law with two men, one of whom would become Lieutenant Governor of California, the other who would the first U.s. District Judge of Nevada.23 He specialized early in criminal defense, and appeared as counsel in a number of celebrated trials in the 1860's.24 The most important of Haymond's early activities came through his work involving the resolution of conflicting mining claims. "Men like Stephen J. Field who came to California expecting to take 'a part in fashioning its institutions ... [and] exerting a powerful force for good upon its destinies' promptly recognized that resource-users 'could not long be left to fight among themselves over questions of priority or extent of claims.tI,25 Haymond was certainly one of those men; he participated in the conflict between established miners who had staked large, sometimes unreasonably expansive, claims and newly arriving ones who hoped to divest early arrivals.26 Two important early cases that he would win involved

22Id. at 329. 23Id. 24Id. at 330-333. 25Charles W. McGurdy, Stephen J. Field and Public Land Law Development in California, 1850-1866: A Case Study of Judicial Resource Allocation in Nineteenth Century America in LAND LAW AND REAL PROPERTY IN AMERICAN HISTORY 362 (Kenneth L. Hall, ed., 1987) (citations omitted). 26Id. at 364-366. definitions of what constituted proper acceptance, forfeiture, and abandonment of mining claims.27 The task of lawyers and judges in this litigation was to carve out space for the judicial review of the monopolistic practices of early-arriving miners who staked claims that were too extensive (ie. unreasonable) and balance this with a respect for traditional property rights and "autonomous politically autonomous groups" attempting self-governance.28 The expense and delay in resolving these claims made clear to Haymond that the existing methods and laws for resolving disputes and allocating scarce resources was inadequate . • Hall McAllister was considered by some the greatest trial lawyer of California's early history, an expert to which less able lawyers turned in the face of seemingly insoluble problems.29 The San Francisco Bar Association, which he would later help found, declared after his death in 1888 that he had tried and won more cases, and collected larger fees than any other lawyer in California.30 McAllister, whose statue still stands today on the street named after him in front of San Francisco's City Hall, was born in Savannah, Georgia on February 9, 1826. His father, Matthew Hall McAllister, was a member of the Georgia State Senate, Mayor of Savannah, United States Attorney for the Southern District of Georgia, an unsuccessful candidate for Georgia governor, U.S. Senator from Georgia,

27Wiseman v. McNulty, 25 Cal. 30; Richardson v. McNulty, 24 Cal 345. 28Id. at 366-67. Hall McAllister in the mid-1880's would be involved with extremely important land litigation himself. Lux v. Haggin, 69 Cal. 255 (1886), involved riparian rights. The decision was considered so monumental that a gubernatorial proclamation called for the reorganization of the California Supreme Court. See San Francisco Bar Ass'n, MEMORIAL OF THE BAR ASS'N OF SAN FRANCISCO TO THE LEGISLATURE OF THE STATE OF CALIFORNIA, July 22, 1886 (in holdings of Stanford University Libraries). 29Bakken, supra note 4 at 39, 54, 141. 306 DICTIONARY OF AMERICAN BIOGRAPHY 546 (Dumas Malone, ed., 1933). See also Shuck, supra note 20 at 21. and eventually, after his relocation to the West, the first United States Circuit Judge in California in 1855.31 In 1846, the younger McAllister began his studies at Yale, but never completed his education there. In 1849, he sailed by way of ship around the Southern @Of South America and landed in San Francisco where he immediately established himself as one of the leading lawyers of the time. His family left behind in Georgia would finally follow him to California in 1850 when they learned of the great wealth that Hall was beginning to achieve. Hall was making in two months what his father was making in a year.32 One is left with the suspicion that economic problems in the family spurred the elder McAllister to

'7 abando~~upon arrival, the three (Hall, his father, and his soon-to-be pretentious socialite brother Ward) began what would become a lucrative and extremely busy litigation practice in a wide variety of areas: criminal defense, debt collection, mining claims, real estate, etc.33 McAllister was also considered a model of earnestness, hard work, respectfulness, strength, collegiality, and moderation: in short, a model of personal rectitude, a legal scientist.34 His reputation for effective advocacy was such to merit the caustic wit of the journalist and author Ambrose Bierce, a frequent contributor

31Ward McAllister, SOCIETY AS I HAVE FOUND IT 20-23 (1890); See also John T. Gordan III, UNDER NO LAW: THE SAN FRANCISCO COMMITTEE OF VIGILANCE OF 1856 AND THE UNITED STATES CIRCUIT COURT FOR THE DISTRICT OF CALIFORNIA (1990). 32McAllister, supra note 31 at 19. 33Shuck, supra note 21 at 25. Shuck writes: "This Bar leader has no specialty. Great lawyers are often distinguished for specialties; too often the public assign them to specialties, when, in truth, they have none. McAllister has never suffered from this popular propensity. Not only has he no specialty, but the fact is acknowledged by all. Whether ·his case involves land titles, inheritance, patent right, private franchises, personal liberty, human life, or constitutional law, he is equal to the occasion." Id. See also Bakken, supra note 4 at 54. 34Shuck, supra note 21 at 21-25. See also Gordon, supra note 15 at 56. to two San Francisco newspapers of the era, the Wasp and the Argonaut35 and, upon his death, more than normal effusive praise in his obituary.36 • Alfred A. Cohen took a significantly more circuitous path to arrive in San Francisco. Unlike his three colleagues who worked for the Southern Pacific, he did not maintain a permanent practice on the West Coast once he had arrived. Cohen was born July 17, 1829 in London. In 1847, he sailed to Jamaica. What he did there for approximately ten years before arriving in California has been difficult to discover.37 He arrived in San Francisco in 1857 settling in Alameda County where he was the first supervising judge of the county. In 1863, he gave up the active practice of law to build the first railroad through Alameda County, the San Francisco and Alameda Railroad.38 Soon after in 1865 he acquired the San Francisco and Oakland Railroad. In conjunction with these roads, he created the first trans-bay steam powered ferries that allowed for businessmen living on the other side of the bay to make a daily commute to the city.39 The ferries that many expected to fail were a great success and spurred the development of small towns across the bay. In 1869,

351 DICTIONARY OF AMERICAN BIOGRAPHY 252-53, supra note 30. Bierce's poem "To An Insolent Attorney" vilifies McAllister for saving "scoundrels from their cells" and for his "ambidextrous conscience." Ambrose Bierce, "To An Insolent Attorney" in Black Beetles in Amber, 5 The COLLECTED WORKS OF AMBROSE BIERCE 240 (1966). 36He was called the greatest lawyer in all the west. 37Almost all early biographical information on Cohen is taken from a volume held in the Stanford University Archives [hereinafter COHEN MANUSCRIPT]. The typewritten text is a compilation of information held in the archives of the Bancroft Library at the University of California at Berkeley and centers around the story of Cohen's relationship with the A.A. Adams banking house. See also SA N FRANCISCO CHRONICLE February 21, 1954 (unpaginated clipping) for a short sketch of the major events in Cohen's life. 38COHEN MANUSCRIPT, supra note 37 at 155. 39Id. at 155-156. Cohen sold the two railroads and the ferries to the Central Pacific, and joined their legal department where he stayed until 1876.40 Newspapers of the time described this entrepreneur-lawyer as truculent, eloquent, biting, literate, and quick-witted. Opinions of him were never ambivalent: either he was unquestionably ethical, beyond the slightest repute, or he was justifiably accused of financial improprieties. Cohen was constantly embroiled in financial controversy. The first began in a long series of shady financial dealing;--; ? involved an important bank.41 "'J In early 1854, San Francisco began its first bout with the negative symptoms of a boom-bust economy, a downward trend. In fact, the radical slowing of the production of gold and the corresponding need for new machinery to maintain production and exploration threw the credit markets into chaos.42 From the six largest banks, over $3.5 million was withdrawn. One particular victim of the run on banks that soon began was the Adams and Co. banking house. Cohen, a trusted associate with experience in finance was appointed receiver of the bank's assets. To protect the gold on hand from the mob violence afflicting banks, he removed during the night an unweighed quantity of gold. Thereafter followed a series of accusations that Cohen had stolen $50,000 of gold and threw the banks records into the bay. Cohen in turn accused the bank of trying to extort $10,000 from him. The principals of the bank responded with an accusation that Cohen had sold them $400,000 worth of inferior gold dust. As with other financial imbroglios involving Cohen, the legal matter ended quietly and without definitive resolution in August, 1855 after the flurry of inaccurate press

40SAN FRANCISCO CHRONICLE, supra note 37. 41A concise narration of these events appears in Robin W. Winks, FREDERICK BILLINGS: A LIFE 73-79 (1991), a biography of the lawyer and railroad magnate who reorganized and consolidated the Northern Pacific Railway. 42Id. at 73. reports that created the public scandal subsided or began to see treat the saga as ludicrous.43 • In a number of important ways, San Francisco was an ideal place for lawyers ~fu .., .,-. 1 migrating'"East in search of new opportunities ready to carve out new roles for lawyers. San Francisco was a city filled with middlemen, "a mining town and an emporium" "attached to the swings of changing technology, to the application of new technologies to hard rock mining, to building construction, to new forms of commerce and new modes of transportation. As an emporium, San Francisco experienced a spectacular flow of goods stimulated by commerce up and down the coast, across the Pacific, and inland to the mines.,,44 Lawyers with connections to financial institutions in the East, like Cohen, would be able to prosper with superior knowledge of how to maneuver in these spaces. While Cohen was an entrepreneurial lawyer able to escort capital between the appropriate points A and B, and McAllister was extremely successful as a courtroom advocate for his clients, Haymond would solidify his stature in California history as a institution builder in the early 1870's by writing after months of laborious research, the first set of codes adopted by any of the states. The <;odification of California law, while a problematic undertaking as it relates to the common law, seems on its face less a product of ideological conflict or motivated by a coherent jurisprudence. Haymond seems to have been motivated by his faith in legal science. Law in Haymond's mind could define rights and relationships in such a way that "the citizenry would be capable of understanding

43Id. at 73-79. Shuck reports, however, that the trial ended with a verdict of $290,000 against Cohen. Shuck, HISTORY OF THE BENCH, supra note 21 at 448. Other details can be found in In the matter of Alfred A. Cohen and Edward Jones,S Cal. 594;Ex Parte Cohen, 6 Cal. 319, and Adams v. Haskell & Woods, 6 Cal. 316. 44Shuck, supra note 21 at 67. and acting upon them. "45 Haymond presented his work as a common-sense pragmatism, or more appropriately legal science's version of common-sense. Haymond wrote in delivering the revised codes to the California legislature in 1874: "Every enlightened state, and every citizen thereof feels it to be a necessity that its laws should be certain, exact, and accessible, not doubtful, inexact, to be found in session acts running through a series of twenty years.,,46 Much of Haymond's early work even involved the dissemination of printed copies of the code.47 Haymond's work on the codes, which went into effect on January 1, 1873, shows him as a reformer unsatisfied with 1) current distribution of property and rights; and 2) with the method by which private law distributed those rights. Solidly betraying his faith in legal science, he felt that the fixity and predictability of written __: could solve social problems. Other codification movements may be described as following a "hypnotically regular beat [of] radical proposals to change the law followed by minor legal reforms."48 California's, however, seems to have had

actual short range success in changi~g the law, but only negligible effects in either changing the social order or making common law adjudication fixed and predictable. The Code has been described as "radical;" it provided for new state regulations of railroads, insurance companies, telegraphs, and banks, and innovations in married women's property and landlord-tenant laws.49 It was not simply a transplantation of the Field Codes that David Dudley Field had prepared for only

45Gordon, supra note 5 at 83. 46REPORT OF THE CODE COMMISSIONERS OF CALIFORNIA 3, February 28, 1874, Creed Haymond, Chairman. 471d. at 9. 48Robert W. Gordon, Book Review, 36 VAND. L.REV. 431 (1983) (reviewing Charles M. Cook, The American Codification Movement: A Story of Antebellum Legal Reform). 49Morton J. Horwitz, The Place of Justice Holmes in American Legal Thought in THE LEGACY OF OLIVER WENDELL HOLMES, JR. 41 (Robert W. Gordon, ed., 1992). partially successful adoption in New York. It was, rather, a "thoroughgoing critical reconsideration of the New York provisions.,,50 The historical legacy of the Codes, however, would not be, as Haymond hoped they might, "enriched and adomed"51 by successive generations. They were not consistently amended, and were to a large extent "ignored ... and considered [by commentators] to be defective in form and content."52 Common law adjudication continued largely oblivious to their existence. 53

III. Stanford, the Founding of the Central Pacific, and the Early Tasks of Lawyers

In 1851, after a fire consumed the Port Washington, Wisconsin office where he had established his law practice, another Eastern born lawyer migrated to California and entered into the grocery, provisions, and wholesale business.54 A wise mining investment started his road to the statehouse, the U.S. Senate, and the corporate boardroom of a company popularly thought of as having a stranglehold on the California economy. By 1861, a successful Leland Stanford had met up with three others, Collis P. Huntington, Charles Crocker, and Mark Hopkins. The "Big Four" as they would come to be known, then formed the Central Pacific Railroad Company.55.

50Arno Van Alystye, The California Civil Code in CAL. CIV. CODE 1 (West, 1954). 51 REpORT OF THE CODE COMMISSIONERS, supra note 46 at 13. 52Izhak England, Li v. Yellow Cab Co.--A Belated Inglorious Centennial of the California Civil Code, 65 CAL. L. REv. 4 (1977). 53Id. . 54Clark, supra note 16 at 35-46. 55 Wilson & Taylor, SOUTHERN PACIFIC: THE ROARING STORY OF A FIGHTING RAILROAD 235-6; Bederman, supra note 2 at 243. The corporation was formed in anticipation on the legislation that Congress would pass in 1862 authorizing the construction of a transcontinental railroad.56 The plan created the Union Pacific Railroad to build the eastern part of the line. Congress assigned the western spur to the Central Pacific. It was to build from San Francisco to the California-Nevada border, and to then finally terminate at the point the railroads met.57 The most important provision of the law, the one that would both guarantee the success of the venture and create the most significant problems of the next forty-six years, were the subsidies included in the law. In addition to generous grants of land,58 the federal government subsidized the railroads by loaning them money at a low interest rate (6%) for thirty years. The amounts were as follows: for each mile from San Francisco to the Sierra Nevada Mountains, the government would loan the company $16,000; through the Sierras, $48,000 per mile; from the eastern edge of the mountain to wherever the line met up with the Union Pacific, $32,000 per mile. All payments were made after each forty miles of track were completed. In addition to this generous financing scheme, Congress mandated in the statute that the security interest in the railroad would be a second mortgage. This made it possible for the railroads to sell bonds of their own to raise even more money.59 When the debts became due in the 1890's, the total amount owed the government was $60 million.60 As we will see, the major challenge leveled against the company in the late 1880's was that the railroad had cost significantly less than the amount loaned to the corporation. By contracting the actual building of the line to their privately held

56 Act of July 1, 1862, ch. 120, 12 Stat. 489. 57Stuart Daggett, supra note 3 at 50-55. 58The CPRR would eventually receive a total of more than 10 million acres of federal land. [d. at 54. 59Id. at 20-21; See also David C. Frederick, Railroads, Robber Barons, and the Saving of Stanford University, W. LEG. HIST., Summer/Fall 1991, at 224, 227. 60Daggett, supra note 3 at 21, 52-54. construction companies, Stanford and the others enriched themselves at the expense of the public fisc. Early legal problems for the railroad, however, came in their relationship not with Washington, but rather with the municipal and county governments that had purchased railroad bonds. Most often the railroads, having exhausted their credit in New York, demanded that a town buy bonds in exchange for the railroads' passing through, the onl~ho guarantee its economic future.61 County subscription to Central Pacific b1a(contributed approximately $1.5 million to the CPRR's coffer. The state's contribution was the assumption of twenty years of interest payments on these bonds.62 On one particularly acrimonious occasion, the city of Stockton was to subscribe to the bonds of the Stockton and Visalia Railroad, a line owned by the Stanford group. A statute had been passed by the state legislature which required the town to raise the money to buy the necessary bonds.63 The town sued, claiming that the law which required it to levy a tax was unconstitutional. Because the railroad was held as a private corporation, they

61Daggett, supra note 3 at 25-35. Railroads could often deal with burgeoning towns with impunity. Los Angeles had no railroad until 1869. Wilson & Taylor, supra note 55 at 237. "At a meeting of the [Los Angeles] city council when a speaker made some humorous remark at his expense, [Charles Crocker] declared heatedly: 'If this be the spirit with which Los Angeles proposes to deal with the railroad upon which the town's very vitality must depend, I will make grass grow in the streets of your city.'" Carl Brent Swisher, MOTIVATION AND POLITICAL TECHNIQUE IN THE CALIFORNIA CONSTITUTIONAL CONVENTION 47 (1930). Far from making Los Angeles into a ghost town, the Southern Pacific contributed significantly to the boom in Southern California's population. In 1887, during a rate war with the Santa Fe Railroad, fares from St. Louis to Southern California dropped to as low as $1 per person. In that year alone, nearly 100,000 took advantage of these "colonist fares" and moved to California. Wilson & Taylor, supra note 55 at 240. Between 1880 and 1890, the population of Los Angeles County alone tripled to over 100,000. Department of the Interior, COMPENDIUM OF THE ELEVENTH CENSUS (1892). 62Daggett, supra note 3 at 26. 63 An Act to empower the City of Stockton to aid in the construction of the Stockton and Visalia Railroad. 1870 Cal. Stat. 551. believed that the Constitution's "public purpose" requirement had not been satisfied. Sanderson, who had just left the bench to head the Central Pacific's legal department, represented the railroad against the city. While the litigation is not particularly important for the substantive outcome achieved (the town was forced to levy the tax),64 it is a good example of the interconnectedness between the railroad's development of a long term strategy and the development of classical legal language of fixed spheres of behavior. Sanderson wrote in his brief: [My political dictionary] does not teach me that monopolies should be protected at the expense of labor, but it does teach me that the cause of labor may be vastly promoted by the judicious exercise of the taxing power in favor of public improvements which are calculated to develop the country and widen the field of labor and production ....

It does not teach me that granting special privileges is the main object of legislation, but it does teach m~ that granting them is one of the objects of legislation, and that they should be granted whenever in the opinion of the legislature they are required to promote the general good ....

Congress has created the Union Pacific [and the Central Pacific] as public agent[s] to build a railroad. It is therefore a public corporation, notwithstanding all its capital [being] owned by private individuals .... Hence from their first creation to the present time, [the UP and the CPRR] have been characterized both in legislative and judicial parlance as quasi public-quasi private. 65 Sanderson here is not yet uncomfortable with the notion that the public and private spheres are· not rigidly separated, as they would be iri a fully developed classical reasoning.66 Nor is he completely averse to the idea that "special" legislation in the

64Stockton and Visalia R.R. Co. v. Stockton, 41 Cal. 146 (1871), held the statute constitutional. Simply because property was held privately did not prevent it from being also of public use, thereby satisfying the Constitutional requirement that the taking in the form of a tax be for public use. Id. at 153-54. 65Silas W. Sanderson, Stockton and Visalia R.R. Co. v. Common Council of the City of Stockton, Reply of the Southern Pacific Railroad to the Third and Last Brief of Respondents 6-9, 36 (1870). 66Morton J. Horwitz, THE TRANSFORMATION OF AMERICAN LAW 1870-1960: THE CRISIS OF LEGAL ORTHODOXY 206 (1992). form of state grant of privileges to particular corporations may be necessary to promote the public good. Special legislation, frankly, would work to the advantage of the railroad: allowing it to establish a vast network of trains upon which towns depended for their survival. Most importantly, Sanderson is comfortable with the possibility that legal reasoning may not be an exercise in flicking on and off the appropriate binarisms; choices are not mechanically dictated by rules. His "there may be times ... " is a recognition that rigid rules forbidding the passage of certain laws are not helpful, except as general policy guides that can be superseded when necessary. Certainly for Sanderson, the economic health of California's farmers, traders, new immigrants, and miners qualified as such a necessity, and thus as a public purpose.67 Lastly, as an example of the kind of legal reasoning that immediately preceded the classical thought that would dominate well into the 1880's, we notice that Sanderson seems to have none of the difficulties conceptualizing intermediate categories, in this case property that is both public and private, that would mark the classical period.68 Having a middle category, th~ quasi public-quasi private, will become a much more problematic venture in later tax litigation. During the corporation's infancy, dependent on subsidies from federal, state, and local governments, this philosophical stance served the railroads extremely well: the principals of the corporation amassed enormous personal fortunes, as we will see, with very little personal liability as the owners of private property and the

67 Compare Sanderson's comfort in articulating a middle ground with Justice Miller's refusal to do so in Loan Ass'n v. Topeka, 87 U.S. 655 (1874). His opinion flails about attempting to draw a coherent line between what is and is not a public purpose. The result of his efforts is at best tautological and at worst unhelpful gibberish: "Whatever lawfully pertains to [the objects for which taxes have been customarily and by long course of legislation levied] and is sanctioned by time and the acquiescence of the people may well be held to belong to the public use, and proper for the maintenance of good government:" Id. at 665. 68Horwitz, supra note 66 at 207. beneficiaries of public funds. It was left to the lawyers to reconcile the apparent contradiction in private citizen's reaping windfall profits through taxation. This was not exceedingly difficult if they could constitute a middle category, not so private so as to be incapable of being the beneficiary of municipal patronage, but not so public as to prevent the company from being a source of private profit.· Nor was this difficult when popular antipathy to railroads had not made them the targets of the intense scrutiny to come.69 This type of litigation in which individual towns attempt to resist the dictates of the state seems to have been quite common in California. Hall McAllister was retained for a number, including one involving San Francisco?O The city in 1863 voted to subscribe to $1 million of Central Pacific bonds. On the suspicion that the election was fraudulently influenced by the railroad, citizens protested the swindle. Hall McAllister represented a citizen-taxpayer in his suit against the City Board of Supervisors. The substantive legal question, however, had little to do with election, and revolved around the question of whether the legislature in permitting the election could constitutionally exempt the city from corporate liabilities beyond the $1 million share. McAllister lost the case?l When the state intervened to forge a compromise plan, citizens protested claiming that the state could not

69The episode involving Stockton ended five years later, again in litigation. When the spiteful Stanford Group decided to end the railroad not in Visalia, but in a smaller, less commercially advantageous town, Oakdale, Stockton sued claiming that the enabling act provided for a railroad to be built into Visalia. The railroad responded saying that all that was required was that they build in the direction of Visalia, which they did. The town, represented by Hall McAllister, lost. Stockton and Visalia R.R. Co. v. Stockton, 44 Cal. 328 (1876). 70Daggett, supra note 3 at 31-40. 71French v. Teschemaker, 24 Cal. 518 (1864). The ruling against McAllister revolved around the holding that the state's constitutional provision for proportional stockholder liability for corporate debt was not self-executing. The decision was viewed with such disfavor that it was soon after overturned by statute. Frederick, supra note 59 at 241. constitutionally force them to spend $400,000 in the interest of the general welfare of the state and a private corporation, both of which were not necessarily in the interest of the city. McAllister, again opposing the railroad, lost the case. As retained counsel for the Central Pacific, he would later have many occasions to argue about the proper relationship between a private corporation and government. This is certainly not the forum to explain exhaustively the historical importance of the CPRR and SPRR as a force in the development of California?2 For the purposes of this essay, it suffices to say that the relationship between the corporation and the citizens/state government soured in the 1870's. Howard J. Graham describes the period as follows: Californians of the 1870's were struggling with the certain knowledge that the frontier was receding from them. Social conditions ... at that time have been described as a 'cauldron of hostility, prejudice, and litigation, racial as well as corporate.' Hostility and antagonism to the Chinese and hostility and antagonism to the corporations, to the railroads had merged, fused, and flared into incandescence.73 Fueling the discontent and popular antipathy to the railroads was the fact that the transcontinental railroad had been completed in 1869 and 10,000 Chinese workers were released into the San Francisco economy to compete with white workers?4

72As a complete tangent, one scholar has called for a "general revision of the anti- corporation .view," claiming that the railroads in California were not "the all powerful entities [they] were made out to be." Richard J. Orsi, Railroads in the History of California and the Far West: An Introduction, CALIFORNIA HISTORY, Spring 1991 at 3, 9. Williams F. Deverell, The Los Angeles "Free Harbor Fight," CALIFORNIA HISTORY, Spring 1991 at 13, 29. Two interesting articles on little-known contributions of the CPRR and SPRR to the development of California are: Richard J. Orsi, "Wilderness Saint" and "Robber Baron": The Anomalous Partnership of John Muir and the SPRR, Co. for the Preservation of Yosemite National Park, PACIFIC HISTORIAN, Summer/Fall 1985, at 135, and Richard J. Orsi, Railroads and Water in the Arid Far West: the Southern Pacific Company as a Pioneer Water Developer, CAL. HIST., Spring 1991, at 76. 73Howard J. Graham, EVERYMAN'S CONSTITUTION: HISTORICAL ESSAYS ON THE FOURTEENTH AMENDMENT 14 (1968). 74 Barbara Allen Babcock, Clara Shortridge Foltz: Constitution-Maker, 66 IND. L. REV. 849, 858 (1991). The Mussel Slough ~described earlier contributed to the perception of the Central Pacific as engaging in predatory practices, no longer able to pass off their activities as obviously in the public interest. The work of McAllister, Haymond, Cohen, and Sanderson would expand significantly in the 1870's as well. The first major expansion was the role that lawyers would play in achieving a monopoly on railroad transport in California. The Stanford group controlled the only line that connected to the East and dominated the lines around San Francisco. Also, the Southern Pacific Lines (connecting San Diego and Los Angeles to the more northern cities) began to carry more traffic more profitably?5 Sometimes the corporation harassed rivals with strike-suits making it as difficult as possible for them to proceed in any way. For example, the Central Pacific sued the California Pacific Railroad, which had come to compete with them near Sacramento, claiming that the company had no right to build a bridge over a certain part of a river?6 Clearly, the substantive legal controversy invented for the purposes of the suit has very little to do with the end goals of the corporation. Here, the CPRR's in-house counsel, Sanderson, is merely a technocrat, ringing legal bells to scare adversaries into moving out of the path of the on-coming Central Pacific. While this suit was unsuccessful, eventually the Central Pacific did achieve a virtual monopoly on railroads in and into California with the help of their lawyers. It simply acquired the California Pacific?7 The attorney who contributed most to achievement of monopoly control was Alfred Cohen. In 1870, having sold out his interests in two San Francisco area railroads and ferry lines, Cohen joined the staff of the CPRR. His duties at the

75Daggett, supra note 3 at 104-5. 76Silas W. Sanderson, California Pac. R.R. v. Central Pac. R.R., Brief for Appellant. 77 See Daggett, supra note 3 at 104ff. Central Pacific were to arrange for acquisition by the CPRR of smaller lines?8 In 1876, after six years with the railroad, however, there was a serious falling out between the Big Four and Cohen. It is not entirely clear why hostilities between the two parties broke out. Perhaps it was because Cohen had come out in support of the Archer Bill, a bill being debated in the California legislature that would have fixed the maximum rated for freight that the railroads could exact?9 Surprisingly enough, Cohen, who had contributed to the achievement of this monopoly power, said after his departure from the corporation: The rights of the people are being invaded by this corporation, and they demand redress. We are shut off from competition with other producers, and other markets because we cannot compete in the matter of the carrying trade. [Former] Governor Stanford ... says in effect that we should leave this matter of regulating freights and fares to competition. This is a very good statement to come from him. His road received $27 million from the government. 80 More importantly, we begin to notice that the middle category has collapsed. Either Stanford has achieved his power at the government's expense or at his own. Another reason why Cohen may have left his post with the railroad could be the accusations made by the company in 1876. They believed that in arranging the sale of some land to the railroad he embezzled approximately $50,000. He counterclaimed for the remainder of the money the company owed him from the

78Pacific Railway Commission Testimony, supra note 6. By 1880, the Central and Southern Pacific system, with Cohen's assistance, had acquired or built up the following lines: Stockton & Visalia, California Pacific, Stockton & Copperopolis, Placerville & Sacramento, San Francisco & North Pacific, San Pablo & Tulare, Los Angeles & Independence, San Joaquin Valley, California & Oregon, Los Angeles & San Pedro, San Francisco & San Jose. Swisher, supra note 61 at 52. See also Wilson & Taylor, supra note 55 at 235-238; By-laws of the Central Pacific Railroad Co. (1870) (includes list of railroad lines that had been constructed or taken over by 1870). 79 See "Railroad Fares and Freights," Report of the Senate Committee on Corporations (1876). 80Id. at Appendix - Statement of Mr. Cohen 18. sale of his railroads/ferries in 1870.81 In the suit, Cohen was given the opportunity to aim his caustic wit at the principals in public. The well-publicized trial suggests that the conflict between the parties was personal, and not over any substantive wrongs ostensibly committed by either party.82 Cohen delivered this prean, essentially an elegant fat joke, to Colton, one example of his ad hominem rhetorical exploits, : General David D. Colton will never go from among us by the ordinary processes of nature. When that dread hour arrives wherein a mourning community can hope to contain him no longer, it will only be necessary to cut the thread that binds him to this cold earth, when, like one of the painted, transparent bags of gas sold by toy vendors on the street corners, he will sail quietly away through the clouds and be seen no more.83 Cohen continued his anti-railroad activities as counsel in a number of shareholder suits against the railroads, often representing towns who believed that their city governments had illegally purchased stock in a private corporation.84 He also campaigned more generally for state regulation of the railroads. In a speech given in San Francisco in 1879 to a group of farmers, he laid out in great detail what he felt was wrong with the railroad; 1) the directors of the corporation have enriched themselves at the public's expense; 2) the railroad's monopoly in California; 3) long haul-short haul discrimination; 4) vertical integration, i.e. the self-dealing of construction contracts to the privately held arms of the Central Pacific empire; 5) unfair profit margins compared to Eastern railroads. On this last point, Cohen laid out his calculations with great detail, claiming that the Central Pacific

81 Alfred A. Cohen, Central Pacific R.R. Co. v. Alfred A. Cohen, Defendant's Answer (1876). 820scar Lewis, THE BIG FOUR 112-13, 288-89 (1946). 83Id. at 288. 84Pacific Railway Commission, Testimony of A.A. Cohen at 2381. had net earnings of $6,800 per mile compared with $4,700 per mile for the next most profitable railroad, the New York Central.85 As for the ideological content of Cohen's discourse, there is tension. Fully in line with a strand of classical thinking grounded in Jacksonian suspicion of corporate privilege, he recognizes that concentrations of wealth and power endanger "the welfare, the business and property of the community in allowing such vast and irresponsible power to be exercised by a few men. ,,86 The solutions, for Cohen, are both republican and statist:87 He wants to turn corporations into mini-republics and spread control out among a number of shareholders, and to use legislative power to limit the powers corporations can have. This is where his thinking seems to diverge from the classical. It is also where holding private property as a public trust, a middle category between totally private and totally public property, can be contemplated: From men who have been so richly endowed much might have been expected. We might reasonably have hoped that, grateful for the munificent generosity of Congress and the State, County, and Municipal governments, they would have felt that a great trust had been conferred upon them; that the people of the Pacific Coast were the beneficiaries of the trust; that this vast property placed in their hands was to be regarded and operated for the benefit of those whose representatives had voted to confer it.88 Cohen's return to the employ of the corporation after 188489 would give him -other opportunities to speak before the public about how corporations should best be controlled and treated by the state.

85 Alfred A. Cohen, An Address on the Railroad Evil and its Remedy, Platt's Hall, San Francisco (August 2, 1879). 86Id. 87Robert W. Gordon, Class lecture (Spring 1994). This critique suggest using legislative controls to limit corporate power. 88Cohen Speech, supra note 85. 89COHEN MANUSCRIPT, supra note 37 at 155. Lewis, supra note 82 at 310. Hall McAllister's practice in the 1870's had ~ade achieved remarkable success. In addition to his founding the San Francisco Bar Association in 1872,90 McAllister established himself as a leading appellate advocate, arguing and winning' a number of cases in front of the Supreme Court. Most often these were brought on behalf of the wealthy corporate clients who came to McAllister's firm to solve complex commercial, tax, and real estate problems.91 One notable case was argued in December, 1871 and called for the Court to decide whether states could constitutionally put an ad valorem tax on certain imported items. McAllister persuaded the Court that imported items did not lose their character as imports and thus could not be constitutionally taxed under Article I, Section 10.92

IV. Legislative Responses and Damage Control by Lawyers

The late 1870's marked the beginning of aQserious economic downturn in the California and national economies. The seething hostility towards the railroads coalesced and legislatures in Sacramento, San Francisco and Washington all responded. "Following a relatively cooperative era between the public and private sectors and a genuinely distributive political climate generated by rapid economic and institutional growth, legislative activity in the 1870's shifted significantly from promoting economic development toward emphasizing its regulation.,,93

90See Kenneth M. Johnson, THE BAR ASSOCIATION OF SAN FRANCISCO: THE FIRST HUNDRED YEARS 1872-1972 (1972). 91 McAllister was for example attorney for the New Almaden Mining Company, the Spring Valley Water Works, and John C. Fremont. See Winks, supra note 41 at 98- 100. See also Fremont v. Flower, 17 Cal. 199 (1861) (McAllister represents John C. Fremont in land title dispute). 92Low v. Austin, 80 U.S. 29 (1872) ... This decision was overruled in Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976) (holding that original meaning of "import- export" clause did not encompass an added value tax on all goods; discussing Low at length). 93Katha G. Hartley, Spring Valley Water Works v. San Francisco: Defining Economic Rights in San Francisco, W. LEG. HIST. Summer/Fall 1990 at 287, 288. The challenge to Stanford's lawyers would be, on a pragmatic level, to control the damage done to corporate interests by regulation. On an ideological level, their tasks were to articulate new discursive boundaries within the legal system in order to protect the railroad. This rethinking would be particularly difficult as the norms upon which classical legal liberalism

94Wilson & Taylor, supra note 55 at 18. It was Charles Crocker's idea in 1864-5 to use Chinese laborers to do the more backbreaking work of grading the track bed while white workers did the job of laying the actual track. Id. 95See Linda C.A. Przybyszewski, Judge Lorenzo Sawyer and the Chinese: Civil Rights Decisions in the Ninth Circuit, W. LEG. HIST. Winter/Spring 1988, at 23, 25. There was already 15% unemployment in California at the time. Hartley, supra note'93 at 299. Creed Haymond, who had been elected to the State Senate in 1875, chaired a special committee to study the "problem" of Chinese immigration. The goal of the committee was to lobby the Federal government to renegotiate their treaty with China96 and to "turn back this tide and to free this land from what is a monstrous evil and promises to be a lasting curse."97 Haymond's commission took extensive testimony over a period of months, and concluded that the Chinese were politically, legally, and socially incapable of inclusion in society: they did not perform the duties of citizenship, integrate, learn English, respond to a U.S. education, or contribute to the economy. Most importantly, he concluded that they were "not amenable to our laws" because they were governed by "secret tribunals antagonistic to our legal system" which were founded upon "moral ideals wholly distinct from our own.,,98 The new California Constitution of 1879 reflected the anti-Chinese prejudices and the Haymond Commission's conclusions. An article entitled "Chinese" read in part: "The Legislature shall prescribe all necessary regulations for the protection of the State .. .from the burdens and evils arising from the presence of aliens who are or may become vagrants, paupers, mendicants, criminals, or invalids inflicted with contagious or infectious diseases ... "99 A particularly damaging supplement to this

96The Burlingame Treaty signed in 1868 allowed for increased migration and trade, and included a civil rights provision that Chinese already in the United States hoped would benefit them. The law mandated that they be afforded the same rights as citizens of the "most favored nation" had. Additional Articles to the Treaty Between the United States and the Ta-Tsing Empire, July 18, 1868, Article V-VI, 16 Stat. 739. See Earl M. Maltz, The Federal Government and the Problem of Chinese Civil Rights in the Era of the Fourteenth Amendment, 17 HARV. J.L. & PUB. POL'y 223 (1994). 97Special Committee on Chinese Immigration, CHINESE n..fMIGRATION: ITS SOCIAL, MORAL, AND POLITICAL EFFECT, Report to the California State Senate at 4 (1878) 98Id. at 61-65. 99CAL. CONST. OF 1879, art. XIX, § 1. official expression of hatred and xenophobia was the prohibition of employment of Chinese by corporations.100 The lawyers who would challenge the constitutional provision as a violation of the Fourteenth Amendment were Hall McAllister and Delos Lake.1 01 In this case, In Re Tiburcio Parrott, McAllister and Lake represented the president of a large mining company that employed many Chinese. The decision102 by Justice Ogden Hoffman did not consider the effect of these provisions on the rights of Chinese. In fact, not only did he decide the case "iJ;respective of the rights secured to the Chinese by the treaty," he declared: "[tlhat the unrestricted immigration of the Chinese to this country is a great and growing evil [and thatl it will be a menace to our peace and even to our civilization is an opinion entertained by most thoughtful persons."103 Hoffman based his decision on the relationship between the California

100CAL. CONST of 1879, art. XIX, § 2 read in part: "N:o corporation now existing or hereafter formed under the laws of this State shall, after the adoption of this Constitution, employ, directly or indirectly, in any capacity any Chinese or Mongolian." A subsequent state law made it a misdemeanor punishable for fine or imprisonment for any corporation to employ Chinese. An Act to amend the penal code by adding two new sections thereto, to be known as sections 178 and 179, prohibiting the employment of Chinese by corporations (1880). The legislature passed the statute in February, 1880, but it was never codified because the suit began almost immediately thereafter. 101Delos Lake was another lawyer born and educated in upstate New York. He arrived in California in 1850. He was eventually appointed U.S. Attorney for California by Lincoln. After a stint as a state court judge, he entered into a lucrative private practice. Alonzo Phelps, CONTEMPORARY BIOGRAPHY OF CALIFORNIA'S REPRESENTATIVE MEN 49-51 (1881). In 1870, he represented the CPRR in the test case that the landholders at Mussel Slough had brought. Bederman, supra note 2 at 240 n.13; Southern Pac. R.R. Co. v. Orton, 32 F. 457 (C.C.D.Cal. 1879). He also argued with his characteristically monstrous sarcasm and ridicule against Clara Foltz, the first woman lawyer in California, in her attempt to challenge the constitutionality of Hastings College of Law's exclusion of women. Babcock, supra note 74 at 708. He died just before the railroad began its suit challenging the California Constitution's taxation clauses. 1021 F. Cas. 481 (CCD.Cal. 1880). 103Id. at 493,498. constitution and the treaty, and on the "constitutional right [of corporations] to utilize their property, by employing such laborers as they choose.,,104 Lorenzo Sawyer, who had attended Williams College with Silas Sanderson and sat with him on the California Supreme Court105 did not base his opinion on the rights of corporations; he was more disturbed by the sinophobia rampant in California.106 It was for Sawyer the right to labor ,included among the privileges -_ .. - . ------....------~--.--.---- and immunities, that guaranteed that the Chinese subjects in the United States would not be victimized by a racist legislature.107 Several years later McAllister had the opportunity to make law with much \ more broad implications for Fourteenth Amendment jurisprudence than the Ninth Circuit law being carved out by Field sitting in Circuit Court and Sawyer. San Francisco in 1880 passed a city ordinance prohibiting the operation of laundries in other than brick buildings. Exceptional permits could be granted by the city's Board of Supervisors. When none of the petitions for exceptions filed by Chinese and nearly al~ted by whites were granted, the Chinese who ran three-quarters of the

104Id. at 493-4. 1050rrin Kip McMurray, An Historical Sketch of the Supreme Court of California, THE RECORD: HISTORICAL AND CONTEMPORARY REVIEW OF BENCH AND BAR IN CALIFORNIA at 6, 12 (1926). See also Johnson, supra note 15; Hubert Howe Bancroft, HISTORY OF THE LIFE OF LORENZO SAWYER (1891). Sawyer also became in 1885, along with Matthew Deady and Stephen J. Field, three of the first members of the Board of . Trustees of Stanford University. Stanford University, THE FOUNDING GRANT WITH AMENDMENTS, LEGISLATION, AND COURT DECREES 3 (1987). For a discussion of the civil rights jurisprudence of Sawyer, see Przybyszewski, supra note 88, which argues that Sawyer went much further in involving the federal government in the protection of the rights of Chinese than did Field. 106Przybyszewski, supra note 95 at 23. 107Graham asserts that the two judges were actually eager to base their decision on an assertion of corporate personality, i.e. that corporations should be considered persons for the purposes of the Fourteenth Amendment and thus the holders of rights. Graham, supra note 73 at 393 n.88. A similar assessment of Sawyer is that his jurisprudence both respected the corporation as an individual and abstracted away the real individuals, the shareholders, officers, and employees, whose lives were driven by the corporation's whims. Bederman, supra note 2 at 263. laundries in the city were outraged. Hall McAllister took the case, retained by the Chinese Consolidated Benevolent Association,108 a coordinating council of immigrant organizations which was dominated by six large and successful Chinese- owned corpora tions.109 Had this discrimination been a part of the statute, the law would clearly have been a violation of the Equal Protection Clause. McAllister's brief was terse in arguing that the discriminatory administration of the statute was really "an occult proviso to the city ordinance." To assert simply that the law was not facially discriminatory would be to ignore the fact "that the body which passed the law is the same that operates it so as to produce discrimination.,,110 Justice Mathews' opinion111 is extraordinary for its acceptance of the proposition that 1) administration of a law, if it makes arbitrary distinctions based on race, violates the Equal Protection clause; and 2) the Fourteenth Amendment tJtif'~J 1. applies equally to Chinese as it did to the newlY"blacks on whose behalf it had supposedly been passed, a conclusion that flew in the face of the ruling of the Slaughterhouse Cases112 of ten years before. This was a point that McAllister did

108CAL. HIST., March 1993 at 4, 6. 109 See Maltz, supra note 96. 110Argument-Brief of Hall McAllister, L.H. Van Shaick, and D.L. Smoot for Appellant and Plaintiff in Error, in 9 LANDMARK BRIEFS AND ARGUMENTS OF THE SUPREME COURT OF THE UNITED STATES - CONSTITUTIONAL LAW 8-9 (Philip B. Kurland & Gerhard Casper, eds. 1975). 111Yick Wo v. Hopkins, 118 U.S. 356 (i886). 11283 U.S. (16 Wall.) 36 (1873) "(ruling, in part, that the Fourteenth Amendment could not be used by white workers to challenge a state regulatory scheme). Walter Hamilton in an essay The Path of Due Process of Law, attaches almost monumental importance to Yick Wo: "After two decisive defeats, the Fourteenth Amendment came quietly into constitutional law. The pomp and circumstance which had attended the previous causes was absent. The victory was scored not by a recently emancipated black ... but by a yellowman [sic] from China. Against the arbitrary act of the state, 'equal protection of the laws' came into the constitutional law where 'privileges and immunities' and 'due process' had been denied admission." Walter H. Hamilton, The Path of Due Process of Law in THE CONSTITUTION RECONSIDERED not argue. He instead relied on the Supreme Court's extension of due process and equal protection applicability to individuals other than newly freed blacks, As we will see, this development of Fourteenth Amendment jurisprudence, particularly as applied to corporations, was achieved largely in litigation begun by the legal department of the Southern and Central Pacific Railroads) 13 • Hatred of the Chinese and of the railroad company went hand in hand, just as the jurisprudential extension of 14th Amendment protection to both did. Dennis Kearney, an organizer and agitator sounded the unified cry, "The Chinese, the Corporations, the Southern Pacific must go."114 More so than the "problem" of Chinese immigration, a solution to the problems caused by railroads was the key reason that a constitutional convention was called for 1879) 15 "Railroad corporations seemed to be running wild and wreaking havoc in the places where their coming had been looked to as a boon to prosperity.,,116 One of the critical provisions that aroused the CPRR's tremendous ire was the taxation scheme .included in Article XIII. It allowed citizens to deduct the amount 'of any debts or mortgages from the total taxable property. The holder of the debt or mortgage would pay tax on the asset, but not the mortgagor. Railroad companies ,and other "quasi-public corporations," however, were unable to take

146 (Conyers Reed, ed. 1938). Given the importance of the Fourteenth Amendment in the development of corporate personality, this seems to be more than a slight overstatement of ¥ick Wo's importance. 113McAllister would also litigate two other petitions by Chinese for habeas relief before the Supreme Court, Ex Parte Tom Tong, 108 U.S. 556 (1883) and Ex Parte Hung Hang, 108 U.S. 552 (1883). 114Graham, supra note 73 at 371. 115Swisher, supra note 61 at 44-45. 116Id. at 45. advantage of these deductions.117 From their perspective, they would have to pay taxes on something that they technically did not own. This type of law was just the sort of "special" legislation, the application of which depended on the formal legal status of the parties, that classical liberalism rejected as a threat to "equality, harmony, freedom and the overall economic and political liberty that property established."118 To one of the delegates at the constitutional convention, however, what seemed a pragmatic solution to corporate mischief was unproblematic. He explained: It was made to appear to the Committee on Revenue and Taxation that the railroad companies were in debt in very large sums, in the form of bonds, and that those bonds were held in Europe, New York, and other places outside this state ... Under a decision of the Supreme Court of the United States .. .it has been held that these bonds are not within the. jurisdiction of the state, and cannot be taxed. So unless this exception is made, the railroad companies will have a good thing of it.119 He was right; the railroad was mortgaged up to $40,000 per mile, approximately 100- 150% of its assessed value. Not having to pay tax on such an enormous sum of money would allow the CPRR that much more leverage in its continuing battles against other railroads, particularly the systems being built by Tom Scott (Penn

117CAL. CONST. of 1879, art. XIII, § 4. The new constitution also included a provision outlining a regulatory comm~n. Article XII, § 22 a!t.~ID, ed to improve the regulatio~he state had ~ adopted in 1875 b~/:fu(l_ki~-4-commissioners elected(g~.i~g/:them subs.ta~tial investigative ,Power, ~~a the increa¢rat~-fixi:ng powers. ----nle fust commIssIon had been a dIsmal faIlu~ the raIlroads seemed to profit by the scheme in that they appeared to submit to a political agency, which in fact they were able to control." Swisher, supra note 59 at 112-13. See also Daggett, supra note 3 at 52-58, 184-97. Under the pressure of Leland Stanford, the regulatory capture that plagued the first commission was repeated under the second, even more feckless commission. 118Stephen A. Siegel, Understanding the Lochner Era: Lessons from the Controversy over Railroad and Utility Rate Regulation, 70 VA. L.REv. 187, (1984). 119Swisher, supra note" at 78. Central) and Jay Gould (Texas and Pacific).120 To the state treasury, as well, the amount of money involved was quite significant and the delinquent payments had a serious effect on the state's fiscal health. For the years 1880 and 1881, the CPRR system owed the state a total of $1,118,000 in taxes assessed on all the railroad's property.121 For the legal battles that ensued, the company, in addition to its normal counsel (Haymond, and Sanderson) would marshal some of the most influential legal minds of the time. John Norton Pomeroy, a founding professor at the Hastings College of Law and leading constitutional law educator and treatise- writer,122 and Roscoe Conkling, a former Republican senator and member of the committee that had drafted the Fourteenth Amendment,123 received large commissions to join the SPRR legal team.124 The railroad company sued the state claiming that the provision unconstitutionally deprived them of the equal protection of the laws in assessing railroad property in a way that applied exclusively to the railroad property.125 In

120Graham, supra note 70 at 410. Despite controlling approximately 4700 miles of railroad lines in the United States and Mexico by the early 1880's, the company continually needed to expand to forestall competition on the precious transcontinental lines, particularly the southern ones. Clark, supra note 16 at 339; Swisher, supra note 61 at 45-46,60. 121 William "c. Fankhauser, A FINANCIAL HISTORY OF CALIFORNIA 300-301(1913). 1228 DICTIONARY OF AMERICAN BIOGRAPHY 52-53, supra note 30. 123See Graham, supra note 73 at 15-16. Conkling had turned down the chief justiceship, leaving the opportunity for Waite. Id. Charles A. Beard and Mary Beard, THE RISE OF AMERICAN OVILIZATION 111-113 (1937). On the relationship between Collis P. Huntington and Roscoe Conkling, see PACIFIC HISTORIAN, Vol. XXIX, No.4, at 30. 124Conkling received $5,000 per year for his work on the initial round of tax litigation. In terms of salaries the others received the following amounts: Cohen - $10,000 per year (1871-1876), $15,000 per year (1881-1888); Haymond - $10,000 per year (1879-188?); Sanderson - $12,000 per year (1870-1871), $18,000 per year (1871-1876), $24,000 (1876-1885); McAllister $10,000 per year as retainer fee. Pacific Railway Commission, Legal Expense Account of CPRR, supra note 6 at 4683-4747. 125Graham, supra note 73 at 398. San Mateo v. Southern Pac. RR Co.,126 each lawyer involved extensively briefed in his own way the question of corporate personality, some having more impact than others on the ultimate result of the question. All expected the substantive legal outcome to hinge on whether the Fourteenth Amendment's protections applied to corporations. 127 Conkling's argument asserted that it had been the original intent of the drafters of the amendment to include corporations among those protected. Despite the attention some historians may have paid him, an originalist interpretation of the Fourteenth Amendment seems to have had very little importance in determining the outcome of the railroad tax litigation, especially since Field's eventual opinion was an explicit rejection of another originalist approach to the Fourteenth Amendment, the one that led to the Slaughterhouse decision.128 Creed Haymond's argument also seems to have been of little weight in determining the substantive outcome of the case. He asserted that because the act that created the Union Pacific Railroad at the same time had contracted with the Central Pacific Railroad, a corporation created under California law, it was transformed into a "national corporation. II The CPRR was a "instrument of the

12613 F. 747 (C.C.D.Cal. 1882). 127Justice Field sat in Circuit Court. He granted the railroad's motion to remove the case from state to federal court, and invited their consideration of the question. He suggested what his eventual resolution of the outcome might look like: "If [the amendment] also include a~.icial persons, as corporations .. .it must be because the artificial entity is composed 'or atural persons whose rights are protected in those of the corporations. It may be at the chain which binds the individuals into a single artificial body, does not keep them in their united form from the protection of the amendment. San Mateo v. Southern Pac. RR Co., 13 F. 145, 151. 128See Argument of Roscoe Conkling, ARGUMENTS AND DECISIONS IN SAN MATEO COUNTY V. SOUTHERN PACIFIC RAILROAD (on file with Stanford University's Libraries). Howard J. Graham unpacks worries about a "Conspiracy Theory," fears that Conkling's post hoc rationalization of corporate personality was the motivating force behind the ultimately pro-business decisions in the San Mateo and Santa Clara. See Graham, supra note 73, particularly the introductory chapter. general government." Thus, according to Marshall's opmlon in McCulloch v. Maryland,129 it could not constitutionally be taxed by a state government.130 Pomeroy and Sanderson were much more influential in the court's acceptance of a "partnership theory" of corporate personality. That is, to them, personifying the corporation was a way of protecting the property rights of the real, human corporators that constitute the business.131 This was not necessarily an assertion of "corporate autonomy per se," but rather a protection of "individual property held in corporate form. ,,132 Sanderson's brief was a mix of pragmatism and political philosophy: combining his concern for the essential role of national corporation in economic life and concern for the property rights of the individuals behind the corporation. Quite similar to Justice Field's view,. Sanderson's larger goal was to force the state to justify how it could dole out legal and financial benefits and burdens and what role it would play in the economic life of private individuals. The ultimate end of the judiciary should be the construction of a rational system for the allocation of rights to stockholders and state regulators.133 It was critical in Sanderson's eye that, if the state were to be allowed to classify property based on the property's owner, and not based on the character of the property, there needed to be some limiting principle to prevent arbitrary classifications based on status.134 If corporations were forced to accept the propriety of rate regulation established in Munn v. Illinois135 and directly applied to state regulation of railroads in The

12917 U.S. (4 Wheat.) 316 (1819). 130 Argument of Creed Haymond before the Circuit Court of the United States in . ARGUMENTS AND DECISIONS, supra note 128 at 1-10. 1315 ee Gregory A, Mark, Note, The Personification of the Business Corporation in American Law, 54 U.CHI.L.REV. 1441, 1455-64 (1987). 1321d. at 1462-63. 133 Argument of Silas W. Sanderson in ARGUMENTS AND DECISIONS, supra note 128. 134Id. 13594 U.S. 113 (1877). Railroad Commission Casesll136 IIthere [had to] be some means to define the limits of the power of the State over its corporations after they have expended money and incurred obligations upon the faith of grants to them, and the rights of the corporations ... and the peoPle"137~d~ protected. For the CPRR, Field, and Sanderson, that means was the extension of the Fourteenth Amendment to corporations. While the substantive legal questions behind San Mateo,138 were dismissed as moot, the arguments marshaled by the railroad had immense impact. Four years later, in Santa Clara County v. Southern Pacific Railroad,139 substantially similar questions arose regarding the ability of the state to assess property owned by corporations differently than other types. The railroad expected that the case would again hinge on a discussion of whether corporations were protected by the Fourteenth Amendment. Sanderson this time was joined as counsel by William M. Evarts, a monumental figure of the Eastern bar.140 Before argument began, Chief Justice Waite, without having submitted the question to a formal vote by the Court, announced in one IIdisquietingly briefll sentence141 the end of a dormant Fourteenth Amendment in the area of economic and social legislation. No longer would the amendment be bound to the limited

136116 U.S. 307 (1886). 137Siegel, supra note 118. 138116 U.S. 138 (1882). 139118 U.S. 394 (1886) 1402 DICTIONARY OF AMERICAN BIOGRAPHY, supra note 30 at 215-18. Evarts had graduated from Yale with later Chief Justice Waite, defended President Johnson at his impeachment, been a distinguished senator, and acted as counsel of President Hayes in his disputed election with Samuel J. Tilden, another of his Yale classmates. Id. 141Horwitz, supra note 66 at 67. historical circumstances, racial discrimination against newly freed blacks, that ') inspired its passage142:.-J::,":I"h . The court does not~to hear argument on the questi~n ~hether ~he provision in the Fourteenth Amendment to the Constitution, whIch forbids a State to deny to any person within its jurisdiction the equal protection of the law, applies to these corporations. We are all of the opinion that it does.143 Lawyers for the Central Pacific clearly were integral in freeing up the Fourteenth Amendment from the stranglehold of the Slaughterhouse ruling, extending it to individuals beyond blacks and eventually to corporations.144 As an historical question, what remains is to assess the significance of the decisions, and for my purposes, the roles Sanderson and to a much lesser extent Haymond played. Were the decisions "symbols of the subservience of the Supreme Court during the Gilded Age to the interests of big business?"145 Had the Supreme Court been simply overwhelmed by the legal expertise of the Central Pacific and other massive corporations trying to manage a huge debt to the federal govemment?146

142Id. at 69. 143118 U.S. 394, 396. 144Interestingly, Sanderson, Pomeroy, and, most notably, the county's brief saw these two questions as really collapsed into one: either the amendment applied to blacks and only them,' or it applied to all legally cognizable individuals (e.g. Chinese and corporations). This is especially interesting in light of the fact that corporate personality. had been emphatically rejected in Insurance Co. v. Woods, 13 F. 67 (C.C.La. 1871), by the same judge who wrote the circuit court opinion in the Slaughterhouse Cases, allowing whites to make a fourteenth Amendment due process claim. Graham, supra note 73 at 383, 391. It is not obviously an all-or- nothing questions as to who else besides blacks could make a due process claim. For afu) fine treatment of the role of railroad lawyers in subsequent developmenYs of Fourteenth Amendment jurisprudence (in the 1890's and forward), see Richard C. Cortner, THE IRON HORSE AND THE CONSTITUTION: RAILROADS AND THE TRANSFORMATION OF THE FOURTEENTH AMENDMENT (1993). 145Horwitz, supra note 66 at 66. See also Mark, supra note 131. 146Graham writes of the reasons behind the corporation's victories in the tax litigation, characterizing them as a result of the "sheer lopsidedness of talents, resources ... not judicial bias, but disproportionate briefing... better prepared counsel who explored the risks of arbitrary legislation much more effectively than their overburdened opponents ... " Graham, supra note 73 at 415 n.172. Or, as Morton Horwitz, has suggested, has the characterization of Santa Clara's extension of Fourteenth Amendment protections to corporations as dramatic and monumental been projected onto the case by later generations trying to justify more extensive theories of corporate personality,t147 As an expression of the work of lawyers, is the acceptance of corporate personality much more an episode of pragmatic legal problem solving technology? Was it simply a way for the CPRR to not have to pay its taxes as assessed by the State? Or is corporate personality a recognition of the individuals behind a fictional corporate veil? Could it be that Fourteenth Amendment jurisprudence was simply a way to "guarantee that the owners of property held in the name of a corporation would receive the same constitutional protections as the owners of property held in their own name" and a way of "assign[ing] the power to assert constitutional rights in corporate held property?"148 That is, were Stanford's lawyers trying to allow the Big Four the benefits of a corporate form, limited shareholder liability for their enormous debt and effective aggregation of wealth, with the standing that a natural individual had to challenge excessive state regulation, a "have your cake and eat it too" strategy? I think that it would be extremely difficult to give a satisfying answer to this set of questions. I just want to suggest that some of the mono-causal theories of how the Santa Clara and San Mateo decisions fit in their legal-historical context are unhelpful. Lawyers are often problems solvers on a number of levels: for their clients who have specific, pragmatic needs for which lawyers have technocratic

147Id. at 75. 148Herbert Hovenkamp, The Classical Corporation in American Legal Thought, 76 GEO.L.J. 1593, (1988). Hovenkamp's analysis suggests that corporate personhood is a pragmatic solution, devoid of ideological content, to the issue of how corporations could have the standing necessary to challenge state or federal laws. solutions; perhaps, although less in this case, for a specific interest group who sees the economic futures of its constitutive members as one. They also are constantly reacting to the ideological current of their times. Any explanation of lawyers roles must relate "legal thinking and legal acting."149 The reactions by the lawyers for corporations could not have been, as Hovenkamp would have us believe, a mechanical/llfunctional response to certain social and commercial needs."150 It is much fairer to say that Sanderson and Haymond saw themselves as participating in the construction of a legal language necessary as a mediating force in society. They do not seem to have been interested i~ kind of big-business capture of the judiciary that occurred during t~e Lochner /~ra. They seemed more interested in finding an answer to the IIgreatPrebl~; the 1870's: determining government's proper role in American economic life."151 I will return to the distinct form of legal work that grew out of their participation in this contest about how to circumscribe government behavior. •

The last of the legislative responses to the perceived excesses of the Central Pacific and to its enormous debt were the federal ones. In 1878, Congress, concerI).ed that the principals of the corporation were depleting its treasury for their personal gain and t~ereby crippling its ability to payoff its huge debt, had passed the Thurman Act which mandated that the railroad deposit 25% of its earnings into a sinking fund.152 The Central Pacific unsuccessfully challenged the legislation, attempting to contractualize the original federal grants of aid. Sanderson hoped to

149Gordon, supra note 5 at 70. 150ld. 151Charles W. McGurdy Justice Field and the Jurisprudence of Government­ Business Relations: Some Parameters of Laissez Faire Constitutionalism 1863-1897, 61 J. AM.HIST. 970, 973 (1970). 152See Swisher, supra note 61 at 46; Wilson & Taylor, supra note 55 at 101-02. persuade the court that allowing post hoc modifications of the original relationship between the CPRR and the federal government would be to assure the entrance of uncertainty and the possibility of arbitrary, one-sided changes to contracts. This would be a dangerous precedent for any investor hoping to deal with the government.153 The court rejected this complete contractualization of the original relationship over Field's dissent,154 instead recalling that the United States is both creditor of the corporation and sovereign of it, and that reasonable regulation of this "practical monopoly to which the citizen is compelled to resort" was reasonable in the same way that regulation in M un n had been approved.155 Federal scrutiny would subside slightly until the celebrated case involving the widow of David Colton forced a series of incriminating revelations about the activities of the Southern Pacific.156 In 1878, David Colton, who had been taken on by Crocker, Hopkins, Huntington, and Stanford, died. His wife signed a settlement with the four remaining principals about how to payoff Colton's debts to his

153S ee McGurdy, supra note 151 at. 154Sinking Fund Cases, 99 U.S. 700 (1879). 1S5Id. at 724, 747. Sanderson argued and Field agreed that the Central Pacific was a state corporation formed under California law, even if was considered a party to a contract with the federal government. Thus, for purposes of avoiding its debt to the federal government, Sanderson asserted that federalism would prevent Congress from intervening with a state corporation. Later, in the San Mateo tax litigation, Haymond argued the opposite, that a franchise conferred by Congress could not be taxed by the state. The legal strategy of the company and even its legal status clearly change when the adversary was the federal government. As a punctuation mark to the taxation story, the Supreme Court ultimately accepted Haymond's argument and voided the mode of assessment used by California. See California v. Central Pac. R.R. Co., 127 U.S. 1 (1888). 156By 1887, the Central Pacific had been reorganized and become part of the Southern Pacific Company, a Kentucky corporation. This corporation, in contrast to the restrictive rules imposed upon California companies, was given almost unlimited power, in particular the ability to issue more bonds. 1884 Ky. Acts Ch. 403, § 3. Kentucky corporation law provided, unlike California's, for limited shareholder liability. Wilson & Taylor, supra note 55 at 103; see also 1876 Ky. Acts. Ch.56. partners. The settlement left her less than satisfied, and she eventually sued to have the agreement set aside.157 The legal staff of the Central Pacific was led by Hall McAllister, and Sanderson, Cohen, and Haymond among others helped to secure witnesses and marshal the enormous amount of evidence. Eventually, a judge ruled that there had been no bad faith negotiations between the parties, and the settlement agreement was deemed valid.158 What transformed the trial from just another bout of litigation drawn out over seven years into an outright political scandal was a packet of 600 letters between Colton and Collis P. Huntington admitted into evidence during the 1885 trial.159 IITheir hastily scrawled pages exposed the railroad's political methods with... thoroughness ... .In [his] letters Huntington named scores of office holders in California and Washington who took orders from the railroad, who ~ on the railroad's payroll, whose career~ould be made or ruined by the railroad.1I160 These tales of influence peddling, bribery, and other forms of outright corruption, on top of the already touchy debt crisis, not to mention other scandals involving the Union Pacific Railroad in the 1880's precipitated the formation in March, 1887 of the Pacific Railway Commission. The committee was to hold hearings on the financial arrangements and business practices of the railroad companies that had received federal aid.

157Lewis, supra note 82 at 307-09. 158Colton v. Stanford, 82 Cal. 351 (1890) 159 An interesting example of popular reaction to the scandalous revelations is Joseph H. Moore, An Open Letter, a Protest, and a Petition (1885) (in holdings of Stanford University Libraries). Huntington had been living in New York at the time the letters were written, traveling between Boston, New York, and Washington trying to secure loans for the railroad. 160Lewis, supra note 82 at 311-312. The letters appear in volume 14 of the testimony in Ellen M. Colton v. Leland Stanford, et. al. at 1605-1848 (in holdings of Stanford University Libraries). The thousands of pages of testimony before the commission begin with questions posed to Collis P. Huntington. Among the topics this first witness was asked about were the activities of the legal representative of the Southern Pacific and the unaccounted for "legal expenses" of the corporation. The Commission suspected quite justifiably that the unvouched for monies were used to make the payoffs to members of Congress and state legislatures chronicled in detail in the Colton letters.161 Haymond and Cohen participated in the hearings extensively in an attempt to control the damage that detailed revelations had on the corporation and to make federal probes as difficult as possible. Haymond and Cohen appeared most often as direct representatives of the corporation before official bodies and as spokesmen for the railroad's interests to the people of the state. This was a distinct form of legal work that Cohen and Haymond would thrive in. Before the Commission, they took testimony from their own witnesses, subprenaed others, and tried to rebut the accusations of corruption, self-dealing, and predatory practices in fixing freight and passenger rates and competition. Also important was the brooding presence of the railroad's debt to the federal government. Cohen's perspective was that the government had received more, in the form of free transportation of mails and troops, that:'- it had given to the railroad in land grants and subsidy bonds.162 In response to questions about the Colton-Huntington letters, Cohen, who had been a member of the Colton trial team a few years earlier, claimed that he could not comment on the issue because it was protected by the attorney-client privilege. When it came time to run through the letters in rebuttal testimony, Cohen led Huntington through a series of evasive musings and non-answers about what the

161 Pacific Railway Commission, supra note 6 at 5-27. 162Id. at 2399. Cohen's other testimony appears in Pacific Railway Commission at 2381-2406. letters could have meant.163 This and similar obstruction tactics continued throughout the months of the hearings. When Leland Stanford was asked questions about how to account for large "legal expenses," and whether money had been used to influence legislation, and what lawyers were employed as agents to represent the company before various legislative bodies, he refused on the advice of Haymond and Cohen to answer. The Commission filed a suit to order him to answer the interrogatories. McAllister, still retained by the CPRR, dealt with all substantive legal questions about how the committee hearings could be constitutionally conducted, what evidence could be admitted, and who could be questioned,164 McAllister asserted that Stanford had fulfilled all the legal responsibilities included in the original act of 1862, and had no duty to appear before a congressional committee to answer for charges of criminal activity.165 An ord~r for him to answer would, McAllister argued, violate his due process rights. Field writing for the circuit court agreed with McAllister, although he stressed much more the constitutional limits of congressional powers to intrude into the private affairs of citizens out of the context of judicial proceedings,166 Months after the hearings were complete, Creed Haymond returned as a public spokesman to Washington to sum up the CPRR's position on what had transpired during the preceding months. In the same way that during the Colton trial, the lawyers ignored the letters revealing the methods the corporation used to achieve its ends, Haymond's summarization did not attempt to address the major

163Id. at 3699-3766. 164See, e.g., id. at 3538-47. 165Hall McAllister, In the Matter of the United States Pacific Railway Commission, Answer of Leland Stanford, reprinted in Pacific Railway Commission, supra note 6 at 4169. 16632 F. 241 (C.C.Cal. 1887). See also Carl Brent Swisher, AMERICAN CONSTITUTIONAL DEVELOPMENT 395-96 (2d. ed. 1954). charges of corrupt, predatory, and exploitive practices. Nor did he characterize the relationship between the federal government and the CPRR in the way that the Supreme Court had emphatically done, as creditor-debtor. Instead, the relationship was completely contractualized, leaving no room for morality and equity concerns. It had been, in his eyes, an arms-length business relationship, and insofar as the CPRR had performed all its obligations, the government could not take any measures to place new obligations on the railroad to settle the debt. I have seen husband and wife united when the wife was the stronger; when she brought the wealth of woman's love and the support which alone that can give. I have seen the spouses go though life, the wife devoted to domestic affairs, the husband mixing with the world, until the man, educated by contact with superior minds ... advanced, while the woman, devoted to household ... duties lagged behind ....

We were wedded to the United States in the hour of darkness and periL.We were then stronger in credit than our spouse. The United States wanted road constructed for military purposes across the mountains upon which the storm king sat enthroned ... We did it faithfully and honestly, and all the obligations of that marriage contract on our part have been performed as truly as the proudest woman of our race ever kept the obligations which she owed to her husband....

It may be that the United States, which has performed none of its obligations towards us, has grown tired of the alliance. It may be that the time has come when, in defiance of the laws which bind us together, the bonds are to be broken.167 What escaped Haymond is the way the public's concern about the corporation's practices was a political problem, not simply a private matter between two contracting parties. Serious issues, apart from whether the parties had complied with the original terms of their "bargain," about how much power the railroad could be permitted and how it was to behave in its sphere of activity could not be

167Creed Haymond, THE CENTRAL PACIFIC RAILROAD CO.: ITS RELATIONS TO THE GOVERNMENT, TESTIMONY BEFORE SELECT COMMITTEE OF THE U.S. SENATE 228-29 (1888). ignored. Classical legal language provided Haymond with a discursive out. By "depoliticiz[ing] public law categories,.. for sure law was rid of moral/ subjective standards. At the same time however, from------my perspective, it fails as a compelling or even coherent language through which the story of the Central Pacific was retold. It also smacks of a certain hypocrisy: the railroad crying foul at this late date.168 Haymond's apology falls flat, obscuring more about the railroad's behavior than it does enlighten. While Haymond may have been the Central Pacific's experienced spokesman, the lawyer who put things in a "telling way" to the people, he seems to have ignored the thrust of what Congress was reacting to when they formed the commission, unsavory practices resulting in too much concentrated power in one corporation. The inadequacies of classical legal language, however, are even worse than a simple disregard for public concerns when communicating with the very same public. By this late da.te, attempts to refigure the original legislation that granted transcontinental railroad franchises to the Central Pacific including the massive subsidies169 seem less like honest reinterpretations of the law, and more like self-serving attempts to hide the fact that the principaV stockholders enriched themselves at the expense of the federal government.170

168Horwitz, supra note 66 at 27. See also Gordon, supra note 15 at 61: Of corporate sanctimoniousness, he writes, "After eliminating their competitors and devising receptive legal forms in state corporation statutes, consolidated enterprises were grateful for the chance to preach respectability." 169Haymond sees the original act as a promise by the railroad to either build the road, repay the money loaned it by the government, or to surrender their ownership of the railroad. See, e.g., Haymond, supra note 167 at 54. 170For an equally unpersuasive argument that Haymond presented for public consumption, see Haymond, TO THE PEOPLE - THE RAILROAD TAX CASES, HISTORY OF THE LITIGATION, AN OPEN LETTER (1887). See also Roscoe Conkling, THE CENTRAL PACIFIC RAILROAD COMPANY IN EQUITABLE ACCOUNT WITH THE UNITED STATES: A REVIEW OF THE TESTIMONY AND EXHIBITS (1887). Haymond's neutral reasoning so abstracts legal from political and moral categories that he ends up sounding, if I dare say so, maybe even morally bankrupt.171

V. Final Thoughts

If classical legal liberalism's explanatory power was waning at the end of the 1880's, then the careers of these four lawyers ended as their discursive tools were being taken away. Sanderson died first in 1887, followed by Cohen in 1888, McAllister in 1889, and Haymond a few years after in 1893. Having described the millieux of the 1870's and 1880's, I am forced to reflect on their careers from the perspective of someone starting his own. Looking at the careers that Sanderson, Haymond, Cohen, and McAllister had, I am amazed at the breadth of their experience. They seem to have inhabited a time and space when

171By way of a punctuation mark to the story of the CPRR's long-running debt saga, I offer the following: The story of the railro~'ormous debt 01:l!~~~ted Cohen, ~~::"\ McAllister, Haymond, and Sanderson. I 18 -anford announceaThal[O"'-~ memorialize his son who had died in adoles nce he would found a university. Upon the father's death, the size of his fortune was estimated at $30 million, and he left an enormous quantity of money for this purpose. Wilson and Taylor, supra note 55 at 105. This large estate suggested that he could have repaid the portion of . the Central Pacific's debt for which he, as holder of nearly one-quarter of the stock, was liable, approximately $15 million. The government's claim was especially compelling. in light of California constitutional provision that held stockholders personally liable for corporate debt. The decision in United States v. Stanford, 69 F. 25 (C.C.N.D. Cal. 1895) and the Supreme Court affirmance, 161 U.S. 412 (1896), effectively guaranteed the continued survival of Stanford University by not holding the estate liable for the CPRR's debt. For a fascinating retelling of this story, see Frederick, supra note 59. The $60 million debt was finally repaid in full in 1908. [d. at 255. See also Wilson & Taylor, supra note 55 at 242. Early legal problems fpr the fledgling university continued. Haymond, the CPRR who advised Stanford on personal matters, drew up a defective founding grant. See supra note 103. The law at the time did not provide for trustees to exercise corporate powers thereby limiting what the trustees could accomplish after Stanford's death. See George E. Crothers, Founding of the Leland Stanford Junior University, AMERICANA Vol. XXVII, No.1, at 194, 199-201 (1932). Only succeeding amendments to the California Constitution passed by referendum allowed for these powers. new forms of legal work were taking shape along with fast-paced social and economic change: Sanderson, the in-house counsel whose legal thinking was wedded, either consciously or not, to his long-time employer; Cohen, the "legal broker" 172 whose dealings had him in the vest pocket of his employers or diametrically opposed to their interests; Haymond, the hopeful reformer of legal institutions who became the public spokesman for a company under tremendous official and popular scrutiny; and McAllister, possessed of enough knowledge and talent that his firm, a measure of his high professional autonomy, could 1) choose clients and demand high fees and 2) involve itself in many constitutional cases without being completely driven by the pragmatic ends of his corporate employers. All four wrapped themselves up in social conflict in ways corporate lawyers in their ordinary routine cannot today. They never were simply working to see that either A, my client, or B, someone else's, was making money. All of them had careers across boundaries: either in both the public and private sectors, in courtrooms, boardrooms, and committee rooms, or on both sides of a similar issue. Most importantly, all four of them were to varying degrees both "bright legal technicians" and applied legal theorists,173 capable of reflection on how they were-- even if at some points only tenuously--participants in social conflict. In short, they were models of legal doers, of praxis in action, and in this, we could do well to learn from and imitate them.

172Gordon, supra note 15 at 59. 173Gordon, supra note 15 at 73.