........The Declaration of Independence, in 1776, freed Americans not only from Britain but also from the tyranny of British corporations, and for a hundred years after the document’s signing, Americans remained deeply suspicious of corporate power. They were careful about the way they granted corporate charters, and about the powers granted therein. Early American charters were created literally by the people, for the people as a legal convenience. Corporations were "artificial, invisible, intangible," mere financial tools. They were chartered by individual states, not the federal government, which meant they could be kept under close local scrutiny. They were automatically dissolved if they engaged in activities that violated their charter. Limits were placed on how big and powerful companies could become. Even railroad magnate J. P. Morgan, the consummate capitalist, understood that corporations must never become so big that they "inhibit freedom to the point where efficiency [is] endangered." The two hundred or so corporations operating in the US by the year 1800 were each kept on fairly short leashes. They weren’t allowed to participate in the political process. They couldn’t buy stock in other corporations. And if one of them acted improperly, the consequences were severe. In 1832, President Andrew Jackson vetoed a motion to extend the charter of the corrupt and tyrannical Second Bank of the United States, and was widely applauded for doing so. That same year the state of Pennsylvania revoked the charters of ten banks for operating contrary to the public interest. Even the enormous industry trusts, formed to protect member corporations from external competitors and provide barriers to entry, eventually proved no match for the state.
By the mid-1800s, antitrust legislation was widely in place.
In the early history of America, the corporation played an important but subordinate role. The people — not the corporations — were in control. So what happened?
How did corporations gain power and eventually start exercising more control than the individuals who created them? The shift began in the last third of the nineteenth century — the start of a great period of struggle between corporations and civil society. The turning point was the Civil War. Corporations made huge profits from procurement contracts and took advantage of the disorder and corruption of the times to buy legislatures, judges and even presidents. Corporations became the masters and keepers of business.
President Abraham Lincoln foresaw terrible trouble. Shortly before his death, he warned that "corporations have been enthroned . . . . An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people . . . until wealth is aggregated in a few hands . . . and the republic is destroyed."
h/t to Indigus