Distribution of Economic Privileges: Eminent Domain

State promotional activity was also significant in distributing privileges, the two most important of which were eminent domain and incorporation. The heyday of public expropriation of private property, one of the most glaring exceptions to laissez-faire ideology, lasted from about 1870 to 1910. ⁸ Before the Civil War, state legislatures, drawing on authority in state constitutions, empowered private corporations to take private property (subject to due-process and just-compensation provisions) for public purposes. These expropriations redounded to the benefit of the entire community and placed the "rights of the public" above private property interests.

Beginning in the 1870s, state legislatures, especially in the developing West, put a new wrinkle in eminent domain law. They authorized private corporations to take private property for private purposes. Delegates to the Colorado constitutional convention of 1875-1876 blazed the way, framing the first fundamental law in the nation to contain such a provision. This portion of the constitution was of particular importance to mining companies chartered in the state. ⁹

Most western legislatures formulated the eminent domain power in ways that mirrored the diverse economic interests that sought to invoke it. Eminent domain, in this sense, was a distributive public policy that resonated with economic pluralism. The political and legal furor that surrounded the eminent domain power in the western states suggests as much. The clash among farmers, ranchers, and miners typically had more to do with who would benefit from the power (either via irrigation to raise crops and livestock or via extraction of minerals) than whether the power should be used. Most western states took an eclectic approach, giving a little bit to every interest. The Idaho legislature prepared an extensive list of economic activities that private individuals could pursue through the eminent domain power. These included "wharves, docks, piers, chutes, booms, ferries, bridges, toll-roads, by-roads [and] supplying mines and farming neighborhoods with water." ¹⁰

The eminent domain power in the dry portions of the West facilitated irrigation, which hastened settlement and economic development. An instrumental vision of law animated economic progress, doing so in ways that rendered laissez-faire theory obsolete. The doctrine of prior appropriation, the controlling principle of western water law, held that the first to get to water had the exclusive use of it; however, this doctrine made little sense if, having acquired it, a user could not take advantage of it. Obviously, the property rights of some landholders suffered. In most western states, private individuals could invoke state eminent domain laws in order to convey water to their own lands.

By 1910 this burst of activity ended amid complaints that corporations had abused the privilege. Eminent domain did not vanish, however; legislatures stiffened the requirements to invoke it, including statutory provisions that juries try all cases of expropriations by private corporations. During the remainder of the twentieth century

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municipalities increasingly invoked eminent domain in its new, more publicly accountable form, to plan and renew cities, while the national government relied on it to develop major regional economic enterprises, such as the Tennessee Valley Authority.

Date: 2015-01-29; view: 676