Charles River Bridge v.Warren Bridge (1837). The American Economy: A Historical Encyclopedia

A court case pitting the public good against private property
In 1785, the Massachusetts legislature granted a corporate
charter to John Hancock and other investors to build a toll
bridge over the Charles River from Boston in the south to
Charlestown in the north. The bridge quickly proved a profitable venture, and the value of the original shares increased
tenfold. The high profits of the Charles River Bridge
Company were threatened in 1828 when the Massachusetts
legislature granted a corporate charter to the Warren Bridge
Company to build another bridge across the Charles River.
The new bridge would charge a toll only until the original
investors had recouped their initial investment. The Warren
Bridge would then be free to all travelers who crossed it.
The owners of the Charles River Bridge sued the owners of
the Warren Bridge, arguing that their original corporate charter gave them a vested right to control bridge traffic across the
Charles River. Because the new Warren Bridge would eventually charge no tolls, it would inevitably destroy the business of
the Charles River Bridge and thus impair the original charter.
Massachusetts, argued owners of the Charles River Bridge,
had therefore violated the contract clause of the U.S.
Constitution that clearly states in Article 1, Section 10: “No
State shall … pass any Law impairing the Obligation of
Contracts.” The owners of the Charles River Bridge hoped
that the Supreme Court would follow the precedent set in
Dartmouth College v. Woodward (1819) and decide the case in
their favor.
Although the case was originally argued in 1831 before the
Court of Chief Justice John Marshall, the justices could never
reach a decision. When Roger B. Taney became chief justice
in 1836, he ordered that the case be reargued in January 1837
and ruled in favor of the Warren Bridge on February 12,
1837. In a 4-to-3 decision, Taney held that the 1785 charter
did not explicitly state that the Charles River Bridge had an
exclusive right to carry traffic. He reasoned that if monopoly
rights were read into every corporate charter, the American
people would be unable to benefit from technological
improvements in the future. Taney laid down an even more
important precedent when he ruled that the public good
must prevail whenever the rights of the community conflict
with the rights of private property. Justice Taney’s decision
did much to promote the growth of American business in the
early nineteenth century.
—Mary Stockwell
Siegel, Martin. The Taney Court, 1836–1864. Millwood, NY:
Associated Faculty Press, 1987.