The colonists and early Americans largely viewed corporations as entities whose function was to help society achieve specific public ends. Those ends included the provision of education (America's oldest corporation, Harvard University, was chartered in 1636), the provision of credit (the nation's first banks were created by government officials), and the building of roads, bridges, and canals. Colonial and early state governments legally recognized particular corporations in order to attain specific public objectives. The state granted corporations certain legal privileges, such as the ability to accumulate relatively large amounts of wealth, have a perpetual life, and enjoy limited liability for their owners, in return for the corporations' agreeing to help the government attain particular social goals. The prevailing view of corporations was not that of today, in which they are expected to compete with each other in order to promote market efficiencies and maximize profits. Instead, the goal was to empower particular corporations with the necessary legal authority and financial means to allow them to accomplish particular public objectives.
As a result, early corporations in the United States were, in effect, semi public entities individually chartered, and frequently partially funded by state legislatures with the goal of providing specific public goods. During this period, it was not always easy to distinguish between government and corporate activities, given that public officials relied heavily on corporations to attain crucial public objectives. In addition, governments kept corporations on tight leashes. Before the middle of the nineteenth century, it was not possible in most states to create a corporation without the legislature's explicit permission. And government officials frequently revoked corporate charters when they believed corporate owners were not meeting their public obligations. Two historians have explained that, in the nation's early decades, "the corporation was conceived as an agency of government, endowed with public attributes, exclusive privileges, and political power, and designed to serve a social function for the state."
Before the development of stock markets and the emergence of private banks, government-created banks provided credit to businesses and farmers. These early banks, as one commentator notes, "showed more interest in public service than in maximizing profits." This is what Alexander Hamilton, the moving force behind the creation of the Bank of the United States, had in mind when he reasoned that "public utility is more truly the object of public banks rather than private profit."
In addition, before private railroads changed the nation's transportation and economy in fundamental ways, it was government approved corporations that built much of the country's basic infrastructure, such as turnpikes, bridges, and canals, including the famous Erie Canal, which links Lake Erie to the Hudson River. It was these corporations acting in the public service that began to stitch together the independent colonies into one nation with a single, national economy.”
The prevailing understanding of corporations as entities formed to attain particular social ends began to change around the middle of the nineteenth century and accelerated rapidly after the Civil War. During this period, a growing number of Americans began to view corporations as primarily profit-maximizing institutions that appropriately prioritized private gains over public objectives. At the same time, many Americans came to see the provision of public goods (such as building basic infrastructure) as indirect by-products rather than the primary objective of corporate activities.