Post-1837 state governments barred themselves from owning corporate stock and lending credit

Evidence

In the same period, the states, burned by experience, and distrustful of their own legislatures, began to forbid direct investment in enterprise. Cities, counties, and the states themselves had rashly piled up mountains of worthless bonds, discredited paper, and high tax liabilities. By 1874, sixteen state constitutions provided that the state could not own stock in private corporations. In twenty states, the state was forbidden to lend its credit to any corporation. — Lawrence M. Friedman, A History of American Law, 2978

Categorization

• XREF: Pays off the book’s earlier treatment of state railroad investment reversing after the 1837 panic. — connects to: The 1837 depression turned states against direct railroad investment. — Lawrence M. Friedman, A History of American Law, 980; States initially justified owning corporate stock on public-works and control grounds. — Lawrence M. Friedman, A History of American Law, 1061; The 1837 panic reversed state investment in railroads and forced privatization. — Lawrence M. Friedman, A History of American Law, 1065 (+1 more)