In holding that only clear and explicit terms of contracts were legally binding, the Supreme Court increased the power of state legislatures to regulate private corporations.
Under Chief Justice John Marshall’s leadership, the Supreme Court had used a broad construction of the contract clause to protect vested rights in private property. Charles River Bridge v. Warren Bridge demonstrated that Chief Justice Roger Brooke Taney and his colleagues wanted to give state legislatures greater latitude in formulating economic policy.
In 1785 the Massachusetts legislature had granted the Charles River Bridge Company a charter to build and operate a toll bridge between Boston and Cambridge. In 1828 the legislature authorized the Warren River Bridge Company to erect a second bridge that would eventually become toll-free. The Charles River Bridge Company sought an injunction against construction of the new bridge on the grounds that the older charter implied the company’s exclusive right to operate a bridge at that location during the life of the charter. The issue was whether the Court would make a broad or a narrow interpretation of the charter under the contract clause.
By a 4-3 margin, the Court rejected the company’s claim. Writing for the Court, Taney
The Charles River Bridge decision reflected and encouraged a new emphasis on competition within the capitalistic system. Under Taney, however, the Court did not at all abandon the contract clause. In Bronson v. Kinzie
Bronson v. Kinzie
Ex post facto laws
Fletcher v. Peck
Home Building and Loan Association v. Blaisdell
Powell v. Alabama
Private corporation charters