Is the United States a Corporation? The 1871 Act and Its Afterlife

Among the most durable propositions in alternative legal literature is that the United States ceased, at some point, to be a constitutional republic and became a corporation — that what Americans call their government is in fact a business entity headquartered in the District of Columbia, and that its relationship with the people is commercial rather than political. The date most often given for this transformation is 1871.

The proposition matters to those who hold it because it reframes everything downstream. If the government is a corporation, its laws are corporate by-laws, binding only on those who have joined; its courts are corporate tribunals; its citizens are employees or customers. The question is therefore worth asking carefully: what happened in 1871, and does the record support the conclusion drawn from it?

The Act of February 21, 1871

On February 21, 1871, Congress passed "An Act to provide a Government for the District of Columbia," published at 16 Stat. 419. The Constitution gives Congress power "to exercise exclusive Legislation in all Cases whatsoever" over the federal district (Article I, Section 8, Clause 17). Before 1871 the District contained several separate jurisdictions, including the cities of Washington and Georgetown and the County of Washington. The 1871 Act consolidated them into a single territorial government with an appointed governor, a legislative assembly, a board of public works and a non-voting delegate to the House.

The first section of the Act provided that the area be "created into a government by the name of the District of Columbia, by which name it is hereby constituted a body corporate for municipal purposes," which "may contract and be contracted with, sue and be sued, plead and be impleaded," and exercise the other powers of a municipal corporation.

This is the language on which the theory rests. Read in isolation, the words "body corporate" seem to confirm that a corporation was created in Washington in 1871.

What the Act did and did not do

Read in context, the Act did something ordinary for its time. American cities and municipal governments have long been organized as municipal corporations — public corporations created by a legislature to govern a locality. The 1871 Act created a municipal corporation for the District, not for the nation. It did not mention the government of the United States as such, did not amend the Constitution, and did not purport to transfer any national power to a private entity.

The territorial government was also short-lived. By the Act of June 20, 1874 (18 Stat. 116), Congress repealed the provisions for the governor, secretary, legislative assembly, board of public works and delegate, and placed the District under a temporary commission. The Organic Act of 1878 (20 Stat. 102) established a permanent government by three commissioners. The arrangement created in 1871 therefore lasted about three years.

Proponents sometimes answer that the corporate status survived the repeal, or that the 1871 Act was the moment when a parallel corporate "UNITED STATES" was formed alongside the constitutional republic. No provision of the 1871 Act, the 1874 Act or the 1878 Act says so, and those who advance this reading generally do not identify a later instrument that creates such an entity. On the documents, the "corporate United States" of 1871 is an inference that goes beyond what the statutes contain.

The definition in 28 U.S.C. § 3002

A second text carries much of the modern weight. The Federal Debt Collection Procedures Act of 1990 contains a definitions section, 28 U.S.C. § 3002. Subsection (15) provides that "United States" means "(A) a Federal corporation; (B) an agency, department, commission, board, or other entity of the United States; or (C) an instrumentality of the United States."

To a reader encountering it for the first time, this looks like an admission. But definitions sections in the Code define terms for the purposes of a particular chapter. Chapter 176 of Title 28 governs how the federal government collects debts owed to it. The definition makes clear that the collection procedures are available not only to executive departments but also to federally chartered corporations — such as government corporations created by Congress — that are owed money. It says that a federal corporation counts as "the United States" for debt-collection purposes; it does not say that the United States is nothing but a corporation.

The older language of "body politic and corporate"

There is a deeper and more interesting strand. In early Anglo-American thought, any organized political community could be described as a corporation in the broad sense: a body that persists beyond the lives of its members, holds property and can sue and be sued. Blackstone discussed the king as a "corporation sole." American courts sometimes described the United States and the states in these terms. In Van Brocklin v. Tennessee, 117 U.S. 151 (1886), holding that a state could not tax federal property, the Supreme Court quoted Chief Justice Marshall's description of the United States as "a government, and consequently a body politic and corporate," and his further phrase: "This great corporation was ordained and established by the American people." Proponents who cite that line are quoting the Supreme Court accurately. In context, it uses "corporation" in the old sense of an organized political body, and the same opinion treats the United States as a sovereign whose property and functions the states may not burden.

Proponents also cite two cases about the government's commercial conduct. In Bank of the United States v. Planters' Bank of Georgia, 22 U.S. (9 Wheat.) 904 (1824), the Court said that when a government becomes a partner in a trading company, it divests itself of its sovereign character so far as that company's transactions are concerned. In Clearfield Trust Co. v. United States, 318 U.S. 363 (1943), the Court held that federal law governs the rights and duties of the United States on commercial paper it issues. Both cases are real and both say something genuine: when government acts in commerce, it can be treated, for those transactions, somewhat like a commercial party.

Neither holds that the government is a corporation in the sense the theory requires. They concern particular transactions, not the nature of the national government.

Where the claim gains and loses strength

The claim gains force from three real facts: Congress did create a "body corporate" in Washington in 1871; a federal statute does define "United States" to include a federal corporation; and courts have long used corporate vocabulary for political bodies. It loses force at the point where those facts are joined into a single narrative of conversion. The 1871 corporation was municipal and local, and it was dissolved within three years. The 1990 definition is limited to one chapter and one purpose. The corporate vocabulary of older cases describes a legal attribute, not a change of regime.

We have found no court decision accepting the proposition that the United States became a private corporation in 1871.

What can reasonably be concluded

The documented record shows a short-lived municipal corporation for the District of Columbia, a narrow definition in a debt-collection statute, and a longstanding habit of describing governments in corporate language. The record does not show a national transformation in 1871. What remains worth thinking about — and what the archive explores in The Corporation as Sovereign — is how far corporate forms and political authority have overlapped in history, and why the idea of a commercial government speaks to so many readers who feel that their relationship with the state has become transactional.