Jurisdictional Competition and Corporate Law: The Rise of Delaware and the Fall of New Jersey

Abstract

This paper examines one of the most consequential jurisdictional shifts in American corporate history: the transition of corporate charter dominance from New Jersey to Delaware. During the late nineteenth and early twentieth centuries, New Jersey’s liberal incorporation statutes, including the legalization of holding companies, positioned it as the premier domicile for America’s industrial giants. However, Governor Woodrow Wilson’s progressive reforms in 1913—known as the “Seven Sisters” Acts—reversed that trajectory, imposing significant regulatory constraints and catalyzing an exodus of corporations. Delaware, with its permissive General Corporation Law, expert Court of Chancery, and constitutionally protected legal stability, emerged as the preferred alternative. This article explores the legislative, political, and institutional dynamics that facilitated Delaware’s ascendancy and highlights the enduring implications for federalism and jurisdictional competition in corporate governance. By tracing this pivotal historical realignment, the analysis offers insights into how legal infrastructure, not just statutory text, sustains long-term dominance in the market for corporate charters.

Keywords: Legal History of Corporate Law Holding Companies Corporate Reincorporation Business Regulation Corporate Governance Antitrust and Regulation Law and Political Economy, Corporate Reincorporation Business Regulation Corporate Governance Antitrust and Regulation Law and Political Economy, Reincorporation, Redomestication, State Competition in Corporate Law, Corporate Law, Jurisdictional Competition, Incorporation Law, Delaware Corporate Law, Charter Competition, New Jersey Corporate Law, Legal History of Corporate Law, Charter Competition