Exact quote from my Corporate Finance (Berk, DeMarzo) textbook: “Unhappy with the political leanings of the board, the state legislature effectively took control of Dartmouth by passing legislation in 1816 that established a governor-appointed board of overseers to run the school.”
What was the political disagreement between the state and the College? I tried looking it up online but the focus is on the Supreme Court case and not of the specifics of the disagreements.
John Wheelock, the second president of Dartmouth who had inherited the role from his father, was reportedly an obstinate and rather pompous character. He believed the college should be completely subject to his whims, and when the village church—the Church of Christ founded by John’s father Eleazar and typically staffed by theology professors from Dartmouth—required a change of pastor in 1805, he sought to install his choice rather than the church’s own. Some members of the local community took against this, and a long-running dispute began that Wheelock eventually attempted to resolve by asking the trustees of the college to enforce his will. They refused to do so, and reproved him for his conduct.
Wheelock was enraged by this criticism of his actions and questioning of his presidential authority at the college. He publicly attacked the trustees in two anonymous pamphlets, which were picked up by local press. The argument was soon amplified into a political dispute about the limits of autonomy and ideal governance. Federalists—then a distinct party having control of both the governorship and legislature of the state and in favour of the federal centralisation represented by the constitution—took the side of the college trustees, while the anti-federalists—a loose coalition of political actors who were concerned that federal centralisation as represented by the constitution could lead to a monarchy—supported Wheelock.
By 1815, Wheelock had been removed from his position by the trustees following the acrimonious dispute over the pastorship and the emergence of his role in fomenting dissent in the press. Francis Brown, a young reverend, was installed in his place. Wheelock of course took this badly, and when the anti-federalist Democratic-Republican party were elected to the governorship and legislature by narrow margins in 1816, he appealed to William Plumer, the new governor, for support. He proposed that they enlarge and stack the Dartmouth board with his supporters and turn Dartmouth College into a state-run Dartmouth University.
The original private board resisted attempts to install a new regime, especially given the association of Wheelock and Plumer’s proposed state-run University with anti-federalist politics. The legal dispute that resulted—which eventually became precedent for corporate law in the Supreme Court’s Trustees of Dartmouth College v. Woodward ruling—came to represent wider debates about civil society in the early republic, as Johan Neem rightly suggests. Should control over institutions be given to elected politicians (i.e., Plumer and the state), or to unelected ‘elites’ who had traditionally run such places (i.e., the private, original board of the college)? As today, of course, such debates overlook the nuances of the case: the supposedly ‘elected’ rulers in the Democratic-Republican party were simply representing the interests with inherited power (Wheelock), so the extent to which this case was ever truly dichotomous is obviously questionable.