should be humane, liberal, and moral, within the province.
Individuals who compose a
of its recognized business.
corporation, in their private capacity, should be altruistic
toward all humanity; but the organization, as a unit, has
had its limited scope definitely marked out at the time of
its creation.

As a rule, the richest and most extensive corporations are composed of a large number of small stockholders. This is the case to an unappreciated extent with railroads, savings banks, and loan associations. Even the national banks, which in the eyes of many represent a small coterie of the rich, are found upon examination to be aggregations of capital generally owned in small amounts and widely scattered. Unfounded prejudice against legitimate wealth is often carried so far that it almost seems as though honest thrift and industry were something not very creditable. But the savings bank is an index, not only of thrift, but of education, refinement, and philanthropy.

The existing prejudice against corporations is not due to any inherent fault or lack of usefulness in the principle, but to the prevailing unfaithfulness among corporate manIt lies in personal character-or rather the lack of it and not in the system.

agers.

The primary movement in the establishment of new forces in material civilization is in the direction of temporary monopoly. But this is only a process. Its working There is seen in the patent laws of all civilized nations. The secondary and permanent tendency is diffusive. must be a gathered energy in the beginning to project new agencies into wide distribution. Meritorious inventions often fail to come into broad application because of the weakness of the centralized agency at their fountain head.

THE ABUSES OF CORPORATE

MANAGEMENT.

Justice, sir, is the great interest of men on earth."

WEBSTER.

"All power is a trust, and we are accountable for its exercise."

DISRAELI.

"Private credit is wealth; public honor is security."

LETTERS OF JUNIUS.

66

Confidence is a plant of slow growth in an aged bosom."

PITT.

XXI.

THE ABUSES OF CORPORATE MANAGEMENT.

DIRECTORIAL unscrupulousness is a dark cloud in the social and moral horizon. It blunts public honesty, drags down pure ideals, chills wholesome enterprise, and furnishes a plausible excuse for socialistic and anarchic agitation. But it is no more a part of the normal corporation than are the barnacles a part of a graceful yacht. It is not an inherent part of the "social system," but a deadly upas, whose roots, trunk, and branches are all in blighted personal character.

It is often asked: Why is business so dull, good stocks so low, and money piled up in banks, instead of filling the channels of business? People scan the financial horizon, and assign almost every other reason for these conditions than the true one. Various theories place the fault in the tariff, the administration, too much silver, too little silver, surplus legislation, or needed legislation. But the true reason is too little honesty. General confidence in the integrity of the average manager and director has been badly shaken. The "lambs have been shorn," and "the goose killed that laid the golden egg," and others are not forthcoming.

The directorial board of a corporation, who are theoretically its servants and guardians, become its dictators and consumers. But the demoralization is general, rather than special; and it is to be feared that many who are not now officials would, under similar circumstances, do much the same. The manager is only a sort of exponent of the prevailing ethical standard.

Directorial abuses are not only common, but subtle, plausible, and insinuating, so as to obscure and almost eclipse axiomatic moral principles, which are older than the Decalogue. The public conscience is so accustomed to directorial manipulation, and skilful and prolific ingenuity on the part of officials, more especially those of the average railroad, that as a matter of course they are almost expected. To be on the "inside" is often as good as a fortune assured. Unscrupulous management is regarded only as "shrewd financiering," and even as "brilliant," so long as it escapes technical and legal cognizance and punishment. Instead of earnest condemnation from the public press, it often calls out criticism only of a flippant or facetious character. Its direct consequences may be seen in great congested, unearned fortunes, in a lax public conscience, in the universal distrust with which the world regards the average American railway management, and in the transformation of a legitimate stock-investment business into one of a gambling character. It furnishes the text and vantage-ground of every anarchist, socialist, and would-be destroyer of our present social order; and so far as legitimate investment is concerned, it has put it in close limitations. It seems strange that both legislation and public opinion have so lightly regarded these great commercial evils, and, while perfectly aware of their magnitude, have The direct taken no earnest measures for their abatement.

financial sufferers are the hundreds of thousands of shareholders1 and owners of other securities, who have furnished the nine or ten billions of dollars which have created the great arteries of American commerce, and without which the material resources of the nation would be but infantile in comparison with the present reality. The great majority of shareholders have no practical way of making their

1 Their numbers range from a few hundred in some lines up to fifteen or twenty thousand each in a few of the great Western systems.