New-York tribune., 1876-10-03
THE DUTIES or R1ILROID DIRECToRN


Have stockholders any rights that managers
are bound to respect? The condition OF some
of the most important railways makes the qucs-
ton pertinent. Great properties winch onSbl
to earn millions yearly have been plundcrcd
with scarcely an attempt at cOncealment. Oth-
ers have been completely gutted under cover
of confused or false reports All examination
or inquiry is deOunced as "a stOck-jObbing
"repOrtn by managers who have skinned the
property so that nothing is left but debts, and
want time to sell out and retire rich. Is a
stakeholder. then, person whom it is right
and reputable to rob? Or arc railway man
ayers a privileged class, whose divine right 1t
is TO relieve other people of their earnings!
The stakeholder is popularly supposed to
protect himself by the election OF directors.
Ii would be well for him to inquire to what
extent directors direct. Many OF them turn
over The responsibility and power to somebody
else, and never scTutinlze report, or bother
themselves about the solemn trust they nave
assumed. Others deliberately betray that
trust. How many are faithful 20 it Let re-
cent exposures answer. To the utter amaze
ment of careless directors. 1t appears That
rreat corporations have been shameiuliy mis-
managed or systematically robbed. In some
cases the very men trusted to guard the prop
ertv have stolen it. 4 baSer breach OF trust
carnot be committed. But what is to he said
of tbe other directors II was their duty TO
know if there was either fraud or mismanagc-
ment, for they were invested with the right
and power to know all that was done, were
selected because it was supposed that they
II I I'LL. mutt fl,tr
for that purpose, and voluntarily accepted
all the responsibility involved. What did they
know? In some cases, il appears, not as much
as any newspaper could discover in an hour.
What did they do7 Many Of them, nothing at
all. Having undertaken to guard property,
they suffered it to be stolen or ruined, without
care or protest While some robbed the prop
erty, or shared the plunder, Others were too
busy or Indifferent to investigate, and by their
neglect helped the robbery. RuinOus leases.
dishonest contracts, enormous debts, have I'M
poverished thousands of stockholders, and
made a few men rich. II was the duty OF
every director to examine all these things
thoroughly, and yet the stockholders of many
important corporations have been compelled TO
Io0l, to the press for all information Of value
about their own property. Has business honor
become lost art Or do modern directors
think it quite enough if they refrain from
stealing a part of the property for themselves
Men who are plundering railroad or neg
! lecting their trust, naturally regard with dis
| favor the publication OF facts which they are
concealng from stockholders. But if directors
want to avoid newspaper investigation, let
them do the investigating. 1t is their duty.
! If they want to avoid exposures, let them ex-
pose bad management themselves. 1t is the
right OF stockholders to have their prop
! critics closely watched by somebody. For the
/ public good, every concern that is really rot
| ten, and must sooner or later be exposed,
should be exposed as soon as possible. All
! industry is in trouble because savings have
! been wasted by unwise investment, and 1t Is
! for the public good to have the fullest possible
/ information as to properties in which savings
may be invested. If managers conceal facts,
| and directors neglect their duty, somebody else
must prick the bubbles The coal combination,
! for example, was gigantic conspiracy against
the public good. 1t was unjust TO consumers
and injurious III the highest degree to de-
pressed and struggling manufactures. Direct
ors who consented to the punder of the pub
lie deserve at least their share of loss. NOr
was this all The combination was an ugly
pitfall to catch unwary investors. 1t was
doomed to defeat and disaster, and yet for the
time, it made shares seem very valuable which
were really buried past all hope under rninOus
land purchases OF railroad leases The direct
ors who sat by while all these things were
done, and gave no warning to the stOckhold-
ers or the public, are responsible for their
neglect of duty. Lei them learn that grave