The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-09-26
rnB o3NrRoI or CORPORATIONS

InO . AAA. - 4 ~ NOuH
and has begun 10 distribute some OF les aeeu-
mutations, Its stock Of cash having decreased
during the week about s10,000,O00. The mill
lions Of gold heretofore ordered TO be shipped
from Europe are now arriving. and many more
millions are on the way. The reserves Of the
New York banks, great rs has been their de-
crease since June, are nearly ten millions
larger than they we're q year ago. Nothing,
therefore, ~justifles a fear OF an impending
scarcity OF money. and. yet, last Tuesday. thai
fear put rates OF interest MP and stocks down to
Al extent which would be u~naccountsble. did
we not know how much more powerfully than
reason Imagination Affects mems minds.
Outside Of the y~icissltudes OF the stock
market, an unusual number Of announcements
and Of umors relating TO changes In the
ownership oi important corporations have lately
aeitated the financial community. Tho story
that the Baltimore and Ohio Railroad Company
had passed into the hands Of certain Western
railroad magnates followed one that the Penn
~sylvania Railroad people were to be It's masters.
and then came a third. that the company's
property will have to remain In the hands OF re-
eeiyers until a fresh foreclosure suit can be
begun and carried to completion. In Brooklyn.
there has been talk Of . sale to the largest
owners OF the Rapid Transit Company
stock. OF enough of the stock Of the
Nassau Electric Railroad Company. to give
them the control Of that concern also.
while the amaleamAtion Of the Edison
Electric Illuminating Company OF the same
city with the Kings County Electric Light and
Power Company. which has been pending a
considerable time. is nearly contaminated. An
alliance OF some sort between the Westing-
house Electric Company Of Pittsburg and the
Walker Company Of Cleveland has also been an
nounced. In addition the committee OF the
minority OF the preferred stockholders Of the
General Electric Company have formally given
MP their struggle against the majority. and
submitted 10 be despoiled OF 35 per cent. Of the
par Of their holdings. Peace consequently
reiRns In the General Electric. as 1t did in War
saw, after the Russian General had massacred
half ito inhabitants. On the other hand. the
recent managers Of the National Linseed Oil
Company have surrendered to their indignant
constituents, and the company win 60 through
Q process Of reorganization under better au-
spices. Some little nre insurance companies
are also the subjects OF q struggle for their
possession between rival aspirants. and there
are rumors OF o change In the control OF the
Manhattan Elevated Railroad Company.
Nominally. stock corporations are democra-
eies, OF Whichth thu stockholders elect the govern
ors % the citizens Of Q republic elect theirs,
Practically. they are oltgarchlos, as Venice was,
and are managed by one or two men who get
and keep their places very much in the same
manner az men get and keep supremacy in po-
litlcal bodies. At the beginning OF every cor
poration's career, as at the beginning OF the
existence Of a republic. the men put at the
head OF It are chosen for their supposed superior
ability. The directors Of a bank or insurance
company. a manufacturing company or q rail-
eoad company. are selected by Its stockholders
DOT out Of compliment. but for the sake of de-
GIVING the benefit Of their services In making
the business OF the concern profitable. Be-
sides. no corporation composed Of a number Of
men can dispense with leaders. It cannot
hold meetings daily and let its mem
bers vote upon every measure affecting
their interests. They must p~erforoe have
representatives. and depute to them the exer-
else Of their powers. This Is true also OF polit-
ical as Of business matters. A political party.
as we'll a. q corporation. must have a head. and
the ~lunatics who deelaim against boss rule"
and "the machine" are virtually Anarchists,
who would have nc government whatever. INIT
leave Affairs Of state to be managed BY the mob.
without organization to direct. or law to re-
strain It. When two men ride the same horse
one must ride behind. and to call the one who
rides In front q tyrant for no other reason than
that he rides in front, Is contrary to common
sense. Consequently. the management Of every
stock corporation. like that Of political bodies,
gradually drifts. into the hands OF one or moro
individuals. who are popularity regarded as
owning the whole concern. and as being dicta-
tors OF It's policy.
Furthermore. in corporations. as In political
organizations. governors cannot govern for any
length OF time without the consent Of q major
ity Of the governed. Occasionally. they them
solves constitute the majority. through the
ownership Of a majority Of the stock Of their
company. but. ~oftener. the majority give their
consent TO their remaining In office. year after
year. because they are content with the way in
which they do their work What the mass of
stockholders chiefly desire ID dividends. and 30
long a. dividends are forthcoming at the rate
they expected when they invested their money.
they do not seek new servants in the place OF
their old ones. Even when dividends dimin-
ish. or when they cease altogether. the dis
satisfied stockholders do not know how to
change their officers. They act upon the
maxim Better the devil you know than the
devil you don't know" and, therefore. they
either grin and bear their Ill luck with pa
tienoe. or sell their stock,
In large corporations, Of which the capital
stock amounts to many millions Of dollars and
the stockholders are numbered by thousands.
Il is almost impossible to expel. without their
consent. the men who once get control. Moth
ing but q gross and fragrant Encouragement
which arouses the indignation Of the stock
holders ~ 0 body or the purchase by an enor-
mously rich man. or set Of men. OF stock
enough to outvote them at an election. can
force them to let 60 their hold. II was not until
Jay Gould and James Flax had ruined the Erie
Railroad Company. and made themselves uni
VersAlly execrAted by the public. that enough
6tookholders' votes could be obtained to COM
nal that's aF,rNandar NJ tho pnwyar thav Ind IN
long exercised for their own benefit.
How small q fraction Of the capital stock Of q
corporation Is needed TO assure to the owners
Of II, 80 long as they retain the confidence OF
their fellow stockholders. the absolute control
Of the corporation. is strikingly exemplined In
the case OF the New York Central Railroad
Company. For the last twenty years. neither
the late William H. Vanderbilt nor his sons.
nor their able associate. j. Pierpont Morgan.
have owned. altogether. more than one-tenth
Of the CentralIs capital. and. yet. not the slight
est attempt has been made to dlsplace them,