The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-06-12
CORPORATE DEMOCRACIES.
Scattered Versus Concentrated Hold
ings of Trust Stocks.
American Banker.


Some years ago when the Standard OIL
Company came generally to be recognized
as a monopoly an attempt was made TO
mitigate public apprehension by showing
that the stock Of that corporation was re-
markedly we'll distributed among large
number of small investors. The inference
was drawn that there could be no serious
danger to the public interest if, indus
tries are concentrated, a large part OF the
people take shares in the resulting cor
porations. Thus If the corporation should
take advantage OF its monopoly by heavy
exactions from the consumers OF its prod
ucts the increased profits would go back
to the people in the form of dividends.
This theory was lost sight of after awhile,
only TO be revived at the present 1uncture
when the problem of Industrial monopoly
has become far graver matter than ever
before in the history of our country. on
the one hand are those who think that the
situation is leading 10 an aristocracy OF
wealth; on the other, those who think
that the multiplication of securities and
the disposition of the smaller capitalists
TO invest in industrial securities, will
evolve in a democre tiZation of industrial
capital instead of its concentration in
few hands. Ii is not difficult TO see that
If the aristocracy OF wealth is 10 be real
ntical system will be weakened and posi-
bly, wrecked. But whether the outcome
would be a closer approach 70 a system of
privilege or government control of monop-
olistic enterprise remains in doubt.
Do present conditions tend 10 promote the
socialization of industrial properties and
will that be the solution Of the trust ques-
ton? Certainly those who are in control
of these enterprises not working for
that end. Their whole energies appear 10
be devoted not only to the concentration of
independent concerns. but to the centrali-
cation of their control in a few hands. For
the purpose of raising the necessary capt.
tai the public may be taken into considera-
ton, but once the concentration is accom-
plished there is little tendency towards the
safeguarding of that interest. That is 10
say, the minority of the stockholders is an
interest which gets scant courtesy from the
controlling power in most of these corpora
tions. And then there is speculative manip-
ulation intended 10 shake out the smaller
holders so that an increasing interest NAV
be secured at bargain prices. Furthermore,
there is the policy of Withholding such in
formation concerning operations and earn
ings discourage investing in the shares
OF secretive concerns, and finally the bad
management which leads 10 losses. These
things do not tend to multiply the number
of shareholders nor 10 invite the invest
ments OF people who save few hundred
dollars.
While it is true that any one who has
$50 can become a part owner Of the United
States Steel Corporation or with a little
more one of the proprietors of the Penn
sylvania Railway, yet the course of most
corporations and the uncertain movements
in the value of their shares do not attra CT
such investors. The risk is felt 10 be too
great. Thus not until a greater stability
is assured will there be such a socializa-
ton Of the ownership of the great corpora
tons as will tend 10 head off dangerous and
subversive legislation.