New-York tribune., 1906-11-17
HADLEY ON TRUST ETHICS
Interstate Commerce Lo7c-
ISavs arbitration Has Failed.

Pesident Radley Of Yale yesterday told the
members Of the New York School Of Phflan-
thropy that higher sense Of business ethics is
necessary for the solution Of the present troubles
between the corporations and the public. He
also said that in his opinion the Interstate Com
merce law and the Antitrust law have been
factors in causing the present complicated sltua-
ton His address. IN part, follows:
In the years Immediately following the Civil
War the whole system Of American railroad
rates was arranged principles which q de-
Gently conducted store would have scOrned 10
admit into its management The restraints Of
competition had been done away with. and the
managers did not the necessity Of substi-
tuting any other legal or moral restraint in
their stead. In fact, they asserted constitu-
tional right to be free Of all other legal or
moral restraints. OF course, this arbitrary ex-
ercise Of power provoked a reaction. The state
legislatures Of the Mississippi Valley passed the
various Granger laws which were placed on
their statute books from 1870 TO 1873. These
laws represented attempts TO reduce rates as
unintelllgent and crude a. had been the at
tempts OF the railroad agents to maintain them
Just when things were at their worst a reaIly
great man appeared upon the scene Of action IN
Charles Francis Adams, Of the Massachusetts
Railroad Commission. He promulgated an idea
essentially ethical in its character. which was
not only Of great service at the time but has
been the really vital force in all good schemes
of corporate regulation ever since.
The relations of corporations TO their employees
and the mutual duties Of organizations of capital
and labor toward the public in making contin-
uous service possible, have become vastly moro
complex than they were thirty years ago. But
the essential fact still remains that the problem
can be settled only by the exercise of common
sense and e certain amount Of unselfshness.
Any law which seeks to render these qualities
unnecessary superhuous is foredooned to
failure.
suppose that some time we shall devise sys-
TENS OF arbitration which will avoid a large
number Of Industrial Quarres: but those
that I have actually seen il operation do not
appear very promising. Nor do I believe very
greatly in the efficiency OF profit sharing sys-
TENS as a general means OF preventing labor
troubles. Sometimes they work well; oftener
they do not. For the present it is not to any
machinery that we must look for & solution Of
these difficulties. It is to h wider sense Of the
responsibility on the part OF directors and gen.
eral officers.
believe that the Interstate Commerce law
did more TO prevent wise railroad regulation
than any other event in the history Of our Coun-
try I think that the courts would have dealt
with the industrial problem better than they
have done If the Antitrust act had never been
passed. have gravely doubted the wisdom Of
some Of the more recent measures adopted by
the national government. But I cannot shut my
ewes 10 the fact that these things what bust
ness men must expect unless business ethics are
modified to meet existing conditions. Industrial
CORPORATIONS grew UP into power because they
met the needs Of the past. To stay in power,
they must meet the needs Of the present and
arrange their ethics accordingly.