The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-07-08

f0oklo68 altenatlon OF properly tFenofioSo,
without attempting an enumeration OF
these organizing privileges, It may DO fairly
stated that nearly all Limitations have been
removed from corporate action. BY prao-
tically unfettered increases Of stock, by
underlined consultations and through the
acquisition Of control by n corporation
Of an. unlimited number Of other corpora
tions-by means Of the stock purchase
laws-the original and restricted corporate
conception has been departed from. The
most excessive concentration OF material
and public power in corporate tenure has
resulted. Not since the ecclesiastical i'm
perio Of the Middle Ages has such O large
proportion OF prope rty and privilege been
vested In corporate bodies-and In Q few
Of such bodies
While these colossal acquisitions exist
In corporate form they have become per-
sonifed In the public mind. Though hum
dreds Of thousands Of stockholders are In
terestsd In these vast enterprises, they are
really governed by very few men, mi their
personalities stand before the nation Tor
all that Is good or that 10 bad In the system
they represent. Recent disclosures from
many sources have produced the impression
that there is much that 10 bad In the
administration Of our public companies
While these delinquonoies are primarily
mere matters Of personnel. TO be corrected
by the courts, they have caused q loss OF
respect for some Of our representative
business men and strengthened the opinion
that the principle OF corporate controi
should now be revised.
The present point Of view from which
---ok xku-- 49, ~ No rdaA In nnt TnAroly
economic. It may be said that railroad
rates are low, and that petroleum Is cheap.
The reply takes the form OF an inquiry:
How, then, have the principal
Of their governing companies become muia-
~millionaires2 IT may be noted that the
average dividends on our stocks are ex-
oeediugly low. The answer is made that
large proportions Of them were issued az
mere drafts on the future, and should not
at present pay any greater returns. mdi-
viduals not Interested in shares dc not
observe that the keenest suffering ID IRE.
auently caused to the uninstructed and
disappointed purchasers Of this corporation
paper. Yet the voting public, by its choice
OF inefficient or corrupt representatives,
has largely contributed to tho entire ait
uation which it Is now Iamentng. Capital
may inherently possess a ocntripetal ten
dency, but the lax legislation concerning
corporate affairs-particularly concerning
stock issues-has largely contributed to
render possible the berated millionaire n
the deceived stock buyer.
There IL, however, one plain TO
be made from these premises-the legal n
moral impossibility Of disturbing the present
distribution OF franchise and monopoly
wealth. The public Ia particeps criminis
in this creation Of ~millionaires. Moreover,
it has 30 carelessly allowed the manu-
facture Of corporate certificates that in
Vulnerable innocent citizens have become
their prayerful holders-prayerful for the
promised land Of intrinsic values and quar-
terly dividends. No nation q permit
such a fabric Of capitalization to DO con-
structed under it's laws and. then try to
decimate it In the Parthian manner.
The function Of legislation is not to
uproot the past but to provide a rule OF
conduct for the future. Is It possible 70
indicate the proper lines Of public policy
which will subserve the general interest in
franchises and the service connected there
with, and incidentally preserve that interest
from cirouitous methods Of transfer Into
some self chosen hands?
Experience demonstrates that when the
possessors Of power-whatever b nature
Of that power may be-prove to be unworthy
of its possession the pro1imate remedy
consists in transferring that power to some
other human agencies. This Ia the principle
Of rotation in political and civil functions.
Though it may not be 30 applicable to bust
ness requirements, 1t may meet q situation
which demands both civic and financial
qualities. -
II the community has reached the con-
olusion that it Is not receiving the proper
service from the controllers OF public fran
ohises: that its trust has been betrayed in
their management; that their retention
by private individuals would be q menace
to the political integrity Of the State, then
no further corporate power should be al
lowed in respect to certain public functions
without special permission from State Off
oials. This suggestion implies that when
bonds or stocks are to be issued, when
consultations or leases are to be made,
or control Of other corporations is to be
acquired, the approval OF the State must
be specially obtained through its authorized
| agents or commissioners,
OF course much will be said about pater-
nalism and the difficulty Of securing honest
and efficient officials. But the old method
has been weighed in the balance and not
found invariably productive Of corporate
chastity. This proposed transfer Of power
has been measurably tested In several
States and found to produce some amelio-
ration. With high salaries and long tenure,
public hearings and quasi-judioial func-
tons, these commissioners should be as
reliable as members Of Che bench. Let the
directors and officers of companies manage
their internal affairs. but when powers
derived from the public and which may at
any time be entirely withdrawn are to be
welded, the States agents are not map
propriate f~unotionaries. When this prin-
ciple Is reduced to a system Throughout
the country one Of the most prolific sources
Of illgotten wealth will be damned. The
emoluments and dignity Of these State
officers should be made attractive enough
to draft some OF the best railroad presidents
deprived Of their most interesting pre-
~rogatives-and convert them into admit
rable commissioners. When this suggestion
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