The Washington herald., 1914-05-25
\
SHOWS CAUSE OF
! SLACK BUSINESS
Untermyer Blames 'Lawless
and Corrupt ! Management
Of c Corporations.
PROPER CONTROL NEEDED
Pending Trust Bills He Considers Too
Weak" to Garry Out
Purposes.
PROPER CONTROL NEEDED

Pittsburgh. May A-An extraordinary
analysis Of the business conditions of the
nation was made today by-Samuel Inter
myer, of New York. This corporation
lawyer. speaking before the Pittsburgh
Commercial Club and the Pittsburgh In
dustrial Development Commission. de-
ciared that It was useless to blink at the
fact that the country is in serious trouble
commercially. He denied tfat this trou-
BILE was due either to the new tariff or
to any of the legislation enacted or con-
templated by the present administration.
He maintained that the United
States is not seriously hampered by the
fact that European capital has been
withdrawn from Investment here ow-
ing to the Balkan war and other
causes. He pointed out that the coun-
try had enjoyed a long series of years
of bountiful crops and that a record
breaking harvest for the present year
was assured. Optimism should be
rampant, he declared, and yet business
contraction and depression is every
where confronting us.
Canse Found In Corruption.
The cause, Mr.. Untermyer said. is to
be found in ..the lawlessness and cor
ruption in the management of our
great corporations and the. destruction
of the confidence of our home and for
eign investors, following the exposures
of few of the many instances that
characterize the~conduct of our cor
porate affairs"
To this reason alone, strengthened by
''the criminal inertia of stockholders"
was ascfibed the present disturbance or
legitimate business. Mr.. -Untermyer eX-
panded his diagnosis of the situation with
unqualified denunciation of the methods
of corporate control and cited the dis
closures with respect to the management
of the New Haven road and the Mutual
and Equitable Life Insurance companies,
with their allied financial institutions
prior to 1906, as cases in point.
Il believe it will be found" he said.
that IL the affairs of other railroads that
might be mentioned ever came under the
scrutiny of an executive or legislative
investigation, or of a court of Justice. we
would find explorations of the sharehold-
ers or the public quite as startling as
anything that has been or will be .ex-
posed in the investigation of the New
Haven road"
Mr.. Untermyer expressed the hope,
however, that the government would not
embark upon any general crusade Of in
vestigation- Our credit and reputation
have already suffered sufficiently" he de-
clared, from the mere suggestion of the
general corruption that lies underneath
the surface Of past corporate manage
ment. 1t is not worth while to disturb
public confidence further by turning up
any more of the horrible facts. We knew, |
in a general way. enough of the evils to |
be able to apply the remedy. 9
Urgent Need of View Haws.
The remedy. Mr.. Untermyer maintain
ed, lay in the restoration of public con-
fidence in corporate management. Leg
islation which will insure the proper con- |
troll of big business" is needed to quiet |
the public distrust. The only criticism |
which he had to make of the pending /
trust bills was that in their present /
form tthey are too largely made up of |
companies superficial, ineffective |
and innocuous" The press, althush hon. |
est. was mistaken, he said. in its sup |
port of the cry that decentralization is |
due to impending legislation. We need, |
he said. these laws: --
/. Prohibiting all forms of interlocking |
control of big competitive businesses, of |
which interlocking directors is but one /
of its many manifestations. but it IS |
not necessary to interfere with small |
business or to bring it under Federal
regulation.
2. Prohibiting holding companies that /
are in restraint of competition.
3. Regulating competition. with a view
Of preventing the practice of unfair
business methods by big business to the
injury of small competitors.
4. Prohibiting the dummy director
and all other forms of secret control, so
that the Responsibility for corporate ac-
lion shall be fixed upon those who IN