The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1914-01-28
The Interleckins Directorate

wv: VI c0uIbS, INC VAL my PAss
Ijust a it ID before Congress and it,
commitments wake up to what it al
means. But no sane man whs
knows anything about the conduct
Of corporate business in this eoun.
/ try can read the present measure
with care and not desire some radi-
cal amendments to it.
Suppose we glance at one or two
provisions of the bill: For instance,
note the fact that no director Of
q financial institution may also be
director in q railway. This means
that not simply in New York and
Chicago, but all over the country
those cautious and prudent bankers
who have sat upon directories of
railways running through their
local towns and cities, who have
helped to get good transportation
business for those railways, have
looked after their local loan re-
quirements, have counseled econ
omy in their expenditures-all
those gentlemen must retire.
And for what reason9 Because
Of the theory Originally PROFOUND
ed by the muckrakers and taken
up with great righteousness by
many agitators who seldom give
themselves time for ample thought),
that if Mr.. Jones, of st. Paul, shoe
merchant and for years a director in
the Milwaukee and st. Paul Rail-
road, happens to be a director in the
Tenth National Bank Of St. Paul, he
must, therefore, (if the railway de-
sires to sell some securities) be
trading with himself. And this, de-
spite the fact that probably the
Tenth National Bank never buys or
thinks of buying a single dollar of
St. Paul Railway securities.
There are hundreds of banks all
over the country, situated like this
one, whose leading directors must
resign or else cease to sit upon some
old-time railway board. What an
absurd alternative and how de-
structive to the country's best bust
ness development! And even sup
pose that the Tenth National Bank
has now and then, with old Mr..
Jones' approval, discounted the St.
Paul's note for SEQ, 00o-or bought
a few of its mortgage bonds-what
of it! Is it not conceivable that
Mr.. Jones, knowing thoroughly the
earnings of the St. Paul road,
should be in a better position than
any one else to advise the bank as
to the entire safety of its note!
The one trouble with all this
clamor about interlocking direc-
torates-a clamor that is likely to
sweep business off its feet and set
it staggering around like drunken |
man if we don't watch outs that |
it is based on a wrong assumption. |
It is founded on the theory that
man is Q natural-born crook, that
unless he be tied hand and foot he |
will have his hand in your pocket |
every instant; and that this prin-
siple applies especially to all Big |
Business. President Wilson voiced
this Calvinistic creed of the total
iepravity of man when, in his mes.
sage Of last week, he said that most
If the railfoads-"if not alp had
suffered from financial malfeasance.
We took respectful, but strong, ex-
seption to this expressed belief of
MS, because it has no basis in fact.
We are sure that he thinks it has, |
,ut it hasn't.
And before we rush through such
nischievous legislation let US look
INTO the facts and see what we find. |
The Herald doesn't pretend to know
everything that can be found by
inquiry. But it knows this: that
men are successful in business NOT
BECAUSE they are selfish and IN
crupulous; and that, take Big Bust.
less in America today, its most
uccessful leaders will be found to
ave attained wealth and good re-
ute by reason of their scrupulous