The Washington herald., 1915-01-19
.BLAMES UNREST
ON WALL STREET
Roger W. Babson, Statistical
Expert, Heard by Indus
trial Commission.
WOULD CUT OUT PROXIES
Absentee Landlordism and Control of
National Industries by Financial
Clique Handicap Labor.
srecial to The Washington Herald.

STeClal 10 Ihe W aShIngton Herald
New York. Jan. 1S.-Absentee land
Iordism, control of the great nationa
industries in Wall Street. and the con.
duct of those industries with the sole
purpose OF making dividends. are tn,
underlying causes of industrial unrest
according 10 Roger w. Bs bson, tn,
Boston statistical expert. He testified
before the United States Industria
/ Commission here today.
Eighty per cent of the control ol
, our large industries" declared Mr.
Ba bsOn. is in the hands of banker:
and promoters in twenty-story office
buildings; S per cent in the hands OF
directors; per cent in the hands OF
salaried officials: > per cent in the
hands of employees. and per cent in
the hands of minority stockholders"
To what extent is this control exer-
cised in labor matters?" asked Frank
?. Walsh. chairman of the commission
which is making a general investiga-
tton of industrial conditions under an
act of Congress.
Dividends Their Aim.
so far as my experience goes" re-
piled Nj Babson, bankers and cap
italists generally have nothing against
labor. They are too busy with other
matters and do not bother about la
Dor. Wall Street is concerned with one
Observation-Disclosures is satisfied as
long as they, are coming along. II
makes little difference whether they
are gained by fair means or foul by
good machinery or bad. or by what
kind of mana cement. If the dividends
are not produced, then the directors get
busy and make changes. But they
never change the management or in
stall new machinery for the sake of
increasing wages, but merely to make
or increase dividends"
Discussing absentee landlordism, Mr..
BahSOn said II was one of the greatest
handiCaps under which both labor and
capital work today.
1t is a fact" he said. that very
few of the directors of the big con-
Germs have any knowledge of the spe-
Cihc business. or are ever in touch with
II. 1t is very seldom that a strike oc-
ours or receivership is appointed in a
business. the owner of which has built
1t up and lives I'm the town where II is
conducted. Strikes and receiverships
come after the death of the original
owner. or after control has been trans
ferred to outsiders through the forma-
tion OF a stock company. Then il is
that the real owner ceases to control
WouId Cut Ont Proxies.
Even then. however. the executives
who are placed in control might man
age well. II they were left alone by
Wall Street"
Explaining how he would overcome
the evil OF absentee landIordism. Mr.
Babsoh said; Il would cut out all
proxies. A man should vote in person.
l would have the annual meeting of
the industry held right in the mill in
stead of in A twcnty-story office build
ing in Wall Street. II there were no
corporation laws in the United States
today. he declared, and you sat
down to draw up code. do you sup
pose You could pass a law which al
lowed labor no representation on
boards or which permitted annual
meetings in office buildings 1000 miles
or"
Mr.. Babson declared that labor was
winning out in its demand for collect
i've treatment. because il is good busi-
ness for capital so to treat with il.
Samuel Untermeyer. counsel for the
PUjO committee. was on the stand for
two hours during the morning session
of the investigation, which will last
for six weeks. Mr.. Tntermeyer Criti-
Cised the great foundations of wealth,
and urged as remedies for present in
duStrial conditions: Insurance against
sickness and inva Iidity, insurance
against unemployment. old-age pen
sions, life and accident insurance, and
benefits.