Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-28
BONUS REGULATION
! REACTION IS COLD
No Method Seen Legal to
Prevent Payments by
Private Firms.
BY J. C. RoYLE.

Oficial Washington had too hectic
time with the soldiers bonus legislation
this year to hear the word bonus with
out wincing. Consequently questions as
to the attitude Of the capital on the
regulation Of payment Of q bonus by
business concern to an executive or en-
ploye receive but cold responses. How
ever, these questions have been asked
repeatedly In connection with the
financial ShowingS of some OF the big
steel companies and other large cor
porations. They may be asked even
more frequently as result of the Beth
lehem Steel Co. meeting Thursday since
President Grace of that company re-
ceived a bonus approximating $1,000, 600.
Proposals that bonus payments be
subject to governmental regulation have
been advanced. Departmental authori-
ties have no hesitancy in stating that
Federal regulation is an impoSsibility.
Even q measure which should be put
throuhg Congress either regulating pay
ments or enforcing non-bonus clause
in a corporation charter would be I'M
constitutional, they assert. The only
possible door through which Federal
regulation could find its way into the
situation is the door of interstate COM
merce and tie payment OF salaries or
OOIluSCo ID AOb q paw Va AAAVCAS0ANN VIVA
n1erce.
Submit Constitutions.
Moreover, corporations obtain their
charters from the various States and
any attempt to change those charters
by the Federal Government would be
an invasion of State rights. Each COM
pany seeking Incorporation must sub
NIT O constitution and bylaws. which
are Scrutinized and approved or disap-
proved by State authorities and which
must conform to the State laws. II
directors and arrangements are eTnpow-
cred under those provisions to pay
bonuses, they cannot be restrained from
doing so.
If public opinion demanded 1t, 1t Is
possible that the Legislature Of State
might amend its laws affecting corpora
tons to require the inclusion Of nom
bonus clause in company charters. Few
States are likely to do this, however.
The competition for the fees incident to
such interpretations is extremely severe.
The provisions of the laws Of Delaware
and New Jersey have resulted in mil
lions accruing from such fees to those
States. II q State were to prohibit
payment of bonuses concerns seeking
Incorporation would assuredly go to an
other State where no such regulation
prevailed.
Few people seem, from the inquiries
here, to object to the bonus in the alb
stract. Their complaints are based on
the size of the payment and the Ques-
ton of who gets it. The main idea Of
the bonus is to hold down fixed charges.
Is always easier to advance wages, sal
aries and charges than to reduce them.
They feel friendly therefore to q SyS-
tenn which enables them to hold down
the sum they are compelled to pay In
bad times and still permits additional
disbursements in good times when
profits warrant it.
Bonus Payments Ended.
This is particularly true in the case
Of brokerage houses. During the hectic
activities In the stock market in 1928
and 1929 payments of bonuses far ex-
ceeding the actual salaries Of the en-
ployes involved were not unusual. But
when the end Of 1890 rolled around
the white collar workers of Wall street
were al singing, Yes. we have no
bonuses" and making q dirge Of the
tune.
It is pointed out here that, Just as
in politics, the remedy lies with the
shareholder, for political voter Is only
another name for shareholder in the
United States. II the national share
holders are not satisfied with the way
the government Of Nation, State, coun-
ty or city is run they can change It
by their votes, If enough Of them feel
that way. The corporation sharehold-
ers can do likewise The trouble Is
that many do not take the trouble to
vote and for every political voter who
Is remiss there are proportionately q
half dozen business voters who pay no
attention to elections.
(rouvri0ht 1oSI