Morals in Trade and Commerce

by Frank B. Anderson

believe that many things are right that were held by our forefathers to be wrong. There was a time when slavery did not offend the most delicate conscience, and if we go still further back, we shall reach a time when theft was almost the only crime recognized and when wholesale murder was a virtue. Every age had its own standards, and it would be absurd to argue that an act was wrong if it received the sanction of the whole community. It was the communal conscience that determined all problems of right or wrong, and it is still the communal conscience that gives us our definitions of morality and honesty. Here, in my opinion, is where a great part of our trouble arises. The communal conscience has changed, and some things regarded right and proper twenty years ago are frowned upon to-day. But business methods tend to become rigid and inelastic, and a sudden evolution of the public conscience leaves them in the rear. Then comes a sudden recognition of the disparity, and laws are passed to prevent the practices that formerly went unchallenged. Usually these laws are passed in a hurry and by politicians who have no clear grasp of the problem. As a result the laws are ineffective. That is to say, business, clinging conservatively to its familiar ways, finds a plan to continue those ways in spite of the laws passed to prevent them and then public opinion, finding no relief, is angered,—not at the breaking of a law, but because the law itself was ill-designed and ineffective. In other words, public opinion has failed in its effort to force the individual to set aside his own interests for what public opinion considers to be the interests of the community. Public opinion in this country is not a steady and persisting force, as it is in some older communities. It moves spasmodically and after long periods of quiescence and usually under some stress of excitement, which prevents deliberation and therefore effectiveness. Law being more unwieldy than conditions, naturally lags behind them, and what we have to recognize is a change in conditions and in laws and not an outbreak of lawlessness. Another evil result from the impetuous way in which we make laws is that they are not enforced because they are not in harmony with the views of the community. The statute books of every State are encumbered with laws passed in moments of hysteria and never put into operation, or else allowed to lapse

after a few months of confusion. Every newspaper in California, for example, breaks the law every day when it prints a news item without appending the name of the writer, and probably we are all of us breaking laws of which we never heard. This sort of thing brings a law into contempt and robs it of the sacredness that should attach to it. The Sherman anti-trust law, for example, would bring the whole business of the country to a standstill if it were strictly enforced, and I believe it is not good to bring large and innocent sections of the community within the scope of a criminal law simply for the purpose of reaching a minute proportion whose methods are flagrantly bad. If the Sherman anti-trust law were enforced, it would have to be repealed at once, and I think honest traders have a right to complain of a law that makes them technical criminals and is enforced only against notorious wrongdoers. The law should be so framed as to reach only wrongdoers and to leave honest traders outside of even its technical scope.

President Roosevelt was emphatic in his declaration that he intended to enforce the Sherman anti-trust act, and during the four years beginning with 1902 his administration was active in that direction.

In 1906 he stated: “Combinations of capital, like combinations of labor, are a necessary element in our present industrial system. It is not possible completely to prevent them; and, if it were possible, such complete prevention would do damage to the body politic. It is unfortunate that our present laws should forbid all combinations, instead of sharply discriminating between those combinations which do good and those combinations which do evil.

It is a public evil to have on the statute-books a law incapable of full enforcement, because both judges and juries realize that its full enforcement would destroy the business of the country; for the result is to make decent men violators of the law against their will and to put a premium on the behavior of the willful wrongdoers. Such a result, in turn, tends to throw the decent man and willful wrongdoer into close association, and in the end to drag down the former to the latter's level; for the man who becomes a law-breaker in one way unhappily tends to lose all respect for law and to be willing to break it in many ways. The

law as construed by the Supreme Court is such that the business of the country cannot be conducted without breaking it.”

But let it be admitted that there are cases where abuses exist and where methods of doing business that were harmless enough and even necessary enough a few years ago are now working hardship upon the public as a result of changed conditions. These abuses should be corrected; there is no question about that, and they will be corrected either by violent methods that will leave behind them a heritage of bitter resentments and wrongs or by the way of a real statesmanship that will recognize only facts and that will do justice by methods that are themselves just. For a long time to come it must be the greatest of all problems confronting the statesmanship of our day, a problem that must try our patience and our capacity for self-government. Do not imagine that America stands alone on this perilous path of reform. All the countries of civilization stand in the same place. All are confronted with the same conflict between new ideals and old methods, between the spirit of to-day and the mechanism of yesterday. The problems of other countries arise from their own peculiar conditions just as our problems arise from our conditions, but their essence, their purport, is the same. And do not imagine that there is any one solution that can be applied or that there is any virtue in the sovereign cure-alls that are clamorously urged upon us by demagogues and by reformers who are eager to reform everything and everybody but themselves. There is no such panacea. It is to be found neither in municipalization, nor nationalization, nor confiscation, nor any of the nostrums advocated so wearisomely by sensation mongers. There is indeed no hope for us except by laborious study of conditions and by an infinitely cautious advance from point to point, so that there may be no injustice, no concessions to prejudice, no incitements of class feeling, no embittering of relations that should be cordial as between citizens of the same republic, whose differences are infinitely small as compared with the well-being of a great nation. Of all the dangers that threaten the path of the reformer that of injustice is the greatest. It is better even that abuses should continue for a time longer than that they should be corrected by injustice and by the infliction of hardships upon those who are wholly innocent.

Two wrongs can never make a right, and wherever we find a so-called reform that is based upon injustice be assured that we are only substituting one evil for another and that our latter end shall be worse than the first. It would be impossible for one now to indicate the direction in which reforms should lie, and there is of course nothing human to which reform is impossible. But it is perhaps suitable that I should indicate some of the ways that can end in nothing but calamity, however alluringly and speciously they may be advocated. For example, there is neither good sense nor honesty in penalizing a corporation because some of its officials have done wrong. Wherever wrong has been done, the guilt is with some individual and not with the corporation as a whole. Find out who that individual is and let him answer to the law, but do not visit his misdeeds upon innocent stockholders who have had nothing whatever to do with the offense, who knew nothing of its commission and could have done nothing to prevent it if they had known. Remember, that a penalty inflicted upon a corporation is actually inflicted not upon guilty persons but upon innocent investors.

Let me give an illustration of the so-called “reforms” that are recklessly urged upon us to-day and that are to be found in operation here and there throughout the country. I refer to the matter of street franchises. Now it may be true, it probably is true, that in many cases these franchises have become of great value and that they ought not to be granted without adequate return. But would it not be just to remember that when these franchises were originally granted they provided a service that was absolutely essential to the growth of the community and that those who obtained the franchises faced a serious risk to their capital and practically threw in their lot with the prospective welfare of the city? It is hard to realize how serious that risk sometimes was and how problematical were the returns. The shareholders in these street traction corporations are spread over the population and every class of the population is represented in them. They invested their money in good faith at a time when no question had ever been raised as to the propriety of these franchises and at a time when these franchises were considered to be for the public good and indubitably were for the public good. And

I will ask you if it is honest to use all the machinery of the government, all the artifices of the politician to depreciate the value of those franchises, to threaten their holders with confiscation, to hamper and harass them by all the ways that are open to a democratically governed people? I say unhesitatingly that it is dishonest to do these things, and I will go so far as to say—believing as I do in the good faith of the great majority—that most of those who noisily advocate such measures would be ashamed to do so if they would but face the facts and understand what it is that they are actually doing and the wrong that they are inflicting upon innocent men and women. If mistakes have been made in granting franchises, then take care to avoid such mistakes in the future, but do not enter into a bargain that seemed advantageous to yourselves and then repudiate it when you find that it is not so advantageous as you thought. There is no way to reconcile such a thing with common honesty, and it is in no way mitigated by the fact that it is done by a community and by means of a vote rather than by an individual and in the ordinary small affairs of life. We all know what we should say of the man who acted in this way toward ourselves personally, but in advocating some of the schemes that are now recommended to us by sensational politicians, newspapers, and magazines we are making ourselves responsible for a dishonesty far greater than the evils that we are trying to remedy. Let us by all means reform whatever needs to be reformed, but let us do it with clean hands.