Discrimination in favor of one and against another by railway corporations was an iniquity that built up large fortunes for a few and starved and ruined many. But that, let us hope, has been effectually stopped forever by its exposure and denunciation by President Roosevelt and the Federal legislation which it provoked; and any revival of it should be punished with the utmost rigor of the law, not by fines but by imprisonment of both the giver and receiver of rebates.
Fines can be easily paid by large corporations, however much their stockholders may suffer, but being placed behind iron bars is always distasteful, if not terrible, to their officers; and it leaves a stigma that they are anxious to avoid.
Their aversion to being disgraced in the eyes of their families and friends by imprisonment as criminals will always tend to make them extremely cautious not to incur this risk, however willing through lack of moral scruples, some of them might be to violate the anti-rebate laws if they could do so with impunity, and however much they might be aware that lawlessness, apart from the question of dishonesty, is anarchy, and therefore unpatriotic.
Corporation looting in its various forms, and political contributions of corporation money, are, like rebating, equally wrong in principle, and should be punished with equal severity and involve compulsory restitution. That is really the only way to prevent the recurrence of such wrongs by the unprincipled.
Judge Anderson, in charging the jury at the trial of John R. Walsh in Chicago for bank frauds, said: “The law presumes that every man understands and foresees the natural, legitimate and inevitable consequences of his acts. The color of the act determines the complexion of the intent. The intent to injure or defraud may be presumed when the unlawful act which results in loss or injury is proved to have been knowingly committed.”
Many of the irregularities, abuses and questionable methods of large corporations resulted no doubt from the haphazard speculative manner in which they were organized. Their promoters and organizers had always, or nearly always, speculative objects in view in forming the combinations we call Trusts. They looked for their first profit in the stock deals involved in them, and were generally willing to give extravagant prices, payable in stock, for properties that they wished to control and bring into these new Trusts.
This, of course, caused overcapitalization, and in many cases this overcapitalization was equivalent to several times the actual value of the properties embraced in the Trusts created, and in some instances to many times their value. Then too extravagantly high salaries were given to the men in control of such organizations for their services as officers. They were generally “on the make,” working for Number One—that is for themselves—as well as the Trusts.
It often followed that, in their efforts to float their stock and pay dividends, loose and none too scrupulous practices were resorted to, and more or less false and exaggerated representations were made as to actual values and conditions. So greed and graft dominated not a few of them more than the interests of their outside stockholders.
They were in a position where they could help themselves to the cream, and leave the skim milk for the investors, and not many of them neglected their opportunity to skim the cream, and to feather their nests more or less, in the last few years, before stricter laws were passed by Congress and the States for the management of corporations.
The laxity of both the State and Federal laws with regard to corporations, till recently, permitted much to be done in the dark, which is now rendered impossible by the light of publicity that is required by the new enactments, as well as by various prohibitions of dishonest practices, besides that crowning evil, railway rebating, that were before prevalent.