Fifty years in Wall Street

by Henry Clews

Campaign contributions by corporations were wrong, morally and legally, not because political contributions are wrong, but because they were a wrongful and illegal use of corporate money. But the controlling officers of many large corporations, particularly the New York City Railways and large life insurance companies, were woefully blind to this, so accustomed had they been to handling corporate funds in their charge as if they owned them, and could do as they pleased.

These transactions were almost on a par with some of those connected with the purchase at a fictitious price of a certain Street Railway—a practically non-existent line—in which large capitalists were concerned. Here was a flagrant instance—involving a diversion of half a million dollars—of the doings of men controlling a great street railway system, at the expense of the stockholders whom it was their duty to faithfully serve and protect.

That many dishonest acts by men controlling corporations have gone unpunished is greatly to be regretted, and looks very much like a miscarriage of justice. But let us believe that dishonesty was exceptional and honesty the rule in corporate management.

Where punishment is inflicted for infractions of the law involving larceny, it should be the same as for giving or receiving railway rebates. Fines have no terrors for wealthy evildoers who violate the law for their own sinister ends at the expense of others.

The popular hostility to the Trusts however, was often too indiscriminate. It made little or no distinction between the good and the bad. The Trusts were, as enlarged corporations with large capital, a national trade development of our time.

Aiming at greater production, economy and efficiency, through their large means and modern improvements, than had been possible with small concerns, they marked a forward step in that progressive industrial, commercial and financial march which has created our vast national wealth and made this country the Wonder of the World.

But of course it was inevitable that these Trusts, with their large capital, and new and improved methods and machinery, should supersede to a great extent the old order of things, and take away from them the business of others that they competed with. It is only natural that the stronger competitors should more or less dominate or destroy the weaker, and the success of the Trusts was merely another illustration of the survival of the fittest. This is a law of Nature which it is useless to resist.

It is therefore not against the creation of Trusts, but against injustice, lawlessness, misrepresentation, looting and other evil practices in the management of Trusts that we have a good right to complain, and against which the strong arm of the law should be always raised. A well and honestly managed Trust can do business as legitimately, and with as much or more, advantage to the public, as any individual, any firm, or any small corporation can.

But there is constantly greater temptation to wrongdoing by those in control of large corporations than is the case in small ones. We have seen many instances of the abuse of power in these, not only in forcing the allowance of rebates from the railways, but in other unjustifiable ways calculated to get the upper hand of competitors, or kill them off entirely, as well as in the misuse of corporate funds for speculative purposes, to say nothing of appropriations through that too common form of dishonesty called graft.

Men in high positions in corporations have often done in secret, in the way of chicanery what they would have been both ashamed and afraid to do openly. But now that the old practices have been exposed and the new laws require publicity of accounts, and have closed the door to the many opportunities for fraud and graft that were before open, through severe penalties, we have a purer business atmosphere and a higher moral tone in our business life. So some good has come out of our corporation scandals, and public sentiment has been aroused against corporate corruption and all abuses of power.