It goes without saying that half the property of the country will not submit to spoliation without a struggle. If it cannot have representation legitimately, it will try to get it illegitimately or extra legitimately. The managers of corporations have in the past found many ways to influence legislation. Despite the prejudices against them, some of them have had themselves chosen as legislators; even as judges. Some have brought about the election of legislators who would act in their favor, and have even bribed legislators. Until recently it was not even unlawful for these managers to use the money of their stockholders in political contributions; some managers acted on the “Good Lord! Good Devil!” principle. Probably most of the politicians paid no railroad fares. Many of them got passes for their families and their friends; and it was certainly to be expected that they should listen to the requests of those who granted these favors. The situation became grotesque when a great ruler, seeking a nomination to office with the proclaimed purpose of enforcing the laws against rebates and passes, required the railroad managers to furnish him free transportation on his righteous mission.
There were obvious objections to these practices, and [pg 88]public opinion finally compelled our rulers to pass laws prohibiting them. Theoretically the managers of corporations are now effectually disfranchised. They dare not offer themselves as candidates for office. They scarcely dare to favor, even secretly, the choice of rulers who will listen to them. Fortunately, however, they hardly longer dare to offer bribes. Anyone on friendly terms with them is politically a suspicious character. Any lawyer who has been employed by them becomes unavailable as a candidate for office. Our legislators, as was to be expected, at once showed the effect of release from restraint. It has been uncharitably said that in revenge for the loss of their passes and other favors, they attacked the railroads; but there has been considerable voting of more mileage, and our congressmen at least voted themselves ample indemnity in larger salaries, and they opened fire on corporations in general and railroads in particular, with a broadside of statutes. Against this fire the property of millions of small holders in the corporations has been almost defenceless. Some of these statutes are so drawn that the plain business man does not know whether he is a criminal or not; if he could afford to consult the best of lawyers it would not help him much. The only safe course to pursue is to agree with the adversary quickly; to plead guilty to whatever charge is made, and beg for mercy. That one is innocent is immaterial. The expense of litigation is nothing to the rulers of the United States; but it may be ruinous to their subjects. The cost of the commissions and investigations and prosecutions of the last few years has been enormous. Only lawyers can contemplate it without consternation.
True, the managers of large corporations can make their protests heard. They can publish their pleas in the newspapers, and issue pamphlets, and they can appear before committees and commissions, and submit arguments. The managers of small corporations cannot afford such measures. You might as well refer a servant-girl who couldn’t [pg 89]collect her wages, to the Hague Tribunal, as to send a plain business man to Washington to plead his cause.
The animus of these statutes is hostility to great corporations. But it is impossible to legislate against great corporations without hitting the small ones. Take the case of the recent corporation income tax; the 244,000 corporations exempt from the tax had to make out their inventories and keep their books and report their proceedings precisely as if they were liable to the tax. A fine of from $1,000 to $10,000 and a 50 per cent. increased assessment were the penalties for failure. But the cost of complying with all the requirements of the law, for a corporation having an income of two or three thousand dollars, cannot be figured at much less than the tax. Many corporations have no net income. The managers of these concerns are not expert book-keepers, and their returns must be in many cases so inaccurate as to expose them to prosecution if the game were worth the candle. If we assume that the average cost of making out the return is only ten dollars, we have a bill of $2,400,000, which the stockholders, or the employees, or the customers, must pay for the privilege of demonstrating that the small corporations are not liable to pay anything at all.
The corporation income tax law was really an act of popular dislike of corporations exercising great monopolies. Grouping all the little corporations with them was an absurdity and a cruelty.
Corporations have no feelings. They are not wounded by the hostility of legislatures. The managers of corporations of large capital have feelings, and some of them are wounded in their pride by this hostility. But they need not suffer in their pockets. They are abundantly able to protect their own property; they know how to make money on the short side of the market as well as the long side. But the managers of the concerns of small capital are seldom able to do this. Oppressive laws cause suffering to them, to the mere holders of stock in all corporations, [pg 90]to the creditors of all, to the employees, and to the customers. Many of these laws profess to be meant to favor small people as against big people—to restrain the rich corporations so that the poor ones may have more liberty. There is no evidence to show that this result is attained, or that the country would be better off if it were attained. But there is plenty of evidence to show that half the people of the country are suffering from these legislative attacks on their property. The men who manage the great corporations, whatever their faults, are men of enterprise and courage. They are the true progressives; the prosperity that they diffuse among the whole people is ordinarily more than can be destroyed by our progressive politicians. They are now beginning to feel that their rulers are discriminating against them as a class, and are uneasy and disheartened, and reluctant to embark in new enterprises; and the progress of the country is halted by their apprehension. It is not the rich who suffer most: it is “the unemployed,” and the millions of dumb, helpless, struggling thrifty men and women whose hard earned savings constitute a large part of the capital of the corporations; and who are already alarmed at the shrinking value of these savings. It is, perhaps most of all, the mass of ignorant unthrifty poor, whose chief wealth is the wages paid them by the corporations which they are taught to look on as their oppressors.