What is the remedy for this state of things, which, if permitted to continue, will make the masses of the people dependent upon the generosity of the few for the means to live? So far as concerns corporations of a public or quasi-public character—and none others should exist—the remedy is simple. They are completely under the control of the legislatures, whence they derive all their powers.
It is entirely competent for a legislature to provide the manner in[in] which the business of a corporation shall be conducted. It may provide that the directors shall consist of few or many persons, that a portion of them shall be taken from the employes of the corporation, selected by them, another part from the stockholders who furnish the capital for carrying on its business. It may provide that the employes shall first be paid from the revenues of the company a certain fixed sum, graduated according to the character[character] of the work performed by each; that a fair rate of interest shall then be paid upon the capital invested, and the balance be distributed upon some equitable principle between the employes and the stockholders. In case of loss the stockholders would have to suffer, since the employe, having a right to live, must in all cases receive his daily wages when dependent upon them for subsistence. This principle receives judicial sanction from United States Circuit Judge Caldwell, in his order entered in case of the Santa Fe Railroad, as follows:
“Ordered that the men employed by the receivers in the operation of the road and the conduct of its business shall be paid their monthly wages not later than the 15th of the month following their accrual. If the earnings of the road are not sufficient to pay the wages of the men as herein directed, the receivers are hereby authorized and required to borrow from time to time, as occasion may require, a sufficient sum of money for that purpose. The obligations of the receivers for money borrowed for this purpose specified in this order shall constitute a lien on the property of the trust prior and superior to all other liens thereon.”
Under the powers inherent in every sovereignty, government may regulate the conduct of its citizens toward each other, and, when necessary[necessary] for the public good, the manner in which each shall use his own property.
Formerly, corporations having special privileges were created by special acts, which the courts construed to be contracts between the granting power and the corporators which, once granted, could not be repealed or varied by the granting power. This granting of charters to favored individuals, conferring upon them privileges not possessed by the general public, became obnoxious to public sentiment, and, as a consequence, general laws have been passed in this and many other States, under which any three persons may become incorporated for any private purpose. This has become a worse evil than the old system of granting special charters. Under the general law enacted in this State twenty years ago. I am informed, 27,200 corporations have been created.
Irresponsible persons are often induced, for a small consideration, to form corporations with a proposed capital of millions; to subscribe for the whole stock except a share or two, and, for a fancied, imaginary or worthless consideration, to issue to themselves fully paid up stock, which is subsequently transferred to the real parties in interest, who expect thereby to escape personal liability if the concern is a failure, and to pocket the profits if a success. Business of all sorts is now to a great extent carried on in the name of corporations, in order that the proprietors may escape personal responsibility. How can the individual, who is personally responsible for his contracts, successfully compete with a corporation run by persons who incur no such responsibility? Doing business in a corporate name not only paralyzes individual effort, but leads to a concentration of capital—the great evil of our time. The remedy for this growing state of things would be to restrict the formation of corporations to such as are formed for public purposes, or such as the public have an interest in. Seventy-eight per cent. of the great fortunes of the United States are said to be derived from permanent monopoly privileges which ought never to have been granted.
As before stated, the power to dispose of property after death by will is conferred by statute, under certain limitations. Why should this privilege be given to dispose of more than a fixed amount of property to any one individual? Say property to the value of not over five hundred thousand dollars to the wife, of not more than one hundred thousand dollars to each child, and of not more than fifty thousand dollars to any other relative, extending to the third or fourth degree, and that the balance of the estate should escheat to the State, to be used by it for the support of schools, charitable institutions, the employment of laborers in making roads, and other good purposes.
The law now provides for the escheat of estates of persons dying without heirs. The same limitation might be put upon inheritances where there is no will, and in this way the accumulation of vast estates by inheritance or devise would be checked, and property, especially landed estates, which by nature belong to all, would be more equally distributed. It should not be forgotten that the method of transmitting property from the dead to the living is entirely derived from the state. If public policy requires that the state should give to the dying possessor, no longer able to control or take with him his possessions, the privilege of disposing of so much as may be conducive to the comfort and happiness of his surviving kindred, does it require that this privilege should be extended to his disposition of millions to the injury of the rest of mankind?
If it be said that to limit the privilege of disposing of exceeding a million dollars of property by devise or descent would check enterprise and industry, as no man would struggle to acquire property which he could not leave to his surviving kindred, my reply is, that man by his own thrift and industry is seldom able to acquire more than a million dollars’ worth of property. Fortunes exceeding that amount are usually acquired by speculation, trickery, or some device by which one man takes advantage of his fellow-man, and which, if not illegal, is immoral; or by members of privileged monopolies, trusts and syndicates.
I don’t mean to say that all great fortunes exceeding a million have been acquired by immoral means, but such as have not are the exception, and to limit the privilege of disposing of more than a million by devise or descent would not affect one in ten thousand of the people. In short, such limitation would tend to discourage, not honest enterprise and industry, but stock-jobbing, trickery and other questionable methods of acquiring vast fortunes.